§ Certain doubts have been raised about the application of the 1960 legislation on one or two points dealing with dividend stripping and related activities. I think it necessary to resolve these doubts, since otherwise there could be a serious loss of revenue. What I propose will fulfil 976 the intentions of the 1960 legislation. My proposals will not be retrospective.
§ I propose also to deal with a device which is being used to avoid tax on building operations. Two connected persons divide between them what is in reality a single operation. One of them acquires the freehold of a building site and contracts to grant a lease to the purchaser of a building to be erected on it. The other puts up the building. Any building profit is subject to tax; but any premium paid for the lease, and any receipt on a subsequent sale of the reversion, go free of tax in the hands of the one who bought the land. In this way what are in reality some or all of the profits of the enterprise are converted into non-taxable form. The Bill will impose an appropriate charge on the person owning the land where this or similar devices are employed.