transfer of property, real, personal or mixed, or any interest therein, or income therefrom in trust or otherwise, to any person, association or corporation, except county, town or municipal corporation within the state, for strictly county, town or municipal purposes, in the following cases: (1) When the transfer is by will or by the intestate laws of this state from any person dying possessed of the property while a resident of the state. (2) When a transfer is by will or intestate law, of property within the state or within its jurisdiction and the decedent was a non-resident of the state at the time of his death. (3) When the transfer is of property made by a resident or by a nonresident when such non-resident's property is within this state, or within its jurisdiction, by deed, grant, bargain, sale or gift, made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death. (4) Such tax shall be imposed when any such person or corporation become beneficially entitled, in possession or expectancy to any property or the income thereof, by any such transfer whether made before or after the passage of this act. (5) Whenever any person or corporation shall exercise a power of appointment derived from any disposition of property made either before or after the passage of this act, such appointment when made shall be deemed a transfer taxable under the provisions of this act in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power and had been bequeathed or devised by such donee by will; and whenever any person or corporation possessing such a power of appointment so derived shall omit or fail to exercise the same within the time provided therefor, in whole or in part a transfer taxable under the provisions of this act shall be deemed to take place to the extent of such omission or failure, in the same manner as though the persons or corporations thereby becoming entitled to the possession or enjoyment of the property to which such power related had succeeded thereto by a will of the donee of the power failing to exercise such power, taking effect at the time of such omission or failure. The word "transfer" in the statute is not to be given a narrow or technical meaning. It means in this connection a change in the possession and ownership of property. The state may impose a succession tax on the transfer of any property taxable under the general tax laws. The legislature intended to tax, under the inheritance tax law, everything which it had power to tax.75 The statutory one-third, to which a surviving spouse renouncing a will is entitled, is subject to an 73 78 G. S. 1913, § 2271. 74 State v. Probate Court, 137 Minn. 238, 163 N. W. 285. 74 75 State v. Probate Court, 145 Minn. 155, 176 N. W. 493. inheritance tax, in so far as it exceeds the statutory exemption." Transfers made in contemplation of the death of the grantor, or intended to take effect in possession or enjoyment at or after such death, are subject to an inheritance tax, if beyond the statutory exemption in value. It is immaterial whether the grantor was seeking to evade the tax." A beneficiary under a will may renounce the gift and if he does the gift is not subject to an inheritance tax.78 Where there is an outright sale and assignment of a beneficiary's interest in an estate the interest of the assignor as determined by the will and decree of distribution is subject to an inheritance tax. An exercise of a power of appointment under a will is a "transfer" within the statute.80 The interest of the vendor under an executory contract of sale is taxable as personal property, and where the vendor died a resident of this state, such interest is subject to the inheritance tax of this state.81 1234. Computation of tax-Primary rates-Exemptions-StatuteThe tax so imposed shall be computed upon the true and full value in money of such property at the rates hereinafter prescribed and only upon the excess of the exemptions hereinafter granted. Section 2a. When the property or any beneficial interest therein passes by any such transfer where the amount of the property shall exceed in value the exemption hereinafter specified and shall not exceed in value fifteen thousand dollars the tax hereby imposed shall be: (1) Where the person entitled to any beneficial interest in such property shall be the wife, or lineal issue, at the rate of one per centum of the clear value of such interest in such property. (2) Where the person or persons entitled to any beneficial interest in such property shall be the husband, lineal ancestor of the decedent or any child adopted as such in conformity with the laws of this state, or any child to whom such decedent for not less than ten years prior to such transfer stood in the mutually acknowledged relation of a parent, provided, however, such relationship began at or before the child's fifteenth birthday, and was continuous for said ten years thereafter, or any lineal issue of such adoption or mutually acknowledged child, at the rate of one and one-half per centum of the clear value of such interest in such property. (3) Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister or a descendant of a broth 76 State v. Probate Court, 137 Minn. 238, 163 N. W. 285. 77 State v. Probate Court, 102 Minn. 268, 113 N. W. 888; State v. Probate Court, 143 Minn. 77, 172 N. W. 902. See 7 A. L. R. 1028; 35 Harv. L. Rev. 773. 78 State v. Probate Court, 143 Minn. 77, 172 N. W. 902. 79 State v. Probate Court, 143 Minn. 77, 172 N. W. 902. so State v. Probate Court, 124 Minn. 508, 145 N. W. 390. See 5 A. L. R. 183 (property appointed by deed); 18 A. L. R. 1470; 35 Harv. L. Rev. 326. 81 State v. Probate Court, 145 Minn. 155, 176 N. W. 493. er or sister of the decedent, a wife or widow of a son, or the husband of a daughter of the decedent, at the rate of three per centum of the clear value of such interest in such property. (4) Where the person or persons entitled to any beneficial interest. in such property shall be the brother or sister of the father or mother or a descendant of a brother or sister of the father or mother of the decedent, at the rate of four per centum of the clear value of such interest in such property. (5) Where the person or persons entitled to any beneficial interest in such property shall be in any other degree of collateral consanguinity than is hereinbefore stated, or shall be a stranger in blood to the decedent, or shall be a body politic or corporate, except as hereinafter provided, at the rate of five per centum of the clear value of such interest in such property. Section 2b. The foregoing rates in section 2a are for convenience termed the primary rates. When the amount of the clear value of such property or interest exceed fifteen thousand dollars, the rates of tax upon such excess shall be as follows: (1) Upon all in excess of fifteen thousand dollars and up to thirty thousand dollars, two times the primary rates. (2) Upon all in excess of thirty thousand dollars and up to fifty thousand dollars, two and one-half times the primary rates. (3) Upon all in excess of fifty thousand dollars and up to one hundred thousand dollars, three times the primary rates. (4) Upon all in excess of one hundred thousand dollars, four times the primary rates. Section 2c. The following exemptions from the tax are hereby allowed: "any devise, bequest, gift, or transfer to or for the use of the state of Minnesota or any political division thereof for public purposes exclusively, and any devise, bequest, gift, or transfer to or for the use of any corporation or association organized and operated for religious, charitable, scientific, literary or educational purposes exclusively, including the encouragement of art and the prevention of cruelty to children or animals, no part of which devise, bequest, gift or transfer, inures to the profit of any private stockholder or individual, and any bequest or transfer to a trustee or trustees exclusively for such purposes shall be exempt." (2) Property of the clear value of ten thousand dollars transferred to the widow of the decedent (or husband of the decedent, each of the lineal issue of the decedent, or any child adopted as such in conformity with the laws of this state, or any child to whom the decedent for not less than ten [10] years prior to such transfer stood in the mutually acknowledged relation of a parent; provided, however, such relationship began at or before the child's fifteenth birthday, and 'was continuous for said ten years thereafter, or any lineal issue of such adopted or mutually acknowledged child), shall be exempt. (3) Property of the clear value of three thousand dollars transferred to each of the lineal ancestors of the decedent shall be exempt. (4) Property of the clear value of one thousand dollars transferred to each of the persons described in the third subdivision of section two a (2a) shall be exempt. (5) Property of the clear value of two hundred and fifty dollars transferred to each of the persons described in the fourth subdivision of section two a (2a) shall be exempt. 84 (6) Property of the clear value of one hundred dollars transferred to each of the persons and corporations described in the fifth subdivision of section two a (2a) shall be exempt.82 In fixing the rate the exemption is to be disregarded. Upon all property passing to an heir, legatee, or devisee, in excess of the clear value of $15,000, the secondary rate applies; the primary rate applying only to what remains of the first $15,000 after deducting the exemption.83 If the tax rate is uncertain the tax is to be paid at the highest rate to which the succession would in any event be subject. If subsequent events show that this rate was too high the excess tax is to be refunded. If in any case it appears that the tax at the minimum rate has accrued upon a definite amount, as to which the beneficiary has entered into the actual use and enjoyment, he I will not be heard to claim that no tax can be collected because in the future it may appear that he should have been taxed at a higher rate upon a larger amount.s Where the estate descends to two or more legatees or devisees in equal shares an exemption to each should be allowed.86 A decree of distribution is conclusive on the state for the purpose of computing inheritance taxes, if it was not entered collusively to evade or reduce the tax.8 Where a will contest has been amicably settled between the beneficiaries named in a will, and they have in good faith stipulated for a decree of distribution in accordance with the settlement, and there is no intent to evade or reduce the inheritance tax, the tax should be computed upon the share received by each beneficiary under the decree.88 Where testator devised all his property to his wife for life, remainder to their daughter, the title vests on the death of the testator, and the probate court in the first instance correctly determined the 87 85 82 G. S. 1913, § 2272, as amended by Laws 1919, c. 410. 83 In re Boutin's Estate, 149 Minn. 148, 182 N. W. 990. The rule was otherwise prior to the amendment of 1911. State v. Probate Court, 111 Minn. 297, 126 N. W. 1070; State v. Probate Court, 112 Minn. 279, 128 N. W. 18. 84 State v. Probate Court, 136 Minn. 392, 162 N. W. 459. 85 State v. Probate Court, 112 Minn. 279, 128 N. W. 18. 86 State v. Probate Court, 101 Minn. 485, 112 N. W. 878. 87 State v. Probate Court, 143 Minn. 77, 172 N. W. 902. See 33 Harv. L. Rev. 574. 88 State v. Probate Court, 143 Minn. 77, 172 N. W. 902. value of the legacy to each of the legatees for the purpose of inheritance taxation, under section 2272, G. S. 1913, as amended by chapter 410, Laws of 1919.89 1235. When taxes due and payable-Statute-All taxes imposed by this act shall take effect at and upon the death of the person from whom the transfer is made and shall be due and payable at the expiration of one year from such death, except as otherwise provided in this act.00 The statute requires the immediate payment of all inheritance taxes at the expiration of one year after the death of the person making the transfer, except in the single case of a tax measured by the value of an estate or interest not susceptible of present valuation.1 That the persons to whom the succession will ultimately pass may not yet be known, and that the amount which will pass to a particular person may not yet be known, are not grounds for deferring the payment of a tax.92 Where the present value of a precedent estate was ascertained and the present value of the estate which would pass to the remainderman was the difference between the present value of the precedent estate and the present value of the entire estate, it was held that the tax on the estate of the remainderman was payable presently." Prior to the amendment of 1911 the tax became due when the beneficiary entered into the possession and enjoyment of any part exceeding the statutory exemption.94 1236. Valuation of future and limited estates, income, interest, and annuities Statute-The value of every future or limited estate, income, interest or annuity dependent upon any life or lives in being, shall be determined by the rule, method and standard of mortality and value employed by the commissioner of insurance in ascertaining the value of policies of life insurance and annuities for the determination of liabilities of life insurance companies, except that the rate of interest for making such computations shall be five per centum per annum.95 It was held, prior to the amendment of 1911, that in determining the value of a life estate the court might refer to life and annuity tables.9* 96 1237. Transfers in trust-Valuation-When taxes payable-StatuteWhen any transfer is made in trust for any person or persons, or corporation or corporations, and the right of the beneficiaries of said trust to receive the property embraced in said trust is susceptible of present valuation, then and in such case the tax thereon shall be paid at the same time and in the same manner and in like amount, that would be 89 In re Meldrum's Estate, 149 Minn. 342, 183 N. W. 835. 90 G. S. 1913, § 2273. 91 State v. Probate Court, 136 Minn. 392, 162 N. W. 459. 92 State v. Probate Court, 136 Minn. 392, 162 N. W. 459. 93 State v. Probate Court, 136 Minn. 392, 162 N. W. 459. 94 See § 1253. 95 G. S. 1913, § 2273. 96 State v. Probate Court, 100 Minn. 192, 110 N. W. 865. |