§ 86. Mr. R. Bellasked the Chancellor of the Exchequer to what extent his regulations permit the accumulated interest on compensation under the Town and Country Planning Acts, which will shortly become payable, to be spread, for purposes of Income Tax and Surtax, over the years in respect of which it has accrued.
§ Mr. R. A. ButlerThis interest, which becomes payable only when the compensation is discharged, will rank for Income Tax purposes as income of the year in which it is paid and tax will be deductible at the standard rate for that year. As regards Surtax, Section 238, Income Tax Act, 1952, contains provisions under which a measure of relief, on a basis broadly equivalent to spreading the interest, can be claimed if the receipt of the accumulated interest increases the recipient's Surtax liability for the year in which the interest is paid by more than 5 per cent. over what it would have been if one year's interest only had been received in that year.