Temporary Payments.

§ 222

any purpose or under any testamentary direction." See also Isham v. N. Y. Assn. for Poor, 177 N. Y. 218.

The effect of such a direction in a will is to give the legatees the principal of their bequests without deduction, or in other words, to increase the particular legacies at the expense of the residuary bequest, to the extent of insuring the payment of the face value of such legacies.

360. When Direction to Pay Tax from Residuary Estate Applies to all Gifts under the Will.

Where a decedent directs her executors to pay out of her residuary estate any and all transfer or inheritance taxes that may be imposed, it was held that it was not the intention of the testatrix to make any distinction concerning the payment of the transfer tax between gifts made pursuant to a power of appointment contained in her father's will and which she exercised and those which she made out of her individual property. Isham v. New York Assn. for the Poor, 78 App. Div. 396, 79 N. Y. S. 1048; affd., 177 N. Y. 218.

361. Temporary Payments to State Comptroller.

When fixing the transfer tax upon the estate of a decedent neither the appraiser nor the surrogate is required to consider a temporary payment made to the State Comptroller on account of the transfer tax. Such temporary payment is deductible from the amount finally found due, and, if nothing is found to be due, then it must be refunded. Matter of Skinner, 106 App. Div. 217.

§ 223

Discount and Interest.

362. When Tax on Trust Estate to Be Paid from Corpus of Fund.

Where a testator bequeaths money in trust to be invested by trustees who are to pay over the income to decedent's nephew, it was held that the transfer tax must be paid out of the corpus of the fund and not out of the income. Matter of Bass, 57 Misc. Rep. 531, 109 N. Y. S. 1084.

363. When to Be Paid from Income of Residuary Estate.

Testator devised the use of a house and lot and furnishings to a person named in a will, and provided that the taxes should be paid from the income of his estate. Held, that the transfer tax must be paid from the income of his residuary estate. Matter of Bass, 57 Misc. Rep. 531, 109 N. Y. S. 1084.

364. Discount and Interest.

[§ 223, Tax Law.] If such tax is paid within six months from the accrual thereof, a discount of five per centum shall be allowed and deducted therefrom.1 If such tax is not paid within eighteen months from the accrual thereof, interest shall be charged and collected thereon at the rate of ten per centum per annum from the time the tax accrued; 2 unless by reason

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1. Sec. 4, Chap. 483, Laws 1885-in effect June 30 of that year. Provided that if the tax was paid within one year, interest at 6 per cent. per annum should be charged, but if not so paid then interest at 10 per cent. shall be charged, except as limited by section 5 of said act, and it was further provided that if the tax was paid within six months from the accrual thereof no interest should be charged, but a discount of 5 per cent. could be deducted from the amount of the tax. This provision as to the 5 per cent, discount has ever since been retained in the law.

2. Chap. 713, Laws 1887 -in effect June 25 of that year. - Amended section 4 of the Act of 1885 (supra), by providing that if the tax was paid within eighteen months no interest shall be charged and collected thereon, but if not paid within that time, interest at the rate of 10 per cent. shall be charged from time the tax accrued, and this provision has been retained in the law.

of claims made upon the estate, necessary litigation or other unavoidable cause of delay, such tax cannot be determined and paid as herein provided, in which case interest at the rate of six per centum per annum shall be charged upon such tax from the accrual thereof until the cause of such delay is removed, after which ten per centum shall be charged.*

365. When a Discount Is Allowed.

The State has always encouraged the early payment of the transfer tax by allowing a discount of 5 per cent. upon the amount of the tax where payment is made within six months from the accrual thereof.*

366. Interest.

The interest clause was changed by several amendments prior to 1892 as to the time within which the tax must be paid to avoid the payment of interest, but since that time it has remained practically unchanged.+

3. Chap. 713, Laws 1887-in effect June 25 of that year. Also amended section 5 of the Act of 1885, by providing that the 10 per cent. interest shall not be charged where by reason of claims made upon the estate, necessary litigation or other unavoidable cause of delay, the estate cannot be settled at the end of eighteen months from decedent's death, and that in such cases only 6 per cent. per annum shall be charged upon said tax "from the expiration of said eighteen months," until the cause for delay was removed.

4. Chap. 399, Laws 1892 in effect May 1 of that year. - Re-enacted by section 4 of that act, the former provisions of sections 4 and 5 of the Act of 1885, except that in cases of remission of interest from 10 per cent. to 6 per cent., the 6 per cent. was to be charged from the accrual of the tax, instead of eighteen months from the decedent's death, until the cause for delay was removed, after which 10 per cent. was to be charged, and the provisions of the Act of 1892 in respect to discount and interest have remained practically the same since that time.

*It is suggested that where payment of transfer tax is made within six months from the accrual of the tax, the discount of 5 per cent. should be deducted by the person making the payment, from the amount of tax as assessed and not include such discount in the payment made.

It is suggested that where the person making a payment of tax forwards the same by mail or otherwise, and such payment is desired to be made within the time to secure the discount, or to avoid the payment of interest, the payment must be received by the proper official on or before the last day within which such payment can be made to entitle such person to the discount, or to avoid the payment of interest.

§ 223

Application to Remit Interest.

367. Remission of Interest.

In

The statute only provides for the remission of the interest from 10 to 6 per cent. in certain cases. terest cannot be remitted altogether. (See section 223, supra.)

368. Application for.

Application to remit the interest can only be made to the court upon motion, and is not to be the subject of an appeal from the decree fixing the tax as the decree should not concern itself with the amount of interest. Matter of De Graaf, 24 Misc. Rep. 147, 53 N. Y. S. 591.

369. To Whom Made.

The appraiser cannot remit the interest. Special application showing grounds therefor must be made to the surrogate. Matter of De Graaf (supra); Matter of Skinner, 106 App. Div. 217.

370. Ignorance of the Law-No Excuse.

Relief from the payment of interest will not be granted where the only reasons given were that the executors were ignorant of the law, or that such payment will be a hardship to the legatee. Matter of Platt, 8 Misc. Rep. 144, 29 N. Y. S. 396.

371. When Application Will Be Denied.

Application for the remission of interest will be denied unless it is shown that the reasons required by the statute existed and caused the delay. Matter of Wormser, 51 App. Div. 441, 64 N. Y. S. 897.

§ 223

When Interest Commences.

372. Surrogate's Power to Remit Penalty.

Surrogate has no power to remit penalty except in cases prescribed by section 223 of the Tax Law. Matter of Oshse, N. Y. Law Journal, November 5, 1908Surrogate Thomas.

373. Delay in Selling Real Estate No Ground for Remitting Penalty.

The executor's delay in selling the real estate is not a ground for remitting the penalty. Matter of McGregor, N. Y. Law Journal, December 23, 1908 — Surrogate Thomas.

374. Unreasonable Delay in Appraisal, Penalty Will Be Remitted.

Where there was an unreasonable delay in making the appraisal, interest will be reduced to 6 per cent. from July 26, 1908, the time when with due diligence the appraisal should be completed, and October 26, 1908, the time when the appraiser's report was filed. Matter of McGregor, N. Y. Law Journal, December 23, 1908.

375. When Interest Commences.

When the liability to pay interest has been incurred it is chargeable from the time the tax accrued. Matter of Davis, 149 N. Y. 539, 540.

376. Interest under the Act of 1887.

Under the Act of 1887, where an estate could not be settled within the eighteen-months' limitation, owing to the statutory reasons, interest is only chargeable at 6 per cent. from the expiration of said eighteen months