HC Deb 08 July 1965 vol 715 cc1853-4
Mr. Diamond

I beg to move, Amendment No. 313, Clause 37, in page 42, line 28, leave out "and" and insert: who, if an individual, is domiciled in the United Kingdom and who". This Amendment restricts the charge under Clause 37 subsection (2) to a person who is ordinarily resident in the United Kingdom and who, if an individual, is domiciled in the United Kingdom. It is a limitation, but it is thought reasonable to limit the charge in this way, otherwise a foreigner who happens to be resident in the United Kingdom in a particular year and who happens also to be a shareholder in an overseas company which is within the definition of a close company would be chargeable on his proportionate share of the company's gains. It seems right that some more permanent connection with the United Kingdom should be required before Clause 37 operates. The Amendment therefore secures this by introducing the test of domicile which was not there previously.

Amendment agreed to.

Mr. Diamond

I beg to move Amendment No. 152, Clause 37, in page 43, line 24, leave out subsection (8) and insert: (8) So far as it would go to reduce or extinguish chargeable gains accruing by virtue of this section to a person in a year of assessment this section shall apply in relation to a loss accruing to the company on the disposal of an asset in that year of assessment as it would apply if a gain instead of a loss had accrued to the company on the disposal but shall only so apply in relation to that person; and subject to the foregoing provisions of this subsection this section shall not apply in relation to a loss accruing to the company. The reason for this Amendment is to be found in the discussion on the Committee stage debate on Clause 38 when my hon. Friend the Minister without Portfolio undertook to consider whether, in the light of the illustrations which were given, there were grounds for providing specifically in Clause 38 that, contrary to the impression which may have been given by subsection (3), only net gains accruing to an oversea trust should be apportioned to beneficiaries resident in the United Kingdom. We have come to the conclusion that the point ought to be met, and, at the same time, that an exactly parallel point which arises on Clause 37(8) of the Bill should also be met. The present Amendment corrects Clause 37(8) in that respect.

Amendment agreed to.