HC Deb 10 October 1912 vol 42 cc533-4W
Mr. CAVE

asked the Chancellor of the Exchequer whether it has been the practice of the Revenue Department for a great number of years, in cases where the annual income of a fund to which an infant is contingently entitled has accumulated during his minority and has been of such amount that the beneficiary, if of full age, would be entitled to a return or abatement of Income Tax, to allow a claim for such return or abatement to be made within a reasonable time after the infant has attained twenty-one; whether, in recent years, a return of tax in such cases has been refused; and on what grounds the Revenue Department have abandoned a practice of old standing and I now claim to retain Income Tax paid in respect of these small incomes?

Mr. LLOYD GEORGE

The practice has been as described. The question whether the sums accumulated could be regarded as the income of the beneficiary arose in connection with the provisions of the Finance (1909–10) Act, 1910, in regard to Super-tax, and the Board of Inland Revenue were advised that they could not foe so regarded, but must be deemed to be ultimately received by the beneficiary as capital. It follows, on the one hand, that no liability to Super-tax arises in respect of such sums; and, on the other hand, that it is not competent for the beneficiary to claim, on the ground of smallness of income, repayment of the Income Tax charged on or deducted from them. Amounts actually expended in education and maintenance of the beneficiary would be treated as his income, and relief allowed in respect of them if his income fell within the limits of exemption or abatement.