HC Deb 11 August 1913 vol 56 cc2180-2

"Any individual who claims and proves that under policies taken out with any recognised life insurance office for redemp- tion of leasehold property having sixty years or less to run, shall be entitled to allowance in respect of the annual premiums paid."

Clause brought up, and read the first time.


I beg to move, "That the Clause be read a second time."

The object of this Clause provides that any person shall be entitled to allowance on Income Tax in respect of annual premiums paid on a leasehold policy. It has been long felt a great hardship that Income Tax should have to be paid on leasehold investments as on freehold. The economical and careful person who guards himself against depreciation by taking out policies gets no allowance for the premium he pays to the insurance company, although the insurance company who invests his premiums pay Income Tax upon the earnings from them. Thus the Government get double Income Tax. That seems to me to be anomalous, more especially in view of the fact that a person who insures his life can do so up to about a fifth of his income, and receive an allowance in respect of the premiums. If the Chancellor of the Exchequer does not like the narrowness or the wideness of this Amendment, he could, of course, limit the investing power of the person in leasehold redemption to the same amount as in the case of life insurance—a fifth of the income. I submit that it would be doing an act of justice to accept this Amendment.


This, in principle, is really the same as a proposal made earlier in the evening, and which was discussed, namely, the question of wasting assets. The hon. and learned Gentleman (Mr. Pollock), who moved that Amendment, used an argument showing that there was a distinction between what he proposed and the Clause which is now submitted, and he said there was no case for this one at all. I must say I think he demonstrated that there was a stronger case in respect of wasting assets than there is for this proposal. I can only say that if we once began to introduce these exemptions the Income Tax would gradually disappear.


It is done in the case of life insurance, and it is the same principle.


There was a good deal of policy in that. The idea was rather to encourage life insurance at the time that provision was introduced, and it was not altogether the recognition of any definite principle. I agree with what the hon. Baronet the Member for the City of London (Sir F. Banbury) said when he objected to the introduction of these exemptions. They lead to complications, and a good many people escape who ought not to escape, while a great many people who can show a much better case still remain liable.


Every time I write a cheque for Income Tax I wish it was for ten times the amount.

Question, "That the Clause be read a second time," put, and negatived.