and not require much extra expenditure of capital, whereas a large farm must be fully equipped by itself. Any tax on pure land values would fall heaviest therefore on the smallest farms.

Besides being so extremely difficult, the separate valuation of agricultural property, except in the near vicinity of growing cities, is practically useless for the purpose of taxing the increment. Increment on such land is very uncommon, and when it occurs is very slow and uncertain, being usually due to changes in prices, not to the activities of the government or the increase in local population. Few persons have been so bold as to suggest taxing the farmers of England on their recovery from the agricultural depression, and in fact the act specifically exempts land with no other than agricultural value. Neither is the valuation of rural land of any use for the Undeveloped Land Duty; and as for the Reversion and Mineral Rights Duties, neither of them depends on the general valuation at all.

In addition to ascertaining the value of all land in the kingdom as on April 30, 1909, the Valuation Department must make a valuation on every occasion of a transfer by sale or gift or by a lease for more than fourteen years, or on the death of an owner. In the case of sales and leases the various values are deduced from the price or rent reserved. At the termination of a lease of over twenty-one years the value of the property must be calculated for the purpose of assessing Reversion Duty, both as it actually is and as it was at the beginning of the lease. Moreover the department values licensed properties for taxation and compensation under the Licensing Act, and occasionally does other work for other branches of the government.

It is almost needless to say that the cost of these valuations is very great. The total expenditure was

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stated by Mr. Montagu, in the House of Commons, April 1, 1914, to have been £2,178,397 up to that date, and the estimate for the ensuing year was £843,614.1 It is not likely that this estimate was too high, as the Government has never erred on the side of caution with respect to either the expenses or the receipts of the land values duties.

The cost of valuation in 1913-14, and the estimate for 1914-15 were made up as follows: —

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Adding the last sum to the cost up to April, 1914, will give £3,022,011 as the cost to the end of March, 1915. The number of officials employed in the Valuation Department on March 31, 1913, was 4151, their salaries amounting to £492,626 per annum. These figures had risen by January 1, 1914, to 4641 and £544,157 respectively. Of the employees at the latter date, 315, with salaries totalling £131,216, were classed as permanent." 4

The land values duties, tho expected to have beneficial social effects, were nevertheless introduced with the expectation of yielding a large revenue; and certainly nothing but a very large revenue could justify

1 Mr. Montagu, April 6, 1914 (H. C. Debates, April 6, 1914, column 1636).

2 Mr. Lloyd George's estimate had been only £680,000 (H. C. Debates, April 17, 1913, column 2125).

H. C. Debates, April 28, 1913, column 811.

H. C. Debates, February 17, 1914, column 782. It is expected that the number employed will be reduced by 1700 during the present fiscal year.

them as a fiscal measure, considering their cost not only to the administration but also to individual landowners. The latter item has been estimated as high as a million pounds a year, and is certainly a very considerable sum. What revenue has in fact resulted?


(1) Let us first consider the Increment Value Duty. This from its nature would require some time to get into full running order, as it strikes only increment accruing after April 30, 1909. Nevertheless it was expected to produce a fair revenue in three or four years at the most. I append the budget estimates for each year, and the amount actually received:


1910-11 1911-12 1912-13 1913-14 1914-15

Budget estimate £20,000 £50,000 £30,000 £20,000 £55,000*
Net receipt
127 6,127 16,981 34,199
Total net receipt, 1910-1914: £57,434

The Increment Duty is technically a stamp tax. Each year the particulars of some 150,000 to 200,000 transactions involving land must be sent in to be stamped. The number of units of valuation in respect of which "occasion " valuations were made, based on the information thus received, was 316,721 in the year 1913-14, besides 8391 in Ireland. The proportion of assessments of duty, as compared with the number of valuations, was very small, being 1.8% in Scotland and 0.9% in England and Wales; but the proportion for all valuations in Great Britain from 1910 to 1914 was only 0.57 %.

1 Mr. E. Royds, in the House of Commons, June 20, 1912, and again June 24, 1914. Cf. various publications by the Land Union for the details of particular cases.

2 Mr. Lloyd George, in House of Commons, May 14, 1914.

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The number of assessments in 1913-14 was 3080, excluding minerals, and the average amount of duty assessed was in Scotland £47, in England and Wales £14. The average taxable increment in Great Britain was only £85, which, taken in connection with the figures in the preceding paragraph, shows that land is not such a profitable investment as the single-taxers would have us believe.1 The average taxable increment discovered by all the valuations made for this purpose, 1910–14, was less than ten shillings. There were also in 1913-14, 61 assessments in respect of minerals, averaging £29 each.

The cost occasioned to landowners by this duty is considerable, whether or not they are called upon to pay anything to the state. The usual solicitor's fee is a guinea for getting the papers stamped, and this item alone probably exceeds the net receipt of the tax. In addition the delay in assessing the duty is very annoying, but possibly this will disappear when the original valuation is completed.

(2) The second of the land values taxes is the Reversion Duty, a tax of 10% on the benefit to a landlord derived from the expiration of a lease, of twenty-one years or more, of property (not merely the site) which has risen in value. This requires two valuations on each occasion, viz: the value as at the grant of the lease, ascertained by reference to the rent reserved and other payments made in consideration of the lease, and the value at the determination of the lease estimated in the usual manner. The two most important judicial decisions affecting this duty are that in the case of Earl Fitzwilliam, which was to the effect that the value of a

1 In Ireland, owing to the different system of land-registry, particulars are not required of every transfer. The proportion of assessments to the total number of transfers, excluding transfers on the occasion of a death, was about 1.7%; the average duty assessed about £10.

83 Law Journal Reports, 1076.

public-house license must be included in the value of the reversion; and that in the Marquis of Camden's case,1 which decided that "payments made in consideration of the lease" were not only those paid to the lessor, but might also include sums expended on buildings or other improvements. It is of course obvious that a lessor who expects to receive a good building at the expiration of the lease will be willing to grant a corresponding reduction in the annual rent. These cases and others caused much delay in the collection of the duty, which was also hindered in its operation by the fact that the general land valuation was not completed. Its estimated and actual yields are as follows:


Budget estimate
Net receipt

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£90,000 £50,000 £125,000 £100,000 £130,000
257 22,621 47,974 80,435

Total net receipt, 1910-1914: £151,287

The number of accounts rendered for this duty, up to March 31, 1914, was 7443, plus 129 in Ireland. The number of accounts dealt with by the Valuation Department was 5224. The number of assessments to duty was 3562, plus 30 in Ireland, and the duty assessed £216,486 and £4609 respectively. The fact that nearly one-third remained unpaid was ascribed by the Commissioners to the decision in the Camden case.

The number of valuations for Reversion Duty made in the year ended 31st March, 1914, was 2405 in Great Britain and 24 in Ireland. The "aggregate value of benefit accruing to lessors" was £1,840,592 in the former and £18,407 in the latter. The average benefit, disregarding minus quantities, from the beginning up to 31st March, 1914, was:

1 30 Times Law Reports, 681.

In some cases there was a loss, not a gain.

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