I beg to move Amendment No. 94, in page 13, line 45, at the end, to insert: (3) For the purposes of the provisions of the Income Tax Acts mentioned in subsection (1) of this section a company shall be deemed to control, directly or indirectly, not less than one-quarter of the voting power in another company if a third company having such control also controls, directly or indirectly, not less than one-half of the voting power in the first-mentioned company. The Clause is generally welcome to industry, particularly to companies having interests abroad, because it provides that a company which controls, directly or indirectly, not less than one-quarter of the voting power in the company paying the dividend can take into account in calculating double taxation relief any foreign tax paid by the latter in respect of its profits.

The difficulty which arises, and towards remedying which the Amendment is put forward, is that companies which have subsidiaries abroad may, for reasons of local taxation, have to vest the owner- ship of the subsidiary in a company specially created for the purpose. They may, therefore, not actually comply with the wording of the Bill, but they are clearly meant to enjoy the relief which the Clause provides.

To give an example of a case in which the parent company controls 20 per cent. and a subsidiary of the parent company controls 20 per cent. of the voting power in the foreign company, as the Bill is drafted the relief would be obtained only in respect of the parent company's 20 per cent. holding. That is not the intention of the Clause.

I do not pretend that the precise form of the Amendment commends itself to the Government draftsman, but I hope that my hon. Friend the Financial Secretary to the Treasury will accept the principle as being fair. The Amendment simply draws attention to a defect in the wording of the Clause which, I hope, my hon. Friend will be able to remedy at a later stage.