Gift-aid: carry-forward of excess allowances
Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff
NC12
To move the following Clause:—
'.—(1) Section 25 of the Finance Act 1990 shall be amended as follows with effect from the year 2002-03.
(2) After subsection (6) of that section insert—
"(6A) For the purposes of the Income Tax Acts and the Taxation of Chargeable Claims Act 1992, if the basic rate limit for the year of assessment referred to in subsection (6) above, as increased by subsection (6)(a)(ii) above, exceeds the income and the capital gains of the donor which are chargeable at the starting rate, lower rate or basic rate for that year of assessment, the excess, in so far as it arises from the operation of subsection (6)(a)(ii), shall be carried forward to the next following year of assessment and the basic rate limit of that year shall be increased by the amount of the excess so carried forward, and if the basic rate limit of the next following year, as so increased, exceeds the income and capital gains of the donor which are chargeable at the starting rate, lower rate or basic rate for that year of assessment, the excess so arising for that year shall be carried forward and so on, until no excess remains.
(6B) In a case where an excess is carried forward under subsections (6A) above, the reference to profits or gains chargeable to income tax or capital gains tax in subsection (2)(i)(i) above shall include a reference to profits or gains chargeable to income tax and capital gains tax for any year of assessment to which such an excess is so carried forward."
(3) Section 587B of the Taxes Act 1988 shall be amended as follows with effect from the year 2002-03.
(4) After subsection (2) of that section insert—
"(2A) In the case of a disposal by an individual, if the relief that may be claimed for the year of assessment referred to in subsection (2)(a)(i) above exceeds the total income of the individual for that year of assessment, the excess after making a claim for that year of assessment and the individual may make a claim for relief under this section for the amount of the excess in the next following year, and if the relief that may be claimed in the next following year, after making such a claim, exceeds the total income of the individual for that year of assessment, the excess shall be carried forward to the next following year and so on until no excess remains.
(2B) In the case of a disposal by an individual, if the relief that may be claimed for a given year of assessment under subsection (2) or (2A) above exceeds the total income of the individual for that year of assessment, the individual may make a claim for that year of assessment to treat the excess as increasing the annual exempt amount for that year for the purposes of charging capital gains tax under section 3(2) of the Taxation of Chargeable Gains Act 1992. To the extent of that relief is so given as a result of such a claim, the amount of any excess which may be carried forward to the next following year under subsection (2A) shall be reduced.".'.
Life Insurance: rate of tax on insurance company chargeable gains and treated as paid on policy gains
Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff
NC13
To move the following Clause:—
'—(1) In subsection (3) of section 88A1 of the Finance Act 1989 (lower corporation tax rate on certain insurance company profits), after 'as consists in income', insert 'or gains'. (2) After subsection (3)(d) of that section, insert—
(3) After subsection (2)(aa) of section 1A of the Income and Corporation Taxes Act 1988 (the charge to income tax), insert—
| "(ab) | any amount included in an individual's total income by virtue of section 547;" |
(4) In subsection (5) of section 547 of the Income and Corporation Taxes Act 1988 (method of charging gain to tax), for "basic rate" substitute "lower rate".(5) The amendments made by subsections (1) and (2) have effect from 1st April 2002.
(6) The amendments made by subsection (3) and (4) have effect from 6th April 2002.
Gift Aid and non-taxpayers
Mr Edward Davey
Mr John Burnett
Dr John Pugh
Mr David Laws
NC14
To move the following Clause:—
'—(1) Section 25 of the Finance Act 1990 (donations to charity by individuals) shall be amended in accordance with subsection (2) below.
(2) In subsection (8),
| (a) | after "year of assessment" there shall be inserted "by more than £520"; and |
| (b) | at the end there shall be added "over £520". |
(3) This section shall be deemed to have effect for the year 2002-03 and subsequent years of assessment.'.
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.'.
Mr Paul Boateng
222
*Schedule 39, page 479, line 2, leave out paragraph (c) and insert—
'(c) subsection (8).'.
Mr Paul Boateng
223
*Schedule 39, page 481, line 6, at end insert—
'( ) Computation of profits
| Short title and chapter | Extent of repeal | | Income and Corporation Taxes Act 1988 (c.1) | In section 473(2), the words, ", if the securities were not such as are mentioned in subsection (1)(b) above". |
| Finance Act 1998 (c.36) | Section 44. |
| Schedule 6. |
| Capital Allowances Act 2001 (c.2) | In Schedule 2, paragraph 102. |
| 1 | The repeal in section 473(2) of the Taxes Act 1988 has effect in accordance with section 66(4)(a) of this Act. |
| 2 |
The other repeals have effect in accordance with section 63(6) of and paragraphs 16 and 17 of Schedule 22 to this Act.'. |
Mr Andrew Smith
154
Schedule 39, page 483, line 47, column 2, leave out '17(5)' and insert '17—
| (a) | in sub-paragraph (5),'. |
Mr Andrew Smith
155
Schedule 39, page 483, line 51, column 2, at end insert—
| '(b) | sub-paragraphs (6) and (7).'. |
Mr Andrew Smith
156
Schedule 39, page 483, line 52, column 2, leave out '18(4),' and insert '18—
| (a) | in sub-paragraph (1), the word "and" immediately preceding paragraph (b); |
| (b) | in sub-paragraph (4),'. |
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