Will the Minister explain how the marginal allowance works?
Committee on Finance. - Finance Bill, 1951—Committee and Report Stage.
Sections 1 to 3, inclusive, agreed to.
SECTION 4.
Question proposed: "That Section 4 stand part of the Bill."
That is not so easy. If the Deputy will look at paragraph (b) of sub-section (1), he will see that it provides that where an individual who would, but for the fact that his total income exceeds £500, be entitled to an allowance, he shall be entitled to have the amount of the income-tax payable in respect of his total income reduced, where necessary, so as not to exceed a sum equal to the sum of the two following amounts, the amount which he would have paid if his income did not exceed £500 and the amount which would be payable, in fact, if the rate of charge upon the income in excess of £500 were to be 10/- in the pound. The position, accordingly, will be that proportionately to the amount of other allowances which he may receive whether as a single or as a married man, the relief will taper off until it completely disappears for all cases. For instance, it will disappear in the case of a single person who has an income of about £685 and is entitled to no other allowances. If a person is married, and has other allowances, the relief will taper off much more rapidly.
Question put and agreed to.
Section 5 agreed to.
SECTION 6.
Question proposed: "That Section 6 stand part of the Bill."
As this section deals with the Conversion Bill, would the Minister answer the question I asked relating to that Bill, as to whether the power to exempt the bonus from income tax should be included here?
So far as the exemption of bonus is concerned, it does not require legislation. In the ordinary way, profits made by people who habitually deal in stocks and shares would be liable to income-tax, but Section 6 which is a relieving provision now enables them to claim, if they so desire, that the bonus will not be taken into account until the actual conversion stock has been realised. So far as ordinary individuals are concerned, it is not necessary to have any provision exempting their bonus from income-tax.
Does this section include postponement of taxation for an investment company on the bonus as well as on the stock until the stock is realised?
Yes.
The word "bonus" is not mentioned in the section.
Is it not the position that the bonus becomes subject to income-tax in the hands of an investment institution, only in the event of the security being realised at a price which yields the investment institution a profit?
Yes.
If the price should deteriorate in the meantime the bonus becomes extinguished?
The loss on realisation is allowed after taking into account the bonus. It is not always easy to find a solitary word in a long section but Deputy Sweetman stated that the word "bonus" does not appear in the section. It does appear in line 13.
Question put and agreed to.
Sections 7 to 10 inclusive agreed to.
SECTION 11.
Question proposed: "That Section 11 stand part of the Bill."
Would the Minister explain this section?
I think I have already explained it on the Second Stage but it was not a very detailed explanation. As will be seen, the main purpose of the section is to amend Section 74 and Section 95 of the Spirits Act, 1880, which apply to liqueurs which, I am told by those who are familiar with the technique, are a form of compounded spirits. Spirits of this type made in the State and intended for home consumption may be deposited under the section in bond on drawback duty. The section also revokes sub-section (4) of Section 95 of the Spirits Act, 1880, which provides that no compounded spirits of a strength exceeding 11 degrees over-proof may be warehoused on drawback for home consumption. Sub-section (3) amends sub-section (5) of Section 95 of the Spirits Act of 1880 so as to permit the warehousing on drawback in bottle of certain forms of compounded spirits which could otherwise be so warehoused only in cask. That is in fact the principal provision. The purpose is to enable manufacturers of these liqueurs to bottle them and maintain a stock in bond without having to pay duty until such time as the liqueurs are released from bond for the purposes of consumption.
It will mean that the liqueurs when consumed are more mature?
Yes, not that I have found that of any consequence in connection with compounded spirits in bottle.
Question put and agreed to.
Sections 12 to 24 inclusive, and the First Schedule agreed to.
SECOND SCHEDULE.
Question proposed: "That the Second Schedule be the Second Schedule to the Bill."
Would the Minister explain how the repeals of the subsections of the two Acts mentioned are to be effected.
They are consequential on Section 14. This is of course the schedule referred to in Section 22. Section 22, with the Second Schedule, provides that Section 16 (3) of the Finance Act of 1894 and Section 13 (2) of the Finance Act, 1914, are to be repealed in relation to the estates of persons dying after the 2nd May, 1951. The reason for these repeals is that Section 14 substitutes new provisions for those repealed. I should like to emphasise, because the question has been put to me, that the new section applies only to the estates of persons dying after 2nd May, 1951. That is the date on which the Budget was introduced. The estate of any person dying before that date will be chargeable at the old rate of duty. Death must have taken place after the 2nd May in order that the estate may-become entitled to the benefits of Section 14.
Question put and agreed to.
Title agreed to.
Bill reported without amendment.
Question: "That the Bill be received for final consideration"—put and agreed to.
Ordered: That the Final Stage be taken at 1 p.m.