Foulsham v Pickles
| Jurisdiction | England & Wales |
| Judge | Lord Atkinson,Lord Sumner.,Lord Dunedin,or,. |
| Judgment Date | 19 February 1925 |
| Judgment citation (vLex) | [1925] UKHL J0219-1 |
| Date | 19 February 1925 |
| Court | House of Lords |
[1925] UKHL J0219-1
House of Lords
Lord Chancellor.
Lord Dunedin.
Lord Atkinson.
Lord Sumner.
Lord Buckmaster.
After hearing Counsel for the Appellant, as well on Tuesday the 20th, as Thursday the 22d, and Friday the 23d, days of January last, upon the Petition and Appeal of Charles Sidney Foulsham, late of Old Post Office Buildings, Carter Street, Blackpool, and now of 35 Topping Street, Blackpool, His Majesty's Inspector of Taxes, praying. That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 21st of November 1923, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, and that the Petitioner might have the relief prayed for in the Appeal, or such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet; as also upon the printed Case of James Arthur Pickles, lodged in answer to the said Appeal; and Counsel appearing for the Respondent but not being called upon; and due consideration being had of what was offered for the said Appellant:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 21st day of November 1923, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellant do pay, or cause to be paid, to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
Mr. James Arthur Pickles the respondent in this case has been found to be a person residing in the United Kingdom. He was engaged by the African Association, Limited, to serve them in West Africa as district supervising agent at a salary of 500 l. and commission, and by the terms of his employment it was provided that he should not draw nor claim payment in the Colony in respect of commission, but payment thereof should only be made to him through the office of the Company in Liverpool. It is also found as a fact by the Special Commissioners that the whole of his salary was also paid into a banking account in England upon which his wife had the right to draw. He was assessed to income tax in the sum of 500 l., for the year ending the 5th April 1920, the basis of the assessment being under Schedule D, subhead (2), Case V., that is, "in respect of income arising from possessions out of the United Kingdom." The amount of this assessment was increased by the General Commissioners, but amounts are not important for the purposes of this Appeal.
The respondent being a person residing in the United Kingdom, it would appear that he was liable to be taxed under Schedule D, subhead 1 ( a) (ii), in respect of annual profits or gains arising from any trade, profession, employment or vocation, whether the same be respectively carried on in the United Kingdom or elsewhere; but, as pointed out, he was in fact assessed under Case V., subhead 2.
The first question is whether that assessment was rightly made.
Now the case of Colquhoun v. Brooks, L.R. 14, A.C. 493, has shown that, however inapt the word "possessions" may be in Case V., it must in fact embrace the trade, profession, employment, or vocation mentioned under subhead 1 ( a) (ii), and in that particular case it was plain that this House regarded the provision as a modification of the earlier clauses and intended to limit the amount of tax in cases where the income arose from possessions out of the United Kingdom to the amount of income actually received from those possessions, see Lord Macnaghten at p. 514 and 515. The real test that was laid down by Lord Herschell and Lord Macnaghten was that you were to ascertain what was the source of income, and, if the source of income was a trade, profession, employment or vocation carried on outside the United Kingdom, only the amount of income actually received in the United Kingdom would be taxed.
In the present case I do not think that the source of income was the employment of the respondent in West Africa. The source of his income was the money paid by an English company into an English bank in pursuance of an agreement for service made in this country. This view is emphasised by the fact that the Rules themselves provide by Rule 2, applicable to Case V., that the tax in respect of income arising from possessions out of the United Kingdom shall be computed on "the actual sums annually received in the "United Kingdom from remittances payable in the United Kingdom or from imported property or money or value arising from property not imported," which points to the fact that the money is to be received here from a source abroad. I therefore think the Court of Appeal and Mr. Justice Rowlatt were right in deciding that the tax could not be properly levied under Case V.
It was then urged that, if this be so, since the respondent was resident here and would consequently be liable under the earlier Rule, the matter should be remitted in order that the assessment might be altered in that respect. I am unable to accede to this request. Remission is not a matter of right but of discretion, a discretion to be carefully exercised in each case, and dependent upon the special circumstances in which it stands. The Court of Appeal has decided here against remission, and I see no reason to interfere with their action. I desire to add that I am not satisfied that the ground upon which Mr. Justice Rowlatt based his refusal to remit was well founded.
My Lords,
However much it may have been open, either in the original assessment or before the Commissioners, to rest the liability on alternative cases under Schedule D, it is distinctly stated in this case that the present demand was based on Case 5 alone. It is not therefore, I think, possible for your Lordships to consider whether upon the facts as set forth an assessment might not be based on some other case.
The question for decision is accordingly whether the sum of 2,245 l received by the Respondent in respect of his salary and commission is, to quote the wording of section 2 of Schedule D of the Income Tax Act, liable to be charged with a tax in respect of income arising from possessions out of the United Kingdom.
Two propositions are here involved: this income must be income from a possession; and the possession must be out of the United Kingdom.
My Lords, I think it is not doubtful that in the ordinary use of language one would not be apt to describe a man who gets a salary and commission...
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