Vote Bundle Text (900606-07)

Amendments proposed to the Finance Bill - continued	House of Commons

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Mr Andrew Smith

323

*Schedule 22, page 443, line 19, leave out 'applied' and insert 'applies'.

Mr Andrew Smith

324

*Schedule 22, page 443, line 30, leave out paragraphs 97 and 98 and insert—

'Quantitative restrictions: change of circumstances bringing case within restrictions

97.—(1) The provisions of this paragraph apply where—

(a) the lessor under a finance lease has been entitled to capital allowances in circumstances in which paragraph 93 (quantitative restrictions on allowances) did not apply, and

(b) a change of circumstances brings the case within paragraph 89(1) so that the restrictions in paragraph 93 do apply.

(2) In this paragraph—

"the relevant period" means the period beginning—

(a) with the beginning of the accounting period of the lessor in which there occurs the change of circumstances in relation to which this paragraph applies, or

(b) if since the beginning of that period there has been a change of circumstances in relation to which paragraph 98 applied (change taking case out of restrictions), with the time of that change (or if there has been more than one such change, the last of them),

and ending with the time of the change of circumstances in relation to which this paragraph applies; and

"the lessor's normal pool" means the lessor's pool that contains the qualifying expenditure relating to the ship at the beginning of the relevant period.

(3) At the beginning of the relevant period an amount ("amount A") equal to—

(a) the tax written down value of the ship as at that time, or

(b) if less, the amount of unrelieved qualifying expenditure in the lessor's normal pool at that time,

shall be brought into account as a disposal value in the lessor's normal pool.

(4) At the same time an amount of qualifying expenditure equal to amount A shall be taken to a separate single-asset pool ("the temporary pool").

(5) Any qualifying expenditure or other items relating to the ship that would otherwise have been brought into account in the lessor's normal pool in the relevant period shall instead be brought into account in the temporary pool.

(6) At the end of the relevant period, the temporary pool shall be closed as if the ship had been disposed of by the lessor for an amount equal to its tax written down value at that time ("amount B"), and any resulting balancing allowance or balancing charge shall be given effect.

(7) The lessor shall be treated as if he had incurred qualifying expenditure equal to amount B on the provision of the ship for the purposes of the lessee's tonnage tax trade immediately after the end of the relevant period.

(8) There shall be allocated to the lessor's 25% and 10% pools the same proportions of amount B as the proportions of the actual cost of providing the ship that would have been so allocated if the case had been within paragraph 89(1) at all material times.

Quantitative restrictions: change of circumstances taking case out of restrictions

98.—(1) The provisions of this paragraph apply where—

(a) the lessor under a finance lease has been entitled to capital allowances in circumstances in which paragraph 93 (quantitative restrictions on allowances) applied, and

(b) a change of circumstances takes the case out of paragraph 89(1) so that the restrictions in paragraph 93 no longer apply.

(2) When the change of circumstances occurs a disposal value shall be brought into account by the lessor equal to the tax written down value of the ship as at that time.

The provisions of paragraph 96 (treatment of disposal proceeds) apply as regards the allocation of that amount to the lessor's 25% and 10% pools.

(3) The lessor shall be treated as if he had incurred qualifying expenditure on the provision of the ship for the purposes of the lessee's non-tonnage tax trade immediately after the change of circumstances occurs.

(4) The amount of that expenditure shall be taken to be the whole of the expenditure on the ship that would have qualified for capital allowances if paragraph 93 had never applied, written down at 25% per annum on the reducing balance for the period beginning with the time when it was actually incurred and ending when the change of circumstances occurs.

Determination of tax written down value, etc.

98A.—(1) This paragraph supplements paragraphs 97 and 98.

(2) The "tax written down value" of the ship at any time means what would be the amount of unrelieved qualifying expenditure at that time determined on the following assumptions—

(a) that the qualifying expenditure relating to the ship had been held in a single asset pool, and

(b) that there had been made to the lessor—

(i) the first-year allowance (if any) that was actually made to him,

(ii) any first-year allowance falling to be made to him that was postponed under section 30(1)(a) or (c) of the Capital Allowances Act 1990, and

(iii) the maximum amount of any writing-down allowances that, on the preceding assumptions, could have been made.

(3) The references in paragraph 97(3)(b) and sub-paragraph (2) above to the amount of "unrelieved qualifying expenditure" are to the balance that would otherwise have been carried forward under Part II of the Capital Allowances Act 1990.

(4) For the purpose of determining that amount at a time other than the beginning or end of an accounting period of the lessor, it shall be assumed that an accounting period of the lessor began or ended at that time.'.

Mr Richard Ottaway [R]
Mr David Heathcoat-Amory [R]
Mr Howard Flight [R]

295

*Schedule 22, page 444, line 43, leave out 'alter' and insert 'increase'.

Mr Richard Ottaway [R]
Mr David Heathcoat-Amory [R]
Mr Howard Flight [R]

296

*Schedule 22, page 445, line 4, leave out from beginning to end of line 42 on page 448.

Mr Andrew Smith

325

*Schedule 22, page 453, line 9, at end insert—

'Part XIIA

Application of provisions to partnerships

Introduction

127A.—(1) The Inland Revenue may make provision by regulations as to the application of this Schedule in relation to activities carried on by a company in partnership.

(2) Nothing in the following provisions of this Part of this Schedule shall be read as restricting the generality of this power.

Calculation of partnership profits

127B. The regulations may provide that—

(a) for the purpose of calculating the profits of a partner which is a tonnage tax company, the profits of the partnership shall be calculated as if the partnership were a tonnage tax company, and

(b) for the purpose of calculating the profits of a partner which is not a tonnage tax company, the profits of the partnership shall be calculated as if the partnership were not a tonnage tax company.

Qualifying partnerships

127C.—(1) The regulations may provide that activities carried on by a company in partnership are not to be regarded as qualifying activities of that company unless the partnership is a qualifying partnership.

"Qualifying activities" here means core qualifying activities, qualifying secondary activities or qualifying incidental activities.

(2) Subject to any provision made by the regulations, a "qualifying partnership" means a partnership that if it were a company would meet the requirements in paragraph 16(1) (qualifying companies).

Ships owned by or chartered to partners

127D. The regulations may provide that a ship which is not partnership property but which—

(a) is owned by or chartered to a member (or two or more members) of a partnership, and

(b) is a ship in relation to which activities of the partnership business are carried on,

shall be treated as if it were owned by or chartered to every member of the partnership and as if everything done by or to any of the partners in relation to it had been done by or to all the partners.

Transactions not at arm's length

127E. The regulations may provide that for the purposes of paragraphs 58 and 59 (transactions not at arm's length) the partnership shall be treated—

(a) as an entity separate and distinct from the persons that are its members, and

(b) as if it were a tonnage tax company.

Adjustments for capital allowance purposes

127F. The regulations may provide that where a partner leaves tonnage tax, such adjustments shall be made for capital allowance purposes, in relation to that partner and all or any of the other partners, with respect to—

(a) the amount of qualifying expenditure under Part II of the Capital Allowances Act 1990 (plant and machinery), and

(b) the amount of unrelieved qualifying expenditure under Part I of that Act (industrial buildings),

as may be specified in the regulations.

General

127G. Regulations under this Part of this Schedule—

(a) may make different provision for different cases, and

(b) may contain such supplementary, incidental and transitional provision as appears to the Inland Revenue to be appropriate.'.

Mr Andrew Smith

326

*Schedule 22, page 456, line 54, at end insert '(and see paragraphs 27(4) and (5) and 28(1A))'.

Mr Nick St. Aubyn

150

Clause 93, page 66, line 18, leave out '21st March 2000' and insert '6th April 2002'.

Mr Richard Ottaway
Mr David Heathcoat-Amory
Mr Howard Flight

149

Schedule 30, page 516, line 20, leave out '6' and insert '9'.

Mr Nick St. Aubyn

152

Clause 141, page 109, line 28, at end insert—

'(5) This section shall not apply to any territory which is not a signatory to the International Convention on Human Rights'.

NEW CLAUSE

Volunteer expenditure

Mr David Heathcoat-Amory

Mr Richard Ottaway

Mr Oliver Letwin

Mr Howard Flight

NC1

To move the following Clause:—

'(1) After section 83B of the Taxes Act 1988 there shall be inserted—

"Volunteer expenditure 83C (1) Subsection (2) below applies to where an individual volunteers to assist in the work of a charity and in the course of providing such assistance incurs expenses attributable to the work for which the individual volunteered.
    (2) On a claim made in that behalf to an officer of the Board the relevant amount shall be allowed as a deduction in calculating the individual's income for the purposes of income tax for the year of assessment in which the expenses are incurred.
    (3) The relevant amount is the amount of the expenses incurred, after deducting any reinbursement for those expenses received by the individual from the charity for whose benefit the expenses were incurred.
    (4) In this section a 'charity' has the same meaning as in section 506 and includes each of the bodies mentioned in section 507(1).

    (2) This section has effect in relation to expenses incurred by an individual on or after 6th April 2000.".'.




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