I am much obliged.

This group of Amendments affects what is called the carry-forward of deductions and allowances from one year to another. Clause 17 deals with the case in which the trader owns an asset—plant or machinery—leases it to the other person, who leases it back with the same kind of arrangement of a bunched-up rent. The Clause provides that there shall be allowances only in respect of a commercial rent, not of a bunched-up rent, and commercial rent as defined.

That is the purpose of Clause 17 but, on close examination, there appeared to be a loophole, and it also appeared that some drafting required clarification. Amendments Nos. 55 and 56 are designed to deal with that. As drafted, the Clause permitted carry-forward to a successor in the trade of a person who made excessive rent payments.

Perhaps I may again return to Messrs. A, B and C. If trader A owned plant and leased it to B at a premium of £8,000, and B leased it back to trader A for £3,000 per annum for three years and thereafter at a peppercorn rent or minimal rent, at the end of three years A would have paid £9,000 in rent and his tax reliefs would be limited to, say, £3,000, assuming that a commercial rent was £1,000. Thereafter, the amount available for carry-forward would be £9,000 less £3,000—£6,000. If A carried on leasing at the peppercorn rent he would be allowed the carry-forward at £1,000 per annum and, at the end of 6 years, he would get full relief, but he would have to go on for six years to get that full relief.

But if he sold—enter Mr. C—to C, and C paid to A what was, in effect, a tax-free premium which reflected both the true value of the lease and the tax reliefs that were to be carried forward, it would cause him to pay an inflated price. The purpose of these Amendments is to negative that advantage. The Amendment provides that the carry-forward is disallowed in respect of rental payments to be added to later payments except by the same person under the same lease. If it is the same person and the same lease, the carry-forward is allowed.

Amendments 65 and 66 carry out the same principle where it applies to rent, and close a similar loophole. This seemed to be a proper way of closing that particular loophole, in which it seemed that it could be possible that this disposal of the asset while the peppercorn rent was continuing would produce for that particular person a capital sum that would be inflated and would have avoided any charges upon it. I therefore move the Amendment, which would have the effect of remedying that situation.