Commissioners of Inland Revenue v FARGUS
| Jurisdiction | England & Wales |
| Judgment Date | 09 March 1926 |
| Date | 09 March 1926 |
| Court | King's Bench Division |
No. 566.-HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).-
Super-tax - Total income - Beneficial occupation - Income Tax Act, 1918 (8 & 9 Geo. V, c. 40), Section 5.
The Respondent negotiated for a lease of a house at a rent of £135 per annum, but it was eventually agreed that if the Respondent would pay the whole of the sum of £683 necessary to put the premises in a fit state for habitation, a lease would be granted at a rent of £35 per annum. The sum of £683 was paid before the execution of the lease. The circumstances in which the rent was fixed at £35 per annum were not set out in the lease-which was for a term of seven years, shortly afterwards extended for another year in consideration of the Respondent contributing a sum of £141 towards further repairs -but it was agreed therein that the rent under any new lease should be £140 per annum.
The Respondent was assessed to Super-tax on amounts which included the difference between the amount of the net Schedule A assessment on the house and the rent of £35 paid under the lease, but the Special Commissioners decided, on appeal, that such difference did not in the circumstances constitute a "beneficial occupation" forming part of his income for Super-tax purposes.
Held, that the sums paid by the Respondent for repairs at the beginning of his tenancy were capital expenditure, and that the difference between the net Schedule A assessment on the property and the rent of £35 actually paid formed part of his total income for Super-tax purposes.
Stated under the Income Tax Act, 1918, Sections 7 (6) and 149, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the King's Bench Division of the High Court of Justice.
At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on 16th day of March, 1925, for the purpose of hearing appeals, Brigadier General Fargus, hereinafter called the Respondent, appealed against two assessments to Super-tax in the sums of £2,107 and £2,278 for the two years ending 5th April, 1924, and 5th April, 1925, respectively, made upon him under the provisions of the Income Tax Acts.
1. The two assessments, the subject of this appeal, included in each case the net Schedule A assessment less the rent paid by the Respondent in respect of a house and premises known as "Cranford," Exmouth, in the County of Devon, under a lease dated the 20th April, 1920; the sum included in the Super-tax assessment for 1923-24 being Schedule A assessment £106 12s., less rent paid, £35, = £71 12s. net, and the sum included in the Super-tax assessment for 1924-25 being Schedule A assessment, £116 15s., less rent paid, £35, = £81 15s. net.
2. The sole point for the determination of the Court is whether the Respondent is, in arriving at the amount of the said assessments, only entitled to a deduction of the sum of £35 or to a deduction of a greater sum as hereinafter appears.
3. Evidence was given before us by the Respondent to the effect (a) that prior to the execution of the said lease he was in negotiation with the agents of Lord Clinton, who is the owner of "Cranford," for the granting to him of a lease of the said premises at an annual rental of £135;
b that the said house was in a very bad state of repair and that the owner was unwilling to spend upon it the sum necessary to put it into a fit state for habitation by the Respondent;
c that the said necessary repairs comprised in a builder's contract amounted to £683;
d that it was mutually arranged between the Respondent and the landlord's agents, that if he, the Respondent, should spend the necessary sum upon the repairs, the landlord bearing no part of...
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Commissioners of Inland Revenue v Miller
...difference between the rent he pays and the annual value is again his income and must be included in his supertax return, Commissioners of Inland Revenue v. Fargus, 10 Tax Cas. 665, and this not because he could let or sublet it, for, under a beneficial lease, he might be subject to an abso......
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Lady Miller v Commissioners of Inland Revenue
...pays and the annual value is again his income and must be included in his Supertax return, seeCommissioners of Inland Revenue v. Fargus, 10 T.C. 665, and this, not because he could let or sublet it, for, under a beneficial lease, he might be subject to an absolute unqualified restriction ag......
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Lady Miller v The Commissioners of Inland Revenue
...pays and the annual value is again his income and must be included in his Supertax return, seeCommissioners of Inland Revenue v. Fargus, 10 T.C. 665, and this, not because he could let or sublet it, for, under a beneficial lease, he might be subject to an absolute unqualified restriction ag......
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Shanks (D M) v Commissioners of Inland Revenue
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