§ Mr. SCOTT DICKSONasked the Secretary to the Treasury whether his attention has been called to the fact that by the practice now prevailing of assessing part- 1543 ners for Income and Super-tax on an average of three years' profits of the firm, such average being divided in the manner provided by the partnership deed for dividing the profits of each 5'ear, the taxpayer has in certain cases to pay tax on a larger income than he ever receives; and will he consider the advisability of remedying the grievance?
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)I am acquainted with the facts of the particular case which I understand the right hon. and learned Gentleman has in mind in raising this question, but I am unable to agree that the statutory system of assessment is inequitable in its general operation, and I should not feel justified in suggesting a fundamental alteration of the law on account of the possible existence in rare cases of exceptional circumstances.
§ Mr. SCOTT DICKSONDo I understand the right hon. Gentleman to admit that in special cases the law acts unfairly?
§ Mr. HOBHOUSENo. I do not admit that at all, more particularly as there is a case under appeal.
§ Mr. SCOTT DICKSONasked the Secretary to the Treasury whether he is aware that the practice of the Special Commissioners of Income Tax is to refuse any deduction for interest on loans obtained for the purpose of purchasing securities unless the loans are kept up for approximately twelve months; and will he consider the expediency of altering the law so as to prevent a person who pays off such loans in less than twelve months from being taxed more heavily than a person who keeps the loan for twelve months?
§ Mr. HOBHOUSEI am aware of the practice referred to, but I am not prepared to propose an alteration of the existing law under which interest to be deductible must be annual interest.