HC Deb 17 October 1939 vol 352 cc661-2
52. Mr. Pethick-Lawrence

asked the Chancellor of the Exchequer what steps he proposes to take to secure that the private profits on the sale of ships contribute to the revenues of the Exchequer?

The Chancellor of the Exchequer (Sir John Simon)

As explained by my right hon. and gallant Friend the Financial Secretary in his reply of 4th October to the hon. Member for Plaistow (Mr. Thorne), any gain arising from a sale of a ship may be a revenue profit or a capital gain according to the circumstances of the particular case, and in the former case it would be taken into account in computing profits for the purposes of taxation. If the right hon. Member has in mind the case where the gain is a capital one, I can only say that as at present advised I am not prepared to propose the special taxation of capital gains arising from the sale of capital assets.

Mr. Pethick-Lawrence

Does the right hon. Gentleman mean by that statement that there is to be no attempt to get a contribution to the State from the very large increases arising from the sale of ships when they are not the subject of the Armament Profits Tax?

Sir J. Simon

I do not say that. The question whether some means can be properly devised for getting a contribution from increases in capital wealth during war is quite a different question. This question has to do with profits on a particular sale.

Mr. Kirkwood

Is not the right hon. Gentleman aware that this is the method by which shipowners make huge fortunes in the selling and transferring of ships, and will he see to it that in this case he steps in and does away with the excess profits?

Sir J. Simon

I am sure the hon. Gentleman will see that this is a particular case on the general question. We have to consider sales of capital assets at a loss as well as sales of capital assets at a profit. What I have said has nothing to do with the general question of whether there is a means to be devised for getting a contribution from increases in capital assets during war.

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