HC Deb 15 April 1969 vol 781 cc1012-3

In recent weeks, two decisions of the House of Lords have overruled certain interpretations of the law which have long been followed by the Inland Revenue and accepted as reasonable and equitable.

The first concerned the allowance to be made for the expenses of a farmhouse in calculating a farmer's profits, and here I propose to restore the position to that which everybody has understood it to be for many years, so that the deduction allowable will in future be limited to the expenses incurred in the business use of the premises only.

The second dealt with the circumstances under which the Revenue may continue to assess to tax under Section 412 of the Income Tax Act, 1952, income arising from assets which have been transferred abroad. This legislation is an important bulwark against the ingenious efforts of some wealthy individuals to escape their share of the common burden of taxation by sending their assets abroad though all the time retaining real control of the money: here, again, I propose to restore the basis of liability which prevailed before the adverse court decision. But I propose to go further. Certain countries, attracted by the idea of setting themselves up as "tax havens", have had the idea of modifying their trust legislation so as to try to make impossible the application of Section 412 as it was meant to be applied. I shall bring forward provisions in the Finance Bill to counter these manoeuvres.