§ 34. Mr. WADDINGTONasked the Chancellor of the Exchequer whether he is aware that the revenue authorities in the Manchester district are now seeking to impose Income Tax on what they describe as the value of the right to receive annual chief rents on conveyances of land subject to perpetual chief rents, notwithstanding such annual rents are already being taxed; and will he inquire into the matter?
§ The CHANCELLOR of the EXCHEQUER (Mr. Churchill)I think that my hon. Friend may be under some misapprehension as to the real question at issue in the matter to which he refers. The Inland Revenue authorities are contending that when property is sold by a taxpayer carrying on the business of dealing in property, the value received for the property, whether it takes the form of cash or of the right to receive 689 an annual chief rent, should be brought into account in computing the profits of the business for the purposes of assessment to Income Tax under Schedule D.
35. Captain CROOKSHANKasked the Chancellor of the Exchequer if his attention has been called to the uncertainty that exists among visitors from other parts of the British Empire coming to this country with regard to their liability to British Income Tax if they stay here for more than a certain time; whether he is aware that this uncertainty prevents many from coming; whether, in fact, any such time limit is applied in the case of visitors; and whether he will publish in a short and easily intelligible form a memorandum explaining exactly in what circumstances such visitors become liable to British Income Tax?
§ Mr. CHURCHILLBroadly speaking, British Income Tax is chargeable in the case of a person resident in Great Britain or Northern Ireland on all his income wherever arising, and in the case of a person not so resident, on his income derived from sources in Great Britain or Northern Ireland. The difficulties in the case my hon. and gallant Friend has in mind centre round the question whether a person is or is not resident here for Income Tax purposes. This question, as was indicated in recent judgments of the House of Lords, is one of fact and degree to be determined according to the circumstances of each case, and does not lend itself to summary exposition in general terms. The matter is, however, engaging my attention, and certainly I do not wish to discourage the temporary residence in this country of foreign visitors.
Captain CROOKSHANKDo I understand there is not really any truth in the widely-held belief that, because you stay in England one day over six months, you are ipso facto brought within the net of British Income tax?
§ Mr. CHURCHILLI do not think that is the case, but I do not like to lay down the law on Income Tax in reply to a supplementary question.
§ Mr. HARRISIs it not a fact that, under agreement between the Dominions and this country, if a man becomes liable 690 for Income Tax in this country, he is exempted in his own Dominion, and vice versa?
§ Mr. CHURCHILLThere are agreements of some such kind, but I was addressing myself more to foreign countries.
§ 40. Lieut.-Colone JAMESasked the Chancellor of the Exchequer whether his attention has been called to the criticisms of Mr. Justice Bowlatt, in the King's Bench Division, on 26th June, on the subject of the interpretation of Section 21 of the Finance Act, 1922; whether, in particular, the statements of the learned Judge to the effect that the people of this country are taxed by laws which they cannot understand, and this is the worst example of such legislation that has been put upon the Statute Book, have been brought to his notice; and whether he is prepared to set up an independent Committee to inquire and make recommendations for the clearer drafting of this rule, particularly in relation to the Amendments contained in Sub-section 24 of Section 31 of the Finance Act of 1927, or whether he is himself prepared to take independent action that will relieve the taxpayer of the cost of litigation in the prosecution of his legitimate claims for relief?
§ Mr. CHURCHILLMy attention has been called to the remarks to which my hon. and gallant Friend refers. I would remind him that the legislation in question owed its origin to the ingenuity of taxpayers in avoiding liability to the Super-tax, and that its length and complexity are mainly due to the multifarious qualifications made at the instance of hon. Members of this House with a view-to confining its application to the proper cases. I would also remind my hon. and gallant Friend that last year I appointed a Committee to review the whole law relating to Income Tax and Super-tax, and to see in what respects it can be simplified and rendered more intelligible to taxpayers. As my hon. Friend the Financial Secretary has already informed the Houe in another connection, I do not think it is desirable, pending the completion of the Committee's task, to try to deal with the matter piecemeal.
§ Mr. SHINWELLCan the right hon. Gentleman say why it is that Judges can criticise legislation and legislators are not permitted to criticise Judges?