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[William Joseph Whittaker, after graduating as ‘Senior’ in the Law Tripos and Chancellor's Medallist, in 1888, and winning a Whewell Scholarship in 1890, was a very successful teacher in the Cambridge Law School till 1900, when he went into practice. In 1901 he was appointed Professor of English Law at University College, London, and, in 1905, to a post on the staff of the Council of Legal Education. In that year he married Hildegarde, daughter of Walter Wren, who survives him. He died in 1931.
2 Super-tax and Surtax. A company, like an unincorporated individual, is assessable to income tax in respect of income derived from the ownership or occupation of land or from the carrying on of a business, under Schedule A (the so-called landlord's property tax) and other Schedules. Its profits until distributed are its income and not the income of the shareholders. When they are distributed by way of dividend, the dividends are income of the shareholders. So far as income tax is concerned, the owner of property gains something by incorporation; for be can at least obtain the relief appropriate to earned income in respect of director's fees and management salary paid to him by the company. As regards super-tax or (since 1928/9) surtax, he gains much; for many expenses which could not be deducted under Schedule A assessments on an owner could be deducted in ascertaining the profit earned by a company which carried on the business of a landowner. See the discussion on this point in Simpson v. Grange Trust, Ltd [1934] 2 K. B. 317Google Scholar. A company is not assessable to super-tax or surtax at all. It was only distributed profit that attracted super-tax or surtax in the hands of the shareholders. Profits of the company carried to its reserve account and not distributed by way of dividend therefore bore no super-tax until s. 21 of the Finance Act, 1922, came into force ‘with a view to preventing the avoidance of the payment of super-tax through the withholding from distribution of income of a company which would otherwise be distributed.’ The section was passed to strike at the practice sanctioned by a majority of the House of Lords in Inland Revenue Commissioners v. Blott [1921] 2 A. C. 171Google Scholar, when it was held that, where the articles of the company contained appropriate provisions, reserves could be capitalized and distributed among the shareholders in the form of bonus shares, which being stamped with the nature of capital did not attract super-tax. S. 21 of the Finance Act, 1922, has been amended by s. 31 of the Finance Act, 1927, and under the joint operation of these sections the Special Commissioners have power, in effect, to treat as distributed and apportioned among the shareholders of certain private companies accumulated profits of the company not reasonably necessary for reserve and development.
3 Att.-Gen. v. Duke of Richmond [1908] 2 K. B. 729, 743.Google Scholar
4 History of Engliih Law, IV, 407et seq.Google Scholar
5 The principles of legacy duty (see the Legacy Duty Act, 1796) and succession duty (see the Succession Duty Act, 1853) are quite distinct from those governing estate duty, and are generally regarded as much more rational. These duties, or one of them, is generally payable upon death, but their rates and incidence are very much lighter than those of estate duty, and depend npon the benefit taken by the legatee or successor.
6 It was doubtless deliberately chosen, as the Divisional Court, in a then recent case of account duty, had commented on the width of the term; Att.-Gen. v. Chapman [1891] 2 Q. B. 526.Google Scholar
7 S. 2 (3) produces this effect by cutting down the wide general terms of s. 1.
8 Earl Cowley v. Inland Revenue Commissioners [1899] A. C. 198, at pp. 210–213Google Scholar, per Lord Macnaghten.
9 But exclusive of property in which the interest of the deceased or other person was only an interest as holder of an office (e.g. the trusteeship of a settlement carrying a reward of £200 per annum: Att.-Gen. v. Eyres [1909] 1 K. B. 723)Google Scholar or as recipient of the benefit of a charity (e.g. the inhabitancy of an alms-house) or as a corporation sole (e.g. bishop, dean or parson).
10 See s. 7 (7) as to ascertaining the extent of the benefit accruing. The doctrine is known as the slice theory.
11 This sub-section is a glaring example of legislation by reference.
12 Re Coleman (1888) 39 Ch. D. 443.Google Scholar
13 Att.-Gen. v. Farrell [1931] 1 K. B. 8Google Scholar, following Att.-Gen. v. Heywood (1887) 19 Q. B. D. 326Google Scholar. The last case was decided in a Common Law Court before the decision in Re Coleman (last note).
14 Att.-Gen. v. De Préville [1900] 1 Q. B. 223.Google Scholar
15 At this date the relevant period was one year and not three years.
16 Att.-Gen. v. Lane Fox [1924] 2 K. B. 498.Google Scholar
17 [1897] A. C. 22.
18 The nominal capital will be adjusted to the amount of the purchase-moneys. It ig unlikely that any further working capital will be required. If X is prepared to forgo the advantages of limited liability (which are not very great in practice in such a company as this) the liability can be unlimited, and the 1 per cent, ad valorem duty payable on the nominal capital of the company will be saved.
19 If the sale transaction stops short of conveyance, stamp duty will be avoided. An estate contract should be registered against X, and subsequent dispositions of the land by the company can be carried through by the company's procuring a direct conveyance to the purchaser from X or his successors in title to the bare legal estate.
20 Tbe disposition of the shares is considered below.
21 See s. 5 (2) of the Finance Act 1894 read with s. 14 of the Finance Act 1914.
22 [1905] 2 Ir. Rep. 218.
23 [1935] 1 K. B. 26.
24 S. 34 (2).
25 Ibid.
26 S. 38.
27 S. 34 (1).
28 S. 34 (2).
29 S. 34 (3).
30 S. 34 (4).
31 S. 34 (1).
32 Proviso to (1) (ii) of s. 34.
33 S. 35 (2).
34 S. 34 (7), s. 35 (3).