§ 7 and 8. Mr. Tiley
asked the Chancellor of the Exchequer (1) in view of the taxability of profits derived from Stock Exchange transactions, where the person concerned is in effect carrying on a business of trading in shares for gain, what steps the Inland Revenue are taking in order to ensure that all profits from such Stock Exchange trading transactions, and in particular profits from stagging operations as opposed to genuine investment, are assessed for tax;
(2) what action it is proposed to take to obtain complete returns from stockbrokers and others of profits derived by individuals or firms from stagging operations so that the appropriate assessments can be raised in respect of past and future transactions.
§ Sir E. Boyle
With permission, I will answer Questions Nos. 7 and 8 together.
If a person is carrying on a business of trading in shares—and this must depend upon the facts—he is under an obligation to show his profits in his Income Tax return. In this, as in other matters, the Inland Revenue does all it can to enforce the law. My right hon. and learned Friend does not at present contemplate bringing before Parliament the legislation that would be necessary to obtain returns of the type suggested in my hon. Friend's second Question. But, as he said in his Budget speech, he will be considering the whole of this question during the coming year.
§ Mr. Tiley
While thanking my hon. Friend for that reply, in view of the fact that it has been definitely stated by my right hon. and learned Friend the Chancellor of the Exchequer that these day-to-day selling operations are trading ventures and are subject to tax, may I ask my hon. Friend what steps we are going to take to see that the proper amount of tax is recoverable? Surely some action should be taken by my right hon. and learned Friend to see that these items are declared. If they are declared by the operators, is it not a serious offence for others concerned not to declare them also? Is it not time that some action was taken, for the good of our economy and of our industrial relations, to stop this inflationary merry-go-round?
§ Sir E. Boyle
If my hon. Friend looks at my original Answer he will realise that my right hon. and learned Friend takes this matter seriously. The point is that there are real practical difficulties about introducing arrangements whereby the United Kingdom Revenue should obtain and be required to analyse details of all bargains put through by stockbrokers. It is no good this House passing legislation which would not stand up from an administrative point of view. But, having said that, I entirely agree that this is a matter that we should consider very seriously.
§ Mr. Speaker
I am sorry. There are two points. One is that in the circumstances the hon. Gentleman is not in a position to refuse his permission for the two Questions to be answered together, and the other is that we are making very poor progress.