ESTATE DUTY.
No. 13 of 1940.
An Act to amend the Estate Duty Act 1914.
[Assented to 20th May, 1940.]
BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title and citation.
1.—(1.) This Act may be cited as the Estate Duty Act 1940.
(2.) The Estate Duty Act 1914, as amended by this Act, may be cited as the Estate Duty Act 1914–1940.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Schedule.
3. The Schedule to the Estate Duty Act 1914 is repealed and the following Schedule inserted in its stead:—
“THE SCHEDULE.
RATES OF ESTATE DUTY.
(a) Where the value for duty of the estate does not exceed Ten thousand pounds—Three pounds per centum.
(b)Where the value for duty of the estate exceeds Ten thousand pounds but does not exceed Twenty thousand pounds—Three pounds per centum increasing by three one-hundredths of one pound per centum for every complete One hundred pounds by which that value exceeds Ten thousand pounds.
(c) Where the value for duty of the estate exceeds Twenty thousand pounds but does not exceed One hundred thousand pounds—Six pounds per centum increasing by three two-hundredths of one pound per centum for every complete One hundred pounds by which the value exceeds Twenty thousand pounds.
(d) Where the value for duty of the estate exceeds One hundred thousand pounds but is less than Five hundred thousand pounds—Eighteen pounds per centum increasing by one two-hundredths of one pound per centum for every complete One thousand pounds by which the value exceeds One hundred thousand pounds.
(e) Where the value for duty of the estate is Five hundred thousand pounds or more—Twenty pounds per centum.”.
Application of amendment.
4. The amendment effected by this Act shall apply to the estates of deceased persons dying on or after the date of the commencement of this Act.
Overview
The Estate Duty Act 1940 was enacted to revise the existing Estate Duty Act 1914, addressing a need for updated and more structured estate duty rates. This Act was assented to by King George VI on 20th May 1940 and was introduced by the Australian Parliament, aiming to provide a clearer and more graduated system of estate duty rates based on the value of the deceased's estate. The Act seeks to ensure that the taxation of estates is both fair and reflective of the increasing value of assets, providing a graduated scale of duty that increases incrementally as the estate value rises. The Estate Duty Act 1940 applies to the estates of individuals who pass away on or after the Act's commencement date, thereby modernising the estate duty system in line with economic and societal changes of the time.
Scope and Application
The Estate Duty Act 1940 amends the Estate Duty Act 1914 and applies to estates of deceased persons who pass away on or after the date the Act receives Royal Assent. The Act imposes estate duty on the estates of deceased persons based on the value of the estate, with the duty calculated according to specified rates outlined in the amended schedule. The duty rates increase progressively as the value of the estate exceeds certain thresholds, starting at three per centum for estates valued up to ten thousand pounds and rising to twenty per centum for estates valued at five hundred thousand pounds or more. The Act operates nationally, applying across the Commonwealth of Australia. There are no stated exclusions, exemptions, or thresholds in the provided text. The Act itself does not mention any subordinate instruments extending or restricting its application.
Key Provisions
The Estate Duty Act 1940 (sections 1–3) sets out the amendments to the Estate Duty Act 1914, introducing new rates of estate duty based on the value of the estate. The Act repeals the previous schedule and replaces it with a new one that specifies duty rates ranging from 3% to 20% depending on the estate's value. The amendment applies to the estates of deceased persons who pass away on or after the Act's commencement, which is the date it receives Royal Assent.
The operative sections of the Estate Duty Act 1940 establish a tiered duty structure. For estates valued up to £10,000, the duty is 3%. For estates between £10,001 and £20,000, the rate is 3% plus an additional 0.03% for each £100 over £10,000. For estates valued between £20,001 and £100,000, the rate is 6% plus an additional 0.032% for each £100 over £20,000. Estates between £100,001 and £500,000 are taxed at 18% plus an additional 0.012% for each £1,000 over £100,000. Lastly, estates valued at £500,000 or more are subject to a duty of 20%.
Under the Estate Duty Act 1940, the primary obligations fall on executors or administrators of estates. They are responsible for calculating the value of the estate and determining the applicable duty rate. Executors must then report this information to the relevant authorities and remit the duty within the specified timeframe. Failure to comply with these obligations may result in penalties or legal consequences.
Breach of the duties imposed by the Estate Duty Act 1940 can lead to various consequences. The Act does not explicitly state penalties or offences for non-compliance, but it is reasonable to infer that penalties could include fines or interest on unpaid duty. Additionally, failure to remit the duty or provide accurate information could result in legal action against the executor or administrator. While specific maximum penalties are not outlined in the Act, the implications of non-compliance could be significant, potentially including legal disputes or additional financial burdens on the estate.