Succession duty—A brief history

Sir Thomas McIlwraith, one of Queensland's Treasurers, believed that 'it was a fair proposal that when a man died leaving money, a certain portion of it should go to the country in which that money was accumulated. There was no better period at which that portion of money could be taken than after the man had died and had bequeathed the money to his heirs or somebody else.'

However, not everyone shared his opinion—many people were afraid that they would have to pay duty twice, as both England and Australia charged succession duty. There was also a great deal of debate about the amount of duty that Queensland charged compared to other states, and whether or not this stopped people from other states investing in Queensland.

In 1895, The Department of Justice allowed the Northern and Central districts to assess succession duty locally (instead of in Brisbane). The rate of succession duty payable depended on who received the property, and the value of the property.

By 1949, the Succession Duties Branch had 23 staff.

Succession duty was abolished on 1 January 1977. Queensland was the first state to abolish succession duty. 

A study on interstate migration by Philip J. Grossman found that Queensland's population growth during the first three years after abolishing death duties was an average 0.2 per higher due to migrants avoiding the death duties of the other five states.

Succession duties in Queensland were governed by the following Acts:

• The Succession and Probate Duties Act 1892
• The Succession Act Amendment Act 1895
• The Succession and Probate Duties Amendment Act 1895
• The Succession and Probate Duties Act 1904
• The Succession Act 1906
• The Succession and Probate Amendment Act 1906.

The Succession and Gift Duties Abolition Act 1976 abolished succession duty on successions vesting after 1 January 1977.

In 1899, the rates of succession duty were as follows:

Amount of estate	Rate of duty
£1 and under £200	No duty
£200 and under £1000	2%
£1000 and under £2500	3%
£2500 and under £5000	4%
£5000 and under £10000	6%
£10000 and under £20000	8%
£20000 and upwards	10%

For a wife, husband or lineal issue of predecessor, duty was payable at half the rate listed above.

For a stranger in blood, or a charitable institution, duty was payable at double the rate listed above.

Succession duty was a controversial tax—the following newspaper articles (taken from The Brisbane Courier) show some of the opinions of the time.

8 September 1892

In his resolutions for increasing the succession duties Sir Thomas McIlwraith has almost universal approval, for no taxation falls so lightly as imposts upon inherited property. The concessions made to blood relations, and the double duty put upon windfalls to 'strangers in blood' it is impossible to object to. Perhaps the only serious disadvantage of succession duties is their uncertain productiveness in any particular year. The law of averages will of course ultimately correct anomalies, and if the increased rate of succession duty does not tempt to over-sanguine estimates, it may be very handy to future Treasurers in making up unexpected deficiencies under more usually certain heads of revenue.

22 November 1895

Mr. Byrnes had still another legislative infant—the Succession and Probate Duties Bill. Although of vital importance, the scope of the bill was simple enough, and laid down a principle that property situated in Queensland shall he taxable and liable to succession duty, no matter where the person dying may have been domiciled. On the other hand, if a person dying in Queensland had his property in other countries his estate would be exempted as far as the Queensland tax-gatherer was concerned. The only members who thought it necessary to speak were Messrs. Foxton, Powers, and Callan, the two former of whom, while not seriously opposing the bill, were quite sure they could improve it in Committee. The second reading was agreed to on the voices.

2 August 1897

Taken from an interview with the Hon T.J. Byrnes

'We all know that that is a form of taxation adopted in most countries. I believe that in this country it was adopted by Pitt, who got the idea from Holland, and he adopted it merely as a temporary expedient to raise money for the great Napoleonic war. But, like most taxation raised merely for temporary purposes, it came to stay. It is rather a singular illustration of that general principle of non-interference with taxation of this sort that although the present party in power in England strongly opposed the last imposition of death duties, now that they are in power their Chancellor of the Exchequer seems to take the greatest possible pleasure in deriving a considerable revenue from that source. It only shows that what is once given to the Treasury is given to the grave. You don't get much back from it. It is a convenient form of taxation in one way, that on the face of it it does not appear to press hardly upon anybody. Dead men tell no tales—they cannot complain—and the persons generally who inherit the property are in the position of what we call in law "volunteers"—that is to say, having a beneficence which, had, the dead man intended otherwise, they might not have received. There is a danger in this taxation that it will be resorted to more and more by necessitous chancellors, and yet, of course, it is really a severe tax on property and on capital. To a moderate extent, perhaps, it is legitimate; but I am only painting out how easily, and with what a plausible reason, such a system of taxation can be abused.'

13 September 1898

The discussion in the Chamber of Commerce yesterday on this subject shows that business men are smarting under a sense, if not of injustice, at least of unwisdom, in the Queensland succession duties. They complain both that these duties are unreasonably heavy compared with the other colonies, and that on occasion they are exacted twice over. We are disposed to put aside with scant courtesy the 'democratic' theory, referred to at yesterday's meeting, that everything left by a man, over and above sufficient provision for his family, is fair game for the State, and that therefore the heaviest duties consistent with such provision should be exacted. Of course on such a theory the exactions complained of by the Chamber of Commerce are matters for congratulation, and should be increased rather than lessened. The economic folly of such a course lies on the surface. Like the entire class of theories of which it is a specimen, it kills the goose that lays the golden egg. It lessens the motive for making money, inasmuch as it lessens the possibility of keeping money. It discourages activity with the individual and investment from the outsider.

11 July 1899

Taken from statements by A.J. Carter (the Chairman of the Brisbane Chamber of Commerce)

He said it was most important that something should be done in the direction of reducing the duties exacted in Queensland. Now that was all very well for the sake of catching, as was intended, certain rich men who wore resident in the colony but it had a far-reaching effect. People would not invest money in Queensland when they knew that in the event of death they would be taxed to such an enormous extent as this. If they left their money to strangers double the duty, or 20 per cent, was exacted. When he was in Sydney the other day a very wealthy man called on him to expressly point this out. This gentleman was worth several millions of money, and had very considerable interests in Queensland, and he told him (Mr. Carter) that he had been compelled to alter his will and leave all his Queensland property absolutely to his wife, In order to save the iniquitous tax of our succession duties. He further said that a mortgage of £80,000 was being arranged on a Queensland property, but when the gentleman who was advancing the money heard what our succession duties were he threw the whole matter up at once. It was not likely that he was going to risk 10 per cent or 20 per cent in Queensland when New South Wales only exacted 3 per cent. The result of these high duties would be to prevent people investing in companies or shares where the head offices of the companies were in Queensland.

This letter to the editor was published in The Brisbane Courier on 28 August 1895. 

Sir,

It is pleasing to observe, from the reply given by the Attorney-General to Mr O'Connell's question in the House, that the Government have under their consideration the question of reciprocity with the home authorities in the matter of succession duties. It may not be generally known that under existing laws duty is claimed in some cases upon personalty (and this includes the proceeds of life policies) both in England and in the colony. Under a clause of the Finance Act passed last year in England, the British Government are prepared to reciprocate with any colony adopting the necessary measures, so that by mutual concession payment of such double duty will be avoided. I understand that New Zealand has already taken the required steps, and it will be matter for congratulation when our own colony deals similarly with the matter.

I am, sir, &c,

27th August. J. F. W.