3. The provisions of Section one hundred and fifteen of the Stamp Act, 1891 (which relates to composition for stamp duty), shall, with the necessary adaptations, apply in the case of any local authority by whom local bonds are issued as if those bonds were stock or funded debt of the authority within the meaning of that Section.
5. The Minister may with the approval of the Treasury make Regulations with respect to the issue (including terms of issue), transfer and redemption of local bonds, and any such Regulations may apply, with or without modifications, any provisions of the Local Loans Act, 1875, and the Acts amending that Act, and of any Act relating to securities issued by the London County Council or by any other local or public body.
Lords Amendment: At the end of paragraph 3, insert the words
4. A local authority shall, in the case of any person who is the registered holder of local bonds issued by that authority of a nominal amount not exceeding in the aggregate one hundred pounds, pay the interest on the bonds held by that person without deduction of -Income Tax, but any such interest shall be accounted for and charged to Income Tax under the third case of Schedule D in the First Schedule to the Income Tax Act, 1918, subject, however, to any provision of that Act with respect to exemption or abatement.
I cannot allow this provision to pass without entering a caveat. The matter has been brought to the notice of the Income Tax Commission, and I must say how very strongly I feel that a proposal to waive the principle or taxation at the source should never be passed without the most careful investigation. Our revenue, perhaps, more largely depends upon the principle of taxation at the source than on anything else, and although this is not an important deviation from it, and I do not desire to divide the House or to speak at any length, I do not think it would be right that this should be done without attention being called to it, because every departure from that principle, however unimportant, is setting the foundation of what is, perhaps, the most important provision in our Income Tax Law.
Question put, and agreed to.
Lords Amendment: In paragraph (5), after the word "bonds"["redemption of local bonds,"] insert the words "and the security therefor."—Agreed to.