House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

177

House of Commons

Tuesday 19 June 2012

Public Bill Committee

New Amendments handed in are marked thus

Amendments which will comply with the required notice period at their next appearance

Finance Bill

(Except Clauses 1, 4, 8, 189 and 209, Schedules 1, 23 and 33,

and any new Clauses and new Schedules first appearing on the Order Paper not later than

Tuesday 17 April 2012 and relating to value added tax)

Note

The Amendments have been arranged in accordance with the Order of the

Committee [24 April 2012].

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—

Public Bill Committee: 19 June 2012
178

Finance Bill, continued

(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—

(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’.

Public Bill Committee: 19 June 2012
179

Finance Bill, continued

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

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—

Public Bill Committee: 19 June 2012
180

Finance Bill, continued

(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.’.

Ed Balls

Rachel Reeves

Cathy Jamieson

Catherine McKinnell

Chris Leslie

195

Clause  151,  page  89,  line  20,  at end add—

‘(7)
Consultation shall be undertaken with interested parties prior to the enactment of

regulations under this section.

(8)
The Chancellor of the Exchequer shall review the impact of the regulations under

this section on friendly societies and shall lay a report of his review in the House

of Commons Library.’.

Ed Balls

Rachel Reeves

Cathy Jamieson

Catherine McKinnell

Chris Leslie

196

Clause  152,  page  90,  line  2,  at end add—

‘(6)
Consultation shall be undertaken with interested parties prior to the enactment of

regulations under this section.

Public Bill Committee: 19 June 2012
181

Finance Bill, continued

(7)
The Chancellor of the Exchequer shall review the impact of the regulations under

this section on friendly societies and shall lay a report of his review in the House

of Commons Library.’.

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

Public Bill Committee: 19 June 2012
182

Finance Bill, continued

(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).

(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

Public Bill Committee: 19 June 2012
183

Finance Bill, continued

(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

the apportioned profit (see subsections (2H) to (4)),

and

(ii)
Q% is to be reduced by the same proportion as P% is

reduced under sub-paragraph (i).

(2B)
Condition D 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).

(2C)
Condition E is met if the following requirement is met in relation to a

time during the relevant corporation tax accounting period.

(2D)
The requirement is that any increase (or any part of any increase) in

the value of the relevant shares which occurs at that time is not (or

would not be) brought into account at step 1 in section 73 of FA 2012

in determining whether CC has an I-E profit for the relevant

corporation tax accounting period.

(2E)
Condition F is met if the following requirement is met in relation to a

time during the relevant corporation tax accounting period.

(2F)
The requirement is that any dividend or other distribution (or any part

of any dividend or other distribution) received at that time by CC from

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

shares is not (or would not be) brought into account at step 1 in section

73 of FA 2012 in determining whether CC has an I-E profit for the

relevant corporation tax accounting period.

(2G)
Condition G is that the assets which represent the relevant interest, or

the part of a relevant interest, during the CFC’s accounting period are

(to any extent) assets held by CC for the purposes of CC’s long-term

business.

(2H)
“The apportioned profit” means 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.’.

David Gauke

49

Schedule  20,  page  433,  line  14,  leave out from ‘under’ to end of line 15 and insert

‘—

(i)
the law of the territory in which the CFC is

incorporated or formed,

(ii)
the articles of association or other document

regulating the CFC, or

(iii)
any arrangement entered into by or in relation to the

CFC,’.



© Parliamentary copyright	Revised 19 June 2012