§ Mr. RidleyI beg to move Amendment No. 58, in page 92, leave out lines 29 to 31, and insert:
'shall not exceed 10 per cent. of the nominal value of the shares which make up the balance of the consideration plus 10 per cent. of any amount transferred to the share premium account of the acquiring company in respect of such shares'
§ Amendment No. 59, in page 92, line 48, at end insert:
§ 'or
§ (iii) by a transfer not forming part of a chargeable transaction which is exempt from stamp duty by virtue of section 42 of the Finance Act 1930 (which exempts from duty conveyances and transfers complying with subsection (2) of that section between companies with limited liability, where one owns 90 per cent. of the issued capital of the other or a third owns 90 per cent. of the issued capital of each) so long as during the period of five years referred to in this subparagraph the acquired company remains a 75 per cent, subsidiary or a 90 per cent. subsidiary within the meaning of section 532 of the Taxes Act of the acquiring company or of another company of which the acquiring company is itself such a 75 per cent. subsidiary or 90 per cent. subsidiary'.
§ Mr. RidleyThese are the penultimate amendments, which I am sure we can deal with very briefly. They deal with exemptions from stamp duty in cases of takeovers.
The first is to correct the position which seems to have arisen under an obligation to the EEC. Where a takeover takes place, up to 10 per cent. of the value of the purchase of shares can be in cash without stamp duty being charge able, but that 10 per cent. is based on the nominal value of the shares and not on the market value. This seems unrealistic, and the amendment seeks to change it.
§ Amendment No. 59 relates to the case of the exempt takeover of the sort I have just described and under the Bill, if there is a second transfer of shares within five years, stamp duty could become payable.
§ This can frustrate reorganisation and slow it down. It should not be like that, and the amendment seeks to change the position. Will my hon. Friend accept the principle of these two amendments to alleviate a position that appears to be cramping on business reorganisation?
§ Mr. NottThe first amendment attempts to substitute actual value of the shares of the acquiring company for the nominal value, in determining how much of an offer may be made in cash. My hon. Friend is right in saying that the 1484 requirements embodied in the schedule arise from an EEC directive. The fact is that the nominal value basis which he is seeking to change is a rule arrived at by international agreement by the members of the EEC.
Our negotiators have obtained substantial amendment to obtain relief for mergers and we do not feel that there is a special United Kingdom interest which would justify us in holding out in the negotiations for an actual value basis.
We secured many objectives in the negotiations and they have worked out well for us. We feel that to go back on the narrow point would not be appropriate, having secured our objectives thoroughly in the talks.
I appreciate that in Amendment No. 59 my hon. Friend is seeking to facilitate reorganisations among groups of companies. This is obviously a desirable objective. I can only say that I do not mean to sound obtuse—a word that is being used about me—and I have listened to what my hon. Friend has said. I have taken due note of it. We will look into the point raised under Amendment No. 59.
§ Mr. RidleyI beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.