EXEMPTION FOR FIRST £10,000 OF DEVELOPMENT VALUE

HC Deb 24 June 1976 vol 913 cc1864-5

Mr. Graham Page

I beg to move Amendment No. 239, in page 19, line 11, leave out 'subject to subsection (10) below'.

Mr. Speaker

With this we may discuss the following amendments: No. 237 in page 19, leave out lines 14 to 28 and insert: 'any dealings by the firm shall be treated as dealings by the partners individually and not by the firm as such'. No. 238 in Clause 31, page 53, leave out lines 22 to 29 and insert: 'the partnership shall be treated as a single individual except that any dealings by the partnership with an individual partner shall be treated as dealings by the partners individually'.

Mr. Page

Amendment No. 239 is a paving amendment to Amendments Nos. 237 and 238. Amendment No. 238 merely seeks to make a plain and obvious statement that 'the partnership shall be treated as a single individual except that any dealings by the partnership with an individual partner shall be treated as dealings by the partners individually". One should deal with a partnership as a single individual but there will be problems if the partners deal amongst themselves with the partners individually. That is a straightforward statement which de-confuses Clauses 12 and 31 which we found confusing in Committee. It was difficult to understand how partners will be treated. If one accepts the provisions of Amendment No. 238 and a partnership is treated as an individual, then the partnership receives only one exemption of £10,000 on any dealing. But Amendment No. 237 seeks to make a partnership dealing a transaction by the individual partners for the purposes of Clause 12 which provides for the £10,000 exemption.

Mr. Denzil Davies

We discussed this difficult subject of partnerships in Committee for a considerable length of time. The right hon. Member for Crosby (Mr. Page) will not be surprised that I cannot accept his proposal. The amendment seeks to give each partner a £10,000 slice exemption from the tax in dealings, not between the partners themselves, but with outsiders or third parties. That would mean that a partnership of 20 would get £200,000 whereas a company with the same number of individuals involved would receive only a £10,000 exemption. That would be anomalous. The Bill gives one exemption and treats partnerships as a single body for these purposes. For that reason, and for others which I expressed in Committee, I cannot recommend the House to accept the amendment.

Mr. Page

The Minister has not dealt with Clause 31, which we found confusing. Does he mean that a partnership is to be treated as a single individual, because the clause seems to mean the opposite?

Mr. Denzil Davies

A partnership is treated as a single individual for the purposes of the £10,000 slice exemption in relation to dealings outside the partnership with any other person. It is treated as a group of individuals when the partners deal with each other and each will get the £10,000 slice.

Mr. Page

I beg to ask leave to withdrew the amendment.

Amendment, by leave, withdrawn.