Amendment Paper as at
Wednesday 7th July 2004
CONSIDERATION OF BILL
FINANCE BILL, AS AMENDED
NOTE
The Amendments have been arranged in accordance with the Order of the House [6th July], as follows:—
New Clauses, amendments relating to Clauses 1 to 4, Schedule 1, Clauses 5 to 19, Schedule 2, Clauses 20 to 28, Schedule 3, Clause 29, Schedule 4, Clause 30, Schedule 5, Clauses 31 to 41, Schedule 6, Clauses 42 to 47, Schedule 7, Clause 48, Schedule 8, Clause 49, Schedule 9, Clauses 50 to 52, Schedule 10, Clauses 53 to 64, Schedule 11, Clauses 65 to 76, Schedule 12, Clauses 77 and 78, Schedule 13, Clauses 79 and 80, Schedule 14, Clauses 81 to 84, Schedule 15, Clause 85, Schedule 16, Clauses 86 to 92, Schedule 17, Clause 93, Schedule 18, Clause 94, Schedule 19, Clause 95, Schedule 20, Clauses 96 to 116, Schedule 21, Clause 117, Schedule 22, Clauses 118 to 134, Schedule 23, Clause 135, Schedule 24, Clauses 136 to 141, Schedule 25, Clause 142, Schedule 26, Clause 143, Schedule 27, Clauses 144 to 162 and 164, Schedule 28, Clauses 163 and 165, Schedule 29, Clauses 166 to 175, Schedule 30, Clauses 176 to 200, Schedule 31, Clauses 201 to 212, Schedule 32, Clauses 213 to 275, Schedule 33, Clauses 276 and 277, Schedule 34, Clauses 278 and 279, Schedule 35, Clause 280, Schedule 36, Clauses 281 to 290, Schedule 37, Clauses 291 and 292, Schedule 38, Clauses 293 to 296, Schedule 39, Clauses 297 to 317, new Schedules, amendments relating to Clause 318, Schedule 40 and Clauses 319 and 320.
Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne
16
Page 4, line 24 [Clause 5], at beginning insert 'Subject to the provisions of subsection (7).'.
[R] Relevant registered interest declared.
Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne
17
Page 4, line 24 [Clause 5], at end insert—
'(7) On any occasion when the average closing spot price of Brent crude oil has been at or above 37.84 US dollars per barrel for a period of fourteen days, the Chancellor of the Exchequer shall make regulations suspending the operation of subsections (1)(a) and (1)(c) of this section.
(8) In this section—
| | "Brent crude oil" means oil from the Brent oilfield in the North Sea; and |
| | "average closing spot price" means the mean of the closing spot prices for Brent crude oil quoted on the International Petroleum Exchange on each day on which that exchange is open for trading within the period of fourteen days.'. |
Mr David Laws
Norman Lamb
Mr John Burnett
Dr Vincent Cable
38
Page 23, line 26 [Clause 28], leave out '19%' and insert '5%'.
Mr Oliver Letwin
Mr Howard Flight
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne
224
Page 23, line 40 [Clause 29], at end insert—
'(5) This section shall not apply to the income of a settlement in any year of assessment if the trustees of the settlement have elected that section 691(2) of the Taxes Act (certain income of maintenance funds for historic houses not to become the income of the settlor etc) shall have effect in the case of—
| (b) | any part of the settlement in relation to that year of assessment'. |
Mr Chancellor of the Exchequer
71
Page 24, line 10 [Clause 30], at end insert '; and
| (c) | at the end of the paragraph insert— |
"(7) In determining for the purposes of sub-paragraph (1) above the amount that would be taken for tax purposes to be the amount of the profits or losses for a year of assessment in the case of a person who is not resident in the United Kingdom, there shall be left out of account any income of that person which is—
| (a) | excluded income for the purposes of section 128 of the Finance Act 1995 (limit on income chargeable on non-residents: income tax), or |
| (b) | income to which section 151 of the Finance Act 2003 applies (non-resident companies: extent of charge to income tax).".'. |
Mr Chancellor of the Exchequer
72
Page 53, line 23 [Clause 44], at end insert '(a), (c) or (ca),'.
Mr Chancellor of the Exchequer
73
Page 53, line 32 [Clause 44], after '76(1)(aa)', insert ', (a), (c) or (ca)'.
Mr Chancellor of the Exchequer
74
Page 303, line 26 [Schedule 8], leave out 'Schedule' and insert 'Chapter'.
Mr Chancellor of the Exchequer
75
Page 303, line 38 [Schedule 8], leave out 'Schedule' and insert 'Chapter'.
Mr Chancellor of the Exchequer
76
Page 308, line 40 [Schedule 10], after 'debit' insert '(in the case of an asset) or credit (in the case of a liability)'.
Mr Chancellor of the Exchequer
77
Page 308, line 42 [Schedule 10], after 'credit' insert '(in the case of an asset) or debit (in the case of a liability)'.
Mr Chancellor of the Exchequer
78
Page 309, line 6 [Schedule 10], after 'credit' insert '(in the case of an asset) or debit (in the case of a liability)'.
Mr Chancellor of the Exchequer
79
Page 309, line 8 [Schedule 10], after 'debit' insert '(in the case of an asset) or credit (in the case of a liability)'.
Mr Chancellor of the Exchequer
80
Page 310, line 4 [Schedule 10], leave out paragraph 10 and insert—
| | '10 | Omit section 92A of that Act (convertible securities etc.: debtor relationships).'. |
Mr Chancellor of the Exchequer
81
Page 311, line 11 [Schedule 10], after 'instruments' insert 'or equity instruments'.
Mr Chancellor of the Exchequer
82
Page 322, line 1 [Schedule 10], leave out from beginning to 'derive' in line 10 and insert—
| 17C (1) | | The Treasury may by regulations make provision— |
(a) excluding amounts of a prescribed description from paragraph 17B(1);
(b) requiring amounts of a prescribed description that do not fall within paragraph 17B(1) (by virtue of regulations under paragraph (a) above or otherwise) to be brought into account in determining a company's profit or loss for a period in prescribed circumstances;
(c) as to the manner in which any such amounts are to be brought into account.
| (2) | The regulations may (in particular) make provision by reference to the fact that amounts'. |
Mr Chancellor of the Exchequer
83
Page 322, line 16 [Schedule 10], leave out from beginning to end of line 18 and insert—
| '() | Regulations under this paragraph may apply, exclude or modify any of the provisions of this Schedule in relation to cases for which provision is made by the regulations.".'. |
Mr Chancellor of the Exchequer
84
Page 329, line 24 [Schedule 10], leave out paragraphs 77 and 78 and insert—
'77 For sections 92 to 94AB of the Finance Act 1993 (c.34) (corporation tax: currency) substitute—
92 The basic rule: sterling to be used
(1) For the purposes of corporation tax the profits of a company for an accounting period must be computed and expressed in sterling.
(2) The following sections contain further provision as to the application of subsection (1) to certain profits or losses falling to be computed in accordance with generally accepted accounting practice—
section 92A (company operating in sterling and preparing accounts in another currency);
section 92B (company operating in currency other than sterling and preparing accounts in another currency);
section 92C (company preparing accounts in currency other than sterling).
92A Company operating in sterling and preparing accounts in another currency
(1) This section applies if, for a period of account, in accordance with generally accepted accounting practice, a company resident in the United Kingdom—
| (a) | prepares its accounts in a currency other than sterling, and |
| (b) | in those accounts identifies sterling as its functional currency. |
(2) Profits or losses of the company for the period that fall to be computed in accordance with generally accepted accounting practice for corporation tax purposes must be computed in sterling as if the company prepared its accounts in sterling.
92B Company operating in currency other than sterling and preparing accounts in another currency
(1) This section applies if, for a period of account, in accordance with generally accepted accounting practice—
| (a) | a company resident in the United Kingdom prepares its accounts in one currency, |
| (b) | in those accounts it identifies another currency as its functional currency, and |
| (c) | that currency is not sterling. |
(2) Profits or losses of the company for the period that fall to be computed in accordance with generally accepted accounting practice for corporation tax purposes must be computed in sterling by—
| (a) | computing those profits or losses in the functional currency as if the company prepared its accounts in that currency, and |
| (b) | taking the sterling equivalent of those profits or losses. |
(3) Where this section applies, it shall be assumed that any sterling amount mentioned in the Corporation Tax Acts is its equivalent expressed in the functional currency of the company.
92C Company preparing accounts in currency other than sterling
(1) This section applies in relation to a company resident in the United Kingdom if, for a period of account—
| (a) | the company prepares its accounts in a currency other than sterling (the "accounts currency"), and |
| (b) | neither section 92A nor section 92B applies. |
(2) This section also applies in relation to a company that is not resident in the United Kingdom if, for a period of account, the company prepares its return of accounts in a currency other than sterling (the "accounts currency").
(3) Profits or losses of the company for the period that fall to be computed in accordance with generally accepted accounting practice for corporation tax purposes must be computed in sterling by—
| (a) | computing those profits or losses in the accounts currency, and |
| (b) | taking the sterling equivalent of those profits or losses. |
(4) Where this section applies, it shall be assumed that any sterling amount mentioned in the Corporation Tax Acts is its equivalent expressed in the accounts currency of the company.
92D Translating amounts into equivalent in different currency
(1) Where, for the purposes of computing the profits or losses of a company for an accounting period, an amount is required by section 92B or 92C to be translated—
| (a) | into its sterling equivalent, or |
| (b) | into its equivalent expressed in the functional currency or the accounts currency of the company, |
the translation must be made by reference to the appropriate exchange rate.
(2) The "appropriate exchange rate" is—
| (a) | the average exchange rate for the current accounting period, or |
| (b) | an appropriate spot rate of exchange for the transaction in question. |
92E Meaning of "accounts", "return of accounts" and "functional currency"
(1) References in sections 92A to 92C to the "accounts" of a company resident in the United Kingdom are to—
| (a) | the annual accounts of the company required by Part 7 of the Companies Act 1985 or Part 8 of the Companies (Northern Ireland) Order 1986; or |
| (b) | if the company is not required to prepare such accounts, the accounts which it is required to keep under the law of the country or territory under whose laws the company is incorporated; or |
| (c) | if the company is not so required to keep accounts, such of its accounts as most closely correspond to accounts which it would have been required to prepare if the provisions of Part 7 of the Companies Act 1985 applied to it. |
(2) The reference in section 92C to the "return of accounts" of a company not resident in the United Kingdom is to a return of such accounts of its permanent establishment in the United Kingdom as may be required by the Inland Revenue under paragraph 3 of Schedule 18 to the Finance Act 1998 (company tax returns).
(3) References in sections 92A, 92B and 92D to a company's "functional currency" are to the currency of the primary economic environment in which the company operates.".
| 78 | (1) | Section 730BB of the Taxes Act 1988 (exchange gains and losses on sale and repurchase of securities) is amended as follows. |
| (2) | In subsection (2)(c) for the words from "section 93 of the Finance Act 1993" to "sterling)" substitute "section 92B or 92C of the Finance Act 1993 (company preparing accounts or operating in currency other than sterling)". |
(a) in paragraph (a) for "section 93 of the Finance Act 1993" substitute "section 92B or 92C of the Finance Act 1993 (company preparing accounts or operating in currency other than sterling)";
(b) in paragraph (b) for the words from "relevant foreign currency" to "the company" substitute "relevant currency".
(c) in paragraph (c)(i) and (ii) for "relevant foreign currency" substitute "relevant currency".
| (4) | After subsection (3) insert— |
"(3A) In subsection (3), references to the relevant currency are—
| (a) | in cases in which section 92B of the Finance Act 1993 applies, to the functional currency (within the meaning of that section), and |
| (b) | in cases in which section 92C of the Finance Act 1993 applies, to the accounts currency (within the meaning of that section)." |
| (5) | Omit subsection (12).'. |
