Company ceasing to be member of a group
Mr Michael Howard [R]
Mr John Bercow
Mr Howard Flight [R]
Mr Christopher Chope
Mr Peter Luff
NC4
To move the following Clause:—
'.—(1) In subsection (1)(c) of section 179 of the Taxation of Chargeable Gains Act 1992 (company ceasing to be a member of group) for "six" substitute "two".
(2) In subsection (6)(a) of that section for "6" substitute "2".'.
Taper relief: holding period for business assets when roll-over relief on transfer of business assets applies
Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff
NC5
To move the following Clause:—
'.—(1) After section 162(3) of the Taxation of Chargeable Gains Act 1992 (roll-over relief on the transfer of business) insert—
"(3A) For the purpose of computing any chargeable gain accruing on the disposal of any new asset that is eligible for taper relief under subsection (3) above the qualifying holding period for taper relief shall be deemed to have commenced on the period after 5th April 1998 when the business so transferred under subsection (1) above was held and to have ceased upon the disposal of the new asset.".'.
Arrangements with respect to payment of corporation tax
Mr Michael Howard [R]
Mr John Bercow
Mr Howard Flight [R]
Mr Christopher Chope
Mr Peter Luff
NC6
To move the following Clause:—
'.—(1) After subsection (2)(d) of section 36 of the Finance Act 1998, insert—
| "(da) | may make provision for members of the group of companies to elect to base this corporation tax payment on the previous year's taxable profits;". |
(2) In section 59E(1) of the Taxes Management Act 1970, at end insert—
"such that for a company:
| (a) | payment of corporation tax shall be paid in four annual instalments (for the purposes of this subsection the 'Instalment Date'); |
| (b) | the corporation tax payable on each of the first, second and third Instalment Dates shall be equal to one quarter of the total corporation tax paid by the company in the immediately preceeding year of assessment; |
| (c) | the corporation tax payable on the fourth Instalment Date shall be equal to the aggregate of— |
| (i) | one quarter of the total corporation tax paid by the company in the immediately preceding year of assessment; and |
| (ii) | the difference between the total corporation tax liability of the company concerned for the year of assessment in which the fourth Instalment Date falls and the corporation tax liability of the company in the immediately preceding year of assessment.".'. |
Attribution of gains to members of non-resident companies
Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff
NC7
To move the following Clause:—
'.—(1) In section 13 Taxation of Chargeable Gains Act 1992 (attribution of gains to members of non-resident companies) in subsection (5) omit the word "or" immediately preceding paragraph (c) and at the end of that paragraph insert "; or
| (e) | a chargeable gain accruing on the disposal of an asset held by a company which complies with subsection (2) of section 13A Taxes Act 1988 (close investment-holding companies).". |
(2) A company ("the relevant company") complies with this subsection in any accounting period if throughout that period it exists wholly or mainly for any one or more of the following purposes—
| (a) | the purpose of carrying on a trade or trades on a commercial basis, |
| (b) | the purpose of making investments in land or estates or interests in land in cases where the land is, or is intended to be, let to persons other than— |
| (i) | any person connected with the relevant company, or |
| (ii) | any person who is the wife or husband of an individual connected with the relevant company, or is a relative, or the wife or husband of a relative, of such an individual or of the husband or wife of such an individual, |
| (c) | the purpose of holding shares in and securities of, or making loans to, one or more companies each of which is a qualifying company or a company which— |
| (i) | is under the control of the relevant company or of a company which has control of the relevant company, and |
| (ii) | itself exists wholly or mainly for the purpose of holding shares in or securities of, or making loans to, one or more qualifying companies. |
| (d) | the purpose of co-ordinating the administration of two or more qualifying companies, |
| (e) | the purpose of a trade or trades carried out on a commercial basis by one or more qualifying companies or by a company which has control of the relevant company, and |
| (f) | the purpose of the making, by one or more qualifying companies or by a company which has control of the relevant company, of investments as mentioned in paragraph (b) above.'. |
NEW SCHEDULE
Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff
NS1
To move the following Schedule:—
'Chargeable gains: set off of losses treated as accruing to settlors
Introduction 1 The Taxation of Chargeable Gains Act 1992 (c. 12) is amended in accordance with paragraphs 2 to 6.
Section 2 2(1) Section 2 (persons and gains chargeable to capital gains tax, and allowable losses) is amended as follows.
(2) In subsection (2) (computation of capital gains tax), for the word "and" at the end of paragraph (a) substitute—
| "(aa) | any attributed loss accruing to that person, and". |
(3) After that subsection insert—
Section 77 3 In section 77 (charge on settlor with interest in settlement), in subsection (1) at the end insert "No deduction of any loss shall be made by the trustees in respect of any disposal which gives rise to a loss which the settlor informs them is to be regarded as an attributed loss for the purposes of section 2(2).".
Section 86 4 In section 86 (attribution of gains to settlers with interest in non-resident or dual resident settlements), after subsection (1), insert—
"(1A) For the purposes of subsection (1)(e) above no account shall be taken of any disposal which gives rise to a loss which the settlor informs the trustees is to be regarded as an attributed loss for the purposes of section 2(2).".
Section 86A 5 In section 86A (attribution of gains to settlor in section 10A cases), after subsection (8) insert—
"(8A) For the purposes of this section, no account shall be taken of any disposal which gives rise to a loss which the settlor informs the trustees is to be regarded as an attributed loss for the purpose of section 2(2).".
Section 87 6 In section 87 (attribution of gains to beneficiaries), before subsection (4) insert—
"(3Z) In making any computations under this section, no account shall be taken of any disposal which gives rise to a loss which the settlor informs the trustees shall be regarded as an attributed loss for the purpose of section 2(2).".
Commencement 7 This Schedule applies to persons and gains chargeable to capital gains tax and allowable losses in the year 2003-04 and subsequent years of assessment.
Election for Schedule to apply for years earlier than 2003-04 8(1) This Schedule also applies, if the person so elects, in relation to chargeable gains and attributed losses accruing to a person in any of the years of assessment 2000-01, 2001-02 and 2002-03.
(2) An election under this paragraph—
| (a) | must be made by notice given to an officer of the Board no later than 31st January 2005; |
| (b) | where attributed losses may be regarded as arising in respect of two or more settlements, may be restricted to those regarded as arising in respect of the settlement or settlements specified in the election. |
(3) All such adjustments shall be made, whether by way of discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to an election under this paragraph.
(4) Where—
| (a) | a person makes an election under this paragraph for any one or more of the years of assessment 2000-01, 2001-02 and 2002-03, and |
| (b) | the effect of the election, or (as the case may be) both or all of them taken together, is to increase the total amount of tax that the person is entitled to recover from the trustees of a particular settlement for those three years under section 78(1)(a) of the Taxation of Chargeable Gains Act 1992 (c. 12) or paragraph 6 of Schedule 5 to that Act, |
the trustees of that settlement must join in the election, or (as the case may be) each of them that has that effect or contributes to it.'.
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