§ The requirement contained in paragraph (ii) of the proviso to Sub-section (3) (b) of Section thirty-nine of the Income Tax Act, 1918, as to the making of returns by a savings bank and any branch thereof as a condition of the right of such bank to exemption from tax under Schedules C and D in respect of interest paid or credited to depositors shall only apply with respect to depositors to whom interest is paid or credited in the year for which exemption is claimed by the bank out of the income of its funds other than interest and dividends arising from investments with the National Debt Commissioners and to an amount exceeding in the case of any such depositor 2153 the said sum of fifteen pounds.—[Mr. N. Chamberlain.]
§ Brought up, and read the First time.
§ Mr. N. CHAMBERLAINI beg to move, "That the Clause be read a Second time."
The two Clauses which stand in my name I am going to move in the interests of the Trustees Savings Bank and the Birmingham Municipal Bank, which is associated with them in this matter The first of these two Clauses looks rather complicated, but it is not really so complicated as it appears, and I think in a very few minutes I can make clear what it is desired to do. There are really two objects to be achieved by this Clause. The first is this. Under the Income Tax Act, 1918, the savings banks are exempted from Income Tax upon the income derived from funds invested with the National Debt Commissioners and that is the fund connected with what is called the ordinary department of the savings banks. Some of the banks, however, have another department which is called the special investment department, and the funds of that department are invested in certain statutory securities selected by the trustees and approved by the Treasury. They are required by the same Act to give a return of the depositors and the addresses of the depositors who have interest credited to them of five per cent. per annum where they are claiming exemption from Income Tax under the proper schedules. The object of the first Clause is to make it clear that the requirements should apply only to the special investment department and not to the deposits in the ordinary department and I hope the Chancellor of the Exchequer will see his way to accept it. It is obvious that if it is not accepted depositors in the banks which have only an ordinary department will be prejudiced as compared with those who have also a special investment department. The second object is to increase the amount which shall be excluded from the return for the purpose of Income Tax, to increase the amount from £5 as it stands at present under the Act of 1918 to £15. The second Clause would apply that extension to the cases where there is no special investment department or only such a 2154 department as is carried on by the Birmingham Municipal Bank.
§ Mr. SNOWDENI quite agree that the right hon. Gentleman has made out a case for consideration. As he pointed out, the Amendment which he is now moving is in a way connected with the next Amendment on the Paper, and if it will be satisfactory to the right hon. Gentleman, I will take the matter into consideration, and try to bring forward an Amendment on Report.
§ Mr. CHAMBERLAINOn the assurance of the Chancellor of the Exchequer, for which I beg to thank him, I ask leave to withdraw the Clause.…
§ Motion and Clause, by leave, withdrawn.