HC Deb 21 July 1909 vol 8 cc586-7W
Mr. LYULPH STANLEY

asked the Chancellor of the Exchequer whether he would state what tax will be charged in the United Kingdom under Part I. of the Finance Bill and in Frankfort under its existing taxation, respectively, in the following case, namely, that land in a town is bought for £200 in 1910, such land being entirely unoccupied and unbuilt upon, the property in the land in question passes on death of the owner in 1920 and is then valued at £290, the condition of the land remaining the same during the whole of the period in question; whether he will state the tax which would be paid in the event of the property passing by sale instead of upon death; and whether he can state what tax, if any, would be annually levied in Frankfort on such land of a nature similar to that proposed in Clause 10 of the Finance Bill?

Mr. LLOYD-GEORGE

Assuming that the land in question does not come within the exemptions promised for agricultural land or for the property of a small holder, it would be liable under Part I. of the Finance Bill to the following charges: (1) Increment Value Duty charged on increment value of £70 (i.e., £90 less 10 per cent, of the original site value) equals £14. The duty would be the same whether the property passes on sale or upon death. (2) Undeveloped Land Duty charged at the rate of one halfpenny per annum for every 20s. of "site value," or a duty for the period, 1910–20, not exceeding 8s. 4d. per annum. In Frankfort, if the land were entirely unoccupied and unbuilt-on, the increase in value would not be sufficient to bring it into the special scale for Increment Duty, because the allowance of 4 per cent, per annum as loss of interest (on £200 value) plus 5 per cent, of the £200 for legal costs, would amount to exactly £90. But for the allowance for interest, the tax would be at the rate of 8 per cent, on an increase of £80 (i.e., £90 less 5 per cent, of the original site value for legal costs). In either case the 2 per cent, basis tax on £290 is payable equals £5 16s.; plus 1 per cent. State Stamp Duty equals £2 18s. There would be levied annually by the Land Tax on this property one-half per cent, on the average of the last three years of the capital value. This would be a total annual tax of from £1 to something approaching £1 10s.