Amendment Paper as at
Tuesday 1st July 2003

CONSIDERATION OF BILL

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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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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

NC1

To move the following Clause:—

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

[R] Relevant interest declared.

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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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Tax Law Commission

   

Mr Michael Jack

NC5

To move the following Clause:—

    '(1)   The Commissioners of Inland Revenue and the Commissioners of Customs and Excise shall jointly prepare and submit to Parliament a Report on the Need for a Tax Law Commission ("the report"), with a view to the review, modernisation, improvement and general simplification of the tax law of the United Kingdom.

    (2)   The report shall have regard to all factors that seem to the Commissioners of Inland Revenue and the Commissioners of Customs and Excise to be relevant but shall be compiled only after a full process of consultation with all interested parties.

    (3)   The report shall in particular consider—

(a)	the increase over recent years in the volume of tax law;

(b)	the age of particular sections of tax law;

(c)	the compliance costs for taxpayers and others resulting from tax law; and

(d)	reports from the Tax Law Rewrite Project on their findings in relation to problems in the tax law that they have rewritten and the actions that have been taken on those matters.

    (4)   The report shall be presented to Parliament by 31st March 2004.

    (5)   In this section—

(a)	"tax law" means—

(i)	primary legislation governing the raising and general management of taxes in the United Kingdom;

(ii)	statutory instruments supporting and amplifying such primary legislation; and

(iii)

any additional guidance materials intended to facilitate the operation of the statutory provisions;

(b)	but "tax law" shall not include case law except in so far as it may provide evidence of areas of tax law that cause operational difficulties.'.

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Exemption from vehicle excise duty on historic vehicles

   

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

NC8

To move the following Clause:—

       'In paragraph 1A(1) of Schedule 2 to the Vehicle Excise and Registration Act 1994, for the words "before 1st January 1973" there shall be substituted "more than 30 years before the beginning of the year in which that time falls.".'.

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R&D tax relief: exploration and appraisal in the North Sea

   

Mr Alex Salmond

NC9

To move the following Clause:—

       '.—Schedule 12 to the Finance Act 2002 (c. 23) is amended by inserting at the end of paragraph 19(1) ", subject to the specific inclusion of oil and gas exploration and appraisal as defined in section 837B of that Act.".'.

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Prepared 1 Jul 2003