HART (INSPECTOR OF TAXES) Vs. SANGSTER

JUDGEMENT

(1.) who reserved the decision of the special commissioners, who adjusted certain assessments for the years 1951-1952 and 1952-53 made upon Sangster in respect of certain interest which he received on a deposit account which he received on a deposit account which he kept at Barclays Bank.

(2.) Sangster, who evidently had the handling of very large sums of money, had kept a deposit account at Barclays Bank for some years, and there was no special arrangement at the time when he opened his deposit account entered into between him and the banker. The commissioners have found, therefore, that the contract between them was the ordinary contract common between English bankers and their customers in respect of deposit accounts. They have set their reasons out in the case, and they find that "Interest on deposit accounts was calculated on the principal on a day-to-day basis and was credited on half-yearly rest dates, June 20 and December 20 in each year. When it was so credited, the interest became principal and then (and no before) began itself to earn interest. It was not the practice to allow accruing interest to be withdrawn between the half-yearly rest dates, save that if an account was closed at any time, interest was calculated up to the date of closure, credited and withdrawn as principal. The rate of interest allowed varied from time to time."

(3.) It happened that in 1951 a very large sum of money amounting to pounds 2,000,000 was paid into the deposit account, which even then had a substantial sum of money in it, and it is in respect of interest earned by this very largely increased amount of money paid in that this appeal arises.