HC Deb 05 February 1913 vol 47 cc2193-4
36. Mr. ROYDS

asked the Chancellor of the Exchequer whether, in view of claims made by the Commissioners Inland Revenue for payment of Increment Value Duty on builder's profits when there has been no rise in the value of the site, he will state what proportion of any given profit is deemed by the Commissioners a legitimate profit and not the subject of taxation and what proportion is in the nature of a fortuitous windfall and the subject of taxation; and on what principle the distinction is founded?


To obtain the site value of land on an occasion on which Increment Value Duty is to be collected, the difference between its gross value ascertained under Section 25 of the Finance (1909–10) Act, 1910, which, if there is a building, included builder's profits not the subject of taxation, and full site value similary ascertained is deducted from the value of the consideration. The difference between the remainder and the original site value is the taxable increment, and any part of this not representing a rise in the value of the site, will be in the nature of a fortuitous windfall. The hon. Member will realise that there can be no constancy in the proportion between the taxable windfall, if any, and the non-taxable profit made by the builder.


Will the right hon. Gentleman give the House a definition of a "fortuitous windfall?"


We very fully discussed it when the Finance Act was under discussion. I think I had to submit some definitions myself.


Docs the right hon. Gentleman suggest the term "fortuitous windfalls" was ever mentioned when the Act was under discussion?


That term or its equivalent was mentioned in very many debates by myself.


If the expression was used at all, was it not in connection with contradictions of any intention to tax windfalls?


It was used for the purpose of asserting that fortuitous windfalls were a legitimate subject for taxation.


If a man sold a horse for more than it was worth, would that be a "fortuitous windfall," and a subject of taxation?


May I ask whether this is the Government's idea of meeting the shortage of workmen's cottages?