rs370607.11-17

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

11

House of Commons

Wednesday 6th July 2005

Report Stage Proceedings

Finance Bill, As Amended

Mr Chancellor of the Exchequer

To move, That the Finance Bill, as amended, be considered in the following order,

namely, New Clauses, amendments relating to Clauses 1 to 6, Schedule 1, Clauses 7 to

12, Schedule 2, Clauses 13 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, Clause 40,

Schedule 8, Clauses 41 and 42, Schedule 9, Clauses 43 to 49, Schedule 10 and Clauses 50

to 69, new Schedules, amendments relating to Clause 70, Schedule 11 and Clauses 71 and

72.

Agreed to

New Clauses

Inheritance Tax

Mr Philip Hammond

Mr Richard Spring

Mr Mark Field

Mr Mark Francois

Gregory Barker

Negatived on division  NC1

To move the following Clause:—

‘The Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations

2004 (S.I., 2004, No. 2543) are amended as follows:—


“Regulations 6,7,8,9 and 10 shall cease to have effect in respect of a

person who dies on or after 31st July 2005.”.’.

Report Stage Proceedings: 6th July 2005
12

Finance Bill, continued

Pensions annuities

Mr Philip Hammond

Mr Richard Spring

Mr Mark Field

Mr Mark Francois

Gregory Barker

Not selected  nc2

To move the following Clause:—

‘(1)
The Income and Corporation Taxes Act 1988 is amended as follows:—

(2)
In subsection (1) of section 630 (interpretation)—

(a)
in the definition of “personal pension scheme”, substitute for the words

“or lump sums” the words “, lump sums, or sums for investment in a

Retirement Income Fund”; and

(b)
in the definition of “income withdrawal”, insert after the word “annuity”

the words “or withdrawal of funds from a Retirement Income Fund”.

(3)
In section 633 (scope of benefits)—

(a)
in subsection (1)(a), the words from “section 634” to the end are omitted;

(b)
in subsection (1)(c), the words from “section 636” to the end are omitted;

and

(c)
after subsection (1)(e) there is inserted—

“(f)
the payment to a member of income from a Retirement

Income Fund satisfying the conditions in section 637B”.

(4)
In section 634 (annuity to member)—

(a)
after subsection (1) there is inserted—

“(1A)
Subject to subsection (7) below, the annuity must provide the

member with an annual income not less than the Minimum

Retirement Income.

(b)
in subsection (2) the words from “commence” to the end are replaced by

the following—

“(a)
before the member attains the age of 50; or

(b)
in relation to a member who is in receipt of benefits

under section 634A before the date of this Act’s entry

into force, after the member attains the age of 75; or

(c)
in relation to any member aged 65 or over as at the date

of this Act’s entry into force, within twelve months of

that date; or

(d)
in relation to all other members, after the member attains

the age of 65.”.

(c)
after subsection (6) there is inserted—

“(7)
Section 45 of the Sex Discrimination Act 1975 shall not apply to

the annuity provided under subsection (1A).

(8)
The income provided each year from the annuity under section

(1A) must increase by reference to increases in the retail price

index, so far as not exceeding 5%”.

(5)
Sections 634A and 636A are repealed.

(6)
Subsection (4) shall not apply to schemes executed before the date of entry into

effect of this Act.

(7)
After section 637A (Return of contributions on death of a member), the following

section is inserted—

Report Stage Proceedings: 6th July 2005
13

Finance Bill, continued

“637B
Retirement Income Fund

(1)
Subject to subsections (2) and (3) of this section, a Retirement Income

Fund is a vehicle for the reinvestment of savings in retirement, which

(a)
has been established by a person designated by subsection (1) of

section 632; and

(b)
is a vehicle whose investments are—

(i)
investments of a kind described in the Insurance

Companies Regulations 1994, Schedule X, Part 1; or

(ii)
approved by the Inland Revenue.

(2)
Funds held in a Retirement Income Fund as referred to in subsection (1)

may be withdrawn from the Retirement Income Fund by the member as

and when he elects.

(3)
A member may not invest in a Retirement Income Fund unless the

requirements of subsection (1A) of section 634, in relation to the

Minimum Retirement Income, are satisfied.

(4)
A Retirement Income Fund, and any income derived from it, must not be

capable of assignment or surrender by the member.

(5)
Any withdrawal from the Fund by the member under subsection (2) shall

be regarded as ‘income’ within section 1 of this Act.”

(8)
‘Minimum Retirement Income’ means such amount as shall be set annually by

the Chancellor of the Exchequer by order.”.’.

Independent Fiscal Projections Committee

Mr Philip Hammond

Mr Richard Spring

Mr Mark Field

Mr Mark Francois

Gregory Barker

Not selected  NC3

To move the following Clause:—

‘(1)
There shall be established an Independent Fiscal Projections Committee of the

Bank of England.

(2)
The Independent Fiscal Projections Committee shall have as its principal

functions the review and monitoring of fiscal projections made by the Treasury

in pre-Budget and Budget reports and the expression of an opinion as to the

timing of the beginning and the end of each economic cycle.

(3)
The committee shall publish reports concerning its functions as often as the

committee shall deem appropriate, but not less than twice in each year.

(4)
The committee shall have not fewer than six and not more than twelve members.

(5)
The members of the committee shall be appointed by the Governor for the time

being of the Bank of England.’.

Report Stage Proceedings: 6th July 2005
14

Finance Bill, continued

Tax Law Commission

Mr Philip Hammond

Mr Richard Spring

Mr Mark Field

Mr Mark Francois

Gregory Barker

Negatived on division  NC4

To move the following Clause:—

‘(1)
The Treasury shall prepare and present to Parliament a proposal for the

establishment of a Tax Law Commission, to act in parallel to and to complement

the work of the Law Commission.

(2)
The Tax Law Commission shall have as its purpose the bringing forward of

proposals for the review, modernisation, improvement and simplification of the

tax law of the United Kingdom.

(3)
The report shall have regard to all factors that seem to the Treasury to be relevant

following consultation with any bodies appearing to Her Majesty’s Revenue and

Customs to have an interest in tax law reform.

(4)
The report shall be presented to Parliament by 31st July 2006.

Inheritance tax: mitigation of double charges

Mr Philip Hammond

Mr Richard Spring

Mr Mark Field

Mr Mark Francois

Gregory Barker

Negatived on division  NC5

To move the following Clause:—

‘The Finance Act 1986 is amended as follows:—

After section 104 there is inserted—

“104A (1)
This section provides for the mitigation to the extent specified, of

double charges to tax arising in the circumstances specified (in

subsection (2)).

      (2)
The specified circumstances are—

(a)
an individual (‘the deceased’) makes a transfer of value to a

person (‘the transferee’) of property which comprises a debt

owed to him by another (‘the debt’), and

(b)
the transfer is or proves to be a chargeable transfer, and

(c)
the deceased dies on or after 31st July 2005 and within seven

years of the transfer of value, and

(d)
at the date of the deceased’s death all or part of the debt has

been written off, waived or released by the transferee or by

any other person and such write off, waiver or release was

made otherwise than for full consideration in money or

money’s worth, and

Report Stage Proceedings: 6th July 2005
15

Finance Bill, continued

(e)
that part of the debt which is written off, waived or released

was before such event, represented by or was attributable to or

its value was derived in part or whole directly or indirectly

from, other property being relevant property within the

meaning given in paragraph 21 or 22 of Schedule 15 to the

Finance Act 2004, and

(f)
the deceased is for the purposes of IHTA 1984 or section

102(3) Finance Act 1986 beneficially entitled immediately

before his death to the relevant property or if not so

beneficially entitled the relevant property was the subject of a

potentially exempt transfer by virtue of section 102(4) of the

Finance Act 1986, and

(g)
the relevant property—

(i)
is comprised in the estate of the deceased

immediately before his death within the meaning of

section 5(1) of the Inheritance Tax Act 1984 and the

value attributed to it is transferred by a chargeable

transfer under section 4 of that Act, or

(ii)
is property transferred by the potentially chargeable

transfer to which sub-paragraph (f) applies, value

attributable to which is transferred by a chargeable

transfer.

      (3)
Where this section applies, there shall be calculated, separately in

accordance with sub-paragraphs (a) and (b), the total tax chargeable as

a consequence of the death of the person—

(a)
disregarding so much of the value transferred by the transfer

of value of the debt (being the property to which paragraph

(2)(a) refers) to the extent that the debt has been written off in

accordance with paragraph (2)(d) above, and

(b)
disregarding so much of the value transferred by the transfer

of value of the relevant property (being property to which

paragraph (2)(g) refers) as is represented by or attributable to

the value of that part of the debt which has been written off,

waived or released in accordance with sub-paragraph (2)(d).

      (4)

(a)
Whichever of the two amounts of tax calculated under

paragraphs (3)(a) or (b) is the lower amount shall be treated as

reduced to nil but subject to sub-paragraph (4)(b) the higher

amount shall be payable.

(b)
Where the amount calculated under paragraph (3)(a) is higher

than the amount calculated under (3)(b)—

(i)
so much of the tax chargeable on the value transferred

by the chargeable transfer to which paragraph (2)(g)

refers as is attributable to the amount of that value

which falls to be disregarded by virtue of paragraph

(ii) shall be treated as a nil amount, and

(ii)
for all the purposes of the 1984 Act so much of the

value transferred by the debt to which paragraph

Report Stage Proceedings: 6th July 2005
16

Finance Bill, continued

(2)(a) refers as is attributable to the property to which

paragraph (2)(d) refers shall be disregarded.”.’.

Pension scheme regulation

Chris Huhne

Susan Kramer

Stephen Williams

Not selected  nc6

To move the following Clause:—

‘(1)
Section 158 of the Finance Act 2004 (c.12) shall be amended as follows.

(2)
After subsection (1) (f) insert “, or

(g)
that the investments of the scheme are invested to a significant

extent in prohibited investments.”.

(3)
After subsections (5) insert—

“(6)
In subsection (1), the test ‘a significant extent’ is satisfied if 20 per cent,

or more by value of the pension scheme over a three year period is so

invested.

(7)
For the purposes of subsection (1)(f), ‘prohibited investments’ are—

(a)
investments of a nature that are not normally held for the

purposes of producing an income return; or

(b)
residential property occupied other than under an agreement with

housing association or owned by an investment trust properly

regulated for the purpose.”.’.

Road fuel regulator

Mr Alex Salmond

Stewart Hosie

Lady Hermon

Mr Nigel Dodds

Mr Elfyn Llwyd

Hywel Williams

Angus Robertson

Pete Wishart

Mr Angus MacNeil

Mr Eddie McGrady

Adam Price

Negatived on division  NC7

To move the following Clause:—

‘In the Hydrocarbon Oil Duties Act 1979 (c. 5) section 6 (excise duty on

hydrocarbon oil) there is inserted after subsection (1A)—

“(1B)
The Chancellor of the Exchequer shall publish a forecast based on the

expected direction of international oil prices.

Report Stage Proceedings: 6th July 2005
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Finance Bill, continued

(1C)
When the average price per litre of a fuel listed in subsection (1A) above

increases by more than 3 pence over any period of six months, the

Chancellor of the Exchequer shall make regulations reducing the duty

rate on that fuel and that reduction in fuel duty shall be based on the

increase in the cost per litre accounted for by VAT.

(1D)
Whenever international oil prices rise above the level estimated by the

forecast made in accordance with subsection (1B) above, indexed fuel

duty increases shall be frozen until the international oil prices return to

the forecast level.”.’.

Inheritance Tax (No. 2)

Mr Philip Hammond

Mr Richard Spring

Mr Mark Field

Mr Mark Francois

Gregory Barker

Not called  NC8

To move the following Clause:—

‘The Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations

2004 (S.I., 2004, No. 2543) are amended, in Regulation 6, line 4, by omitting

“must” and inserting “may”.’.

Real estate investment trusts

Mr Philip Hammond

Mr Richard Spring

Mr Mark Field

Mr Mark Francois

Gregory Barker

Withdrawn  NC9

To move the following Clause:—

‘(1)
The ICTA 1988 is amended, by inserting after section 842A—

“Real Estate Investment Trusts

(1)
The Treasury shall, by regulations, to be laid priot to 31st October

2005—

(a)
make provision about the treatment of Real Estate Investment

Trusts for the purposes of any enactment relating to the taxation

or Stamp Duty Land Tax, and may make provsions for separate

sub-funds of such trusts;

(b)
impose requirements on a company as to the conditions that need

to be met for a company to be a Real Estate Investment Trust for

an accounting period;