Yes, indeed, this is Mr. D. This sort of thing goes on quite normally in the world into which we are now venturing.

I am advised that there is a danger of transactions of that sort carried on by associated companies being caught by Clause 17, and it was suggested to me that the particular mischief might be avoided if at the beginning of Clause 17(1,b) after the word "asset" there were inserted the words "not being stock-in-trade of the vendor" to differentiate between the capital goods which we have all been talking about, and to which Messrs. A, B and C have directed their attention, and the end product, the telephone or the lorry or whatever it may be, which might be caught in the mischief of this Clause.

8.15 p.m.

What is the mischief of the Clause? Allowances for tax purposes are limited by the Clause to commercial rentals as defined in subsection (6) which describes commercial rent as the rent which might at the relevant time be expected to be paid under a lease of the assets for the remainder of the anticipated normal working life of the assets, being a rent payable at uniform intervals and at a uniform rate which would afford a reasonable return for its market value at the relevant time… When one turns to the definitions one finds that "anticipated normal working life" has, for any asset, the meaning given for machinery and plant by Section 281(6) of the Income Tax Act, 1952.

Further consultation of the Income Tax Act, 1952, does not produce any sort of answer to what is an anticipated normal working life. In a happy form of drafting and circumlocution the Section says: …'the anticipated normal working life' means, in relation to machinery or plant of any class, the period which might be expected, when machinery or plant of that class is first put into use, to be going to elapse before it is finally put out of use as being unfit for further use, it being assumed that it is going to be used in the normal manner and for the normal extent and is going to be so used throughout that period.