House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Public Bill Committee: 12 June 2012
109

Finance Bill, continued

David Gauke

126

Schedule  13,  page  324,  line  31,  leave out ‘sub-paragraphs (4)(b) to (d) and (7)(b) to

(d)’ and insert ‘sub-paragraph (4)(b) to (d)’.

David Gauke

127

Schedule  13,  page  324,  line  33,  after ‘arrangement’ insert ‘or any other

arrangement’.

David Gauke

128

Schedule  13,  page  328,  line  2,  leave out from second ‘E,’ to end of line 4 and insert

‘makes—

(a)
to the lender, or a person connected with the lender, in order to reverse

the relevant change in relation to the partnership, or

(b)
otherwise to a responsible authority in order to buy out the authority’s

interest in any partnership involved in the asset-backed arrangement.’.

David Gauke

129

Schedule  13,  page  328,  line  25,  leave out from ‘not’ to end of line 30 and insert

‘include a responsible authority.’.

David Gauke

35

Schedule  13,  page  330,  line  33,  leave out from ‘year’ to end of line 35 and insert

‘(but allowing for payments otherwise due to arise on a non-working day to arise on the

next working day),’.

David Gauke

36

Schedule  13,  page  330,  line  49,  at end insert—

‘(4A)
For the purposes of subsection (4)(b) the first payment is to arise no

later than one year after the day on which the advance is paid.’.

David Gauke

37

Schedule  13,  page  333,  line  22,  leave out from ‘year’ to end of line 24 and insert

‘(but allowing for determinations otherwise due to be made on a non-working day to be

made on the next working day),’.

David Gauke

38

Schedule  13,  page  333,  line  40,  at end insert—

‘(4A)
For the purposes of subsection (4)(c) the first determination is to be

made no later than one year after the day on which the advance is

paid.’.

Public Bill Committee: 12 June 2012
110

Finance Bill, continued

David Gauke

39

Schedule  13,  page  336,  line  11,  leave out from ‘year’ to end of line 13 and insert

‘(but allowing for determinations otherwise due to be made on a non-working day to be

made on the next working day),’.

David Gauke

40

Schedule  13,  page  336,  line  29,  at end insert—

‘(4A)
For the purposes of subsection (4)(c) the first determination is to be

made no later than one year after the day on which the advance is

paid.’.

David Gauke

41

Schedule  13,  page  342,  line  17,  at end insert—

    ‘(3)
For the purposes of sub-paragraph (1)(d), in sections 196C(4A), 196E(4A) and

196G(4A) the reference to one year is to be read as a reference to 18 months.’.

David Gauke

130

Schedule  13,  page  343,  line  12,  leave out ‘under’ and insert ‘in connection with’.

David Gauke

131

Schedule  13,  page  343,  line  45,  leave out ‘under’ and insert ‘in connection with’.

David Gauke

132

Schedule  13,  page  344,  line  21,  leave out from ‘including’ to end of line 22 and

insert ‘drawings or distributions from a partnership, payments in respect of the security

and other payments in respect of an asset (as read in accordance with section 776(4)(b) of

CTA 2010).’.

David Gauke

133

Schedule  13,  page  344,  line  25,  at end insert—

  ‘(9A)
For the purposes of sub-paragraphs (3)(a) and (6)(b) a person is entitled to a

payment “in connection with” the asset-backed arrangement if the person is

entitled to the payment directly or indirectly in consequence of the

arrangement or otherwise in connection with the arrangement.’.

David Gauke

134

Schedule  13,  page  344,  line  28,  after ‘arrangement’ insert ‘or any other

arrangement’.

Public Bill Committee: 12 June 2012
111

Finance Bill, continued

David Gauke

135

Clause  126,  page  76,  line  13,  leave out from ‘any’ to end of line 15 and insert

‘relevant non-trading deficit which the company has for the accounting period.’.

David Gauke

136

Clause  126,  page  76,  line  15,  at end insert—

‘(2)
The reference to a relevant non-trading deficit for an accounting period is a

reference to the non-trading deficit which the company would have under section

388 of CTA 2009 (loan relationships and derivative contracts) if credits and

debits given in respect of the company’s creditor relationships (within the

meaning of Part 5 of that Act) were ignored.’.

David Gauke

137

Clause  129,  page  78,  line  19,  at end insert—

‘(5A)
But if there is a difference between—

(a)
the net amount recognised by the transferee in respect of the transfer of

contracts of long-term insurance or contracts made in the course of

capital redemption business, and

(b)
the net amount recognised by the transferor in respect of the transfer of

those contracts,


the amount of the difference is to be taken into account for the purpose of

calculating the BLAGAB trade profit or loss of the transferee for the accounting

period in which those contracts are transferred.

(5B)
The difference is to be taken into account—

(a)
as a receipt (if, when added to the net amount in subsection (5A)(b), the

result is the net amount in subsection (5A)(a)), and

(b)
as an expense (if, when subtracted from the net amount in subsection

(5A)(b), the result is the net amount in subsection (5A)(a)).

(5C)
The net amount recognised by an insurance company in respect of the transfer of

the contracts is determined by subtracting—

(a)
the total amount in respect of liabilities relating to the contracts that is or

would be recognised for the purposes of a balance sheet drawn up at the

relevant time by the company in accordance with generally accepted

accounting practice, from

(b)
the total amount in respect of assets relating to the contracts that is or

would be recognised for those purposes,


and “the relevant time” means the time immediately before the transfer (in the

case of the transferor) and the time immediately after it (in the case of the

transferee).

(5D)
The Treasury may by order amend any of subsections (5A) to (5C).’.

David Gauke

138

Clause  129,  page  78,  line  19,  at end insert—

‘(5E)
This section does not apply to any amount that arises in respect of a transfer so

far as the transfer consists of a with-profits fund transfer.


The reference here to a with-profits fund transfer is a reference to—

Public Bill Committee: 12 June 2012
112

Finance Bill, continued

(a)
a transfer of business from a with-profits fund to a fund that is not a with-

profits fund, or

(b)
a transfer of business from a fund that is not a with-profits fund to a with-

profits fund.’.

David Gauke

139

Clause  130,  page  78,  line  27,  at beginning insert ‘either’.

David Gauke

140

Clause  130,  page  78,  line  28,  at end insert ‘or, if they are, the transfer consists of or

includes a with-profits fund transfer within the meaning of section 129(5E)’.

David Gauke

141

Clause  130,  page  78,  line  31,  leave out ‘business (or part of the business)

transferred’ and insert ‘relevant transferred business’.

David Gauke

142

Clause  130,  page  78,  line  38,  at end insert—

‘(2A)
In subsection (1)(c) “the relevant transferred business” means—

(a)
if the transferor and transferee are not members of the same group of

companies when the transfer occurs, the business (or part of the business)

transferred under the insurance business transfer scheme, and

(b)
if the transfer consists of or includes a with-profits fund transfer, the

business transferred by the with-profits fund transfer.’.

David Gauke

143

Clause  130,  page  78,  line  41,  leave out from ‘apply’ to end of line 42 and insert ‘so

far as section 129(5) applies in relation to the transfer.’.

David Gauke

144

Schedule  16,  page  388,  line  41,  leave out paragraph (c) and insert—

‘(c)
in step 2, for paragraph (a) (together with the “and” at the end of it)

substitute—

“(a)
so much of the amount for the purposes of section

73 of FA 2012 of the adjusted BLAGAB

management expenses of the company for the

period as, on the assumption that the company had

no BLAGAB non-trading loan relationships profits

for the period, could be subtracted at step 6 under

Public Bill Committee: 12 June 2012
113

Finance Bill, continued

that section without producing a negative amount,

and”,’.

David Gauke

145

Schedule  17,  page  417,  line  8,  leave out sub-paragraphs (2) to (5) and insert—

    ‘(2)
Each new holding is treated for the purposes of corporation tax on chargeable

gains as if it were a holding of the company with a base cost and an indexation

allowance as at 1 January 2013 equal to the total of the base costs and

indexation allowances of the old holdings that are carried into the new holding.

      (3)
In the case of securities (“new securities”) comprised in a new holding, the

amount of the base cost or indexation allowance of an old holding that is

carried into the new holding is equal to the proportion which the new securities

derived from the old holding bear to all of the securities comprised in the old

holding.

      (4)
For the purpose of calculating the indexation allowance of a new holding in

respect of any period falling on or after 1 January 2013, it is to be assumed that,

on that date, there had been a disposal of the holding for a consideration of such

amount as would secure that on the disposal neither a gain nor a loss would

accrue to the company.

      (5)
For the purposes of this paragraph—

(a)
references to a base cost are—

(i)
in the case of a section 104 holding, references to the amount

of qualifying expenditure within the meaning of section 110

of TCGA 1992, and

(ii)
in the case of a 1982 holding, references to the amount of

expenditure that would fall to be deducted if the holding were

disposed of,

(b)
references to an indexation allowance are—

(i)
in the case of a section 104 holding, references to the

indexation allowance as found in accordance with section 110

of TCGA 1992, and

(ii)
in the case of a 1982 holding, references to the indexation

allowance within the meaning of Chapter 4 of Part 2 of that

Act,

(c)
the base cost and the indexation allowance of an old holding are

calculated on the assumption that the holding is disposed of

immediately before 1 January 2013,

(d)
“section 104 holding” has the same meaning as in section 104(3) of

TCGA 1992, and

(e)
“1982 holding” has the same meaning as in section 109 of that Act.’.

Public Bill Committee: 12 June 2012
114

Finance Bill, continued

Stephen Williams

Mark Durkan

Caroline Lucas

Ian Swales

2

Clause  180,  page  105,  line  19,  at end add—

‘(2)
Notwithstanding the provisions of Part 4 of Schedule 20, the Schedule will not

come into force until a full impact assessment has been prepared in conjunction

with the Department for International Development reviewing the effect on

developing countries’ tax revenue, and details of aid and technical assistance

being provided to developing countries in order to increase the capability and

technical expertise in their tax regimes to collect the taxes that are due in their

countries, has been laid before and approved by the House of Commons.’.

Mark Durkan

Caroline Lucas

1

Page  105,  line  13,  leave out Clause 180.

David Gauke

46

Schedule  20,  page  428,  line  15,  leave out ‘section’ and insert ‘sections 371BG

and’.

David Gauke

47

Schedule  20,  page  428,  line  46,  leave out ‘to 371BG’ and insert ‘and 371BF’.

David Gauke

48

Schedule  20,  page  430,  line  2,  leave out from beginning to end of line 3 on page

431 and insert—

‘(1)
Subsection (2) applies if conditions A to C are met in relation to a

relevant interest, or a part of a relevant interest, which a chargeable

company (“CC”) has in the CFC at all times during the CFC’s

accounting period.

(2)
Step 5 in section 371BC(1) is to be taken in relation to CC on the

following basis.

(3)
That basis is—

(a)
so much of P% as is attributable to CC having the relevant

interest, or the part of a relevant interest, during the CFC’s

accounting period is to be left out of P%, and

(b)
so much of Q% as is so attributable is to be left out of Q%.

(4)
Condition A is that, at all times during the CFC’s accounting period,

CC has the relevant interest, or the part of a relevant interest, by virtue

of its holding shares (“the relevant shares”) in the CFC (directly or

indirectly).

Public Bill Committee: 12 June 2012
115

Finance Bill, continued

(5)
Condition B is that any increase in the value of the relevant shares at

any time during the relevant corporation tax accounting period is (or

would be) income, or brought into account in determining any income,

of CC chargeable to corporation tax for that period.

(6)
Condition C is that any dividend or other distribution received at any

time during the relevant corporation tax accounting period by CC from

the CFC (directly or indirectly) by virtue of its holding the relevant

shares is (or would be) income, or brought into account in determining

any income, of CC chargeable to corporation tax for that period.

(7)
Subsection (8) applies if—

(a)
CC has the relevant interest, or the part of a relevant interest,

by virtue of section 371OB(3) or (4),

(b)
the CFC is an offshore fund (as defined in section 355) which

does not meet the qualifying investments test in section 493 of

CTA 2009, and

(c)
conditions B and C would be met but for the offshore fund not

meeting that test.

(8)
Conditions B and C are to be taken to be met.

(9)
This section is subject to section 371BH.

371BH
Companies carrying on BLAGAB

(1)
Subsection (2) applies in relation to a chargeable company (“CC”)

if—

(a)
CC carries on basic life assurance and general annuity

business during the relevant corporation tax accounting

period,

(b)
the I-E rules apply to CC for the relevant corporation tax

accounting period, and

(c)
the following are met in relation to a relevant interest, or a part

of a relevant interest, which CC has in the CFC at all times

during the CFC’s accounting period—

(i)
condition D,

(ii)
condition E or F (or both), and

(iii)
condition G.

(2)
An additional sum is charged on CC at step 5 in section 371BC(1) and,

for this purpose, step 5 is to be taken on the following basis.

(2A)
That basis is—

(a)
in paragraph (a) at step 5, the reference to the appropriate rate

is to be read as a reference to—

(i)
the policyholders’ rate of tax under section 102 of FA

2012 applicable to the I-E profit for the relevant

corporation tax accounting period, or

(ii)
if there is more than one such rate, the average rate

over the whole of the relevant corporation tax

accounting period, and

(b)
any reduction of P% or Q% under section 371BG(3) by

reference to any relevant interest of CC is to be ignored, but—

(i)
P% is to be reduced so that it represents only the

policyholders’ share of the BLAGAB component of



© Parliamentary copyright	Revised 12 June 2012