DR. McDONNELL (Queen's Co., Leix)
I beg to ask the Chancellor of the Exchequer if he is aware that tenants in Ireland whose rents are less than the valuation are compelled to pay Income Tax on the difference unless they prove each year on appeal that the valuation is greater than the fair annual value; and, whether he will direct the Inland Revenue authorities that when the rent is a judicial rent it should be taken for this purpose as the fair annual value, without putting the tenants to the trouble of appealing?
§ THE CHANCELLOR OF THE EXCHEQUER (Sir MICHAEL HICKS BEACH,) Bristol, W.
The case mentioned by the hon. Member is, I understand, of rare occurrence. The law is, that under the Income Tax Acts assessments under Schedule A have to be made on the full annual value of the land, and in Ireland the value in the Poor Law valuation is, subject to appeal, taken to be the value for this purpose. Where the rent is less than this value, the assessment is divided between landlord and tenant—the landlord being charged on the rent, the tenant being charged in respect of his beneficial occupation, on the difference between the rent and the full annual value. A judicial rent is fixed, not as being the full annual value in the sense required by the Income Tax Acts, but as representing that part of the annual value which is fairly due to the landlord in respect of his interest in the land, as distinct from that of the tenant. The fact, therefore, that a judicial rent is 483 fixed below the Poor Law valuation cannot be held to show, of itself, that that valuation is in excess of the annual value for the purposes of Schedule A of the Income Tax Acts.