§ Mr. Bostonasked the Chancellor of the Exchequer, in view of the fact that the charge of Income Tax under Schedule F on a transfer of assets from a company to its members at less than market value can be an obstacle to the reorganisation of groups of companies, if he will introduce legislation to remove the charge.
§ Mr. DiamondI am aware of this difficulty which arises from paragraph 1(2) of Schedule 11 to the Finance Act 1965. I shall propose in due course that this provision be amended so as not to charge Schedule F tax on a transfer of assets by a subsidiary company to a parent company in cases where the companies could make an election to have dividends paid gross. Meanwhile the Board of Inland Revenue are arranging that assessments to Schedule F tax will not be made in such cases.