Amendments proposed to the Finance (No. 2I Bill - continued	House of Commons
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Interpretation of Chapter IV of ICTA

   

Mr David Gauke

NC7

To move the following Clause:—

'In section 413 of ICTA, after subsection (10) add—

    "(11)   This Chapter shall apply notwithstanding the terms of the European Communities Act 1972.".'.

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Exemption from Pre-Owned Asset Tax for estates below IHT threshold

   

Julia Goldsworthy
Mr Colin Breed
John Thurso
John Hemming

NC8

To move the following Clause:—

    '(1)   Schedule 15 to Finance Act 2004 is amended as follows.

    (2)   At the beginning of paragraph 3(1), insert the words "Subject to paragraph 3A below,".

    (3)   After paragraph 3, insert—

"3A

(1)

Paragraph 3 does not apply if the value of the chargeable person's relevant estate is below the relevant threshold at the relevant time.

(2)	The value of the chargeable person's relevant estate shall mean the aggregate of—

(a)   the value of the chargeable person's estate at the relevant time; and

(b)   the value of any property that is treated at the relevant time (in relation to the chargeable person) as subject to a reservation in acordance with section 102(2) of the 1986 Act.

(3)	The relevant time is—

(a)   in a case where the disposal condition would otherwise apply, the time immediately before the disposal referred to in paragraph 3(2)(b);

(b)   in a case where the contribution condition would otherwise apply, the time immediately before the provision of the consideration referred to in paragraph 3(3).

(4)	The relevant threshold is 80 per cent. of the amount that, at the relevant time, is the largest chargeable transfer that may be made by an individual that is wholly subject to inheritance tax at the nil rate.

(5)	For the purposes of sub-paragraph (2)(a) above, the value of a person's estate is the value that would be treated under section 4 of IHTA 1984 as being transferred by that person if that person were to have died at the relevant time.

    (4)   At the beginning of paragraph 6(1), insert the words "subject to paragraph 6A below,".

    (5)   After paragraph 6, insert—

"6A

(1)

Paragraph 6 does not apply if the value of the chargeable person's relevant estate is below the relevant threshold at the relevant time.

(2)	The value of the chargeable person's relevant estate shall mean the aggregate of—

(a)   the value of the chargeable person's estate at the relevant time; and

(b)   the value of any property that is treated at the relevant time (in relation to the chargeable person) as subject to a reservation in accordance with section 102(2) of the 1986 Act.

(3)	The relevant time is—

(a)   in a case where the disposal condition would otherwise apply, the time immediately before the disposal referred to in paragraph 6(2)(b);

(b)   in a case where the contribution condition would otherwise apply, the time immediately before the provision of the consideration referred to in paragraph 6(3).

(4)	The relevant threshold is 80 per cent. of the amount that, at the relevant time, is the largest chargeable transfer that may be made by an individual that is wholly subject to inheritance tax at the nil rate.

(5)	For the purposes of sub-paragraph (2)(a) above, the value of a person's estate is the value that would be treated under section 4 of IHTA 1984 as being transferred by that person if that person were to have died at the relevant time.".

    (6)   A the beginning of paragraph 8(1), insert the words "Subject to paragraph 8A below,".

    (7)   After paragraph 8, insert—

"8A

(1)

Paragraph 8 does not apply if the value of the chargeable person's relevant estate is below the relevant threshold at the relevant time.

(2)	The value of the chargeable person's relevant estate shall mean the aggregate of—

(a)   the value of the chargeable person's estate at the relevant time; and

(b)   the value of any property that is treated at the relevant time as subject to a reservation in accordance with section 102(2) of the 1986 Act.

(3)	The relevant time is the time immediately before the chargeable person settled the property (or added property to the settlement) as referred to in paragraph 8(2).

(4)	The relevant threshold is 80 per cent. of the amount that, at the relevant time, is the largest chargeable transfer that may be made by an individual that is wholly subject to inheritance tax at the nil rate.

(5)	For the purposes of sub-paragraph (2)(a) above, the value of the person's estate is the value that would be treated under section 4 of IHTA 1984 as being transferred by that person if that person were to have died at the relevant time.".

    (8)   After paragraph 23, insert—

"Automatic application of inheritance tax provisions

24

(1)

This paragraph applies if, at any time—

(a)   paragraph 3 would apply but for paragraph 3A, or

(b)   paragraph 6 would apply but for paragraph 6A.

(2)	So long as the chargeable person continues to enjoy the relevant property or any property which is substituted for the relevant property—

(a)   the chargeable proportion of the property is to be treated for the purposes of Part 5 of the 1986 Act (in relation to the chargeable person) as property subject to a reservation, and

(b)   section 102(3) and (4) of that Act shall apply and this paragraph applies whether or not an election is made under paragraph 21.

(3)

In this paragraph "the chargeable proportion", in relation to any property, shall have the meaning given in paragraph 21(3); a person shall be treated as enjoying the relevant property if he enjoys the property as set out in paragraph 21(4) and the term "relevant property" has the meaning given in paragraph 21.

25

(1)

This paragraph applies if, at any time paragraph 8 would apply but for paragraph 8A.

(2)	So long as the conditions in paragraph 22(3) are satisfied—

(a)   the relevant property and any property which represents or is derived from the relevant property shall be treated for the purposes of Part 5 of the 1986 Act (in relation to the chargeable person) as property subject to a reservation, and

(b)   section 102(3) and (4) of the 1986 Act shall apply and this paragraph applies whether or not an election is made under paragraph 22.

(3)	In this paragraph, the term "relevant property" has the meaning given in paragraph 22.".

    (9)   This section has effect from 6 April 2005 as if Schedule 15 had always had had effect subject to the amendments in this section.'.

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Dawn Primarolo

72

Schedule     26,     page     203     [Vol     II],     leave out lines 14 to 18.

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ORDER OF THE HOUSE [24th APRIL 2006]

That the following provisions shall apply to the Finance (No. 2) Bill:

    (1)   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 shall be committed to a Committee of the whole House;

    (2)   the remainder of the Bill shall be committed to a Standing Committee;

    (3)   when the provisions of the Bill considered, respectively, by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill shall be proceeded with as if it had been reported as a whole to the House from the Standing Committee.

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ORDERS OF THE COMMITTEE [9th MAY 2006]

That—

the Order in which proceedings in Standing Committee on the Finance (No. 2) Bill are to be taken shall be: Clauses 1 to 12, Clauses 16 to 25, Clause 27, Schedule 1, Clause 28, Schedule 2, Clause 29, Schedule 3, Clauses 30 to 37, Schedule 4, Clauses 38 to 42, Schedule 5, Clauses 43 to 60, Clauses 62 to 76, Schedule 6, Clauses 77 to 79, Schedule 7, Clauses 80 and 81, Schedules 8 and 9, Clause 82, Schedule 10, Clauses 83 to 86, Schedule 11, Clauses 87 and 88, Schedule 12, Clause 89, Schedule 13, Clause 90, Clauses 92 to 102, Schedule 15, Clauses 103 and 104, Schedule 16, Clause 105, Clauses 107 to 134, Schedule 17, Clauses 135 to 147, Schedule 18, Clauses 148 to 155, Schedule 19, Clauses 156 and 157, Schedule 20, Clauses 158 and 159, Schedule 21, Clauses 160 and 161, Schedule 22, Clause 162, Schedule 23, Clauses 163 and 164, Schedule 24, Clause 165, Schedule 25, Clauses 166 to 178, new Clauses (other than new Clauses relating to the effect of provisions of the Bill on section 18 of the Inheritance Tax Act 1984), new Schedules, Clause 179, Schedule 26, Clauses 180 and 181.

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That—

during proceedings on the Finance Bill (No.2) Bill (except 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), the Committee do meet at half-past Ten o'clock and half-past Four o'clock on Tuesdays, and five minutes past Nine o'clock and a quarter to Two o'clock on Thursdays, when the House is sitting.

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Prepared 6 Jun 2006