§ The Chairman
It may be convenient to consider all the Amendments together, as they all deal with the same point.
§ The Economic Secretary to the Treasury (Mr. R. Maudling)
I beg to move, in page 18, line 15, to leave out "if," and to insert "in so far as."
Between them, these Government Amendments meet the three points which I undertook to meet in the course of the Committee stage. The first point was made by some hon. Friends and hon. Members opposite that the Bill, as originally drafted, provided that where someone had income in a blocked currency for which there was a market through which the blocked currency could be transferred he would not be able to claim the benefit of the Clause and have his tax postponed. It was pointed out that this was unfair and the Government accepted that it was unfair. Consequently, in place of the existing provision, we are putting in the new paragraph (b) in line 21 in the place of the second of the conditions.
1058 The position, therefore, is that the person will get the benefit of this Clause and postponement of tax deduction if the currency which he has earned is blocked overseas even though there is a market in which that blocked currency can be exchanged for sterling.
The other two points were made by the right hon. and learned Member for Neepsend (Sir F. Soskice). The first was that the Clause should make provision for a case in which the overseas income is not wholly but partially blocked and we have met that point by the first and third Amendments and the first part of the fourth Amendment. We have provided that where the income is only partially blocked the benefit to the taxpayer should only run to the extent to which the income is blocked.
The third point was also made by the right hon. and learned Member for Neepsend. It was that the taxpayer should not have the benefit of the Clause unless he could show that he had made reasonable efforts to get the money transferred into sterling. That point we have met by the second half of the fourth Amendment and the two Amendments preceding, which are consequential to it.
Of the seven Amendments the first six meet the three points we undertook to meet in Committee. The final Amendment, to page 19, line 16, is in a sense consequential. Subsection (5) deals with the position where a person has some overseas income which is blocked but chooses to pay tax on it notwithstanding the fact that it is blocked. We are providing that if the blocked income has a market in which it can be transferred at a discount, if the person chooses to pay tax he shall not pay it at the official exchange rate but at the rate current in the market in that blocked currency. On the whole, this is likely to be to the benefit of the taxpayer and will be consequential on the other changes we have introduced. I hope that the Committee will consider that in this group of Amendments we have met the undertakings we gave at an earlier stage.
§ Mr. Hugh Gaitskell (Leeds, South)
I am much obliged to the Government for meeting the points raised by my right hon. and learned Friend the Member for Neepsend (Sir F. Soskice). I certainly 1059 think that the concessions improve the Clause.
§ Mr. F. J. Erroll (Altrincham and Sale)
Those of us on this side of the Committee who also tabled Amendments, to which several hon. Members opposite added their names, are glad to see that these Amendments cover the points we raised.
§ 3.45 p.m.
§ Mr. Charles Williams (Torquay)
I wish to add my thanks to the Government. There have been a large number of cases in my constituency, sometimes of great hardship, and I welcome the change on which both sides of the Committee have combined to redress a grievance. I congratulate the Opposition on being on a good point for the first time for many years.
§ Amendment agreed to.
Further Amendments made: In page 18, line 21, leave out from beginning, to end of line 23, and insert:
(b) he has not realised the overseas income outside that territory for a consideration in sterling or a consideration in some other currency which he is not prevented from transferring to the United Kingdom.
§ In line 26, leave out "after having given," and insert "gives."
In line 28, leave out from "subsection," to end of line 30, and insert:
then, in the first instance, account shall not be taken of the overseas income to the extent to which he shows to the satisfaction of the Commissioners of Inland Revenue that the following conditions are satisfied with respect to it, that is to say—
In line 34, leave out "it is unremittable," and insert:
the said conditions are satisfied.
In line 39, leave out "it ceases to be unremittable," and insert:
the said conditions cease to be satisfied with respect to it.
In page 19, line 16, after "determined," insert:
by reference to the generally recognised market value in the United Kingdom (if any) or, in the absence of any such value.
§ [Mr. Maudling.]1060
§ Clause, as amended, ordered to stand part of the Bill.
§ Bill, as amended, to be reported.
§ Bill reported, with Amendments; as amended (in Committee, and on recommittal), considered.