§ Sir W. Smithers
asked the Chancellor of the Exchequer if he will investigate and introduce legislation to ensure that when fixing a farmer's profits for Income Tax purposes, premiums for insurance on agricultural products, his stock in trade, are allowed as items of expenditure, if the policy moneys received under the policies are to be charged as items of receipts, and if there is no claim under the policy.
§ Sir J. Anderson
The normal taxation rule in regard to insurance of trading stocks, which applies to the general68W scheme for insurance of trading commodities under the War Risks Insurance Act, 1939, is that the premium is allowable as a deduction and any policy monies received are treated as a trading receipt. Farming stocks are, however, not dealt with under the general scheme but are specially covered by policies issued under Part II of the War Damage Act of 1943. While the policy monies are liable under the general rule, Section 113 of that Act expressly provides that the premium payable is not to be a deduction for taxation purposes. It was with full knowledge that the premium would not be allowed as a deduction that it was decided to insure farming stocks under Part II of the War Damage Act and thereby secure for the farmer in addition to other advantages the benefit of a lower premium than is paid by the ordinary trader. I see no reason to alter the existing position under which farmers in general gain as compared with the ordinary trader.