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Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
142
Schedule 7, page 111, line 18, leave out from beginning to end of line 30.
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
138
Schedule 7, page 117, line 37, leave out from beginning to end of line 8 on page 118.
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
139
Schedule 7, page 117, line 38, at end insert—
'(2A) Where two or more associated companies cease to be members of a group at the same time, sub-paragraph (2) does not have effect in relation to a transfer between those companies.
(2B) But where—
| (a) | a company ("the transferee") that has ceased to be a member of a group of companies ("the first group") has been assigned an asset or liability from another company ("the transferor") which was a member of that group at the time of the transfer, |
| (b) | sub-paragraph (3) applies in relation to the transferee's ceasing to be a member of the first group so that sub-paragraph (2) does not have effect, |
| (c) | the transferee subsequently ceases to be a member of another group of companies ("the second group"), and |
| (d) | there is a relevant connection between the two groups (see sub-paragraph (5)), |
sub-paragraph (2) has effect in relation to the transferee's ceasing to be a member of the second group as if it were the second group of which both companies had been members at the time of the transfer.
(2C) For the purposes of sub-paragraph (4) there is a relevant connection between the first group and the second group if, at the time when the transferee ceases to be a member of the second group, the company which is the principal company of that group is under the control of—
| (a) | the company that is the principal company of the first group or, if that group no longer exists, was the principal company of that group, when the transferee ceased to be a member of it; or |
| (b) | any person or persons who control the company mentioned in paragraph (a) or who have had it under their control at any time in the period since the transferee cease to be a member of the first group; or |
| (c) | any person or persons who have, at any time in that period, had under their control either— |
| (i) | a company that would have been a person falling within paragraph (b) if it had continued to exist, or |
| (ii) | a company that would have been a person falling within this paragraph (whether by reference to a company that would have been a person falling within paragraph (b) or by reference to a company or a series of companides falling within this provision). |
(2D) The provisions of section 416(2) to (6) of the Taxes Act 1988 (meaning of control) have effect for the purposes of sub-paragraph (5) as they have effect for the purposes of Part 11 of that Act.But a person carrying on a business of banking shall not be regarded for those purposes as having control of a company by reason only of having, or of the consequences of having exercised, any rights in respect of loan capital or debt issued or incurre by the company for money lent by that person to the company in the ordinary course of that business.'.
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
140
Schedule 7, page 119, line 12, at end insert—
| 24A | (1) | Paragraphs 18 and 24 do not apply where a company ceases to be a member of a group by reason only of the fact that the principal company of the group becomes a member of another group ("the second group"). |
| (2) | But if, in a case where paragraphs 18 and 24 would have applied but for sub-paragraph (1) above, after the assignment and before the end of the period of six years after the date of the assignment— |
(a) the transferee ceases to satisfy the condition that it is both a 75% subsidiary and an effective 51% subsidiary of one or more members of the second group ("the qualifying condition"), and
(b) at the time at which the transferee ceases to satisfy that condition, the relevant loan relationship or derivative contract is held by the transferee or another company in the same group,
this Schedule has effect as if the transferee, immediately after the assignment to it of the relevant loan relationship or derivative contract, had realised the loan relationship or derivative contract for its market value at that time and immediately reacquired the asset at that value.
| (3) | The adjustments required to be made in consequence of sub-paragraph (2), by the transferee or a company to which the relevant loan relationship or derivative contract has been subsequently assigned, in relation to the period between— |
(a) the assignment of the relevant loan relationship or derivative contract to the transferee, and
(b) the transferee ceasing to satisfy the qualifying condition,
shall be made by bringing the aggregate net credit or debit into account as if it had arisen immediately before the transferee ceased to satisfy the qualifying condition.
| (4) | For the purposes of section 82 of this Finance Act 1996 (Method of bringing amounts into account) and paragraph 14 of Schedule 26 to the Finance Act 2002 (Method of bringing amounts into account), credits or debits brought into account by virtue of this paragraph take their character from the purposes for which the relevant loan relationship or derivative contract was held by the transferee immediately after the assignment.'. |
Chris Huhne
Susan Kramer
Stephen Williams
104
Schedule 9, page 131, leave out lines 1 to 12.
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
105
Schedule 9, page 131, line 1, leave out from beginning to end of line 12.
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
106
Schedule 9, page 131, line 5, at end insert—
'(3A) Where the Treasury by order amend any of the provisions indicated in subsection (3)(a), (b) or (c), such that an amount which has not been recognised in regulatory surplus and without the regulations would not have been treated as attributable to basic life assurance and general annuity business, has been treated as fully attributable to basic life assurance and general annuity business, and treated for the purposes of section 89 of the Finance Act 1989 within the shareholders' share of the relevant profits (Amount ("C")) then on a subsequent transfer of shareholders' excess assets, the company shall be entitled when computing the Case I profits, defined in section 89(7) of the Finance Act 1989, to deduct an amount equal to the amounts ("C") that in any accounting period following the introduction of the order, have not been recognised in regulatory surplus, that have been treated as fully attributable to basic life assurance and general annuity business, and have been treated for the purposes of section 89 of the Finance Act 1989 within the shareholders' share of the relevant profits, and for which no corresponding deduction has already been claimed.
(3B) Where the Treasury by order amend any of the provisions indicated in subsection 3(a) (b) or (c), such that an amount which has not been recognised in regulatory surplus and without the regulations would not have been treated as attributable to basic life assurance and general annuity business, has been treated as fully attributable to basic life assurance and general annuity business, and treated for the purposes of section 89 of the Finance Act 1989 within the policyholders' share of the relevant profits (Amount ("D")), then on a subsequent transfer of shareholders' excess assets, the company shall be entitled when computing the Case I profits, defined in section 89(7) of the Finance Act 1989, to deduct an amount equal to the sum of amounts ("D") multiplied by the lower rate of tax, and then divided by the mainstream rate of corporation tax, that have not been recognised in regulatory surplus, that have been treated as fully attributable to basic life assurance and general annuity business, and have been treated for the purposes of section 89 of the Finance Act 1989 within the shareholders' share of the relevant profits for which no corresponding deduction has already been claimed.
(3C) For the purposes of subsections (3A) and (3B), "shareholders' excess assets" means—
| (a) | the amount of assets shown in a non-participating fund of the company attributed to the interests of the shareholders of the company as a result of a reattribution exercise, less |
| (b) | the amount of assets used to provide support to the with-profits fund of the same company.'. |
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
107
Schedule 9, page 132, line 38, at end insert 'plus any taxable amount computed in accordance with Section 444AB of this Act'.
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
108
Schedule 9, page 133, line 8, at end insert—
'(2BA) The relevant proportion of the excess determined in accordance with subsection (2A) that relates to long-term business that is not life assurance business shall not be included within the excess referred to in subsection (2B)(a) above.'.
Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley
110
Schedule 9, page 135, line 21, at end insert—
| 8 | (5) | After section 83(2) of the Finance Act 1989 insert— |
"(2AA) But subsection (2A) does not require to be taken into account as receipts of a period of account any increase or decrease in value of subsidiary undertakings, nor shall any distribution from a subsidiary undertaking, resident in the United Kingdom, be taken into account in subsection (2A).".'.
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