Amendments proposed to the Finance Bill - continued House of Commons

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

269

Schedule     15,     page     382,     leave out lines 16 to 23.

   

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

270

Schedule     15,     page     383,     line     25,     leave out from 'is' to end of line 27 and insert 'to be determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992.'.


   

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

271

Schedule     17,     page     389,     line     11,     at end insert—

    '(2) The Treasury may by regulations make provision for cases where—

      (a) a holding of eligible shares is exchanged for other shares or securities,

      (b) the exchange is made for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is the avoidance of tax, and

      (c) the new shares or securities do not meet some or all the requirements of section 289 of the Taxes Act 1988

    providing that the new shares or securities shall be treated as meeting those requirements.

    (3) The references in sub-paragraph (2) to an exchange of shares or securities include any form of company reorganisation or other arrangement which involves a holder of shares or securities in a company receiving other shares or securities—

      (a) whether the original shares or securities are transferred, cancelled or retained, and

      (b) whether the new shares or securities are in the same or another company.

    (4) The regulations shall specify—

      (a) the cases in which, and conditions subject to which, they apply,

      (b) which requirements of section 289 of the Taxes Act 1988 are to be treated as met, and

      (c) the period for which those requirements are to be treated as met.

    (5) The regulations may contain such administrative provisions (including provision for advance clearances) as appear to the Treasury to be necessary or expedient.

    (6) The regulations may authorise the Board to give notice to any person requiring him to provide such information, specified in the notice, as they may reasonably require in order to determine whether any conditions imposed by the regulations are met.

    (7) Regulations under this paragraph—

      (a) may make different provision for different cases,

      (b) may include such supplementary, incidental and transitional provisions as appear to the Treasury to be appropriate, and

      (c) may include provision having retrospective effect.

    (8) In the first column of the table in section 98 of the Taxes Management Act 1970 (penalty for failure to comply with notice requiring information etc.) after the entry relating to paragraph 4 of Schedule 22 to the Taxes Act 1988 insert "Regulations under paragraph 1(2) of Schedule 17 to the Finance Act 2000.".'.

   

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

226

Schedule     17,     page     389,     line     30,     at end insert—

    '(4) In section 297 (qualifying trades), after the words "receiving royalties or licence fees" insert:

    "other than the leasing or hiring or disposals by hire purchase of products which have been produced by or on behalf of the applicable company itself provided that where the products are produced on behalf of the relevant company they are produced using an intangible asset of the relevant company which would for the purposes of Paragraph 22 be a relevant intangible asset.".'.

   

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

272

Schedule     17,     page     389,     line     30,     at end insert—

    '(4) In section 293 of the Taxes Act 1988 (Qualifying Companies) in subsection (2) for paragraph (a) substitute:

      "(a) a company which exists wholly or mainly for the purpose of carrying on one or more qualifying trades, or" and

    In subsection (3B) for paragraph (a) substitute:

      "(a) wholly or mainly carrying on a trade or trades within one or more of the activities falling within section 297(2)(a) to (g) but not within subsection (3C) below; and".'.

   

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

273

Schedule     17,     page     389,     line     30,     at end insert—

    '(4) In section 293 of the Taxes Act 1988 (Qualifying Companies), in subsection 3C after the words "to the company receiving them" insert "or the criteria set out in sub-paragraph (2) of Paragraph 22 of Schedule 14 to the Finance Act 2000 are met in relation to the receipt of royalties or licence fees from the exploitation of relevant financial assets (as defined in that Paragraph) or relevant financial assets and other assets acquired by the company provided that such other assets were acquired by the relevant company for bona fide commercial reasons in order to exploit its own relevant intangible assets by providing them or the use of them as part of an assembly or to be used together as part of a larger assembly to be constructed by those who as users pay the royalties or licence fees in question".'.

   

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

274

Schedule     17,     page     389,     line     30,     at end insert—

    '(4) In section 293 (Qualifying Companies) in section (6A), for the figure "15" substitute "30" and for the figure "16" substitute "32".'.

   

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

275

Schedule     17,     page     389,     line     30,     at end insert—

    '(4) In section 297 of the Taxes Act 1988 (Qualifying Trades), after the words "receiving royalties or licence fees" insert "other than the leasing or hiring or disposals by hire purchase of products which have been produced by or on behalf of the applicable company itself, provided that where the products are produced on behalf of the relevant company they are produced using an intangible asset of the relevant company which would for the purposes of Paragraph 22 of Schedule 14 to the Finance Act 2000 be a relevant intangible asset".'.


   

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

288

Schedule     18,     page     395,     line     4,     at end insert—

    '(1A).—After section 842AA of the Taxes Act 1988 (venture capital trusts) insert the following: "842AB Venture capital trusts: amalgamations

    (1) For the purposes of section 842AA and Schedule 28B, where a venture capital trust ("the first trust") acquires control of another venture capital trust ("the second trust") then

      (a) in assessing the qualifying holdings of the first trust any shares in the second trust shall be disregarded and investments made by the second trust shall, for so long as it remains under the control of the first trust, be deemed to have been made by the first trust; and

      (b) shares in the first trust acquired by individuals in exchange for shares in the second trust shall be deemed to have been acquired by them at the same time as the shares in the second trust, and there shall be deemed to have been no disposal by them of their shares in the second trust.

    (2) In subsection (1) above control shall have the meaning given it by section 840 below.".'.

   

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

289

Schedule     18,     page     395,     line     11,     leave out 'issued' and insert 'acquired'.

   

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

290

Schedule     18,     page     395,     line     24,     after 'assets', insert 'or partly of relevant intangible assets and partly of other intangible assets provided that such other assets were acquired by the relevant company for bona fide commercial reasons in order to exploit its own relevant intangible assets by providing them or the use of them as part of an assembly or to be used together as part of a larger assembly to be constructed by those who as users pay the royalties or licence fees in question'.

   

Mr Andrew Smith

287

Schedule     18,     page     397,     line     46,     at end insert—

    '( ) In section 842AA of the Taxes Act 1988 (venture capital trusts: requirements for approval), after subsection (5AC) insert—

            "(5AD) Regulations under paragraph 11B of Schedule 28B may make provision for the purposes of subsection (2)(b) to (d) above for securing that where—

            (a) there is an exchange of shares to which regulations under that paragraph apply, and

            (b) the new shares are treated by virtue of the regulations as meeting the requirements of that Schedule,

            the value of the holding of new shares, and of any original shares that are retained under the exchange, shall be taken to be an amount such that the requirements of subsection (2)(b) to (d) above do not cease to be met by reason of the exchange.

            (5AE) In subsection (5AD) above—

            (a) 'shares' includes securities; and

            (b) 'exchange of shares', 'new shares' and 'original shares' have the same meaning as in paragraph 11B of Schedule 28B.".'.


   

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

276

Clause     65,     page     44,     line     38,     at end insert—

    '(2A) In subsection (5), for the third and fourth columns of the table (which relates to gains on disposals of non-business assets) substitute—


Gains on disposals of non-business assets
Number of whole years in qualifying holding periodPercentage of gain chargeable
1100
2100
3 80
4 or more 60

.'.

   

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

277

Clause     65,     page     45,     line     18,     at end insert—

    '(3A) In sub-paragraph (2)(b) of paragraph 2 of Schedule A1 to the Taxation of Chargeable Gains Act 1992 (period for which an asset is held and relevant period of ownership) for "ten" substitute "four''.'.

 
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