Vote Bundle Text (900718-06)

Amendments proposed to the Finance Bill - continued	House of Commons

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Mr Chancellor of the Exchequer

Page 332, line 10 [Schedule 14], leave out 'not'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

139

Page 332, line 28 [Schedule 14], leave out 'within 40 days' and insert 'before the first anniversary'.

Mr Chancellor of the Exchequer

Page 332, line 36 [Schedule 14], at end insert—

'This is subject to sub-paragraph (3).

(3) Paragraphs 44 to 46 and sub-paragraph (2) of this paragraph do not apply if the amount chargeable under section 135 of the Taxes Act 1988 on the exercise of the option would, in the absence of those provisions, be less than the amount so chargeable by virtue of those provisions.'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

140

Page 333, line 29 [Schedule 14], leave out 'within 40 days' and insert 'before the first anniversary'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

136

Page 47, line 10 [Clause 66], at end insert—

'(2A) Following subsection (7) add—

"(7A) Where any individual retires or dies or ceases employment due to ill health, injury or disability, and as a result an asset ceases to be a business asset, then on a subsequent disposal of that asset taper relief shall be applied as if—

(a) there had been a disposal of a non-business asset which had been acquired for a consideration equal to the market value of the asset at the time it ceased to be a business asset, and which had been acquired two years prior to that time; and

(b) there had been a disposal of a business asset for a consideration equal to the market value of the asset on the date it ceased to be a business asset.".'.

Mr Chancellor of the Exchequer

Page 49, line 8 [Clause 67], at end insert—

'( ) After paragraph 22 insert—

"Qualifying shareholdings in joint venture companies

(2) For the purposes of this paragraph a company is a 'joint venture company' if, and only if—

(a) it is a trading company or the holding company of a trading group, and

(b) 75% or more of its ordinary share capital (in aggregate) is held by not more than five companies.

For the purposes of paragraph (b) above the shareholdings of members of a group of companies shall be treated as held by a single company.

(3) For the purposes of this paragraph a company has a 'qualifying shareholding' in a joint venture company if—

(a) it holds more than 30% of the ordinary share capital of the joint venture company, or

(b) it is a member of a group of companies, it holds ordinary share capital of the joint venture company and the members of the group between them hold more than 30% of that share capital.

(4) For the purpose of determining whether the investing company is a trading company—

(a) any holding by it of shares in the joint venture company shall be disregarded, and

(b) it shall be treated as carrying on an appropriate proportion—

(i) of the activities of the joint venture company, or

(ii) where the joint venture company is the holding company of a trading group, of the activities of that group.

This sub-paragraph does not apply if the investing company is a holding company.

(5) For the purpose of determining whether the investing company is a holding company—

(a) any holding by it of shares in the joint venture company shall be disregarded, and

(b) it shall be treated as carrying on an appropriate proportion of the activities—

(i) of the joint venture company, or

(ii) where the joint venture company is the holding company of a trading group, of that group.

This sub-paragraph does not apply if the joint venture company is a 51 per cent subsidiary of the investing company.

(6) For the purpose of determining whether a group of companies is a trading group—

(a) every holding of shares in the joint venture company by a member of the group having a qualifying shareholding in that company shall be disregarded, and

(b) each member of the group having such a qualifying shareholding shall be treated as carrying on an appropriate proportion of the activities—

(i) of the joint venture company, or

(ii) where the joint venture company is the holding company of a trading group, of that group.

This sub-paragraph does not apply if the joint venture company is a member of the group.

(7) In sub-paragraphs (4)(b), (5)(b) and (6)(b) above 'an appropriate proportion' means a proportion corresponding to the percentage of the ordinary share capital of the joint venture company held by the investing company or, as the case may be, by the group member concerned.

(8) The following shall be treated as having a relevant connection with each other—

(a) the investing company;

(b) the joint venture company;

(d) any company having a relevant connection with the joint venture company by virtue of being—

(i) a 51 per cent subsidiary of that company, or

(ii) a member of the same commercial association of companies.

(9) The acquisition by the investing company of the qualifying shareholding shall not be treated as a relevant change of activity for the purposes of paragraph 11 above.

(10) For the purposes of this paragraph 'ordinary share capital' has the meaning given by section 832(1) of the Taxes Act.".'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

137

Page 49, line 10 [Clause 67], leave out '2000' and insert '1998'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

138

Page 49, line 12 [Clause 67], leave out 'at a time before that date' and insert 'in respect of a disposal prior to 6th April 2000'.

Mr Chancellor of the Exchequer

Page 432, line 32 [Schedule 22], at end insert '; and

(f) the profits of the overseas company out of which the distribution is paid are subject to a tax on profits (in the country of residence of the company or elsewhere, or partly in that country and partly elsewhere).'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

147

Page 66, line 21 [Clause 92], leave out 'that are' and insert 'who are not trustees of a settlement for the benefit of the persons named in paragraphs (a) and (b) of section 86 of the Inheritance Tax Act 1984 but who are'.

Mr Chancellor of the Exchequer

Page 482, line 5 [Schedule 26], leave out ', in subsections (1), (3)(a), (4), (5), (7) and (8), after "sections 86A to 96"' and insert '—

(a) in subsections (1), (3)(a), (4) and (7), after "sections 86A to 96", and

(b) in subsections (5) and (8), after "sections 86A to 90",'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

148

Page 67, line 26 [Clause 93], after '(a)', insert '"settlement" means any settlement other than for the benefit of the persons named in paragraphs (a) and (b) of section 86 of the Inheritance Tax Act 1984 and'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

149

Page 67, line 45 [Clause 94], after '13', insert 'and "settlement"means any settlement not being for the benefit of the persons named in paragraphs (a) and (b) of section 86 of the Inheritance Tax Act 1984.'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

150

Page 68, line 34 [Clause 94], leave out 'that' and insert 'which is not engaged in a trade or which does not have a 51 per cent. subsidiary (as that term is defined in section 838 of the Taxes Act 1988) which is engaged in a trade, and which'.

Mr David Heathcoat-Amory
Mr Richard Ottaway
Mr Howard Flight

151

Page 68, line 34 [Clause 94], at end insert—

'(3) This section shall not apply if the trustees show in writing or otherwise to the satisfaction of the Board of Inland Revenue either

(a) that the purpose of avoiding liability to capital gains tax was not the purpose or one of the purposes for which the trustees became a participator in the close company to which the chargeable gain accrued; or

(b) that the acquisition and the disposal by the close company of the asset on which the chargeable gains accrued were bona fide commercial transactions and were not designed for the purpose of avoiding liability to capital gains tax.

(4) The jurisdiction of the Special Commissioners on any appeal shall include jurisdiction to review any relevant decision taken by the Board in exercise of their functions under subsection (3) above.'.

Mr Chancellor of the Exchequer

103

Page 513, line 11 [Schedule 30], at end insert—

'Restriction of relief for underlying tax

7A.—(1) Amend section 799 of the Taxes Act 1988 (computation of underlying tax) as follows.

(2) In subsection (1) (underlying tax to be taken into account to be so much of the foreign tax on the relevant profits as is attributable to the proportion represented by the dividend) after "as" insert "(a)" and at the end of the subsection add ", and

(b) does not exceed the amount calculated by applying the formula set out in subsection (1A) below."

(3) After subsection (1) insert—

D x M

(100 — M)

D is the amount of the dividend; and

M is the maximum relievable rate;

and for the purposes of this subsection the maximum relievable rate is the rate of corporation tax in force when the dividend was paid."

(4) In subsection (3) (profits by reference to which underlying tax to be taken into account is calculated)—

(a) at the end of paragraph (a) insert "and";

(b) omit paragraph (b); and

(c) in paragraph (c), for "paid neither for a specified period nor out of specified profits" substitute "not paid for a specified period".

(5) This paragraph has effect in relation to any claim for an allowance by way of credit made on or after 31st March 2001 in respect of a dividend paid by a company resident outside the United Kingdom to a company resident in the United Kingdom, unless the dividend was paid before that date.

(6) In determining, for the purpose of any such claim made on or after that date, the underlying tax of any such third, fourth or successive company as is mentioned in section 801(2) or (3) of the Taxes Act 1988, this paragraph shall be deemed to have had effect at the time the dividend paid by that company was paid.'.