Amendments proposed to the Finance Bill - continued House of Commons

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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.'.


      Relationship with chargeable gains

         

      Mr Paul Boateng

      NC12

      To move the following Clause:—

          '(1)   Subsection (3) below applies if—

          (a) section 125 applies as a result of a receipt on or after 17 March 2004, by a company that is or has been a member of a partnership, of any consideration for a disposal on or after that date of all or any of its interest in the partnership ("the section 125 disposal");

          (b) a chargeable gain accrues to the company on a relevant disposal; and

          (c) the total amount of chargeable gains accruing to the company on relevant disposals exceeds the total amount of any allowable losses accruing to it on such disposals.

          (2)   References in this section to a "relevant disposal" are to any disposal of an asset that, alone or together with other disposals of assets, constitutes the section 125 disposal; and references in this subsection to a disposal of an asset are to be construed in accordance with the 1992 Act.

          (3)   Where this subsection applies—

          (a) any chargeable gain accruing to the company on a relevant disposal must be excluded in computing, for the purposes of section 8(1) of the 1992 Act, the total amount of chargeable gains accruing to the company in the accounting period in which that gain accrued;

          (b) the relevant net gain (defined by subsection (4) below) must be included in computing for those purposes the total amount of chargeable gains accruing to the company in the accounting period in which the receipt mentioned in subsection (1) above occurred; and

          (c) any allowable loss accruing to the company on a relevant disposal must be excluded in computing for the purposes of section 8(1) of the 1992 Act the amount of any allowable losses.

          (4)   To find "the relevant net gain" for the purposes of this section—

          (a) take the amount by which the total amount of chargeable gains accruing to the company on relevant disposals exceeds the total amount of allowable losses accruing to it on such disposals; and

          (b) reduce it (but not below nil) by an amount equal to the chargeable amount.

          (5)   Where section 125 applies as mentioned in subsection (1)(a) above, in computing any chargeable gain or allowable loss accruing to the company on a relevant disposal—

          (a) neither the chargeable amount, nor any amount taken into account in computing it, shall be excluded by section 37(1) of the 1992 Act (exclusions from consideration); and

          (b) an amount that has been taken into account in computing the chargeable amount shall not by reason of that fact be excluded by section 39(1) of that Act (exclusions from allowable deductions).

          (6)   If section 125 and this section apply more than once as a result of two or more receipts by a company of consideration relating to the same section 125 disposal—

          (a) subsection (3)(b) above does not apply in relation to any of the receipts after the first; and

          (b) in relation to the first receipt, the amount to be deducted under subsection (4)(b) above is an amount equal to the total of the chargeable amounts found in relation to the receipts.

          (7)   Subsection (8) below applies if subsection (3) above prevents an allowable loss that accrued to a company otherwise than on a relevant disposal from being deductible from a chargeable gain accruing to the company on a relevant disposal.

          (8)   That loss (to the extent that it has not been deducted from any other chargeable gain) shall instead be deductible from the total amount of chargeable gains accruing to the company in the accounting period in which the receipt mentioned in subsection (1) above occurred.

          (9)   But if, in any case where subsection (3) above applies, there are one or more allowable losses—

          (a) that are losses to which section 18(3) of the 1992 Act applies, and

          (b) that accrued to the company otherwise than on a relevant disposal and are prevented by subsection (3) above from being deductible from a chargeable gain accruing to the company on a relevant disposal,

        the total amount deducted under subsection (8) above in respect of those losses must not exceed the relevant net gain.

          (10)   In this section—

      "the 1992 Act" means the Taxation of Chargeable Gains Act 1992 (c.12);"the chargeable amount" means the amount found under section 125 in relation to the receipt mentioned in subsection (1) above; andreferences to chargeable gains, or allowable losses, accruing on disposals are to be construed in accordance with the 1992 Act.'.


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.'.


 
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