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S.C.B.

Amendment Paper as at
Thursday 30th June 2005

STANDING COMMITTEE B


FINANCE BILL

(Except Clauses 11, 18, 40, 43, 44 and 69 and Schedule 8)

NOTE

The Amendments have been arranged in accordance with the Order of the Committee[21st June], as follows—

Clauses 1 to 6, Schedule 1, Clauses 7 to 10, Clause 12, Schedule 2, Clauses 13 to 17, Clauses 19 to 24, Schedule 3, Clauses 25 to 34, Schedule 4, Clause 35, Schedule 5, Clauses 36 and 37, Schedule 6, Clauses 38 and 39, Schedule 7, Clauses 41 and 42, Schedule 9, Clauses 45 to 49, Schedule 10, Clauses 50 to 68, new Clauses, new Schedules, Clause 70, Schedule 11 and Clauses 71 and 72.

SCHEDULE 9

   

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—

      'Taxation of structural investments of long-term funds of insurance companies

    (1) 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).".'.

   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

109

Schedule     9,     page     135,     line     22,     leave out from beginning to end of line 25 on page 136.

   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

111

Schedule     9,     page     138,     line     19,     leave out from beginning to end of line 7 on page 140.

   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

112

Schedule     9,     page     141,     line     22,     at end insert—

    '(2A)   Section 76 of ICTA 1988 is amended as follows—

    (2B)   In subsection (11) after paragraph (a) insert—

          "(aa) receipts of the company chargeable under Case VI of Schedule D by virtue of section 85(1) above,

          (ab) income of the company treated as referable to basic life assurance and general annuity business by section 441B(2) of the Taxes Act 1988 (treatment of UK land),

          (ac) amounts treated as accruing to the company and charged to tax under Case VI of Schedule D by virtue of section 442A of that Act (taxation of investment return where risk reinsured), and"

    (2C)   Section 89 of the Finance Act 1989 is amended as follows—

    (2D)   Replace subsection (1B) with—

              "For the purposes of this section the BLAGAB profits of a company for an accounting period are the aggregate of—

          (a) income and chargeable gains referable in accordance with section 432A of the Taxes Act 1988 to the company's basic life assurance and general annuity business insert,

          (b) receipts of the company chargeable under Case VI of Schedule D by virtue of section 85(1) above,

          (c) income of the company treated as referable to basic life assurance and general annuity business by section 441B(2) of the Taxes Act 1988 (treatment of UK land),

          (d) amounts treated as accruing to the company and charged to tax under Case VI of Schedule D by virtue of section 442A of that Act (taxation of investment return where risk reinsured).

        reduced by the aggregate of—

          (e) any non-trading deficit on the company's loan relationships,

          (f) expenses of management falling to be deducted under section 76 of the Taxes Act 1988, and

          (g) charges on income,

        so far as referable to the company's basic life assurance and general annuity business.".'.


   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

91

Clause     46,     page     38,     line     44,     at end add 'or

      (c) the pension rights and entitlements of former employees of UKAEA who are members of pension schemes that were, or are, run by UKAEA.'.


   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

92

Clause     47,     page     39,     line     11,     after 'regulations', insert 'laid in draft at least 90 days before such regulations would otherwise come into effect'.


   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

93

Clause     48,     page     40,     line     15,     after '1988', insert 'and'.

   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

94

Clause     48,     page     40,     line     19,     leave out from '1977' to end of line 21.


   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

95

Schedule     10,     page     145,     line     7,     after 'effect', insert ', (but not so as to make the vendor in relation to the earliest previous transaction the vendor for the purposes of paragraph 5(2)(a))'.

   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

96

Schedule     10,     page     145,     line     13,     at end insert 'and relief has not been withdrawn by virtue of paragraphs 3 or 9 on or before the change of control in the purchaser to which this paragraph applies,'.

   

Mr Philip Hammond
Mr Richard Spring
Mr Mark Field
Mr Mark Francois
Mr David Ruffley

97

Schedule     10,     page     145,     line     42,     at end insert—

    '(6) Where—

            (a)   there is a change of control of the purchaser; and

            (b)   the same circumstances that give rise to a change of control of the purchaser in relation to the relevant transaction may also give rise to a change of control of the vendor; and

            (c)   paragraph 4A(1) could apply in relation to an earlier transaction on which group relief has been obtained and not withdrawn ("the prior transaction") in relation to which the vendor (under the relevant transaction) was the purchaser (under the prior transaction);

    paragraphs 3 and 4 shall only apply to the prior transaction if and to the extent that the market value of the property the subject of the prior transaction, exceeds the market value of the property the subject of the relevant transaction".'.

 
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©Parliamentary copyright 2005
Prepared 30 Jun 2005