| Amendments proposed to the Finance Bill - continued | House of Commons |
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NEW CLAUSESRestriction of exceptions from charges
Mr Paul Boateng NC2 To move the following Clause:—'(1) Each of the provisions of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (employment income: securities) specified in subsection (2) (exception from charges for certain company shares) is amended in accordance with subsections (3) to (5). (2) The provisions are—
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| (a) | section 429 (restricted securities), |
| (b) | section 443 (convertible securities), |
| (c) | section 446R (securities acquired for less than market value), and |
| (d) | section 449 (post-acquisition benefits from securities). |
(3) In subsection (1) of each of those sections, after paragraph (b) (but before the word "and" where that word features at the end) insert—
| "(ba) | subsection (1A) is satisfied,". |
(4) After subsection (1) of each of those sections insert—
"(1A) This subsection is satisfied if the avoidance of tax or national insurance contributions was not the main purpose, or one of the main purposes, of the arrangements under which the right or opportunity to acquire the employment-related securities was made available."
(5) In subsection (4) of sections 429, 443 and 446R, and in subsection (3) of section 449, for the words after "are not" substitute "employment-related securities."; and accordingly omit section 429(5), 443(5), 446R(5) and 449(4).
(6) In Chapter 3A of that Part of that Act (securities with artificially depressed market value), after section 446I insert—
"446IA Disapplication of exceptions from charges
(1) Section 429 (exception from charge under section 426 for certain company shares) does not prevent section 426 (restricted securities: chargeable events) applying in relation to an event if section 446E or 446I(1)(a) would have effect in relation to the event.
(2) Section 443 (exception from charge under section 438 for certain company shares) does not prevent section 438 (convertible securities: chargeable events) applying in relation to an event if section 446G, 446H or 446I(1)(b) would have effect in relation to the event.
(3) Section 446R (exception from charge under Chapter 3C for certain company shares) does not prevent that Chapter (securities acquired for less than market value) applying in relation to employment-related securities if section 446B would have effect in relation to them.
(4) Section 449 (exception from charge under Chapter 4 for certain company shares) does not prevent that Chapter (benefits from securities) applying in relation to a benefit if section 446I(1)(e) would have effect in relation to the benefit."
(7) In Chapter 3B of that Part of that Act (securities with artificially enhanced market value), after section 446N insert—
"446NA Disapplication of exceptions from charges
(1) None of the provisions specified in subsection (2) (exceptions from charges for certain company shares) apply in relation to employment-related securities if the market value of the employment-related securities at the time of the acquisition has been increased by at least 10% by non-commercial increases within the period of 7 years ending with the acquisition.
(2) The provisions are—
| (a) | section 429 (restricted securities), |
| (b) | section 443 (convertible securities), |
| (c) | section 446R (securities acquired for less than market value), and |
| (d) | section 449 (post-acquisition benefits from securities). |
(3) If section 446L (market value on valuation date increased by more than 10% by non-commercial increases during relevant period) applies in relation to employment-related securities, section 429 does not subsequently apply in relation to the employment-related securities."
(8) This section applies on and after 7th May 2004.'.
Restricted securities with artificially depressed value
Mr Paul Boateng
NC3
To move the following Clause:—'(1) Section 446E of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (employee securities with artificially depressed market value: charge on restricted securities) is amended as follows.
(2) In subsection (1), after "on restricted securities)," insert—
| "(aa) | immediately before the employment-related securities are disposed of (in circumstances which do not constitute such an event) or are cancelled without being disposed of,". |
(3) For subsections (3) to (6) substitute—
"(3) "The relevant period" is the period beginning—
| (a) | if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applied in relation to the employment-related securities, 7 years before the acquisition, and |
| (b) | in any other case, 7 years before the relevant date, |
and ending with the relevant date.
(4) "The relevant date" is—
| (a) | in a case within subsection (1)(a), the date on which the chargeable event concerned occurs, |
| (b) | in a case within subsection (1)(aa), the date on which the disposal or cancellation concerned occurs, and |
| (c) | in a case within subsection (1)(b), the 5th April concerned. |
(5) Where this section applies in a case within subsection (1)(aa) or (b), a chargeable event within section 427(3)(a) (lifting of restrictions) is to be treated as occurring in relation to the employment-related securities on the relevant date.
(6) In every case where this section applies, subsection (1) of section 428 (amount of charge on restricted securities) applies as if the reference in subsection (2) of that section to what would be the market value of the employment-related securities immediately after the chargeable event but for any restrictions were to what would be their market value at the appropriate time but for the matters to be disregarded.
(7) "The appropriate time" is—
| (a) | in a case within subsection (1)(a) or (b), the time immediately after the chargeable event concerned, and |
| (b) | in a case within subsection (1)(aa), the time immediately before the chargeable event concerned. |
(8) "The matters to be disregarded" are—
| (a) | any restrictions, |
| (b) | the things done as mentioned in subsection (2), and |
| (c) | if the employment-related securities are about to be disposed of or cancelled, that fact. |
(9) Where this section applies in a case within subsection (1)(aa), section 428(1) applies with the omission of the reference to OP.
(10) Where this section applies in a case within subsection (1)(a) and the chargeable event concerned is within section 427(3)(c) (disposal for consideration), section 428 applies with the omission of subsection (9) (case where consideration is less than actual market value)."
(4) This section applies on and after 7th May 2004.
(5) But if the employment-related securities were acquired before that date, section 446E does not apply by virtue of the amendment made by subsection (2) of this section unless their market value would be artificially low immediately before the disposal or cancellation if the date on which the relevant period began were the later of—
| (a) | that on which it did begin, and |
| (b) | 7th May 2004.'. |
Repeal of section 677 of Taxes Act 1988
Mr Oliver Letwin
Mr Howard Flight
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne
NC1
To move the following Clause:—'Section 677 of the Taxes Act 1988 (sums paid to settlor otherwise than as income) is hereby repealed.'.
Expenditure incurred on assets leased by small or medium-sized enterprise
Mr Oliver Letwin
Mr Howard Flight
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne
NC4
To move the following Clause:—'(1) The Capital Allowances Act 2001 is amended as follows.
(2) For subsection 44(1), 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) | it is not excluded by subsection (2) or section 46 (general exclusions)." |
(3) In the table in subsection 52(3) insert in the second and third lines after "small or medium-sized enterprises"—
"or incurred by a lessor on equipment leased to a small or medium-sized enterprise".'.
Expenditure incurred in installing access ramps
Mr Oliver Letwin
Mr Howard Flight
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne
NC5
To move the following Clause:—(1) The Capital Allowances Act 2001 is amended as follows.
(2) In section 23(2) after "section 29 (fire safety)" insert—
"29A (ramps for disabled access)"
(3) After section 29 insert—
"29A Ramps for disabled access installed by small or medium-sized enterprises
(1) This section applies to expenditure if a small or medium-sized enterprise carrying on a qualifying activity has incurred it in installing ramps required to facilitate access by disabled persons to premises which the small or medium-sized enterprise uses for the purposes of the qualifying activity.
(2) A small or medium-sized enterprise installs ramps required to facilitate access by disabled persons if the installation is or will be required to comply with section 21 of the Disability Discrimination Act 1995.
Mr Paul Boateng
72
Schedule 40, page 564, line 17, at end insert—
'( ) Employment-related securities
| Short title and chapter | Extent of repeal |
| Income Tax (Earnings and Pensions) Act 2003 (c. 1) | Section 429(5). Section 443(5). Section 446R(5). Section 449(4). |
| These repeals have effect in accordance with section (Restriction of exceptions from charges) (8).'. |
ORDER OF THE HOUSE [20th APRIL 2004]
That—(1) Clauses Nos. 4, 5, 20, 28, 57 to 77, 86, 111 and 282 to 289 and Schedules Nos. 1, 3, 11, 12, 21 and 37 to 39 shall be committed to a Committee of the whole House;
(2) the remainder of the Bill shall be committed to a Standing Committee;
(3) when the provisions of the Bill considered, respectively, by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill shall be proceeded with as if it had been reported as a whole to the House from the Standing Committee.
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