Rent charge
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A rent charge was a type of financial obligation, which at one time was paid by the owners of freehold land in parts of England, as a commutation of the former obligation to pay tithes.
The right to receive tithes was granted to the English churches by King Ethelwulf in 855. The Saladin tithe was a royal tax, but assessed using ecclesiastical boundaries, in 1188. Tithes were given legal force by the Statute of Westminster of 1285. Adam Smith criticised the system in The Wealth of Nations (1776), arguing that a fixed rent would encourage peasants to farm more efficiently. The Dissolution of the Monasteries led to the transfer of many tithe rights from the Church to secular landowners, and then in the 1530s to the Crown. The system ended with the Tithe Commutation Act 1836, which replaced tithes with a rent charge decided by a Tithe Commission. The records of land ownership, or Tithe Files, made by the Commission are now a valuable resource for historians.
At first this commutation reduced problems to the ultimate payers by folding tithes in with rents (however it could cause transitional money supply problems by raising the transaction demand for money). Later the decline of large landowners led tenants to become freeholders and again have to pay directly; this also led to renewed objections of principle by non-Anglicans.
The rent charges paid to landowners were converted by the Tithe Act 1936 to annuities paid to the state through the Tithe Redemption Commission. The payments were transferred in 1960 to the Board of Inland Revenue, and finally terminated by the Finance Act 1977.