Building Societies and the Land Tax.
The relations of building societies to the Land Tax Department are disclosed by the correspondence which has taken place between Commissioner Sperrey and the Nelson Permanent Building Society. The return made by the latter has been challenged by the Commissioner on the ground that the Society’s assets and liabilities have not been treated in the same way as those of an ordinary trading company, the directors considering that the value of each subscriber’s interest is a legitimate deduction, whereas the Commissioner insists that nothing shall be taken off except what is owing to persons outside the Society. The Colonist puts the case thus : The Commissioner, in a genuine official spirit, is determined to obtain as large a yield as possible from the tax he is appointed to manage, and treats Building Societies as companies “ formed wholly or mainly for the purpose of gain or profit divisible amongst the shareholders.”— Op the other hand it is contended that as the Building Societies Acts both here and in England class them as Friendly Societies, imposing restrictions that materially lessen the possible profits, and granting privileges no one would dream of conferring on trading companies, no return can properly be called for of the funds as a whole, but that each person concerned should include the value of his interest in his statement of the personal property belonging to him. Mr. Sperrey, however, insists on dealing with a Building Society as “ a Joint Stock Company,” though he must be well q,ware that it j.n no sense cpmes under the laws' affecting that class of associations ; while the directors submit l> that the shares held by members are in almost the same relative position as they would be were their amount placed as fixed deposits in a bank, seeing that any shareholder may withdraw the amount of his deposits at any time by giving one month’s notice of his intention to do so,” The directors of the Society refuse to comply with Mr. Sperrey’s request, which in their case involves the payment of the tax on the sum of L 21,350.
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