1920.] 



Redemption of Tithe Rentcharge. 



387 



(4) Effects of Redemption of Tithe Rentcharge upon income Tax 

 Llabiiity.^ — Leallct Xo. 329 sets out tlic two alternative 

 methods of redeeming a tithe rentcharge, viz., (1.) by payment 

 of a lump sum, and (11.) by payment of an annuity. 



J . — Redemption hy pay ment of a lump sum. — If the titheovvner 

 has been assessed directly in respect of his tithe rentcharge, 

 his position after the redemption will be that his income 

 from this particular source has diminished. He will, therefore, 

 be entitled to a proportionate reduction of the total gross 

 assessment upon his tithes, subject to a proportionate reduction 

 also of the deduction allowed from such assessment in respect 

 of rates, land tax and cost of collection. The landowner, 

 on the other hand, will after the redemption no longer be under 

 the necessity of paying the tithe rentcharge redeemed. He has, 

 however, previously received for assessment purposes a deduc- 

 tion in respect of this tithe (vide paragraph 3 [a)), and such 

 deduction will now fall to be withdrawn. 



If the titheowner has not been directly assessed for the 

 tithe rentcharge, the effect of a redemption will be merely 

 to diminish the amount of income which he receives under 

 deduction of tax {vide paragraph 2 (6) ). The landowner 

 being no longer under obligation to pay tithe rentcharge out 

 of his rent will, in future, himself bear the tax which he formerly 

 recovered from the titheowner [vide paragraph 3 (6) ). 



II. — Redemption by payment of an annuity. — Where redemp- 

 tion is effected by payment of an annuity, the titheowner, 

 if assessed directly for the tithe rentcharge, will be entitled 

 to apply for a reduction of his total assessment for tithe as 

 explained under (I.) above. Such portion of the annuity 

 as represents interest upon the consideration money will 

 be received under deduction of tax, but tax will not be payable 

 on the residue of the annuity. As regards the landowner, 

 inasmuch as he will be relieved of any further payment of 

 tithe rentcharge he will no longer be entitled ta the deduction 

 hitherto allowed him, as explained in paragraph 3 {a) above. 

 He should, however, clearly understand that he is entitled to 

 deduct Income Tax from such portion of the annuity as represents 

 interest upon the consideration money (vide Leaflet No. 329, 

 paragraph 6). 



If the titheowner has not been directly assessed for the tithe 

 rentcharge, he will after the redemption be receiving interest 

 upon the consideration money, taxed by deduction, in place 

 of tithe rentcharge taxed by deduction. The landowner, 

 on the other hand, will be paying interest from which he is 



