HL Deb 14 June 1945 vol 136 cc640-1WA

asked His Majesty's Government whether the relief afforded by Section 26 of the Finance Act, 1941, applies to a director of a limited or statutory company who retired by rotation and was re-elected after September 3, 1939, on the same terms as those on which he previously held office.


The tax relief given under Section 26, Finance Act, 1941, in cases where salaries, fees, etc., paid free-of-tax under contracts made before September 3, 1939, were reduced under the authority of that section, applies only to cases where at the passing of the Act (July 22, 1941) the taxpayer was serving under such a contract. The point raised in the question is one of interpretation of the law, and it rests with the appeal authorities or the Courts on a stated case to determine the interpretation of the law in any particular case. The view taken by the Board of Inland Revenue in administering the taxation provisions of the section is that a director who retires by rotation and is re-elected is to be regarded as holding a fresh contract from the date of re-election, and it follows, on this view, that the fact that re-election after September 3, 1939, was on the same terms as those under which the director previously held office is irrelevant to the application of the section. If, however, a director is dissatisfied with the assessments to Income Tax or Surtax made upon him on the ground that tax relief under Section 26 should have been allowed, it is open to him when the assessments are made to appeal in the usual way to the General or Special Commissioners and., if the determination of the Commissioners was unfavourable on a point of law, to demand a ease to be stated for the opinion of the High Court.