Abbildungen der Seite

Name of Case.

Commissioners of Inland Revenue v. Zorab.

Commissioners of In

land Revenue V. Brown.

The Ormond Investment Co., Ltd. v. Betts (H.M. Inspector of Taxes).

Lord Manton's Trustees v. Steele (H.M. Inspector of Taxes). Steele (H.M. Inspector of Taxes) v. Lord Manton's Trustees.

(1) B. W. Noble, Ltd. v. Mitchell (H.M. Inspector of Taxes). (2) Mitchell (H.M. Inspector of Taxes) v. B. W. Noble, Ltd.


Précis of Decision.

A British subject born in Calcutta had
held an appointment in India for 30
years. He retired in 1920 and visited
the United Kingdom for periods
amounting to nearly six months in each i
year from 1920-21 to 1924-25, living in
hotels during these visits. The Special
Commissioners decided that he was not
resident in the United Kingdom for
the year 1924-25, and the Court, I
holding that there was evidence on
which the Commissioners could come
to their decision, was unable to disturb

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24th Nov.,

2nd Feb.,

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25th Nov.,

3rd Feb.,

A British subject who for many years 24th Nov.,
prior to 1893 had held an appointment 1926.
in the Indian Civil Service, resided in
the United Kingdom from 1893 until
1918, when he sold his house and stored
his furniture. Subsequently he visited
the United Kingdom for about three
months in each year, staying with
friends or at hotels, and spent the rest
of each year abroad. The Special
Commissioners decided that he was not
resident in the United Kingdom for
the year 1924-25 and the Court, holding
that there was evidence on which the
Commissioners could come to their
decision, was unable to disturb it.
An investment company incorporated in
June, 1922, held shares in a foreign
company. It received a dividend
thereon in December, 1922, which was
its only income from foreign investments
up to 5th April, 1923. Held in the
Court of Appeal, reversing the decision
in the King's Bench Division, that
Rule 1 (2) of the Rules applicable to
Cases I and II of Schedule D applies
to assessments made under Rule 1 of
Case V, and that the Case V assess-
ment on the company for each of the
years 1922-23 and 1923-24 was rightly
made in the amount of the dividend
received in December, 1922.
Under an agreement in writing a sum of
money was lent personally by an indi-
vidual to a foreign company, to be
repaid in London by instalments with
interest at 6 per cent. In default of
payment of any instalment of principal
or interest the whole principal outstand-
ing, together with interest, became due
and payable. Held that the interest
was income arising not from a foreign
security but from a foreign possession,
and was assessable under Case V of
Schedule D on the amount of the
remittances by reference to Rule 1 (2)
of Cases I and II of Schedule D.
(1) Under its Articles of Association the
management of a British company of
insurance brokers was vested in its
Board of Directors in London. The
French business of the company was
conducted under a power of attorney
by a director resident in Paris, and
the results of the French business were
incorporated in the company's balance
sheets, but no profits were ever remitted
to London. Held that the French
business was controlled by the Board
of Directors in London and that the
company was assessable on the French
profits under Case I of Schedule D.
(2) Circumstances arose in which the
company might have been justified in
dismissing a director, but in order to
avoid publicity the company entered
into negotiations with him for his
retirement and agreed to pay him a
sum of money by five yearly instalments.
Held that the instalments were admissi-
ble deductions in computing the com-
pany's Income Tax liability.

29th Nov.,

7th Feb.,

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Name of Case.

Martin v. Lowry (H.M.
Inspector of Taxes).

Lothian Chemical Co.,
Ltd. v. Rogers (H.M.
Inspector of Taxes).

Kirke's Trustees v.
Commissioners of
Inland Revenue.


Commissioners of In-
land Revenue
Peeblesshire Nursing]

Marshall v. Tweedy (H.M. Inspector of Taxes).


Précis of Decision.

wholesale agricultural machinery merchant who had purchased from the the Government its surplus stock of aeroplane linen, having failed to sell the whole of it to linen manufacturers in bulk, set up a selling organisation and disposed of the whole of the linen in portions within a period of some seven months. Held that his dealings in the linen constituted the carrying on of a trade of which the profits were chargeable to Income Tax.

A company was up till June, 1917, manu-
facturing explosives for the Ministry of
Munitions, but owing to the dangerous
situation of the works it was agreed
with the Ministry that the plant should
be converted and used for the manu-
facture of calcium nitrate, the Ministry
defraying the cost of conversion_up
to a maximum of £15,000. The
company carried out the conversion
but the actual cost exceeded this figure
by £4,044, of which £1,879 was subse-
quently paid by the Ministry. Held
that the net loss of £2,165 was not a
trading loss or a bad debt, but a loss
of capital, and was accordingly in-
admissible as a deduction for Income
Tax purposes.

A repayment of Excess Profits Duty made
after the cessation of the business in
respect of which the duty was previously
paid must be regarded as an ascertained
profit assessable under Schedule D for
the year of repayment.

The Association was formed for the
improvement of nursing facilities
throughout the County of Peebles, and
the provision of such facilities at a
moderate rate to working people in
the County. A nursing home and
emergency hospital instituted as part
of the County War Memorial was in
1922 handed over to the Association,
and in addition the balance of the
Memorial Fund was invested for the
Association's behoof. The Association
had also a capital fund made up of
subscriptions and donations. Members
were divided into three classes, according
to means, and membership fees were
graded accordingly. Members obtained
the services of nurses or hospital treat-
ment at low charges, and non-subscribers
could also obtain these benefits on
payment of higher fees. The Special
Commissioners decided that the object
of the Association was to supply nursing
at less than cost price to sick persons
of the poorer classes, and that the
Association was accordingly entitled to
exemption from Income Tax under
Section 37 (1) (b) of the Income Tax
Act, 1918, and Section 30 (1) (a) of the
Finance Act, 1921. Held that there
was sufficient evidence to warrant the
finding of the Special Commissioners.
A farmer and breeder of horses and cattle
occupied three farms. He owned a
number of stallions which he used for
the service of his farm mares, and
he also sold for fees the services of his
stallions to mares of other owners.
Held that the Appellant was assessable
under Schedule D on the stallion fees,
after allowing expenses required to
earn the profits from the service of
mares plus any expenses of keeping up
the stud to the number of stallions
earning fees but that replacement
should not exceed one-third of that

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9th Dec.,


14th Dec.,

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15th Dec.,

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17th Dec.,

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Commissioners of In

land Revenue บ. Falkirk Temperance Café Trust.

Ingle v. Farrand (H.M. Inspector of Taxes).

A ship repairer, a blacksmith and a fish salesman purchased as a joint adventure a cargo vessel with a view to its conversion into and sale as a steam drifter. The two former were employed on the work at the ordinary trade rates, and on the completion of the repairs and alterations the vessel was sold at a profit. Held that the Respondents were assessable to Income Tax under Case I of Schedule D in respect of this profit.

A testator bequeathed one half of the residue of his estate in trust to be used for providing Falkirk with a temperance public house or houses. The trustees purchased a hotel which they reconstructed and furnished as a temperance hotel and café. The café was in two sections, one for the middle classes where meals were provided at ordinary rates and the other for the poorer classes where lower prices were charged; the premises also included reading and recreation rooms where newspapers and periodicals were supplied free of charge, and bedrooms, bathrooms and a lecture room which could be hired. The balance of the share of residue was invested in name of the trustees. The café was run at a loss which was made good out of the income of the invested funds, the policy of the trustees being to charge only such prices as would avoid a trading deficiency in excess of the income from investments. Held that the trust was one established for charitable purposes only within the meaning of Section 37 (1) (b) of the Income Tax Act, 1918, that the income had been applied to such purposes only, and that the trust was accordingly entitled to exemption from Income Tax in respect | of such income.

An additional assessment to Income Tax under Schedule E for the year 1921-22 was made, after the 1st May, 1922, upon a Second Class Assistant in the employ of the London County Council in respect of the excess of his actual remuneration for that year over the i amount of the original Schedule E assessment made upon him for that year. Held that, as the original assessment under Schedule E exceeded the amount upon which he should have been assessed under Schedule D on the three years' average basis as not holding a public office or employment, there had been no undercharge for the year in question and the additional assessment could not be supported.

18th Dec., 1926.

24th Feb., 1927.


Session (First Division)

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42. The amount included for Income Tax in the Budget Estimate for 1926-27 was £254,800,000, and the Exchequer Receipt amounted to £234,717,000, showing a deficit of £20,083,000. The Gross Receipt of tax in the year amounted to £273,912,916, and the repayments to £43,777,048 leaving a Net Receipt of £230,135,868. The Budget Estimates, Exchequer Receipts and Net Receipts in 1926-27 and the ten preceding years are as follows:

Table 43.-Budget Estimate, Exchequer Receipt, and Net Receipt.

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43. The standard rate of Income Tax in force for the year 1926-27 was 4s. in the £. The personal allowances, deductions and reliefs granted to individuals are shortly summarised below.

Table 44.-Taxation in force for the Years 1920-21 to 1926-27.

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The following allowances, deductions and reliefs were granted to individuals, the age allowance only being contingent upon the total amount of the income:Earned Income Allowance

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1920-21 to 1924-25, one

tenth of the earned income, not exceeding £200 for any individual.

1925-26 and 1926-27, onesixth of the earned income, not exceeding £250 for any individual.

1925-26 and 1926-27, one

sixth of such total income. Married persons, £225; Other persons, £135.

Increased Personal Allowance where Wife has Up to £45. earned income.

Widower's or Widow's Housekeeper taking care of 1920-21 to 1923-24, £45. children.

Widower's or Widow's Housekeeper

1924-25 to 1926-27, £60.

Unmarried person's widowed mother taking care of 1920-21 to 1923-24, £45; children. 1924-25 to 1926-27, £60.

Children under 16 years of age, or over 16 if continu- £36 for one child and £27 ing full-time education. for each subsequent child.

Certain Dependent Relatives incapacitated by old £25 for each such relative. age or infirmity.

Rates of Tax in the £ Chargeable on the Taxable Income.

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44. The following table illustrates the graduation of the tax for representative incomes and taxpayers :


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