Scottish Court of Session Decisions

At a meeting of the Commissioners for General Purposes for the Kintyre district of the County of Argyll, under the Property and Income-Tax Acts, held at Campbeltown on 25th January 1878, the Rev. George Walter Strang, minister of the second charge of the parish of Campbeltown, appealed against an assessment of £100, for 1877–78, made upon him under Schedule E of the income-tax, in respect of a sum paid to him in the following circumstances, and alleged to be an emolument of his office:—

It was admitted on behalf of the appellant that since he had come to Campbeltown, about three years before, he had received at each Christmas time a pecuniary gift from his congregation of £100, as a token of their regard for him, and that at Christmas 1877 he had received this gift, which was raised by voluntary subscription among his friends—the majority being members of the congregation. The appellant had granted no receipt, the contributors were under no obligation whatever to repeat the gift, and it might never be repeated.

The appellant contended that the gift formed no part of his income within the meaning of the Income-Tax Acts. He paid income-tax on his stipend, glebe, rents, &c., being the full amount of the profit derived by him from his public office or employment as a minister of Campbeltown parish. The gift did not follow the office, nor did it fall under any of the descriptions given in the Act as “salaries, fees, wages, perquisites, or profits whatsoever accruing by reason of such offices or employments.”

In support of the charge the Surveyor referred to Schedule E of the Act 16 and 17 Vict. cap. 34, under which duties in respect of every public office or employment of profit were granted, and to the rules for charging these in section 146 of the Act 5 and 6 Vict. cap. 35. The first rule there provided that the duties should be annually charged on those persons having, using, or exercising the office or employments of profits mentioned in Schedule E, “for all salaries, fees, wages, perquisites, or profits whatsoever accruing by reason of such offices or employments.” And by the third rule it was provided that the duties should be paid in respect of, inter alia, “any office or employment of profit held under any ecclesiastical body.”

The appellant being a minister of the Church of Scotland as by law established, his benefice, it was contended, was clearly within the description of an “office or employment of profit held under any ecclesiastical body, and so chargeable under Schedule E; and the £100 received annually, though voluntarily paid, accrued to him by reason of his holding such office under that ecclesiastical body, and was a pecuniary profit or perquisite liable to duty. Even although the sum in question should not be deemed a profit chargeable under Schedule E, the appellant was nevertheless liable to assessment therefor as “annual profits or gains, ” under the general rule, Sch. D, 5 and 6 Vict. cap. 35, which by virtue of section 188 of the same Act could be applied to the assessment in dispute.

The Commissioners sustained the appeal, and relieved the appellant, whereupon the Surveyor craved a case for the opinion of the Court of Exchequer, which was granted.