§ 8. Mr. Warbey
asked the Chancellor of the Exchequer if, in preparing his proposed legislation regarding a capital gains tax, he will have regard to the capital gains that can accrue to share holders when companies make bonus issues in the form of redeemable and negotiable loan stock.
§ Mr. Barber
I would refer the hon. Gentleman to the speech made by my right hon. and learned Friend yesterday afternoon.
§ Mr. Warbey
Does not this mean that the recent issue by Courtaulds of £40 million of its capital profits to shareholders, 1110 as part of its bribe to shareholders to resist the L.C.I. take-over bid, will go entirely scot-free and that if it were repeated by another company tomorrow it would go virtually scot-free? Does not this show that the speculative gains tax is a farce and that the Chancellor and his party have no real sense of either equity or social justice?
§ Mr. Barber
I think that my right hon. and learned Friend the Chancellor of the Exchequer made the position perfectly clear, as reported in col. 982 of the OFFICIAL REPORT of yesterday's Budget statement. The new charge is to be made on certain realised gains and it is not intended that tax should be levied on an appreciation in value which has not been and may not be realised.