[G. L. c. 65, §§ 13, 14 pendent upon the amount of income or annuity actually paid."

In the case of a present interest determinable upon a contingency other than death, as in the case of a will providing for the payment of income to the testator's widow until her death or remarriage, or in the case of termination upon any other condition which cannot be valued by the experience tables, it appears to be the practice to tax the interest as a life interest and to require payment of the tax without deferment.12

Payment of Taxes on Future Interests

SECTION 14. Any person entitled to a future interest in any property may pay the tax on account of the same at any time before such tax would be due under this chapter, and in such cases the tax shall be assessed upon the actual value of the interest at the time of payment, and such value shall be determined by the commissioner as provided in this chapter. Whenever it is impossible to compute the present value of any interest, the commissioner may, with the approval of the attorney general, effect such settlement of the tax as he shall deem to be for the best interests of the commonwealth, and payment of the sum so agreed upon shall be a full satisfaction of such tax.

Under the original inheritance tax act of 1891, it was provided that all taxes imposed by the act should be paid within two years of the date of the bond of the executor or administrator unless the probate court specially ordered the date of payment extended, and the value of a future interest was determined by deducting from the value of the property the value of the preceding estate, as determined by the experience tables if it depended upon the duration of human life. If a future interest was contingent, and it was uncertain when it would vest and what would be the relationship to the testator of the person who eventually would receive it, the probate court was necessarily bound to defer payment of the tax until the uncertainty upon which the amount, and under the law which taxed only collateral inheritances, liability to the tax depended.1

In 1902, it was provided that the tax upon a future interest

11 St. 1913, c. 689, §1.

12 Howe v. Howe, 179 Mass. 546 (1901); Moors v. Treasurer & Receiver General, 237 Mass. 254 (1921).

'Howe v. Howe, 179 Mass. 546 (1901).

G. L. c. 65, § 14] should not be payable until the person entitled came into possession, and should be based upon the actual value of the property at the time when the right of possession accrued. The statute however permitted the payment of the tax at any time previous to the acquisition of possession, and this provision of statute is still in force.3

It may be of great advantage to pay a tax on a future interest immediately upon the death of the testator, for the tax is based upon the value of the interest at the time of payment, and if the property is likely to appreciate in value it is wise to pay the tax at once. So also, if a tax is based on the present value of a future interest, the value of the present interest must be deducted from the value of the property itself to determine the value of the future interest, whereas, if the tax is paid when the holder of the future interest comes into possession and enjoyment, the tax is based upon the entire value of the property. If the rate is the same in either case, although the tax will be larger if the payment is deferred, this disadvantage will be counterbalanced by the advantage to the taxpayer in having the use and interest of the money applicable to the tax in the interval. If however the additional value to the future estate which comes to it with the expiration of the preceding estate subjects it to a tax at a higher rate, there may be a substantial advantage in paying the tax in advance, even if the property itself is not likely to appreciate in value.*

Nevertheless, there is no right to the payment of a tax on a future interest unless the value of such interest can be definitely determined by the experience tables or otherwise. If there is a contingency which creates an uncertainty, there is no enforceable right to the payment of the tax, even if the person presumptively entitled to the future interest offers to pay a tax based upon the assumption that the uncertainty will be determined in such a way as to operate against him and the amount of which will thus be at least equal to and may be more than the amount which would be due if the value of his interest could be accurately determined."

2 St. 1902, c. 473. See G. L. c. 65, §7, supra, page 627.

3 Dow v. Abbott, 197 Mass. 283 (1908). The provision is at present contained in the first sentence of section 14.

'Moors v. Treasurer & Receiver General, 237 Mass. 254 (1921).

'Mitton v. Treasurer & Receiver General, 229 Mass. 140 (1918).

[G. L. c. 65, §§ 14, 15 The provision authorizing a settlement when it was impossible to compute the value of an interest first appeared in the statutes in 1903, but was then limited to the case of a taxable devise dependent upon a contingency or the exercise of a discretion. In 1904 settlement was authorized in the case of a devise of an estate for life or years to a person of the untaxable class with power of appointment over the remainder. In 1907 the provision for settlement was extended to all future interests and in 1909 to all interests, future or otherwise, and the statute as finally amended and re-enacted was made applicable to all cases in which the tax remained unpaid at the date of its passage. The settlement of a tax under this provision lies wholly in the discretion of the taxing officials and will not be enforced by mandamus, no matter how reasonable an offer a taxpayer may have made and how unreasonable the position of the commissioner in refusing to accept it."

If the person entitled to a present interest in the income of property pays a tax on such interest and afterward receives a share of the principal by reason of being alive when the time for distribution arrives, the value of his interest in the income and of his share of the principal when distributed should be added together to determine the rate at which they should be taxed, and if they are taxable at a higher rate than that at which the interest of the legatee in the income which was payable at the death of the testator was assessed, the legatee must pay an additional tax upon his interest in the income.

Deposit or Bond for Payment of Tax on Future Interests

SECTION 15. In case of a bequest or grant of personal estate made or intended to take effect in possession or enjoyment after the death of the grantor, to take effect in possession or come into actual enjoyment after the expiration of one or more life estates or a term of years. whether conditioned upon the happening of a contingency, dependent upon the exercise of a discretion, subject to a power of appointment, or otherwise, the executor, administrator or grantee may deposit with the state treasurer a sum of money sufficient in the opinion of the commissioner to pay all taxes which may become due upon such

St. 1909, c. 527, §10, enacted June 19, 1909.

'Mitton v. Treasurer & Receiver General, 229 Mass. 140 (1918).

* Moors v. Treasurer & Receiver General, 237 Mass. 254 (1921).

G. L. c. 65, §§ 15, 16] bequest or grant, and the persons having the right to the use or income of such personal estate shall be entitled to receive from the commonwealth interest at the rate of two and one half per cent per annum upon such deposit, and when said tax shall become due the treasurer shall repay to the persons entitled thereto the difference between the tax certified and the amount deposited; or any executor, administrator, trustee or grantee, or any person interested in such bequest or grant may give bond to a judge of the probate court having jurisdiction of the estate of the decedent, in such amount and with such sureties as said court may approve, conditioned that the obligor shall notify the commissioner when said tax becomes due and shall then pay the same to the commonwealth.

In 1902 authority for deferring payment of the tax on a future interest was for the first time given by the legislature,' but in the following year it was provided that the tax on any future interest in personal property should be payable without deferment unless the person beneficially entitled to the interest gave bond for the payment of the tax within one year of the death of the testator. While this statute was in force, unless the legatee gave the bond within the specified period, the executor or administrator was bound to pay the tax.3

In 1907 the deposit of money was made permissible, as well as a bond, but the deposit or bond ceased to be a condition precedent to the deferment of the tax; but the statutes authorizing the deposit or bond are still in force, and the making of the deposit or the giving of a bond is still of advantage in making the allowance of the final accounts of the executor or administrator possible."

Excessive Coripensation of Executor Taxable

SECTION 16. If a testator gives, bequeaths or devises to his executors or trustees any property otherwise liable to the tax imposed by this chapter in lieu of their compensation, the value thereof in excess of reasonable compensation, as determined by the probate court upon the application of any interested party or of the commissioner, shall be subject to this chapter.

1 See G. L. c. 65, §§7, 14, supra, pages 627, 640.

St. 1903, c. 276.

'Dow v. Abbott, 197 Mass. 283 (1908).

St. 1907, c. 563, §5.

See G. L. c. 65, §23, infra, page 648.

[G. L. c. 65, §§ 16, 17 This statute has received no modification since it was first enacted in 1891 other than reduction to its present concise phraseology in the Revised Laws and the substitution in 1907 of the tax commissioner for the treasurer and receiver general as the party to make application to the probate court.

The ordinary compensation of an executor, administrator or trustee is not subject to the inheritance tax, being deducted as one of the expenses of administration, and it is only a bequest in excess of reasonable compensation that is taxable, and then only as to the amount of the excess.

Executor Liable for Tax

SECTION 17. An executor, administor or trustee holding property subject to the tax imposed by this chapter shall deduct the tax therefrom or collect it from the legatee or person entitled to said property; and he shall not deliver property or a specific legacy subject to said tax until he has collected the tax thereon. An executor or administrator shall collect taxes due upon land passing by inheritance or will which is subject to said tax from the heirs or devisees entitled thereto, and he may be authorized to sell said land, in the manner prescribed by section twenty-one, if they refuse or neglect to pay said tax.

The first part of this section appeared in the original act of 1891 and the last part first appeared in 1901. The two statutes were consolidated in the Revised Laws and appeared in the direct inheritance law of 1907, in the codification of 1909 and in the General Laws in the same phraseology as in the Revised Laws. It is plain that under this statute it is the duty of the executor, administrator or trustee in the case of articles of personal property specifically devised to collect the tax before delivering the article to the legatee, and that in the case of a specific legacy in common to two or more persons the tax is to be collected from each in proportion to his interest.1

It is to be noted that in collecting the inheritance tax the commonwealth deals directly with the executor or administrator, and has no direct relations with the persons who eventually receive the property of a decedent except in the case of a 1 Ops. Attorney General, 30.

2 Dow v. Abbott, 197 Mass. 283 (1908).