§ Sir A. POWNALLasked the Chancellor of the Exchequer whether he is aware that Miscellaneous Rule 3 (Schedule D) having been repealed by the Finance Act, 1926, as from 6th April, 1927, and the special relief given by Miscellaneous Rule 3 having been re-established by Sections 31 and 32 of that Act, but only as from April, 1928, there is no Income Tax relief in the case of a transferred business (as opposed to a business permanently discontinued) for the year April, 1927, to April, 1928: and whether he can give the reason for the difference in treatment?
Mr. SAMUELI am aware of the legal position to which my hon. and gallant Friend refers, but I would remind him that under Rule P of Cases I and II of Schedule D, the liability of a taxpayer transferring a business is restricted to the proportion of the liability appropriate to the portion of the year during which he carried on the business. I would also remind him that the new provisions form part of the legislation which changed the basis of assessment for income Tax under Schedule D from the three years' average to the preceding year. As I have previously stated, over the whole field of industry taxpayers have gained very considerably from this change, and while provision has been made, so far as reasonably possible, to meet cases in which, owing to exceptional circumstances, hard-shin might arise, it was impossible to prevent some isolated cases in which a change of this far-reaching character would be unfavourable to the taxpayer.