I beg to move, That the Clause be read a Second time.

It is known that finance companies deal normally in shares and stocks of all kinds, and these may be wholly or partly in all kinds of securities. When there is a take-over bid or reconstruction and the company does not voluntarily sell the securities it technically makes a paper profit. In such a case, as I say, there has been no sale whatsoever, but, as the law stands at present, this paper profit is subject to tax, although it is virtually forced on the company, whether it wishes it or not, by the reconstruction or take-over bid, as the case may be.

Such a profit is ignored for the purpose of the capital gains tax passed last year. I consider that that is the right approach to this type of paper profit, and the Government have already recognised this inequality in connection with paper gains on the conversion of their own securities. I would suggest that my new Clause remedies this present inequality, and I hope that the Government will see fit to accept it.