Session 2017-19
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1

 

House of Commons

 
 

Thursday 11 January 2018

 

Public Bill Committee

 

New Amendments handed in are marked thus Parliamentary Star

 

Parliamentary Star - whiteAmendments which will comply with the required notice period at their next appearance

 

 

Finance (No. 2) Bill


 

(Except Clause 8; Clause 33 and Schedule 9; Clauses 40 and 41 and Schedule 11; New Clauses


 

or new Schedules relating to the income tax treatment of armed forces’ accommodation al­


 

lowances, the bank levy, stamp duty land tax, the effect of the Bill on equality, or the effect of


 

the Bill on tax avoidance or evasion)


 

Note

 

This document includes all amendments tabled to date and includes any

 

withdrawn amendments at the end. The amendments have been arranged in

 

accordance with the Order of the Committee [9 January 2018].

 

 


 

Peter Dowd

 

Anneliese Dodds

 

Jeff Smith

 

45

 

Schedule  6,  page  88,  line  32,  at end insert—

 

“Part 6

 

Returns: payment on account

 

16  (1)  

TMA 1970 is amended as follows.

 

      (2)  

After section 12AC (notice of enquiry), insert—

 

“12ACA 

  Requirement for payment on account

 

(1)    

In any case where notice of an enquiry has been given under section

 

12AC(1) in respect of a return, an officer of the Board may require a

 

payment on account from a partner in respect of that partner and other


 
 

Public Bill Committee: 11 January 2018                  

2

 

Finance (No. 2) Bill, continued

 
 

partners (whether in respect of that return or a return for a subsequent

 

tax year).

 

(2)    

Sections 59A and 59AB apply to payments made under this section as

 

they apply to payments made under section 59A.”

 

Member’s explanatory statement

 

This amendment enables HMRC to require payments on account from partners in respect of

 

themselves to allow for unknown partners in any case where there has previously been a notice of

 

an enquiry in connection with a return.

 

Peter Dowd

 

Anneliese Dodds

 

Jeff Smith

 

50

 

Schedule  6,  page  88,  line  32,  at end insert—

 

“Part 6

 

Returns: payment on account

 

16  (1)  

TMA 1970 is amended as follows.

 

      (2)  

After section 12AC (notice of enquiry), insert—

 

“12AD

  Review of proposal for power to require payment on account

 

(1)    

Within one month of the passing of the Finance Act 2018 the

 

Chancellor of the Exchequer must commission a review into the

 

effects of introducing a power to allow HMRC to require payment on

 

account for returns where an enquiry has been given under section

 

12AC(1) in respect of a return.

 

(2)    

The review under this section must consider—

 

(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.

 



 
 

Public Bill Committee: 11 January 2018                  

3

 

Finance (No. 2) Bill, continued

 
 

Peter Dowd

 

Anneliese Dodds

 

Jeff Smith

 

49

 

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.

 


 

Mel Stride

 

46

 

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

 

Mel Stride

 

47

 

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”.”

 



 
 

Public Bill Committee: 11 January 2018                  

4

 

Finance (No. 2) Bill, continued

 
 

Peter Dowd

 

Anneliese Dodds

 

Jeff Smith

 

48

 

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”

 

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).”


 
 

Public Bill Committee: 11 January 2018                  

5

 

Finance (No. 2) Bill, continued

 
 

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—

 

(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


 
 

Public Bill Committee: 11 January 2018                  

6

 

Finance (No. 2) Bill, continued

 
 

(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”—

 

(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”


 
 

Public Bill Committee: 11 January 2018                  

7

 

Finance (No. 2) Bill, continued

 
 

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)”

 

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”


 
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Revised 10 January 2018