S.24(3) of the Customs and Inland Revenue Act, 1888 provided that "upon payment of any interest of money or annuities charged with income tax under Sched. D, and not payable ... out of profits or gains brought into charge to such tax," the payer was required to withhold and remit tax "out of so much of the interest or annuities as is not paid out of profits or gains brought into charge." Since Schedule A rents were "brought into charge," the taxpayer was exempt from this withholding requirement with respect to interest paid by it out of its rental income (chargeable under Schedule A) in addition to interest paid out of its interest income (chargeable under Schedule D). Although the standards of assessment (e.g., annual value in the case of Schedule A) under the different Schedules varied according to the source, "in every case the tax is a tax on income, whatever may be the standard by which the income is measured" (pp. 37-38). Therefore, the first part of s. 24(3) should be interpreted as referring to interest or annuities being charged with a special kind of income tax, but instead to the assessment of income tax in accordance with the provisions of Schedule D.
Lord Davey added (pp. 44-45) that although "it is said that the tax imposed on property within Sched. A is not strictly an income tax, because it is levied on the annual value of property and not on the profits received by the owner ... that arrangement is but the means or machinery devised by the Legislature for getting at the profits."
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