386 



Redemption of Tithe Rentckarge. 



[JULY, 



REDEMPTION 

 OF TITHE RENTCHARGE: 



THE TITHE ACT, 1918— INCOME TAX LIABILITY 

 OF LANDOWNER AND TITHEOWNER. 



(1) [ntrocJuction. — Lealiet No. 329 issued by the "Ministry 

 detailed the procedure for the redemption of tithe rentcharge 

 under the provisions of the Tithe Act, 1918. A redemption 

 of tithe rentcharge will, however, generally entail modifications 

 of the Income Tax liability of both the titheowner and the 

 landowner who has redeemed the rentcharge, a.nd this supple- 

 mental leaflet, which has been prepared in conjunction with 

 the Commissioners of Inland Revenue, is intended to explain 

 the modifications that will be necessary. 



(2) The Present Method of Assessing: Tithe Rentcharge to income 

 Tax. — (a) The usual practice is for the owner of a number 

 of tithe rentcharges arising out of property in any one 

 parish to return them all for assessment upon himself 

 in one sum. 



(b) In the exceptional cases, however, where the titheowner 

 does not make a return for the assessment of the tithe rentcharge 

 upon himself for the payment of Income Tax, the land out 

 of which the tithe arises is assessed inclusive of the tithe 

 (as explained in paragraph 3 {b) ), and the landowner deducts 

 Income Tax from the tithe as and when he pays it to the tithe- 

 owner. 



(3) Tithe Rentcharge as affectlngr the Landowner. — (a) \\ here 

 the landowner pays out of the rent received for a particular 

 property a tithe rentcharge to a titheowner who returns 

 the same for direct assessment, as explained in paragraph 

 2 {a), a deduction in respect of the tithe rentcharge is made 

 from the rent when assessing the property to Income Tax 

 under Schedule A. Thus, if the landowner in such a case lets 

 a farm for a rent of £200 per annum, and out of the rent pays 

 a tithe rentcharge of £20 per annum, he w^ould be assessed 

 upon £180 only. 



(b) If, however, the titheowner were not directly assessed 

 for the tithe rentcharge, the landowner w^ould be assessed 

 upon the full rent, £200 ; but as he would have the right to 

 deduct tax from the tithe, £20, upon payment — as explained 

 in paragraph 2 (b) — he w^ould ultimately bear tax upon 

 /180 only. 



