Session 2017-19
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Other Bills before Parliament


 
 

Public Bill Committee: 9 January 2018                  

8

 

Finance (No. 2) Bill, continued

 
 

(a)    

the administrative implications for HMRC,

 

(b)    

the impact on the taxation regime for partnerships, and

 

(c)    

the potential revenue effects of the change.

 

(3)    

The Chancellor of the Exchequer must lay the report of this review

 

before the House of Commons within six months of the passing of the

 

Finance Act 2018.””

 

Member’s explanatory statement

 

This amendment requires the Chancellor of the Exchequer to review the effects of introducing a

 

power to require partnerships to make a payment on account in respect of a return when there has

 

previously been a notice of an enquiry in connection with a return.

 


 

Peter Dowd

 

Anneliese Dodds

 

Jeff Smith

 

49

 

Parliamentary Star    

Schedule  7,  page  96,  line  22,  at end insert—

 

“Review of operations

 

18A      

After section 259M, insert—

 

“259O

  Hybrid and other mismatches measures: review of operation

 

(1)    

Within 12 months after the passing of the Finance Act 2018, the

 

Chancellor of the Exchequer must review the operation of the

 

measures in this Part.

 

(2)    

The review under this section must consider—

 

(a)    

the impact of the measures on the use of hybrid transfer

 

arrangements;

 

(b)    

the impact of the measures on the revenue effects of the use of

 

hybrid transfer arrangements to reduce a person’s tax liability;

 

(c)    

possible alternative or additional measures to reduce the use

 

of hybrid transfer arrangements to reduce a person’s tax

 

liability;

 

(d)    

whether the measures constitute application of EU Directive

 

2016/1164 (“The Anti Tax Avoidance Directive”), including

 

in what ways the measures do not constitute an application of

 

that directive.

 

(3)    

The Chancellor of the Exchequer must lay before the House of

 

Commons the report of the review under this section as soon as

 

practicable after its completion.””

 

Member’s explanatory statement

 

This amendment provides for a review of the measures against hybrid transfer arrangements to

 

reduce a taxpayer’s tax liability, and that this review consider whether alternative or additional

 

measures would be more appropriate, and how these measures compare to the EU Anti Tax

 

Avoidance Directive.

 



 
 

Public Bill Committee: 9 January 2018                  

9

 

Finance (No. 2) Bill, continued

 
 

Mel Stride

 

46

 

Parliamentary Star    

Schedule  8,  page  100,  line  24,  at end insert “or held for distribution to owners”

 

Mel Stride

 

47

 

Parliamentary Star    

Schedule  8,  page  100,  leave out lines 27 to 29 and insert “each of the following

 

expressions has the meaning given by international accounting standards—

 

“held for distribution to owners”

 

“held for sale”

 

“subsidiary”.”

 


 

Peter Dowd

 

Anneliese Dodds

 

Jeff Smith

 

48

 

Parliamentary Star    

Clause  26,  page  18,  line  35,  at end insert—

 

“(7A)    

Within 12 months of the passing of this Act, the Chancellor of the Exchequer

 

must review the impact of the provisions of this section.

 

(7B)    

A review under subsection (7A) must consider the revenue effects of freezing

 

indexation allowance for gains chargeable to corporation tax.

 

(7C)    

The Chancellor of the Exchequer must lay before the House of Commons the

 

report of the review under subsection (7A) as soon as practicable after its

 

completion.”

 

Member’s explanatory statement

 

This amendment provides for a review to be undertaken on the revenue effects of freezing

 

indexation allowance for gains chargeable to corporation tax in Clause 26 of the Bill.

 


 

Mel Stride

 

2

 

Schedule  10,  page  146,  line  7,  after “is” insert “—

 

(a)    

where the individual is UK resident for the year,”

 

Mel Stride

 

3

 

Schedule  10,  page  146,  line  9,  at end insert “, and

 

(b)    

where the individual is non-UK resident for the year, treated for the

 

purposes of subsection (2) (but no other purpose) as income of the

 

individual for the year, subject to subsection (5).”

 

Mel Stride

 

4

 

Schedule  10,  page  146,  line  33,  leave out from “purposes” to second “for” in line

 

34 and insert “as income of the settlor for the year and, in a case within paragraph (a), not

 

as income of the individual”


 
 

Public Bill Committee: 9 January 2018                  

10

 

Finance (No. 2) Bill, continued

 
 

Mel Stride

 

5

 

Schedule  10,  page  147,  line  4,  at end insert—

 

“(7)    

If—

 

(a)    

an enactment other than this section contains a reference (however

 

expressed) to—

 

(i)    

income treated as arising by this section, or

 

(ii)    

an amount treated as income by this section, and

 

(b)    

the reference mentions this section without mentioning any particular

 

provision of this section,

 

    

the reference is (in accordance with subsection (1)(b)) to be read as not including

 

amounts treated as income by subsection (1)(b) except so far as they are treated

 

as income of the settlor of a settlement by subsection (3) or (4).”

 

Mel Stride

 

6

 

Schedule  10,  page  148,  line  4,  at end insert—

 

“(4)    

In this section and sections 643C to 643M, a reference to a benefit provided by

 

trustees of a settlement is to—

 

(a)    

a benefit treated by subsection (6) as provided by the trustees, or

 

(b)    

any other benefit if it is provided by the trustees directly, or indirectly,

 

out of—

 

(i)    

property comprised in the settlement, or

 

(ii)    

income arising under the settlement.

 

(5)    

In this section and sections 643C to 643M, a reference to a benefit provided by

 

trustees of a settlement to an individual is to—

 

(a)    

a benefit treated by subsection (6) as provided by the trustees to the

 

individual, or

 

(b)    

any other benefit if it is provided by the trustees to the individual directly,

 

or indirectly, out of—

 

(i)    

property comprised in the settlement, or

 

(ii)    

income arising under the settlement.

 

(6)    

Where—

 

(a)    

income arises under a settlement, and

 

(b)    

the income, before being distributed, is the income of a person other than

 

the trustees,

 

    

a benefit is for the purposes of subsection (4)(a) treated as provided by the trustees

 

and is for the purposes of subsection (5)(a) treated as provided by the trustees to

 

the person.

 

(7)    

A benefit treated as provided by subsection (6) is treated—

 

(a)    

as consisting of the income mentioned in that subsection, but after any

 

reduction in accordance with Chapter 8 of Part 9 of ITA 2007 for

 

trustees’ expenses, and

 

(b)    

as provided at the time that income arises.”

 

Mel Stride

 

7

 

Schedule  10,  page  148,  leave out lines 14 to 18 and insert—

 

“PFSI is the total of—

 

(a)    

any protected foreign-source income—


 
 

Public Bill Committee: 9 January 2018                  

11

 

Finance (No. 2) Bill, continued

 
 

(i)    

arising under the settlement in the year or in any earlier

 

tax year,

 

(ii)    

that would be treated under section 624 as income of the

 

settlor but for section 628A,

 

(iii)    

that can be used directly or indirectly to provide benefits

 

for the individual, and

 

(iv)    

on which the individual is not liable to income tax

 

(ignoring for this purpose any liability under section

 

643A), and

 

(b)    

any protected foreign-source income—

 

(i)    

arising under the settlement in the year or in any earlier

 

tax year,

 

(ii)    

that would be treated under section 629 as income of the

 

settlor but for section 630A, and

 

(iii)    

on which the relevant child concerned (see section 629)

 

is not liable to income tax (ignoring for this purpose any

 

liability under section 643A),”

 

Mel Stride

 

8

 

Schedule  10,  page  148,  line  25,  leave out “all amounts which” and insert “so much

 

of PFSI as is”

 

Mel Stride

 

9

 

Schedule  10,  page  148,  line  26,  leave out “are”

 

Mel Stride

 

10

 

Schedule  10,  page  148,  line  29,  leave out “all amounts which” and insert “so much

 

of PFSI as is”

 

Mel Stride

 

11

 

Schedule  10,  page  148,  line  30,  leave out “are”

 

Mel Stride

 

12

 

Schedule  10,  page  149,  line  33,  leave out “available”

 

Mel Stride

 

13

 

Schedule  10,  page  149,  leave out lines 37 to 40

 

Mel Stride

 

14

 

Schedule  10,  page  149,  line  41,  at end insert—

 

“(6)    

In this section and section 643G—

 

“protected income” means the income that forms PFSI in the calculation of

 

the settlement’s available protected income in the case of the relevant

 

individual for the year, and

 

“the relevant individual”—


 
 

Public Bill Committee: 9 January 2018                  

12

 

Finance (No. 2) Bill, continued

 
 

(a)    

where the deemed income is treated as income of an individual

 

by section 643A(1)(a) both before and after the application of

 

section 643A(3) and (4), means that individual, and

 

(b)    

where the deemed income is treated as income of the settlor by

 

section 643A(3) or (4) after having been treated as income of

 

another individual by section 643A(1), means that other

 

individual.”

 

Mel Stride

 

15

 

Schedule  10,  page  149,  line  43,  leave out “subsection (2)” and insert “this section”

 

Mel Stride

 

16

 

Schedule  10,  page  150,  line  2,  leave out from “settlement,” to end of line 7 and

 

insert “the year and the relevant individual,

 

(b)    

“protected income” and “the relevant individual” have the meaning given

 

by section 643F(6), and

 

(c)    

“the settlement” and “the year” mean, respectively, the settlement and tax

 

year mentioned in section 643F.”

 

Mel Stride

 

17

 

Schedule  10,  page  150,  line  10,  after first “the” insert “relevant”

 

Mel Stride

 

18

 

Schedule  10,  page  150,  line  16,  leave out “available”

 

Mel Stride

 

19

 

Schedule  10,  page  150,  line  17,  at end insert—

 

“(ca)    

where the whole or part of an item of the protected income is, in respect

 

of benefits provided by the trustees in the year or in any earlier tax year,

 

taken into account in charging income tax under Chapter 2 of Part 13 of

 

ITA 2007 (transfer of assets abroad) for the year or any earlier tax year,

 

reduce the item by so much of itself as is so taken into account,

 

(cb)    

where the whole or part of an item of the protected income is, by

 

reference to benefits provided by the trustees to individuals other than the

 

relevant individual, treated by section 643A or 643J or 643L as income

 

for the year or any earlier tax year, reduce the item by so much of itself

 

as is so treated,”

 

Mel Stride

 

20

 

Schedule  10,  page  150,  line  18,  leave out “643A as arising to the” and insert

 

“643A(1) (before the application of section 643A(3) and (4)) as arising to the relevant”

 

Mel Stride

 

21

 

Schedule  10,  page  150,  line  19,  after “benefits” insert “referred to in paragraph (a)”


 
 

Public Bill Committee: 9 January 2018                  

13

 

Finance (No. 2) Bill, continued

 
 

Mel Stride

 

22

 

Schedule  10,  page  150,  line  23,  after “benefits” insert “referred to in paragraph (a)”

 

Mel Stride

 

23

 

Schedule  10,  page  150,  line  24,  leave out “available”

 

Mel Stride

 

24

 

Schedule  10,  page  150,  line  25,  leave out second “the” and insert “those”

 

Mel Stride

 

25

 

Schedule  10,  page  150,  line  26,  leave out “available”

 

Mel Stride

 

26

 

Schedule  10,  page  150,  line  27,  at end insert—

 

“(3)    

For the purposes of subsection (2)(ca), the whole or part of an item of the

 

protected income is to be treated as taken into account in respect of a benefit so

 

far as the item or part—

 

(a)    

is matched under section 735A of ITA 2007 with notional income with

 

which the benefit is matched under that section, or

 

(b)    

would be matched under that section (if it applied also for this purpose)

 

with notional income with which the benefit would be matched under that

 

section (if it applied also for this purpose),

 

    

and here “notional income” means income which is treated as arising under

 

section 732 of ITA 2007.”

 

Mel Stride

 

27

 

Schedule  10,  page  150,  line  47,  leave out “643A(1),” and insert “643A(1)(a),”

 

Mel Stride

 

28

 

Schedule  10,  page  152,  leave out lines 10 to 19 and insert—

 

“(2)    

Where, in a case within subsection (1)(a)(i) and by reference to the amount

 

mentioned in subsection (1)(a), income is treated by section 643J or 643L as

 

arising to a person for a tax year, the original beneficiary is not liable to tax for

 

any later tax year on so much of the amount mentioned in subsection (1)(a) as is

 

equal to that income; and where, in a case within subsection (1)(a)(ii) and by

 

reference to the amount mentioned in subsection (1)(a), income is treated by

 

section 643J as arising to a person for a tax year, the settlor is not liable to tax for

 

any later tax year on so much of the amount mentioned in subsection (1)(a) as is

 

equal to that income.”

 

Mel Stride

 

29

 

Schedule  10,  page  154,  line  38,  leave out “643A(1)” and insert “643A(1)(a), both

 

before and after the application of section 643A(3) and (4),”


 
 

Public Bill Committee: 9 January 2018                  

14

 

Finance (No. 2) Bill, continued

 
 

Mel Stride

 

30

 

Schedule  10,  page  156,  line  40,  at end insert—

 

“(ca)    

the original recipient is not taxed on the original benefit (see subsection

 

(6A)),”

 

Mel Stride

 

31

 

Schedule  10,  page  158,  line  15,  at end insert—

 

“(6A)    

For the purposes of subsection (1)(ca), the original recipient is taxed on the

 

original benefit if the original recipient is liable to income tax, or capital gains tax,

 

by reference to the amount or value of the original benefit; and where the original

 

recipient is so liable by reference to the amount or value of part only of the

 

original benefit, this section applies as if the two parts of the original benefit were

 

separate benefits.”

 

Mel Stride

 

32

 

Schedule  10,  page  158,  line  21,  at end insert—

 

    

“and see also section 643B(4) to (7) (interpretation of references to provision of

 

benefits by trustees).”

 


 

Kirsty Blackman

 

Alison Thewliss

 

33

 

Clause  39,  page  29,  line  43,  leave out “day on which this Act is passed” and insert

 

“22 November 2017”.

 

Member’s explanatory statement

 

This amendment would change the date from which the amendment to VATA 1994 (refunds of VAT

 

in certain cases) would come into effect and would allow the public authorities set out in this clause

 

to claim VAT refunds from 22 November 2017.

 


 

New Clauses

 

Kirsty Blackman

 

Alison Thewliss

 

NC1

 

To move the following Clause—

 

         

“Review of retrospective VAT refunds for the Scottish Fire and Rescue

 

Service and the Scottish Police Authority

 

(1)    

Within one month of this Act receiving Royal Assent, the Chancellor of the

 

Exchequer shall commission a review of the potential consequences of allowing

 

the Scottish Fire and Rescue Service and the Scottish Police Authority to claim

 

VAT refunds under section 33 of VATA 1994 retrospective to the date of their

 

establishment.


 
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Revised 09 January 2018