HC Deb 15 June 1965 vol 714 cc403-4

Question proposed, That the Clause stand part of the Bill.

Mr. William Clark

I wonder whether the Minister could answer two very simple questions. Subsection (4) says that the value of the trading stock shall be taken at market value.

Under Section 143 of the 1952 Act, when there is discontinuance of a business in that it is taken over by another company, but the trade continues except for the difference in name, it has always been the case that one takes the sale price for the value of consideration. I wonder whether the Minister would have a look at this again, because I do not think that there is any reason why, in this context, the wording we have had in Section 143 of the 1952 Act, which has operated very successfully, should be changed.

Clause 57 (4) is not really at variance with Section 1943 of the 1952 Act.

11.45 p.m.

I should like to raise one other point. On reconstruction of a company, under the Clause as drafted one is able to carry forward accumulated losses. Surely, it is not the intention of the Government to penalise companies any more. They should allow them to carry forward capital losses in the event of a reconstruction. If a trading loss is allowed to be carried forward from the old company to the reconstructed company, it is surely logical to allow capital losses from the old company also to be carried forward to the reconstructed company. If the Minister is not able immediately to answer these points, perhaps he will look at them again before Report.

Sir Eric Fletcher

I must protest against the observation of the hon. Member for Nottingham, South (Mr. William Clark) when he says that he hopes that it is not the intention to penalise companies further. Surely, the hon. Member realises by now that the whole object of this new and equitable system of fiscal legislation is to assist companies so that we can have a fairer and more just system of taxation for the benefit of all companies.

I will certainly respond to the hon. Member's invitation to look between now and Report at the two points which he has raised. It is the intention that Clause 57 should reproduce in the scheme of Corporation Tax precisely the same arrangements that now exist and operate on a company reconstruction where there is no change of ownership. I will consider whether there is any substance in the points raised by the hon. Member and will either write to him or consider whether any Amendment is required on Report.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 58 ordered to stand part of the Bill.