1931 Finance Act
Finance Act 1931 (Part 3) - Land Value Tax
This is a summary of the section of the 1931 Finance Act that deals with Taxation of Land Values.
Note that information in square brackets [ ] has been added for clarification.
Land Value Tax
7. Charge of Land Value tax
A annual charge of 1d per £1 [0.42%] of the land value [capital value] of every land unit. [from section 15 below it is implied that this is approx 8% of annual rent]
8. Ascertainment of Values
(1) The land value determined by the Commissioners of the Inland Revenue is the open market value of the land unit without any buildings or other additions.
(2) For agricultural land a cultivation value is also ascertained.
(3) Each unit of land is valued separately.
(4) The surroundings are taken exactly as they are.
(5) The owner can supply his own estimate.
(6) If there is a change of use for exempt land [see section 19 below] it will be valued as soon as it becomes taxable.
9. Recording and registration of values
(1) The Commissioners will keep a record of every land unit with a description, land value and cultivation value (for agricultural land).
(2) Copies of the register will be kept by each Local Authority.
(3) Owners will be notified of the entries.
(4) Valuations at times other than the valuation date will be added to the register and the owner notified.
10. Division of units and apportionment of values
(1) If the Commissioners discover that units of land have been divided then revisions will be made in the register.
(2) The owners will be notified.
11. Objections to and appeals from valuations.
(1) If an owner objects to the valuation he can give his own estimate. The Commission can either accept this and amend the register or refuse.
(2) The owner can appeal against the refusal to a panel of referees.
(3) Only the land owner or his representatives and the Commissioners may attend the appeal.
(4) A Reference Committee shall make the rules pertaining to the operation of the appeals.
(5) The Referees can direct the Commissioners to alter the entries in the register.
(6) The Referees can order the costs of the appeal to be paid.
12. Amendment and keeping of registers
(1) Following objections and appeals the Commissioners can amend the registers.
(2) Following any amendments owners of the land will be notified.
(3) Local authorities who hold registers will update them and allow access to them free of charge.
13. Values in force for assessment of tax.
(1) For land values and cultivation values the values taken are those in force on January 1st of the financial year in question.
(2) Any amendments made to the register will be backdated to the previous 1st January.
14. Assessment and Recovery of tax
(1) For any financial year the tax falls on the owner on January 1st.
(a) Where there is a building on the land with a number of owners the tax will be apportioned between them.
(b) Where the site is mortgaged and the lender is in possession of all or part of the site the tax will fall proportionately on them.
(2) The value of any land unit is reduced by the amount of the cultivation value.
(3) If the owner dies the tax falls on his personal representatives.
(4) If the tax is assessed before the 1st June it is payable on 1st July and if assessed after 1st June it is payable one month after the assessment.
(5) An assessment may be made up to six years after the date of charge.
(6) Any person aggrieved by an assessment can appeal with 42 days to the county court for values less than £100 or to the High Court.
(7) The amount of tax payable shall be recoverable as a debt to His majesty and as a charge against the land in respect to which it is charged.
(8) The Commissioners shall make any repayments and assessments as are necessary under the above arrangements.
15. Recoupment of tax to leaseholders by lessors
(1) Where land is leased at a rent, on paying the tax for a year the leaseholder can recover from the lessor (reversioner) either the tax or one twelfth of the year's rent, whichever is less, by a deduction in the rent paid.
(2) If the lessor was themselves a leaseholder then the same applies to them.
(3) The above apply notwithstanding any previous agreement made before the passing of the Act.
(4) The "reversioner" means the owner or mortgagee.
(5) References in the register or appeals etc. to the owner refer to the reversioner.
16. Tax paid by mortgagee charged on mortgaged estate
(1) For a mortgaged estate the tax shall be a charge on the estate in addition to the mortgage money with priority over other charges and with interest charged at 5%.
17. Ultimate incidence of tax assessed on persons not having whole beneficial interest
(1) Where the person on whom the tax ultimately falls does not have a beneficial interest for the whole year in question the way the tax falls follows the way rent would be due. "Relevant estate" is defined as the land being taxed either directly, indirectly through a tenant or through a mortgagee.
(2) If the tax is only chargeable for part of a year then that should be taken into account.
(3) [from point 14 above, the tax falls on the owner on Jan 1st.] When the person is not the owner for the whole year then he recovers what he has paid from the new owner.
18. Procedure as to assessment and collection.
(1) The Commissioners may make regulations with respect to the assessment and collection of the tax including adapting existing legislation that applies to income tax.
(2) Aspects of earlier Finance Acts relating to income tax can be adapted in relation to the recovery of unpaid tax. Unpaid amounts of less than £50 can be recovered as civil debts.
(1) Land not subject to a lease of greater than 50 years shall not be taxed for the following reasons: If it is
(a) Land owned by the Government or public bodies and used for public purposes
(b) Land owned by local authorities
(c) Land owned by the National Trust
(d) Land used for public infrastructure - railways canals, docks, etc.
(e) Land used for public worship
(f) Land used for hospitals run by charities or for care of the elderly or invalids
(g) Land for churchyards and for burial
(h) disused burial grounds on which no building has been erected
(2) If the land is exempt for these reasons for only part of a year the tax will be charged for the portion it was not exempt.
(3) Where land has no value at the time it is valued no tax will be charged for that year.
20. Relief from tax in certain cases
(1) Land subject to a lease of greater than 50 years which is exempt for one of the above reasons then it will be relieved from paying.
(2) A lessee leasing land from an owner which is exempt for the above reasons does not have to pay.
(3) If the total amount payable is less than 10 shillings then nothing need be paid for that year.
(4)The commissioners may give relief by repayment or discharge of part or whole of the assessment.
21. Tax not to be included amongst impositions payable by lesees.
(1) If it was part of a lease agreement that all tax would be borne by the lesee it will not apply in the case of this tax.
22. Power of commissioners to obtain information.
23. Production to Commissioners of instruments transferring land
24. Service of documents
25. Miscellaneous provisions
26. Definition of owner
28. Application to Crown Lands
29. Provision as to Expenses
30. Application to Scotland
First Schedule: Incumbrances from which land is not deemed to be free for the purpose of valuation.
Second Schedule: Requirements in connection with production of instruments of transfer
Third Schedule: Enactments Appealed
Source Material - The Original Parliamentary Documentation
"The Land Value Tax. A Guide to Part III of the Finance Act 1931"
by W. E. Wilkinson (solicitor of the Supreme Court)
Solicitors Law Stationary Society Limited, 1931