Mr. NICHOLSON:

Mr. ABBOTT:

I have listened to my hon. friend. I am afraid I have been giving a lot of latitude here this morning. I protested before that we should keep within the section. This question whether a man is capable or incapable of making a will is a matter of property and civil rights which falls within the jurisdiction of the provinces. The dominion has no jurisdiction to say whether or not he is capable of making a will. Therefore it would be completely improper for the dominion government to be represented at any trial to determine whether a man was capable of making a will or not. I do not want to get into a long legal discussion here on testamentary capacity or anything else, but I do wish the committee would keep within the provisions of section 1, which extends and amplifies the definition of "child" as contained in the succession duty act.

Mr. HANSON (York-Sunbury):

Subsection 1 of this section repeals the existing para-

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graph (d) of subsection 1 of section 3 of the act. It is in the nature of a benefit because there is an exemption from taxation through the limitation of three years. That applies where a gift is made and there is a bona fide possession and enjoyment and no reassumption by the donee. I think that is a proper provision. I am interested in the second subsection which adds a new subsection 4. This covers the case we were discussing on the resolution stage. It is quite clear now that it is the intention of the government to take authority to tax succession twice in a given set of circumstances.

Mr. ABBOTT:

They are doing it now; this is really to confirm it.

Mr. HANSON (York-Sunbury):

I doubt if they have the authority to do it. This is to make sure?

Mr. ABBOTT:

That is correct.

Mr. HANSON (York-Sunbury):

I doubt if they have authority to do that now. This is to make sure that where a person has a general power of disposition and does not exercise that power he shall be deemed to take succession in the first instance, and on his death the second succession occurs. That is exactly the situation in at least some of the provinces. Is that rule general in all the provinces, or only in some?

Mr. ABBOTT:

I am told it is the rule in practically all.

Mr. HANSON (York-Sunbury):

You do not know of any exception?

Mr. ABBOTT:

No.

Mr. HANSON (York-Sunbury):

It is just one of those cases where the thumbscrews are being turned a little in order to get more money for the crown. I should like to know if I understand the thing thoroughly. Of course, those who will have the liability in the first place will have to protect themselves with a proper instrument of disposition, that is, under their will. If a person in that situation makes a proper disposition and provides for alternative disposition in the event of the failure of the person to whom the power is given to appoint or dispose of the property, this situation will not arise.

Mr. ABBOTT:

That is correct. If the power is general, then this section will operate, and section 31 as well.

Mr. HANSON (York-Sunbury):

If there is a general power to appoint and he does appoint, will there still be double taxation?

Mr. ABBOTT:

That is right.

Mr. HANSON (York-Sunbury):

Has that always been the law?

Mr. ABBOTT:

I call my hon. friend's attention to section 31 of the act as it now stands, which reads:

Where a general power to_ appoint any property either by instrument inter vivos, or by will, or both, is given to any person, the duty levied in respect of the succession thereto shall be payable in the same manner and at the same time as if the property itself had been given, devised or bequeathed, to the person to whom such power is given.

Mr. HANSON (York-Sunbury):

That means he pays on the devolution in the first instance?

Mr. ABBOTT:

He is getting it just as though it was his own property.

Mr. HANSON (York-Sunbury):

Not unless he takes a beneficial interest.