Law: Income Tax Act, 1922

Section: 44

Income Tax Discontinuance of trade or profession Author-¬Death Royalties arising from authors contracts Payment after death Whether assessable Income tax Act, 1918 (8 & 9 Geo. 5. C. 40), Sch. D, Cases II, Iii, VI Income tax Act, 1952 (15 & 16 Geo. 6 & I Eliz. 2, C. 10) Sch. D, Cases II, III, VI [Income-tax Act (XI of 1922), S. 44]. After the death in 1951 of C., an author, certain sums due as royalties under agreements made by him were paid to his executor. There were produced four representative examples of these agreements, three dealing with works which at the dates of the agreements were not yet written and in which, therefore, there was not copyright or property, and the fourth dealing with the publication in French of an extant work already the subject of copyright. During his life C. had been assessed to Income tax (properly, as the Crown admitted) in respect of royalties received under the agreements as profits arising from the carrying on of his profession as an author under Case II of Schedule D : Held, that the payments were the fruit or aftermath of pro¬fessional activity, whatever the mechanism through which they were paid, and did not change their character when the profession was discontinued. This was equally true of all the contracts here in question and, accordingly, the executor was not liable to be assessed to Income tax on sums received under them. Stainers Executors v. Purchase 1952 A C 280 applied and 1958 Ch. 345 affirmed. JUDGMENT This was an appeal from an order dated 21st October, 1957, of the Court of Appeal, dismissing an appeal by the appellant, Gilbert Carson (Inspector of Taxes), from an order dated 6th June, 1957, of the Chancery Division of the High Court of Justice (Queens Remembrancer) (Harman, J.) whereby an appeal by the appellant on a case stated by the Commissioners for the General Purposes of the Income tax for the Division of Bromley in the County of Kent was dismissed and the determination of the General Commissioners was affirmed. The respondent, William Alexander Roy Collins, the sole surviving executor of the late Reginald Evelyn Peter Southouse Cheyne (known as "Peter Cheyney"), a well known writer of…

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