| 6/1/2009 |
Bil-Malti
HOME
SERVICES
HELP
SEARCH
|
| Board of Special Commissioners - Cases |
| Case No. 13/60 |
Decided: 26 October, 1960 |
   |
|
Interest payable on outstanding death duty was not deductible against the income arising from the inherited assets - article 10, now 14, Income Tax Act
|
Appellants claimed that interest paid on outstanding death duty was deductible against the income arising from the inherited assets. They argued that had they not inherited the assets the chargeable income itself would not have been earned. The Commissioner, on the other hand, maintained that non-settlement of the tax in due time did not constitute a debt on which interest could be deductible. Even had appellants borrowed monies from third parties, interest would still not be deductible because it was not incurred in the production of income. A distinction had to be drawn between duties and assets when determining the source of income.
The Board agreed with the decision of the Commissioner quoting Lord Davey's ruling in the case Strong & Co v Woodfield ("disbursements must be made for the purpose of earning the profits").
The Board dismissed the Commissioner's oral plea that the Board could not review the case once he (the Commissioner) had used his discretionary powers when making the assessment. The Board ruled that the case involved the interpretation of a provision of the law and was, therefore, a legal point falling within its jurisdiction.
An appeal was entered before the Court from this decision (see case no. 40).
|
|
|
|
|