House of Lords Thursday 7 June 2012 CONSIDERATION OF BILL Finance Bill

Page 322, line 39 [Schedule 13], leave out from ‘is’ to end of line 43 and insert
‘“completed”—

(b) if earlier, when no responsible authority is any longer entitled
(conditionally or unconditionally) to any payments in connection with
the asset-backed arrangement.

(7) “Responsible authority” means—

(a) the persons who from time to time are the trustees of the relevant
scheme, or

(b) the persons who from time to time are the persons controlling the
management of the relevant scheme,

in their capacity as such.

(8) A responsible authority is entitled to a payment “in connection with” the asset-
backed arrangement if it is entitled to the payment directly or indirectly in
consequence of the arrangement or otherwise in connection with the
arrangement.’.

(a) when the share in the partnership’s profits of the person involved in the
relevant change is no longer to be determined under the asset-backed
arrangement (conditionally or unconditionally) by reference (wholly
or partly) to payments in respect of the security, or

(6) In sub-paragraph (5)(b) the reference to payments are to payments of any type
including 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).

Page 323, line 7 [Schedule 13], leave out ‘(2)’ and insert ‘(3)’.

Page 323, line 11 [Schedule 13], leave out sub-paragraph (2).

Page 323, line 17 [Schedule 13], leave out from ‘which’ to ‘the’ in line 18 and insert
‘a responsible authority is entitled in connection with’.

Page 323, line 38 [Schedule 13], leave out sub-paragraphs (5) to (7).

Page 324, line 25 [Schedule 13], leave out ‘and (6) and (7)’.

Page 324, line 26 [Schedule 13], leave out from ‘including’ to end of line 27 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).’.

Page 324, line 28 [Schedule 13], leave out sub-paragraph (9).

Page 324, line 31 [Schedule 13], leave out ‘sub-paragraphs (4)(b) to (d) and (7)(b) to
(d)’ and insert ‘sub-paragraph (4)(b) to (d)’.

Page 324, line 33 [Schedule 13], after ‘arrangement’ insert ‘or any other
arrangement’.

Page 328, line 2 [Schedule 13], leave out from second ‘E,’ to end of line 4 and insert
‘makes—

(b) otherwise to a responsible authority in order to buy out the authority’s
interest in any partnership involved in the asset-backed arrangement.’.

(a) to the lender, or a person connected with the lender, in order to reverse
the relevant change in relation to the partnership, or

Page 328, line 25 [Schedule 13], leave out from ‘not’ to end of line 30 and insert
‘include a responsible authority.’.

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

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

Page 344, line 21 [Schedule 13], 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).’.

Page 344, line 25 [Schedule 13], 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.’.

Page 344, line 28 [Schedule 13], after ‘arrangement’ insert ‘or any other
arrangement’.

Page 76, line 13 [Clause 126], leave out from ‘any’ to end of line 15 and insert
‘relevant non-trading deficit which the company has for the accounting period.’.

Page 76, line 15 [Clause 126], 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.’.

Page 78, line 19 [Clause 129], at end insert—

(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).’.

‘(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.

Page 78, line 19 [Clause 129], 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—

a transfer of business from a with-profits fund to a fund that is not a with-
profits fund, or

a transfer of business from a fund that is not a with-profits fund to a with-
profits fund.’.

Page 78, line 27 [Clause 130], at beginning insert ‘either’.

Page 78, line 28 [Clause 130], 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)’.

Page 78, line 31 [Clause 130], leave out ‘business (or part of the business)
transferred’ and insert ‘relevant transferred business’.

Page 78, line 38 [Clause 130], 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.’.

Page 78, line 41 [Clause 130], leave out from ‘apply’ to end of line 42 and insert ‘so
far as section 129(5) applies in relation to the transfer.’.

Page 388, line 41 [Schedule 16], 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
that section without producing a negative amount,
and

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

(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.

‘(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.

(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.’.

Page 436, leave out lines 36 and 37 and insert ‘by a UK connected
company.

“(3) In subsection (2)(b)(ii)—

“services” does not include services provided as part of insurance
business, and

“UK connected company” means—

Page 451, leave out lines 43 and 44 and insert ‘by a UK connected
company.

“(2A) In subsection (2)(b)(ii)—

“services” does not include services provided as part of insurance
business, and

“UK connected company” means—

Page 211, line 14 [Schedule 6], leave out ‘in consequence’ and insert ‘, nor any
money raised by the issue spent, in consequence or anticipation’.

Page 211, leave out lines 17 to 27 and insert—

(aa) that activity is the relevant qualifying business activity,’.

‘(a) the main purpose, or one of the main purposes, of the arrangements is to
secure—

(i) that a qualifying business activity is or will be carried on by the
issuing company or a qualifying 90% subsidiary of that
company, and

(ii) that one or more persons (whether or not including any party to
the arrangements) may obtain relevant tax relief in respect of
shares issued by the issuing company which raise money for the
purposes of that activity or that such shares may comprise part of
the qualifying holdings of a VCT,

Page 211, line 33 [Schedule 6], leave out from ‘is’ to end of line 34 and insert ‘, in
the course of the arrangements, paid to or for the benefit of a relevant person or relevant
persons.’.

Page 211, line 36 [Schedule 6], after ‘that’ insert ‘the whole or greater part of’.

Page 211, line 38 [Schedule 6], leave out from ‘by’ to end of line 39 and insert ‘a
relevant person or relevant persons.’.

Page 212, line 6 [Schedule 6], at end insert—

‘“relevant person” means a person who is a party to the arrangements or a
person connected with such a party;’.

Page 248, leave out lines 20 and 21.

Page 248, leave out lines 24 and 25.

Page 258, line 20 [Schedule 6], at end insert—

(1) Schedule 4 (index of defined expressions) is amended as follows.

(2) Insert the following entries at the appropriate places—

(3) In the entry for “control”, in the second column, after “257(3),” insert
“257HJ(3),”.’

Page 261, line 16 [Schedule 7], leave out ‘in consequence’ and insert ‘, nor any
money raised by the issue employed, in consequence or anticipation’.

Page 261, leave out lines 19 to 29 and insert—

(aa) that activity is the relevant qualifying business activity,’.

‘(a) the main purpose, or one of the main purposes, of the arrangements is to
secure—

(i) that a qualifying business activity is or will be carried on by the
issuing company or a qualifying 90% subsidiary of that
company, and

(ii) that one or more persons (whether or not including any party to
the arrangements) may obtain relevant tax relief in respect of
shares issued by the issuing company which raise money for the
purposes of that activity or that such shares may comprise part of
the qualifying holdings of a VCT,

Page 261, line 35 [Schedule 7], leave out from ‘is’ to end of line 36 and insert ‘, in
the course of the arrangements, paid to or for the benefit of a relevant person or relevant
persons.’.

Page 261, line 38 [Schedule 7], after ‘that’ insert ‘the whole or greater part of’.

Page 261, line 40 [Schedule 7], leave out from ‘by’ to end of line 41 and insert ‘a
relevant person or relevant persons.’.

Page 262, line 10 [Schedule 7], at end insert—

‘“relevant person” means a person who is a party to the arrangements or a
person connected with such a party;’.

Page 266, line 33 [Schedule 7], leave out ‘in consequence’ and insert ‘, nor any
money raised by the issue employed, in consequence or anticipation’.

Page 266, line 36 [Schedule 7], leave out from beginning to ‘and’ in line 8 on page
267 and insert—

(aa) that activity is the relevant qualifying business activity,’.

‘(a) the main purpose, or one of the main purposes, of the arrangements is to
secure—

(i) that a qualifying business activity is or will be carried on by the
company or a qualifying 90% subsidiary of the company, and

(ii) that one or more persons (whether or not including any party to
the arrangements) may obtain relevant tax relief in respect of
shares issued by the company which raise money for the
purposes of that activity or that such shares may comprise part of
the qualifying holdings of a venture capital trust,

Page 267, line 13 [Schedule 7], leave out from ‘is’ to end of line 14 and insert ‘, in
the course of the arrangements, paid to or for the benefit of a relevant person or relevant
persons.’.

Page 267, line 16 [Schedule 7], after ‘that’ insert ‘the whole or greater part of’.

Page 267, line 18 [Schedule 7], leave out from ‘by’ to end of line 19 and insert ‘a
relevant person or relevant persons.’.

Page 267, line 36 [Schedule 7], at end insert—

‘“relevant person” means a person who is a party to the arrangements or a
person connected with such a party;’.

Page 271, line 30 [Schedule 8], leave out ‘in consequence’ and insert ‘, nor any
money raised by the issue employed, in consequence or anticipation’.

Page 271, line 33 [Schedule 8], leave out from beginning to end of line 1 on page
272 and insert—

(aa) that qualifying activity is the relevant qualifying activity by reference to
which the requirement in section 293(1)(b) (money raised to be
employed within two years for relevant qualifying activity) is met in
relation to the relevant holding,’.

‘(a) the main purpose, or one of the main purposes, of the arrangements is to
secure—

(i) that a qualifying activity is or will be carried on by the relevant
company or a qualifying 90% subsidiary of that company, and

(ii) that shares or securities issued by the relevant company may be
comprised in any company’s qualifying holdings or that one or
more persons may obtain relevant tax relief in respect of such
shares which raise money for the purposes of that qualifying
activity,

Page 272, line 7 [Schedule 8], leave out from ‘is’ to end of line 8 and insert ‘, in the
course of the arrangements, paid to or for the benefit of a relevant person or relevant
persons.’.

Page 272, line 10 [Schedule 8], after ‘that’ insert ‘the whole or greater part of’.

Page 272, line 11 [Schedule 8], leave out ‘business’.

Page 272, line 12 [Schedule 8], leave out from ‘by’ to end of line 13 and insert ‘a
relevant person or relevant persons.’.

Page 272, line 26 [Schedule 8], at end insert—

‘“relevant person” means a person who is a party to the arrangements or a
person connected with such a party;’.

Page 272, leave out lines 27 to 31 and insert—

‘“qualifying activity” has the same meaning as in section 291;”.