HC Deb 06 July 1971 vol 820 c1115
16. Mr. Evelyn King

asked the Chancellor of the Exchequer if he will seek to amend the law in order to relieve from capital gains tax those whose property is purchased by compulsion.

Mr. Patrick Jenkin

I have noted my hon. Friend's view, but I do not consider that such a change would be justified.

Mr. King

Would my hon. Friend agree that to take away a man's house by force is in any event unkind, and for the State to argue thereafter that, even though he did not want to sell the house, there would have been a profit if he had wanted to sell it, and to take that profit on the basis of that illusion reduces the compensation, which in any case is usually inadequate? Is not this rather much, even for the Treasury?

Mr. Jenkin

The Treasury does no such thing. On the contrary, we do not take the profit. We charge capital gains tax on profit. If one is charging a gains tax on realised gains, one cannot look at the circumstances in which the gains arise in order to determine the taxability of the transaction. One would be in great difficulty, for example, in making a distinction in the case of a shareholder in a company where majority control was won and he was bought out by the majority shareholder. I do not see how one can draw a distinction.