Mayor and Others of Gateshead v Lumsden: CA 10 Mar 1914

The plaintiffs, as the urban authority of a borough, had under s. 150 of the Public Health Act, 1875, and the Gateshead Improvement Act 1867, some years before action brought paved and made up certain streets, and had from time to time apportioned the expenses thereof among the owners of the premises fronting thereon. The defendant was the owner of premises in these streets, and the plaintiffs, under the power conferred upon them by s. 32 of the Gateshead Improvement Act, 1867, allowed him time for the repayment of the sums apportioned in respect of his premises, interest being payable thereon at the rate of 5 per cent, per annum. The defendant paid to the plaintiffs varying sums at irregular intervals in part payment of the amount due, which the plaintiffs credited in the first place to the interest due and in the second place towards payment of the principal. There was no evidence to shew that the plaintiffs made a regular practice of allowing these expenses to remain unpaid, bearing interest, as a mode of investing their funds. The defendant claimed, upon paying off the final amount due for principal and interest, to be entitled to deduct the income tax upon the amount due for interest as being ‘yearly interest of money’ within s. 40 of the Income Tax Act, 1853.
Held: the interest did not come within the words ‘ yearly interest of money ‘ in s. 40, and that therefore the defendant was not entitled to deduct income tax therefrom.

[1914] UKLawRpKQB 72, (1914) 2 KB 883
England and Wales
Cited by:
CitedRevenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.671255