UNEARNED INCOME

Evening Star, Issue 23129, 1 December 1938, Page 12

UNEARNED INCOME

ASSESSMENT APPEAL DISMISSED SUPREME COURT JUDGMENT “ The terms of the definition of the Act are, in my view, definite, and to treat the taxpaj’er’s income as earned income when she was absent in England and had not in fact derived it from her personal exertion would be to introduce a gloss upon the Statute which is not warranted,” said Mr Justice Kennedy, in the course of a, lengthy judgment which he delivered to-day in the ease in which Margaret Isabel Massey Stewart disputed an assessment upon her income made by the Commissioner of Taxes. His Honour dismissed the appeal, and directed that the Commissioner’s assessment should stand. Reviewing the facts of the case. His Honour stated that Horatio Arthur Massey died leaving a , large estate. During his lifetime he carried on a sawmilling business at Invercargill and elsewhere, and the trustees of his will carried on the business since his death. The trustees carried on the business themselves and one of them acted as manager of the business, to which ne devoted his. whole time and-for which he was paid a salary. Margaret Isabel Massey Stewart, of ■ Nottingham, England, widow, the appellant, was a daughter of the testator. In the events which had happened, she was in terms of the will entitled to the income of the residuary estate, subject to the prior satisfaction of several. annuities given by the will and the second codicil, and subject also to discretionary powers vested in the trustees. During the income year ending March 31, 1935, the trustees paid to the appellant the sum of £2,283 6s 9d, this sum being paid out of the income derived by the trustees from the conduct by them of the sawmilling business. The Commissioner of Taxes regarded this sum as unearned income so far as concerned the appellant and assessed the appellant accordingly.' The appellant claimed this sum was, so far as she was concerned, “ earned ” income. The question was whether the taxpayer derived this sum as unearned and ,as such was liable to the additional tax of 33 J per centum, or whether she derived it as earned, income. - . . His Honour ordered the appellant to pay costs, £ls 15s.