§ 65. Mr. HANNONasked the Chancellor of the Exchequer whether his attention has been drawn to a recent decision in the King's Bench Division whereby it has been stated that the 25 per cent. additional rent payable to landlords carrying out repairs in houses, under the Rent Restrictions Act, 1920, is a part of 2460 the rent, and therefore to be included in the assessment to Income Tax under Schedule A; and whether, seeing that such an increase was intended as an indemnity against a possible increase in the cost of repairs, the Government is prepared to amend the law to remove this anomaly?
Mr. GRAHAMI am aware of the decision to which the hon. Member refers, but I cannot agree that it involves any anomaly. The annual value of a property for the purposes of assessment to Income Tax (Schedule A) is, broadly speaking, the annual rent which is or would be paid for the property under an ordinary tenancy, and the law makes provision whereby the owner can obtain not merely the flat-rate deductions for repairs granted in all cases in which the landlord covenants to repair, but also any further appropriate allowance in respect of expenditure on repairs and maintenance upon a five-year average, so that, in the result, he will ultimately bear tax on no more than the income which he enjoys.