§ Under a long established practice, companies have deducted Income Tax from the full amount of any dividends paid by them out of profits of a revenue nature irrespective of the amount on which the company bas been charged to tax for the particular period to which the dividend relates, and the full amount of such dividends has been regarded as income of the shareholders for all purposes, that is to say, not only for the purpose of assessment to Sur-tax, but also for the purpose of repayment of Income Tax to people who are not liable. One or two attempts have been recently made in various quarters to upset this practice. Although in a recent case—Hamilton and the Commissioners of Inland Revenue—the practice has been upheld in the Courts, I am advised that in certain circumstances, which did not arise in that case, the position may not be free from some element of doubt. The matter is of vital importance—in the first place to the companies with regard to their right to deduct tax from their dividends; secondly, to the small shareholder who is entitled to the repayment of Income Tax; and, thirdly, to the Exchequer as regards the due assessment of Sur-tax. It cannot, therefore, be left 1402 to the hazards of further litigation. I shall, accordingly, ask the House to agree to legislation in order to make the position perfectly clear and in order to avoid any further legal controversy.