sc1611306.285-291

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

S.C.A.
285

House of Commons

Tuesday 13th June 2006

Standing Committee Proceedings

Standing Committee A

Finance (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)

[sIXTEENTH AND sEVENTEENTH Sittings]

Clause 147 Agreed to.

Dawn Primarolo

Agreed to  225

Schedule  18,  page  98  [Vol II],  leave out lines 11 to 26 and insert—

‘“(A1)
Where the conditions in subsection (A2) below are met in the case of a disposal

of oil by a person, section 2(5A) of the Oil Taxation Act 1975 (“the 1975 Act”)

(transportation etc) is to apply in determining the amount which the person is to

bring into account for the purposes of the charge to corporation tax on income in

respect of the disposal as it applies (or would apply) for the purposes of petroleum

revenue tax.

(A2)
The conditions are that—

(a)
the oil is oil won from an oil field in the United Kingdom,

(b)
the disposal is a disposal of the oil by the person crude in a sale at arm’s

length, as defined in paragraph 1 of Schedule 3 to the 1975 Act,

(c)
the circumstances are such that the price received or receivable—

(i)
falls to be taken into account under section 2(5)(a) of that Act in

computing for the purposes of petroleum revenue tax the

assessable profit or allowable loss accruing to the person in any

chargeable period from the oil field, or

(ii)
would fall to be so taken into account, had the oil field been a

taxable field, as defined in section 185 of the Finance Act 1993,

(d)
the terms of the contract are such as are described in the opening words

of section 2(5A) of the 1975 Act,

(e)
apart from subsection (A1) above, the person is not entitled to a

transportation allowance in respect of the oil (see subsection (A3)) in

computing his ring fence profits,

(f)
the person does not claim a transportation allowance in respect of the oil

in computing for the purposes of corporation tax any profits of his that

are not ring fence profits.

(A3)
In subsection (A2) above “transportation allowance”, in relation to any oil, means

any of the following—

S.C.A.  Standing Committee Proceedings: 13th June 2006
286

Finance (N, continued

(a)
a deduction in respect of the expense of transporting the oil as mentioned

in the opening words of section 2(5A) of the 1975 Act,

(b)
a deduction in respect of any costs of or incidental to the transportation

of the oil as there mentioned,

(c)
any such reduction in the price to be regarded as received or receivable

for the oil as would result from the application of section 2(5A) of the

1975 Act, if that provision applied for the purposes of corporation tax.”.’

Schedule, as amended, Agreed to.

Clause 148 Agreed to.

Stuart Hosie

Negatived on division  374

Clause  149,  page  124,  line  10   [Vol I],  at end insert ‘and

(f)
may not be made until the Chancellor of the Exchequer has laid before

both Houses of Parliament a report on the extent of tax avoidance in

relation to blended oil.’.

Clause Agreed to.

Dawn Primarolo

Agreed to  219

Clause  150,  page  124,  line  37 [Vol  I],  after ‘(9)’, insert—

‘(a)
omit “subsection (7) or”, and

(b)
’.

Clause, as amended, Agreed to.

Dawn Primarolo

Agreed to  220

Clause  151,  page  126,  line  32 [Vol  I],  leave out subsection (8) and insert—

‘(8)
In paragraph 6—

(a)
in sub-paragraph (1) omit “Subject to sub-paragraph (3) below,” and

(b)
omit sub-paragraphs (2) and (3).’.

Clause, as amended, Agreed to.

S.C.A.  Standing Committee Proceedings: 13th June 2006
287

Finance (N, continued

Dawn Primarolo

Agreed to  221

Clause  152,  page  127,  line  25 [Vol I],  after ‘field),’, insert—

‘(a)
’.

Dawn Primarolo

Agreed to  222

Clause  152,  page  127,  line  28 [Vol I],  at end insert—


‘, and

(b)
for the purposes of corporation tax, that amount shall be available to the

person as a deduction in computing the profits of any trade to which

section 492(1) does not apply.’.

Clause, as amended, Agreed to.

Stuart Hosie

Withdrawn  375

Clause  153,  page  127,  line  37   [Vol I],  at end insert—

‘(2A)
The amendment made by subsection (1) shall cease to have effect if the average

price of Brent crude oil falls below $30 a barrel for one month.

(2B)
If subsection (1) ceases to have effect as a result of the provisions in subsection

(2A) above, the Chancellor of the Exchequer may by order restore the amendment

made by subsection (1) if the average price of Brent crude oil rises above $30 a

barrel for one month.’.

Stuart Hosie

Not called  376

Clause  153,  page  127,  line  37   [Vol I],  at end insert—

‘(2C)
If the average price of Brent crude oil falls below $40 a barrel for one month, the

Chancellor of the Exchequer shall lay a report before both Houses outlining

options for introducing a variable rate of supplementary charge.’.

Stuart Hosie

Not selected  377

Clause  153,  page  129,  line  7   [Vol I],  at end add—

‘(11)
This section shall not come into effect until the Chancellor of the Exchequer has

laid before both Houses a report on possible exploration and investment

incentives for the UK Continental Shelf.’.

Clause Agreed to.

Clauses 154 and 155 Agreed to.

Schedule 19 Agreed to.

Clause 156 Agreed to.

Clause 157 Agreed to on division.

S.C.A.  Standing Committee Proceedings: 13th June 2006
288

Finance (N, continued

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Negatived on division  287

Schedule  20,  page  111,  line  13 [Vol  II],  leave out ‘settled property (including

property settled before 22nd March 2006)’ and insert ‘property settled on or after 22nd

March 2006’.

Dawn Primarolo

Agreed to  383

Schedule  20,  page  111,  line  21  [Vol II],  leave out ‘to which section 89 below

applies’ insert ‘in which a disabled person’s interest subsists’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Withdrawn  270

Schedule  20,  page  111,  line  24  [Vol II],  leave out ‘parent’ and insert ‘relative’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  280

Schedule  20,  page  111,  line  30  [Vol II],  leave out from beginning to end of line 7

on page 112 and insert—

‘(a)
that the bereaved minor, if he has not done so before attaining the age of

18, will on attaining that age become absolutely entitled to the settled

property or to the income arising from it,

(b)
that the bereaved minor, if he has not done so before attaining the age of

25, will on attaining that age become absolutely entitled to—

(i)
the settled property, and

(ii)
any income that has arisen from the property held on the trusts

for his benefit and been accumulated before he became

beneficially entitled to the property in accordance with

paragraph (a) above,

(c)
that, for so long as the bereaved minor is living and under the age of 25,

if any of the settled property is applied for the benefit of a beneficiary, it

is applied for the benefit of the bereaved minor, and

(d)
that, for so long as the bereaved minor is living and under the age of 18,

either—

(i)
the bereaved minor is entitled to all of the income (if there is any)

arising from any of the settled property, or

(ii)
no such income may be applied for the benefit of any other

person.’.

S.C.A.  Standing Committee Proceedings: 13th June 2006
289

Finance (N, continued

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not moved  272

Schedule  20,  page  111,  line  31  [Vol II],  leave out ‘18’ and insert ‘25’.

Dawn Primarolo

Agreed to  355

Schedule  20,  page  112,  line  10  [Vol II],  leave out from ‘of’ to end of line 15 and

insert ‘—

(a)
the trustees having the powers conferred by section 32 of the Trustee Act

1925 (powers of advancement),

(b)
the trustees having those powers but free from, or subject to a less

restrictive limitation than, the limitation imposed by proviso (a) of

subsection (1) of that section,

(c)
the trustees having the powers conferred by section 33 of the Trustee Act

(Northern Ireland) 1958 (corresponding provision for Northern Ireland),

(d)
the trustees having those powers but free from, or subject to a less

restrictive limitation than, the limitation imposed by subsection (1)(a) of

that section, or

(e)
the trustees having powers to the like effect as the powers mentioned in

any of paragraphs (a) to (d) above.’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  271

Schedule  20,  page  112,  line  24  [Vol II],  at end insert—

‘(5A)
In this section “relative” has the same meaning as in the Taxation of Chargeable

Gains Act 1992 section 286 as if the reference to “lineal descendant” in that

section were omitted.’.

Dawn Primarolo

Agreed to  356

Schedule  20,  page  112  [Vol II],  leave out lines 26 to 29 and insert ‘as if, in subsection

(2) above, before “which” there were inserted “the purposes of”.’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  281

Schedule  20,  page  112,  line  41  [Vol II],  leave out ‘on attaining the age of 18 or

becoming, under that age, absolutely entitled as mentioned in’ and insert ‘becoming

entitled as mentioned in paragraph (a) or (b) of’.

S.C.A.  Standing Committee Proceedings: 13th June 2006
290

Finance (N, continued

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  273

Schedule  20,  page  112,  line  41  [Vol II],  leave out ‘18’ and insert ‘25’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  282

Schedule  20,  page  112,  line  44  [Vol II],  leave out ‘that age’ and insert ‘the age at

which he would have become absolutely entitled as mentioned in paragraph (a) or (b) of

section 71A(3) above’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  288

Schedule  20,  page  113,  line  12  [Vol  II],  leave out from ‘subsection,’ to end of

line 23 and insert ‘there were substituted for the reference to 13th March 1975 in

subsection 8(b) a reference to 22nd March 2006.’.

Dawn Primarolo

Agreed to  357

Schedule  20,  page  113,  line  23  [Vol II],  at end insert ‘, and

(d)
as if, for the purposes of section 70(8) above as applied by this

subsection, property—

(i)
which is property to which section 71A above applies,

(ii)
which, immediately before it became property to which section

71A applies, was property to which section 71D below applied,

and

(iii)
which, by the operation of section 71D(5)(a) below, ceased on

that occasion (“the 71D‑to‑71A occasion”) to be property to

which section 71D below applied,


had become property to which section 71A above applies not on the

71D‑to‑71A occasion but on the relevant earlier occasion.

(4)
In subsection (3)(d) above—

(a)
“the relevant earlier occasion” means the occasion (or last occasion)

before the 71D‑to‑71A occasion when the property became property to

which section 71D below applied, but

(b)
if the property, when it became property to which section 71D below

applied, ceased at the same time to be property to which section 71 above

applied without ceasing to be settled property, “the relevant earlier

occasion” means the occasion (or last occasion) when the property

became property to which section 71 above applied.’.

S.C.A.  Standing Committee Proceedings: 13th June 2006
291

Finance (N, continued

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  274

Schedule  20,  page  113,  line  26  [Vol II],  leave out ‘18’ and insert ‘25’.

Dawn Primarolo

Agreed to  358

Schedule  20,  page  113,  line  27  [Vol II],  at end insert—

‘71D
Age 18-to-25 trusts

(1)
This section applies to settled property (including property settled

before 22nd March 2006), but subject to subsection (5) below, if—

(a)
the property is held on trusts for the benefit of a person who

has not yet attained the age of 25,

(b)
at least one of the person’s parents has died, and

(c)
subsection (2) below applies to the trusts.

(2)
This subsection applies to trusts—

(a)
established under the will of a deceased parent of the person

mentioned in subsection (1)(a) above, or

(b)
established under the Criminal Injuries Compensation

Scheme,


which secure that the conditions in subsection (6) below are met.

(3)
Subsection (4) has effect where—

(a)
at any time on or after 22nd March 2006 but before 6th April

2008, or on the coming into force of paragraph 3(1) of

Schedule 20 to the Finance Act 2006, any property ceases to

be property to which section 71 above applies without ceasing

to be settled property, and

(b)
immediately after the property ceases to be property to which

section 71 above applies—

(i)
it is held on trusts for the benefit of a person who has

not yet attained the age of 25, and

(ii)
the trusts secure that the conditions in subsection (6)

below are met.

(4)
From the time when the property ceases to be property to which

section 71 above applies, but subject to subsection (5) below, this

section applies to the property (if it would not apply to the property by

virtue of subsection (1) above) for so long as—

(a)
the property continues to be settled property held on trusts

such as are mentioned in subsection (3)(b)(i) above, and

(b)
the trusts continue to secure that the conditions in subsection

(6) below are met.

(5)
This section does not apply—

(a)
to property to which section 71A above applies,

(b)
to property to which section 71 above, or section 89 below,

applies, or