§ The following Rule shall he added after Rule 3 of the Rules applicable to Case V of Schedule D:
§ 4. Where a person who has been charged with tax in respect of income from a possession out of the United Kingdom proves that the total amount of tax, computed in accordance with Rule 1 of the Rules applicable to Cases I and II of Schedule D which was paid in respect of that income for the first three complete yearn of assessment during which he was the owner of the possession, exceeds total amount which would have been paid if he had been assessed for each of those years on the actual amount of the income of each year, he shall be entitled to repayment of the excess.
§ An application for repayment under this Rule shall be made within twelve months after the end of the three years aforesaid and shall be determined by the Commissioners by whom the assessment for the last of the said three years was made.—[Mr. Graham.]
§ Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
This Clause is of a rather technical character, but may be quite briefly and simply explained. During the Committee stage the hon. Baronet the Member for the Erdington Division of Birmingham (Sir A. Steel-Maitland) drew attention to the taxation of certain possessions outside the United Kingdom, more particularly during the first three years of that taxation. The system at the moment is roughly this, that as regards the first year, the tax falls on that year as regards the second year, the tax is also on the first year, as the preceding year; and as regards the third year, the tax falls upon an average of the first two years. It was represented to us that in the first year, which was perhaps prosperous, a business of that kind might be established and a position attained, but if the succeeding years were not prosperous a hardship would be involved to the taxpayer on the 273 principle which we now follow, and the taxpayer might have to pay more than he would be called on to pay if each year were assessed separately. By administrative custom it has been possible so far to meet that difficulty, and all we are doing in response to the suggestion of the hon. Baronet is to give legislative effect to what has been the administrative arrangement. In a single sentence the new scheme will be this, that at the end of the first three years it will be possible for the taxpayer to come along and get the benefit of an assessment as on each of the three years, that is to get the benefit of taxation on each of the three separate years of assessment. That is broadly what the new Clause achieves.
§ Clause read a Second time, and added to the Bill.