McKeown v Roe

• Jurisdiction: Ireland
• Judgment Date: 01 January 1928
• Date: 01 January 1928
• Court: High Court (Irish Free State)

M'Keown v. Roe.

R. J. J. M'KEOWN, Inspector of Taxes

Appellant

and

PATRICK J. ROE, Respondent (1)

High Court.

Revenue - Income tax - Office or employment of profit - Solicitor's fees - Payment to be made when costs were taxed - Whether assessable for year in which work was done or for year in which payment was made -"Profits . . . for the year of assessment" - Income Tax Act, 1918 (8 & 9 Geo. 5, c. 40), sect. 1, Sch. E. rr. 1, 2, 5, and 6 (j).

The respondent was employed as solicitor to a Harbour Board. He was not required to devote his whole time to the duties of the office or employment, and he was to be paid such costs in respect of work done as were taxed and certified by the Taxing Master of the High court. For work done during the period of his appointment (i.e., from 2nd December, 1924, to 29th May, 1925), he furnished two bills of costs which were not taxed until after 5th April, 1925. The total amount of his fees or profits for the period of his appointment was £617, of which £422 was, on the basis of work done, allocated to the year of assessment 1924-1925, the balance being allocated to the following year. From December 2nd, 1924 (the date of his appointment), until 5th April, 1925, he did not receive any payment in respect of his bills of costs except a sum to cover certain disbursements made by him on behalf of the Harbour Board.

Held that he was chargeable to income tax for the year of assessment 1924-1925, under Schedule E of the Income Tax Act, 1918, in respect of the sum of £422, notwithstanding that the bills of costs which included this sum were not taxed or paid within the year of assessment.

Case Stated under the Income Tax Act, 1918, sect. 149, by the Commissioners for the special purposes of the Income Tax Acts for the opinion of the High Court of Justice.

The following was the case stated:—

"1. At a meeting of the Commissioners for the special purposes of the Income Tax Acts, held on the 1st October, 1925, at Dundalk, for the purpose of hearing appeals, Mr. Patrick J. Roe (hereinafter referred to as 'the respondent') appealed against an assessment to income tax on the sum of £479, made upon him under Schedule E of the Income Tax Act, 1918, for the year of assessment 1924-25, in respect of his office or employment as solicitor to the Dundalk Harbour Board.

2. The following facts were admitted or proved:—In the year of assessment 1924-25, the respondent was a solicitor by profession practising in Dundalk, and no question arises as to the amount of the assessment made upon him in respect of the profits of his profession, apart from the profits of his office or employment as solicitor to the Dundalk Harbour Board.

3. On the 2nd December, 1924, the respondent was appointed solicitor to the Dundalk Harbour Board. The formal resolution

appointing him did not contain any terms or conditions, but it was understood—(a) that he would not be required to devote his whole time to the duties of the office or employment; (b) that he would be paid such costs in respect of work done as were taxed and certified by a Taxing Master of the High Court; (c) that he should furnish his bills of costs each year up to the 1st May and 1st November, in order to facilitate the half-yearly audit of the accounts of the Dundalk Harbour Board.

4. The respondent resigned his appointment as solicitor to the Dundalk Harbour Board on the 29th May, 1925, and gave up his profession as solicitor with a view of qualifying as a member of the Irish Bar.

5. The respondent prepared two bills of costs in respect of work done while acting as solicitor to the Dundalk Harbour Board between the 2nd December, 1924, and the 29th May, 1925, one of which was taxed on the 3rd July, 1925, and the other on the 27th July, 1925. The gross amount of the first bill (which comprised, miscellaneous costs) as certified by the Taxing Master was £84 10s. 6d., of which £64 represented profit to the respondent. The gross amount of the second bill (which comprised costs in relation to the promotion of a Bill by the Dundalk Harbour Board) as certified by the Taxing Master was £1,160 18s. 3d., of which £553 4s. 10d. represented profit of the respondent.

6. It is agreed that the total amount of fees or profits derived by the respondent from his office or employment as solicitor to the Dundalk Harbour Board between the 2nd December, 1924, and the 29th May, 1925, was £617—made up of the two sums of £64 and £553 mentioned in the preceding paragraph.

7. Between the period from the 2nd December, 1924, to the 5th April, 1925, the respondent did not receive any payment from the Dundalk Harbour Board in respect of...