The Curate and His Grant - Foreign Insurance Companies - The Hard Case of Boarding-house.

Keepers - Easter Offerings - Allowances and Exemptions

Contributions paid by colliery owners to an association for the purpose of securing an indemnity from loss occasioned by strikes are not moneys "wholly and exclusively laid out or expended for the purposes of trade " within the meaning of the rules applying to the section, and do not, therefore, form a proper subject for deduction in estimating the balance of profits of the colliery for income-tax purposes.

Grant To Curate

In recognition of faithful service for more than fifteen years, the Council of the Curates' Augmentation Fund made a grant to a curate of 50. The grant was renewable at the discretion of the council, but only upon the condition that the curate obtained donations to the fund to half the amount of the grant. It was held that in these circumstances the curate was not assessable to the income tax in respect of the sum granted.

Foreign Life Insurance Company

No deduction from an assessment for income tax was allowable in respect of premium on policies of life insurance effected with foreign insurance companies. The abatement provided for by the Act was only applicable to policies effected with insurance companies in the United Kingdom which are properly subject to the jurisdiction of the English Parliament. On this ground, the abatement of a claimant insured with a New York insurance company having an office in England was not allowed, but the provision has now been extended to any insurance company " lawfully carrying on business in Great Britain or Ireland," so that those insured with American and other companies carrying on business in this country would appear to be entitled to the abatement.

House Duty

As a general rule, income tax is chargeable upon the occupier for the time being of a house or land, and the latter, if a tenant, is entitled to deduct the amount from the next payment of rent to his landlord, who must allow the deduction under a penalty of 50; any agreement between landlord and tenant to the contrary is invalid.

In the case of flats and apartments occupied by two or more persons, the income tax is in the first instance payable by the landlord, but where houses are divided into distinct properties and occupied by distinct owners, the tax is charged separately on the respective occupiers.

How To Reckon Profits

Profits are to be computed on a three years' average, but where the trade has been commenced within the three years, the computation is to be made on the average of profit for one year. In the case of a partnership, the predominant partner is to make the return ; and in some cases of married women and infants the return is to be made by their trustees.

A person carrying on two distinct trades may set off results."no deductions are allowed for any disbursements or expenses of maintenance of the parties or. their families or establishments, nor for the rent or value of any dwelling-house or domestic

P offices, except such part as may be used for the trade or profession, not exceeding two-thirds of the rent bona fide paid for such house.

Deduction from Rent

In the case of a bank the annual value of that part of the bank which is used as a residence for the manager may be deducted. Where the clergyman or minister pays rent for a dwelling-house, and uses part mainly and substantially for the purpose of his duty as such, the commissioners may allow as a deduction such part of the rent, not exceeding one-eighth, as they think fit.

Inhabited house duty is payable by boarding-house keepers and people who let lodgings, although the house may only be occupied for a short period of the year.

The Scarborough Case

Therefore, in the case of some houses at Scarborough which were generally let to three or four different families during the Spa season, between June and October, and were shut up and unoccupied from the end of the season until the beginning of the next Spa season - that is to say, for a period of about eight months in the year - during which time they were never entered to be aired by fires or otherwise, or used in any manner by the owners or their families or servants, it was held that they were chargeable to the assessed taxes for the entire year. This may be good law, but is undeniably hard on people who make a precarious income by letting lodgings.

At Tunbridge Wells

In the following cases, the Commissioners were willing to allow the abatement which was claimed, but the judges decided that they had no power to do so. In the first case, the owner of three lodging-houses at Tunbridge Wells, which were never let for a longer period than six months, paid three-quarters of a year's assessed taxes, and not unfairly claimed an abatement for the remaining quarter. It appeared that the season began in June, when the visitors arrived for the summer, and that they usually left between Michaelmas and Christmas. From January until after the commencement of April, the houses, which were furnished, were shut up and not used in any way. Nevertheless, he had to pay for the full year.

In the second case, which concerned a house let in Sussex, the claim was stronger still, for in this case the house was unfurnished for one entire quarter, and yet it was held that a person keeping a house for the purpose of being let as a ready-furnished lodging is chargeable for the whole year's duty, although it be unoccupied and unfurnished for one entire quarter.

In the case of a clergyman living in Berkshire who occupied a house which belonged to him, and which he left upon June 26, the house remaining unoccupied and empty until April of the following year, it was held that he was chargeable for the assessed taxes for the remainder of the year.

When houses have been unoccupied for a whole year, notice in writing should be given to the income-tax assessors.

Profits upon all securities bearing interest payable out of the public revenue ; profit upon all interest of money not being annual interest; home and foreign and colonial Government dividends and shares (except India stock in cases where the half-yearly payment does not amount to 2 10s.) ; interest or dividends paid or credited to a depositor in a savings bank whose income exceeds 160 ; annuities, etc., are all chargeable, and the duty is to be computed upon the profits of the previous year.

Voluntary Gifts

Voluntary gifts which are derivable from holding an office or being engaged in some employment are chargeable as emoluments. Thus, voluntary contribution to a beneficed clergyman from a fund designed to raise the income of the living to a certain sum, and voluntary Easter offerings made by parishioners and others, are chargeable, but not so presents of money made to a poor clergyman in his individual capacity.

A person is chargeable in respect of a sum placed annually to his credit as part of his salary under a provident fund, the payment of which is deferred.

Allowances may be made for the maintenance, including the replacement, of farmhouses, farm buildings, cottages, fences, and other works, and are made by way of abatement in the repairs of churches, ecclesiastical dues, taxes and parochial rates on tithe rent-charge, unredeemed land tax, drainage, fencing, and embankment rates, repairs of sea-walls, repairs of university buildings, hospitals, public schools, and almshouses.

Property Exempted

Certain classes of property are exempted from income tax, including university buildings, public buildings belonging to hospitals, public schools, and almshouses, buildings of literary and scientific institutions, rents and profits of lands, etc., belonging to hospitals, etc., or to trustees for charitable purposes, or to the trustees of the British Museum or of certain friendly societies.

Incidental Expenses

Expenses incidental to the performance of an office may be deducted, as, for example, the expenses of travelling in the performance of the duties of a public office or employment, or of keeping a horse to enable the holder to perform such duties, but expenses of travelling from a person's residence to his place of business are not deductible.

Returns Required from Employers

Every employer is required on recipt of notice from an assessor to make a return of the names and places of residence of persons employed by him, and to specify the amount of payments made by him to such persons. This requirement does not extend to such employees as are not employed in any other employment, and whose remuneration does not exceed 160.