S.C.D.
NOTICES OF AMENDMENTS
given up to and including
Tuesday 15th June 1999
Secretary Clare Short
That, during proceedings on the Commonwealth Development Corporation Bill [Lords], the Committee do meet on Tuesdays at half-past Ten o'clock and at half-past Four o'clock and on Thursdays at Nine o'clock and at half-past Four o'clock.
STANDING COMMITTEE D
COMMONWEALTH DEVELOPMENT CORPORATION BILL [LORDS]
Mr Gary Streeter
Mrs Cheryl Gillan
1
Clause 5, page 3, line 35, at end insert—
'(5) On registration an employee of the Corporation shall cease to be a Crown servant.'.
Mr Gary Streeter
Mrs Cheryl Gillan
2
Clause 16, page 7, line 33, at end insert—
'(2A) The Secretary of State shall direct the Corporation to issue securities at market value not less than 2 years after registration.'.
Mr Gary Streeter
Mrs Cheryl Gillan
3
Clause 16, page 8, line 4, at end insert—
'(5A) No securities shall be issued until a memorandum of the Secretary of State setting out how the proceeds of any such issue shall be treated by the Treasury has been laid before and approved by each House of Parliament.'.
Mr Gary Streeter
Mrs Cheryl Gillan
4
Clause 16, page 8, line 4, at end insert—
'(5A) Before making a direction under subsection (2) the Secretary of State shall obtain the advice of a panel of not less than 3 financial advisers appointed by him to advise on all matters connected with the issue of securities.'.
Mr Gary Streeter
Mrs Cheryl Gillan
5
Clause 16, page 8, line 6, at end add—
'(7) No securities shall be issued to a third party unless the proposed balance sheet of the Corporation, as at the date of issue of the said securities, has been laid before and approved by each House of Parliament.'.
Mr Gary Streeter
Mrs Cheryl Gillan
6
Clause 18, page 8, line 15, leave out '25' and insert '15'.
Mr Gary Streeter
Mrs Cheryl Gillan
7
Clause 18, page 8, line 21, at end insert—
'(2A) The Secretary of State shall make regulations listing the events in respect of which the Crown may exercise its right under subsection (2) and the circumstances in which that right may be exercised; but no regulations shall be made unless a draft has been laid before and approved by resolution of each House of Parliament.'.
Secretary Clare Short
9
Clause 27, page 11, line 28, leave out subsection (3).
Mr Gary Streeter
Mrs Cheryl Gillan
8
Clause 27, page 11, line 29, after 'until' insert—
'(a) the Commonwealth Heads of Government have given their approval; and
Secretary Clare Short
10
Clause 27, page 11, line 33, leave out subsection (4).
NEW CLAUSES
Tax
Secretary Clare Short
NC3
To move the following Clause:—
'. Schedule (Tax) shall have effect.'.
Liquidation
Mr Gary Streeter
Mrs Cheryl Gillan
NC1
To move the following Clause:—
'.—(1) Not later than three months after the passing of this Act the Secretary of State shall lay before Parliament regulations setting out the procedures to be followed in the event of the liquidation of the Corporation.
(2) Without prejudice to the generality, regulations under subsection (1) shall include particular reference to the treatment of the Corporation's assets, liabilities and employees.'.
Investment policy of the Corporation
Mr Gary Streeter
Mrs Cheryl Gillan
NC2
To move the following Clause:—
'.—(1) The Corporation shall at the end of each complete financial year after the day appointed under section 3(3) make a report to the Secretary of State on its investments during that twelve month period and on its policy on future investments.
(2) The Secretary of State shall as soon as practicable lay a report under subsection (1) before Parliament.'.
Secretary Clare Short
11
Schedule 2, page 14, line 36, at end insert—
'Status as investment company
.—(1) Section 266 of the Companies Act 1985 (investment company) shall have effect with the omission of subsection (2)(d) in relation to any accounting reference period which—
(a) falls within the exempt period, or
(b) begins before and ends within the exempt period.
(2) Section 842(1A)(a) of the Income and Corporation Taxes Act 1988 (holdings in groups) shall not apply for the purposes of determining whether the Corporation complies with the requirement in section 266(2)(b) of the Companies Act 1985 at any time during the exempt period.
(3) In this paragraph "the exempt period" means the exempt period for the purposes of Schedule (Tax) to this Act.
(4) Paragraph 73(a) of Schedule 4 to the Companies Act 1985 (company accounts: investment company) shall be taken to be satisfied in relation to the financial year of the Corporation during which it first becomes an investment company.
(5) If at any time during that financial year—
(a) the Corporation is prohibited under section 265(4) of that Act from making a distribution by virtue of that section, and
(b) the prohibition arises by reason only that the condition in section 265(4)(a) is not satisfied,
the prohibition shall be ignored for the purposes of paragraph 73(b) of Schedule 4 to that Act.'.
NEW SCHEDULE
Secretary Clare Short
NS1
To move the following Schedule:—
'Tax
The exempt period
1.—(1) The exempt period for the purposes of this Schedule shall begin with a day appointed by the Secretary of State by order made by statutory instrument.
(2) If—
(a) an order is made under section 18(5) as a result of which section 18(1)(b) ceases to have effect, and
(b) the Crown ceases on any day to hold any special share provided for under the Corporation's articles of association,
the exempt period for the purposes of this Schedule shall end with that day.
Exemption from tax
2.—(1) The Corporation shall not be chargeable to corporation tax on profits arising during the exempt period.
(2) The Corporation shall not have a liability to tax by virtue of section 747(4)(a) of the Income and Corporation Taxes Act 1988 (controlled foreign companies) in respect of profits arising during the exempt period.
Residence for tax purposes
3.—(1) Sub-paragraph (2) shall apply if—
(a) the exempt period ends, and
(b) at that time the Corporation would be regarded for the purposes of the Taxes Acts as resident in the United Kingdom by virtue only of section 66 of the Finance Act 1988 (company incorporated in UK).
(2) That section shall not apply in relation to the Corporation at any time during the period beginning with the end of the exempt period and ending in accordance with sub-paragraph (3).
(3) The period shall end—
(a) with the seventh anniversary of the final day of the exempt period, or
(b) if earlier, at any time when the Corporation comes to be regarded for the purposes of the Taxes Acts as resident in the United Kingdom (otherwise than by virtue of section 66).
(4) The following provisions shall not apply where the Corporation ceases to be resident in the United Kingdom by virtue of sub-paragraph (2)—
(a) section 179 of the Taxation of Chargeable Gains Act 1992 (company ceasing to be member of group);
(b) section 185 of that Act (deemed disposal of assets when company ceases to be resident in UK).
(5) In this paragraph "the Taxes Acts" has the same meaning as in the Taxes Management Act 1970.
Groups of companies, &c.
4.—(1) The Corporation cannot be a member of a group of companies for the purposes of Chapter I of Part VI of the Taxation of Chargeable Gains Act 1992 (groups of companies) at any time during the exempt period.
(2) Where a company ceases to be a member of a group of companies by virtue of sub-paragraph (1), section 179 of that Act shall not apply.
5.—(1) The Corporation cannot be a member of a group of companies for the purposes of Chapter IV of Part X of the Income and Corporation Taxes Act 1988 (group relief) at any time during the exempt period.
(2) The Corporation cannot be a surrendering company for the purposes of a consortium claim within the meaning of section 402(3) of that Act.
Distributions
6.—(1) This paragraph applies where the Corporation makes a distribution during the exempt period.
(2) The following provisions shall not apply in relation to the distribution—
(a) section 208 of the Income and Corporation Taxes Act 1988 (exemption from corporation tax);
(b) section 231 of that Act (tax credits).
(3) The distribution shall be treated for the purposes of corporation tax and income tax as income falling within Case V of Schedule D as set out in section 18(3) of that Act.
(4) The distribution shall be treated as equivalent foreign income for the purposes of section 1A of that Act (rate of tax for income from savings and distributions).
(5) In this paragraph "distribution" has the same meaning as it has in the Corporation Taxes Acts by virtue of Chapter II of Part VI of the Income and Corporation Taxes Act 1988 (company distributions).'.
