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Valuation assumptions
Mr Paul Boateng
NC16
To move the following Clause:—
'For the purposes of this Part the valuation assumptions in relation to a person and any benefits are—
| (a) | if the person has not reached such age (if any) as must have been reached to avoid any reduction in the benefits on account of age, that the person reached that age on the date, and |
| (b) | that the person's right to receive the benefits had not been occasioned by physical or mental impairment.'. |
Premium bonds
Mr Paul Boateng
NC17
To move the following Clause:—
'Regulations under section 11 of the National Debt Act 1972 (c.65) (power of Treasury to make regulations as to raising of money under auspices of Director of Savings) may repeal any provision contained in section 54 of, or Schedule 18 to, the Finance Act 1968 (c.44) (terms of issue of premium savings bonds).'.
Partnerships exploiting films
Mr Paul Boateng
NC18
To move the following Clause:—
'After section 118ZK of the Taxes Act 1988 (inserted by section 119) there is inserted—
"Partnerships exploiting films
118ZL Partnerships exploiting films (1) Where (apart from this section) an amount may be given to an individual under section 380 or 381 in respect of a loss ("the loss in question") sustained by him—
| (a) | in a trade consisting of or including the exploitation of films, and |
| (b) | in an affected year of assessment, |
none of that amount may be given otherwise than against income consisting of profits arising from the trade; but this is subject to subsection (4).
(2) An "affected year of assessment" means a year of assessment at any time during which the individual carried on the trade in partnership which is also—
| (a) | the year of assessment in which the trade is first carried on by him or any of the next three years of assessment, |
| (b) | a year of assessment in which he did not devote a significant amount of time to the trade, and |
| (c) | a year of assessment at any time during which there existed a relevant agreement guaranteeing him an amount of income. |
(3) For the purposes of subsection (2)(c)—
| (a) | "a relevant agreement" means— |
| (i) | an agreement that was made with a view to the individual's carrying on the trade or in the course of his carrying it on (including any agreement under which he is or may be required to contribute an amount to the trade), or |
| (ii) | an agreement related to an agreement falling within sub-paragraph (i), |
| (b) | an agreement "guarantees" the individual an amount of income if the agreement, or any part of it, is designed to secure the receipt by the individual of that amount (or at least that amount) of income, and |
| (c) | it is immaterial when the amount of income would be received under the agreement. |
(4) If the loss in question derives to any extent from exempt expenditure, amounts that (apart from this section) may be given under section 380 or 381 in respect of the loss otherwise than against income consisting of profits arising from the trade may be so given to the extent that the total of the amounts so given does not exceed the exempt part of the loss.
(5) The exempt part of the loss is so much of the loss in question as derives from exempt expenditure.
(6) Expenditure is exempt expenditure for the purposes of this section if it is—
| (a) | expenditure incurred before 26 March 2004 in a case where this paragraph applies, or |
| (b) | expenditure that, for the purposes of the computation required by section 111(2), was deducted under section 41 or 42 of the Finance (No. 2) Act 1992, or |
| (c) | incidental expenditure that, although deductible apart from section 41 or 42 of that Act, was incurred in connection with the production or acquisition of a film in relation to which expenditure was deducted under either of those sections. |
(7) Subsection (6)(a) applies where the individual carried on the trade before 26 March 2004.
118ZM Partnerships exploiting films: supplementary (1) In section 118ZL and this section any reference to a film is to be construed in accordance with paragraph 1 of Schedule 1 to the Films Act 1985.
(2) Section 118ZH (meaning of "a significant amount of time" etc) applies for the purposes of section 118ZL as it applies for the purposes of section 118ZE.
(3) For the purposes of section 118ZL(3) agreements are related if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).
(4) The reference in section 118ZL(6) to the acquisition of a film is a reference to the acquisition of the master negative or any master tape or master disc of the film; and this subsection is to be construed in accordance with section 43(1) and (2)(b) of the Finance (No. 2) Act 1992.
(5) In section 118ZL(6) "incidental expenditure" means expenditure on management, administration or obtaining finance.
(6) The part of the loss in question that derives from exempt expenditure shall be determined on such basis as is just and reasonable.
(7) The extent to which any expenditure falls within section 118ZL(6)(c) shall be determined on such basis as is just and reasonable.
(8) In any case where sections 380 and 381 have effect as mentioned in section 118ZD(2) or 118ZI(3) (cases where sections 380 and 381 have effect as if loss carried forward from earlier year sustained in subsequent year), section 118ZL also has effect as mentioned in section 118ZD(2) or (as the case may be) section 118ZI(3)."'.
Approved plans and schemes
Mr Paul Boateng
NC19
To move the following Clause:—
'(1) The Income Tax (Earnings and Pensions) Act 2003 (c.1) is amended as follows.
(2) Omit section 421G (exclusion from Chapters 2 to 4 of Part 7 of shares awarded or acquired under approved plan or scheme).
(3) In Chapter 2 of Part 7 (restricted securities), after section 431 insert—
"431A Shares under approved plan or scheme (1) Where employment-related securities are restricted securities or a restricted interest in securities, the employer and the employee are to be treated as making an election under section 431(1) in relation to the employment-related securities if they are shares, or an interest in shares, to which this subsection applies.
(2) Subsection (1) applies to—
| (a) | shares awarded or acquired under an approved share incentive plan (within the meaning of Chapter 6 of this Part) in circumstances in which (in accordance with section 490) no liability to income tax arises, |
| (b) | shares acquired by the exercise of a share option granted under an approved SAYE option scheme (within the meaning of Chapter 7 of this Part) in circumstances in which (in accordance with section 519) no liability to income tax arises, |
| (c) | shares acquired by the exercise of a share option granted under an approved CSOP scheme (within the meaning of Chapter 8 of this Part) in circumstances in which (in accordance with section 524) no liability to income tax arises, and |
| (d) | shares acquired by the exercise of a qualifying option within the meaning of section 527(4) (enterprise management incentives) in circumstances in which (in accordance with section 530) no liability to income tax arises." |
(4) In section 489 (operation of tax advantages in connection with approved share incentive plans), after subsection (3) insert—
"(4) And those sections do not apply if the main purpose (or one of the main purposes) of the arrangements under which the shares in question are awarded or acquired is the avoidance of tax or national insurance contributions."
(5) In sections 505 and 506 (charge on shares ceasing to be subject to approved share incentive plan), after subsection (4) insert—
"(4A) Any tax due under subsection (2) or (3) is reduced by the amount or aggregate amount of any tax paid by virtue of Chapter 3B of this Part in relation to the shares."
(6) In section 519(1) (approved SAYE option schemes: no charge in respect of exercise of option) insert at the end "and
| (c) | the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised." |
(7) In section 524(1) (approved CSOP schemes: no charge in respect of exercise of option) insert at the end "and
| (c) | the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised." |
(8) Section 701 (PAYE: meaning of "asset") is amended as follows.
(9) In subsection (2)(c)—
| (a) | in sub-paragraph (ia), for the words after "employee" substitute "under a scheme approved under Schedule 4 (approved CSOP schemes) in circumstances in which Condition A or B as set out in section 524(2) or (2A) is met;", |
| (b) | omit sub-paragraph (ii), and |
| (c) | in sub-paragraph (iii), after "1996" insert "where the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the right was obtained or is exercised". |
(10) After subsection (3) insert—
"(3A) Paragraph (c) of subsection (2) does not apply to shares after their acquisition as mentioned in that paragraph."
(11) This section has effect on and after 18th June 2004 and (so far as it does not relate to the award or acquisition of shares) applies in relation to shares awarded or acquired before that date as well as in relation to those awarded or acquired on or after that date.
(12) Where section 431A(1) of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (as inserted by subsection (3)) has effect (by virtue of subsection (11)) in relation to shares acquired before 18th June 2004, it applies in relation to them so as to treat an election under section 431(1) of that Act as made in relation to them on that date.
(13) For the purposes of the application of Chapter 3B of Part 7 of that Act (securities with artificially enhanced market value) by reason of subsections (2) and (11) in relation to shares acquired before 18th June 2004, section 446O of that Act (meaning of "relevant period") has effect as if they were acquired on that date.'.
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