Inland Revenue v. Fothringham [1923] ScotLR 159 (17 November 1923)

Inland Revenue v. Fothringham [1923] ScotLR 159 (17 November 1923)

In valuing the benefit accruing from the cesser of an annuity for estate duty under the Finance Act 1894 s.7(7)(b), 'income' means net income after deduction of public burdens and the annual cost of ordinary and necessary repairs. Therefore, the average annual expenditure on repairs must be deducted from gross rental to determine the number of years' purchase and the capital value of the benefit.

Citation
[1923] ScotLR 159
Parties
Pursuer: Commissioners of Inland Revenue; Defender: Walter Thomas Scrymsoure-Steuart Fothringham
Jurisdiction
Scotland
Judgment Date
17 November 1923
Procedural Posture
Civil (revenue/estate Duty) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, First Division
Outcome
Appeal allowed (interlocutor of Lord Ordinary recalled); Revenue's contention sustained.
Legal Topics
Estate Duty, Valuation of Benefit on Cesser of Annuity, Interpretation of Finance Act 1894 S.7(7)(b), Deduction of Repairs From Rental in Estate Valuation
Tax Law Succession Law Property Law Estate Duty Valuation of Benefit on Cesser of Annuity Interpretation of Finance Act 1894 S.7(7)(b) Deduction of Repairs From Rental in Estate Valuation

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Parties

Commissioners of Inland Revenue

Pursuer

Walter Thomas Scrymsoure-Steuart Fothringham

Defender

Procedural Posture

Civil (revenue/estate Duty) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, First Division

Legal Issues

  1. 1 Whether, in valuing the benefit accruing from the cesser of an annuity for estate duty purposes under the Finance Act 1894 s.7(7)(b), the deduction for repairs should be made from the gross rental to determine net income.

Ratio Decidendi

In valuing the benefit accruing from the cesser of an annuity for estate duty under the Finance Act 1894 s.7(7)(b), 'income' means net income after deduction of public burdens and the annual cost of ordinary and necessary repairs. Therefore, the average annual expenditure on repairs must be deducted from gross rental to determine the number of years' purchase and the capital value of the benefit.

Court Disposition

Appeal allowed (interlocutor of Lord Ordinary recalled); Revenue's contention sustained.

Orders

  • Deduction for repairs to be made from gross rental in calculating net income for estate duty valuation.
  • Case remitted for further procedure consistent with this judgment.