HC Deb 22 February 1886 vol 302 cc904-5

asked Mr. Attorney General, If his attention has been called to a statement recently made in The Daily News in reference to the income tax, to the following effect:— We continue to be overwhelmed with letters on the subject of the deduction for income tax which a tenant is allowed to make from his rent. We must adhere to our original statement that the rent of a man's house is free from income tax. We are hopeless of convincing one of our correspondents, who says that 'If a man agrees to take a house at a hundred a-year he has no legal right to deduct the income tax on that hundred a-year.' An Act of Parliament expressly says that he has, and we cannot expect that a gentleman who upsets the authority of the Legislature will accept ours; We will make a final attempt to explain our meaning by taking a concrete case. A. B.'s income from all sources is a thousand a-year. The rent of his house is a hundred a-year. He is entitled to no other exemption. Upon what sum does he really pay income tax? The correspondents to whom we have referred say a thousand pounds. We say nine hundred pounds, because he can deduct the tax from the hundred pounds which he would otherwise owe to his landlord; and, as there is evidently much confusion of opinion on this matter, would he say if the view taken by The Daily News is in conformity with Law?


The landlord of premises is liable to the Income Tax under Schedule A. It is sometimes called the Property Tax. This tax is in the first instance paid by the tenant, who is entitled by law in the case put to deduct from the rent the amount. The tenant is liable for Income Tax on the full amount of his income; but if the premises are used for business the rent is taken into account in estimating the income. If the house is not used for the purpose of business from which he makes his income, then, like any other expenditure, it is not taken into account. It follows, therefore, that in the case put a tenant would pay on the full sum of £1,000. I hope I may be allowed to say that I do not consider it to be part of my duties, nor has it been considered so by my Predecessors, to answer any legal puzzle which hon. Members may choose to put to me.