Re Barnes: 1939

A gift was made within three years of death. Under estate duty law it fell to be treated as property passing on the death. The deceased’s estate was heavily insolvent with a deficit of over andpound;90,000 and the executrix claimed that the aggregate of the virtually negligible personal estate and the preceding gift should be reduced by the total amount of the debts.
Held: ‘I am unable to agree with the construction of s.7, sub-s. I, contended for by the appellant. I think the words of the section contemplate liabilities of the estate which are met out of the estate, and I think that the last three lines of s.7, sub-s 1, in their natural meaning are inconsistent with the appellant’s case. I do not see how, in determining the value of an estate, allowance can be made for debts beyond the value of the assets out of which the debts are to be met. It is an unnatural use of words, in my view, to speak of making an allowance for a minus quantity in determining value. The appeal will therefore be dismissed, with costs.’
References: [1939] 1 KB 316
Judges: Lawrence J
Statutes: Finance Act 1894 7
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Last Update: 27 November 2020; Ref: scu.221018