HC Deb 03 July 1923 vol 166 c263W

asked the Chancellor of the Exchequer if he will give instructions to assessors of Income Tax, Schedule A, in cases where property is bona fide let under a lease for a short term of years, not to assess such property in excess of the rent actually received, notwithstanding that if the owner was free to rent the property by the year a higher rent could be obtained than that received during the currency of the lease?


The reassessment for Income Tax purposes is being made in accordance with law under which the annual value of property is the rack-rent at which it is let, or is worth to be let, by the year. In cases where property is let at a rack-rent fixed by agreement within the preceding seven years, the annual value is by law fixed at the amount of the yearly rent. If, however, the rent paid by a tenant is not a rack-rent, for example, when the tenant undertakes also to hear the cost of repairs, or pays a substantial premium on the grant of the lease, the rack-rental value of the property would often be in excess of the actual rent, and often has so been in the past.