§ Mr. E. Rowlandsasked the Chancellor of the Exchequer if he will make a statement about the liability of companies to tax in respect of short-term gains on assets acquired before Budget day, 1965, following the repeal by Schedule 13 to the Finance Act, 1966, of Section 82 of the Finance Act, 1965.
§ Mr. MacDermotIt was intended to repeal only subsection (1) of Section 82, which was superseded as from 6th April, 1966, from which date all capital gains of companies were brought within the Corporation Tax charge (paragraph 12, 5th Schedule, Finance Act, 1966). By inadvertence, however, the whole of Section 82 was repealed.
If this repeal were allowed to stand a company which, after 5th April, 1966, 180W realised a short term gain on property acquired before 6th April, 1965, would escape tax liability on the gain for the period from the date of acquisition up to 6th April, 1965. Similarly a loss for that period would be unrelieved.
It would not be right to accept these unintended consequences of a drafting error. My right hon. Friend accordingly intends to propose in the coming Finance Bill that the former treatment of these short-term gains should be restored with effect from the beginning of the current year, 1966–67.