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Amendment Paper as at
Tuesday 2nd May 2006

COMMITTEE OF THE WHOLE HOUSE


FINANCE (No. 2) BILL


(Clauses 13 to 15, 26, 61, 91 and 106, Schedule 14, and new Clauses relating to the effect of provisions of the Bill on section 18 of the Inheritance Tax Act 1984)

NOTE

The Amendments have been arranged in accordance with the Order to be proposed by Mr Chancellor of the Exchequer

Mr Chancellor of the Exchequer To move, That the order in which proceedings in the Committee of the whole House on the Finance Bill (No. 2) are to be taken shall be: new Clauses relating to the effect of provisions of the Bill on section 18 of the Inheritance Tax Act 1984, Clause 61, Clause 26, Clause 91, Schedule 14, Clause 106 and Clauses 13 to 15.

NEW CLAUSE RELATING TO THE EFFECT OF PROVISIONS OF THE BILL ON SECTION 18 OF THE INHERITANCE TAX ACT 1984

Application of section 18 IHTA 1984

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

NC1

To move the following Clause:—

'Notwithstanding any provision of this Act, section 18 of the Inheritance Tax Act 1984 (transfers between spouses) shall continue to apply to transfers of value between spouses to the extent to which they are exempt transfers under the provisions of that section.'.

     As Amendments to Mrs Theresa Villiers' proposed New Clause (Application of section 18 IHTA 1984) (NC1):—

   

Mr David Gauke

(c)

Line     1,     leave out from 'Act' to end of line 4 and insert 'all transfers of value made on or after 22nd March 2006 which would have been exempt under section 18 of the Inheritance Tax Act 1984 (transfers between spouses) if made immediately prior to 22nd March 2006 shall continue to be exempt.'.

   

Julia Goldsworthy
Mr Colin Breed

(a)

Line     2,     at end insert 'written into trust by will, life assurance policy and lifetime gift'.

   

Julia Goldsworthy
Mr Colin Breed

(b)

Line     3,     after 'spouses', insert 'and civil partners'.


Application of section 18 IHTA 1984 (No. 2)

   

Julia Goldsworthy
Mr Colin Breed

NC2

To move the following Clause:—

'Notwithstanding any provision of this Act, section 18 of the Inheritance Tax Act 1984 (transfers between spouses) shall continue to apply to transfers of value written into trust by will, life assurance policy and lifetime gift to spouses and civil partners for two years until—

(a) a full consultation has been undertaken about the operation of that section;

(b) a Regulatory Impact Assessment of the operation of that section has been completed; and

(c) the impact of the Act on transfers of value written into trust through wills, lifetime gifts and life assurance policies has been calculated.'.


Application of section 18 IHTA 1984 (No. 3)

   

Julia Goldsworthy
Mr Colin Breed

NC3

To move the following Clause:—

'Notwithstanding any provision of this Act, all transfers of value made on the death of a person on or after 22nd March 2006 but before 6th April 2008 which would have been exempt under section 18 of the Inheritance Tax Act 1984 (transfers between spouses) if made immediately prior to 22nd March 2006, shall continue to be exempt.'.


   

Julia Goldsworthy
Mr Colin Breed

17

Clause     61,     page     46,     line     30     [Vol I],     leave out subsection (1) and insert—

    '(1)   Amend section 3200 of ITEPA 2003 (employment income: limited exemption for computer equipment) by substituting "desktop computers, laptops, printers, scanners and modems provided to the employee or director himself or to a member of his family or household" for "computer or peripheral equipment".'.

   

Julia Goldsworthy
Mr Colin Breed

19

Clause     61,     page     46,     line     32     [Vol I],     leave out '2006-07' and insert '2007-08'.

   

Julia Goldsworthy
Mr Colin Breed

20

Clause     61,     page     46,     line     36     [Vol I],     leave out '2006' and insert '2007'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

3

Clause     61,     page     46,     line     36     [Vol I],     at end add—

    '(4)   The Chancellor of the Exchequer shall—

(a) consult representatives of industry and scheme users regarding the list of products to which this section applies; and

(b) not later than 6th April 2007 shall lay before Parliament a report on the effects of this section.

   

Julia Goldsworthy
Mr Colin Breed

18

Clause     61,     page     46,     line     36     [Vol I],     at end add—

    '(4)   On or before 1st March 2007 the Chancellor of the Exchequer shall lay before Parliament a report containing any evidence available to him that the exemption under section 320 of ITEPA has been abused.'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr Andrew Selous

28

Clause     61,     page     46,     line     36     [Vol I],     at end add—

    '(4)   It does not cause any liability to income tax to arise in respect of the provision of computer equipment by making it available to an employee, or a member of an employee's family or household, if the computer equipment is subsequently utilised for any private use which is not significant, such use to be defined in guidance notes to be issued by HM Revenue and Customs.'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

2

Page     46,     line     29     [Vol I],     leave out Clause 61.


   

Julia Goldsworthy
Mr Colin Breed

27

Clause     26,     page     26,     line     19     [Vol I],     at end insert—

    '( )   At the end of section 8 of ICTA there is inserted—

    "(3A)   Notwithstanding the provisions of this section—

(a) corporation tax shall not be charged on the profits of a company where the profits of the company for any accounting period in question do not exceed a limit of £500;

(b) where an accounting period is shorter than 12 months that £500 limit shall be reduced in proportion to the reduction in accounting period; and

(c) where a company has associated companies, that £500 limit shall be reduced in proportion to the number of associates during the accounting period.".'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

1

Page     26,     line     19     [Vol I],     leave out Clause 26.


   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

6

Schedule     14,     page     74 [Vol II],     leave out lines 5 to 26.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

7

Schedule     14,     page     74 [Vol II],     leave out from beginning of line 27 to end of line 4 on page 75.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

8

Schedule     14,     page     75 [Vol II],     leave out lines 5 to 18.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

9

Schedule     14,     page     75,     line     18 [Vol II],     at end insert—

'Part 1A

Definition of gross assets

3A  In section 293 of The Taxes Act 1988 insert new subsection—

    "(6CA)   For the purposes of subsection (6B) above assets of any member of the company's group that consist of capitalised internal costs of the company relating to research and development expenditure shall be disregarded.".

3B  In paragraph 8 of Schedule 28B to The Taxes Act 1988 insert new sub-paragraph—

 "(3A) For the purposes of this paragraph assets of any member of the company's group that consist of capitalised internal costs of the company relating to research and development expenditure shall be disregarded.".

3C  In paragraph 22(3) of Schedule 15 to FA 2000, at end add "and disregarding assets that consist of capitalised internal costs of the company relating to research and development expenditure".'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

10

Schedule     14,     page     75,     line     25 [Vol II],     leave out '30' and insert '40'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

11

Schedule     14,     page     75,     line     30 [Vol II],     leave out '30' and insert '40'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

12

Schedule     14,     page     76 [Vol II],     leave out lines 1 to 13.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

13

Schedule     14,     page     77,     line     3 [Vol II],     at end add—

'(3) Sub-paragraph (1) shall not apply to protected money as defined in paragraph 2(4) of this Schedule.'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

5

Schedule     14,     page     77,     line     3 [Vol II],     at end add—

'Part 6

Inheritance tax

 In section 104(1)(a) of IHTA 1984 for "(b) or (bb)" substitute "(b) (bb) or (bc)".

10  In section 105(1) of IHTA 1984 after subsection (bb) insert—

"(bc) eligible shares in a venture capital trust as defined by section 842AA(14) of the Taxes Act 1988;"

Part 7

Longer holding periods

11 (1) Schedule 15B to The Taxes Act 1988 is amended as follows.

(2) In paragraph 1, after subparagraph (2) insert—

"(2A) An individual shall also be eligible for relief in the 6th year after subscribing for eligible shares if those shares are held by him at the 6th anniversary of the subscription.

(2B) The amounts on which an individual shall be taken for the purposes of sub-paragraph (2A) above to be eligible for relief shall be the original subscription amount for such shares.

(3) In paragraph 3(1)(b) leave out "those shares were issued to that individual" and insert "the shares became eligible for relief under paragraph 1(2) or (2A) above. But relief claimed for a subscription of eligible shares more than five years before the date of disposal shall not be withdrawn.".'.



 
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Prepared 2 May 2006