In his letter to me of 9th June, however, the Financial Secretary said: When we exchanged letters on this subject recently I said that until 1940 there was no distinction between feu duties and rents under short leases for tax purposes. I have since been informed that, while this was the law, it seems likely that in practice the Inland Revenue did not trouble to restrict maintenance claim repayments by proprietors of feus to the balance of the tax under the net Schedule A assessment after deducting the amount of tax on the feu duty. In those days maintenance claims were rare and feu duties small, and the point was no doubt regarded as unimportant. I take that as admitting that the practice in Scotland prior to 1940 was what was made legal—accidentally, according to the Government—by the steps taken in 1940.

Therefore, what was done in 1963 was to reverse a principle which had been applied to feu duties in Scotland, not simply for the short period of 24 years, to which the hon. Gentleman referred in his letter to me which I received tonight, but as long back as one could wish to go. This seems to me to have always been the practice.