§ (1) Where any land or interest in land in respect of which Increment Value Duty or Reversion Duty is charged is settled land within the meaning of the Settled Land Act, 1882, and the tenant for life is the person who is liable to pay any sums on account of either of these duties, he shall be entitled to charge by deed upon the settled land any amount paid by him 797 or which he may then be or may thereafter become liable to pay in respect of either of these duties, and the amount of any expenditure which he may have reasonably incurred in connection with the valuation, and the benefit of any such charge may be transferred in like manner as a mortgage.
§ (2) A deed executed for the purposes of this Section shall not take effect until notice thereof has been given to the trustees of the settlement for the purposes of the Settled Land Act, 1882.
§ (3) Sections sixty and sixty-two of the Settled Land Act, 1882 (which relate to the exercise of powers on behalf of infants and lunatics), shall apply to the exercise of the power under this Section in the same manner as they apply to the exercise of the powers of a tenant for life under that Act.
§ (4) In Scotland, where any person having a limited interest in the land or interest in land in respect of which any duty under this part of this Act is charged, is the person who is liable to pay any sums on account of the duty, he shall be entitled to charge such land or such interest in land by means of a bond and disposition or bond and assignation in security in his own favour which he is hereby authorised to grant.
§ Amendments made: In Section (1), after the word "Where," to insert the words "the fee simple of."
§ After the word "or" ["Where any land or interest"], to insert the word "any."
§ After "1882," to insert the words "or is vested in a trustee."
§ After the word "life" ["and the tenant for life"], to insert the words "or persons having the power of a tenant for life or the trustee."
§ After the word "settle" ["upon the settled land"], to insert the words "land or interest in."
§ In Sub-section (2), at the beginning, to insert the words "In the case of settled land."
§ In Section (3), after the word "Section," to insert the word "fifty-nine."—[Sir W. Robson.]
§ Sir W. ROBSON moved, at the end of Section (3), to insert, "(4) Where the fee simple of any land or any interest in land in respect of which Increment Value Duty or Reversion Duty is charged is vested in a mortgagee who is liable to pay any sum on account of either of those duties, he 798 shall be entitled to add to his security the sum for which he is so liable, including any costs or expenses properly incurred by him in respect of the payment of the duty.
§ Mr. WATSON RUTHERFORD, who had an Amendment on the Paper, rose——
§ Mr. SPEAKERThe hon. Member's (Mr. Watson Rutherford) Amendment does not appear to be germane to the proposed Amendment.
§ Mr. WATSON RUTHERFORDThe mortgagee is only mentioned twice in the Bill up to this point—once in Clause 2 and once in Clause 14. When you come to this new Clause that the Government propose you find words in it like this: "a mortgagee who is liable to pay any sum on account of either of these duties." Mortgagees in this country really have to do with about five-sixths of the whole value of the land of the country. I am aware that in many directions they are very frightened of this Clause. I think it will be conceded that where you find a Clause coming in the Bill at this point in the shape of a Government Amendment, stating in so many words that the mortgagee is liable to pay it——
§ Sir W. ROBSONThese words do not; impose any liability whatever. The Amendment is "Where the fee simple of any land in respect of which Increment Value Duty or Reversion Duty is charged is vested in a mortgagee who is liable to pay."
§ Mr. SPEAKERThe hon. Member must address himself to this point if he has anything to say. This is a Clause the note of which says: "Power to charge duty on land in certain cases." What the hon. Member wishes to do is to exempt a mortgagee from payment in certain cases—a wholly different matter.
§ Mr. WATSON RUTHERFORDThat is so, undoubtedly, but this is the first time we come to anything which says a mortgagee is to be liable to pay. The Government Amendment contains words saying that the mortgagee is to be liable to pay.
§ Mr. SPEAKERNo it does not. It contains words saying where the mortgagee is liable—a very different matter. These words do not make him liable. The mere fact of the word "mortgagee" being introduced does not entitle him to take that opportunity to move to exempt the mortgagee from payment.
§ Mr. WATSON RUTHERFORDI will not move my Amendment, but I will say 799 a few words on the Amendment proposed by the Attorney-General. I venture to think that this Amendment is as important as any proposed during the whole time the Bill was in Committee. About three-fifths of the land in this country is to-day subject to mortgage, and about four-fifths is subject either to mortgage or charges of some description. We on this side of the House raised this subject over and over again in Committee, and we asked whether the mortgagee was liable, and, if so, at what stage and how far he would become responsible to pay these taxes. The only place where, in my opinion, the mortgagee could become responsible is where he forecloses. That is exactly the case which the Government have left out. They have not made foreclosure one of the occasions on which the tax should be paid. I submit that it is exceedingly objectionable to insert in Clause 39, which is supposed only to give power to charge duty on land in certain cases, the words "vested in a mortgagee who is liable to pay any sum on account of either of those duties." If, as the Attorney-General says, the mortgagee is not liable, why complicate the Bill by putting in these words? I take it that this Amendment introduces a very serious question indeed. The amount of money invested to-day on mortgage in this country is, I suppose, approximately almost equal to the National Debt. That the people interested in those moneys—trustees, societies, companies, and individuals—should have their minds disturbed by the question whether their investments are safe, and whether they might be called upon at any time to pay the new Land Duties, is a serious matter indeed. While the Bill was in Committee I appealed to the Government to make clear what the responsibilities and liabilities of mortgagees under certain circumstances were. It was in accordance with an Amendment which I moved that a Subsection was put in what is now Clause 14 of the Bill that something was done in that direction, but even that has been altered by the Government, and now the Clause is absolutely different from what was agreed to in Committee. I take this opportunity of protesting against the way in which the Government have treated the subject of the mortgagee. In addition to the men who own land, there are the men who have lent money upon it, and it ought to be made perfectly clear that they are not going to be penalised with regard to these taxes. Take the case of Income 800 Tax. A mortgagee has nothing to do with a mortgagor's Income Tax. Why, because he happens to have lent money on the security of landed property he is to be dragged in, and the suggestion made that he may be liable to pay any of these taxes is more than I can understand.
§ Sir W. ROBSONThe hon. and learned Member (Mr. Watson Rutherford) is under a very serious misapprehension as to the meaning of the Amendment. He began by saying that we have left out the mortgagee who forecloses. A mortgagee may become the owner of property, like anybody else.
§ Mr. WATSON RUTHERFORDThat is not made an occasion where duty becomes payable.
§ Sir W. ROBSONThe hon. and learned Member is under a misapprehension. Under Clause 2 we have dealt with the position of a mortgagee. That Clause, which defines increment value, says: "This provision shall apply to a mortgage of the fee simple of the land or any interest in land in the same manner as it applies to a transfer, with the substitution of the amount secured by the mortgage for the consideration."
§ Mr. WATSON RUTHERFORDReally the hon. and learned Gentleman——
§ Mr. SPEAKERThe hon. Member has had a good innings.
§ Sir W. ROBSONUnder Sub-section (5) of Clause 14 it is provided: "Where a reversion has been mortgaged before the thirtieth day of April nineteen hundred and nine, and the mortgagee has foreclosed before the lease on which the reversion is expectant determines, the mortgagee shall not be liable to pay Reversion Duty in excess of the amount by which the total value of the land at the time of the determination of the lease exceeds the amount payable under the mortgage at the date of the foreclosure." That shows clearly enough that the case of the mortgagee has been carefully provided for.
§ Amendment made.