Mr. H. Wilson
asked the Chancellor of the Exchequer if he is aware of the uncertainty in industry and commerce about the form of agreement required by the Board of Inland Revenue in respect of subventions made between associated companies under Section 20 of the Finance Act, 1953; and if he will take an early opportunity of clarifying the position, if necessary by legislation.
§ Mr. R. A. Butler
I am not aware that there is uncertainty about the form of agreements of this kind. If the right hon. Gentlemen has any particular case in mind I will gladly look into it if he will let me have the necessary details.144W
The position generally is that such an agreement is not required by the Inland Revenue to be made in any specified form. To qualify as a subvention payment a payment must, however, be made under an agreement providing for the paying company to bear or share in losses or a particular loss of the payee company. The payment must accordingly be made in pursuance of a contract, as distinct from being, for example, a mere uncovenanted gift.