Mr. E. Ellicerose to put a question to the right hon. Gentleman the Chancellor of the Exchequer on the operation of the Income Tax. A benevolent society for widows and orphans, established in Fife for more than a century, had been charged with the tax, although the income was very much below 150l. a year. It had appealed to the Commissioners, who dismissed the appeal, and confirmed the assessment, on the ground that the property of the society was not vested in Government securities. There was an exception, however, that persons receiving pensions under 150l. a year might obtain a return of the tax; but the truth was, that the pensions were, in some cases, not more than 5s. a year. He wished to ask the Chancellor of the Exchequer this plain question—whether it were contemplated by Government that a society like this, founded for purely benevolent purposes, with an income of less than 150l. a year, should be subject to the tax?
§ The Chancellor of the Exchequersaid that the case was a peculiar one. The Property Tax Act made an exception in favour of all enrolled friendly societies whose property was invested in public securities; but this voluntary association of Fife had invested its funds in lands and mortgages, so as to take it out of the exception. Of course, upon such small fractional sums as the hon. Member had mentioned, it must be very difficult to obtain a return of the tax; but within the last hour, he (the Chancellor of the Exchequer) had communicated with the Tax Department; and he hoped that, even as the law stood, it would be possible to grant the relief sought.
§ Mr. T. Duncombewished to call the attention of the right hon. Gentleman to what appeared to him a manifest injustice; to which he trusted a remedy might be applied. The Department of Legacy Duties and the Assessments upon Incomes 725 were under the same Commissioners at Somerset House; and he would put this case. A person, sixty-four years old, had an annuity left him of 1,000l.; and in the market it would be worth 8,030l. The duty of 10 per cent. upon the annuity was 803l., which the party was allowed to pay in four years, at the rate of 200l. 15s. per annum. His income was thus reduced to about 890l. a year; but, nevertheless, he was called upon to pay the Income Tax upon the whole 1,000l. a year, as if no deduction had been made from it for legacy duty, This was palpably unjust; and he should be glad to know if the right hon. Gentleman was prepared to give instructions to the Commissioners to remedy the injustice? He had another question to put, which he had no doubt the Chancellor of the Exchequer would be ready to answer. During the last three years, since the passing of the Income Tax Act, there had been in the Office of the Stamps and Taxes, for the purpose of making the assessments, copies of the Bank of England dividend books. It had been always supposed, that these books were sacred, and that they were kept only at the Bank of England; that it was competent for the Board of Commissioners to obtain extracts from them; but that no copies were to be in their control. The fact that the Commissioners had such books, he believed, was not generally known; nor was it known to the public, that some thirty or forty clerks had access to them, and could thereby ascertain what any individual possesed. There had been of late not a few instances of forgery; and some curiosity had been excited on the point how the offenders came by their knowledge; in future, however, there would not be the same difficulty; for if the books were open to the eyes of thirty or forty clerks, it was evident that means of information would be easily accessible. ["Order."] He might not be strictly in order, but if he were not, he had only to wait till the next Motion, and then make his remarks. However, he would now only put his questions: first, as to the injustice in charging the Income Tax upon a sum deducted for the legacy duty; and next, as to the copies of the Bank dividend books in the hands of the Commissioners.
§ The Chancellor of the Exchequerregretted that the nature of the questions had not earlier been communicated to 726 him, as he would have taken care to be in possession of the facts. As to the first point, all he could do was to say that he would make the necessary inquiries. As to the inspection of the books of the Bank he apprehended that the hon. Member was mistaken—that there was no copy in the hands of the Commissioners; but that when they wanted information a Bank clerk attended them, and supplied it by reference to the books. On this point, also, he would furnish himself with more precise information.