INCOME OF bISHOP OF WELLINGTON

Dominion, Volume 13, Issue 256, 23 July 1920, Page 9

INCOME OF bISHOP OF WELLINGTON

NOT EXEMPT FROM TAXATION

A FULL COURT DECISION

'■ The question whothor the income-of the Right Rev. T. H. Sprott, Bishop of Wellington, is exempt from taxation was argued before the Full Court yesterday, and was answered by the-Court in the negative. '• • -- Mr. T. - F;-Martin-appeared'for the Bishop, and Mr. P. S. K. Macassey for tho Commissioner of Taxes,

«r; Martin said, that a, fund was ted by gifts!, of various kinds for: tho endonihbnt ! of the Seo.of Wellington, .'and' the "Bishop for tho timo- being' of Wellington- received the'whole of -tho ihcomo of the fund, - beuoiitiug by any increase or suffering from any.decrease .of tho income. In other' words, tho ■Bishop was not paid a fixed stipend; but was,' during his occupancy of the see,the bonoiicinry of the luni.'' There had ben .considerable diujculiv in the past in arriving at the, real position of the Bishopric (Endowment Siiiul' with regard to taxation. , For many years taxwas paid, twice-onco by the trustees of the fund, in the shane o£ mortgage tax, and again by tho Bishop in tho shape of income tax, the Bishop being apparently unaware of the trustees', payment.' The matter was discovered accidentally, and tho -Commissioner refunded the income tax paid by the Bishop, Then it was understood that tlie,mortgage tax should continue to bo paid, .but that the Bishop should not in addition pay income tav There came, however, a change ,m: the 'incidence- of taxation,- and one of the results was that the mortgage tax was iepealed';-but paragraph, (k) of section 81 of the Land and Income Tax, 191 C, camo. into' force, and provided exemption for the'following olass of income;-'lhcomo derived- bv.tru9te<s in trust for chantnble, religions, educational, or scientific purposes of a public nature within Nev Zealand or derived by any society,: or I institution'- 'established exclusively for such' purposes, and not earned on for privntq\ : pecuniaiy gain-"' Counsel dia,.cussed with the Commissioner of-Taxes. 'the question whether that- paragraph exempted' the Bishop' from payment of income 'tat.. At -first tlie Commissioner thought that'it did, and tho matter for a time'rested then). Then the question was'investigated again by the Land and Income Tax Department, witn the icsuit that- the present case was brought—a case of a--friendly nature designed, to obtain a. decision that would serve to guide both the Bishop and the DepartAfter hearing Mr. Martin and Mr. Macassey'on-the construction of the paragraph' iindor' which.-exemption was claimed, the Court delivered its decision The Chief .Justice (Sir Robert Mout). .held that the income, of. the Bishop,did not coiho within the gub-Section. 1M object of the section. was,- clearly, to prevent double taxation. Sub-section (k) rendered 'trustees for religious, chanttblei educational or scientific purposes exempt.' But>there was nothing in section. 8i" to .say. that -persons receiving income from'the: bust estate should be exempt from -taxation. Trustees merely distributed .the income,to the.persons ; who: ver& entitled' to ,it, but those 'persons- had .to pay income taxvyhen they received the income. The B.shop was not a ;-trustec, ami he did not derive any- income in trust for, charitable, rehgious, educational, or scientific purpo es,Mr., Justice Chapman, Mr. Justice Sim, Mr.., Justice Hcrdman agreed withthe .Chief Justice's ruling.