House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

1179

House of Commons

Wednesday 17 April 2013

Committee of the whole House

New Amendments handed in are marked thus

Finance (No. 2) Bill

(Clauses 1, 3, 16, 183, 184 and 200 to 212; Schedules 3 and 41; any new Clauses, and any new

Schedules, first appearing on the Order Paper not later than Tuesday 16 April 2013 and

relating to tax measures concerning housing; and any new Clauses, and any new Schedules,

relating to value added tax or the bank levy or air passenger duty or the subject matter of

Clauses 1 and 16 and Schedule 3 or the subject matter of Clause 3 or the subject matter of

Clauses 203 to 212 and Schedule 41)

Note

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

[15 April 2013].

New Clauses and new Schedules relating to tax measures concerning

housing

Government housing market support (second homes)

Ed Balls

Chris Leslie

Catherine McKinnell

Cathy Jamieson

NC1

To move the following Clause:—

‘HM Government shall provide a report to Parliament within three months of the

passing of this Act on the availability of government housing market support as

part of the tax system to those seeking to purchase a second home and plans to

prevent this.’.

Committee of the whole House: 17 April 2013
1180

Finance (No. 2) Bill continued

Mansion tax

Ed Balls

Cathy Jamieson

Chris Leslie

Catherine McKinnell

NC5

To move the following Clause:—

‘The Chancellor shall review the possibility of bringing forward a mansion tax on

properties worth over £2 million and publish a report, within six months of the

passing of this Act, on how the revenue could be used to fund a tax cut for

millions of people on middle and low incomes as part of a fair tax system.’.

Availability of affordable housing

Ed Balls

Cathy Jamieson

Chris Leslie

Catherine McKinnell

NC6

To move the following Clause:—

‘The Chancellor of the Exchequer shall provide a report to Parliament within six

months of the passing of this Act on the effect on the availability of affordable

housing of the tax system and of Regulation 5 of the Housing Benefit

(Amendment) Regulations 2012.’.

Ed Balls

Chris Leslie

Catherine McKinnell

Cathy Jamieson

2

Clause  200,  page  118,  line  22,  at end add—

‘(14)
The Chancellor of the Exchequer shall review the possibility of incorporating a

bank payroll tax within the bank levy and publish a report, within six months of

the passing of this Act, on how additional revenue raised would be invested to

create new jobs and tackle unemployment.’.

Committee of the whole House: 17 April 2013
1181

Finance (No. 2) Bill continued

New Clauses and New Schedules relating to the subject matter of Clauses

203 to 212 and Schedule 41

General anti-tax-avoidance principle

Mr Michael Meacher

Caroline Lucas

Michael Connarty

Mr Frank Field

Kelvin Hopkins

John McDonnell

NC7

To move the following Clause:—

‘(1)
This Part has effect for the purpose of counteracting tax advantages arising from

tax arrangements that are considered to embrace tax-avoidance.

(2)
The principles included in this Part are collectively to be known as the “general

anti tax-avoidance principle”.

(3)
The general anti-tax avoidance principle applies to the following taxes:

(a)
income tax,

(b)
corporation tax, including any amount chargeable as if it were

corporation tax or treated as if it were corporation tax,

(c)
capital gains tax,

(d)
petroleum revenue tax,

(e)
inheritance tax,

(f)
stamp duty land tax,

(g)
value added tax, and

(h)
annual tax on enveloped dwellings.’.

Meaning of ‘tax arrangements’

Mr Michael Meacher

Caroline Lucas

Michael Connarty

Mr Frank Field

Kelvin Hopkins

John McDonnell

NC8

To move the following Clause:—

‘(1)
Arrangements are “tax arrangements” if, having regard to all the circumstances,

it would be reasonable to conclude that the obtaining of a tax advantage as a result

of tax avoidance was the main purpose, or one of the main purposes, of the

arrangements.

(2)
Arrangements are not tax arrangements if:

(a)
the arrangement was specifically permitted by legislation or regulation

relating to any of the taxes referred to in section [General anti tax-

avoidance principle] (3) or is clearly consistent with principles on which

Committee of the whole House: 17 April 2013
1182

Finance (No. 2) Bill continued

the taxes referred to in section [General anti tax-avoidance principle] (3)

are based whether express or implied,

(b)
the advantaged party shows that the arrangement was neither designed

nor carried out with the intention of achieving a tax advantage and that

no step or feature was included in or omitted from it with that intention.’.

Meaning of ‘tax avoidance’

Mr Michael Meacher

Caroline Lucas

Michael Connarty

Mr Frank Field

Kelvin Hopkins

John McDonnell

NC9

To move the following Clause:—

‘(1)
Arrangements represent “tax avoidance” if, having regard to all the

circumstances, it would be reasonable to conclude that tax is not paid—

(a)
by the right person, or

(b)
at the right time, or

(c)
in the right place, or

(d)
under the charging provisions of the right tax, or

(e)
at all when it would appear right that it was due, or

(f)
in any combination of the circumstances noted in (a) to (e).

(2)
In subsection (1) an arrangement is considered “right” when the economic

substance of that arrangement giving rise to a potential charge to tax under any

one or more of the taxes referred to in section [General anti-tax-avoidance

principle] (3) of this Part accords with the form in which that arrangement is

declared for assessment for taxation purposes whether in the United Kingdom or

elsewhere with non-declaration of a potential charge to tax on the economic

substance of a transaction in the United Kingdom as a result of the form adopted

for its completion being considered a tax declaration for the purposes of this

section.

(3)
For the purposes of subsection (2) the economic substance of an arrangement

does not accord with the economic form in which that arangement is declared for

taxation purposes if having regard to all the circumstances:

(a)
one or more of the parties to the arrangement cannot reasonably have

been included as a party to it without the securing of a tax advantage

having been an objective,

(b)
the contractual form of the arrangement cannot reasonably have been

adopted without the securing of a tax advantage having been an

objective,

(c)
the location in which the arrangement is recorded as having occurred

cannot reasonably have been decided upon without the securing of a tax

advantage having been an objective;

(d)
the timing of the arrangement cannot reasonably have been decided upon

without the securing of a tax advantage having been an objective;

(e)
the arrangement has as one or more of its objectives the declaration of a

transaction for assessment under the provisions of one of the taxes

Committee of the whole House: 17 April 2013
1183

Finance (No. 2) Bill continued

referred to in section [General anti-tax-avoidance principle] (3), or none

of them, when declaration under the provisions of another of those taxes

would seem more appropriate,

(f)
the arrangement represents a transaction as relating to capital when it

would appear to related to income,

(g)
the arrangement represents a transaction as being income derived from

capital when it would appear to be derived from the profits of a trade or

employment,

(h)
the arrangement appears to be without economic substance,

(i)
the arrangement cannot be regarded as a reasonable course of action

having taken into consideration—

(i)
any relevant tax provisions,

(ii)
the substantive results of the arrangements, and

(iii)
any other arrangements of which the arrangements form a part.

(j)
Any party to the arrangement has stated that an objective of structuring

the arrangement in the form adopted was the securing of a tax advantage.

(4)
In subsection (3) “taxation purposes” includes—

(a)
any action required to comply with the obligations of any legislation or

regulation relating to any of the taxes referred to in section [General anti-

tax-avoidance principle] (3) or their administration or assessment

notwithstanding any deficiency or shortcoming in them that the

arrangement is meant to exploit,

(b)
any principles on which the taxes referred to in section [General anti-tax-

avoidance principle] (3) are based whether express or implied,

(c)
the policy objectives of the taxes referred to in section [General anti tax-

avoidance principle] (3).’.

Meaning of ‘tax advantage’

Mr Michael Meacher

Caroline Lucas

Michael Connarty

Mr Frank Field

Kelvin Hopkins

John McDonnell

NC10

To move the following Clause:—

‘(1)
A “tax advantage” may be considered to have arisen for the purposes of this Part

if:

(a)
the arrangement results in an amount of income, profits or gains for tax

purposes that is significantly less than the amount for economic

purposes,

(b)
the arrangement results in deductions or losses of an amount for tax

purposes that is significantly greater than the amount for economic

purposes,

(c)
the arrangement results in a claim for the repayment or crediting of tax

(including foreign tax) that has not been, and is unlikely to be, paid,

Committee of the whole House: 17 April 2013
1184

Finance (No. 2) Bill continued

(d)
the arrangements involve a transaction or agreement the consideration

for which is an amount or value significantly different from market value

or which otherwise contains non-commercial terms,

(e)
the arrangement results in an amount of income, profits or gains tax

purposes being assessed for tax purposes upon a person who appears to

have less ecomonic claim upon that income, profit or gain than another

person who would have greater taxation liability due upon it if they were

assessed to that income, profit or gain for tax purposes,

(f)
the arrangement results in an amount of income, profit or gain being

subject to a tax other than that which the economic substance of the

arrangement would suggest appropriate with less tax being due as a

result,

(g)
the arrangements results in an amount of income, profit or gain being

subject to tax assessment in a jurisdiction other than the United Kingdom

when the economic substance of the arrangement would suggest that

inappropriate whether or not more or less tax is due in that other place or

not,

(h)
the arrangement results in a lower rate of tax being applied to the income,

profit or gain than might otherwise have been the case,

(i)
the arrangement results in tax being paid later than might otherwise have

been the case,

(j)
any combination of the circumstances referred to in subsection (a) to (i).’.

(2)
Subsection (1) is not to be read as limiting in any way the cases in which tax

arrangements might give rise to a tax advantage.

(3)
A tax advantage may, without limitation , be indicated to have arisen by the

existence of:

(a)
relief or increased relief from tax,

(b)
repayment or increased repayment of tax,

(c)
avoidance or a reduction of a charge to tax or an assessment to tax,

(d)
avoidance of a possible assessment to tax,

(e)
a deferral of a payment of tax or an advancement of a repayment of tax,

and

(f)
avoidance of an obligation to deduct or account for tax,

(g)
the passing of an obligation to make declaration of a liability to be

assessed to tax to another party.’.

Counteracting tax advantages

Mr Michael Meacher

Caroline Lucas

Michael Connarty

Mr Frank Field

Kelvin Hopkins

John McDonnell

NC11

To move the following Clause:—

‘(1)
If tax arrangements meeting the definition of section [Meaning of “tax

arrangements”](1) of the Part are identified then the tax advantages arising from

the arrangements are to be counteracted on a just and reasonable basis.

Committee of the whole House: 17 April 2013
1185

Finance (No. 2) Bill continued

(2)
The counteraction may be made in respect of each or any tax to which the general

anti-tax-avoidance principle applies.

(3)
An officer of Revenue and Customs must make, on a just and reasonable basis,

such consequential adjustments in respect of any tax to which the general anti-

abuse rule applies as are appropriate.

(4)
These consequential adjustments:

(a)
may be made in respect of any period, and

(b)
may affect any person (whether or not a party to the arrangements) so

long as they are connected to the party that has enjoyed the benefit of a

tax advantage, such connection being as defined in section 993 of the

Income Tax Act 2007.’.

Proceedings before a court or tribunal

Mr Michael Meacher

Caroline Lucas

Michael Connarty

Mr Frank Field

Kelvin Hopkins

John McDonnell

NC12

To move the following Clause:—

‘(1)
In proceedings before a court or tribunal in connection with the general anti-tax-

avoidance principle, HMRC must show—

(a)
that there are tax arrangements that give rise to a tax advantage as a result

of tax avoidance, and

(b)
that the counteraction of the tax advantages arising from the

arrangements is just and reasonable.

(2)
In determining any issue in connection with the general anti-tax avoidance

principle, a court or tribunal must take into account—

(a)
explanatory notes that cast light on the objective setting or contextual

scene of the specific Taxing Act or this Part of this Act.

(b)
the clear statements by a Minister or other promoter of the specific

Taxing Act or this Part of this Act together if necessary with such other

parliamentary material as was necessary to understand such statements

and their effect.

(c)
HMRC’s guidance about the general anti-tax-avoidance principle,

(d)
guidance, statements or other material (whether of HMRC, a Minister of

the Crown or anyone else) that is in the public domain at the time the

arrangements were entered into as to the principles on which the taxes

referred to in section [General anti tax-avoidance principle] (3) are based

whether express or implied, the nature of tax avoidance, and those

matters considered to fall within section [Meaning of “tax

arrangements”] (2)(a) of this Part (on which matter HMRC shall issue

periodic guidance),

(e)
evidence of established practice at that time,



© Parliamentary copyright	Revised 17 April 2013