The Act of Revestment was the act of the Westminster Parliament by which the English Crown bought back the regalities of the Island from the Atholl family for the sum of :£70,000. This was paid for all the interest and privileges of the island, reserving, however, to the Athol family the landed property, with all their rights in and over the soil, with courts-baron, rents, services, and other privileges, together with the patronage of the bishopric , and other ecclesiastical benefices in the island, on the payment of £101 5s. l ld. per annum, and rendering two falcons to the succeeding kings and queens of England, on the days of their coronations.
By this purchase the London goverment effectively gained control over the Island and could bring it under the control of the UK customs service thus preventing the Island being used as a base for the 'smuggling trade'.
In1806 the sovereignty of the island was sold by the fourth Duke of Athol to the British Government, and in 1826, on receiving a further payment from the Crown of £416, 000 the duke surrendered the remaining privileges of which he had possession.
The idea of revestment goes back to at least 1725 when the British Parliament passed an Act which enacted that no foreign goods of any kind other than the growth and produce of the Island should be imported from the Island into any port of Great Britain or Ireland. However it was obvious that the geographic position of the Island made this almost impossible to police and the Act 1 Geo 12 contained a clause authorising the Treasury to treat with Lord Derby and his immediate heirs for the purchase of the royalties of the island on such terms as might seem fitting. By 1736 the last of the Derby line died and the Island passed to the Atholl family.
The question of acquiring the Island would appear to have been brought up again in 1752 though soon dropped (it would appear that Lord Mansfield and the Duke of Argyll aided the Duke of Atholl in this), in 1754 the merchants of Whitehaven raised a memorial to Parliament and although it was suggested that the topic would be raised there nothing came of it. In 1759 another attempt to open negotiations for the sale of the Island was commenced but again repulsed by the Duke of Atholl and friends. The loss to the Treasury continued to grow, some were quoting it as at least £200,000 pa, in particular the illicit imporation of tea was noted; Arthur Onslow, collector of customs at Liverpool would appear to have sent agents to the Isle of Man during 1762 to report on ships contravening the Act with forbade inportation of East India goods into Britain except via East India company and used this Act to seize 3 vessels which then proceeded in ballast from the Island to Liverpool.
James 2nd Duke of Atholl died in January 1764 and the Island passed to his son in law and nephew, James 3rd Duke of Atholl - it may possibly be this change of ownership that prompted a Parliamentary question in April 1764, and shortly afterwards on the 11th May the Commissioners of Customs wrote to various ports to gather information (one surprising factor here is that Basil Cochrane who had been Governor of the Island from 1751 to 1761 now worked for the Customs in Edinburgh and surely must have been able to fill in any detail required) - there would however appear to have been strong links between John Quayle, Clerk of the Rolls and Arthur Onslow, collector of customs at Liverpool who offered to supply a copy of the Manx customs rate book and Charles Lutwidge at Whitehaven who was able to very accurately judge the Duke's income. However before waiting for all these replies to come in the Treasury wrote on the 25th July to the Duke stating that they wished to treat for the purchase. The Duke immediately contacted Lord Mansfield for assistance who suggested amendments to a proposed reply as well as suggesting a private letter to George Grenville (First Lord of the Treasury) - the Duke attempted to play for time stating, correctly, that he had not had enough time to come to any judgement about the value of the Island (though a rough draft indicated that he had quickly applied himself to this task), but the Treasury wrote again on the 12th September, this time threatening that if he was not prepared to treat then they would see what further legislation would be required. On the 17th August the screws were further tightened by an Order in Council that, in order to put a stop to 'this evil, that has been long complained of', saw orders to station cutters in the Manx habours as well as many more around the coasts; a copy of this had been returned by Grenville to the Duke. The Duke of Atholl drafted a reply on the 20th September which appears to capitulate to the demand for a sale but Lord Mansfield strongly urged against sending the reply (which is marked in the Atholl papers as not sent).
It would appear that the requests for information to the Custom Houses had already reached the Island and in July the Duke was forced to issue a denial that he was contemplating a sale, though this information briefly re-assured the merchants, it would appear by September that the proclamation in Council greatly worried them. By early January there were two cutters in Douglas whose captains had been given instruction to seize any vessel that broke the law concerning the illegal imporation of East India goods; by the end of January a Man of War in Ramsey bay with the threat of seven cutters based around the Island.
The Duke's own valuation gave him a high estimate of the value but he had a bad three months ahead - on 21 January 1765 the Mischief Act was introduced in the Commons, and read a second time on the 19th February - on the 26th February the Duke had a three hour meeting with Grenville and wrote (to Lord Mansfield ?)
The weight which has hung upon me for this 3 months past, thank God is now dissapated I have been with Mr Grenvil this 3 hours and have concluded a bargain - you only saw the law on my side but there was as much or more against me.
We give up our soverainty & customs but keep our landed estate & as justice will be administered in the name of the Crown, they will likewise pay the officers.
Seventy thousand pounds and an annuity upon Ireland for the Duchess and my joynt lifes of two thousand a year - mighty good bargain I promise you as matters stood - and a fixd income instead of being under perpetual alarms
God neglects not them who trust in him.
His son however never agreed with him -
Pushed to an immediate decision by the urgency of the moment, and trusting to the information of others, he concluded a transaction, which, to the day of his death, he never thought upon but with the deepest regret and dejection. But I well know, to use the words of my great ancestor, who it was that told him it was so little worth, even they who had thriven by it.
The bill was brought in the of January 1765. 40,0001. was offered to my father ; it was refused. Counsel were heard against the bill on the 18th of February: 70,0001. was then offered, and an annuity of 2,0001. This, with a reservation of ecclesiastical and insular rights, was accepted by my father, under the pressure of a bill being in existence, and there being a probability of its passing on the morrow, which went, in his mind, to take away his rights and interests, without any compensation whatever. His acceptance (which, in my opinion, was improperly turned into the light of an offer) was contained in a letter, dated the 27th of February 1765;the revestment was the 5th of March following.
The 'Revesting Act' became law on the 10th May 1765 and after a grace period of six weeks for the merchants to organise their affairs, the British Crown took over on the 21st June (tho the proclamation had being hurriedly translated into Manx was read on 11 July).