§ Where interest payable in the United Kingdom on an advance from a bank carrying on a bonâ fidebanking business in the United Kingdom is paid to the bank, without deduction of Income Tax, out of profits and gains brought into charge to Income Tax, the person by whom the in-interest is paid shall be entitled, on proof of the facts to the satisfaction of the special Commissioners, to repayment of an amount equal to Income Tax on the amount of the interest.
§ Brought up, and read the first time.
§ Motion made, and Question proposed,
§ "That the Clause be read a second time."
§ Mr. McKENNA
I move this new Clause in fulfilment of the promise made in Committee. I think the Clause carries out in its entirety the understanding which was arrived at. The Clause is quite simple, I think, and clear.
§ Mr. PETO
I am much obliged to the right hon. Gentleman for meeting so fully the point which I put before him in the Clause which I put on the Paper in Committee. As he says, this Clause fully 760 meets the point in regard to bankers' loans to private individuals. I should not have risen had it not been that I desire just to point out the particular bearing of this Clause upon the great National War Loan, the successful issue of which the Chancellor of the Exchequer has this afternoon announced in the House. In regard to that, I should like to be allowed to congratulate the right hon. Gentleman, as he congratulated the country, upon the magnificent result of this, his earliest effort in his new office. There is one other thing I must point ont, and that is of a technical nature. The right hon. Gentleman has met my point fully in regard to bankers' loans. Of course he has hedged that around, very properly, and limited it to bonâ fide banking business in the United Kingdom. Although I do not want to be greedy, I would point out to the right hon. Gentleman that there is another class of loan which, although I shall not press it this year, I may refer to in future. It is much larger in extent. Here the grievance—and it is a real grievance—is exactly the same, and that is in connection with the habitual lending by stockbrokers against the stocks they hold Here again Income Tax on the interest is undoubtedly received by the Treasury twice over, just as it is in the case of a loan made by bonâ fide bankers.
I do not think it would be appropriate to press that point now, but I just want to mention it to the right hon. Gentleman. In order to complete the symmetry of this Clause and remove this grievance altogether, I hope that next year the right hon. Gentleman will see his way to somewhat extend the limit so as to include all bonâ fideloans, whether made by bankers or by Stock Exchange firms, against securities which are really not the property of the persons who are the nominal owners, and who do not really derive the benefit of them. There is only one other point. I take it that this Clause is strictly limited to the present year. I should like, just to avoid any possible doubt, and to know positively from the right hon. Gentleman whether, on this Clause being enacted, it would be within the rights of anyone to claim arrears of Income Tax that they have wrongly paid over the usual period of three years?
§ Question put, and agreed to.
§ Clause added to the Bill.