May 20, 1941

LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

I am opposed to this resolution, just the same as I was opposed to Bennett's social legislation. I am opposed to it in its entirety, and if I do not speak on every resolution called, it does not mean that I am not against it. I am against this piece of legislation from the first to the last, for reasons stated yesterday and for other reasons I could give in proper time. It is bad, rotten and dangerous legislation.

Topic:   SUCCESSION DUTY ACT
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NAT

Gordon Knapman Fraser

National Government

Mr. FRASER (Peterborough West):

Paragraph (a) of resolution 2 refers to "property transferred by the deceased in his lifetime in contemplation of death." Does the federal department intend to proceed as the Ontario government has done, and search bank accounts for thirty years back? As to the expression "contemplation of death," every man contemplates death. How far back is the government going?

Topic:   SUCCESSION DUTY ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Hon. J. L. ILSLEY (Minister of Finance):

I cannot say how far back the investigations will go, but if I am correctly informed, in Ontario gifts made many years ago are deemed to be property passing on the death, whether made in contemplation of death or not. Under this resolution, for a gift simply to be recorded as property passing on the death it must have been made within three years before the death.

Topic:   SUCCESSION DUTY ACT
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NAT

Gordon Knapman Fraser

National Government

Mr. FRASER (Peterborough West):

Would it not be wise to put in paragraph (a) an addition indicating that -this would go back only three years?

Topic:   SUCCESSION DUTY ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

No; this is an entirely different thing. The gift to be regarded as property passing on the death must be made after April 29, if I remember correctly. But gifts are not covered by paragraph (a) of section 2. That paragraph covers something else, namely, property transferred by the deceased in his lifetime in contemplation of death. It would include some gifts, but something more than gifts is required under paragraph (a); it must be a gift -made in contemplation of death. That is regarded as property passing on the death, even though it may be made many years before such death.

Topic:   SUCCESSION DUTY ACT
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NAT

Gordon Knapman Fraser

National Government

Mr. FRASER (Peterborough West):

Then the government could go back even thirty years? The Ontario government has done that, and it does not seem fair.

Succession Duty Act

Topic:   SUCCESSION DUTY ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

As I said before, the hon. member is talking about something which is different.

Topic:   SUCCESSION DUTY ACT
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NAT
LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes, he is talking about gifts made, whether in contemplation of death or otherwise. I am quite sure that under the Ontario act gifts are regarded as property passing on the death, even though they were made many years ago. I believe that those are the investigations to which the hon. member refers. The instances in connection with property transferred by a deceased in his lifetime in contemplation of death would be very few in number, and it would be extremely difficult to prove what was transferred or made in contemplation of death unless it were done comparatively recently. But there is no limitation as to time.

Topic:   SUCCESSION DUTY ACT
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NAT

Douglas Gooderham Ross

National Government

Mr. ROSS (St. Paul's):

Resolution 2 (g) refers to "annuities or other interests purchased or provided by the deceased to the extent of the beneficial interest arising on his death." It would seem that a tax is here to be paid in respect of succession duties, both on capital and on interest, in addition to income tax. It is true that annuities are taxable under the income tax legislation?

Topic:   SUCCESSION DUTY ACT
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LIB
NAT

Douglas Gooderham Ross

National Government

Mr. ROSS (St. Paul's):

And according to this resolution they are again taxable under the succession duty provisions. Is there not some conflict in regard to what is capital in the passing and what is income? It seems to me that only the interest on annuities should be subject to income tax, or there should be no tax on the annuities.

Topic:   SUCCESSION DUTY ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

The annuities taxed here

are those beginning at the date of death. They are annuities after the death, payable to someone after the decease. The deceased is not taxed on those for income tax.

Topic:   SUCCESSION DUTY ACT
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NAT
LIB
NAT

Douglas Gooderham Ross

National Government

Mr. ROSS (St. Paul's):

It looks as if the government is taxing the succession in the form of succession duty and then taxing it again by way of income from year to year.

Topic:   SUCCESSION DUTY ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That is correct. If $100,000 passed to a beneficiary he would be taxed on the $100,000 under the Succession Duties Act, and he would be taxed on the income from that $100,000, as the years went by, by way of income tax. '

Topic:   SUCCESSION DUTY ACT
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Resolution agreed to. 3. That the rates of taxation be based upon the following factors, namely:-[DOT] (a) The "aggregate value" of the succession, that is to say, the fair market value of all property, wherever situated, owned by the deceased at the time of his death together with the fair market value of the properties mentioned in paragraph two of this resolution, after funeral expenses and debts are deducted therefrom; (b) The value of the individual property or benefit passing to each successor; and (e) The relationship, if any, existing between the successor and the deceased.


NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

Do "funeral expenses"

include medical expenses prior to death?

Topic:   SUCCESSION DUTY ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Ordinarily medical expenses would be included in debts. Funeral expenses and debts may be deducted. The amount owing to the doctor would be a debt.

Topic:   SUCCESSION DUTY ACT
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May 20, 1941