to alter the present system of assessment, and the machinery for levying and collecting the Income Tax. This machinery is difficult and complicated, and I should not certainly venture, on my own responsibility, to make any alteration until there had been a thorough and careful inquiry into the whole matter. only seven farthings per pound, and would give for him to pay £4 178. 8d., or about 15 per cent less than the English farmer. He knew how desirable it was to get on with the Bill, and therefore did not like to trouble the right hon. Gentleman; but proposed that he should explain the matter at some future stage or opportunity, more especially as the case involved figures suddenly put, and which possibly might be incorrect. MR. GLADSTONE replied, that the difference had, as the hon. Member was from the Scotch farmer hiring under other terms, his rent including the tithe and half the rates; but he would suggest to the hon. Member to furnish him with his calculations, and he would be happy to explain the point at some future time. Clause agreed to. MR. ILLINGWORTH suggested that if the concession were given by the Government it should not be confined to the agricultural interest. The pressure was equally great in some of the manufac-aware, existed from the first, and arose turing districts of the North of England. It would be very acceptable to employers of labour and gentlemen engaged in commerce in the manufacturing districts just now to have shorter periods in which the assessments might be levied. He thought the argument of his hon. Friend the Member for Burnley (Mr. Rylands) was unanswerable-that if remissions of this nature were to be made in adverse times they ought to abandon the present system of assessment, and insist upon the Property Tax being levied in full when times were good. MR. BIDDELL asked the right hon. Gentleman the Chancellor of the Ex chequer to explain the great difference there appeared to be in the taxation of the latter's farming constituents in Mid Lothian, and his (Mr. Biddell's) in West Suffolk. He was aware that the different modes of letting land would in some degree account for the difference between ten farthings in the pound and the seven which the Scotch paid. He was also aware that this difference had existed from the first institution of the present tax; but no time would make good an injustice. It would be best understood if he put the case of two farms of equal merit and size-the one in England, the other in Scotland. Take a farm of 400 acres in England, it would be taxed as follows:-Rent-say 258. per acre-£500. Tithe-say 68. per acre£120. Total £620. From this total one-eighth was allowed to be deducted, £77 108., leaving a net total of £542 108., which, assessed upon atten farthings in the pound, would give for the farmer to pay £5 128. 10d. In Scotland, the rent would include the tithe and the parish rates, which, taking them at £50-28. 6d. per acre-about the same in both countries, -would make a total sum of £670-for the Scotch farmer to be assessed upon, at VOL. CCLXI. [THIRD SERIES.] Clause 21 (Provisions of Income Tax Acts to apply to duties hereby granted) agreed to. Clause 22 (Provisions of Income Tax Acts to apply to duties to be granted for succeeding year) agreed to. Clause 23 (Assessment of Income Tax under Schedule (A) and (B), and of the inhabited house duties for the year & 33 Vict. c. 67) 1881-1882, 32 agreed to. Clause 24 (Interpretation of "servant" and "other person" in exemption from inhabited house duty). MR. ANDERSON moved, in page 10, line 25, after "1878," to insert "Houses that are not strictly inhabited houses but which are institutions of a public or an educational character, and which can be called 'indwells in some small part of them, shall not habited' solely because a servant or caretaker be assessed to the inhabited house duty, except in respect of the annual value of such part of them as is in the actual occupation of the servant or caretaker, and if such annual value comes within the limits of the tax." The Amendment was aimed at a practice which, in regard to the Inhabited House Duty, had long been looked upon as a grievance. The law had been interpreted by those who levied the Inhabited House Duty to mean that it should be levied on the full rental of the house, whether it was strictly an inhabited house or not, provided anybody lived in it at all. Thus a large public institution, worth, perhaps, £1,000 a-year, if it had 2 X In page 10, line 25, after "1878," to insert but which are institutions of a public or an a "houses that are not strictly inhabited houses, cational character, and which can be called it. habited' solely because a servant or caretaker dwells in some small part of them, shall n the assessed to the inhabited house duty, except in them as is in the actual occupation of the ser respect of the annual value of such part of vant or caretaker, and if such annual valse comes within the limits of the tax."-M. Anderson.) Question proposed, "That those words be there inserted." as much as a caretaker living in it and | Law Courts. He hoped, therefore, that occupying one or two rooms, was rated the right hon. Gentleman would be willat its full rental. This had long been ing to grant relief by a statutory enfelt to be a great grievance. A few actment of the kind suggested by the years ago the London merchants suc- Amendment, and he trusted that the ceeded in passing an Amendment by words he proposed would be accepted. which it was provided that merely Amendment moved, having a caretaker living in a house should not subject a large establishment to the duty to the extent of the whole rental, provided that the establishment was used for purposes of gain; and it did appear to him that a large establishment not used for the purposes of gain had, à fortiori, a much stronger claim for relief than places used for gain. It was most unfair that such institutions as Museums, Colleges, Schools, or other public buildings of various kinds, should be charged the duty on their full rental value because it happened that a caretaker occupied a room in them. He had asked the right hon. Gentleman the Chancellor of the Exchequer a question in reference to this particular grievance a month or two ago, and the right hon. Gentleman replied that the Treasury instructed the tax collectors not to levy on educational establishments, and that they gave a wide and liberal interpretation to the term "educational establishments." But when he (Mr. Anderson) came to inquire into the facts of the case, he found that however much that might be the understanding of the right hon. Gentleman and the desire of the Treasury, the practice of the tax collectors was to levy the tax in a great many cases all over the country in a most capricious fashion. Some establishments were allowed to escape altogether, while others, in precisely the same position, were heavily taxed. He was informed that of late a new instruction had been sent out by the Treasury, and that the grievance would, to some extent, be mitigated. But unfortunately in one of the cases which had occurred there had been an appeal to the Court of Session, and the Court of Session decided that the tax was a justifiable statutory tax. Having been so decided by a Law Court, he was very doubtful whether a mere instruction from the Treasury would be sufficient to cause the practice to be discontinued in future. It would certainly be in the power of any tax collector to say that any instruction of that kind was not to overrule and set aside a decision of the Mr. Anderson MR. GLADSTONE: My hon. Friend proposes this Amendment because he is afraid that, in consequence of a declaration of the law by the Court of Session, the authority of the Executive Government will not avail to give the necessary remission of duty. Now, the Executive Government were parties to obtaining that declaration of the law. They were unwilling that any statutory right should be established against them; but they see no difficulty in the relaxation of the conditions, and they are even disposed to add something to that relaxation. I can, therefore, assure my hon. Friend that he need be under no apprehension at all upon the ground he has stated-namely, that the declaration of the Court of Session will be an obstacle to giving this just relief in remission of the tax upon houses beneficially occupied by any person acting under the name of caretaker or servant. And the additional relaxation we propose to give is that in the case of buildings such as those referred to by my hon. Friendbuildings held in trust by municipalities for the advancement of either science or art-the assessment will be limited to beneficial occupation. MR. ANDERSON said, after that declaration by the Chancellor of the Exchequer he should not press his Amendment. MR. W. FOWLER wished to call the attention of the Chancellor of the Exchequer to a small but important point in connection with this clause. There were many large buildings in the City of London in which more than one caretaker was required, and under the peculiar wording of the Act of 1878, it had been suggested that in cases of that kind the house should be dealt with as an inhabited house. That appeared to him to be an absurd proposition, and he trusted the right hon. Gentleman would say that under this Act it was not intended to put it in practice. Amendment, by leave, withdrawn. LORD FREDERICK CAVENDISH said, the matter should receive attention. Clause agreed to. ascertain the vast amount of property held in every large town upon occupation of under 12 months, he would see that his proposal would produce a very serious injury to the owners of property therein. For that reason he appealed to the right hon. Gentleman to reconsider the clause, which, as it stood, simply called upon one class to pay a tax that another class ought to pay, and agree to its postponement. MR. T. COLLINS agreed with the hon. Member for Liverpool in thinking that the Committee were not at all aware of the effect which this clause would have. For his own part, having been a Commissioner of Income Clause 25 (Amendment of 43 & 44 Tax for many years, he had never heard Vict. c. 19, s. 53) agreed to. Clause 26 (Provisions as to assessment to inhabited house duty on houses let for short periods). MR. WHITLEY said, he did not think attention had been sufficiently directed to this clause, nor did he believe that hon. Members fully realized the effect which it would have upon the owners of property, especially in our large cities and towns. The Inhabited House Duty was essentially a tax upon occupation; but the effect of this clause would be to transfer the incidence of taxation from the occupier to the landlord. It was difficult to realize the extent of the prejudicial result which this proposal would have with regard to property in large towns. He believed almost every hon. Member connected with those places would know that, say, eight-tenths of the houses in them were not let in annual tenancies, but at three, six, and even one month's notice. If, therefore, the owner of property were made liable not only for Property Tax, but also for Inhabited House Duty in cases where he might not receive his rent, their position would be greatly prejudiced. He was convinced, from the representations made to him from many quarters, that the owners of property in large towns had no idea of the extent to which they would suffer. They would be unable to protect themselves, because it was almost impossible to get tenants for their houses, and it would necessarily bear very hardly upon them if they were exposed to this extra taxation. If the right hon. Gentleman the Chancellor of the Exchequer would of such a proposal as this being made. Certainly, he did not think the clause was understood throughout the country as making the owner, instead of the occupier, liable for Inhabited House Duty if the house was let for any period less than a year. Many houses in Yorkshire were let ont hree months' tenancies. The Inhabited House Duty was essentially a tax levied upon the occupier; but the country was now given to understand that the owner was responsible. In view of the great importance of the proposal in its effect upon property throughout the country, he suggested that the best course would be to omit the clause from the Bill, and then, at some future time, when the country had fully considered it, it might, if necessary, be brought up again. It had rather the appearance of stealing a march upon the country to make the owner liable for the occupier's tax. MR. ALDERMAN LAWRENCE pointed out that the Inhabited House Duty was always paid by the occupier in the case of houses let upon lease. That was not the case with the Land Tax, which was always paid by the landlord, unless he covenanted with the tenant to the contrary. He did not think the Treasury ought to impose further conditions upon landlords in order to make them liable for default of the tenant more than they were at present; but, according to this clause, every landlord would be liable for House Tax in cases where the property was let for a less term than one year. MR. GREGORY said, that the term "Inhabited House Duty" implied occupation, and had, therefore, always been the tenant's tax. The distinction between the landlords' taxes and the tenants' taxes was perfectly well known at present; but, as he understood the clause, it would entirely relieve the occupier from the payment of a tax which had always been paid by him and throw it upon the landlord, notwithstanding any previous contract that might exist between the parties. MR. GLADSTONE said, the object of the clause was to prevent the recurrence of loss, which, under the present arrangements, had occurred to the Revenue. At the same time, he should be sorry that a proposal such as that contained in this clause should be adopted without full consideration on the part of the House; and he was, therefore, willing that it should be omitted from the Bill. Clause, by leave, withdrawn. PART III.-STAMPS. Clause 27 (Stamp duties to be under the care and management of the Commissioners of Inland Revenue) agreed to. Clause 28 (Grant of duties in respect of probate and letters of administration, and on inventories). MR. ALDERMAN LAWRENCE contended that the duty under the next grade of the scale would fall more heavily on estates of between £300 and £500 than those in any portion of the scale; and he therefore hoped the Chancellor of the Exchequer would receive with favour his proposal to extend the duty of £1 on every £50 to those estates. Amendment moved, in page 12, line 19, to leave out "£300," and insert "£500." -(Mr. Alderman Lawrence.) MR. GLADSTONE said, he was not convinced that the operation of the duty would be more severe at the particular point indicated by the Amendment of the hon. Member than at any other; but as it would afford relief to a large number of persons, and as there would be no great loss to the Revenue in consequence, he was willing to extend the limit of £300 to £500. Amendment agreed to. On Question, "That the Clause, as amended, stand part of the Bill." MR. GREGORY said, the Committee would be aware that the Probate Duties Mr. Gregory were considerably raised last year by the late Chancellor of the Exchequer. He had upon that occasion taken some objection to the measure, but had been unable to pursue the subject fully in consequence of the dispersion which occurred at the General Election. There was, however, no doubt that the former alteration had a very considerable effect in the way of increasing the charge on estates. The present Bill now proposed a further advance. Upon an estate under £4,000 the old duty was £80; it was, under the arrangement of the late Chancellor of the Exchequer, raised to £130, and the present Bill would increase the duty to £147. The original duty on an estate under £10,000 was £180; under the present Bill it would be £297. In the case of estates under £30,000, the old duty was £400; it was raised last year to £690, and would now be increased to £897. He admitted that lineal descendants would be relievedthat was to say, those in direct descent would be relieved to the extent of 1 per cent; but, as he understood it, there would be no relief for those in remoter degrees of consanguinity. This alteration was very material in view of the possibility of the Probate Duty being extended to real estate, and should be borne in mind by those who were in favour of that change. He did not raise any objection to the amount of the duty, but thought it right that the Committee should understand the real effect of the clause. MR. GLADSTONE said, the aim had been to make the scale almost entirely equal. He felt rather dissatisfied with the arrangement proposed, because the per cent Probate Duty was not the exact equivalent of the Probate Duty which had been given up. It was something less, and if they had not been led by a desire to keep to round numbers the charge would have been a little higher. It was perfectly true that the change did not operate with perfect equality as regarded lineals and collaterals; but this change had been instituted on the principle that the residue generally went to the lineal. The hon. Gentleman opposite (Mr. Gregory) might be assured of the correctness of the general assertion that the lineals would receive relief somewhat greater than the tax, while they would have no expense in connection with the payment of the duty. On the other hand, the Department would get earlier payment. MR. DODDS pointed out that under the proposed assessment every £100 had to bear its proper share of the duty, and that the blots which existed in the old system, and had been complained of for so many years, were now got rid of. No doubt, some estates had now to pay which formerly escaped duty altogether. MR. ALDERMAN LAWRENCE said, that the clause made no alteration whatever with regard to the legacies received by collaterals, who would have to pay the same amount of duty as before. They would have to pay more only in case they were residuary legatees. He hoped the principle would be brought to bear upon freehold legacies, which now had to pay an infinitely smaller amount than they ought to pay. MR. WHITLEY wished to ask the Chancellor of the Exchequer whether it was proposed that the duty should be paid upon affidavit instead of on probate? At present the duty had to be paid before it was possible to ascertain the value of the estate, and in case of error the practice was to pay back the excess in fees. Of course, in the case of a mistake-say, of £1,000-it would be very inconvenient to receive the overpayment in this way and not in cash. If it was thought desirable to change the present practice, and transfer the duty from probate to affidavit, perhaps some directions might be given to the officers to settle the form of the affidavit before the Probate Duty was paid. If the money was returned in fees it would cause great difficulty to the Profession. He had heard no reason for the change that was proposed up to the present time, and should, therefore, be glad to receive some explanation with regard to it. Numbers of representations had been made to him from the Profession, and he was sure that the removal of the difficulties to which he had referred would be received with great satisfaction. MR. DODDS said, he was in a position to re-assure the hon. Member for Liverpool (Mr. Whitley). He had brought this point under the attention of the authorities at Somerset House, and had received from them very satisfactory assurances as to the way in which the proposed alteration would be worked. The conclusion at which he had arrived, after fully considering the question, was, that there would be no difficulty whatever in connection with it. Some difficulty existed at the present time in ascertaining the amount of the estate, but, in future, payment would simply be made upon the affidavit; the duty, however, would not be charged until all preliminaries were settled-until it was ascertained whether there were any difficulties with regard to probate, and whether any caveat was entered. He was assured there would be no inconvenience under the new system. On the contrary, there would be the benefit of deducting the debts in a way that was not before practicable. For his own part, he was grateful to the Chancellor of the Exchequer for this benefit. Clause, as amended, agreed to. Clause 29 (Power to deduct debts and funeral expenses when deceased died domiciled in the United Kingdom). MR. GREGORY said, the object of the Amendment he was about to move was to insure that if affidavits were made of the debts of the deceased, they should not be taken as an admission of liability, as between the creditor and the estate or representative of the deceased. On applying for probate a person had to swear in an affidavit that such and such amounts were due to certain persons. But it was well known to be impossible, in many cases, immediately after the death of the deceased to ascertain what the debts were. Many of the debts sworn to might be doubtful, and be only confessed afterwards, in the course of administration. In case of litigation it might materially prejudice the estate of a debtor to have it put in evidence that he had made an affidavit to the best of his knowledge and belief that certain debts were due by him. If the Solicitor General would say that the party in question would not be prejudiced, he would give up his Amendment. He regarded it as a most serious matter that the affidavit should be held to be an admission of liability; and as the insertion of his Amendment would, at all events, do no harm, he trusted it would meet with the approval of the right hon. Gentleman. He did not think it afforded anything like an adequate protection to say that the admission made in the affidavit would be withheld by the office, which could be compelled by the ordinary process to produce it. |