§ SIR HENRY KIMBER (Wandsworth)I beg to ask Mr. Chancellor of the Exchequer if he is aware that the Inland Revenue Commissioners contend that the income of an inventor derived from patent royalties is, under the Finance Act of 1907, not to be treated as earned income, but is liable to the full tax of 1s. in the pound instead of 9d., which is the rate allowed on incomes earned by other professional and scientific labours; and will he state upon what section of the Act the contention is founded.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. LLOYD-GEORGE,) Carnarvon BoroughsWhere an inventor sells outright his patent rights, the sum realised from the sale is regarded as capital and is not taxed. Where an inventor has not parted with his patent rights, but allows another person to work the patent in consideration of a payment of a royalty, the resulting income is regarded as unearned income derived from property.