NOTICES OF AMENDMENTS

given up to and including

Friday 27th June 2003

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New Amendments handed in are marked thus *

CONSIDERATION OF BILL

FINANCE BILL, AS AMENDED

NEW CLAUSES

Intangible fixed assets: tax avoidance arrangements and related parties

   

Mr Chancellor of the Exchequer

NC6

To move the following Clause:—

    '(1)   Schedule 29 to the Finance Act 2002 (c.23) (gains and losses of a company from intangible fixed assets) is amended as follows.

    (2)   In paragraph 111 (tax avoidance arrangements to be disregarded)—

(a)	in sub-paragraph (1) for the words following "in determining" substitute "whether a debit or credit is to be brought into account under this Schedule or the amount of any such debit or credit", and

(b)	in sub-paragraph (2)—

(i)	for "under paragraph 9" in paragraph (a), and

(ii)	for "under Part 4" in paragraph (b),

substitute "under this Schedule".

    (3)   In paragraph 95(1) (cases in which persons are "related parties") at the end add—

       "Case Four

P is a company and C is another company in the same group."

    (4)   The amendments in this section—

(a)	have effect in relation to the debits or credits to be brought into account for accounting periods beginning on or after 20th June 2003, and

(b)	in relation to the debits or credits to be brought into account for any such period shall be deemed always to have had effect.

    (5)   For this purpose an accounting period beginning before, and ending on or after, that date is treated as if so much of that period as falls before that date, and so much of that period as falls on or after that date, were separate accounting periods.'.

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Inheritance tax: gifts with reservation

   

Mr Chancellor of the Exchequer

NC7

To move the following Clause:—

    '(1)   Section 102 of the Finance Act 1986 (c.41) (gifts with reservation) is amended as follows.

    (2)   In subsection (5) (section not to apply where disposal is an exempt transfer by virtue of any of the provisions of the Inheritance Tax Act 1984 specified in the paragraphs of that subsection) at the end of paragraph (a) (section 18: transfers between spouses) insert ", except as provided by subsections (5A) and (5B) below".

    (3)   After subsection (5) insert—

    "(5A)   Subsection (5)(a) above does not prevent this section from applying if or, as the case may be, to the extent that—

(a)	the property becomes settled property by virtue of the gift,

(b)

by reason of the donor's spouse ("the relevant beneficiary") becoming beneficially entitled to an interest in possession in the settled property, the disposal is or, as the case may be, is to any extent an exempt transfer by virtue of section 18 of the 1984 Act in consequence of the operation of section 49 of that Act (treatment of interests in possession),

(c)	at some time after the disposal, but before the death of the donor, the relevant beneficiary's interest in possession comes to an end, and

(d)	on the occasion on which that interest comes to an end, the relevant beneficiary does not become beneficially entitled to the settled property or to another interest in possession in the settled property.

    (5B)   If or, as the case may be, to the extent that this section applies by virtue of subsection (5A) above, it has effect as if the disposal by way of gift had been made immediately after the relevant beneficiary's interest in possession came to an end.

    (5C)   For the purposes of subsections (5A) and (5B) above—

(a)	section 51(1)(b) of the 1984 Act (disposal of interest in possession treated as coming to end of interest) applies as it applies for the purposes of Chapter 2 of Part 3 of that Act; and

(b)	references to any property or to an interest in any property include references to part of any property or interest.".

    (4)   The amendments made by this section have effect in relation to disposals made on or after 20th June 2003.'.

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Registered social landlords: treatment of certain leases granted between 1st January 1990 and 27 March 2000

   

Mr Chancellor of the Exchequer

NC10

To move the following Clause:—

    '(1)   This section applies to a lease in relation to which the following conditions are met—

(a)	it is a lease of a dwelling to one or more individuals;

(b)	it is for an indefinite term or is terminable by notice of a month or less;

(c)	it was executed on or after 1st January 1990 and before 28th March 2000;

(d)	at the time it was executed the rate or average rate of the rent (whether reserved as a yearly rent or not) was £5,000 a year or less; and

(e)	the landlord's interest has at any time before 26th June 2003 been held by a registered social landlord.

    (2)   A lease to which this section applies (whether or not presented for stamping) shall be treated—

(a)	for the purposes of section 14 of the Stamp Act 1891 (c.39) (production of instrument in evidence) as it applies in relation to proceedings begun after the day on which this Act is passed, and

(b)	for the purposes of section 17 of that Act (enrolment etc of instrument) as it applies to any act done after that day,

as if it had been duly stamped in accordance with the law in force at the time when it was executed.

    (3)   If in the case of a lease to which this section applies the Commissioners are satisfied—

(a)	that the instrument was stamped on or before the day on which this Act is passed, and

(b)	that stamp duty was charged in respect of it,

       they shall pay to such person as they consider appropriate an amount equal to the duty (and any interest or penalty) so charged.

    (4)   Any such payment must be claimed before 1st January 2004.

    (5)   Entitlement to a payment under subsection (3) is subject to compliance with such conditions as the Commissioners may determine with respect to the production of the instrument, to its being stamped so as to indicate that it has been produced under this section or to other matters.

    (6)   For the purposes of section 10 of the Exchequer and Audit Departments Act 1866 (c.39) (Commissioners to deduct repayments from gross revenues) any amount paid under subsection (3) above is a repayment.

    (7)   This section shall be construed as one with the Stamp Act 1891 (c.39).

    (8)   The reference in subsection (1) above to the landlord's interest being held by a "registered social landlord" is to its being held by a body that—

(a)	is registered in a register maintained under—

(i)	Article 124 of the Housing (Northern Ireland) Order 1981 (S.I.1981/156(N.I.3)),

(ii)	section 3(1) of the Housing Associations Act 1985 (c.69),

(iii)

Article 14 of the Housing (Northern Ireland) Order 1992 (S.I.1992/1725 (N.I.15)),

(iv)	section 1(1) of the Housing Act 1996 (c.52), or

(b)	is a body corporate whose objects correspond to those of a housing association and which, pursuant to a contract with Scottish Homes, is registered in a register kept for the purposes by Scottish Homes.

    (9)   Section 129 of this Act (relief for certain leases granted on or after 1st January 2000) does not apply to a lease to which this section applies.'.

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Tax credits for individual savings accounts and personal equity plans

   

Mr Michael Howard [R]
Mr Howard Flight [R]
Mr Stephen O'Brien [R]
Mr Mark Prisk [R]
Mr David Wilshire

[R] Relevant registered interest declared.

NC1

To move the following Clause:—

       '.—Section 76(1)(a) of the Finance Act 1998 (c. 36) shall cease to have effect.'.

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Debits and credits treated as relating to capital expenditure

   

Mr Michael Howard
Mr Howard Flight [R]
Mr Stephen O'Brien
Mr Mark Prisk
Mr David Wilshire

NC2

To move the following Clause:—

    '.—(1)   Paragraph 14 of Schedule 9 to the Finance Act 1996 (debits and credits treated as relating to capital expenditure) is amended as follows:

    (2)   After sub-paragraph (1) insert—

"(1A)

This paragraph also applies where any debit or credit given by an authorised accounting method for any accounting period in respect of a loan relationship of a company is allowed by generally accepted accounting practice to be treated, in the accounts of the company, as an amount brought into account in determining the value of a financial asset.".

    (3)   After sub-paragraph (3) insert—

"(4)	For the purpose of sub-paragraph (1A) above a 'financial asset' is as defined by Financial Reporting Standard 5 issued in April 1994 by the Accounting Standards Board, as from time to time amended.".'.

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Continuation of children's tax credit for persons subject to immigration control

   

Mr Michael Howard
Mr Howard Flight
Mr Stephen O'Brien
Mr Mark Prisk
Mr David Wilshire

NC3

To move the following Clause:—

    '(1)   Where this section applies—

(a)	the repeal of section 257AA of, and Schedule 13B to, the Taxes Act 1988 (children's tax credit) by sections 1(3)(a) and 60 of, and Schedule 6 to, the Tax Credits Act 2002 (the 2002 Act); and

(b)	the repeal of the references to "section 257AA" in section 257C of the Taxes Act 1988 by section 60 of, and Schedule 6 to, the 2002 Act

       shall not apply.

    (2)   This section applies where the claimant is wholly or partly excluded from entitlement to child tax credit or working tax credit (or both) by reason of being a person subject to immigration control within the meaning of section 42 of the 2002 Act and regulations made thereunder.'.

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Small or medium-sized enterprises

   

Mr Michael Howard
Mr Howard Flight [R]
Mr Stephen O'Brien
Mr Mark Prisk
Mr David Wilshire

NC4

To move the following Clause:—

    '.—(1)   The Capital Allowances Act 2001 is amended as follows.

    (2)   For subsection (1) of section 44 (expenditure incurred by small or medium-sized enterprises) substitute—

"(1)	Expenditure is first-year qualifying expenditure if—

(a)	it is incurred by a small or medium-sized enterprise, or

(b)	it is incurred by a lessor on equipment leased to a small or medium-sized enterprise, and

(c)	and it is not excluded by subsection (2) or section 46 (general exclusions applying to sections 40, 44 and 45)."

    (3)   In subsection (5) of section 46 (general exclusions applying to sections 40, 44 and 45) after "section", insert "44,".

    (4)   In section 52 (first-year allowances) column 1 of the Table is amended by inserting at the end of the second row "or incurred by a lessor on equipment leased to a small or medium-sized enterprise".'.

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Prepared 27 Jun 2003