Let me frankly admit, this is just a point to lighten the heaviness of this discussion, or rather to promote the atmosphere we should have in approaching this Bill, and against which I sin as much as anyone else.
To get back to the seriousness of this: granting what marriage is in its totality, granting the physical, social, moral, economic and all other aspects of the state of marriage for both spouses, granting the traditional approach, granting these accretions of thought and procedure that have grown around this institution over the years, we can still see clearly one thing—that, at this time, and let us take the Minister's favourite date, the 4th April, 1975, it is fact, recognised and practical, that a husband and a wife, as individuals regardless of their status and sex, are entitled to hold, own, dispose of and otherwise exercise full proprietary rights over property, and property as defined in this and its cognate Acts. If that is so, I repeat the question which arises: if there is such an independent holding of property why should that property be aggregated and the owners thereof considered to be, for the particular purpose in hand, conjoined in order to tax that property?
When one asks the question in that clear way, one sees immediately that one is up against what might be called a taxation device. It is a taxation device pure and simple. There is no principle to support it. There is no equity to support it, granted the premises I have postulated. It is here I see the relevance of what the Minister said about the Income Tax Acts. In short, where the Income Tax Acts were concerned, two factors came into play. The first, I rather suspect, was the traditional. I suspect that those who first thought of income tax and developed the code in its early and middle phases were thinking only in terms of the traditional concept of the wife being in the hand of her husband, to use the Roman expression; the wife, so to speak was under the tutelage of her husband and marriage reduced her into a subordinate position where her husband was concerned. I rather think that concept ruled and, therefore, most of the thinking would have been conditioned by that notwithstanding the fact that earlier provisions visualised women with property and so on; they were strong-minded women; there were even medieval, fuedal laws and so on that qualify the statement I make. Basically that thinking obtained.
The second aspect—and this was bound to influence development— was the possibilities of evasion, and complications encouraged that approach. Lastly, in the early stages, it was not usual for women, certainly from the point of view of earned income, to be in the income tax bracket.
That was in the past; that was the income tax code. It was income that was being taxed. It was arguable that income was pooled, in so far as two people were living together in the traditional set-up, where you had a man who was the so-called bread-earner, a woman who was the housewife and minder of the children, however the money came into the house, the income was both effectively and practically and could be in contemplation of law, pooled. The income tax approach was perfectly justified, apart from administrative convenience. Even that has changed.
I do not want to get away from the amendment. I could launch off too far on section 196 and the income tax code generally here. Suffice it to say, it is understandable but, even there, new thinking may be and is indeed desirable. If I may be permitted to say so on this amendment, the taxation of married women from the income tax point of view in relation to their status as single has anomalies. That is not what we are dealing with in this Bill. We are dealing with property. This property is defined and is separate. With all the precautions that are built into the Bill to keep it separate, in other cases and so on, there will be no difficulty in keeping it separate. The only thing that can be confused is the income deriving therefrom. Income deriving therefrom is a totally different thing. That is why I am letting the income tax code take care of itself, whether it is in pari materia. This is property which can be taken separately. Therefore, why should it not be assessed separately on a property tax? What is a capital tax? It is a property tax.
The Minister can play away. I suppose he is entitled to his political gimmicks. He can talk about abolishing death duties when he is only giving substantial reliefs and changing them. All right, that is politics but he calls it capital acquisition. Where property is transferred for a consideration and where profits are made he calls it capital gains. When he taxes property directly, he calls it a wealth tax. As I said, what is in a name? Changing a name does not change a fact. What we are dealing with in these three Bills is property. So fundamental is that point in all these Bills, and in this Bill in particular, that the actual definition has to be brought in. In this Bill property is defined as including interests and rights of any description. Real property and personal property are defined. If all the definitions are brought together and the common demoninator taken, we finish up with the one word "property".
If A and B can hold property, if it can be ascertained and is taxable and if A and B are independent, then the tax is independent. Why in the name of goodness should the property be aggregated just because A and B get married? Leaving out the income consideration that I have mentioned as far as the property is concerned, why should the property be aggregated? The only good reason I can advance is if you aggregate it you will bring it over the threshold; it is just another device to bring it over the threshold so that it can be caught. This is very apparent in a later section. It is one of the reasons why the £90,000 threshold is, to a certain extent, objectionable.
I admit that this is a preliminary amendment and I do not want to exhaust all the arguments. There will be other arguments to be made on the next amendment. This does not dispose of all that may be said on this point. I want to ask a question, which I will try to answer when it becomes substantive on the other amendment. If the property is held independent, with the owners having full proprietary rights, why should the mere fact of marriage bring the two properties together? That is as far as I will go on this amendment. There is a lot more to be said when we come to the substantive point of the other amendment.
There is a slight technical point on this amendment too. Here the Minister reverted back to section 196 of the Income Tax Act. The point I am going to make will not be very material if my point of in pari materia is admitted. If the Minister for Lands, deputising for the Minister for Finance, was right that the question of in pari materia does not stand up—my learned friend, Deputy Esmonde, seemed to argue in support of his Minister—this point may have relevance. If the Minister is going to invoke the income tax code to answer me, all I will say is, all right but then he is invoking in pari materia and must take the consequences elsewhere. If he is rejecting the principle of in pari materia, then he says they are, in fact, separated in such circumstances that the separation is likely to be permanent.
What is separation in this case? These are simple questions that seem at first sight to be so elementary as not to be worth asking but Acts of Parliament, like everything else, have to assume common meaning. This is a new code. I am taking the Minister for Land's point of view, admitting that if you accept all the codes of in pari materia then, correspondingly, there is less substance in what I am going to say. If they are not in pari materia, then we have got to look and ask what does the word “separate” mean.
In case A that is clear enough, but in B they are separated in such circumstances that the separation is likely to be permanent. Under the income tax code that is explained and qualified. Under this code, I think even the Minister's advisers would like to have something more definite than "likely to be permanent". What is "separation" for the purpose of this Bill? If it is not accepted that the income tax legislation in this code is in pari materia, and that this stands absolutely on its own, what exactly does “separation” mean and what does “likely to be permanent” mean?
The Minister has referred to a valuation date. The income tax code would want to be considered very carefully and perhaps the precedents will get one out of trouble if it is in pari materia. If it is not, this section nakedly says “on the valuation date unless on that date they are separated in such circumstances that the separation is likely to be permanent”. I will give a case under this Bill, far-fetched though it may be. Suppose that on the valuation date a husband and wife are separated by the physical fact that one or other of them is in a hospital with medical certification that that separation is likely to be permanent, whether it is in the form of a prognosis or a terminal disease or anything else you like to imagine with relation to matrimony or otherwise, that section on its own might create a problem in a case like that.
That is only one of the things I could think of in relation to it. Whether you accept this amendment or not, the relevance of the Minister's quoting of the income tax code raises a matter which I queried when the Minister for Lands was deputising for him on this very definition section which obviously has not been completely disposed of. I do not want to hold up the House by a long dissertation on that subject.
The questions I asked have been very simple. If two people hold property independently, why should they be aggregated for property taxation purposes? If this section stands on its own, as the Minister for Lands maintained vehemently at the beginning of the Committee Stage, ably backed by the senior counsel and learned Deputy behind him, and if that view is correct as against the one I propounded—we are both agreed on the strict construction of a taxation statute in favour of the taxpayer—then the desirability of adopting Deputy Colley's amendment to paragraph (b) is a live question.
