In the first place, the total property comes out at £8,376,000,000 which is about £5,400,000,000 less than the estimate of private property arrived at in Chapter 5. This is not surprising. There can be no question that a considerable amount of property evades the Death Duties. On page 78 will be found details, taken from the Reports of the Inland Revenue Commissioners, of the various descriptions of property which passed in the year 1908-9. Take the item "Household Goods, Apparel, etc." It amounts to but £6,000,000. Now, in Chapter 5, as the reader will remember, I formed an estimate of £550,000,000 as the value of such effects, this estimate being £400,000,000 lower than that made by Sir Robert Giffen twenty years ago. The £6,000,000 is officially described as relating to "household goods, pictures, china, linen, apparel, etc." Multiplied by 30 it gives but £180,000,000, which is certainly £300,000,000 less than it should be. It will be seen that "Book Debts, Stock, Goodwill, etc.," figure for only £17,000,000 in 1908-9, pointing to under-estimation. Similar undervaluation probably obtains in regard to other items of property, while bonds to bearer frequently escape taxation. Of investments in places overseas a very great part undoubtedly escapes death duty.
Another and most important point is that a considerable amount of property eludes the Death Duties through gifts by the living. The following figures are significant:—
COMPARISON OF (1) INCOME TAX ASSESSMENTS
AND (2) ESTATE ASSESSMENTS
| Gross Assessments to Income Tax. Million £ | Net Estates Reviewed for Death Duties. Million £ | |
| 1895-6 | 677.8 | 213.2 |
| 1896-7 | 704.7 | 215.8 |
| 1897-8 | 734.5 | 247.3 |
| 1898-9 | 762.7 | 250.6 |
| 1899-1900 | 791.7 | 292.8 |
| 1900-1 | 833.3 | 264.5 |
| 1901-2 | 867.0 | 288.9 |
| 1902-3 | 879.6 | 270.5 |
| 1903-4 | 902.8 | 264.1 |
| 1904-5 | 912.1 | 265.1 |
| 1905-6 | 925.2 | 272.2 |
| 1906-7 | 943.7 | 298.5 |
| 1907-8 | 980.1 | 282.3 |
| 1908-9 | 1010.0 | 270.9 |
It will be observed that there is a remarkable lack of correlation between the income tax and the death duty assessments. The former have grown most satisfactorily. The latter grew in the first few years of the operation of the Harcourt revised Death Duties and then became, for practical purposes, stationary. There can be no doubt that the explanation is to be found in the increase of gifts made inter vivos to avoid the payment of death duty, and that the estates reviewed in 1908-9 should have been nearer £400,000,000 than £300,000,000.
Parliament has tried to meet this avoidance by enacting (Finance Act of 1909, which was passed into law in 1910 after rejection by the Peers in 1909) that gifts inter vivos shall not be exempted from death duty unless made more than three years prior to the death of the giver.
The apparent discrepancy between the £8,376,000,000 arrived at on page 75 and the £13,700,000,000 arrived at on page 65 is therefore not an inaccuracy, but an accurate consequence of the facts referred to.
As it stands, then, the table on pages 74-75 represents the greater part, but not the whole, of the property of the persons to whom it relates. Nevertheless, it gives us as accurate an idea of the manner of distribution as though it dealt with the whole.