Bennett v Ogston (HM Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judgment Date | 30 April 1930 |
| Date | 30 April 1930 |
| Court | King's Bench Division |
NO. 755.-HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).-
Income Tax, Schedule D, Case III - Instalments on moneylender's promissory notes - Whether such part of instalments falling due after the death of the lender as did not represent repayment of capital was assessable as interest under Case III - Trading profits - Cessation of business.
A moneylender made loans on promissory notes which provided for payment to him of monthly or more frequent instalments. Up to the date of his death he was assessed to Income Tax under Case I, Schedule D, in respect of the profits of this business, all instalments due and paid prior to his death being brought into the relative computations.
Instalments falling due after his death were collected by the administrator of his estate but it was not suggested that the administrator was at any time carrying on any trade.
Assessments to Income Tax were made on the administrator on the basis that so much of the instalments collected by him as did not represent repayment of capital was "interest of money" within the meaning of Rule 1, Case III, Schedule D, Income Tax Act, 1918. The administrator contended that the sums in question were not assessable as "interest of money" within the Income Tax Acts. The General Commissioners confirmed the assessments. The administrator appealed.
Held, that the sums in question were "interest" assessable under Case III.
Stated by the Commissioners for the General Purposes of the Income Tax Acts for the Parish of St. James in the City of Westminster under Section 149 of the Income Tax Act, 1918, for the opinion of the King's Bench Division of the High Court of Justice.
1. At a meeting of the Commissioners for the General Purposes of the Income Tax Acts for the Parish of St. James in the City of Westminster held at 187 Piccadilly in the City of Westminster on the 1st day of May, 1929, P. Bennett as Administrator of Harris
Bennett deceased (hereinafter called "the Appellant") appealed against estimated assessments to Income Tax under Case III of Schedule D of the Income Tax Acts as follows:-| Assessment No. | 15910 | Year | 1926-27. | £5,000 | on untaxed interest. |
| 17000 | 1927-28. | £5,000 | do. | ||
| 8434 | 1928-29. | £500 | do. |
2. The question for the determination of the Commissioners for General Purposes upon this appeal was whether certain amounts claimed to be assessed as interest included in the instalments payable by borrowers in repayment of loans made by the late Mr. Harris Bennett and collected by the Appellant was interest of money within the meaning of the words in Rule 1 of the Rules applicable to Case III of Schedule D and whether such amounts could be assessed under such Case.
3. The following facts were admitted between the parties:-
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(a) The late Mr. Harris Bennett who died on the 23rd day of August, 1926, carried on for some years the business of a moneylender and Income Tax up to the date of his death on the profits of his business has been duly assessed under Case I of Schedule D and the full amounts of the...
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