HC Deb 23 June 1938 vol 337 cc1327-8

6.22 p.m.

Mr. Hely-Hutchinson

I beg to move, in page 12, line 40, to leave out Subsection (8).

This Clause, and Clauses 19 and 20, cover certain important matters of principle, as well as some technical details. My hon. and learned Friend the Member for Ashford (Mr. Spens) and I are challenging the principle that when a change is made in the Income Tax laws covering ground which is in dispute between a taxpayer and the Government, that change must not be made retro-active unless Parliament fully understands the circumstances and knows exactly what is being done. May I say that we appreciate to the full the difficulties with which the Revenue is faced in this situation, but it is important to realise that these Clauses cover cases which were in dispute between taxpayers and the Inland Revenue Department over a considerable period of time, in fact ever since the spate of defaults started on foreign bonds following the depression of 1931–32. The necessity for these Clauses, as I understand, arises out of two suits which were decided against the Government during 1937. The first of these is what is known as the London Provincial suit, and the second the Dorothy Paget suit. The first of these suits was fostered from the very beginning by the Association of Investment Trusts, and I may mention that that association is a body representing, as its name implies, investment trusts, having an invested capital of some £400,000,000, representing the investments of at least 250,000 investors small and large. The Dorothy Paget case, which came on later, was also fostered by that body. The history of the cases is this: The London Provincial case, which covered the taxability of the proceeds of funding bonds issued by the Brazilian Government in New York in lieu of the coupons of certain Brazilian dollar bonds, was decided by the special—

Whereupon the GENTLEMAN USHER OF THE BLACK ROD being come with a Message, The CHAIRMAN left the Chair.

Mr. SPEAKER resumed the Chair.

Forward to