HC Deb 16 July 1947 vol 440 cc519-21
Mr. Dalton

I beg to move, in page 44, line 38, at the end, to insert: or, if the issue is made by way of bonus to members or debenture holders of a company other than that issuing the securities and forms part of a bona fide scheme for the amalgamation or grouping of two or more businesses including that of the other company. I think this Amendment will be generally acceptable. It follows an undertaking given by my hon. and learned Friend the Solicitor-General in the Committee stage, and its purpose is to exclude from the additional charge of Stamp Duty company issues where the issue is made solely for the purpose of carrying out a bona fide amalgamation scheme. We have sought to put words on the Order Paper which will carry out the intentions of those who moved an Amendment on the Committee stage to this effect.

Mr. Assheton

I am much obliged to the right hon. Gentleman for moving this Amendment, which I think goes a long way to meet the point which was raised.

Amendment agreed to.

Mr. Assheton

I beg to move, in page 45, line 9, at the end, to insert: Provided that this subsection shall not apply to securities issued under a Scheme of Arrangement to preference shareholders as consideration for relinquishment by them of rights to arrears of preference dividend. This is a small, but, I think, a valuable Amendment, and I hope the Chancellor will be able to accept it. In schemes of arrangement it is quite often the case that shares of preference dividend are exchanged for a share in the equity. Such an Amendment as this would appear necessary, and I hope that it meets with the approval of the Chancellor.

Mr. Dalton

I am advised that this Amendment is unnecessary, and that the case which the right hon. Gentleman has put is one in which no tax liability would arise. If, however, it is desired to make the matter clear beyond a peradventure, I have no objection—although believing that it is unnecessary and would have no appreciable effect—to accepting the Amendment.

Amendment agreed to.

Mr. Dalton

I beg to move, in page 46, line 34, at the end, to insert: (6) Notwithstanding anything in the foregoing provisions of this Section where securities are issued by way of bonus to members or debenture holders of a company, the value of the bonus as respects any of the securties shall be taken to be nil if, as determined in accordance with the said provisions, it does not exceed one-twentieth of the amount or value of the consideration received or receivable by the company issuing the security, other than any consideration such as is referred to in subparagraph (i) of paragraph (b) of Subsection (4) of this Section and any consideration consisting of a contingent liability attached to the security. In determining for the purposes of this Subsection the amount or value of the consideration aforesaid, no deduction shall be made in relation to any liability to pay for the security or any liability attached to the security for the fact that the liability is prospective. This Amendment gives effect to a promise made by me in Committee when an Amendment was moved by the hon. Member for Flint (Mr. Birch) to exempt very small bonus issues. I said then that I was prepared to look at the drafting of the Clause to see whether there could be any provision made to avoid very small bonuses being brought within the operation of the Clause. I dare say that 5 per cent. is a reasonable figure to indicate a relatively small bonus element which might be cleared. Having looked at the matter again, I am moving this Amendment, the purpose of which is to carry out that undertaking to clear quite small bonuses, defined as being within 5 per cent., from the operation of the duty.

Mr. Birch

It is right that we should say a word of thanks to the Chancellor in this matter. He has accepted what we put forward. Looking back at it, I am astonished at my own moderation in asking for such a small concession. As the Chancellor will appreciate, being himself an issuer of securities, it is the experience of issuing houses that stocks sometime move more than 5 per cent. from their issue price rather quickly.

Mr. Dalton

Up or down?

Mr. Birch

Though this concession does not meet our case on the main issue, I am obliged for it, so far as it goes.

Amendment agreed to.

Mr. Dalton

I beg to move, in page 47, line 25, to leave out "(6)," and to insert "(7)."

This Amendment is consequential on the Amendment I have already made to Clause 50, which cuts out bonus issues of the kind we have just considered.

Amendment agreed to.