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S.C.A.
Amendment Paper as at
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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). |
| "(ba) | subsection (1A) is satisfied,". |
- "(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). |
(8) This section applies on and after 7th May 2004.'.
As an Amendment to Mr Paul Boateng's proposed New Clause 2 (Shares in employee-controlled companies and unconnected companies):
Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne
(a)
Line 21, after 'securities', insert 'that have been acquired within the previous seven years'.
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) "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. |
(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. |
| (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. |
(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. |
(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. |
| (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. |
| (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). |
| (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. |
(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.'.
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