HC Deb 25 October 1909 vol 12 cc767-71

Any duty under this Part of this Act may be assessed on or in respect of any such pieces of land whether under separate occupation or not, as the Commissioners think fit; and where it is necessary for the purposes of any such assessment to apportion the value of any land, which has been valued as a whole, the value shall be apportioned by the Commissioners in such proportions as they think just.

Sir W. ROBSON moved to leave out the words, "and where it is necessary for the purposes of any such assessment to apportion the value of any land, which has been valued as a whole, the value shall be apportioned by the Commissioners in such proportions as they think just," and to insert thereof the words: (2) The Commissioners shall make such apportionments and re-apportionments of any original site value or any site value fixed on a periodical valuation as they consider necessary for the purpose of the collection or assessment of Increment Value Duty or Undeveloped Land Duty, or which they may be required at any time to make on the application of any person entitled to the fee simple of any land or to an interest in any land. On any such apportionment or re-apportionment for the purpose of the collection of Increment Value Duty on the occasion of the transfer on sale of the fee simple of the land or any interest in the land, or on the occasion of the grant of any lease of the land, the consideration for the transfer, or for the grant of the lease, shall be treated as one of the matters to which regard must be had in making the apportionment or re-apportionment. (3) The provisions relating to the procedure on the valuation of land for the purposes of this Part of this Act shall apply with respect to the apportionment or re-apportionment of site value under the Section as they apply with reference to the ascertainment of the original site value of land. (4) The value attributed on any such apportionment or re-apportionment to each part of the land shall for the purposes of this Part of this Act be treated as the original site value or the site value of the land, as the case may be.

Mr. WATSON RUTHERFORD

We do not desire in any way to move Amendments to this Amendment, the greater proportion of which is certainly in accordance with what was foreshadowed by the Government in the long discussion that we had in Committee. There is one point I wish to mention, and that is if the hon. and learned Gentleman (Sir W. Robson) could see his way, cither now or later on, to make it quite clear that all apportionments, not merely those mentioned here, but on any of those other points, would also be dealt with, because it is quite certain they will all be required. The enormous complication that is going to result in a few years with regard to many estates, and the necessity for examining the figures, and taking into account, not merely the matters that are referred to, but all kinds of other things, which bear on the same subject, have, I think, hardly been appreciated, because we shall have sites in the course of a few years in which they will be bound to go back to the year 1909, and we shall have scores of transactions where a piece has been carved out of another piece of land. Perhaps that piece has been laid together with some other piece of land similarly carved out of another estate. It is obvious for Increment Duty that the apportionment on each of the previous occasions will have to be regarded in respect of each particular piece. I think it will be seen that it is necessary to have an apportionment on each of the operations with respect to all the different allowances, deductions, and payments that will be made from time to time. It is particularly necessary with respect to Increment Duty, because that is not a matter that arises out of the mere value of the land as it stands. It has only got to be paid on any occasion in so far as it has not been paid before. I think it is a pity that the Amendment did not go a step further and say that every payment and allowance has got to be taken into consideration on any of those periodical occasions.

Mr. JAMES HOPE

The point was raised on Thursday as to where the severance of land may depreciate the value, and that on each of the occasions when apportionment has to be made that it would be more satisfactory if the Commissioners had instructions to take into account any depreciation by severance or other cause. When you come to reapportion the value of a particular bit of land you have to put a new value on one piece. When you are doing that you ought to consider the effect on the whole land as it was originally valued. I understood the Chancellor of the Exchequer on Thursday last to say that that would be taken into account, but I cannot see anywhere in the Bill any direction that it should be. I think this is the point where it would naturally arise.

Mr. PRETYMAN

This Clause is a very difficult one to discuss and embodies one of the most difficult points in the Bill, namely, that referred to in the original Debate under the term "unit of valuation." It is the unit of valuation which will necessarily cause one of the greatest difficulties in levying this tax, and this provision has to do mainly with the unit of valuation.

Sir W. ROBSON

No.

Mr. PRETYMAN

What does "apportionment or reapportionment" mean except altering the unit of valuation? If it does not mean that, what does it mean? I take it that Sub-section (2) of Clause 29 gives the Commissioners power to alter the unit of valuation at any moment they think necessary, not only periodically on the given dates, but at any other time, whether it be an occasion for the levying of the duty or not. I see no limitation of that power. Apparently the Commissioners may put the taxpayer to unlimited expense at any moment by desiring an apportionment or reapportionment. The question of whether the tax is leviable or not, or how much is leviable, largely depends on the unit of valuation selected. If you take a particular portion of the original unit and claim increment value upon it, the other portion must be affected by the value put upon the new portion. All sorts of difficulties will be created. I admit that in this complicated machinery something of this kind must be inserted. It is a cleverly drafted sub-section, but it is extraordinarily difficult to follow what will be its effect upon different kinds of property. We have exempted small ownerships. These will have to be valued in case they may at some future time become parts of a property liable to Increment Value Duty. That means that they will not be exempted at all. When the owner parts with them he will do so subject to the burden of Increment Value Duty. Therefore he will lose it in the price, and the small owner will pay just the same as anybody else.

Mr. LLOYD-GEORGE

That is dealt with in Clause 8 (4). But even if it were not, it has nothing to do with this provision. This proposal is entirely in the interests of the subject. The only alteration in the Bill as it left Committee is one enabling the Commissioners, on the application of any person entitled to an interest in the land, to make a reapportionment. That is a point raised repeatedly by the hon. Member for the West Derby Division of Liverpool (Mr. Watson Ruther-ford). He was anxious that the owner should be able to claim reapportionment at any time, and we have put it in. The whole point is this: You may have a hereditament valued as an hereditament. The owner sells a portion of it. He then says, "You cannot take that portion as if it were a sample out of the bulk, and say that because I am getting £1,000 for it and only paid £100, therefore there is an increment of £900. That is a choice piece." He will ask for a reapportionment of the value, giving £900 as the value of that piece, and not £100, thus getting out of the payment of an otherwise large Increment Duty. The whole of this Amendment is in the interests, not of the revenue, but of the taxpayer. Supposing an owner has a piece of land of 50 acres, a part of which he decides to develop for building. It is perfectly clear that the valuation then will be of a totally different character. Therefore, in order to protect himself from unreasonable Increment Value Duty in the event of his selling the land, he will ask for a reapportionment, and he will get it. From beginning to end this is a concession made in the interests of the subject.

Mr. PRETYMAN

I apologise for having forgotten the Sub-section which deals with this particular case. Will that reapportionment be substituted for the original site value?

Sir W. ROBSON

That is provided for by Sub-section (4) of the Amendment.

Amendment made.