court was whether the legacy in trust was to pay estate duty, or only the crdinary duty payable when not especially exempted. It was held that the legacy was not liable for the estate duty, the court saying: "The testator meant by putting in the words 'subject to death duties' in this particular case merely to denote that the duties legally payable out of the property were to be paid, and that that particular legacy was not to be within the exemption clause which he contemplated making with regard to other legacies in the will. . . As a matter of construction, that what he obviously means is that this legacy is not to be free as the other legacies are, but that it is to bear its own legal incidents and to pay its own duty. Its own duty does not include the estate duty payable, which, as everybody knows, comes out of the personalty generally before the legacies are allocated."

In Re Palmer (1912) 106 L. T. N. S. (Eng.) 319-C. A., a testator, after making certain specific devises, devised the residue of his real property to trustees for sale and conversion, and to stand possessed of the "clear money" to arise therefrom upon the trusts to be declared of his residuary personal estate. He then gave a number of specific bequests and numerous pecuniary legacies, some by settlement and some absolutely, and thereafter directed that nine annuities of various amounts should be paid certain persons during their lives. Then followed a clause in which the testator said: "I declare that I intend to give all the legacies and annuities hereby bequeathed, and I direct that the same shall be paid or appropriated free from legacy duty, respectively." Then followed a bequest of his residuary estate to the trustees to pay the annuities and other sums directed paid, and a further direction to his trustees to "pay his funeral and testamentary expenses, debts, and legacies, and the annuities thereinbefore directed to be paid, and the duties on the legacies and annuities, as well as all settlement estate duty." By several codicils the testator revoked some gifts and be

queathed others in lieu thereof, and therein declared that he intended to give the legacies thereby bequeathed, and directed that they should be paid free of legacy duty, respectively. The question asked by the trustees upon an originating summons taken out by them was whether the pecuniary legacies and annuities given by the will were given free of estate duty, and whether they were given free of succession duty. It was held that both the estate and succession duties should be paid out of the residuary estate, including the estate duty upon the real estate devised to trustees for sale to hold the "clear" money devised therefrom upon the same trusts as the residuary personal estate.

In Re Waller [1916] 1 Ch. (Eng.) 153, a testator, after giving certain legacies, specific and pecuniary, “free of duty," bequeathed to his wife two pecuniary legacies and a life annuity, in each case without mention of the duty, and then other pecuniary legacies and life annuities "free of duty." Later he authorizes his trustees to appropriate so much of his residuary estate as would, by its "net income" pay the annuities therein before bequeathed. Under these provisions it was held that the widow took her annuity free from the settlement estate duty, which would have to be borne by the residuary estate, but that she would have to pay the legacy taxes upon both her annuity and the pecuniary bequests.

In Ferguson v. Ogilby (1862) 12 Ir. Ch. Rep. 411, a testator bequeathed a certain sum over which he had the power of appointment, to trustees upon trust to pay out of the interest an annuity to his son's wife, the residue of the interest to his granddaughter for life, and, at the death of the son's widow, the principal and interest to go to the granddaughter, if alive, but, if she be dead, to sink into the residue of the personal estate. Then follows a clause in which the testator says: "And with the exception of the said sum of £50,000 (over which he had power of appointment) so charged as aforesaid on my Pollipar estate, I hereby direct that all my just debts,

funeral and testamentary expenses, legacies and legacy duties, and such sums as I shall hereby bequeath

shall be paid and payable from and out of such parts or portions of my personal estate as shall not be hereby specially bequeathed." The testator then directs that all legacies be paid without any deduction for legacy or stamp duty, and makes another bequest in which he declares: "My will is that the duty on this bequest shall be paid as and in the same manner as that on the other legacies contained in my will." Then the will contains bequests of several other legacies, and another clause in which the testator says: "And I hereby direct that my executors shall pay the legacy duties payable on said legacies; and that all legacies hereby bequeathed be paid without any deduction whatever." The will then devises and bequeaths all the residue of the estate to a son of the testator. It was held that the legacy to the granddaughter was given free of legacy duty.

In Re King [1904] 1 Ch. (Eng.) 363, a testator gave two large legacies to two of his sons, "free of all duties," and to a daughter and two other sons a certain legacy each. The first two legacies and the daughter's legacy were settled for the benefit of the legatees. The testator then devised and bequeathed his residuary real and personal estate to trustees upon trust to sell and convert the same into money, and out of the proceeds thereof to pay his funeral and "testamentary expenses," debts, legacies, and the legacy duty thereon, with bequests of the residue. The daughter, while admitting that her legacy did not come within the clause wherein the testator directed some of the legacies to be paid "free of all duties," contended that the settlement duty upon her legacy should be paid out of the residuary estate, by reason of the fact that such a duty was one of the "testamentary expenses." It was held, however, that the testator's direction to pay "testamentary expenses" did not include a direction to pay the settlement estate duty upon the daughter's settled legacy, as this duty was not a

testamentary expense; and that this duty must be borne by the settled property itself.

In Jones's Estate (1902) 12 Pa. Dist. R. 83, 27 Pa. Co. Ct. 139, it is held that an executor is not required to pay the collateral inheritance tax on legacies out of the residuary estate, where the testator, after making the legacies, gives to a brother and sister "all the rest and residue of my estate after payment of the foregoing bequests and after payment of all taxes, costs, and expenses of whatever kind in the settlement of my estate." The court says: "The intention of the testator to impose said tax or charge upon the residuary estate is not sufficiently. clear to warrant such action."

In Burrows v. Cottrell (1830) 3 Sim. 375, 57 Eng. Reprint, 1038, a testator by his will, gave to two of his sisters an annuity or yearly sum of a certain amount, equally to be divided between them during their joint lives, "free from all taxes and stamp duties;" and, after the death of one of the sisters named, if the other should be still living, the testator gave and bequeathed such annuity to her for life, and at the end of the life estates the sum invested to be returned to the residue of the testator's personal estate. Subsequently, by a codicil, he revoked the annuity given to the sisters, and gave to them a "clear" annuity of a certain amount each, with benefit of survivorship, and the question propounded to the court was whether these latter annuities were given free from the legacy duty. It was held that the latter annuities were subject to the legacy duty.

In Stow v. Davenport (1833) 5 Barn. & Ad. 359, 110 Eng. Reprint, 823, a testator bequeathed an annuity of a certain amount, to be paid "clear of all taxes and deductions whatsoever," and to be a charge upon certain land. It was held that the annuitant took without deduction for the legacy tax, the court saying: "The legacy duty is clearly a tax; and, unless it be deducted, the annuity will not be paid clear of taxes. If the testator had intended to exempt it from the proportion of the taxes affecting the land, as the

land tax, or other future taxes of the like nature, he ought to have used some qualifying expression. As he has not done so, we must take his meaning to have been that no tax of any description should reduce the amount to be paid to the legatee."

2. As affecting income taxes. While it is competent to pass a gift free of income tax if the language of the will in that regard is sufficiently clear and strong, in a few cases it has been held that the income tax must be paid by the recipient, notwithstanding the fact that the execution provision expressly mentions taxes and duties. Most of the difficulty, however, has arisen over the word "deductions," where this word is used in the provision, as the courts hold that the income tax is not a deduction, because of the fact that it is payable by the recipient, and not by the executor or administrator, as are legacy and other transfer duties. And it should also be noticed in this group of cases that the supertax, a tax payable according to a graduated scale and on higher amounts than the income tax, is usually treated in the same manner as the income tax.

In Lovat v. Leeds (1862) 2 Drew. & S. 62, 62 Eng. Reprint, 545, a testator devised a house and lands to his wife for life, and directed that the trustees, out of the rents and profits from his other estate, should "pay and defray all taxes, parliamentary, parochial, or otherwise, affecting the same hereditaments;" and it was held that this direction made it the duty of the trustees to pay an income tax payable by the widow in respect to such hereditaments.

In Re Bates [1925] 1 Ch. (Eng.) 157, a testator, after bequeathing various specific legacies, gave his wife, out of the trust fund of his residuary estate, "such a sum in every year as, after deduction of the income tax for the time being payable in respect thereof, will leave a clear sum of" a certain amount, and, after directing that his trustees should pay out of his residuary estate all the duties payable in respect to any legacy or annuity

bequeathed free of duty, he created the trust fund of his residuary estate, out of which the wife was to receive "the said clear annual sum or annuity" bequeathed to her as aforesaid. The question before the court was whether the trust fund should pay any of the supertax assessed against the widow. It was held that the widow was not entitled to the payment of any sum in respect of the supertax, as no supertax was really payable in respect to the sum given by the will, but only in respect to the income of the widow.

In Re Saillard (1917) 2 Ch. (Eng.) 401-C. A., a testator directed payment out of the income of his estate of a certain sum per annum, to be paid "free of all duties" to a solicitor trustee for his services in acting as a trustee, and for so long as he should continue to act as trustee, and provided, also, that he should have the power to charge and be paid for professional and other charges. The trustee contended that payment should be made free of the income tax, but it was held that the annuitant should bear his own income tax, the court saying: "It was no doubt at one time thought that a testator could not by will give interests that would be free of income tax, and it was thought that a disposition of that sort would be contrary to the provisions of the income tax acts. That notion has now been held to be entirely erroneous; and it is simply a matter of construction of the will whether the testator has given the annuity, together with a sum equal to the income tax, to the annuitant, so that the annuitant may receive the annuity free of income tax, or has simply given an annuity and left the annuitant to bear his own income tax. That is entirely a question of construction. . . . In the present case we have the words 'free of all duties.' In my opinion that expression does not extend to and include income tax. What the testator gives to the annuitant is this annual sum free of all duties in the sense and meaning of death duties, that is to say, all duties that are payable by reason of this beneficial disposition that he makes of some part of his property;

but the annuitant taking an annuity free of all duties is not entitled to claim also the income tax upon it; he must pay his own income tax."

In Sadler v. Rickards (1858) 4 Kay & J. 302, 70 Eng. Reprint, 126, where a testator devised and bequeathed his residuary real estate and personal property to trustees, upon trust, to pay out of the annual income an annual sum of a certain amount "free from legacy duty and other deductions" to his wife during her life, it was held that this annuity was subject to the income tax, which should be paid out of the annuity.

In Re Buckle [1894] 1 Ch. (Eng.) 288-C. A., a testator, after various pecuniary and specific bequests, gave his residuary estate to trustees upon trust to convert and invest, and out of the income to pay certain annuities, "all the said annuities (except where otherwise directed) to be paid clear of all deductions whatsoever except income tax." By a codicil the testator later made some changes in the legacies and increased one of the annuities, and then proceeded: "And I expressly direct that every legacy and other interest, as well derivable under my will as any codicil thereto, shall be free of legacy duty and every other deduction, and as to those belonging to females shall be for their sole and separate use. In all other respects, I confirm my said will and first codicil." Under these circumstances, it was contended by one of the annuitants that she was entitled to have her annuity paid her clear of income tax, and, upon appeal, this contention was approved by the court, it being there said: "Income tax is not a deduction; but if a testator tells you that he understands the word 'deductions' to include income tax, it must be taken to include it. The expression in the will, 'clear of all deductions whatsoever except income tax,' shows that the testator treated income tax as a deduction. We must interpret the word 'deductions' by the testator's use of it in his will. The case is governed by Turner v. Mullineux (1861) 1 Johns. & H. 334, 70 Eng. Reprint, 775.”

In Bannerman v. Young (1882) L.

R. 21 Ch. Div. (Eng.) 105, a testator bequeathed his wife "one annuity or clear yearly sum" of a certain amount "for and during the term of her natural life, free from all deductions in respect to any present or future taxes, charges, assessments, or impositions, or other matter, cause, or thing whatsoever," and later made a further gift in the same instrument, by which he gave her another "annuity or clear yearly sum" for life while she remained unmarried, "free from all such deductions as aforesaid." This exemption from taxation was held by the court to extend to the income tax as well as other taxes and expenses, and it was held that the widow was entitled to receive the total amount named, without any deduction.

In Turner V. Mullineux (Eng.) supra, a testator devised certain premises to trustees, upon trust, out of the rents and profits to pay his widow an annuity of a certain amount, "free from income or property tax, or any other deduction;" an annuity to each of his two daughters, to be paid "free from all deductions;" and, upon the marriage of his widow, to pay to one of his daughters a further annuity "free from deduction." It was held that all three annuities must be paid free from or without deducting from them the income tax, the court saying: "This court always holds that income tax is not a deduction; but here the testator, in the first instance, speaks of 'income or property tax and all other deductions,' which explains that he understands the word 'deduction' as extending to income tax. When he afterwards goes on to give other annuities, he shortens his form of expression, first to 'free from all deductions,' and then to 'free from deduction.' The true way of construing the will is not to interpret the last gift and carry back that construction of the word 'deduction' to the earlier clauses, but to read the word throughout in the sense in which it is first used."

In Festing v. Taylor (1862) 9 Jur. N. S. (Eng.) 44, a testator devised certain real property to trustees to secure a yearly rent charge to his

wife for life, payment secured by powers of distress and entry reserved to the wife, and by a term of years created in the trustees, the rent charge to be paid each year "without any deduction or abatement whatsoever on account of any taxes, charges, impositions, or assessments already or to be thereafter taxed, charged, imposed or assessed, on the same hereditaments, or on the said rent charge of £2,000 or on the said Margaret, Duchess of Somerset, or her assigns, in respect thereof, by the authority of Parliament or otherwise howsoever;" and it was held that the donee was entitled to have the rent charge paid to her in full, and free from deduction for the income tax.

In Re Bowen (1925) 70 Sol. Jo. (Eng.) 44, it is held that a direction for an annuity "to be paid without any deduction by equal quarterly payments free from income tax" is a direction to pay the annuity free from supertax, which, the court states, is called by the act of Parliament imposing it, an "additional duty or income tax."

In Re Doxat (1920) 125 L. T. N. S. (Eng.) 60, a testator, in a codicil revoking a previous legacy to his wife, bequeathed to her a certain sum free of legacy duty and a life annuity of a certain amount "free of income tax and all other deductions." He later directed his trustees to set aside a portion of his residuary estate to form a fund "the income of which will be fully sufficient to provide the said annuity and the income tax payable in respect of the same." The widow contended that the supertax should be deducted and the residuary legatees contended the contrary. It was held that the annuity was given free of the supertax, that tax being only a species of income tax.

And in Lethbridge v. Thurlow (1851) 15 Beav. 334, 51 Eng. Reprint, 567, a testator bequeathed to his son for life, an annuity of a certain amount, "clear of legacy duty and every other deduction whatsoever;" and the question asked the court was whether the annuitant was to take clear of the income tax. It was held

that the income tax was not properly a deduction out of the estate or legacy, but a charge fixed by the legislature upon the recipient himself, and that the income tax could not be included within the word "deduction" as used by the testator.

In Re Crawshay [1915] W. N. (Eng.) 412, a testator had, sometime before making his will, by deed, appointed that, out of the income of a certain trust fund, a certain sum should be paid his wife annually, for life, "free of all deductions except income tax." By a codicil to his will, the testator later bequeathed to his wife during her widowhood such a sum as, together with the income received by her under the appointment, would make up an annual sum of a certain amount, "clear of all deductions including income tax." By a second codicil the annuity given in the first codicil was increased to a larger sum, to be paid his widow "clear of all deductions including income tax." It was held that the annuitant must pay the supertax herself, as the clause "clear of all deductions including the income tax" did not include the supertax. In the court's opinion, the testator, when he gave the annuity in question, was considering the income tax for which the respective trustees would be accountable in respect of the particular annuity; and, as said by the court, as the supertax was not a charge in respect of any particular annuity, but a charge in respect of the recipient's whole income, it was a matter with which the trustees were not concerned at all.

3. As affecting property tax.

In Wall v. Wall (1847) 15 Sim. 513, 60 Eng. Reprint, 718, a testator devised his real estate to trustees, to the use, intent, and purpose that they should permit his wife, during her life, to receive out of the rents thereof, and also from the income of his residuary estate thereafter bequeathed to them, an annuity or clear yearly rent charge of a certain amount, "clear of all taxes and deductions;" and the question before the court was whether this annuity should