Allowance in respect to Premiums for Life Insurance, etc.—A claim may be made for an allowance in respect to premiums paid for life insurances, or under contracts for deferred annuities, effected in respect to the claimant's own life or that of his wife. Such allowance will not, however, be authorized where the premiums are paid to any foreign insurance company or foreign or colonial friendly society; it is limited to an expenditure on annual premiums not exceeding one-sixth of the claimant's net personal income from all sources; and has not the effect of giving exemption or abatement where the total income is thereby reduced below the respective limits (for which, see previous page).
To obtain such allowance the following particulars must be sent to the Surveyor of Taxes:—Name of person on whose life the insurance or annuity is effected, name of insurance company or friendly society, amount of premium claimed as an allowance, and when payable. If required, the receipts for the premiums must also be transmitted.
Income of Husband and Wife, how calculated.—The income of a married woman living with her husband is deemed to be part of the husband's income; and particulars thereof must be included in any statement of income rendered by him for the purpose of obtaining exemption or abatement. The only exception is where the joint income of husband and wife being not more than £500, the wife earns part thereof independently of her husband by the exercise of her own labour, and the husband's income, or some part of it, is likewise earned by his personal labour. In such case the profit thus earned by the wife may be treated as a separate income, and a separate claim for exemption or abatement may be made in respect thereof.
Classification and Assessment of Income.—Incomes are assessed (according to the sources from which they are derived ), under the following heads, which are known as Schedules A, B, C, D and E of the Income Tax Act.
Schedule A: INCOME DERIVED FROM THE OWNERSHIP OF LAND OR HOUSE PROPERTY.[1] Every owner of such property is liable to income tax in respect to its annual value, whether it is let to a tenant or occupied by the owner himself. This is commonly known as "Landlords' Property Tax." The annual value is the rack rent at which it is let, if fixed within seven years; or, if not let, the rent at which it might be so let, subject in either case to a deduction of one-sixth on houses not being farm buildings attached to land, and one-eighth in respect to land including farm buildings. A deduction is also allowed in respect to land tax, tithe rent-charge, and public drainage rates, if any. "Rack rent" may be described generally as the rent which a tenant, taking one year with another, might reasonably be expected to give if he undertook to pay all usual tenant's rates and taxes,[2] and the landlord undertook to bear the cost of repair, insurance, and other expenses, if any, necessary to maintain the property in a state to command that rent.
In the Metropolis the annual value is the gross assessment of the property, as shown in the valuation list made for rating purposes.
Where the property is let, the tax is payable in the first instance by the tenant, who is entitled to deduct the amount from his next payment of rent, but if he fails to do so, he cannot deduct it from any subsequent payment. It has been held, however, in Scotland that he may obtain repayment of it by an action for money paid, and there seems to be no reason why he should not do so in England.
If the property is, in fact, unoccupied for the whole or any part of the year, the tax in respect to that period can be recovered back within twelve months after the year of assessment. So, too, with regard to any temporary remission of rent that may have been actually made.
- ↑ The actual words of the Act are sufficiently wide to include such sources of income as quarries, mines, iron works, tithe rent charge, manorial rights, market tolls, and many other more or less exceptional kinds of property, all of which are assessed according to special rules,
- ↑ As to which see p. 1959,
