§ 117. Mr. THURTLEasked the Chancellor of the Exchequer whether, in order to avoid loss of revenue, he is prepared to take such steps as may be necessary to have the interest credited by banks in respect of bank balances taxed at source?
§ Mr. CHURCHILLThe matter to which the hon. Member refers involves a number of important and difficult considerations, but the hon. Member may rest assured that all possible methods of evading liability to Income Tax are being constantly watched.
§ Mr. THURTLEIs the right hon. Gentleman aware that there is considerable loss owing to this fact?
§ Mr. CHURCHILLI do not think it is a considerable loss, but there may be some loss.
§ 118. Mr. THURTLEasked the Chancellor of the Exchequer whether, when any public or private firm writes up the value of its fixed assets as a result of a revaluation, he is prepared to treat the amount by which the assets are thus written up as income, and therefore liable to Income Tax?
§ Mr. CHURCHILLI am unable to adopt the hon. Member's suggestion, which would involve a departure from an established principle of the Income Tax, namely, that neither gains nor losses of capital can be taken into account in the computation of income for Income Tax purposes.
§ Mr. THURTLEIs the right hon. Gentleman aware that in cases of this sort an issue of bonus shares frequently follows, and may not that issue of bonus shares be legitimately regarded as income?
§ Mr. CHURCHILLIf you take gains into consideration, surely you would have to take losses also into consideration. When heavy losses are sustained, as they frequently are, large concerns write down capital values, and if we were to have to make repayments of Income Tax in those cases, we should be the losers on the whole.