§ 3.32 p. m.
§ Mr. Geoffrey Stevens (Portsmouth, Langstone)I beg to move, in page 41, line 48, at the end to insert:
2. The said section twenty-two shall not affect section three hundred and seventy-nine of the Income Tax Act, 1952 (under which the investment income of a superannuation fund approved under that section is exempt from income tax and which, by virtue of paragraph (a) of and proviso (iii) to subsection (3) of that section, only applies where the fund is established in connection with a trade or undertaking carried on wholly or partly in the United Kingdom).The Schedule deals with certain modifications of the Income Tax Act which apply to overseas trade corporations. In Clause 22 of the Bill a clear differentiation is made between the trading profits of an overseas trade corporation exempted from United Kingdom Income Tax, and also Profits Tax, and the investment income of an overseas trade corporation. I do not quarrel with that at all, but the words of the Amendment clearly bring out that under normal Income Tax practice the income derived from the investment of superannuation funds operated by limited companies is exempt from Income Tax, and I can see no reason at all why that investment income of an overseas trade corporation should not also be exempt.
§ The Financial Secretary to the Treasury (Mr. J. Enoch Powell)I would agree that it is undesirable that because a company becomes an overseas trade corporation, or hives off part of its trade to a 699 firm which qualifies as an overseas trade corporation, the existing benefits which are enjoyed by its employees under superannuation schemes should, as it were by a side wind, be withdrawn. I would, therefore, recommend the Committee to make this addition to the Schedule.
§ Amendment agreed to.
§ Schedule, as amended, agreed to.