Inland Revenue v. Fothringham

Dame Hester Mary Fraser or Stewart was the widow of Sir Archibald Douglas Stewart, Baronet, heir of entail in possession of the entailed estate of Grandtully and Murthly, who by his antenuptial marriage contract and by bond of annuity and disposition in security had burdened the entailed estate with two annuities in her favour under the “Aberdeen” Act (5 Geo. IV, cap. 87). The defender was the successor of the late Sir Archibald Douglas Stewart in the entailed estates now held in fee Page: 160 ↓

The Lord Ordinary sustained the second and third pleas-in-law for the defender, continued the cause, and granted leave to reclaim.

I should perhaps point out that it is quite clear that in Henderson's case the Crown did not claim, as they now do, any deduction from the rent for repairs. The only explanation of the apparent change in practice was a statement by the Lord Advocate that it must have been an oversight, as, so he was informed, the invariable practice has always been to make such a deduction.”

The circumstances of the Murthly property and the method adopted for its valuation create no difficulty in arriving at the correct number of years' purchase to be applied to the net income of the property, or to that proportion of it to which the annuity extended, viz., £4000. I think, therefore, the contention of the Revenue should prevail.

I shall now consider the case as it was argued to and disposed of by the Lord Ordinary. The question is whether, assuming that feu-duties and public burdens ought to be deducted from the gross rental for the purposes of section 7 (7) of the Finance Act 1894, an average annual sum in respect of repairs ought also to be deducted.