Amendments proposed to the Finance Bill, As Amended - continued	House of Commons
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Mr Chancellor of the Exchequer

100

Page     365,     line     42     [Schedule     15],     after first 'the' insert 'chargeable proportion of the'.

   

Mr Chancellor of the Exchequer

101

Page     365,     line     45     [Schedule     15],     at end insert—

'(2A)

In this paragraph, "the chargeable proportion", in relation to any property, means—

DV
V

where DV and V are to be read in accordance with sub-paragraph 4(2) or 7(2), as the case requires, but as if—

(a)   any reference in paragraph 4(2) or 7(2) to the valuation date were a reference—

(i)	in the case of property falling within subsection (3) of section 102 of the Finance Act 1986, to the date of the death of the chargeable person, and

(ii)	in the case of property falling within subsection (4) of that section, to the date on which the property ceases to be treated as property subject to a reservation, and

(b)   the transactions to be taken into account in calculating DV included transactions after the time when the election takes effect as well as transactions before that time.'.

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Mr Oliver Letwin

Mr Howard Flight

Mr Mark Prisk

Mr Andrew Tyrie

Mr George Osborne

228

Page     366,     line     4     [Schedule 15],     at end insert—

    '(4)   If—

(a)	within two years of the death of the chargeable person the relevant property is transferred to a settlement, and

(b)	a direction is given in respect of the property under the provisions of paragraph 1 of Schedule 4 to IHTA 1984 (maintenance funds for historic buildings),

       sub-paragraph 2(b) shall not apply to the property and the chargeable person shall be treated as the settlor of the property under the provisions of Schedule 4 to IHTA 1984.'.

   

Mr Chancellor of the Exchequer

102

Page     366,     line     10     [Schedule     15],     leave out 'by reference to the relevant property'.

   

Mr Chancellor of the Exchequer

103

Page     366,     line     11     [Schedule     15],     at end insert 'by reference to the relevant property or any property which the relevant property represents or is derived from'.

   

Mr Chancellor of the Exchequer

104

Page     366,     line     13     [Schedule     15],     leave out 'by reference to the relevant property'.

   

Mr Chancellor of the Exchequer

105

Page     366,     line     15     [Schedule     15],     after 'assessment' insert 'by reference to the relevant property or any property which represents or is derived from the relevant property'.

   

Mr Chancellor of the Exchequer

106

Page     366,     line     17     [Schedule     15],     leave out 'the property' and insert 'the relevant property and any property which represents or is derived from the relevant property'.

   

Mr Chancellor of the Exchequer

107

Page     366,     line     22     [Schedule     15],     leave out from 'property' to 'remains' in line 24 and insert 'or the property which represents or is derived from the relevant property'.

   

Mr Oliver Letwin

Mr Howard Flight

Mr Mark Prisk

Mr Andrew Tyrie

Mr George Osborne

229

Page     366,     line     27     [Schedule 15],     at end insert—

    '(4)   If—

(a)	within two years of the death of the chargeable person the relevant property is transferred to a settlement, and

(b)	a direction is given in respect of the property under the provisions of paragraph 1 of Schedule 4 to IHTA 1984 (maintenance funds for historic buildings),

       sub-paragraph 2(b) shall not apply to the property and the chargeable person shall be treated as the settlor of the property under the provisions of Schedule 4 to IHTA 1984.'.

   

Mr Chancellor of the Exchequer

108

Page     366,     line     41     [Schedule     15],     at end insert—

'(6)

Subject to sub-paragraph (5), the election takes effect for the purposes of inheritance tax from the beginning of the initial year within the meaning of paragraph 21 or (as the case requires) paragraph 22 or, if later, the date on which the chargeable person would (but for the election) have first become chargeable under this Schedule by reference to the property to which the election relates.'.

   

Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne

11

Page     366,     line     41     [Schedule     15],     at end insert—

'24

(1)

This paragraph applies where—

(a)	the provisions of paragraph 3 (land), paragraph 6 (chattels) or paragraph 8 (intangible property) apply to a person during the year of assessment 2004-05 ("the current year") by reference to any property ("the relevant property"); and

(b)	the relevant property is transferred absolutely to the chargeable person during the current year or during the year of assessment 2005-06 either directly or by "associated operations" (as defined by section 268 of the Inheritance Tax Act 1984).

    (2)   Where this paragraph applies, no operation by which the relevant property is so transferred shall—

(a)	be a disposition or transfer of value for the purposes of the Inheritance Tax Act 1984,

(b)	be subject to Inheritance Tax under section 65(1) of the Inheritance Taxt Act 1984,

(c)	be a disposal for the purposes of paragraphs 3 and 6 above,

(d)	be subject to Stamp Duty Land Tax; and

(e)	the receipt of the relevant proprty by the chargeable person shall not be subject to Income Tax.

    (3)   If any operation by which the property is so transferred constitutes a disposal for the purposes of the Taxation of Chargeable Gains Act 1992, the person making the disposal and the person acquiring the property shall be treated as if the asset was acquired from the person making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the person making the disposal.'.

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Mr Chancellor of the Exchequer

109

Page     372,     line     18     [Schedule     16],     after 'section 484(7)' insert 'of the Income Tax (Earnings and Pensions) Act 2003'.

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Mr Oliver Letwin

Mr Howard Flight

Mr Mark Prisk

Mr Andrew Tyrie

Mr George Osborne

230

Page     399,     line     10     [Schedule 21],     leave out from 'settlement' to end of line 16 and insert 'in relation to which a direction under paragraph 1 of Schedule 4 to the Inheritance Tax Act 1984 (maintenance funds for historic buildings) has been given.'.

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Mr Oliver Letwin

Mr Howard Flight

Mr Mark Prisk

Mr Andrew Tyrie

Mr George Osborne

231

Page     407,     line     23     [Schedule 22],     leave out from 'settlement' to end of line 30 and insert 'and a direction under paragraph 1 of Schedule 4 to the Inheritance Tax Act 1984 (maintenance funds for historic buildings) was given in relation to a relevant earlier disposal.'.

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Mr Chancellor of the Exchequer

110

Page     117,     line     41     [Clause     131],     at end insert—

    '(5A)   If any non-income amount is taken into account in computing a relevant profit, then for the purposes of subsection (5) the amount of the company's due share of the relevant profit and the amount of the share of the relevant profit that was actually allocated to the company shall be taken to be what they would have been if all non-income amounts had been left out of account in computing the relevant profit.

    (5B)   In subsection (5A) a "non-income amount" means an amount that for the purposes of corporation tax would not be taken into account as income or in computing income.'.

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Mr Chancellor of the Exchequer

111

Page     141,     line     40     [Clause     147],     leave out from 'Part' to end of line 45 and insert '"overseas pension scheme" means a pension scheme (other than a registered pension scheme) which—

(a)	is established in a country or territory outside the United Kingdom, and

(b)	satisfies any requirements prescribed for the purposes of this subsection by regulations made by the Board of Inland Revenue.

    (8)   In this Part "recognised overseas pension scheme" means an overseas pension scheme which—

(a)	is established in a country or territory prescribed, or of a description prescribed, for the purposes of this subsection by regulations made by the Board of Inland Revenue, or'.

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Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne

27

Page     151,     line     16     [Clause     162],     leave out '70% of the basis amount for the alternatively secured pension year' and insert 'the greater of:

(a)	70% of the basis amount for that alternatively secured pension year, or

(b)	in an alternatively secured pension year other than the first alternatively secured pension year, the aggregate of:

(i)	the total amount of alternatively secured pension which could have been paid to the member in all previous alternatively secured pension years less the amount actually paid to the member in those alternatively secured pension years ("the undrawn alternatively secured pension"), and

(ii)	70% of the basis amount for that alternatively secured pension year (calculated after deducting from the sums and assets representing the member's alternatively secured pension fund on the nominated date the amount of the undrawn alternatively secured pension).'.

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Prepared 7 Jul 2004