§ A person shall not be entitled to claim any deduction for the purpose of ascertaining the site value of land on any occasion on which Increment Value Duty becomes payable if the deduction is one which could have been, but was not, claimed for the purpose of ascertaining the original site value of the land, or was one which could have been, but was not, claimed by that person or a predecessor in title of that person for the purpose of ascertaining the site value of the land on any previous occasion for the collection of Increment Value Duty in respect of the land.
§ Question proposed, "That the Clause be now read a second time."
§ Mr. PRETYMANI should like to ask the Chancellor of the Exchequer if it is perfectly clear that this Clause will not prevent a man from obtaining a larger allowance on the second occasion than on the first occasion? What I mean is this: There are different stages in the development of a property. A man plants a tree, makes a railway, or does something which starts development. On the first occasion of collecting Increment Duty, at an early stage of its growth, the tree is valueless. At that time the land is valued at £200 an acre. The owner has created a considerable portion of that value, say £150. Ten years pass, and the second occasion arises to value the land. It is valued at £500. It is perfectly clear that that is laregly due to the original expenditure, which had only partially fructified at the time of the first valuation. Does the Clause mean that the owner will be entitled to claim the same actual allowance, namely, £150, which he claimed in the first place? On the second occasion of valuing for Increment Duty, the tree which he himself planted would have grown and become more valuable. Would the owner be debarred from getting a larger allowance on the second occasion, or would the amount which would be charged depend on the stage of development when the first valuation took place? When a man undertakes large expenditure for the purpose of improving the value of a certain amount of land, and the value grows as the result of his expenditure, he should, it appears to 1444 me, get an allowance in proportion to the increase in the value. The Commissioners will have the whole facts before them at each stage. They will know how much of the improved value was due to the original expenditure, and how much was due to the action of the community. What I want to make clear is whether there is anything in the Clause which will in any way hamper the full jurisdiction of the Commissioners to give whatever allowance may be due on a later occasion—however much larger it may be—to the original improvement executed one or two occasions back. There is another comparatively small point arises upon that. You may be dealing with property which is leased, and it may be the lessor under a long lease would be the person who would have to pay, for instance, on an occasion, and he might neglect or not be aware of something done by the owner. And on a subsequent occasion it might be for the owner to raise a just claim. There is provision, I know, in the Bill that accounts of any adjudication must be sent on application to an owner, but that would be too late in this case, because in order to protect himself the owner would have to have cognisance of the case before the claim is made; otherwise he would be debarred from raising it later. All I suggest is that some machinery should be provided by which in a case like that the owner might make a claim.
§ Sir W. ROBSONWith regard to the first point raised by the hon. and gallant Gentleman, which no doubt is important, I think the Clause is clear enough. The value which would be ascribed to any such matter of deduction is the value it has at the time the valuation is being made. It would be impossible to expect that the value should in all cases take into account prospective value when the prospects of improvement can scarcely be estimated at all. Therefore the further improvements that take place would not be a deduction that could have been made at the time of the original valuation, because the value had not accrued. The second point, I confess, gives rise to a little difficulty, but still I think it is fairly covered.
§ Mr. PRETYMANHave you answered my first point?
§ Sir W. ROBSONI think so. The increased value, the subject-matter of the claim for deduction later on, could not have been taken into account in the first instance, and the owner is therefore not 1445 precluded from making a second claim. We must distinguish between the subject-matter of deduction and the increased value after the original site value has been fixed. In the case taken the site value was fixed when the tree was young, and afterwards when the tree has increased in size and stature there is an increased value attaching to it which could not have been claimed when the original site value was fixed, because the value had not arisen. The value of the infant tree is one of the recorded deductions in the original site value. Afterwards when they came to a subsequent occasion, and it is decided to make a claim for further deduction on the ground of increased value, then that increased value under this Clause can be deduction. The hon. and gallant Gentleman took a tree as an illustration.
§ Mr. PRETYMANIt was figurative.
§ Sir W. ROBSONFor the purpose of the argument the value to be taken on the original site value is the value of the infant tree. Twenty years afterwards when the tree has increased in size and stature then the owner of the land may say, "I am not content with the deduction originally made; I want a deduction for increased value," and he will, under this Clause, be entitled to get it. The second point was in reference to a case in which the lessor had failed to claim some deduction, but the owner afterwards desired to put up a claim. I have not in my mind at the moment the clauses relating to notices to the lessor, but I think such a case would scarcely arise. The owner would get notices of the assessment as well as of the adjudication, but if he did not that is certainly a point that has to be looked up. I think it is met by the Bill. I have not tried to look through all the clauses, but the hon. and gallant Gentleman will see whether it is covered by the other clauses, and if not it can be put right.
§ Viscount HELMSLEYI do not see why, because no claim for deduction was made when the original site value was fixed, that therefore for all time afterwards no claim can be made.
§ Sir W. ROBSONIt can be made and always is.
§ Viscount HELMSLEYI quite realise that the additional value can be claimed as in the illustration of the trees; but, to pursue the illustration, if you had planted the tree when a sapling, and had not made 1446 any claim, though you might have done so, no matter what value accrued in future, and no matter how careful the next man may be when the next occasion arises, he cannot claim that portion of the value of the tree which could have been claimed before. I think that is rather hard. It should be allowable on a subsequent occasion to make that deduction and at the same time to make a coresponding deduction from the original site value.
§ Clause read a second time, and added to the Bill.
§ Mr. LLOYD-GEORGE moved after Clause 11 to insert the following:—