LORD ORANMORE AND BROWNEasked Her Majesty's Government, Why (in Ireland), in calculating liability for income tax payable under Schedule B., it is, in lands let to tenants, calculated on rent actually paid, while on lands farmed by the owner it is calculated on ordnance value, when the owner can show from previous lettings that the letting value of such lands is considerably higher than the ordnance value?
§ LORD SUDELEY,in reply, said, that the Income Tax under both Schedule A and Schedule B in Ireland was calculated upon the Poor Law valuation, known also as Griffith's, and called by the noble Lord "ordnance." The landowner was supposed to receive as rent the amount of the valuation, and he was taxed on that. The occupier was supposed to make as profit, in addition to the rent, one-third of that amount, and he was taxed on that—i.e., nominally on the whole valuation at one-third of the general rate of the tax. 834 These amounts were maxima, which could not be increased, and which were only reduced by way of remission in special cases. When land was in hand the landlord paid under both Schedules (A and B) on figures calculated as thus explained. If, at the end of the year, he considered that his profit as occupier was less than the amount so calculated, he could appeal; and if he could put in figures to prove his case, the overcharge, under Schedule B, was repaid to him. In such figures on appeal—and this was the point to which the noble Lord was supposed to refer—the rent theoretically payable by him as occupier to himself as owner was put at the amount of the Poor Law valuation. This was obviously just, because that was the amount on which he was taxed as owner under Schedule A. If a larger allowance were made on the one side he ought, in equity, to pay the tax for a larger receipt on the other. Where the owner did not farm his own land, and the occupier applied for a remission, the actual rent paid was a fact which appeared in the accounts, and if it was larger than the valuation it was possible he might get a remission where the owner would not, if the land were in hand. But this was no hardship to the latter; in fact, it was the contrary, because he got a higher rent than the amount on which he was taxed. In short, the owner who had land in hand paid no more than was just and lawful, while on let land the occupier paid as much as could be properly claimed from him. Rents in all parts of Ireland except Ulster being even now sensibly, often considerably, in excess of the Poor Law valuation, landlords there habitually paid Income Tax on less than they received, and provision was made that in no case should they pay it on more than they received.