Inland Revenue v. Wemyss

Subject_1 Revenue Subject_2 Super Tax Subject_3 Assessment Subject_4 Income Arising from Ownership — Income Arising from Occupation — Income Tax Act 1918 (8 and 9 Geo. V, cap. 40), secs. 5 (1), 19, and 27 (1) — Conditional Occupation, subject to Discretion of Trustees of Trust Property, by Beneficiary Liferenter.

By his antenuptial marriage contract a husband who was vested under his father's settlement in a reversionary right to shares which were burdened with certain charges, one of which had been created by himself, conveyed his whole right in the shares to the marriage-contract trustees, subject to a Page: 263 ↓

The questions of law for the opinion of the Court were—“1. Whether the annual value of Wemyss Castle, offices, policies, and shootings forms part of the income of Captain Wemyss for the purposes of super tax? and 2. Whether the income from the said shares, so far as it exceeds 12 1 2 per cent. per annum, forms part of the income of Captain Wemyss for the purposes of super tax?”

Lord President (Clyde) —The questions in this case relate to the assessment of the respondent's income to super tax.

The Inland Revenue further contends with reference to the respondent's marriage contract that the income thence arising to him includes not merely the income which he is entitled to receive during his life, and actually receives at present, from the trust thereby created, but also certain other income of the trust which he does not receive, but which in terms of the trust is employed by the trustees for the purpose of paying off certain charges on the securities which form the trust assets.