Maurice Boisvert:—This is an appeal from an assessment dated October 11, 1970 wherein a tax in the sum of $83,264.81 was levied under the Estate Tax Act (SC 1958, c 29 as amended).
The appeal was heard at Toronto, Ontario on September 9, 1971 by the Tax Appeal Board as it was then constituted.
The question to be decided revolves around the interpretation of the meaning of paragraphs 7(1 )(a) and (b) of the above-mentioned Act which read as follows:
7. (1) For the purpose of computing the aggregate taxable value of the property passing on the death of a person, there may be deducted from the aggregate net value of that property computed in accordance with Division B such of the following amounts as are applicable:
(a) the value of any property passing on the death of the deceased to which his spouse is the successor that can, within six months after the death of the deceased or such longer period as may be reasonable in the circumstances, be established to be vested indefeasibly in his spouse for the benefit of such spouse, except any such property comprising a gift made by the creation of a settlement or the transfer of property to a trustee in trust;
(b) the value of any gift made by the deceased whether during his lifetime or by his will that can, within six months after the death of the deceased or such longer period as may be reasonable in the circumstances, be established to be absolute and indefeasible and that was made by him by the creation of a settlement under which
(i) the spouse of the deceased is entitled to receive
(A) all of the income of the settlement that arises after the death of the deceased and before the death of such spouse, or
(B) periodic payments in ascertained amounts or limited to ascertained maximum amounts, to be made at intervals not greater than twelve months, out of the income of the settlement that arises after the death of the deceased and before the death of such spouse, or, if that income is completely exhausted by those payments, out of the income and capital of the settlement, and
(ii) no person except such spouse may receive or otherwise obtain, after the death of the deceased and before the death of such spouse, any of the capital of the settlement or any use thereof, or any of the income of the settlement to which such spouse is entitled or any use thereof,
or by the transfer of property to a trust that at the time of the transfer was a settlement to which subparagraphs (i) and (ii) apply, the creation of which constituted a gift inter vivos by him to his spouse that was exempt from tax under Part IV of the Income Tax Act by virtue of paragraph (e) of subsection (1) of section 112 thereof;
The facts are covered by an agreed statement of facts which reads as follows:
1. Norman Wright Devitt (hereinafter referred to as the deceased) died on or about the 15th day of May, 1969.
2. The deceased appointed the appellants herein to be the executors and trustees of his Will.
3. The Last Will and Testament of the deceased provided, inter alia, as follows:
“I GIVE, DEVISE AND BEQUEATH all my estate of every nature and kind whatsoever unto my said Trustees upon the following trusts:
1) to allow my said wife, MARGARET OLIVE, to occupy and use as a home whatever house and lands I may own and be using as a home at the time of my death, together with all chattels including furniture, equipment, accessories, consumable stores, and articles of domestic and household use or ornament therein or used in connection therewith, until she re-marries or until she notifies my Trustees that she desires to vacate the premises, or until her death, whichever event first occurs, whereupon the said house and lands shall be sold or otherwise dealt with and distributed by my Trustees as part of the residue of my estate and in the event of the termination of her occupancy otherwise than by her death, she shall have the privilege of taking, within one month after such event, for her own use absolutely, all or some of the said chattels, any chattels not so taken to be sold or otherwise dealt with by my Trustees as part of the residue of my estate. All taxes, insurance, repairs and any other charges or amounts necessary for the general upkeep of the said house, lands and chattels shall be paid out of my general estate during the occupancy thereof by my said wife under this paragraph, and my Trustees may in their uncontrolled discretion make such payments or any of them out of capital or income, and in such proportions as they think fit, partly out of capital and partly out of income.
6) If my said wife survives me for a period of thirty days, my residuary estate shall be divided and distributed as follows:
a) Fifty per cent of my said residuary estate shall be paid to my said wife for her own use absolutely;..
4. The children of the deceased referred to in his Will are alive.
5. The wife of the deceased, the said Margaret Olive Devitt, one of the appellants herein, is presently alive, and at all times material to this appeal has occupied and used as a home the house, lands and furniture referred to in the Will of the deceased as hereinbefore set out in paragraph 3.
The deceased, Norman Wright Devitt, passed away on May 15, 1969 at the age of 83. He was separate as to property and was survived by Margaret Olive Devitt, his wife. On June 18, 1865 he had made the following will:
THIS IS THE LAST WILL AND TESTAMENT of me, NORMAN WRIGHT DEVITT, of the City of Toronto, in the County of York, Manager.
I. I HEREBY REVOKE all Wills and testamentary dispositions of every nature or kind whatsoever by me heretofore made.
ll. l APPOINT my wife, MARGARET OLIVE, and LAURENCE GEORGE GOODENOUGH, of the City of Toronto, in the County of York, Queen’s Counsel, to be the Executors and Trustees of this my Will. In the subsequent clauses of this my Will, the expression “my Trustees” (wherever the words permit) shall mean and include the Executor or Executrix or Trustee or Trustees for the time being, whether original, additional, surviving or substituted.
Hl. I GIVE, DEVISE AND BEQUEATH all my estate of every nature and kind whatsoever unto my said Trustees upon the following trusts:
1. To allow my said wife, MARGARET OLIVE, to occupy and use as a home whatever house and lands I may own and be using as a home at the time of my death, together with all chattels including furniture, equipment, accessories, consumable stores, and articles of domestic and household use or ornament therein or used in connection therewith, until she re-marries or until she notifies my Trustees that she desires to vacate the premises, or unitl her death, whichever event first occurs, whereupon the said house and lands shall be sold or otherwise dealt with and distributed by my Trustees as part of the residue of my estate and in the event of the termination of her occupancy otherwise than by her death, she shall have the privilege of taking, within one month after such event, for her own use absolutely, all or some of the said chattels, any chattels not so taken to be sold or otherwise dealt with by my Trustees as part of the residue of my estate. All taxes, insurance, repairs and any other charges or amounts necessary for the general upkeep of the said house, lands and chattels shall be paid out of my general estate during the occupancy thereof by my said wife under this paragraph, and my Trustees may in their uncontrolled discretion make such payments or any of them out of capital or income and, in such proportions as they think fit, partly out of capital and partly out of income.
2. WITH RESPECT to a mortgage dated September 1, 1964, registered as Number 57908 in the Registry Office for the District of Nipissing, on September 18, 1964, between Jean I Gunn, Widow, as Mortgagor, and myself as Mortgagee, for the principal amount of $10,000.00 and interest as therein stipulated, and in respect of which no payment for principal or interest has been made, to take no steps to enforce payment of the said principal or interest or of any instalments thereof, until the death of the said Jean I Gunn, she being a niece of mine, and upon her death, to then call in and collect, by court proceedings, if necessary, the principal and interest payable under the said mortgage, provided that if as a result of such proceedings or otherwise my estate becomes entitled to and has received the proceeds of a sale (including a sale after foreclosure) of the mortgaged property in an amount which is in excess of the claim of my estate for principal, interest and costs under the said mortgage, the amount of such excess shall be paid and transferred by my Trustees to the daughter of the said Jean I Gunn, and otherwise the said proceeds shall be distributed as part of my residuary estate.
3. Subject to the provisions of the preceding paragraphs 1 and 2 to use their discretion in the realization of my estate, with power to my Trustees to sell, call in and convert into money any part of my estate not consisting of money at such time or times, in such manner and upon such terms, and either for cash or credit or for part cash and part credit as my said Trustees may in their uncontrolled discretion. decide upon, or to postpone such conversion of my estate or any part or parts thereof for such length of time as they may think best, and I hereby declare that my said Trustees may retain any portion of my estate in the form in which it may be at my death (notwithstanding that it may not be in the form of an investment in which trustees are authorized to invest trust funds, and whether or not there is a liability attached to any portion of my estate) for such length of time as my Trustees may in their discretion deem advisable and my Trustees shall not be held responsible for any loss that may happen to my estate by reason of their so doing.
4. To pay out of the capital of my general estate my just debts, funeral and testamentary expenses and all succession duties, inheritance, estate and death taxes, whether imposed by or pursuant to the law of this or any province, state, country or jurisdiction whatsoever, that may be payable in connection with any insurance on my life or any gift or benefit given by me either in my lifetime or by survivorship or by this my Will or any codicil thereto.
5. To pay to the MEMORIAL FUND of HIGH PARK UNITED CHURCH the sum of FIVE THOUSAND DOLLARS ($5,000.00).
6. If my said wife survives me for a period of thirty days, my residuary estate shall be divided and distributed as follows:
(a) Fifty per cent of my said residuary estate shall be paid to my said wife for her own use absolutely;
(b) The balance of my said residuary estate shall be divided into as many equal shares as there are daughters of mine alive at the time of my death, provided that if any daughter of mine shall be then deceased but Shall have left a child or children then alive, such daughter shall be considered as being alive for the purposes of such division into equal shares;
(c) Each such share in respect of any deceased daughter shall be divided into as many equal shares as there are children of hers alive at the time of my death;
(d) One equal share determined under paragraph (b) shall be transferred and paid to each daughter alive as aforesaid;
(e) One equal share determined under paragraph (c) shall be transferred and paid to each grandchild who shall have attained the age of twenty-one years;
(f) The share, including income therefrom, of any grandchild who shall not have attained the age of twenty-one years; PROVIDED THAT if such grandchild should die before attaining the age of twenty-one years, the share or any balance thereof, including income, shall be added in equal portions to the share or shares of his brothers and sisters who survive such deceased grandchild and be dealt with as part thereof; PROVIDED FURTHER that if no such brother and sister survive so as to take up such share or balance, it shall be paid to any daughter of mine who survives such brothers and sisters;
7. If my said wife should predecease me, or surviving me shall die within a period of thirty days following my decease, then the whole of my residuary estate shall be divided, dealt with and distributed in the manner set forth in paragraphs (b), (c), (d), (e) and (f) of clause 6 of this Section III.
8. My Trustees shall have the following further powers:
(a) To receive and hold the share and the income arising therefrom that shall not for the time being have become transferable to any person or persons under the trusts of this my Will, and to pay such income and (or) share, or so much of such income and (or) share as my Trustees in their absolute discretion shall think fit, for the benefit, maintenance and education of the person or persons presumptively entitled thereto;
(b) To invest moneys of my estate in any investments which my Trustees shall deem reasonably secure and likely to return fair annual income, but not of a speculative character, my Trustees not being limited to investments in which Trustees are by law authorized to invest, and with power to retain investments made by me in my lifetime as long as my Trustees shall think proper, and to re-invest the proceeds of the same or any part thereof in similar securities; and I exonerate my Trustees from any responsibility for loss or damage which may be occasioned by the retention of investments in the form in which the same shall be at the time of my death or by reason of investments made by my Trustees in good faith in securities other than those authorized by law;
(c) To appropriate and partition any real and personal property forming part of my residuary estate to or towards the share of any person or persons therein under the trusts hereinbefore contained, and to charge any share with such sums by way of equality or partition as my Trustees may think fit and for such purposes to fix the value of any real or personal estate so appropriated as my Trustees shall think fit, and every such valuation, appropriation and partition shall be binding upon all persons interested under this my Will;
(d) So long as any real or leasehold property forming part of my residuary estate shall remain unsold, to be at liberty to let or demise the same from month to month, year to year or for any term of years, and subject to such covenants and conditions as my Trustees shall think fit, to accept surrenders of leases and tenancies, to expend money in repairs and improvements, and generally to manage the property and to exercise al! or any of such powers and discretions without any order of the Court or consent of any person claiming under this my Will; and further, notwithstanding the trusts hereinbefore declared by this my Will of and concerning my residuary estate, to raise out of the capital or income of my residuary estate any sums from time to time required and in the opinion of my trustees properly raisable thereout for the exercise of any of the powers and discretions under this sub-clause;
(e) to make any payments for any person under the age of twenty-one years to his or her parent or guardian, whose receipt shall be a sufficient discharge to my Trustees;
9. THE PROVISIONS herein made for my said wife are intended by me and shall be accepted by her in lieu of dower.
The above will was probated in the Surrogate Court of the County of York on August 19, 1969. Mrs Devitt (the testator’s wife) and Laurence George Goodenough were appointed executors and trustees. On or about August 7, 1969, in their capacity of executors, the appellants filed an estate tax return with the Department of National Revenue, in which they reported the aggregate net value of the estate as being in the amount of $673,167.79.
On April 27, 1970 the assessor calculated the aggregate total value of the estate as follows:
Declared Total Value $673,167.79 Add: Valuation changes per form ET85 attached 36,530.08
Revised Total Value $709,697.87 Less: General Debts as filed $ 9,101.91
Add: Accounting Fees prior to death 325.00 9.426.91
Revised Aggregate Net Value $700,270.96 Less exempt property — Section 7(1) 5,000.00
Revised Net Value 695,270.96 Less: Exemption for Spouse and Children
Spouse — Section 7(1)(a) as per schedule 214,611.72
Children — Section 7(1 )(c)
2 children over 26 years 20,000.00 234,611.72
REVISED AGGREGATE TAXABLE VALUE $460,659.24
CALCULATION OF ESTATE TAX
Estate Sum Calculation — Section 8(2)(a)(i) $460,659.24 Estate Sum $460,659,24 Tax on Estate Sum $169,529.62 Gift Sum Calculation — Section 8(2)(b) 20,000.00 $20,000.00 Tax on Gift Sum nil Estate Tax Before Abatement and Credits $169,529.62 Less: Provincial Tax Abatement $84,764.81 Foreign Tax Credit 84,764.81 ESTATE TAX ASSESSED $ 84,764.81 DISTRIBUTION Aggregate Net Value $695,270.96 Less: PV Succession Duty applicable $55,967.83 Less: Estate Tax 84,764.82 140,732.64 $554,538.32 Widow — Insurances $ 5,599.64 Gift inter vivos 20,000.00 /2 Residue 189,012,11 $214,611.72 Gift Inter Vivos — Niece 6,000.00 Daughters (2) Gifts inter vivos $ 6,000.00 /2 Residue 189,012.10 195,012.10 Widow and Daughters Real Estate and Household goods 138,914.50 $554,538.32 CALCULATION OF SUCCESSION DUTY DEDUCTIBLE FROM RESIDUE
Re assets payable to widow not exempt under Section 7(1 )(a)
or 7(1 )(b) of Estate Tax Act.
Gifts Inter Vivos $ 8,595.00 Interest in Income 127,993.09 $136,588.09 Tax @ 13.18% $ 18,002.31 Surtax @ 15% thereon 2,700.35 20,702.66 Propn, of Section 7(2a) exemption applicable 20,702.66 x 4,743.35 36,699.66 1,541.73 $ 19,160.93 Immediate payment $ 1,205.73 Payable by instalments (10 @ 1759.52) 17,955.20 $ 19,160.93 Present Value — Immediate payment $ 1,205.73 1,795.52 x 8.11090 14,563.28 $ 15,769.01 Re assets payable to daughters — Immediate payment 37,691.16 Re assets payable to niece — 2,507.66 Total deductible residue $ 55,967.83
It is the appellants’ contention that Mrs Devitt was entitled to the benefit of the exemption provided for in paragraphs 7(1 )(a) and (b), while the respondent contends that she has no right to such exemption. With respect to the debated question, the respondent stated his position in his Reply to Notice of Appeal which alleged:
2. In assessing the Appellants, the Minister acted upon the following assumptions:
(a) Norman Wright Devitt (hereinafter referred to as the deceased) died on or about the 15th day of May, 1969;
(b) the deceased appointed the Appellants herein to be the executors and trustees of his Will;
(c) the Last Will and Testament of the deceased provided, inter alia, as follows:
See Section Ill, 1 and 6(a) hereinbefore reproduced in the Will.)
(d) the house as aforesaid was not vested indefeasibly in the deceased’s spouse;
(e) the aforesaid house comprised a gift made by the creation of a settlement;
(f) the aforesaid house was transferred to the Trustees of the Will of the deceased in trust.
3. The respondent relies, inter alia, upon Sections 2(1), 3, 7(1 )(a) and 7(1 )(b) of the Estate Tax Act, RSC 1958, as amended.
4. The Respondent submits as follows:
(a) the house as aforesaid could not become immediately vested indefeasibly in the deceased's spouse and the house constituted property comprising a gift made by the creation of a settlement or the transfer of property to a Trustee in trust, within the meaning of Section 7(1)(a) and accordingly, no such exemption may be claimed pursuant to the provisions of 7(1 )(a);
(b) the settlement does not fulfil the requirements of Section 7(1)(b) of the Estate Tax Act in that the settlement was not absolute and indefeasible in the deceased’s spouse and other persons except such spouse could receive or obtain after the death of the deceased and before the death of said spouse of the capital of the settlement.
The appellants submitted the following in their Notice of Appeal:
3. The said deceased was survived by his said wife, and two daughters, all of whom are now living. There were no daughters who predeceased him leaving a child or children.
4. Under paragraph 6(a) of Section III of the said Will fifty per cent (50%) of the residuary estate is given to the deceased’s wife.
The sole question to be determined is whether, under paragraphs 7(1 )(a) and (b), Mrs Devitt received the value of the property which passed on the death of her husband from his own to her own.
Paragraphs 58(1 )(o) and (p) say as follows:
58. (1) In this Act,
(o) “property” means property of every description whatever, whether real Or personal, movable or immovable, or corporeal or incorporeal, and without restricting the generality of the foregoing, includes any estate or interest in any such property, a right of any kind whatever and a chose in action;
(p) “property passing on the death” includes property passing either Originally or by way of substitutive limitation, either certainly or contingently and either immediately on the death or after an interval determinable by reference to the death, and without restricting the generality of the foregoing, includes any property the value of which is required by this Act to be included in computing the aggregate net value of the property passing on the death;
What is meant by “passing on the death” was interpreted by Lord Tomlin in A-G v Lloyd’s Bank, Limited, [1935] AC 382, as follows:
. . . if there has been a passing of property on the death there must have been a passing or shifting of the beneficial interest from one to another.
In A-G v Milne, [1914] AC 765, Lord Parker said:
“Passing on the death” has been held to mean some actual change in the title or possession of the property as a whole which takes place at the death.
Now looking at Mr Devitt’s will, it is to be seen, in the first place, that Mrs Devitt had received the right to occupy and use a house which was the home of the spouses at the death of the de cujus. That right was extended to her for her lifetime or until she decided otherwise, which did not take place. The trustees and executors could not deprive her of that right.
In the second place, Mrs Devitt, “in the event of the termination of her occupancy otherwise than by her death”, had the right within one month after such event, of taking, for her own use absolutely, “all or some of the chattels”.
In the third place, the de cujus expressed his will by the following words:
6. If my said wife survives me for a period of thirty days, my residuary estate shall be divided and distributed as follows:
(a) Fifty per cent of my said residuary estate shall be paid to my said wife for her own use absolutely;
(The italics are mine.) I am of the opinion that at Mr Devitt’s death, the above property passed from Mr Devitt to Mrs Devitt absolutely and in- defeasibly, through the trustees who were appointed by the testator to carry out the directions and requests in his will. The trustees had only the administration of the estate for the benefit of the heirs. They had no power to make defeasible the property given by the deceased to his wife. It is not in vain that the testator, twice in his will, used the word absolutely.
Reference is had to the appeal of James J Halley, Executor of the Estate of William F Halley v MNR, [1963] Ex CR 372; [1963] CTC 108; 63 DTC 1090. Thurlow, J had to deal with a situation similar to the one shown in the instant appeal but having regard to a gift to the Roman Catholic Episcopal Corporation of St John’s. The section involved was 7(1 )(d) of the Estate Tax Act, then in force in 1963, that is to say before the new paragraphs 7(1 )(a) and (b). William F Halley had appointed the executor of the estate as trustee. In that appeal the Minister considered that the word absolute used in the enactment denoted “certainty that the gift will come into possession and that as so used the word means both vested and indefeasible”. Thurlow, J cited Lord Cottenham, LC in Lassence v Tierney (1849), 1 Mac & G 551; 41 ER 1379. At page 561 Lord Cottenham said:
If a testator leave a legacy absolutely as regards his estate, but restricts the mode of the legatee’s enjoyment of it to secure certain objects for the benefit of legatee — upon failure of such objects, the absolute gift prevails; but if there be no absolute gift as between the legatee and the estate, but particular modes of enjoyment are prescribed, and those modes of enjoyment fail, the legacy forms parts of the testator’s estate, as not having in such event been given away from it.
The learned Judge also cited the dictum of Lord Davey in Hancock v Watson, [1902] AC 14. At pages 22 and 23 Lord Davey said:
The appellants’ second point is that the two-fifths alloted to Susan Drake on failure of the gift over goes to the next of kin of the testator, and not to Susan’s representatives as declared by the Court of Appeal. I confess to some surprise at hearing this point treated as arguable. For, in my opinion, it is settled law that if you find an absolute gift to a legatee in the first instance, and trusts are engrafted or imposed on that absolute interest which fail, either from lapse or invalidity or any other reason, then the absolute gift takes effect so far as the trusts have failed to the exclusion of the residuary legatee or next of kin as the case may be. Of course, as Lord Cottenham pointed out in Lassence v Tierney, if the terms of the gift are ambiguous, you may seek assistance in construing it — in saying whether it is expressed as an absolute gift or not — from the other parts of the will, including the language of the engrafted trusts. But when the Court has once determined that the first gift is in terms absolute, then if it is a share of residue (as in the present case) the next of kin are excluded in any event.
In other words, as between herself and the estate there is a complete severance and disposition of her share so as to exclude an intestacy, though as between her and the parties taking under the engrafted trusts she takes for life only.
Thurlow, J also referred to Adamson v Attorney-General, [1933] AC 257; Browne v Moody, [1936] AC 635; In re Williams; Williams v Williams, [1897] 2 Ch 12. After having made the above references, the learned Judge said at page 377 [113-14, 1092-3] (Halley):
There being more than one sense in which the word is commonly used the problem which the present case presents is to determine in what sense the word was used in Section 7(1)(d) of the Estate Tax Act and this, it appears to me, must be resolved by reference to the context, in which it is found. At the outset it may be observed that the context is not that of a deed or will but that of a taxing statute. In general the Act exacts a tax on the passing of property on death and is so worded as to include in the computation of the value of such property for the purposes of the statute both property alienated by the deceased during his lifetime by certain types of transactions and certain notional types of property as well in which the deceased never had any proprietary right, the whole without reference to the person or persons who become beneficially entitled thereto. But while the value of all such property is initially brought into the computation, the tax is imposed only in respect of the amount by which such value exceeds certain specified amounts which by Section 7 are permitted to be deducted, most of which amounts are also prescribed without reference to the person or persons who become entitled to any portion of the property. Only in respect of the amounts referred to in Section 7(1)(d) and Section 7(1)(h) does the identity of the recipient become material. Under the latter paragraph the value of property vesting in the Crown by es-cheat or as bona vacantia on the death of the deceased may be deducted from the aggregate. Under the former, with which this case is concerned, the value of property given to a charitable organization or to the Crown or to a public body performing a function of government may also be deducted. The intention of this provision is apparently to permit the deduction of the value of what is given to the particular recipients and with this in mind it seems to me that it is more natural to interpret the word “absolute”’ in the paragraph from the point of view of the recipient than from the point of view of the deceased and as referring to the irrevocable and undefeatable vesting of the subject matter of the gift in the recipient rather than to the unlimited extent of the interest given to the recipient. This interpretation is, I think, also supported by the concluding portion of the paragraph which reduces the deduction allowable in respect of such a gift by the amount of any tax levies which may be imposed on it or which may become payable by the donee on accepting it and to this extent limits the allowable deduction to the net value of the gift accruing to the donee. Moreover while I can see no reason why Parliament should have intended to draw a distinction between a gift of an unlimited interest and an indefeasible gift for a lesser interest and to permit deduction of the value in the one case but not in the other it is not difficult to understand that in authorizing the deduction of the value of a gift to such a body Parliament would be concerned to ensure that the deduction should not be permitted when because of the provisions attaching to the gift, the body referred to in Section 7(1 )(d) might never receive it. The word used is an apt one to make such a distinction and secure this object. I am accordingly of the opinion that the word “absolute” in Section 7(1)(d) should be interpreted as meaning vested and indefeasible.
Applying this interpretation to the facts of the present case, it is I think plain that the Roman Catholic Episcopal Corporation, St. John’s, did not become indefeasibly entitled on the death of the deceased to the residue given to it by paragraph 7 of the will and that because of this the gift cannot be established to have been “absolute” within the meaning of Section 7(1)(d).
Having in mind the above considerations I am of the opinion that the facts admitted for the purpose of the present appeal allow me to consider that the shares of Mr Devitt’s estate were vested absolutely and indefeasibly in Mrs Devitt and therefore the value under paragraphs 7(1 )(a) and (b) must be deducted from the aggregate net value of the estate.
Counsel for the respondent submitted that a devise in a will for lifetime or of a lesser interest to the spouse, comprises a settlement and rested his submission upon paragraph 58(1)(q) which states as follows:
58. (1) In this Act,
(q) “settlement” includes
(i) any trust, whether expressed in writing or otherwise, in favour of any persons, and, if contained in a deed or other instrument effected the settlement, whether or not such deed or other instrument was made for valuable consideration as between the settlor and any other person, and
(ii) any deed or other instrument under or by virtue of which a usufruct or substitution is created or any real property or estate or interest. therein stands limited to any persons by way of succession;
I disagree with the respondent’s submission because it contradicts paragraph 3(1 )(e) which says:
3. (1) There shall be included in computing the aggregate net value of the property passing on the death of a person the value of all property, wherever situated, passing on the death of such person, including, without restricting the generality of the foregoing,
(e) property comprised in a settlement whenever made, whether by deed or any other instrument not taking effect as a will, . . .
(The italics are mine.)
For all the above reasons, the appeal is allowed and the assessment is referred back to the Minister for reconsideration and reassessment based upon my finding.
Appeal allowed.