(Supplementary Provisions as to Duties Relating to Betting and Gaming.)
Amendment made: In page 65, line 5, leave out “on” .—[Mr. MacDermot.].
(Amendments of Corporation Tax Acts.)
I beg to move, Amendment No. 113, in page 79, line 6, to leave out from “effect” to the end of line 20.[column 1626]
The Deputy Chairman
We can discuss at the same time Amendment No. 54, page 79, line 9, leave out from “and” to end of paragraph and insert:
“the words ‘or from general annuity business at the end of that subsection shall be omitted” ;
Amendment No. 55, page 79, line 26, leave out “franked investment income” and insert:
“distributions of companies resident in the United Kingdom” .
[column 1627]and Amendment No. 56, page 79, line 40, at end insert:
(5) In section 69(5) of the Finance Act 1965 the word “them” in line 10 shall be omitted and the words “franked investment income” inserted.
This Amendment and the associated Amendments relate to relieving measures affecting life insurance companies. Of all the complexities one comes across in taxation, insurance companies are without question the most complex. I would therefore deal with the major principle and then, if the House wishes, make a quarter-of-an-hour speech explaining the technicalities.
The normal arrangement with regard to dividends paid by a subsidiary company to the parent company is that the subsidiary company pays its Corporation Tax, and there is no further tax paid on the income transferred to the parent company so long as it remains within the parent company and is not further distributed by that parent company to its shareholders. What is proposed with regard to life annuity business of insurance companies is that the same principle should apply. It does not apply at the moment. I hope that the House will agree that it should apply.
I am glad that the Government have brought forward this series of Amendments. They have been urged on them for some time. They were on the Notice Paper in Committee in the names of my right hon. Friends and myself, and they have been on the Notice Paper for the Report stage. They substantially meet the point that there should not be a double charge to Corporation Tax on companies doing general annuity business.
Amendment agreed to.