§ ' .— (1) Subject to subsection (2) below, an amount equal to the aggregate amount of the sums paid by the authority to the successor company under section 4(4) above shall be treated as accumulated realised profits of the successor company.
§ (2) The amount which under subsection (1) above falls to be treated as accumulated realised profits of the successor company shall be—
- (a) increased by any amount by which the asset value on the transfer to the successor company under section 7 above exceeds the liability amount; or
- (b) reduced by any amount by which the liability amount on that transfer exceeds the asset value;
§
(3) In subsection (2) above—
the asset value" means the aggregate value of the assets transferred; and
the liability amount" means the aggregate amount of the liabilities transferred.
§ (4) For the purposes of this section the value of any asset and the amount of any liability transferred to the successor company under section 7 above shall be taken to be its value or amount determined in accordance with any provision made by the scheme under paragraph 9 of Schedule 1 below (transitional provision as to accounts, etc., of the successor company).'.—[Mr. McLoughlin.]
962§ Brought up, and read the First time.
§ Mr. McLoughlinI beg to move, That the clause be read a Second time.
This is a short new clause, intended to make clear the accounting treatment of the net proceeds of sale of a port after the levy on proceeds and any tax liability has been paid. Without such a specific provision, there might have been doubt whether the net proceeds of disposal could be treated as accumulated realised profits of the successor company available for distribution. The new clause makes it clear that that is the case.
§ Mr. BellI am grateful to the Minister for giving that explanation to the House. I read the entire new clause with great perplexity throughout the afternoon. I even missed the statement of the Secretary of State for the Environment on the so-called abolition of the poll tax. I still could not make head nor tail of the new clause.
As I understand it, the Minister said that the new clause defines an asset on which tax has already been paid. When I read the new clause in relation to schedule 1(9), I wondered how I would annotate the Bill for legal publishers and how I would square schedule 1, paragraph 9 with the new clause. I wondered what explanation I would give. Is there a contradiction in terms between schedule 1, where the assets are described, and new clause 4, as explained by the Minister?
§ Mr. McLoughlinI think that the answer to that question is no.
§ Mr. BellThe Minister is improving somewhat on Mark Twain, who, when asked the distance from Nashville to New Orleans on the Mississippi, said with great prompitude that he did not know. I suspect that that was the true answer that the Minister gave. It was with a nod of the heads of the—two, four, six—seven officials in the Box that he was able to give such a prompt answer. In any event, the explanation seems to be that the assets of the port are assets on which taxes have already been paid and on which taxes are not likely to be paid a second time.
§ Mr. PrescottIs new clause 4 in any way related to the new clauses which affect clause 16, in which estimates are made of what the assets are, what will be taxed and what will be the Government's take? I take it that the Minister does not think that that is so.
§ Mr. McLoughlinLet me reassure the hon. Gentleman. This is a fairly technical matter. We shall come to the points that he made, and it is clear that we shall have a long debate on them. The new clause has been tabled simply for the avoidance of doubt and uncertainty and to make clear the accounting treatment of receipts of a somewhat unusual nature, in that they represent part of the purchase price returning to the purchaser. We have sought to clarify that matter.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.