Abstract
THE case of the Commissioners of Inland Revenue v. Forrest (the latter representing the Institution of Civil Engineers), which was finally decided on the 1st inst. by the House of Lords, is of great importance to all scientific corporations, associations, and institutions in this country, and, incidentally, the judgments cannot fail to interest, and possibly also to amuse, men of science, because it became necessary for their Lordships to consider what is science, or, rather, what the Legislature meant by the word science in a particular statute. Shorn of all technicality, the question was whether the Institution of Civil Engineers was liable to pay income-tax under the Revenue Act of 1885, section 11 of which was framed with the object of imposing a duty of 5 per cent, on the yearly value, income, or profits of bodies which escape probate, legacy, and succession duties, inasmuch as they never die and have no legal heirs or successors. The net was thrown with the object of catching trading corporations, companies, and associations, and compelling them to pay, in the shape of an annual impost, an equivalent for the various death duties levied on private individuals. The Act imposing this tax, however, exempted different classes of associations, and notably in sub-section 3 of section 11 it exempted all property the income or profit of which is applied for religious or charitable purposes, “or for the promotion of education, literature, science, or the fine arts.” The whole question therefore resolved itself into this: Is the Institution of Civil Engineers an association “for the promotion of science”? The Commissioners thought it was not, in the sense used in the Act; Lord Coleridge and Mr. Justice (now Lord) Field sitting in one Court agreed with the Commissioners; Lord Justice Lopes in the Court of Appeal, and the Lord Chancellor in the House of Lords, were of the same opinion; but Lord Esher and Lord Justice Fry in the Court of Appeal, and Lord Watson and Lord Macnaghten in the House of Lords, held that the Institution was one for the promotion of science, and therefore exempt from the tax. The Institution therefore had a majority of the judges in the Court of Appeal and in the House of Lords, and it is now the law of England, until the Legislature chooses to alter it, that the Institution and all similar associations and bodies are exempt from this tax. Science, and, indeed, literature and the fine arts as well, owe a debt of gratitude to the Institution for its sturdy stand against the demand for payment. Although it is successful, its costs, over and above what it will receive from the Crown as the losing party, would, if invested, probably yield an income sufficient to satisfy the demand made upon it; by continuing the fight it has been the means of relieving the revenues of every association of the kind in the country from a burden of 5 per cent, per annum, an impost which in some cases would be intolerable, and would perhaps lead to the extinction of many struggling associations which are worthy of more support than they receive. In a sense, all science is relieved of a tax, and this it owes to the Institution of Civil Engineers.
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The Income-Tax and the Promotion of Science. Nature 42, 361–362 (1890). https://doi.org/10.1038/042361a0
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DOI: https://doi.org/10.1038/042361a0