§ Mr. Arbuthnotasked the Chancellor of the Exchequer how long he proposes to continue the practice of the Special Commissioners not to give Surtax directions under Section 245, Income Tax Act, 1952, in the case of a trading company which maintains a rate of dividend accepted as reasonable for periods before June, 1947, even though the company's profits have since increased.
§ Mr. P. ThorneycroftI have come to the conclusion that this practice, which was announced by my predecessors in June, 1947, and July, 1948, should now be discontinued. In dealing with accounts made up for periods ending after the date of this Answer, the Special Commissioners will not regard themselves as bound by these statements, but will make directions in appropriate cases by reference to the statutory test, namely, that the company has failed to distribute a reasonable part of its income from all sources, having regard to the current requirements of its business and to such other requirements as may be necessary or advisable for the maintenance and development of that business.