The argument that under the present set-up, unearned income is ata decided advantage as against wages received powerful confirmation last week, The occasion was the bringing before the House of Lords of an appeal ty the British South Africa Company from a majority decision of the Court of Appeal in favour of the Crown comerning the taxing of profits made on : * share deal. In 1953 the company lent £200,000 to the President Steyn “< Mining Company at 6% interest, plus a loan-raising charge and an option to acquire 100,000 President Steyn shares at par,
In 1954, when the shares were worth 43s 6d the toring ina acer ge option, taking up 100,000 shares, and the logn was treated as re weraheg £100,000. The Crown claimed that the company was liable for on seul difference between the market and par value of the shares, a ric eae that when the option was exercised the company exchanged one trading for another with a resultant trading profit of £117,500.
after goi through several courts and ending up at the : House oe tae the British South Africa Company won its case}; eae eas of Borth-y-Gest, Lord. Hodson, Lord Donovan, and Lord antes a finding that under existing law this gain was not ane : . nn lord , Lord Guest dissented, but the appeal was carried ie = ce ie Crown now has to pay the company its costs in the erage pid — Court of Appeal. It is good that a capital gains tax wi eat be gone evasions, but the average trade ay de: Le Guat oes, P.A.Y.E., must be somewhat cynical when cae sat