[TO THE EDITOR OF ME "SPECTATOR."]
STE,—Mr. Frank Perks's letter in your issue of the 8th inst. has evidently been written without due consideration of the pro- visions of the Finance Act, otherwise he would have been aware of the terms of the second section, which formed the basis of the decision in the Lumsden case. According to that section the site value on the occasion of a sale is the con- sideration given, less the deductions which are made in the original valuation (as on April 30th, 1909) for the purpose of arriving at the site value from the total value, so that the valuer is bound to take the price paid as the basis of his valuation. How unfairly this method may work is shown by Lumsden's case, but I am afraid that Mr. Justice Horridge's decision will prove to be correct if the matter goes to the Court of Appeal, and that the unfairness can only be got rid of by an amending Act, making it optional whether the price paid is to form the basis or not. This might be done by repealing Subsection (2) of Section 2 and substituting the following shorter clause :—
"The site value of the land on the occasion on which increment value duty is to be collected shall be taken to be the total value of the land on that occasion, to be estimated in accordance with the general provisions of this part of this Act as to valuation, subject to the like deductions as are made under such provisions for the purpose of arriving at the site value from the total value."
This clause would no doubt let in the evil contemplated by Mr. Perks, but the possibility of appeal to the referee would be sufficient to prevent any injustice on that score. As the
law now stands, the whole of the increase in value arising from a sale to an eager purchaser is thrown on to the site value, although the special adaptability of the buildings to the requirements of the purchaser may be the main cause of the enhanced price.—I am, Sir, &c.,
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