§ (1) The provisions of this section shall have effect where—
- (a) a notice of assessment of levy has resulted in an operative assessment of levy, and
- (b) in consequence of the issue of a certificate under Part III of Schedule (Allowance in respect of estate duty) or Part IV of Schedule (Deductions from levy in respect of capital gains tax and corporation tax) to this Act the principal amount of levy specified in the assessment falls to be reconsidered, with a view to its being either reduced or increased.
§ (2) Any person who has paid, or would be liable to pay. levy payable in accordance with the assessment may at any time before the end of the period of six years beginning with the date of service of the notice of assessment ot levy, make an application in writing to the Commission for relief.
§ (3) If, on any application under the last preceding subsection, the Commission find that, by reason of the matters to which the application relates,—
- (a) an allowance or deduction under one of those Schedules falls to be made and was not taken into account in the assessment, or
- (b) such an allowance or deduction taken into account in the assessment falls to be increased.
§ and that accordingly the assessment was excessive or no levy was properly chargeable, the Commission shall give, by way of repayment or otherwise, such relief as is appropriate in the circumstances.
§ (4) Subsections (3) to (5) of section 54 of this Act shall have effect in relation to any application under subsection (2) of this section as they have effect in relation to an application under that section, as if in those subsections any reference to varying the notice of assessment of levy by reducing the principal amount of the levy included a reference to discharging that notice and giving such consequential directions as the Lands Tribunal may determine to be appropriate.
§ (5) If the certificate is a revised certificate issued under paragraph 32 of Schedule (Deductions from levy in respect of capital gains tax and corporation tax) to this Act, and in accordance with that certificate a deduction previously taken into account in the assessment falls to be reduced, section 55 of this Act shall apply as if the circumstances in which the deduction falls to be so reduced were circumstances to which that section applies.
§ (6) In this section any reference to a deduction previously taken into account in the assessment includes a reference to a deduction in respect 1090 of which relief has already been given under subsection (3) or subsection (4) of this section; and anyreference to reducing the principal amount of the levy specified in the assessment shall, where the appropriate reduction would be equal to, or would exceed, that principal amount, be construed as a reference to cancelling it.—[Mr. IVilley.]
§ Brought up, and read the First time.
§ Mr. Willey
I beg to move, That the Clause be read a Second time.
Having added the previous new Clause to the Bill, the House will certainly welcome this new Clause, which is concerned with taking into account a certificate for an allowance or deduction after a notice of assessment has become operative. In other words, the new Clause provides that the assessment can be reopened in these circumstances and the appropriate repayment made. It also deals with the possibility of a revised certificate for a deduction in respect of Capital Gains Tax or Corporation Tax being given. I hope that, with that explanation, the House will accept the new Clause.
§ Mr. Rossi
We welcome the new Clause because it brings a little relief into a generally penal, oppressive and confiscatory Bill. At least here we see that the Commission is seeking to give to itself power, within a period of six years from the assessment of the levy, to make a repayment of the levy if an allowance should have been made against it but if, for one reason or another, the claim was not brought in at the right time. That is my understanding of the object of the new Clause.
However, it requires that two conditions must be fulfilled before the Commission may exercise its discretion in either repaying some of the levy or giving such other relief as it thinks fit. These two conditions are contained in subsection (1) of the new Clause and they are that, first, there must have been an operative assessment of levy and, secondly, a certificate of the kind which we were discussing earlier. That must have been issued by the Commissioners of Inland Revenue. Until those two conditions have been fulfilled, the Commission may not grant relief.
1091 The very fact that the Commission is being given power to grant relief appears to presuppose that a claim for an allowance was not made at the right time; because the Commission is being given six years after the levy in which to grant this relief. Bearing that in mind, the question arises, on looking at the Schedule, whether this can be done. I mentioned this to the Minister a few days ago and I hope that he now has the answer. It is interesting to note that under Part II of the proposed new Schedule "Allowance in respect of Estate Duty" it is stated:(2) A notice of claim may be served either before or after the service of a notice of assessment of levy in respect of the levy in question, but shall not have effect if served after such a notice of assessment of levy has resulted in an operative assessment of levy.Under Clause 47, a notice of assessment of levy becomes an operative assessment within two months of the service of the notice, if no counter notice has been served. We may assume—as we are discussing in the new Clause the circumstances where an allowance has not been claimed at the right time—that a counter notice has not been dealt with and has been overlooked. This means that within two months of the notice of assessment we have an operative assessment of levy. At that moment a notice of claim shall not have effect and, if that is the case, the Commission cannot obtain a certificate from the Commissioners of Inland Revenue to show what the allowance should be. This means that if we do not get a certificate from the Commissioners of Inland Revenue as to what the allowance should be, the proposed new Clause cannot operate at any time two months after the notice of assessment of levy has been served. Why, therefore, do we give the Commission six years in which to apply this relief and why is it barred by the Schedule from giving relief?
There may be a simple answer which I have not been able to see from my study of the provision. As I said, I gave the Minister notice of this question some time ago and I hope that he now has the answer. The Government have gone wrong in this matter of Estate Duty and Capital Gains Tax in trying to give a concession to the Opposition but in being too cheeseparing about it.
1092 In Committee the Opposition raised the question of Estate Duty. We took the view, rightly I believe, that where a family has already had to pay a substantial charge to the State by way of Estate Duty because of the death of the pater familias and where that family, within a short space of time, wishes to sell its house, it should not come in for another 40 per cent. levy on part of the value of that house. The State should not take two lots of duty from a family selling its home within a short space of time after there has been a death and Estate Duty has been paid.
It does not take very much these days for one to be in the 10 per cent. to 20 per cent. Estate Duty bracket and for a substantial chunk to be taken out of the value of a family's home. Our approach to this is that where a death has occurred and Estate Duty has been paid, if the family then wishes to sell its home within a reasonable period—within, say, a year or two of the death—it should be given credit for the Estate Duty it has paid on that house against the amount of levy. In other words, one should be set off against the other. We have not got that.
This could be worded very simply. One would not need a complicated Schedule of 318 lines to work out something like that. Instead, we have a very complicated Schedule with very complicated arithmetical formulae, because what the Government are trying to do is to save the Estate Duty paid on the development value part, and that only. They are trying to give relief only for a small slice of the duty that has already been paid, and not for the whole of it.
That is the basic difference between the two sides on this matter and the reason why the Government mislead themselves into these difficult byways of the law is that they are being far too cheeseparing. They have not regarded this problem in human terms. They have not regarded the position of a family that has had a death and then has to sell its home within a few months. We think that in those circumstances one duty should be offset against the other so that the total duty is not excessive, but the Government do not want to do that at all. They want their full whack of Estate Duty and still have part of the betterment levy. That is 1093 where we differ basically and fundamentally. I am sure that when the country realises what the Government are up to here, it will be solidly behind this side of the House.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.