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England) Land Union (London.

The new land taxes and mineral rights duty. The Land Union's handbook on provisional valuations; being general advice to owners of land and house property in dealing with valuations under the Finance (1909-10) Act, 1910, as amended by the Revenue Act, 1911 online

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Online LibraryEngland) Land Union (LondonThe new land taxes and mineral rights duty. The Land Union's handbook on provisional valuations; being general advice to owners of land and house property in dealing with valuations under the Finance (1909-10) Act, 1910, as amended by the Revenue Act, 1911 → online text (page 1 of 19)
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THE

LAND UNIONS
HANDBOOK

ON

PROVISIONAL VALUA'



With Statutes ami Forms






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3




THE LIBRARY

OF

THE UNIVERSITY

OF CALIFORNIA

LOS ANGELES



THE LAND UNION'S HANDBOOK

ON

PROVISIONAL VALUATIONS



THE NEW LAND TAXES

AND

MINERAL RIGHTS DUTY



THE



Land Union's Handbook

ON

PROVISIONAL VALUATIONS



BEING GENERAL ADVICE TO OWNERS OF LAND AND HOUSE

PROPERTY IN DEALING WITH VALUATIONS UNDER THE

FINANCE (1909-10) ACT, 1910, AS AMENDED BY

THE REVENUE ACT, 1911



WITH STATUTES AND FORMS



LONDON :

VACHER & SONS, LIMITED,

WESTMINSTER HOUSE, GREAT SMITH STREET, S.W.

[Copyright]



PRINTED BY

VACHER AND SONS, LTD.,

WESTMINSTER HOUSE, LONDON, S.W.






CONTENTS



PAGE.

Introduction . . . . . . . . . . • • . . ■ • vii.

Preliminary Observations . . . . . . . . . . • . ix.

Chapter I.— THE NEW TAXES AND THE VALUATION UNDER
THE ACT. Valuation to fix the " Assessable Site Value."
Various " Site Values " applicable to the same piece of land.
Every piece of Land in separate occupation to be separately
valued. Right of Owner to require any portion of an occupation
to be separately valued or to require lands in separate occupa-
tion to be valued together. Calculation of " Values " . . . . 1

Chapter II.— THE PROVISIONAL VALUATION. Sixty days
allowed for Owners' " Objections." Manner of presenting
Owners' " Objections." Amended Provisional Valuations.

/j Caution to Owners. Appeal to Referee and the Courts. Right

of Persons " Interested " to Object and Appeal 4

n

Chapter III.— INCREMENT VALUE DUTY. When chargeable.
Exemptions and their Effect. Conditional Exemption of
Agricultural Land. Conditional Exemption of Occupying
Owners of Small Houses. Conditional Exemption of Small
Agricultural Holdings. Exemption of Lands used for Games.
Exemption of Flats and Tenements. Personal Exemptions.
Leaseholds Liable to Increment Value Duty. Who pays the

J Duty. Set off and Allowances for sums paid for Reversion

Duty and Betterment. Assessment and Apportionment of
Increment Value Duty. Increment Value Duty, a Stamp Duty. 8

" Chapter IV.— UNDEVELOPED LAND DUTY. Quinquennial
Re-valuations. When and by Whom Undeveloped Land Duty
is Payable. Exoneration from Undeveloped Land Duty where
Increment Duty or Betterment Charges already paid. Set off
and Allowances for sums paid for Increment Value Duty and
Betterment. Hardships of the Tax. Exceptions and Exemp-
tions with Notes thereon. Minimum Site Value Taxable.
Exemption of Agricultural Value. Exemption for Expenditure
on Roads and Sewers. Partial Exemption of Lands U6ed for
Games or Recreation. Optional Exemption of Lands unbuilt
upon in connection with pre-arranged Scheme of Development.
Lands and Gardens attached to Dwelling-houses. Exemption
of Public Parks, Gardens, &c. Agricultural Land let for a term.
Conditional Exemption of Occupying Owners of Small Agricul-
tural Properties. Personal Exemptions. Minerals Excepted . . 16

Chapter V.— REVERSION DUTY. How Assessable. Caution to
Owners of Reversions. When and by Whom Payable. Allow-
ance for Increment Value Duty paid in respect of the same
benefit. Obligation of Lessors to make Returns. Exemptions
from Reversion Duty. Exemption of Reversions purchased
before 1909. Personal Exemptions. Exemption of Leases of
Agricultural Land. Exemption of Leases for not more than
21 years. Underleases. Partial Exemption in case of Mortgages
of Leaseholds. Exemption of Mining Leases. New Provisions
under the Revenue Act. 1011. Allowance of Duty on Surrender
and Re-grant of Lease •. 23



410315



IV. LAND UNION HANDBOOK

PAGE.
Chapter VI.— DUTIES ON MINERALS. Mineral Rights Duty.
How Payable. When Payable. Right of Sub-Lessees to deduct
Mineral Rights Duty paid by them from Rent Payable to
Head-Lessees. Duty of Proprietor to give Particulars of Rentals,
&c. Meaning of Expressions used in the Act. Surface Rents.
Exemptions from Mineral Rights Duty. Exemptions from
Reversion Duty and Increment Value Duty. Doubt whether
certain Limited Owners are Proprietors under the Act.
Definition of Mining Lease. Definition of Capital and Total
Values of Minerals 28

Chapter VII— INCREMENT VALUE DUTY ON MINERALS.

Minerals Valued Separately from Land. Minerals to be Treated
as of No Value unless Value stated in Owner's " Return " to
Commissioners. Definition of "Total Value" and "Capital
Value " of Minerals. Exemption of Minerals Leased or Worked
before Commencement of Act. Increment Value Duty on
Minerals : In what cases Charged. Amount of Duty Charged
on Sale, Leasing or Working of Minerals 32

Chapter VIII.— THE VARIOUS "VALUES" UNDER THE
ACT. I.— Valuation as on 30th April, 1909. " Gross Value."
Value to be ascertained as at the date fixed by the Act. "Full
Site Value." " Total Value." " Original Assessable Site
Value." " Substituted Site Value." Value for Agricultural
Purposes. II. — Values on Occasion for Assessment of Increment
Value Duty. Site Value on Sale. Site Value on Death. Site
Value on Grant of Lease or Sale of any " Interest " in Land.
Site Values on Periodical Occasions 35

Chapter IX.— SITE VALUE DEDUCTIONS. Generally. Lands

with Existing or Future Building Value 48

Chapter X.— COPYHOLDS AND CUSTOMARY FREEHOLDS.
I. — Copyholds of Inheritance or for Life or Lives with a
Right of Renewal, and Customary Freeholds. II. — Copyholds
held for a Life or Lives or for Years without a Right of
Renewal 51

Chapter XL— SPECIAL PERSONAL EXEMPTIONS. Rating
Authorities, Governing Bodies Constituted for Charitable
Purposes, Friendly Societies and Statutory Companies
and the Crown. A. — Rating Authorities. B. — Governing
Bodies for Charitable Purposes. C. — Friendly Societies. D. —
Statutory Companies. E. — The Crown . 53

Chapter XII.— THE POSITION OF TRUSTEES, PERSONAL
REPRESENTATIVES, MORTGAGEES, LIMITED OWNERS,
SOLICITORS, AGENTS AND OTHERS UNDER THE
FINANCE ACT AS REGARDS THEIR RESPONSIBILITY
TO BENEFICIARIES AND CLIENTS. As regards making
Returns for the Purposes of Valuations (Section 26). As to
Payment of Increment Value Duty in respect of Land or Minerals.
As to Undeveloped Land Duty. As Regards Reversion Duty.
As to Mineral Rights Duty 60

Chapter XIII.— HINTS ON CHECKING VALUATIONS. Gener-
ally. Agricultural Land. Agricultural Land with Potential
Building Value. Building Plots, with example. A Freehold or
Leasehold Villa. Agricultural Land 65



tAND UNION HANDBOOK V.

PAGE.
Appendix I.— STATUTES AND FORMS. The Finance (1909-10)
Act, 1910. Revenue Act, 1911, Annotated. Statutory Rules
and Orders, 1910. Regulations as to Increment Value Duty.
Form 7. — Claim for Site Value Deductions. Undeveloped
Land Duty. Provisional Valuation 81

Appendix II.— NOTES AND PAPERS. Substituted Site Values.
Some Points at Issue. Cases and Decisions. The Govern-
ment's Mode of Assessing Increment Value Duty. The Land
Union's View as to the Mode of Presenting Objections to
Provisional Valuations, with Form. Separate Valuations of
Parts of Land, in One Occupation and Combined Valuation
of Contiguous Land in Separate Occupations, with Forms . . 147



INTRODUCTION.



Probably no Act dealing with Finance has been the
subject of more controversy both inside and outside the
Houses of Parliament than the Finance Act of 1909-10.
Introduced in the Commons on 29th April, 1909, it did
not receive the Royal Assent until 29th April, 1910, and
then only after a prolonged and bitter struggle culminating
in a General Election. It may safely be said that no
measure of recent years has been discussed at such great
length. Notwithstanding this, very little is yet really
understood outside professional and parliamentary circles,
as to the details of the new taxes imposed.

Into the merits or demerits of the Act, it is not intended
in this Handbook to enter, except incidentally, where the
subject requires it. The chief desire is to set down, in
language as simple as possible, the principal points of a
most, complicated piece of legislation. It is also desired to
give such hints as may be conducive to the protection of the
interests of numerous Owners of Land and House property
and others liable to pay the new duties who have not
the leisure at their disposal to study the Act in detail,
nor to peruse at length the many excellent legal and
professional works already available.

The original MS. for this Handbook was prepared by
Mr. Ernest Watson, F.S.I. — an Assistant Secretary of the
Land Union — for private publication, but the Executive
Committee of the Land Union, realising the importance
of issuing to its Members a practical Guide to dealing
with Provisional Valuations, thought it desirable to acquire
the rights of publication, and to issue it, with considerable
additional matter added by the Literature Committee,
as a Handbook — subject to revision by some Members
of the Legal Committee.



Vlll. LAND UNION HANDBOOK

It is not intended as a technical legal Handbook, nor
can it take the place of professional advice on the com-
plicated points of law raised by this new legislation. But
it states as simply as possible the main features which
property owners ought to understand, and the direction
in which they should move if they desire to protect their
interests. The subject matter of the Act is so novel and
so complicated, and so many interpretations still remain
to be decided in the Courts, that opinions now given may
subsequently require modification. But the Land Union
has a unique experience in advising its Members on Valua-
tions and in contesting claims before the Referees and the
Courts. Few professional men have so far had much
experience of this character, and therefore this Handbook
may be of use even to them.

This Handbook will supply convincing proof of the
necessity for very careful examination of the Provisional
Valuations now being issued under the authority of the
Commissioners of Inland Revenue.

The present work does not specifically refer to the case
of land in Scotland, but it is hoped that, in conjunction
with the original Scottish Edition of the Land Union Guide,
it may prove of assistance to owners in Scotland.



LAND UNION HANDBOOK



PRELIMINARY OBSERVATIONS.



In perusing the Act, it must always be borne in mind
that many of the words employed are not used in their
ordinary sense, but have a special or extended meaning
given to them either by some General Statute such as the
Interpretation Act, 1889,* or by the definitions contained
in the Act, particularly in Section 41, and as to Minerals
and Mineral Rights Duty in Section 24 (see the Statute
set out in the Appendix). The following may be men-
tioned : —

" Land "f includes buildings, timber and minerals, but
does not include fee farm or chief rents (rent charges),
quit rents, sporting rights, tithe rent charge. (For
copyholds see Chapter X.)

" Owner " includes the tenant for life, in tail, or in fee
simple in possession of the rents and profits, also
the holder of a lease or underlease of which more
than 50 years remains unexpired. (As to Trustees
and Mortgagees see Chapter XII.)

" Lease " includes an underlease and an agreement for a
lease or an underlease, and " lessor " and " lessee "
have correspondingly wide meanings. The term
" lease " does not include terms of years granted for
the purpose of securing money (such as are usually



* Extract from the Interpretation Act, 52 & 53 Vict. c. 63.

30th August, 1889.

1. (1) In this Act and every Act passed after the year one Rule* as to

thousand eight hundred and fifty whether before or after the gender and

commencement of this Act, unless the contrary intention appears: — number.

(a) words importing the masculine gender shall include

females ; and

(b) words in the singular shall include the plural and

words in the plural shall include the singular.
3. In every Act passed after the year one thousand eight Meanings of
hundred and fifty whether before or after the commencement
of this Act, the following expressions shall, unless the contrary inten-
tion appears, have the meanings hereby respectively assigned to
them : namely, —

The expression "month" shall mean calendar month:
The expression "land" shall include messuages, tenements,
and hereditaments, houses, and buildings of any tenure.

t This is derived from Section 3 of the Interpretation Act 1889,
as qualified by Section 41 of this Act.



"Month
"Land."



X. LAND UNION HANDBOOK

created by under settlements of estates for securing
jointures and portions) until and unless they are
foreclosed. (As to leases for a life or lives, see Foot-
note on page 52.)

" Interest " in reference to land includes an undivided
share of the fee simple in possession — also the
reversion expectant on a lease, but not an incum-
brance or a rent charge or a lease for a term not
exceeding 14 years, or sporting rights.

" Rent charge " means tithes or tithe rent charge, fee
farm rents or any perpetual annuity granted out of
the land.

" Fixed charge " means a " Rent charge " and also any
burden or charge (other than rates and taxes)
imposed by Parliament, but presumably Land Tax
is not included.

" Fee Simple " means the freehold in fee simple in
possession and not subject to a lease — but it does
not include an undivided share of the fee simple
(the latter and the freehold subject to a lease may be
" Interests " as above defined).

" Agricultural Land," besides its ordinary meaning,
includes meadow or pasture, orchards, osier beds,
woodlands, market gardens, nursery grounds and
allotments.

" Body Unincorporatc " means an unincorporated com-
pany or society, or trustees in whom any property
is vested in such a manner or on such permanent
trusts that the same does not become liable to
death duties — e.g., parochial rooms, clubs, chapels
of Nonconformists. The definition is adapted from
Section 12 of the Customs and Inland Revenue Act,
1885 (48 and 49 Victoria, c. 51) ; and see Section 1,
paragraph c of the Finance (1909-10) Act, 1910.

Copyholds, glebe and other particular interests are dealt
with in the text. The word " fee simple " is used throughout
this work when a freehold estate in fee simple is intended.
" Freehold " includes interests other than the fee simple,
e.g., a tenant for life may be a freeholder.

One word of caution : It is often erroneously assumed
that only " owners " as such are liable for the Increment
Value Duty. This is not the case.i -, {For instance, if a
leaseholder sells his lease or grants an iunderlease for more
than 14 years, or dies, he or hia estate is liable to pay
Increment Value Duty. (See Seotion 4.)



LAND L'XION' HANDBOOK



Valuations.



CHAPTER I.

The New Taxes and the Valuation under the Act.

The Finance (1909-10) Act, 1910, imposed altogether five New Taxes
new burdens upon land and house property (including in and tn f
the latter expression business and manufacturing premises
of all kinds), viz., Increment Value Duty, Undeveloped
Land Duty, Reversion Duty, Mineral Rights Duty, and
Increment Value Duty on Minerals. A short description
of each of these will be found in the following chapters
with notes as to their incidence, the exemptions therefrom
and other points of interest.

Valuation to fix the " Assessable Site Value.'"

Section 26 of the Act provided that the Commissioners
of Inland Revenue should cause a valuation to be made
of all Land in the United Kingdom as it existed on the
30th' April, 1909, showing separately what are called in the
Act the " Total Value " and the " Assessable Site Value "
and, in the case of agricultural land, the value for agricul-
tural purposes where that value differs from the Assessable
Site Value. The main object is to fix the original
" Assessable Site Value " of all Land, as it is hypothetically
assumed to have existed on that date. This value will be
found to be an artificial conception having very little to
do with the real market value of any property. Neverthe-
less, this " Site Value "* when found is to be the datum line
from which all future " Increment " in value is to be
calculated, with a view to the charging of Increment
Value Duty. (See Footnote to page 8.)

This same " Site Value " also forms the basis for assessing
the annual Undeveloped Land Duty on all lands not
" developed " by the erection of dwelling houses or other
buildings or used for any bona-fide business, trade, or
industry other than agriculture (Sec. 16 (2)). But in the
case of Undeveloped Land Duty, the " Site Value " originally
found under the process of the Act is subject to revision on
revaluation for this particular Duty, once in every five years.

* When the words " Site Value " are used, " Original Assessable
Site Value " is meant, except when the same expression is used in Sec-
tion 2 of the Finance Act to mean " Site Value " upon an occasion for
the levying of duty. It is important to remember this.



2 LAND UNION HANDEOOK

Various " Site Values " applicable to the same piece of land.

So far as Increment Value Duty is concerned the original
Site Value once fixed is a constant factor and unalterable.
It is apparent, however, that after the year 1914 (when the
first revaluation for Undeveloped Land Duty takes place)
any piece of " undeveloped " land may have at least two Site
Values assigned to it, one fixed and the other changeable,
viz., (a) the Original Site Value for Increment Value Duty,
and (6) the Amended Site Value for Undeveloped Land
Duty made on the quinquennial revaluation. It may also
have a higher " Substituted Site Value " recorded in its
favour as a protection against Increment Value Duty,
if the Owner has availed himself of the provisions of
Section 2 (3) of the original Act as amended by Section 2
of the Revenue Act 1911. (See Note on " Substituted Site
Value " in Appendix.)

Every piece of Land in separate occupation to be separately
valued. Right of Owner to require any portion of an
occupation to be separately valued or to require lands
in separate occupation to be valued together.

Section 26 provides that every piece of Land under
separate occupation (and, if the Owner so requires, any
portion of such land) shall be separately valued, and a
Register is to be kept recording separately the Total Value
and the Site Value of each piece of land thus valued.
Further, under the Revenue Act, 1911 (Section 5), the
Commissioners, if they think fit, may, on the request of the
Owner, aggregate for the purposes of Valuation any pieces
of contiguous land not exceeding one hundred acres in
extent and value them together, although they may be
under separate occupations. In the case of lands used
for agricultural purposes the Agricultural Value of such
land has to be shown in addition, where it differs from the
Site Value. Any Owner is entitled, if he chooses, to furnish
his own Estimate of the various values under the Act,
but as the Commissioners are not bound to accept but only
to consider such Estimates, and the " Values " themselves
are more or less hypothetical in character, few Owners are
likely to avail themselves of this opportunity of " placing
their cards on the table " at the outset for the inspection
of the Official Valuers. It is to be noted that the
expression " Land " includes all buildings and other
structures thereon, and all minerals on, in or under the
surface of the land, but not easements, rent charges,
sporting rights, &c. For additional notes and suggested
forms of application see pages 177-179.



LAND UNION HANDBOOK 3

Calculation of " Values."

No methods of calculation in arriving at the several
values are laid down in the Act, and it is assumed that
every District Valuer appointed by the Commissioners will
exercise his own discretion as to the methods of valuation
he will pursue, the deductions from Gross to arrive at
Net Rental Value, the amount of interest an investment of a
particular class should pay, and the consequent multiplier
to be adopted in calculating the Total Value on the Income
derivable from the property.



LAND UNION HANDBOOK



CHAPTER II.



The Provisional Valuation.



The Commissioners of Inland Revenue, represented by
the District Valuer, having made a " Valuation " of the
property, which may be partly based on* the information
supplied by the Owner on " Form 4 — Land," the result
of his labour is then served upon the Owner in the form
of a "Provisional Valuation" (for a copy of this Foim
Section 26. see page 143) in which the several " Values " (the definitions
of which are explained in Chapter VIII.) are set forth
with figures representing the amount of the District
Valuer's deductions in respect of such matters as the
sum representing the difference between the " Gross
Value " and the " Full Site Value," the capitalised Tithe
Rent Charge, Cost of Redeeming the old Land Tax, and
so on.f (See " Site Value Deductions," Chapter IX.)

Sixty days allowed, for Owners' " Objections."

Section 27, The Owner has then sixty} days from the date of the

s-s. (2). service§ of such Provisional Valuation in which to decide

whether he will object to it or not. If, after mature

deliberation with full knowledge of the circumstances and

the law, he considers the valuation a fair one,*[| he need

* Many Provisional Valuations are being sent in which are not
based upon proper information. Yet if not objected to within 60
days they, however incorrect, will be fixed for ever. It seems
therefore desirable to put in notice of objection whenever doubt
exists as to the correctness of the figures whenever the owner's know-
ledge of law or fact is insufficient to enable him to arrive at an
immediate decision.

"j" It is for the Owner to see that these are correct, as if not claimed
and inserted in the Provisional Valuation they cannot afterwards
be claimed on any " occasion " for calculating Increment Value
Duty. (Section 12.)

X As regards the Value for Agricultural purposes, it may be that,
under the peculiar wording of the Act, the owner has only 30 days
in which to appeal. (See page 169 below, Appendix II. — " Mode of
presenting objections to Provisional Valuations.")

§ Cases have occurred where the Provisional Valuation
has been dated some days earlier than the day of delivery. The
date on the registered envelope should be carefully noted, and the
full sixty days for objection from the dale of actual service should be
claimed.

H It should always be borne in mind that the property
is not to be valued as at the date of valuation, but as at 30th April,
1909, before depreciation by the introduction of the Act could have
had effect.



TANTJ UNION HANDBOOK 5

take no further steps, and the valuation will stand against
the property valued, for all time, so far as any future
liability for Increment Duty is concerned, but subject to
quinquennial adjustment in the case of " Undeveloped "
land. However, the Owner must not forget that before
any valuation is agreed to, Deductions may or may not be
claimed by him, which have a most important bearing on
the incidence of Undeveloped Land Duty — and possibly
ulterior taxation. (See page 48.)

Manner of presenting Owners' " Objections."

If, on the other hand, the Owner considers the values are
unfair and against his interests, or he wishes to claim
deductions, he is entitled to serve on the Commissioners
an " Objection " to the Provisional Valuation.* This
he can do in an informal manner upon the District
Valuer, who is the local representative of the Commis-
sioners. No particular form of objection is required,
but the Owner must state (1) the grounds of his objection
and (2) the amendments he requires in the valuation.
No special method of serving notice of objection against a
Provisional Valuation is laid down in the Act, but pre-
sumably it must be in writing, signed by the Owner or
his accredited agent, and in order to avoid loss in the
post it would be prudent to register its despatch
as a safeguard. It should be addressed to the Com-
missioners of Inland Revenue, care of the District Valuer,
by whom the valuation is served, and whose address appears
on the form No. 35 which accompanies it. (See Form of
Objection, Appendix II., page 175, and notes thereon.)

Amended Provisional Valuations.
On receipt of the Owner's Objection, it is open to the
Commissioners to revise their figures and to serve upon the
Owner an Amended Provisional Valuation, which then
takes the place of the original Provisional Valuation and
can, in its turn, be objected to within a period of sixty


1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Online LibraryEngland) Land Union (LondonThe new land taxes and mineral rights duty. The Land Union's handbook on provisional valuations; being general advice to owners of land and house property in dealing with valuations under the Finance (1909-10) Act, 1910, as amended by the Revenue Act, 1911 → online text (page 1 of 19)