Grubb v Commissioner of Taxes (Tas) [1948] HCA 42

High Court of Australia Latham C.J. Rich and McTiernan JJ. Grubb v Commissioner of Taxes (Tas) [1948] HCA 42

ORDER Appeal allowed. Order of Supreme Court discharged. Declare that duty is assessable only in respect of the excess of the amount of the moneys received under a policy over the surrender value of the policy at the time of the death of Percival Beaumont Grubb in proportion to the amount contributed or provided by the said deceased for the provision of the policy. Costs of appellant in Supreme Court to be paid by respondent. No order as to costs of appeal.

Cur. adv. vult.

Dec. 14 Latham C.J.

The Deceased Persons Estates Duties Act 1931-1942 Tas., s. 5 (2), includes within the estate of a deceased person upon which duty is payable under the Act as "notional estate":—"XI. Any annuity or interest purchased or provided by such person, either by himself alone or in concert or by arrangement with any other person, to the extent of the beneficial interest accruing or arising by survivorship or otherwise on the death of the deceased, and in proportion to the amount, if any, provided or contributed by such person for the purchase or provision of such annuity or interest." The Commissioner of Taxes has included in the dutiable estate of Percival Beaumont Grubb deceased the proceeds in whole or in part of certain life policies upon his life. Three of the policies were taken out by his wife with the National Mutual Life Association of Australasia Ltd. They were:—

(1) Policy No. 248854 for £2,000 payable on death, with a provision that if upon the death of the life assured the association should not have notice of anything in any way affecting the assured's (that is the wife's) absolute ownership of the policy, the policy moneys might be applied in payment of duty payable on the issue of probate of the will of the life assured (the husband). This policy was taken out on 5th July 1923 and by arrangement with the association was converted into a fully-paid policy for £144 on 23rd June 1926. The husband paid all the premiums on the policy. The insurance company paid upon his death £309 14s. under the policy. The whole of this sum has been included by the commissioner in the dutiable estate.