Tax Avoidance

Oral Answers to Questions — National Finance – in the House of Commons on 10th November 1942.

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Photo of Sir George Broadbridge Sir George Broadbridge , City of London

asked the Chancellor of the Exchequer whether his attention has been drawn to a method of avoidance of tax by which persons buy up the shares of companies that hold stocks of certain commodities and use the control so obtained to acquire the commodities at fictitious prices, and to provide for the realisation of the stocks in such a manner as to defeat the claims of the Revenue for the tax due on the profits of sale, a large part of which will in effect have gone to pay for the shares at inflated prices; and if he proposes to take any action to put a stop to such practices?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I am informed by the Commissioners of Inland Revenue that one or two cases of this kind have come to their notice and are under consideration at present in the light of the existing taxation law. The Revenue authorities already possess certain powers to deal with avoidance of taxation, but I should like to give a warning to all concerned that if further powers prove necessary, in relation to these or any other schemes of tax avoidance, I shall ask Parliament to grant them and to grant them with restrospective effect and in such form as to ensure that all the various persons who may have benefited by the transactions will have to pay their share of any tax that may have been lost to the Revenue.