CHAPTER 294

An Act to amend and reenact §§ 58-152, 58-156, 58-159, 58-178, 58-176
and 64-151 of the Code of Virginia, relating to inheritance taxes, the
sections, respectively, relating to property subject to tax, property
previously taxed, by whom tax paid and to whom charged, assessment
and valuation of temporary and remaining interests, when payment
of tax due, and the apportionment of death taxes; and to amend the
Code of Virginia by adding § 58-161.1 relating to how tax charged in
case of temporary and remaining interests and by adding § 58-161.2
relating to how tax charged where a will or inter vivos instrument is
contrary to the provisions of the Code; and to repeal §§ 58-168,
58-171 and 58-172 relating to how minimum tax is to be charged, and
the appointment, duties, and compensation of inheritance tax
commissioners.

[H 583]

Approved March 10, 1952

Be it enacted by the General Assembly of Virginia:

1. That §§ 58-152, 58-156, 58-159, 58-173, 58-176 and 64-151 of the Code
of Virginia be amended and reenacted, and that the Code be amended by
adding sections numbered 58-161.1 and 58-161.2, the amended and new
sections being as follows:

58-152. Property subject to tax; to whom taxed; levy; gifts prima
facie in contemplation of death.—State inheritance taxes as hereinafter
prescribed are hereby levied upon the shares of the respective beneficiaries
in all property within the jurisdiction of this Commonwealth, real, personal
and mixed, and any interest therein, which shall pass:

(1) By will or by the laws regulating descents and distributions;

(2) By grant or gift made or intended to take effect in possession
or enjoyment at or after the death of the grantor or donor;

(3) By grant or gift made in contemplation of death;

(4) By a transfer under which the transferrer has retained for his
life the possession or enjoyment of the property or the income therefrom
or the right to designate or change the beneficiaries who shall be entitled
to possess or enjoy the property or the income therefrom;

By virtue of the fact that it is held by the decedent and another
as joint tenants or tenants by the entireties, with the right of survivorship,
* or is deposited with any person, firm or corporation doing a banking busi-
ness, in their joint names and payable to either or the survivor, except such
part thereof as may be shown to have originally belonged to such other
person and never to have been received or acquired by the latter from the
decedent for less than an adequate and full consideration in money or
money’s worth; provided, that when such property or any part thereof or
any part of the consideration with which such property was acquired is
shown to have been at any time acquired by such other person from the
decedent for less than an adequate and full consideration in money or
money’s worth, there shall be excepted only such part of the value of such
property as is proportionate to the consideration furnished by such other
person.

_Every grant or gift made by the decedent within * a period of three
years ending with the date of his death shall be deemed prima facie to
have been made in contemplation of death; but no such grant or gift made
prior to such three year period shall be deemed or held to have been made
in contemplation of death.

§ 58-156. * Credit where property previously taxed.

(a) As used in this section, the word “transfer” means the passing
of property taxable under this chapter or under chapter 6 of this title.

(b) Each beneficiary to whom property shall pass from the decedent
shall be allowed a credit against the tax imposed by § 58-158 tf the property
(or property given in exchange therefor by the decedent) was transferred
to the decedent within two years prior to his death and a tax paid on such
transfer under the provisions of this chapter or chapter 6 of this title.
To be entitled to such tax credit, the beneficiary claiming it shall identify
the property as having been so transferred and taxed, or identify the
property as having been acquired in exchange for property so transferred
and taxed, such property and the property acquired in exchange therefor
being hereinafter in this section called “previously taxed property”. —

(c) The tax credit of a beneficiary shall be computed by apportioning
among all beneficiaries to whom previously taxed property shall pass from
the decedent the tax paid on the transfer thereof to the decedent, such
apportionment to be made in accordance with the actual value at the date
of the decedent’s death of the previously taxed property included in the
respective shares of all beneficiaries of the decedent’s estate, but such
credit allowed to any beneficiary shall not exceed that proportion of the
total tax on such beneficiary’s entire share of the decedent’s estate as the
actual value at the date of the decedent’s death of the previously taxed
property included in such beneficiary’s share bears to the actual value at
the date of the decedent’s death of the entire share of such beneficiary.

(d) If the estate of the decedent consists of both previously taxed
property and other property, it shall be presumed for the purposes of this
section, unless the contrary clearly appears, that each distributive share
of the entire estate includes the same proportion of the previously taxed
property as the entire value of each share at the date of the decedent’s
death bears to the aggregate value of all the entire shares at such date.

§ 58-159. When tax paid by personal representative; how charged
to beneficiaries.—The personal representative of such decedent shall] with-
hold and pay the whole of the tax, except the tax on the transfer of such
real estate belonging to the estate of the decedent as he is not authorized
to sell or receive the rents and profits from. The sureties on his official
bond shall be bound for the payment thereof. The part of the tax so paid
by the personal representatives assessed to the several beneficiaries shall
nae against their respective shares in the distribution of the
estate.

§ 58-161.1. In case of temporary interest, tax thereon charged against
corpus.—Notwithstanding the provisions of 8§ 58-159, 58-160 and 58-161,
where any beneficiary, through creation of a trust or otherwise, is given
an interest in income, or an estate for years or for life, or other temporary
anterest or estate in any property or fund, the tax on such temporary
interest or estate shall be charged against and paid out of the corpus of
such property or fund without apportionment between temporary interests
or estates and remainders thereafter.

§ 58-161.2. Contrary provisions of will or inter vivos instrument
to govern.—The provisions of §§ 58-159, 58-160, 58-161 and 58-161.1 are
subject to the following qualification, that none of such provisions shall
in any way impair the right or power of any person by will or by written
instrument executed inter vivos to make direction for the payment of
such taxes and to designate the fund or property out of which such pay-
ment shall be made; and in every such case the provisions of such will
or of such written instrument shall be given effect to the same extent as
af said sections made no provision as to where or upon whom the burden
of such taxes shall fall.

§ 58-173. * Assessment and valuation of temporary interests and
remainders.—In every case in which there shall be a devise, descent,
bequest or grant, in trust or otherwise, of a remainder in any property
or fund to take effect in possession or enjoyment after the expiration of
one or more * interests in income, or estate for years or for life, or other
temporary interests or estates in such property or fund, the tax shall be
assessed on the actual value of * such remainder at the time when * the
beneficiary becomes entitled to the same in possession or enjoyment. The
value of * all such temporary interests or estates shall be determined as
of the death of the decedent in accordance with the applicable provisions
of § 55-269 to § 55-274, inclusive, and where none of said sections shall be
applicable, such value shall be determined in such manner as the Depart-
ment of Taxation may by regulation prescribe. In every case in which it
is impossible to compute the present value of any interest or estate in
property so passing, the Department of Taxation may effect such settle-
ment of the tax as it shall deem to be for the best interest of the Common-
wealth and payment of the same so agreed upon shall be a full satisfaction
of such taxes; and, notwithstanding the provisions of the first sentence
of this section, such Department may effect like settlement of the entwre
tax on estates in which remainders are involved, without awaiting the
termination of precedent temporary interests or estates.

§ 58-176. Payment of tax; when due.—Taxes imposed by the provi-
sions of this chapter shall be payable into the State treasury at the
expiration of one year after the death of the decedent; provided, however,
that the Department may, upon the application of the personal repre-
sentative of the decedent, extend the time of payment of such taxes so
that the same shall be payable at the expiration of fifteen months after
the death of the decedent, if the Department be of the opinion that the
gross value of the decedent’s estate will be of such amount as to require
the filing of the federal estate tax return. In all cases in which there shall
be a grant, devise, descent or bequest, in trust or otherwise, of a remainder
in any property or fund to take effect in possession or * enjoyment after
the expiration of one or more * interests in income, or estates for years
or for life, or other temporary interests or estates in such property or fund,
the taxes on such remainder shall, subject to the provisions of § 58-178,
be payable by the executors, administrators or trustees in office when such
right of possession or enjoyment accrues and no distribution shall be made
of the estate until such taxes have been paid, or, if there is no such
executor, administrator or trustee, by the person or persons so entitled
thereto, and at the expiration of one year after the date when the right
of possession or enjoyment accrues to the person or persons so entitled.

§ 64-151. Apportionment required.—Whenever it appears upon any
settlement of accounts or in any other appropriate action or proceeding
that an executor, administrator, curator, trustee or other person acting in
a fiduciary capacity has paid an estate tax levied or assessed under the
provisions of any estate tax law of the United States heretofore or here-
after enacted or under § 58-162, upon or with respect to any property
required to be included in the gross estate of a decedent under the provi-
sions of any such law, the amount of the tax so paid shall be prorated
among the persons interested in the estate to whom such property is or
may be transferred or to whom any benefit accrues. Such apportionment
shall be made in the proportion that the value of the property, interest or
benefit of each such person bears to the total value of the property,
interests and benefits received by all such persons interested in the estate,
except that in making such proration each such person shall have the
benefit of any exemptions, deductions and exclusions allowed by such law
in respect of such person or the property passing to him (provided, how-
ever, that in making such proration of the tax wmposed under § 58-162,
a surviving spouse shall not have the benefit of the marital deduction
allowable in determining the net estate under the estate tax law of the
United States); and except that notwithstanding the preceding provisions
of this sentence in cases where a trust is created, or other provision made
whereby any person is given an interest in income, or an estate for years,
or for life, or other temporary interest or estate in any property or fund,
the tax on * such temporary interest * or estate shall be charged against
and paid out of the corpus of such property or fund without apportionment
between * temporary interests or estates and remainders thereafter.

2. §§ 58-163, 58-171 and 58-172 of the Code of Virginia are repealed.

8. The provisions of this act shall apply to the estates of all persons who
shall die on or after the date this act takes effect, to all estates created by
will which shal] vest in interest on or after said date, and to all estates of
deceased persons which shall come into possession or enjoyment of bene-
ficiaries by the exercise or relinquishment of powers on or after said date.