§ Dr. Brayasked the Chancellor of the Exchequer whether he will make a statement in the light of the decision of the High Court in the case of Inland Revenue Commissioners v. Montgomery.
§ Mr. Joel BarnettYes. The court held that where the rights to receive compensation under a policy of insurance were assigned there was no liability to capital gains tax on the proceeds. The Finance Act 1965 expressly charges insurance receipts to the tax and it was never the intention that proceeds of the sale of those rights should be exempt. The Inland Revenue will be considering whether 515W there are grounds for an appeal against the High Court decision but my right hon. Friend has decided to include provisions in the spring Finance Bill to ensure that effect is given to the intention of Parliament. The new provisions will apply to all assignments after today of such rights.