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| | That, during proceedings on the Finance Bill (except Clauses 11, 18, 40, 43, 44 and 69 |
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| | and Schedule 8), the Committee do meet at half-past Ten o’clock and half-past Four |
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| | o’clock on Tuesdays and quarter-past Nine o’clock and Two o’clock on Thursdays when |
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| (except Clauses 11, 18, 40, 43, 44 and 69 and Schedule 8)
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| | To move, That the Order in which proceedings in Standing Committee on the Finance |
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| | Bill are to be taken shall be Clauses 1 to 6, Schedule 1, Clauses 7 to 10, Clause 12, |
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| | Schedule 2, Clauses 13 to 17, Clauses 19 to 24, Schedule 3, Clauses 25 to 34, Schedule 4, |
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| | Clause 35, Schedule 5, Clauses 36 and 37, Schedule 6, Clauses 38 and 39, Schedule 7, |
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| | Clauses 41 and 42, Schedule 9, Clauses 45 to 49, Schedule 10, Clauses 50 to 68, new |
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| | Clauses, new Schedules, Clause 70, Schedule 11 and Clauses 71 and 72. |
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| Clause 1, page 1, line 7, at end add— |
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| | ‘(1B) | The circumstances which may be prescribed in subsection (1A) shall be limited |
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| | to those where goods are sold by taxable persons to non-registered persons within |
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| Clause 7, page 8, line 30, leave out from beginning to end of line 34. |
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| Clause 7, page 8, line 34, at end add— |
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| | ‘(9) | In this section “total income” shall mean total income after deduction of the |
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| | relevant personal allowance mentioned in section 257 ICTA 1988’. |
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| | Clauses 8, 9, 10 and 12 Agreed to. |
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| Schedule 2, page 63, line 13, after ‘is’, insert ‘entered into as part of a scheme or |
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| arrangement the main purpose (or one of the main purposes) of which is the avoidance of |
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| tax or national insurance contributions and is’. |
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| Schedule 2, page 63, line 22, at end insert— |
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| | ‘(d) | any contract of insurance offered by a company whose business |
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| | includes the business of selling insurance policies where the |
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| | contract is offered on substantially the same terms in the ordinary |
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| | course of that insurance business.”.’. |
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| Schedule 2, page 63, line 36, leave out from beginning to end of line 3 on page 64 |
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| | ‘(8) | This paragraph has effect on and after 2nd December 2004 and applies in |
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| | relation to rights under contracts of insurance acquired on or after that |
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| Schedule 2, page 64, line 19, leave out from ‘acquired’ to end of line 24 and insert |
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| Schedule 2, page 64, line 25, leave out paragraphs 5 and 6. |
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| Schedule 2, page 65, line 1, leave out paragraph 7. |
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| Schedule 2, page 65, line 9, at end insert— |
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| | ‘431C | Procedure for clearance in advance |
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| | Section 431B shall not apply so as to treat an election as having been made for |
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| | the purposes of section 431 if, before the issue of securities is made, the Board |
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| | have, on the application of either the employer or the employee notified either the |
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| | employer or the employee that the Board are satisfied that the issue of the |
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| | securities is for bona fide commercial reasons and will not form part of any such |
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| | arrangements as are referred to in section 431B.”.’. |
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| Schedule 2, page 65, leave out lines 27 to 40 and insert— |
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| | ‘(3) | Where subsection (1) does not apply by virtue of subsection (2) the |
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| | market value of the employment-related securities is to be determined in |
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| | each case as if they were immediately and fully convertible.’. |
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| Schedule 2, page 66, line 16, at end insert— |
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| | ‘(3B) | (a) This subsection applies where subsection (2) of section 437 of this |
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| | (b) If on a chargeable event the amounts charged under the provisions |
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| | referred to in section 437(1) because of the application of subsection (2) |
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| | of section 437 and the amounts computed under this section (the “original |
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| | amounts”) exceed the amounts that would have been charged under |
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| | section 437(1) and under this section had section 437(2) not applied, the |
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| | associated person shall be charged on the lower of such amounts and any |
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| | amounts overpaid shall be refunded, provided that if, on a later |
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| | chargeable event, such amounts do not exceed the original amounts, the |
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| | original amounts shall be due on the dates on which such sums were due |
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| | and payable as if this provision had not applied.’. |
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| Schedule 2, page 67, line 12, at end insert— |
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| | ‘(3) | Subsections (1) and (2) shall not apply if the loan is repaid, in which case |
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| | within one month after the repayment has been notified to the Inland |
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| | Revenue any tax and national insurance paid shall be repaid.’. |
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| Schedule 2, page 67, line 38, at end insert— |
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| | ‘(5) | Where subsection (4) applies, then the taxable amount determined in |
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| | accordance with subsection (2) shall be reduced, where otherwise an |
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| | amount may be subject to tax more than once, to such an amount to |
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| | ensure that no part of the benefit is subject to tax more than once.”.’. |
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| Schedule 2, page 67, line 42, at beginning insert— |
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| | ‘(1) | After section 447 ITEPA 2003 insert— |
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| | “447A (1) | Section 447 shall not apply where the employee shows that the benefit |
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| | arose from an ordinary investment transaction. |
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| | (2) | An ‘ordinary investment transaction’ means any transaction in |
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| | securities regularly traded on an EEA exchange (being a market which |
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| | appears on the list drawn up by an EEA State pursuant to Article 16 of |
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| | EU Council Directive No 93122/EEC on investment services in the |
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| | securities field) and any transaction in securities not so regularly |
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| | traded where the following circumstances are present: |
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| | (a) | the securities were acquired for an amount (or the acquirer is |
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| | charged to income tax on all or part of such amount under |
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| | Chapter 1 of part 3) which was not less than their market value |
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| | (as determined for the purposes of the Taxation of Chargeable |
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| | Gains Act 1992), provided that in the information a purchaser |
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| | may require there shall be included (if this would not |
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| | otherwise be the case) any known or reasonably projected |
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| | returns on the securities and any value the securities might |
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| | acquire through the conversion or alteration of rights of those |
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| | or other securities, always having regard to the possibility or |
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| | otherwise of such conversion or alteration occurring; |
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| | (b) | other than the provisions in the constitution of the body |
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| | issuing the securities, giving the holder the right to transfer if |
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| | a majority decide to transfer their securities, there are no |
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| | arrangements which give the holder a right to transfer his |
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| | (c) | at the date of the acquistion there is no certainty that the holder |
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| | of the securities will necessarily recover the amount invested |
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| | in the securities, and there is not at any time any guarantee or |
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| | indemnity from any third party of the amount invested in the |
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| | securities or any income therefrom; and |
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| | (d) | the securities are securities acquired in a trading company or |
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| | the holding company of a trading group (as defined in |
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| | Schedule A1 of the Taxation of Chargeable Gains Act 1992). |
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| | (3) | Where in pursuance of this subsection a person furnishes to the Board |
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| | particulars of a transaction relating to employment-related securities |
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| | acquired or to be acquired by him or of any benefit anticipated or |
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| | received by him in relation to any employment-related securities |
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| | which may give rise to a charge under section 447, the following shall |
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| | (a) | if the Board are of the opinion that the particulars, or any |
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| | further information furnished in pursuance of this paragraph, |
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| | are not sufficient for the purposes of this section, they shall |
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| | within 30 days of the receipt notify to that person what further |
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| | information they require for tax purposes and unless that |
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| | information is furnished to the Board within 30 days from the |
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| | notification, or such further time as the Board may allow, they |
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| | shall not be required to proceed further under this subsection; |
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| | (b) | subject to paragraph (a) above, the Board shall within 30 days |
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| | of the receipt of the particulars, or where that paragraph has |
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| | effect, of all further information required, notify that person |
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| | whether or not they are satisfied that the circumstances of the |
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| | aquisition were or will be such, or that the circumstances |
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| | giving rise to the receipt of any benefits were or will be such |
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| | that any benefits anticipated or received ought not to be |
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| | subject to the charge to income tax contained in section |
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| | (c) | if the particulars, and any further information given under |
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| | subsection 447A(4) with respect to any acquistion and benefit |
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| | are not such as to make full and accurate disclosure of all facts |
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| | and considerations which are material to be known to the |
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| | Board, any notification given by the Board under this section |
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| | (d) | if the Board notify the person that they are satisfied that the |
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| | circumstances of the acquistion or receipt of benefits are such |
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| | that any benefits anticipated or received ought not to be |
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| | subject to the charge to income tax contained in section |
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| | 447(1), section 447 shall not apply to that person in relation to |
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| | (e) | if the Board notify the person that they are not so satisfied, the |
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| | person may within 30 days of such notification appeal to the |
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| | Special Commissions against such decision. Save for a |
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| | notification by the Board referred to under paragraph (d), in |
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| | no event shall the giving of a notification under this section |
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| | prevent section 447 applying to a person in relation to any |
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| | Clauses 13 to 15 Agreed to. |
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| Clause 16, page 14, line 39, at end insert— |
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| | ‘(4) | In relation to an open-ended investment company mainly invested in interests or |
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| | rights over land, the rate of corporation tax for the year 2005 and subsequent |
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| | financial years may be determined under Regulations made under section 18 of |
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| | Clauses 16 and 17 Agreed to. |
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| | Clauses 19 to 23 Agreed to. |
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| Further consideration adjourned —( Mr Tom Watson) |
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| [Adjourned till Thursday at 9.15 a.m. |
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