Scottish Court of Session Decisions

The Income Tax Act 1853 (16 and 17 Vict. cap. 34) enacts—Section 2—“For the purpose of classifying and distinguishing the several properties, profits, and gains for and in respect of which the said duties are by this Act granted, and for the purposes of the provisions for assessing, raising, levying, and collecting such duties respectively, the said duties shall be deemed to be granted and made payable yearly for and in respect of the several properties, profits, and gains respectively described or comprised in the several schedules contained in this Act …—that is to say …”—Schedule B—“For and in respect of the occupation of all such lands, tenements, hereditaments, and heritages as aforesaid.…”

The Income Tax Act 1842 (5 and 6 Vict. cap. 35), the rules and cases of which for Schedule B of that Act were applicable to the above schedule, enacts—Section 63, No. IX— First—“The said duties, except where other provisions are made as aforesaid for estimating particular properties, shall be estimated according to the general rule contained in Schedule A, and shall be charged on and paid by the occupier for the time being, his executors, administrators, and assigns.” Second—“Every person having the use of any lands or tenements shall be taken and considered for the purposes of this Act as the occupier of such lands or tenements.”

W. Miller, Surveyor of Taxes, Edinburgh, appellant, being dissatisfied with a decision of the Commissioners for the General Purposes of the Income Tax Acts at Edinburgh reducing the assessments of William Watson Anderson, farmer, Colzium, Kirk-newton, respondent, obtained a Case for appeal.

The assessments were made under Schedule B of the Income Tax Acts in respect of the occupancy of certain farm lands, and were reduced by the amount which the respondent received from letting the shoottings of the lands.

The Case set forth—The following facts were admitted or proved:—1. The respondent is tenant of the farms and grazings of Easter and Wester Colzium and West Cairns in the parish of Midcalder in the county of of Midlothian. 2. The respondent's father William Watson Anderson, now deceased, rented the said farms and grazings from the respondent's grandfather John Anderson under a lease for ten years from Whitsunday 1899. The said lease provides, inter alia, as follows:—‘ The said John Anderson … lets to the said William Watson Anderson and his heirs … [then followed an express exclusion of assignees and subtenants, legal or conventional, of every description] … all and whole the farms and grazings of Easter and Wester Colzium and West Cairns as at present occupied by the said William Watson Anderson, all lying in the parish of Midcalder and county of Midlothian, together with the right and privilege of fishing and shooting and killing game of every description, including hares and rabbits, on the said lands either by himself or those having his permission, and that for the full term and space of ten years from and after the term of Whitsunday Eighteen hundred and ninety-nine … for which causes and on the other part the said William Watson Anderson binds and obliges himself and his heirs, executors, and successors to content and pay to the said John Anderson and his fore-saids or to any factor whom he may appoint the yearly sum of seven hundred and fifty pounds sterling.’ 3. By minute of agreement, dated 28th May and 10th June 1908, the said lease was extended for a further period of ten years from and after the term of Whitsunday 1909, when the respondent became joint tenant.… 5. The respondent's father the said William Watson Anderson died in 1913, when the respondent as survivor became sole tenant of the said farms and grazings. 6. The shootings over the aforesaid farms Easter and Wester Colzium and West Cairns were let by the tenants under the said lease to Messrs Bruce & Menzies from 1903-4 to 1912-13 inclusive at £100 per annum, and for 1913-14 at £150 per annum. 7. On the 17th November 1913 the respondent let the shootings to Messrs A. & H. Lawrie, 4 St Andrew Square, Edinburgh, for five years at £250 per annum, but reserved the right to shoot rabbits and white hares from 10th December to 1st April in each season. A copy of

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the respondent's letter of the 17th November 1913 agreeing to let the shootings as aforesaid is annexed to and forms part of this case. 8. The respondent pays the rates on the farms and shootings, although Mr Alfred A. Lawrie appears as the occupier in the valuation roll.

“The Commissioners on consideration of the facts and arguments submitted to them were of opinion that the respondent's contentions were correct, and accordingly reduced the assessments under Schedule B for each of the years ended 5th April 1916 and 1917 to £500.”

The letter of 17th November 1913 was in following terms:—“This is to state that I have let to Messrs A. & H. Lawrie, 4 St Andrew Square, Edinburgh, the shootings of Colzium for a period of five years (seasons 1914-15-16-17-18) at a rent of £250, to be paid in half-yearly sums of £125. A man will be engaged to act as gamekeeper for Messrs Lawrie and estate man for me. This man will do all work necessary as a keeper for the Messrs Lawrie at Colzium when not required by the shooting tenants. He will do whatever is required of him on the estate for me—he will be paid in equal share by me and the Messrs Lawrie, both parties to pay for upkeep of man's house in equal share. The Messrs Lawrie as shooting tenants of Colzium have also the right to fish (two rods) on Harperrigg reservoir, also shoot (two guns) round this reservoir. If the farm tenant of Colzium has a boat on the reservoir the Messrs Lawrie have the right to use this boat when required. I guarantee to allow my shepherds to grouse drive unless I find it absolutely impossible. I have full control of heather-burning. In order to keep down rabbits and white hares I have the right to shoot same after December 10th of each season to April 1st. All grouse butts on green land must be protected from sheep by wire netting—this is to prevent such a waste of valuable ground in rebuilding of butts each season.”

Argued for the appellant—The Commissioners had gone behind the lease and taken a figure which depended on any arrangements the respondent might make from time to time to obtain profits out of the lands by allowing people to shoot over them. There was no warrant for what the Commissioners had done, and there would be ho certainty in assessment if their decision was right. Schedule B was for assessing an occupier on certain benefits he gained from occupation and applied to such profits as these. By granting the letter by which the shootings were let the tenant had not parted with the occupancy of the lands and shootings. If it, were so, “occupier” might be held to apply to the privilege of shooting with one gun or fishing with one rod. The word was to be interpreted in the technical meaning given to it by the statutes— Governors of Sutton's Hospital in Charterhouse v. Elliot, 1921, 38 T.L R. 129; Bent v. Roberts, 1877, 3 Exch. Div. 66—and meant the person paying under Schedule A or some person in direct financial relationship with him—Income Tax Act 1842, section 190, Schedule G; section 60, Schedule A, No. 1; and section 69 Dowell's Income Tax Laws (7th ed.), p. 200. The test for assessment under Schedule B was payment of rent. Persons other than those in the position of owners or tenants appeared to be excluded. So a tenant could not avoid assessment on the whole rent by holding the farms and shootings under separate leases— Revell v. Scott, 1895, 22 R. 772, 32 S.L.R. 585. “Occupier” and “lessor” were not synonymous (Schedule A, No. IV, Rule 3) unless the lessor was in financial relationship with the owner as his tenant— Glasgow Billiard Rooms Company v. M'Call, 1903, 5 F. 507, 40 S.L.R. 592. There was no provision for taxing a person in the position of this shooting tenant, and if the respondent's contention was right the machinery of the Acts would break down. (2) The fact that the shooting tenant's name was in the valuation roll could have no bearing on the question of assessment for income tax—Armour on Rating, 2nd ed., p. 7. (3) There was no proper sub-lease here, but if there were tenant could not be held to include sub-tenant— MacGregor v. Clamp & Son, 1914, 1 K.B. 288.

Argued for the respondent—The shooting tenant here had the use of the lands and was therefore the occupier in the meaning of the Acts—Income Tax Act 1842, section 63, Schedule A, No. IX, Rule 2. He had the actual use and that was the test. So a life-renter might be an occupier. The contention of the appellant introduced the principle of constructive occupation, which was not in accordance with the intention of the Acts. Revell v. Scott, cit. sup., showed that there could be occupation for sport separate from agriculture. Bent v. Roberts, cit. sup., and Governors of Sutton's Hospital v. Elliot, cit. sup., were cases of occupation for services and did not apply. The document itself was decisive on the question of whether there was a lease of the shootings. The reservation of the right to shoot hares and rabbits was merely for the purpose of keeping down ground game and did not affect the question of occupation. The letter contained the proper terms of a lease of shooting, and if it was a lease the shooting tenant must be the occupier under Schedule B, No. IX, Rule 2. The letter could not be classed as merely the grant of a privilege. Further, tenant must be taken to include sub-tenant from the terms of the Act of 1842, section 69. The rent therefore fell to be deducted from the assessment. The shooting tenant ought to pay the tax, and could deduct it on paying the rent.

At advising—