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Ground Rents (Income Tax Deductions)

Volume 393: debated on Tuesday 2 November 1943

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asked the Chancellor of the Exchequer the reason for the inequality arising from the rule of the Inland Revenue which permits, in the case of a private company owning ground rents, the deduction of expenses of collection and management before payment of Income Tax, whereas such deduction is not allowed when similar ground rents are owned by an individual, although he will have to incur an equal expense; and whether he will consider remedying this?

The relief to which my hon. Friend refers is allowed under a provision of the law, namely, Section 33 of the Income Tax Act, 1918, which is applicable only to companies. I am afraid that I cannot see my way to an extension of that provision to the case of the individual who incurs expenses in collecting his income from ground rents or other investments.

Can the Chancellor say what is equitable? Is it equitable in the one case to give a certain amount of rebate and not in the other case, which is similar on all points?

In the case of companies, it is treated as a matter of business and ranks as business expenses. On the point put by my hon. Friend, the law does draw a distinction in other respects between companies and private individuals.