§ Mr. Biffenasked the Chancellor of the Exchequer whether he is aware of a scheme which is intended to produce tax-free gains similar to those which were available on the disposal of certificates of deposit before the enactment of Section 26 of the Finance Act 1973; and if he will take steps to discourage such schemes.
§ Mr. Patrick JenkinYes. The scheme which has been brought to our notice involves the deposit of money at interest with a bank or other borrower, and the subsequent sale of the right to uplift the deposit together with the accrued interest. The Inland Revenue is advised that if there is no written document evidencing the deposit, by the transmission of which the right to uplift may be passed, the sale of the right will not come within the charge imposed by Section 26 of the Finance Act 1973.
This new scheme appears to have no purpose other than to avoid the provisions of Section 26, and I therefore think it right to give notice that we shall propose in the next Finance Bill provisions to bring within the scope of the tax charge a profit made on the disposal of the right to uplift any money deposited after today in so far as that profit is not already liable to tax.