Clause 23.—(DEATH.) (Hansard, 7 July 1965)

§ Mr. MacDermot
I beg to move Amendment No. 32, in page 22, line 5, at the beginning to insert: Subject to section ('transfer of business on retirement') of this Act. This is a drafting Amendment which is consequential on the decision of the House to accept the new Clause on the transfer of business on retirement.

§ Mr. MacDermot
I beg to move Amendment No. 33, in page 22, line 35, to leave out "two" and to insert "three".
May we discuss this Amendment and the next one at the same time, Mr. Speaker? The two go together and deal with the same point.

§ Mr. Speaker
If the House so pleases. I see gestures of assent.

§ Mr. MacDermot
I am much obliged, Mr. Speaker. These are the two Amendments to which I referred a moment ago. As Clause 23(5) stands, it provides that allowable losses which accrue to an individual in the year of assessment in which he dies may, in so far as they cannot be deducted from gains accruing in that year, be carried back for the two preceding years. It has been represented to us that this two-year carry-back period is unduly restrictive and ought to be extended. I think that some representations suggested that it should be allowed to be carried back without limit in point of time. We cannot accept that proposition, which would involve reopening assessments for a long period back, but we think that there is force in the representations and propose to the House to increase the carry-back period from two years to three. This is done by Amendment No. 33, and Amendment No. 34 is a consequential drafting Amendment.

§ Mr. Peter Walker
Although we accept the improvement that has taken place as a result of the Amendment, we still think that in logic it would be correct to go right back and allow past years for an unlimited period. We do not really accept the administrative argument on this, because it is one which works against the taxpayer. Nevertheless, we are pleased that, as a result of the representations we made during the Committee stage, at least some improvement has been made.

§ Mr. MacDermot
I beg to move, Amendment No. 35, in page 23, line 6, at the end to insert: (8) Allowable losses which accrue to the personal representatives of a deceased person in 1718 the period of three years from the death, may, so far as they cannot otherwise be deducted from chargeable gains, be deducted from chargeable gains accruing to the deceased in the year of assessment in which the death occurs, or in the preceding three years of assessment, taking chargeable gains accruing in a later year before those accruing in an earlier year. May I point out to the hon. Gentleman the Member for Worcester (Mr. Peter Walker) that this Amendment is one which arises as a result of a point which was raised in Committee, unlike the last Amendment, the subject of which was not, I think, discussed in Committee. This, however, arose on a point raised by the hon. Member himself, and in Committee we gave an undertaking to look into it.
Briefly, the Amendment provides that allowable losses which accrue to the personal representatives of the deceased in the three years following the death and which cannot be set off otherwise against chargeable gains also accruing to the personal representatives may be set against gains which accrued to the deceased in the year of his death or in the three preceding years of assessment. In short, net losses accruing to the personal representatives in the three-year period following the death are treated for this purpose precisely as if they were net losses accruing to the deceased person at his death. It is a point similar to that in the Amendment the House has just accepted.

§ Mr. Peter Walker
We are delighted that, as the result of this process of constant capitulation by the Treasury Bench, they are gradually accepting our proposals. As the Financial Secretary is well aware, this could have been a very major point, because there could have been considerable sums involved in respect of certain estates. We welcome this Amendment.

§ Mr. MacDermot
I beg to move, Amendment No. 36, in page 23, line 20, to leave out "twelve months" and to insert "two years".
This is a somewhat similar Amendment in favour of the taxpayer, dealing with the situation where there has been a deed of family arrangement after the death in effect altering the provisions of the will. The effect of the Amendment is to extend from one year to two years the period in which the deed of family arrangement 1719 can be made so as to be treated as if it had been a disposal by the deceased and thereby avoid a second occasion to charge.