MASON (INSPECTOR OF TAXES) Vs. INNES.

JUDGEMENT

(1.) LORD Denning, M. R. Mr. Hammond Innes is a writer of distinction who has for many years carried on the profession of an author. He has written many novel and travel books. He has kept his accounts on a cash basis and has submitted these to the revenue for tax purposes. On the one side, he has included his receipts from royalties and so forth. On the other side, he has included the expenses of his travels overseas to gather material; the expenses of his study at home and a small salary to his wife for her work for him.

(2.) IN this case we are concerned with one particular novel which he wrote called The Doomed Oasis. It was based on material which he gathered in the Persian Gulf in 1953. He started to write it in September, 1958, and worked on it up till 1959. He charged all the expenses in his accounts for those years. In 1960 he was about to publish it. But he felt he would like to do something to support his father, who had retired on modest resources. So Mr. Hammond Innes decided to transfer the copyright in the book. The Doomed Oasis to his father as a gift. By an assignment made on April 4, 1960, he assigned to his father, "in consideration of natural love and affection," the copyright, performing rights and all other rights in The Doomed Oasis.

(3.) THE question arises whether he is liable to tax on the value of those rights in The Doomed Oasis. If he had sold the right at that time in 1960 their market value would have been pound 15,425. The Crown say that that sum ought to the brought into his accounts and that he should be taxed on it, although he did not receive a penny for the rights because he had given them away. I may add that Mr. Hammond Innes had also before publication assigned right in two others of his novels, one to his mother and the other to his mother -n -law. So a like question may arise there.