§ No stamp duty shall be chargeable on any transfer of any unit in an authorised unit trust to which section 59 of this Act applies and under the terms of which the funds of the trust cannot be invested in any investment on the transfer of which ad valorem stamp duty would be chargeable.—[Mr Heddle.]
§ Brought up, and read the First time.
6.15 pm§ Mr. John Heddle (Lichfield and Tamworth)I beg to move, That the clause be read a Second time.
The new clause has the support of the Unit Trust Association which kindly assisted in its drafting and which has done a great deal over the past 20 years to help small savers invest in equity stocks. The objectives of the new clause are to encourage wider share ownership and to open the Government's own funding programme to a much wider market.
Clause 59 enables unit trust managers to operate trusts, authorised by the Department of Trade, investing in gilt-edged and industrial debentures, and such investments are transferred free of ad valorem stamp duty. It therefore seems logical and reasonable that trusts which, under their trust deeds, are permitted to invest only in securities transferred free of 1553 stamp duty should themselves be free of stamp duty.
Otherwise, duty would be paid when a unit was sold back to the trust managers by the unit holders. Margins between the managers' selling prices and buying prices would be unnecessarily widened, and therefore managers would be unlikely to maintain their prices at the lowest possible level permitted by the Department of Trade. Consequently, there would be little chance of the trust being competitive with direct investments and the objective of clause 59 would be nullified.
There is no gain to the trust managers in the granting of the exemption contained in the new clause. I invite Ministers to agree that there will be no loss of revenue to the Government, because clause 59 is a new concept.
§ Mr. LawsonMy hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) paid tribute to the Unit Trust Association, as I do. I hope that my hon. Friend will also pay tribute to the Government, because clauses 59 and 80 are important measures to assist the unit trust movement and the causes of wider share ownership and the interests of small investors—causes in which we profoundly believe.
My hon. Friend has made a good point. I think that the new clause would be an improvement to the Bill. I do not think that he is correct in saying that the cost would be zero, but it would be negligible. I am convinced by his arguments and the case that he put so eloquently; and I recommend that the new clause be accepted.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.