OUR LOAN CONDITIONS

Dominion, Volume 10, Issue 3154, 4 August 1917, Page 8

OUR LOAN CONDITIONS

Sir.—May I point out an error in your loading article to-day on the Budget. Toil env tliat the rate of interest on the coming'loan is i\ per cent, free of income tax as against the rate of 5 per cent. on. the last English loan. But tho latter is subject to an incomo tax averaging ss. in the £, and although part of the loan was issued free of income tax this part, carried i per cent, interest only, \ per cent, less than the !New Zealand loan Moreover, this i per cent, loan w-is onlv free of the ordinary income tax- a purchaser would still be liable to the supertax charged on large incomes. -I am, etc., P. D. WAY. [What our correspondent states is quite true Under the. terms of the British Loan the big investor could get his 4 per cent, free of income tax while the small investor, to whom the concession of exemption from income tax would be of much less value, could get 5 per cent, for his money. Under the terms of the New Zealand Loan it is an excellent thing for a big investor, who thus_ escapes a heavy income tax charge on his interest, but much less so for the smaller man, whose income tax is at a low rate, or who perhaps does not pav income tax atall-l ■