A tenement was valued, under the Finance (1909-10) Act 1910, as at 30th April 1909, the original total value pounds 400, the original assessable site value pounds 20, pounds 380 being the deduction made for buildings. In June 1911 the property was sold by a widow to her brother-in-law, a man up in years, who had long lived and carried on a draper’s business there. The price paid was pounds 650. Nothing admittedly had occurred calculated to affect the value of the buildings or the site since April 1909. The Inland Revenue claimed increment value duty on pounds 250, viz., on the pounds 650 less the pounds 380 which had been allowed for buildings in the original valuation, and less pounds 20, the original assessable site value. A referee being of opinion that the property had not altered in value since April 1909, but that the figures then taken were too low, made a new valuation, the total value pounds 470, the deduction for buildings pounds 400, the assessable site value pounds 70. As regarded the price obtained, he, purporting to act under section 25 4 ( d), deducted pounds 180, which he stated must be attributed to some personal consideration, bringing out the occasional site value at pounds 70.
Held (1) that the case being ruled by the English case of Lumsden v. Inland Revenue (v. infra) the deduction for buildings on the occasion of sale was pounds 400, the ‘like deductions’ in section 2 (2) ( a) meaning deductions ascertained by the same method as in the original valuation- i.e., by obtaining a gross value and total value by valuation and not by reference merely to the purchase price, which might or might not correspond with open market value; and (2) that no deduction for personal matters fell to be made, as that did not arise on the facts, the referee merely surmising, not finding as a fact, that part of the purchase price was due to personal matters. Increment value duty was consequently due on pounds 230, i.e., on pounds 650, less pounds 400 for buildings, and less pounds 20, the original assessable site value.
Judges:
Earl Loreburn, Lord Atkinson, Lord Parker, Lord Sumner, and Lord Parmoor
Citations:
[1914] UKHL 151
Links:
Jurisdiction:
Scotland
Capital Gains Tax
Updated: 26 April 2022; Ref: scu.620734