§ Last year, it may be remembered, I endeavoured, by making certain improvements in Income Tax allowances, which were so severely cut in 1931, to bring some relief to the Income Tax payers with small incomes who are bearing the responsibilities of a family. I should like to carry that process a little farther this year. I think there is still something owing to those people on that account, and the saving that I am going to secure by dealing with educational trusts gives me an opportunity of taking that money and distributing it equitably among all Income Tax payers who have children to maintain. Accordingly, I am proposing to increase the statutory allowance for 49 children from £50 per child to £60, at a cost of £1,000,000 this year and £2,000,000 in a full year, thus putting it up to a higher level than it has ever stood at before. Furthermore, in pursuance of the same idea, I am proposing to find the means to raise the general statutory allowance for married persons from £170, to which I raised it last year, up to £180. That will also cost £1,000,000 this year and £2,000,000 in a full year, and these two proposals together will do something to mitigate the effects of an alteration of a different character which I shall have to mention later in my speech.
§ I have also a proposal to make relating to the avoidance of Estate Duty. Under the law as it stands at present Estate Duty is not chargeable on personalty abroad where it has been the subject of a gift, of a joint investment, or of a foreign settlement, and I have some reason to suppose that advantage is being taken of that state of things to place property outside the scope of charge. I am proposing, therefore, that personalty abroad shall be treated in the same way as personalty at home, and I have taken the effect of that change into account in my estimate of Death Duties for the year.
§ In addition to the Resolutions which I shall have to submit dealing with the avoidance of taxation, there will also be two Resolutions dealing with amendments of the Income Tax law. The only one which I think I need explain now relates to the method of assessing Income Tax under Schedule A upon mills, factories, and other buildings in which machinery is installed. In the past quinquennium Schedule A Assessments have been made upon the same principle which is followed in rating, but there is no express provision of the Income Tax law as to how you are to compute annual value in the case of machinery installed in buildings, and the courts have lately held that certain machinery which is not taken into account in rating shall be taken into account in computing value for the purposes of Income Tax. I propose to provide that in future the rating principle shall be followed for the Income Tax, and therefore my proposal will merely maintain the position as it has been during the past five years.