TAXATION

Southland Times, Issue 19357, 24 September 1924, Page 5

TAXATION

SECOND BILL INTRODUCED MORTGAGE INCOME TAX PASTORAL RUN-HOLDERS. (Our Parliamentary Reporter). WELLINGTON, September 23. The second Land and Income Tax Amendment Bill was introduced in the House of Representatives this afternoon by the Governor-General’s message. In explaining the provisions of the measure, the Prime Minister and Minister of Finance (Mr Massey) referred to a number of clauses, particularly clause 2. He said they concerned the changes made by the Committee in dealing with the annual Bill recently introduced. This clause increased the exemption in respect of mortgaged lands. The present exemption was one of £4OOO unimproved value up to £6OOO, diminishing by £2 for every £1 in excess of £6OOO, so as to disappear at £BOOO. The exemption proposed in the Bill was £lO,OOO, diminishing by £2 for every £1 in excess of £lO,OOO, so as to disappear at £15,000. He believed this would be a tremendous benefit to the ordinary working farmer, working under a mortgage and taxed on the money which he owed. In addition there was the provision intended to be inserted in the Land and Income Tax Bill, which was before Parliament towards the end of last session dealing with small pastoral leases for grazing. What was proposed then was to restore the income tax to what it had been before the war. There was another clause which was being asked for. It was generally recognised that if a landowner fell into arrears with his land tax and then disposed of his land by sale, the arrears could not be done away, but continued to be a liability on the land. The clause made it perfectly clear that the new owner was to be advised of what was owing. It really restored the old provision in the Land and Income Tax Assessment Act, 1908, for registering charges against land in respect of taxes owing. AMENDMENTS OUTLINED.

The Bill provides for an amendment of Section 49 of the 1923 Act. As explained by Mr Massey, there is a machinery amendment of Section 58 as to two or more companies with substantially the same shareholders to be deemed a single company. Section 71 is amended to provide for the lessee of native land (instead of “occupier”) being liable for the payment of land tax on behalf of the native owner.

The special exemptions in Section 77 of the 1923 Act in respect of insurance premiums are to be calculated with respect to the assessable income.

Incomes derived from pensions granted in Great Britain or within the British Dominions, in respect to the Great War are added to the list of exemptions from taxation.

The term “all profits or gains” derived from any business which is the basis of assessable income under Section 79 is amended by the inclusion of any increase in the value of stock in hand at the time of the transfer or the sale of a business or on the reconstruction of a company. When a bonus, gratuity or retiring allowance is paid in a lump sum, only 5 per cent, of such sum shall be deemed to be income in respect of employees of local authority a public authority other than Public Trust or State Advances Department. Income derived from lands held as small grazing runs, or for pastoral purposes, is to be assessable for income tax.

The term "capital value” is defined for purposes of Section 83 of the principal Act (relating to special exemptions in respect of income derived from use of land) in the valuation of the Land Act, 1908, as excluding timber or flax (other than the root® of flax plants). . The clause relation to unpaid land tax constituting a charge on land is as explained by Mr Massey.