The Gazette 1949-1952

years both in a partnership and on his own account. A. appointed B. his Executor. C. was also a qualified solicitor acting as qualified assistant to A. In the year 1934 A. died and after negotiations between B. and C., and the Residuary Legatees o f A ’s. will, it was agreed between B. and C. that they should enter into partnership under a name and style different to the names of the firm carried on by A. and the firm previously carried on by B., and that they should jointly acquire the solicitor’s business carried on by A. up to the date of his death. This was done, and on the 1st January, 1936, the new firm, Messrs. X Y Z & Co., of which B. and C. were the partners, commenced business. The firm X Y Z employed a firm of Auditors to prepare their accounts and to deal with the income tax position o f the firm X Y Z from its inception. As a result of the first year’s working of the firm the audited accounts showed a loss which was accepted by the Inspector o f Taxes dealing with the firm’s assess­ ment. The accounts of the firm were made up on the basis o f costs furnished during the year 1936 and an adjustment was made in respect of costs earned in cases which were finally completed up to the 31st December, 1936, where bills had not been furnished prior to that date. No account was taken in the accounts of the firm X Y Z for the amount of costs earned on partially completed work in the year 1936, and therefore the question of work in progress was not considered. It would have been very difficult and probably impossible to assess with any degree of accuracy the amount of costs due in respect of such work in progress, and accordingly by negotiation between the Auditors and the Inspector of Taxes it was agreed that no figure should be included in the accounts in respect of it, thereby, establishing a loss for the calendar year 1936. Accordingly for the period 1st January to 5th April, 1936 actual (a loss), the financial year 1 936/37, (first 12 months of the new business, 1st 1st January to 31st December, 1936—a loss), and the financial year 1937/38 (based on preceeding year 1 st January to the 31st December 1936) the Case II assessment was nil. This position follows the rule applicable to cases I and II o f Schedule D Income Tax Act of 1918 as amended by Section 9 of the Finance Act of 1929, the relief in respect of the loss being allowed under the provisions of Section 34 of the Income Tax Act, 1918. It will be seen that the most important aspect of the matter is the establishment o f a loss for the first year in which the business is operated, as, of course, on the results of this first year depends the quantum of the assessments for several Income Tax years. It is usually found that the Revenue Authorities endeavour to have all fees brought into the first

delay in two Government departments which resulted in the loss o f almost a year’s pension. The point to be noted by solicitors is that in such cases an appeal should be lodged immediately against a decision of the Local Pensions Committee refusing the claim with the request that the hearing of the appeal should be postponed until registration o f the dealing had been completed in the Land Registry. STAMP DUTY ON TRANSFER IN CONSIDERATION OF MARRIAGE A m e m b e r o f the Society writes referring, to a case of a transfer on marriage in which a brother or sister assigns or transfers to another brother or sister in consideration of marriage, and also a money consideration. This situation frequently arises in connection with marriage deeds where the father has died intestate, one of the children subsequently getting the land on marriage, the mother or brothers or sisters getting the fortune brought in by the bride on “ marrying into the farm.” The following is a quotation from a letter received by our corres­ pondent’s town agent:—“ The Adjudication Office wish us to inform you that where a brother or sister assigns his or her interest to another brother or sister in consideration of marriage and also of money the instrument is assessed as a conveyance on sale o f the interest o f such brother or sister unless the market value ot the interest is greatly in excess o f the money consideration, in which event the marriage is treated as the primary consideration. This is in accordance with counsel’ s opinion.” INCOME TAX CLAIMS FOR EXEMP­ TION UNDER SCHEDULE D IN SO FAR AS THEY AFFECT THE OPENING OF NEW BUSINESSES I t is thought that many members of the profession are not fully aware o f their rights to claim exemption from Income Tax Schedule D it a loss can be shown in the first year of the carrying on of a new business. The following are the tacts o f a case in which exemption from Income Tax was claimed. It is pointed out, however, that this claim for exemption from tax is applicable not only to solicitors’ businesses but to the opening of new businesses of any kind. The actual facts in the case o f which the writer is personally aware are as follows :—A. was a solicitor who had carried on practice in Ireland for many years. B. was another solicitor who had also carried on practice as a solicitor in Ireland for many