§ Mr. Peter Walker
I beg to move Amendment No. 344, in page 26, line 8, to leave out subsections(1) and (2) and to insert:
- (1) In determining the amount of estate duty payable on a death allowance shall be made for any capital gains tax chargeable in consequence of the death and in determining
730 the value of the estate for the purposes of estate duty an allowance shall be made for any capital gains tax owed by the deceased.
- (2) In determining the amount of estate duty payable by reference to settled property passing on a death whether it continues to be settled property or not, an allowance shall be made for any capital gains tax chargeable in consequence of the death in respect of the settled property, so far as that tax falls to be paid out of the property so passing or to be borne by any person to whom the property so passes for any beneficial interest in possession.
§ The Chairman
I have a note that I might suggest to the Committee that with this Amendment we might also take Amendment No. 387, in page 26, line 10, leave out "in consequence of the death" and insert:on chargeable gains accruing on the death in consequence of the provisions of section 23(1)".But I do not press this.
§ Mr. Walker
The principle involved in the Amendment is an attempt to reduce the adverse effects which have been brought into operation by the previous Clause. I do not want to delay the Committee by repeating the many arguments which have been put forward by both sides of the Committee on the subject of bringing in a form of double taxation at death of both the Capital Gains Tax and death duties. The object of the Amendment is to see that both in the case of the individual and of the settlement the amount of Capital Gains Tax is deducted from the amount of duty to be paid under the Estate Duty provisions rather than out of the size of the estate.
To put on this double form of taxation would particularly adversely affect the individual who had built up his own business. The Committee heard previously this afternoon of the case of the person who, at present, would be responsible for paying £2,400 of duty on a business valued at £20,000 which he had built during his lifetime. As a result of the provisions of the Bill that amount of duty payable on death would be increased to £5,800.
This was considered, quite rightly, by several hon. Members opposite to be an unreasonable position, and both sides of the Committee agreed that death duties are already very high. In the United States there is, rightly, a system under which, during the lifetime of the person, there is a capital gains tax and on death a separate estate duty tax. This Government wish to impose both Capital Gains Tax and Estate Duty at the time of death. This is thoroughly wrong. We failed to have it removed by previous Amendments and we are now endeavouring, by this Amendment, to reduce at least the total impact of both these taxes.
§ The Chairman
Perhaps the hon. Gentleman would wish to comment on my suggestion that we take the two Amendments together, but if there is any doubt about it we will ignore it.
§ Sir Eric Fletcher
I can agree with the hon. Member for Worcester (Mr. Peter Walker) on one point—that it is quite unnecessary to repeat all the arguments that we had on this subject on Clause 23. In dealing with the Clause, my hon. and learned Friend the Financial Secretary argued fully why it was quite impossible to accept any of the Amendments proposed by the Opposition for removing or eliminating the charge of Capital Gains Tax on the occasion of death. The hon. Member said that this Amendment would reduce the liability thus arising, but, in fact, it would eliminate it completely. If the Amendment were carried the effect would be to render completely nugatory the charge arising on death of Capital Gains Tax. Therefore, it is quite unacceptable to the Government.
The effect of the Amendment is that the whole amount paid under Capital Gains Tax would be allowed as relief against the claim for Estate Duty, and in a great many cases the result would be to eliminate liability for Capital Gains Tax altogether. In substance, therefore, the Amendment is the same as some of the Amendments proposed to Clause 23 which were decisively rejected by the Committee. I hope that the Committee will repeat on this Amendment the decision to which it came on those.
§ Sir D. Glover
The Minister without Portfolio said that he could agree with my hon. Friend the Member for Worcester (Mr. Peter Walker) that we need not have tedious repetition of previous arguments, but the Financial Secretary, on the Amendment we have just disposed of, took exactly the opposite view and, after we on this side had repeated our arguments, he accepted them. There seems to be something to be said for hammering home common sense into the Government.
§ The Chairman
I think that the Chair comes in here. There is a case against tedious repetition of arguments which we have had previously.
§ Sir D. Glover
Of course, Dr. King, I listen to your Ruling, but I am sure that 733 even your Ruling must be influenced by what you saw happen on the previous Amendment. The arguments had to be put twice before the Government understood them, and they then accepted them. I do riot want to enter upon long and tedious repetition of previous arguments, but I want to feel sure that the Government understand the point which we are making now.
The Minister without Portfolio said that the Amendment was completely unacceptable. In the previous debate, in reply to a very pungent speech from the hon. Member for Manchester, Cheetham (Mr. Harold Lever), the Financial Secretary said that he saw some point in it and he would look at the matter again between now and Report. This is contrary to what the Minister without Portfolio is now saying.
§ Sir Eric Fletcher indicated dissent.
§ Sir D. Glover
The Minister shakes his head, and so does the Financial Secretary. Of course he did not say give us carte blanche and accept all our arguments, but he said that we had made a sufficient case, and a sufficient case has been made by his hon. Friend the Member for Cheetham, that he was prepared seriously to look into it. There must be some meeting of minds on this. There is a difficulty, of course, with two different Ministers speaking from the Government Front Bench, but at the moment we really have a bit of a nonsense.
Which story is right? My right hon. and hon. Friends might, with the partial accommodation given by the Financial Secretary, decide not to divide on this Amendment. But, if we are to take the view put by the Minister without Portfolio, that the Amendment is completely unacceptable, we shall, of course, divide the Committee. We return to the fact that, in a case like this, it is right and just—and I do not want to reiterate the arguments—
§ 9.45 p.m.
§ Mr. MacDermot
I am sure that the hon. Gentleman does not wish to waste time by reiterating the arguments. I want to make it clear that what I undertook to look at was a specific problem in relation to the small businessman. This Amendment is in very wide terms and would apply throughout the whole field. 734 The point my hon. Friend the Minister without Portfolio made was that the effect of the Amendment would, in substance, be the same as the issue we decided following our debate on Clause 24. If, therefore, we are to argue this issue we shall be back on the main argument. This in no way detracts from what I said earlier.
§ Sir D. Glover
Perhaps I might be complimentary to the hon. and learned Gentleman. In the early hours of the day I did not think that he would see the day through, but he seems to have taken a "purple heart" or something, because he is doing extraordinarily well. He is full of vigour. It shows that a night out of bed seems to suit him down to the ground.
The division between the two sides of the Committee, if the hon. and learned Gentleman seriously meant what he said in our previous debate about going into the problem, concerns whether or not we are talking about a narrow field when we cite the case of a man with £1,000 who has opened a business. I am certain that, if he goes into the problem in depth, he will discover that, far from being an exception, such a case is far more the rule. My hon. Friend the Member for Peterborough (Sir Harmar Nicholls) said that such a case is the norm and not the exception, while the case which the hon. and learned Gentleman looks upon as the norm is actually the exception.
I am certain that, on any reassessment of the problem, the hon. and learned Gentleman will find—if he can stop being ideologically arrogant and thinking that I am trying to make a special case—that this is a far wider range than he believes at the moment. It applies right across commerce, distribution and manufacturing and also to such businesses as solicitors'. Nearly all such firms, if they have been successful in business, will be hit severely by the tax. I hope that, despite our debate on Clause 24, my right hon. and hon. Friends will vote for the Amendment.
§ Mr. Harold Lever
I shall be neither tedious nor repetitive. All I seek is a little clarity. I should like some sort of assurance that the Treasury is now satisfied that when people die they do not do so in order to avoid Capital Gains Tax. Perhaps, however, I am venturing a rash prediction. The Clause is not yet in force 735 and I am making an assumption that it is unlikely to be.
I ask these questions to clear my mind, in which there is further confusion, or perhaps it is really confusion in the Treasury's mind. As I understand it, the Treasury takes the view that if one is unwise and unkind enough to die without having conferred the inestimable benefit of a donation to the Treasury by realising one's capital gains, something has to be done about this form of avoidance, and that this is equally so if one sets up a trust which keeps the property in question unrealised.
I am a little confused about this, because it seems to me that when a person dies without realising his capital gains, or sets up a trust to ensure that the gains are not realised, what is happening is not that he is avoiding tax but that he is staying outside the intended application of the tax. Since the raison d'etre of the tax is that we wish to bring into account as revenue a tax on the gains which have been realised and no other, it is not an avoidance any more than when I gave up cigarette smoking I did not avoid the tobacco tax.
If the same process of reasoning applied in the Clause were applied by analogy to the moment when I gave up cigarette smoking, one of the following consequences would be likely to follow: either I would be forcibly fed with cigarettes to ensure that there was no depletion of the Revenue, or on death, I should be deemed to have smoked 60 cigarettes a day when I made the decision to abstain until the unfortunate day, which, if it ever happens, which I have been told to assume it will, I perish. I dare say that it would cause relief in some quarters even though my heir would have to bear a ghastly rate of tax. This process of reasoning, if it be the process of reasoning in the Revenue, is fallacious, or I am confused.
I should like an assurance from the Financial Secretary, who is always so courteous, lucid and careful in these matters, that the Treasury does not feel that it is a form of Capital Gains Tax avoidance when a man dies with an unrealised gain.
Secondly, I hope that the reasons advanced for resisting Amendments to this Clause and previous Clauses will bear 736 further examination because we have been told that the hon. Member for Cheetham and others are right in saying that grave hardship will follow if the Clauses are not amended. The answer to this is, "The Government have often inflicted hardship on citizens so that there is not any reason why they should not inflict another." I say—and it may be a prejudiced mind operating—that if the Government inflicted a number of hardships in the past, it is a good idea to suggest their avoidance in the future. If it is recognised that Estate Duty causes hardship in many cases, one may well hesitate before applying Capital Gains Tax at the point of death in addition.
§ Mr. Grimond
I have totally misunderstood the Government's case, because "MacDermot's law" is that if the Government have inflicted hardship they must inflict greater hardship.
§ Mr. Lever
The Leader of the Liberal Party, being brought up to believe that the non-conformist conscience is not dead and therefore that the non-conformist memory is not dead, has reminded me of the words of the ancient biblical king who said that his predecessor had chastised his people with whips and that he intended to chastise them with scorpions. I did not understand the argument in that way—or perhaps I just did not understand the argument. At all events, it is not altogether persuasive—and I should be grateful if the Treasury would look at the argument again—to say in answering a case about hardship that other hardships are caused by other legislation and other circumstances.
Does my hon. Friend the Financial Secretary feel that the rejection of the Amendment and the adoption of the Clause unmutilated will provide another opportunity for the compassionate exercise of the Revenue's discretion. I am not anxious to proliferate Clauses which bring into play the well known extensive compassion of the Inland Revenue to those who owe them large sums of money. I do not want to be critical of the Inland Revenue the members of which carry out what to them must be a distasteful and unrewarding job with a great deal of compassion, intelligence and flexibility. I do not feel that it is right that we should pass legislation imposing unjust 737 taxation, if we think it unjust and liable to cause hardship, and lay the flattering unction to our souls that the tax gatherers will repair their callousness by their overflowing abundance of human Icindnes3. In those circumstances, my right hon. and hon. Friends should be careful in their legislation and should have another look at it from this point of view.
My final point, which does not relate directly to the Amendment but is a general and brief observation, concerns the attitude which I shall adopt in the Division. What I am doing is weeding is the Government's legislative garden. There, there are glorious plants which I revere, respect and cherish, but here and there a weed which I am helping to remove. The idea of returning to the Tory wilderness, however, daunts me, and I shall avoid it at all costs.
§ Sir Lionel Heald (Chertsey)
If the hon. Member will not vote with us, will he not at least come and sit on this side?
§ Mr. Peter Walker
While not wanting to add to the cogent arguments of the hon. Member for Manchester, Cheetham (Mr. Harold Lever), I know that the Minister without Portfolio will be preparing his reply to his hon. Friend. I am sorry that the hon. Member decided yet again to give his declaration of voting
|Division No. 144.]||AYES||[9.58 p.m.|
|Abse, Leo||Darling, George||Harper, Joseph|
|Albu, Austen||Davies, S. O. (Merthyr)||Hart, Mrs. Judith|
|Allaun, Frank (Salford, E.)||Delargy, Hugh||Hattersley, Roy|
|Allen, Scholefield (Crewe)||Dempsey, James||Hazell, Bert|
|Armstrong, Ernest||Diamond, John||Healey, Rt. Hn. Denis|
|Atkinson, Norman||Dodds, Norman||Herbison, Rt. Hn. Margaret|
|Bacon, Miss Alice||Doig, Peter||Hill, J. (Midlothian)|
|Barnett, Joel||Driberg, Tom||Hobden, Dennis (Brighton, K'town.)|
|Benn, Rt. Hn. Anthony Wedgwood||Dunn, James A.||Holman, Percy|
|Bennett, J. (Glasgow, Bridgeton)||Dunnett, Jack||Houghton, Rt. Hn. Douglas|
|Binns, John||Edwards, Rt. Hn. Ness (Caerphilly)||Howell, Denis (Small Heath)|
|Blackburn, F.||English, Michael||Howie, W.|
|Boardman, H.||Ensor, David||Hoy, James|
|Boston, T. G.||Evans, Albert (Islington, S.W.)||Hughes, Emrys (S. Ayrshire)|
|Bottomley, Rt. Hn. Arthur||Fernyhough, E.||Hunter, Adam (Dunfermline)|
|Bowden, Rt. Hn. H. W. (Leics S.W.)||Finch, Harold (Bedwelity)||Hunter, A. E. (Feltham)|
|Boyden, James||Fletcher, Sir Eric (Islington, E.)||Hynd, H. (Accrington)|
|Braddock, Mrs. E. M.||Floud, Bernard||Hynd, John (Attercliffe)|
|Brown, R. W. (Shoreditch & Fbury)||Foot, Sir Dingle (Ipswich)||Irving, Sydney (Dartford)|
|Buchanan, Richard||Foot, Michael (Ebbw Vale)||Jackson, Colin|
|Butler, Herbert (Hackney, C.)||Fraser, Rt. Hn. Tom (Hamilton)||Janner, Sir Barnett|
|Butler, Mrs. Joyce (Wood Green)||Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)|
|Callaghan, Rt. Hn. James||Freeson, Reginald||Jenkins, Hugh (Putney)|
|Castle, Rt. Hn. Barbara||George, Lady Megan Lloyd||Jones, Dan (Burnley)|
|Coleman, Donald||Ginsburg, David||Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)|
|Conlan, Bernard||Gourlay, Harry||Jones, [...]. Idwal (Wrexham)|
|Corbet, Mrs. Freda||Greenwood, Rt. Hn. Anthony||Kelley, Richard|
|Cronin, John||Gregory, Arnold||Kenyon, Clifford|
|Crossman, Rt. Hn. R. H. S.||Griffiths, David (Rother Valley)||Kerr, Dr. David (W'worth, Central)|
|Cullen, Mrs. Alice||Gunter, Rt. Hn. R. J.||Lawson, George|
|Dalyell, Tam||Hamilton, William (West Fife)||Leadbitter, Ted|
§ intention. This is, I think, the tenth time today. We said that we would accept it in future to save the time of the Committee and I am sure that the Whips will not be too ruthless and nasty with the hon. Member if he does not repeat it every time.
§ The hon. Member suggested that the result of the Amendment would be completely to do away with the Capital Gains Tax. That simply is not the case. For example, the illustration has been quoted throughout the day of the heavy penal taxation which is put upon a person with a large goodwill factor in his business. In that example, the death duty amounted to £2,400, but the Capital Gains Tax amounted to £4,200. In that case, therefore, there would still be a heavy imposition of the Capital Gains Tax.
§ I am also sorry that the hon. Member did not take advantage of the Amendment to answer the point made earlier by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) about the appalling double taxation Capital Gains Tax that takes place within a settlement.
§ Question put, That the words proposed to be left out, to the word "in" in line 10, stand part of the Clause:—
§ The Committee divided: Ayes 179, Noes 172.
|Lee, Rt. Hn. Frederick (Newton)||O'Malley, Brian||Soskice, Rt. Hn. Sir Frank|
|Lever, Harold (Cheetham)||Oram, Albert E. (E. Ham, S)||Stones, William|
|Lewis, Arthur (West Ham, N.)||Owen, Will||Summerskill, Hn. Dr. Shirley|
|Lewis, Ron (Carlisle)||Padley, Walter||Swain, Thomas|
|Lomas, Kenneth||Page, Derek (King's Lynn)||Swingler, Stephen|
|Loughlin, Charles||Palmer, Arthur||Taverne, Dick|
|Mabon, Dr. J. Dickson||Pargiter, G. A.||Thomson, George (Dundee, E.)|
|McBride, Neil||Park, Trevor (Derbyshire, S.E.)||Thornton, Ernest|
|MacColl, James||Parker, John||Tinn, James|
|MacDermot, Niall||Parkin, B. T.||Tuck, Raphael|
|McKay, Mrs. Margaret||Pavitt, Laurence||Urwin, T. W.|
|Mackenzie, Gregor (Rutherglen)||Pearson, Arthur (Pontypridd)||Varley, Eric G.|
|Mackie, John (Enfield, E.)||Prentice, R. E.||Wainwright, Edwin|
|Mahon, Simon (Bootle)||Price, J. T. (Westhoughton)||Walden, Brian (All Saints)|
|Manuel, Archie||Pursey, Cmdr. Harry||Walker, Harold (Doncaster)|
|Mapp, Charles||Rankin, John||Wallace, George|
|Mason, Roy||Redhead, Edward||Wells, William (Walsall N.)|
|Mellish, Robert||Rees, Merlyn||Whitlock, William|
|Mikardo, Ian||Reynolds, G. W.||Wigg, Rt. Hn. George|
|Molloy, William||Robertson, John (Paisley)||Wilkins, W. A.|
|Monslow, Walter||Robinson, Rt. Hn.K.(St. Pancras, N.)||Williams, Albert (Abertillery)|
|Morris, Charles (Openshaw)||Ross, Rt. Hn. William||Williams, Mrs. Shirley (Hitchin)|
|Mulley,Rt.Hn.Frederick(SheffieldPk)||Rowland, Christopher||Wilson, Rt. Hn. Harold (Huyton)|
|Murray, Albert||Shore, Peter (Stepney)||Wilson, William (Coventry, S.)|
|Neal, Harold||Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)||Woodburn, Rt. Hn. A.|
|Newens, Stan||Silkin, John (Deptford)||Wyatt, Woodrow|
|Noel-Baker, Francis (Swindon)||Silkin, S. C. (Camberwell, Dulwich)||Yates, Victor (Ladywood)|
|Noel-Baker,Rt.Hn.Philip(Derby,S.)||Slater, Mrs. Harriet (Stoke, N.)|
|Oakes, Gordon||Slater, Joseph (Sedgefield)||TELLERS FOR THE AYES:|
|Ogden, Eric||Solomons, Henry||Mr. George Rogers and|
|Mr. Ifor Davies.|
|Alison, Michael (Barkston Ash)||Foster, Sir John||Litchfield, Capt. John|
|Allan, Robert (Paddington, S.)||Fraser,Rt.Hn.Hugh(St'fford & Stone)||Lloyd,Rt.Hn. Geoffrey (Sut'nC'dfield)|
|Amery, Rt. Hn. Julian||Fraser, Ian (Plymouth, Sutton)||Lloyd, Ian (P'tsm'th, Langstone)|
|Anstruther-Gray, Rt. Hn. Sir W.||Galbraith, Hn. T. G. D.||Lloyd, Rt. Hn. Selwyn (Wirral)|
|Astor, John||Gammans, Lady||Longden, Gilbert|
|Atkins, Humphrey||Gilmour, Sir John (East Fife)||Loveys, Walter H.|
|Awdry, Daniel||Glover, Sir Douglas||Lubbock, Eric|
|Baker, W. H. K.||Godber, Rt. Hn. J. B.||MacArthur, Ian|
|Barlow, Sir John||Goodhew, Victor||Mackenzie, Alasdair (Ross&Crom'ty)|
|Batsford, Brian||Gower, Raymond||Mackie, George Y. (C'ness & S'land)|
|Beamish, Col. Sir Tufton||McLaren, Martin|
|Bennett, Sir Frederic (Torquay)||Grant, Anthony||McMaster, Stanley|
|Berry, Hn. Anthony||Gresham Cooke, R.||McNair-Wilson, Patrick|
|Bessell, Peter||Griffiths, Peter (Smethwick)||Maginnis, John E.|
|Birch, Rt. Hn. Nigel||Grimond, Rt. Hn. J.||Mathew, Robert|
|Black, Sir Cyril||Hall, John (Wycombe)||Maude, Angus|
|Blaker, Peter||Harrison, Brian (Maldon)||Maxwell-Hyslop, R. J.|
|Box, Donald||Harvey, Sir Arthur Vere (Macclesf'd)||Maydon, Lt.-Cmdr. S. L. C.|
|Boyd-Carpenter, Rt. Hn. J.||Harvey, John (Walthamstow, E.)||Meyer, Sir Anthony|
|Boyle, Rt. Hn. Sir Edward||Harvie Anderson, Miss||Mills, Peter (Torrington)|
|Brewis, John||Hawkins, Paul||Mills, Stratton (Belfast, N.)|
|Brinton, Sir Tatton||Heald, Rt. Hn. Sir Lionel||Miscampbell, Norman|
|Bromley-Davenport.Lt.-Col.SirWalter||Heath, Rt. Hn. Edward||Mitchell, David|
|Brooke, Rt. Hn. Henry||Hendry, Forbes||Morrison, Charles (Devizes)|
|Bryan, Paul||Higgins, Terence L.||Mott-Radclyffe, Sir Charles|
|Buchanan-Smith, Alick||Hill, J. E. B. (S. Norfolk)||Munro-Lucas-Tooth, Sir Hugh|
|Buck, Antony||Hirst, Geoffrey||Murton, Oscar|
|Buxton, Ronald||Hobson, Rt. Hn. Sir John||Neave, Airey|
|Chichester-Clark, R.||Hogg, Rt. Hn. Quintin||Nicholls, Sir Harmar|
|Clark, William (Nottingham, S.)||Hooson, H. E.||Nugent, Rt. Hn. Sir Richard|
|Cole, Norman||Hopkins, Alan||Orr, Capt. L. P. S.|
|Cooper, A. E.||Hordern, Peter||Osborn, John (Hallam)|
|Costain, A. P.||Hornsby-Smith, Rt. Hn. Dame P.||Page, John (Harrow, W.)|
|Craddock, Sir Beresford (Spelthorne)||Howe, Geoffrey (Bebington)||Page, R. Graham (Crosby)|
|Crowder, F. P.||Hunt, John (Bromley)||Pearson, Sir Frank (Clitheroe)|
|Curran, Charles||Iremonger, T. L.||Peyton, John|
|Currie, G. B. H.||Irvine, Bryant Godman (Rye)||Pickthorn, Rt. Hn. Sir Kenneth|
|Dalkeith, Earl of||Johnston, Russell (Inverness)||Pitt, Dame Edith|
|Davies, Dr. Wyndham (Perry Barr)||Jopling, Michael||Price, David (Eastleig[...])|
|d'Avigdor-Goldsmid, Sir Henry||Kaberry, Sir Donald||Prior, J. M. L.|
|Deedes, Rt. Hn. W. F.||Kerby, Capt. Henry||Pym, Francis|
|Dodds-Parker, Douglas||Kilfedder, James A.||Ramsden, Rt. Hn. James|
|Doughty, Charles||Kimball, Marcus||Redmayne, Rt. Hn. Sir Martin|
|Errington, Sir Eric||King, Evelyn (Dorset, S.)||Rees-Dav'es, W. R.|
|Eyre, Reginald||Kitson, Timothy||Russell, Sir Ronald|
|Fell, Anthony||Langford-Holt, Sir John||Sharples, Richard|
|Fletcher-Cooke, Charles (Darwen)||Legge-Bourke, Sir Harry||Shepherd, William|
|Flet[...]her-Cooke, Sir John (S'pton)||Lewis, Kenneth (Rutland)||Sinclair St. George|
|Smith, Dudley (Br'ntf'd & Chiswick)||Thatcher, Mrs. Margaret||Whitelaw, William|
|Spearman, Sir Alexander||Thompson, Sir Richard (Croydon,S.)||Wills, Sir Gerald (Bridgwater)|
|Stanley, Hn. Richard||Tiley, Arthur (Bradford, W.)||Wilson, Geoffrey (Truro)|
|Stoddart-Scott, Col. Sir Malcolm||Tweedsmuir, Lady||Wolrige-Gordon, Patrick|
|Studholme, Sir Henry||van Straubenzee, W. R.||Woodnutt, Mark|
|Tal[...]bot, John E.||Walder, David (High Peak)||Yates, William (The Wrekin)|
|Taylor, Sir Charles (Eastbourne)||Walker, Peter (Worcester)||Younger, Hn. George|
|Taylor, Edward M. (G'gow.Cathcart)||Walters, Dennis|
|Taylor, Frank (Moss Side)||Ward, Dame Irene||TELLERS FOR THE NOES:|
|Teeling, Sir William||Weatherill, Bernard||Mr. Jasper More and|
|Temple, John M.||Webster, David||Mr. Geoffrey Johnson Smith.|
Amendment made: In page 26, line 10, leave out
in consequence of the death" and insert "on chargeable gains accruing on the death in consequence of the provisions of section 23(1)".— [Sir Eric Fletcher.]
§ Mr. Peter Walker
I beg to move, Amendment No. 290, in page 26, line 11, at the end to insert:and as well as for any amount of capital gains tax chargeable on the whole or such proportion of a gift inter vivos by the deceased as fell to be included in the deceased's estate for the calculation of estate duty.
§ The Chairman
With this Amendment we can discuss Amendment No. 408, in Clause 23, page 22, line 4, at end insert:but the total amount of capital gains tax and estate duty paid on the assets shall not exceed he amount of the estate duty which would have been paid off if the provisions of this Act did not apply".
§ Mr. Walker
This Amendment is designed to put right what seems to be an unwarranted discrepancy in the position of somebody giving a gift. At present, as the Committee will be aware, the amount of a Capital Gains Tax is deducted from the estate prior to the imposition of the death duties. Under this Amendment we endeavour to cater for the position where somebody is giving a gift and has paid a Capital Gains Tax at the time of giving that gift and then the gift, as a result of it perhaps only just being recently given and not given within the five-year period, is added to the estate for the purpose of death duty but the Capital Gains Tax already paid is not deducted.
I think that this is a reasonable and logical point and I hope that it will be accepted by the other side of the Committee.
§ Mr. MacDermot
Owing to the wording of the Amendment, we were a little mystified about the point which the hon. Gentleman had in mind by putting it down. I have listened to what he has 742 said. I do not wish to try to answer this "off the cuff". I should like time to consider it, if he will permit me to do so, because we had not grasped the point by looking at the Amendment. The hon. Gentleman obviously has a point. I undertake to consider it before the Report stage.
§ Mr. Peter Walker
I am grateful to the hon. and learned Gentleman. I am sure that this is a point which the Government will want to take into consideration, as it is a just one. In view of the hon. and learned Gentleman's undertaking, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Amendments made: In page 27, line 26, leave out "and" and insert "or".
In page 27, leave out lines 28 and 29 and insert:
deemed to be effected in accordance with section 24(3) of this Act".
In line 37, leave out "and" and insert "or".
In line14, leave out "(1)" and insert "(2)".—[Sir Eric Fletcher.]
§ Question proposed, That the Clause, as amended, stand part of the Bill.
§ Mr. Maxwell-Hyslop
I think that we need to make a few more inquiries about what the Clause means before we decide whether or not to assent to it being part of the Bill. I am sorry to have to do this when the Financial Secretary is so sleepy, but it is perhaps better that he should yawn than that the taxpayer should groan.
In line 23 we see the expressionif sold in the open market",and it is that on which I seek advice. One would think that we knew what was meant by the open market, but during the course of the last year it has become clear—and a number of hon. Members have raised the point in the House—that auction sales which may appear to constitute an open market sale 743 have been something rather less than open. I should like the Financial Secretary, or the Minister without Portfolio, to give us an explanation of what does or does not constitute valuation for sale in the open market.
Incidentally, is the value of something when sold in the open market inclusive or exclusive of the auctioneer's commission and stamp duty? This is relevant because it increases by a significant percentage, or alternatively decreases by a significant percentage, the actual valuation on which any Capital Gains Tax will hypothetically have to be paid. Because of the imperfections of the market, I think that we ought to have clearly defined what is meant by the words,if sold in the open market".
|Division No. 145.]||AYES||[10.15 p.m.|
|Abse, Leo||George, Lady Megan Lloyd||Molloy, William|
|Albu, Austen||Ginsburg, David||Monslow, Walter|
|Allaun, Frank (Salford, E.)||Gourlay, Harry||Morris, Charles (Openshaw)|
|Allen, Scholefield (Crewe)||Greenwood, Rt. Hn. Anthony||Mulley, Rt. Hn. Frederick(SheffieldPk)|
|Armstrong, Ernest||Gregory, Arnold||Murray, Albert|
|Atkinson, Norman||Griffiths, David (Rother Valley)||Neal, Harold|
|Bacon, Miss Alice||Hamilton, William (West Fife)||Newens, Stan|
|Baxter, William||Hannan, William||Noel-Baker, Francis (Swindon)|
|Benn, Rt. Hn. Anthony Wedgwood||Harper, Joseph||Noel-Baker,Rt.Hn.Philip(Derby,S.)|
|Bennett, J. (Glasgow, Bridgeton)||Hart, Mrs. Judith||Oakes, Gordon|
|Binns, John||Hattersley, Roy||Ogden, Eric|
|Blackburn, F.||Hazell, Bert||O'Malley, Brian|
|Boston, T. G.||Healey, Rt. Hn. Denis||Oram, Albert E. (E. Ham, S.)|
|Bottomley, Rt. Hn. Arthur||Herbison, Rt. Hn. Margaret||Owen, Will|
|Braddock, Mrs. E. M.||Hill, J. (Midlothian)||Padley, Walter|
|Brown, R. W. (Shoreditch & Fbury)||Hobden, Dennis (Brighton, K'town.)||Page, Derek (King's Lynn)|
|Buchanan, Richard||Holman, Percy||Palmer, Arthur|
|Butler, Herbert (Hackney, C.)||Houghton, Rt. Hn. Douglas||Pargiter, G. A.|
|Butler, Mrs. Joyce (Wood Green)||Howell, Denis (Small Heath)||Park, Trevor (Derbyshire, S.E.)|
|Callaghan, Rt. Hn. James||Hoy, James||Parker, John|
|Cattle, Rt. Hn. Barbara||Hughes, Emrys (S. Ayrshire)||Parkin, B. T.|
|Coleman, Donald||Hunter, Adam (Dunfermline)||Pavitt, Laurence|
|Conlan, Bernard||Hynd, H. (Accrington)||Pearson, Arthur (Pontypridd)|
|Corbet, Mrs. Freda||Irving, Sydney (Dartford)||Prentice, R. E.|
|Cronin, John||Jackson, Colin||Pursey, Cmdr. Harry|
|Crossman, Rt. Hn. R. H. S.||Janner, Sir Barnett||Rankin, John|
|Cullen, Mrs. Alice||Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)||Redhead, Edward|
|Dalyell, Tam||Jenkins, Hugh (Putney)||Rees, Merlyn|
|Darling, George||Jones.Rt.Hn.Sir Elwyn(W.Ham,S.)||Reynolds, G. W.|
|Davies, Ifor (Gower)||Kelley, Richard||Robertson, John (Paisley)|
|Davies, S. O. (Merthyr)||Kenyon, Clifford||Robinson, Rt. Hn.K.(St. Pancras, N.)|
|Delargy, Hugh||Kerr, Dr. David (W'worth, Central)||Rose, Paul B.|
|Diamond, John||Lawson, George||Ross, Rt. Hn. William|
|Dodds, Norman||Leadb[...]ltter, Ted||Rowland, Christopher|
|Doig, Peter||Lever, Harold (Cheetham)||Shore, Peter (Stepney)|
|Driberg, Tom||Lewis, Ron (Carlisle)||Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)|
|Dunn, James A.||Loughlin, Charles||Silkin, John (Deptford)|
|Dunnett, Jack||Mabon, Dr. J. Dickson||Silkin, S. C. (Camberwell, Dulwich)|
|Edwards, Rt. Hn. Ness (Caerphilly)||McBride, Neil||Silverman, Julius (Aston)|
|English, Michael||MacColl, James||Slater, Mrs. Harriet (Stoke, N.)|
|Ensor, David||MacDermot, Niall||Slater, Joseph (Sedgefield)|
|Evans, Albert (Islington, S.W.)||McKay, Mrs. Margaret||Solomons, Henry|
|Fernyhough, E.||Mackenzie, Gregor (Ruthergien)||Soskice, Rt. Hn. Sir Frank|
|Finch, Harold (Bedwellty)||Mackie, John (Enfield, E.)||Stones, William|
|Fletcher, Sir Eric (Islington, E.)||Mahon, Simon (Bootle)||Strauss, Rt. Hn. G. R. (Vauxhall)|
|Floud, Bernard||Manuel, Archie||Summerskill, Hn. Dr. Shirley|
|Foot, Sir Dingle (Ipswich)||Mapp, Charles||Swain, Thomas|
|Foot, Michael (Ebbw Vale)||Mason, Roy||Swingler, Stephen|
|Fraser, Rt. Hn. Tom (Hamilton)||Mellish, Robert||Taverne, Dick|
|Freeson, Reginald||Mikardo, Ian||Thomson, George (Dundee, E.)|
§ Mr. MacDermot
The reference to the open market is a well understood term among valuers. It appears in a great body of legislation in one form and another. The test is that of a sale between a willing buyer and a willing seller, and is not influenced by considerations of commission.
§ 10.15 p.m.
§ Mr. MacDermot
Perhaps the hon. Gentleman did not hear my closing words. It is not influenced by considerations of commission.
§ Question put, That the Clause, as amended, stand part of the Bill:
§ The Committee divided: Ayes 167, Noes 160.
|Thornton, Ernest||Wells, William (Walsall N.)||Wilson, William (Coventry, S.)|
|Tuck, Raphael||Whitlock, William||Wyatt, Woodrow|
|Urwin, T. W.||Wigg, Rt. Hn. George||Yates, Victor (Ladywood)|
|Varley, Eric G.||Wilkins, W. A.|
|Walden, Brian (All Saints)||Williams, Albert (Abertillery)||TELLERS FOR THE AYES:|
|Walker, Harold (Doncaster)||Williams, Mrs. Shirley (Hitchin)||Mr. George Rogers and|
|Wallace, George||Wilson, Rt. Hn. Harold (Huyton)||Mr. William Howie|
|Alison, Michael (Barkston Ash)||Grimond, Rt. Hn. J.||Mott-Radclyffe, Sir Charles|
|Allan, Robert (Paddington, S.)||Hall, John (Wycombe)||Munro-Lucas-Tooth, Sir Hugh|
|Amery, Rt. Hn. Julian||Harris, Reader (Heston)||Murton, Oscar|
|Anstruther-Gray, Rt. Hn. Sir W.||Harrison, Brian (Maldon)||Nicholls, Sir Harmar|
|Atkins, Humphrey||Harvey, John (Walthamstow, E.)||Nugent, Rt. Hn. Sir Richard|
|Awdry, Daniel||Harvie Anderson, Miss||Orr, Capt. L. P. S.|
|Baker, W. H. K.||Hawkins, Paul||Osborn, John (Hallam)|
|Barlow, Sir John||Heald, Rt. Hn. Sir Lionel||Page, R. Graham (Crosby)|
|Batsford, Brian||Heath, Rt. Hn. Edward||Pearson, Sir Frank (Clitheroe)|
|Beamish, Col. Sir Tufton||Hendry, Forbes||Peyton, John|
|Bennett, Sir Frederic (Torquay)||Higgins, Terence L.||Pickthorn, Rt. Hn. Sir Kenneth|
|Berry, Hn. Anthony||Hill, J. E. B. (S. Norfolk)||Pitt, Dame Edith|
|Bessell, Peter||Hirst, Geoffrey||Price, David (Eastleigh)|
|Birch, Rt. Hn. Nigel||Hobson, Rt. Hn. Sir John||Prior, J. M. L.|
|Black, Sir Cyril||Hogg, Rt. Hn. Quintin||Pym, Francis|
|Blaker, Peter||Hooson, H. E.||Ramsden, Rt. Hn. James|
|Box, Donald||Hordern, Peter||Redmayne, Rt. Hn. Sir Martin|
|Boyd-Carpenter, Rt. Hn. J.||Hornsby-Smith, Rt. Hn. Dame P.||Rees-Davies, W. R.|
|Boyle, Rt. Hn. Sir Edward||Howe, Geoffrey (Bebington)||Russell, Sir Ronald|
|B[...]rewis, John||Iremonger, T. L.||Sharples, Richard|
|Brinton, Sir Tatton||Irvine, Bryant Godman (Rye)||Shepherd, William|
|Brooke, Rt. Hn. Henry||Jenkin, Patrick (Woodford)||Sinclair, Sir George|
|Bryan, Paul||Johnston, Russell (Inverness)||Smith, Dudley (Br'ntf'd & Chiswick)|
|Buchanan-Smith, Alick||Kaberry, Sir Donald||Spearman, Sir Alexander|
|Buck, Antony||Kerby, Capt. Henry||Stanley, Hn. Richard|
|Buxton, Ronald||Kilfedder, James A.||Stoddart-Scott, Col. Sir Malcolm|
|Carlisle, Mark||Kimball, Marcus||Studho[...]lme, Sir Henry|
|Clark, William (Nottingham, S.)||King, Evelyn (Dorset, S.)||Talbot, John E.|
|Cooper, A. E.||Kitson, Timothy||Taylor, Sir Charles (Eastbourne)|
|Costain, A. P.||Langford-Holt, Sir John||Taylor, Edward M. (G'gow,Cathcart)|
|Crowder, F. P.||Legge-Bourke, Sir Harry||Taylor, Frank (Moss Side)|
|Curran, Charles||Lewis, Kenneth (Rutland)||Teeling, Sir William|
|Currie, G. B. H.||Lloyd,Rt.Hn.Geoffrey(But'nC'dfield)||Temple, John M.|
|Dalkeith, Earl of||Lloyd, lan (P'tsm'th, Langstone)||Thatcher, Mrs. Margaret|
|Davies, Dr. Wyndham (Perry Barr)||Longden, Gilbert||Thompson, Sir Richard (Croydon,S.)|
|d'Avigdor-Goldsmid, Sir Henry||Loveys, Walter H.||Tiley, Arthur (Bradford, W.)|
|Deedes, Rt. Hn. W. F.||Lubbock, Eric||Tweedsmuir, Lady|
|Dodds-Parker, Douglas||Mackenzie, Alasdair (Ross&Crom'ty)||van Straubenzee, W. R.|
|Doughty, Charles||Mackie, George Y. (C'ness & S'land)||Walder, David (High Peak)|
|Errington, Sir Eric||McLaren, Martin||Walker, Peter (Worcester)|
|Eyre, Reginald||McMaster, Stanley||Walters, Dennis|
|Fell, Anthony||McNair-Wilson, Patrick||Ward, Dame Irene|
|Fletcher-Cooke, Charles (Darwen)||Maginnis, John E.||Weatherill, Bernard|
|Fletcher-Cooke, Sir John (S'pton)||Marp[...]es, Rt. Hn. Ernest||Webster, David|
|Foster, Sir John||Mathew, Robert||Whitelaw, William|
|Fraser,Rt.Hn.Hugh(St'fford & Stone)||Maude, Angus||Wills, Sir Gerald (Bridgwater)|
|Fraser, lan (Plymouth, Sutton)||Maxwell-Hyslop, R. J.||Wilson, Geoffrey (Truro)|
|Gammans, Lady||Maydon, Lt.-Cmdr. S. L. C.||Woodnutt, Mark|
|Gilmour, Sir John (East Fife)||Meyer, Sir Anthony||Yates, William (The Wrekin)|
|Glover, Sir Douglas||Mills, Peter (Torrington)||Younger, Hn. George|
|Godber, Rt. Hn. J. B.||Mills, Stratton (Belfast, N.)|
|Goodhew, Victor||Miscampbell, Norman||TELLERS FOR THE NOES:|
|Gower, Raymond||Mitchell, David||Mr. Ian MacArthur and|
|Gresham Cooke, R.||More, Jasper||Mr. Geoffrey Johnson Smith|
|Griffiths, Peter (Smethwick)||Morrison, Charles (Devizes)|