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S.C.B.

33

 
 

House of Commons

 
 

Thursday 30th June 2005

 

Standing Committee Proceedings

 

Standing Committee B

 

Finance Bill


 

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

 

 

[Seventh and Eighth Sittings]


 

Schedule 9

 

Chris Huhne

 

Susan Kramer

 

Stephen Williams

 

Not moved  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

 

Negatived on division  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

 

Not called  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


 
 

S.C.B.  Standing Committee Proceedings: 30th June 2005            

34

 

Finance Bill, continued

 
 

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

 

Withdrawn  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

 

Not called  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.’.


 
 

S.C.B.  Standing Committee Proceedings: 30th June 2005            

35

 

Finance Bill, continued

 
 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Withdrawn  110

 

Schedule  9,  page  135,  line  21,  at end insert—

 

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

 

8      (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

 

Not called  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

 

Withdrawn  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

 

Withdrawn  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—


 
 

S.C.B.  Standing Committee Proceedings: 30th June 2005            

36

 

Finance Bill, continued

 
 

    

“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.”.’.

 

Schedule Agreed to.

 

Clause 45 Agreed to.

 


 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Withdrawn  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.’.

 

Clause Agreed to.

 


 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Withdrawn  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’.


 
 

S.C.B.  Standing Committee Proceedings: 30th June 2005            

37

 

Finance Bill, continued

 
 

Clause Agreed to.

 


 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Negatived on division  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

 

Not called  94

 

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

 

Clause Agreed to.

 

Clause 49 Agreed to.

 


 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Withdrawn  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

 

Not called  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

 

Not called  97

 

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


 
 

S.C.B.  Standing Committee Proceedings: 30th June 2005            

38

 

Finance Bill, continued

 
 

    ‘(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”.’.

 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Withdrawn  98

 

Schedule  10,  page  146,  line  6,  leave out ‘that does not consist wholly or mainly of

 

dealing in chargeable interests’.

 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Withdrawn  99

 

Schedule  10,  page  147,  line  34,  at beginning insert ‘Subject to sub-paragraph (5)’.

 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Not called  100

 

Schedule  10,  page  147,  line  41,  at end add—

 

    ‘(5)    

Sub-paragraph (2) shall not apply where the grant to or by a nominee is

 

associated with, incidental to or preparatory to, a transaction involving a

 

securitisation company within the meaning of Section 83(2) of the

 

Finance Act 2005.’.

 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Withdrawn  101

 

Schedule  10,  page  149,  line  23,  leave out paragraph 15.


 
 

S.C.B.  Standing Committee Proceedings: 30th June 2005            

39

 

Finance Bill, continued

 
 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

 

Negatived on division  146

 

Schedule  10,  page  151,  line  1,  leave out paragraph 19.

 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Not called  102

 

Schedule  10,  page  151,  line  9,  after ‘duty’, insert ‘stamp duty reserve tax and stamp

 

duty land tax.’.

 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

 

Not called  147

 

Schedule  10,  page  151,  line  9,  leave out ‘income tax, corporation tax, capital gains

 

tax or tax under this Part’ .

 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

Not called  103

 

Schedule  10,  page  151,  line  9,  leave out ‘corporation tax, capital gains tax or tax

 

under this Part’.

 

Schedule Agreed to.

 

Clause 50 Agreed to.

 


 

Mr Philip Hammond

 

Mr Richard Spring

 

Mr Mark Field

 

Mr Mark Francois

 

Mr David Ruffley

 

 

Withdrawn  148

 

Clause  51,  page  42,  line  12,  after ‘State’, insert ‘and’.


 
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