§ Mr. BishopI beg to move Amendment No. 1, in page 2, line 26 at end insert—
'(8) Any gain accruing to the Board in consequence of subsection (1) above shall not be a chargeable gain for the purposes of corporation tax on chargeable gains.'The amendment provides for the exemption of the Sugar Board from the liability to pay corporation tax on chargeable gains when its assets are transferred to my right hon. Friend, as provided for under Clause 1(1).It will be known that the purpose of the clause is to transfer to the Minister the assets and liabilities of the board, and to provide for the dissolution of the board on a day to be appointed by the Minister. Such a transfer would normally be a chargeable gain liable to corporation tax. That would generate a significant tax liability.
The major asset to be transferred is the board's holding of 2½million shares in the British Sugar Corporation. As the board's liabilities will be transferred to the Minister at the same time as the assets, any tax liability would fall upon the Exchequer.
The point I am making is that the Exchequer would pay the Minister so that he could pay the Inland Revenue tax which would then return to the Exchequer. On these grounds it is proposed that there should be no liability to pay corporation tax on chargeable gains on the transfer of shares.
This would not be the first occasion on which a public body has been granted exemption from corporation tax on chargeable gains. The exemption was given to the United Kingdom Atomic Energy Authority in 1970.
§ Mr. WigginLike many other hon. Members I have been privileged on many occasions to waste a considerable amount of time on the Floor of the House, but to be debating an amendment that precludes a Government Department from charging itself tax is the height of Gilbert and Sullivan.
In Committee the Minister said:
As I have made quite clear, the orders under the clause will not authorise any new 1383 Exchequer expenditure"—[Official Report, Standing Committee C; 16th December 1976. c. 76.]It is true that the hon. Gentleman was then talking about something slightly different, but we did not imagine that there would be a tax liability to his Department that would have to go back to the Treasury.I have not had the privilege of being in Her Majesty's Government, but I understand from my hon. Friends and colleagues who have that in all circumstances the Treasury should be kept at bay. We shall gladly join in such an exercise with the Minister of Agriculture, Fisheries and Food. We have no intention of opposing this minor amendment.
§ Amendment agreed to.