Section 13 lays down the rules for charging a company's chargeable gains to corporation tax as part of its total profits. The chargeable gains will first be reduced by any allowable losses. The net gains will then be reduced by 48 per cent to an amount (52 per cent) which, when charged at the normal corporation tax rate of 50 per cent, will produce the same tax as if the net gains were chargeable at the capital gains tax rate of 26 per cent. Chargeable gains are to be computed in accordance with the principles which apply for purposes of capital gains tax. So we get the 26 per cent by this device.
SECTION 13.
Question proposed: " That section 13 stand part of the Bill."
Do I take it that this does not apply to the sale of assets that are used in the business? These are other assets, trade assets?
This will apply to the sale of assets which are not used in the business, but if business assets are sold and recycled, it will not apply.
Question put and agreed to.
Progress reported; Committee to sit again.
The Committee adjourned at 6.30 p.m. until 11 a.m. on Wednesday, 18th February, 1976.