§ Mr. DiamondI beg to move Amendment No. 64, in page 85, line 32, at the end to insert:
§ Exchange of shares and securities under nationalisation Acts: short term gains
§ 12. For the purposes of paragraph 11 of Schedule 9 to the Finance Act 1962 (conversion of securities not to involve any disposal of the old holding or any acquisition of the new holding) 'conversion of securities' shall include any exchange of securities effected in pursuance of the Iron and Steel Act 1967 or any other enactment (including an enactment passed after this Act) which provides for the compulsory acquisition of any shares or securities and the issue of securities or other securities instead.
§ This Amendment is a relieving provision which I am sure will prove acceptable to the House. The background is that under the short-term gains tax of 1962 it was provided that where there was a conversion of shares on a reorganisa- 586 tion that was not to count as a disposal. When we had the Capital Gains Tax, 1965, broadly the same provision was made, but it was added that where there was such a compulsory conversion on nationalisation there also it did not count as a disposal of the shares, but the earlier provisions had not included that fine point.
§ So we have the slight anomaly under which, no contemplation of a nationalisation measure having been taken at the time of the 1962 short-term gains tax provisions, if we did not do anything about it there would be a disposal of shares arising on vesting day concerning the nationalisation of steel.
§ The whole House wants the nationalisation of steel to go through smoothly. Nobody, I am sure, desires that on vesting day the compulsory acquisition of shares should be regarded as a disposal 587 and should give rise to a short-term Capital Gains Tax. Accordingly, this Amendment is proposed so as to include the same provision as in the Capital Gains Tax itself and to remove the question of liability arising on the disposal of shares on vesting day under steel nationalisation.
§ Amendment agreed to.