Clause 16.—(AMENDMENTS OF CASE VII OF SCHEDULE D.) (Hansard, 7 July 1965)

§ Mr. MacDermot
I beg to move, Amendment No. 12, in page 11, line 30, at the end to insert: (5) A gain shall be exempt from tax chargeable under Case VII if accruing from the acquisition and disposal by any person of a decoration awarded for valour or gallant conduct which he acquired otherwise than for consideration in money or money's worth. This is an Amendment which we have put down in response to an undertaking given in a short debate raised in Committee by the hon. Member for Ormskirk (Sir D. Glover), who suggested that it would be desirable, if we could, to exempt from liability to Capital Gains Tax decorations awarded for valour or gallant conduct. This was apparently stimulated by the recent sale of a Victoria Cross for over £1,000. Occasions when such a chattel could give rise to a liability must be rare indeed, but I think the House was impressed with the argument that if we could exempt this, in particular where the medal was being disposed of either by the original recipient or a member of his family, it was desirable to do so.
We undertook to look at this. I hope that we shall have at least five marks out of ten on this occasion, because we are not only doing what we were asked to do but we are taking the matter a little wider, because we thought that rather than limit it to disposal by the recipient or a member of his family we should cover also any disposal by someone other than a person who had acquired it by purchase. This would eliminate any speculative dealings in such medals from 1631 the exemption and I am sure that this would appeal to the House. This Amendment exempts from liability to short-term tax. There is a later Amendment proposing similar exemption from long-term tax.

§ Mr. John Hall (Wycombe)
I respond with the greatest pleasure to the Financial Secretary's invitation to give him five marks out of ten. He deserves them for getting this right on the second attempt, but the direct crib was given by my hon. Friend the Member for Ormskirk (Sir D. Glover), who I am sorry is not here to take a bow for persuading the Government to move this very necessary Amendment. We welcome it, and we might consider giving the Financial Secretary an extra half mark for taking the matter further than was originally suggested. I sit down pleased with the progress of our pupils and hoping that they make further progress as we go on.

§ Mr. Deputy-Speaker
We come now to Amendment No. 13, with which it is proposed that we take Amendment No. 282, in page 28, line 29, at end insert: (4) British Government securities shall not be chargeable assets. and Mr. Speaker would allow a Division on Amendment No. 282 if asked for.

§ Mr. Diamond
On a point of order. Would it be convenient, Mr. Deputy-Speaker, to you and the Opposition if in addition to these Amendments we consider at the same time the related Amendments? They are Amendment No. 57, in page 28, line 25, at end insert: (2A) If the adjusted sale price and adjusted purchase price to be taken into account under Schedule 6 to this Act in computing the amount of a gain accruing on a disposal of securities of one of the descriptions in Schedule (Capital gains: Government securities issued at a discount) to this Act are both within the exempt price range specified in that Schedule for those securities a gain accruing on that disposal shall not be a chargeable gain (and a loss so accruing shall not be an allowable loss) and if the range between those prices overlaps that exempt price range a proportion of a gain so accruing shall not be a chargeable gain, which shall be the proportion which the part of the range between those prices which overlaps that exempt price range bears to the whole of the range between those prices (and correspondingly a part of a loss so accruing shall not be an allowable loss). 1632 In this subsection "adjusted sale price" means the amount of the consideration for the disposal and "adjusted purchase price" means the amount of the consideration for the acquisition (that is the acquisition by the person making the disposal), both adjusted, where the nominal amount of the securities being disposed of is not one hundred pounds, to represent a price for a nominal amount of one hundred pounds. Amendment No. 95, in page 77, line 38, at end insert: (2) If in consequence of a conversion on their redemption date of securities of one of the descriptions in Schedule (Capital gains; Government securities issued at a discount) to this Act any securities of that description and a new holding of Government securities are, under paragraph 4(2) of this Schedule as applied by this paragraph, to be treated as the same asset acquired as the converted securities were acquired, and the adjusted purchase price (as defined in section 26(2A) of this Act) of the converted securities is less than one hundred pounds then, in computing under Schedule 6 to this Act the gain accruing on the acquisition and disposal of the new holding, or any part of the new holding, there shall be added to the amount of the expenditure which is allowable as a deduction the amount of the gain which would have been exempted from being a chargeable gain by virtue of the said section 26(2A) if the converted securities, or as the case may be the corresponding part of them, had been disposed of at the time of their redemption for a consideration equal to their nominal value.