§ Mr. CASSELasked the Chancellor of the Exchequer whether his attention had been called to the view that buildings cannot increase in value apart from a rise in the cost of material and labour; and whether calculations, for the purpose of arriving at site value on an occasion for collection of Increment Duty, proceed on that footing?
§ Mr. LLOYD GEORGEThe answer to the first part of the question is in the affirmative. As regards the second part, the method of arriving at the site value on an occasion is that prescribed by Section 2 of the Finance (1909–10) Act, 1910, and is fully explained in the Instruction to Valuers, dated 21st January, 1911.
§ Mr. CASSELWill the right hon. Gentleman consider that the instructions should instruct the valuers to proceed on the footing indicated in the question?
§ Mr. LLOYD GEORGEI should not like to answer that without notice. I really do not like to answer these highly technical questions without notice.
§ Mr. AUSTEN CHAMBERLAINWill the right hon. Gentleman at the same time look into the information supplied to the Secretary to the Treasury by the valuation officials to the effect that a rise in site value may be caused by an improvement in the buildings put on the site. You are breaking the law all round?
§ Mr. CASSELasked how many valuations of the original site values of lands under the Finance (1909–10) Act, 1910, have hitherto resulted in minus quantities; and what is the largest minus quantity yet arrived at?
§ Mr. LLOYD GEORGEI regret that it will not be possible to collect and compile the information asked for by the hon. Member before the date on which the House rises.
§ Mr. CASSELasked the Chancellor of the Exchequer whether in the instructions to valuers dated the 21st January, 1911, it is intended to make any and, if so, what distinction between a calculation and a valuation; and whether he will assent to the substitution of the word valuation for calculation in such instructions?
§ Mr. LLOYD GEORGEThe term calculation is used in the instructions to indicate what is in effect a process in a valuation, and it does not appear to me that any advantage would be gained by the substitution of the word "valuation" for "calculation" in those instructions.
§ Mr. CASSELDoes the right hon. Gentleman not think it would be more appropriate to use the word "valuation" in dealing with the value of land than the word calculation?
§ Mr. LLOYD GEORGEThe word valuation is used. Calculation is used as indicating a process in arriving at the valuation.
§ Mr. CASSELasked the Chancellor of the Exchequer if he can state or give any sort of indication of the circumstances under which valuers ought, and under which they ought not, to consider themselves bound by the actual consideration 1554 in arriving at gross value and site value on an occasion for the collection of increment duty?
§ Mr. LLOYD GEORGEGenerally speaking the valuers would consider themselves bound by the actual consideration, but they would clearly not be justified in so considering themselves in cases where the consideration obviously does not represent the market value.
§ Mr. CASSELCan the right hon. Gentleman indicate at all the circumstances under which the valuers ought to consider themselves bound and the conditions under which they ought not to consider themselves bound?
§ Mr. LLOYD GEORGEI do not think it would be possible to give that indication without notice. It is obviously a case in which full notice ought to be given, and it would be a very great mistake to give indications of that kind, because circumstances must vary.
§ Mr. CASSELIs the right hon. Gentleman not aware that that is precisely the question?
§ Mr. LLOYD GEORGEIt is not quite the question. At any rate, I still say it would be a great mistake to attempt to give an exhaustive interpretation of these cases, because there is such a variety of them.
§ Mr. CASSELIs the right hon. Gentleman not aware that the question does not ask for an exhaustive interpretation, but any kind of indication?
§ Mr. LLOYD GEORGEI am replying not to the question itself but to the supplementary question.
§ Mr. CASSELasked whether the unit of valuation referred to in Clause 2 (b) of the Instructions to Valuers, dated 21st January, 1911, includes both land and buildings?
§ Mr. LLOYD GEORGEThe answer is in the affirmative.
§ Mr. CHARLES BATHURSTasked the Chancellor of the Exchequer whether he realises that, under the joint operation of Section 2 (2) and Section 25 (2) of the Finance (1909–10) Act, 1910, whereby it is provided that in arriving at the original site value of land a deduction shall be made of the difference between its gross value and its value when divested of buildings, growing timber, fruit trees, and other things growing thereon, and that on 1555 the occasion upon which Increment Value Duty becomes payable the actual price paid shall be taken as the total value, and that the like deduction shall be made as in calculating the original site value, in all cases where the character of the land, and therefore the object for which it was valuable has changed, such like deduction will often prove to be a minus quantity, leaving no sum to be deducted under Section 25 (4) (a), and thus exaggerate the apparent increment by the amount originally deducted in connection with the farm buildings and other agricultural improvements, thereby resulting in a direct tax of 20 per cent. upon such improvements; and, if so, whether he will introduce a new Clause into the present Finance Bill in order to avoid possible injustice and the discouragement of agricultural enterprise?
§ Mr. LLOYD GEORGEThe value of buildings, etc., is eliminated in arriving at both the original site value and the Bite value on the occasion of a sale. Accordingly, the Sections to which the hon. Member refers do not operate in the manner suggested, and I am not satisfied that amending legislation is called for.
§ Mr. C. BATHURSTAs the matter is considered one of very great doubt amongst the surveyors, would the right hon. Gentleman be prepared to receive a deputation from the Surveyors' Institution, as requested on 21st July last?
§ Mr. LLOYD GEORGEI shall be very happy to. I met them before and discussed these things with very good results.
§ Mr. C. BATHURSTIs the right hon. Gentleman aware that they are still waiting for a reply to their letter?
§ Mr. LLOYD GEORGEI am very sorry. I shall be very glad to see that letters are written.
§ Mr. C. BATHURSTasked the Chancellor of the Exchequer whether the market value of land for agricultural purposes under Section 7 of the Finance (1909–10) Act, 1910, is interpreted by the Treasury to mean the valuation of a holding as it stands subject only to the usual tenant's rates and taxes, or whether, alternatively, in estimating such value tithe, fee farm rents, copyhold dues, and other like outgoings, in no way affecting the agricultural value of such land are taken into account; and, if the latter is the case, whether he realises that land 1556 subject to such outgoings will become sooner liable to Increment Value Duty under Section 7, and to more Undeveloped Land Duty under Section 17, than land of exactly the same character and agricultural value which is not subject to such outgoings; and whether, if this is the true-interpretation of the existing law, he will amend the Act accordingly?
§ Mr. LLOYD GEORGEThe interpretation of the Board of Inland Revenue is in accordance with the latter alternative put forward by the hon. Member, but it is not held that the adoption of that alternative will render land subject to outgoings sooner liable to Increment Value Duty or to more Undeveloped Land Duty than land not so subject.
§ Mr. C. BATHURSTDoes the right hon. Gentleman consider that his interpretation of the expression "agricultural purposes" is likely to stand the test of judicial proceedings?
§ Mr. LLOYD GEORGEI could not possibly answer that. I shall do my very best to see that my interpretation is placed before the court.