§ Mr. Haleasked the Chancellor of the Exchequer to what extent the opening to the public of houses with a charge for admission is regarded as carrying on a business within the meaning of the Income Tax Acts so as to permit the salaries of household staff to be a permissible deduction.
§ Mr. R. A. ButlerSuch an activity would be treated as the carrying on of a trade for Income Tax purposes if the property is maintained solely or mainly as a show-place, and managed on a commercial basis and with a view to the realisation of profits within the meaning of Section 124 (2) of the Income Tax Act, 1952.
Particulars of matters taken into account by the Inland Revenue in considering whether a trade is carried on are set out in Appendix II to the Report of the Committee on Houses of Outstanding Historic or Architectural Interest, published in 1950. Generally speaking, it must be shown that a definite organisation has been set up for attracting and dealing with visitors, and that the whole activity is undertaken with the intention of making a profit and not for purely altruistic motives or with a view to getting relief from tax.
Any deduction allowable where a trade is carried on in respect of salaries of household staff would not include such part, if any, of the salaries as is referable to domestic or private purposes.