asked the Chancellor of the Exchequer whether, in view of the fact that investors in the last War Loan who borrowed money from the banks for the purpose have now been advised by the bankers that 6 per cent. will be charged on the money advanced, any allowance will be made when the Government deduct Income Tax from the dividends?
I would refer my hon. Friend to the provisions of Section 36 (1) of the Income Tax Act, 1918, which authorises repayment of Income Tax in respect of interest, paid without deduction of tax, on advances from a bank carrying on a bonâ fide banking business in the United Kingdom. The tax on such interest will then be recoverable in the ordinary way.
Where the total income does not exceed £800, relief from tax upon £25 may be claimed under Section 13 of the Income Tax Act, 1918, in respect of any person whom the taxpayer maintains at his own expense, being a relative of his, or of his wife, who is incapacitated by old age or infirmity from maintaining himself and whose income from all sources does not exceed £25 a year. The "housekeeper" allowance in the case of an unmarried person is confined to cases where the "housekeeper" resides with and is maintained by the taxpayer for the purpose of having the charge and care of any brother or sister of his in respect of whom the Income Tax relief for children is given. In this connection, I would refer my hon. Friend to the provisions of Section 21 (1) of the Finance Act, 1919.