137 / 244
delay in two Government departments which
resulted in the loss o f almost a year’s pension. The
point to be noted by solicitors is that in such cases
an appeal should be lodged immediately against a
decision of the Local Pensions Committee refusing
the claim with the request that the hearing of the
appeal should be postponed until registration o f the
dealing had been completed in the Land Registry.
STAMP DUTY ON TRANSFER IN
CONSIDERATION OF MARRIAGE
A
m e m b e r
o f the Society writes referring, to a case
of a transfer on marriage in which a brother or
sister assigns or transfers to another brother or
sister in consideration of marriage, and also a money
consideration. This situation frequently arises in
connection with marriage deeds where the father
has died intestate, one of the children subsequently
getting the land on marriage, the mother or brothers
or sisters getting the fortune brought in by the
bride on “ marrying into the farm.” The following
is a quotation from a letter received by our corres
pondent’s town agent:—“ The Adjudication Office
wish us to inform you that where a brother or sister
assigns his or her interest to another brother or
sister in consideration of marriage and also of
money the instrument is assessed as a conveyance
on sale o f the interest o f such brother or sister
unless the market value ot the interest is greatly in
excess o f the money consideration, in which event
the marriage is treated as the primary consideration.
This is in accordance with counsel’ s opinion.”
INCOME TAX CLAIMS FOR EXEMP
TION UNDER SCHEDULE D IN
SO FAR AS THEY AFFECT THE
OPENING OF NEW BUSINESSES
I
t
is thought that many members of the profession
are not fully aware o f their rights to claim exemption
from Income Tax Schedule D it a loss can be shown
in the first year of the carrying on of a new business.
The following are the tacts o f a case in which
exemption from Income Tax was claimed. It is
pointed out, however, that this claim for exemption
from tax is applicable not only to solicitors’
businesses but to the opening of new businesses of
any kind. The actual facts in the case o f which the
writer is personally aware are as follows :—A. was a
solicitor who had carried on practice in Ireland for
many years. B. was another solicitor who had also
carried on practice as a solicitor in Ireland for many
years both in a partnership and on his own account.
A. appointed B. his Executor. C. was also a qualified
solicitor acting as qualified assistant to A. In the
year 1934 A. died and after negotiations between
B. and C., and the Residuary Legatees o f A ’s. will,
it was agreed between B. and C. that they should
enter into partnership under a name and style
different to the names of the firm carried on by A.
and the firm previously carried on by B., and that
they should jointly acquire the solicitor’s business
carried on by A. up to the date of his death. This
was done, and on the 1st January, 1936, the new
firm, Messrs. X Y Z & Co., of which B. and C.
were the partners, commenced business. The firm
X Y Z employed a firm of Auditors to prepare their
accounts and to deal with the income tax position
o f the firm X Y Z from its inception. As a result
of the first year’s working of the firm the audited
accounts showed a loss which was accepted by the
Inspector o f Taxes dealing with the firm’s assess
ment.
The accounts of the firm were made up
on the basis o f costs furnished during the year
1936 and an adjustment was made in respect of
costs earned in cases which were finally completed
up to the 31st December, 1936, where bills had
not been furnished prior to that date. No account
was taken in the accounts of the firm X Y Z for
the amount of costs earned on partially completed
work in the year 1936, and therefore the question
of work in progress was not considered. It would
have been very difficult and probably impossible
to assess with any degree of accuracy the amount
of costs due in respect of such work in progress,
and accordingly by negotiation between the Auditors
and the Inspector of Taxes it was agreed that no
figure should be included in the accounts in respect
of it, thereby, establishing a loss for the calendar
year 1936. Accordingly for the period 1st January
to 5th April, 1936 actual (a loss), the financial year
1 936/37, (first 12 months of the new business, 1st
1st January to 31st December, 1936—a loss), and
the financial year 1937/38 (based on preceeding year
1 st January to the 31st December 1936) the Case II
assessment was nil. This position follows the rule
applicable to cases I and II o f Schedule D Income
Tax Act of 1918 as amended by Section 9 of the
Finance Act of 1929, the relief in respect of the loss
being allowed under the provisions of Section 34
of the Income Tax Act, 1918.
It will be seen that the most important aspect
of the matter is the establishment o f a loss for the
first year in which the business is operated, as, of
course, on the results of this first year depends the
quantum of the assessments for several Income Tax
years. It is usually found that the Revenue Authorities
endeavour to have all fees brought into the first