House of Commons portcullis
House of Commons
Session 2005 - 06
Internet Publications
Other Bills before Parliament


 
 

S.C.A.  Standing Committee Proceedings: 15th June 2006            

311

 

Finance (N, continued

 
 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  238

 

Schedule  20,  page  118,  line  27  [Vol II],  leave out ‘22nd March 2006’ and insert

 

‘6th April 2007’.

 

Dawn Primarolo

 

Agreed to  362

 

Schedule  20,  page  118,  line  33  [Vol II],  at end insert ‘, or

 

(iii)    

a gift into a bereaved minor’s trust on the coming to an end of a

 

immediate post-death interest.’.

 

Dawn Primarolo

 

Agreed to  390

 

Schedule  20,  page  119,  line  2  [Vol II],  after ‘89’ insert ‘or 89A’.

 

Dawn Primarolo

 

Agreed to  363

 

Schedule  20,  page  119,  line  2  [Vol II],  at end insert—

 

‘(3B)    

A transfer of value falls within subsection (1A)(c)(iii) above to the

 

extent that the value transferred is attributable to settled property

 

(whenever settled) that becomes property to which section 71A below

 

applies in the following circumstances—

 

(a)    

under the settlement, a person (“L”) is beneficially entitled to

 

an interest in possession in the settled property,

 

(b)    

the interest in possession is an immediate post-death interest,

 

(c)    

on or after 22nd March 2006, but during L’s life, the interest

 

in possession comes to an end,

 

(d)    

L is beneficially entitled to the interest in possession

 

immediately before it comes to an end, and

 

(e)    

on the interest in possession coming to an end, the property—

 

(i)    

continues to be held on the trusts of the settlement,

 

and

 

(ii)    

becomes property to which section 71A below

 

applies.”.’.

 

Dawn Primarolo

 

Agreed to  364

 

Schedule  20,  page  119,  line  2  [Vol II],  at end insert—

 

    ‘( )  

In subsection (7) (application of section in relation to charge to tax under

 

section 52), after “subsection (1)(a)” insert “or (1A)(a)”.’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  341

 

Schedule  20,  page  119,  line  2  [Vol  II],  at end insert—


 
 

S.C.A.  Standing Committee Proceedings: 15th June 2006            

312

 

Finance (N, continued

 
 

‘(5A)    

In subsection (7) (application of section 3A to an event on the happening of which

 

tax is chargeable under section 52 of the Inheritance Tax Act) after “in subsection

 

(1)(a)” insert “or subsection (1A)(a).”.’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  277

 

Schedule  20,  page  119,  line  11  [Vol II],  after ‘which’, insert ‘section 71(1)(a)

 

or’.

 

Dawn Primarolo

 

Agreed to  365

 

Schedule  20,  page  119,  line  11  [Vol II],  after ‘71A’ insert ‘or 71D’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  278

 

Schedule  20,  page  119,  line  18  [Vol II],  after ‘which’, insert ‘section 71(1)(a)

 

or’.

 

Dawn Primarolo

 

Agreed to  366

 

Schedule  20,  page  119,  line  18  [Vol II],  after ‘71A’ insert ‘or 71D’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  239

 

Schedule  20,  page  119,  line  22  [Vol II],  leave out ‘22nd March 2006’ and insert

 

‘6th April 2007’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  321

 

Schedule  20,  page  119,  line  26  [Vol  II],  at end insert ‘, and

 

(iv)    

not a relationship breakdown settlement interest.”.’.

 

Dawn Primarolo

 

Agreed to  391

 

Schedule  20,  page  119,  line  26  [Vol II],  at end insert—


 
 

S.C.A.  Standing Committee Proceedings: 15th June 2006            

313

 

Finance (N, continued

 
 

‘Life assurance policies entered into before 22nd March 2006

 

10A(1)  

After section 46 insert—

 

“46A  

Contract of life insurance entered into before 22nd March 2006 which

 

on that day is settled property in which interest in possession subsists

 

(1)    

Subsections (2) and (4) below apply where—

 

(a)    

a settlement commenced before 22nd March 2006,

 

(b)    

a contract of life insurance was entered into before that day,

 

(c)    

a premium payable under the contract is paid, or an allowed

 

variation is made to the contract, at a particular time on or

 

after that day,

 

(d)    

immediately before that day, and at all subsequent times up to

 

the particular time, there were rights under the contract that—

 

(i)    

were comprised in the settlement, and

 

(ii)    

were settled property in which a transitionally-

 

protected interest (whether or not the same such

 

interest throughout that period) subsisted,

 

(e)    

rights under the contract become, by reference to payment of

 

the premium or as a result of the variation,—

 

(i)    

comprised in the settlement, and

 

(ii)    

part of the settled property in which the then-current

 

transitionally-protected interest subsists, and

 

(f)    

any variation of the contract on or after 22nd March 2006 but

 

before the particular time, so far as it is a variation that—

 

(i)    

increased the benefits secured by the contract, or

 

(ii)    

extended the term of the insurance provided by the

 

contract,

 

    

was an allowed variation.

 

(2)    

For the purposes of the provisions mentioned in subsection (3)

 

below—

 

(a)    

the rights mentioned in subsection (1)(e) above shall be taken

 

to have become comprised in the settlement, and

 

(b)    

the person beneficially entitled to the then-current

 

transitionally-protected interest shall be taken to have become

 

beneficially entitled to his interest in possession so far as it

 

subsists in those rights,

 

    

before 22nd March 2006.

 

(3)    

Those provisions are—

 

section 3A(2) above;

 

section 5(1A) above;

 

section 49(1A) and (1B) below;

 

section 51(1A) and (1B) below;

 

section 52(2A) and (3A) below;

 

section 53(1A) and (2A) below;

 

section 54(2A) and (2B) below;

 

section 54A(1A) below;

 

section 57A(1A) below;

 

section 58(1B) and (1C) below;

 

section 59(1) and (2) below;


 
 

S.C.A.  Standing Committee Proceedings: 15th June 2006            

314

 

Finance (N, continued

 
 

section 80(4) below;

 

section 100(1A) below;

 

section 101(1A) below;

 

section 102ZA(1) of the Finance Act 1986 (gifts with reservation); and

 

sections 72(1A) and (2A) and 73(2A) of the 1992 Act.

 

(4)    

If payment of the premium is a transfer of value made by an individual,

 

that transfer of value is a potentially exempt transfer.

 

(5)    

In this section—

 

“allowed variation”, in relation to a contract, means a variation that takes

 

place by operation of, or as a result of exercise of rights conferred by,

 

provisions forming part of the contract immediately before 22nd

 

March 2006;

 

“transitionally-protected interest” means—

 

(a)    

an interest in possession to which a person was beneficially

 

entitled immediately before, and on, 22nd March 2006, or

 

(b)    

a transitional serial interest.

 

46B    

Contract of life insurance entered into before 22nd March 2006 which

 

immediately before that day is property to which section 71 applies

 

(1)    

Subsections (2) and (5) below apply where—

 

(a)    

a settlement commenced before 22nd March 2006,

 

(b)    

a contract of life insurance was entered into before that day,

 

(c)    

a premium payable under the contract is paid, or an allowed

 

variation is made to the contract, at a particular time on or

 

after that day,

 

(d)    

immediately before that day, and at all subsequent times up to

 

the particular time, there were rights under the contract that—

 

(i)    

were comprised in the settlement, and

 

(ii)    

were settled property to which section 71 below

 

applied,

 

(e)    

rights under the contract become, by reference to payment of

 

the premium or as a result of the variation, comprised in the

 

settlement, and

 

(f)    

any variation of the contract on or after 22nd March 2006 but

 

before the particular time, so far as it was a variation that—

 

(i)    

increased the benefits secured by the contract, or

 

(ii)    

extended the term of the insurance provided by the

 

contract,

 

    

was an allowed variation.

 

(2)    

If the rights mentioned in subsection (1)(e) above would, but for

 

subsection (1A) of section 71 below, become property to which that

 

section applies, those rights shall become settled property to which

 

that section applies when they become comprised in the settlement.

 

(3)    

Subsection (5) below also applies where—

 

(a)    

a settlement commenced before 22nd March 2006,

 

(b)    

a contract of life insurance was entered into before that day,

 

(c)    

a premium payable under the contract is paid, or an allowed

 

variation is made to the contract, at a particular time on or

 

after that day when there are rights under the contract—


 
 

S.C.A.  Standing Committee Proceedings: 15th June 2006            

315

 

Finance (N, continued

 
 

(i)    

that are comprised in the settlement and are settled

 

property to which section 71A or 71D below applies,

 

(ii)    

that immediately before that day were settled

 

property to which section 71 below applied, and

 

(iii)    

that on or after that day, but before the particular time,

 

became property to which section 71A or 71D below

 

applies in circumstances falling within subsection (4)

 

below,

 

(d)    

rights under the contract become, by reference to payment of

 

the premium or as a result of the variation, comprised in the

 

settlement, and

 

(e)    

any variation of the contract on or after 22nd March 2006 but

 

before the particular time, so far as it was a variation that—

 

(i)    

increased the benefits secured by the contract, or

 

(ii)    

extended the term of the insurance provided by the

 

contract,

 

    

was an allowed variation.

 

(4)    

The circumstances referred to in subsection (3)(c)(iii) above are—

 

(a)    

in the case of property to which section 71D below applies,

 

that the property on becoming property to which section 71D

 

below applies ceased to be property to which section 71 below

 

applied without ceasing to be settled property;

 

(b)    

in the case of property to which section 71A below applies—

 

(i)    

that the property on becoming property to which

 

section 71A below applies ceased, by the operation of

 

section 71(1B) below, to be property to which section

 

71 below applied, or

 

(ii)    

that the property, having become property to which

 

section 71D below applied in circumstances falling

 

within paragraph (a) above, on becoming property to

 

which 71A below applies ceased, by the operation of

 

section 71D(5)(a) below, to be property to which

 

section 71D below applied.

 

(5)    

If payment of the premium is a transfer of value made by an individual,

 

that transfer of value is a potentially exempt transfer.

 

(6)    

In this section “allowed variation”, in relation to a contract, means a

 

variation that takes place by operation of, or as a result of exercise of

 

rights conferred by, provisions forming part of the contract

 

immediately before 22nd March 2006.”

 

      (2)  

Sub-paragraph (1) shall be deemed to have come into force on 22nd March

 

2006.’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  353

 

Schedule  20,  page  119,  line  26  [Vol  II],  at end insert ‘; and

 

(iv)    

not an immediate self-settled interest.’.


 
 

S.C.A.  Standing Committee Proceedings: 15th June 2006            

316

 

Finance (N, continued

 
 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  240

 

Schedule  20,  page  119,  line  32  [Vol II],  leave out ‘22nd March 2006’ and insert

 

‘6th April 2007’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  302

 

Schedule  20,  page  119,  line  35  [Vol  II],  at end insert ‘; or

 

(c)    

an immediate self-settled interest.’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  322

 

Schedule  20,  page  119,  line  35  [Vol  II],  at end insert ‘, or

 

(c)    

a relationship breakdown settlement interest.”.’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  241

 

Schedule  20,  page  119,  line  37  [Vol II],  leave out ‘22nd March 2006’ and insert

 

‘6th April 2007’.

 

Dawn Primarolo

 

Agreed to  367

 

Schedule  20,  page  119,  line  39  [Vol II],  after ‘71A’ insert ‘or 71D’.

 

Dawn Primarolo

 

Agreed to  368

 

Schedule  20,  page  119,  line  41  [Vol II],  leave out paragraph 12.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  303

 

Schedule  20,  page  119,  line  42  [Vol  II],  at end insert ‘or an immediate self-

 

settled interest’.


 
 

S.C.A.  Standing Committee Proceedings: 15th June 2006            

317

 

Finance (N, continued

 
 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  242

 

Schedule  20,  page  120,  line  1  [Vol II],  leave out ‘22nd March 2006’ and insert

 

‘6th April 2007’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  304

 

Schedule  20,  page  120,  line  5  [Vol  II],  after ‘interest’, insert ‘or an immediate

 

self-settled interest’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  305

 

Schedule  20,  page  120,  line  7  [Vol  II],  after ‘interest’, insert ‘or an immediate

 

self-settled interest’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  306

 

Schedule  20,  page  120,  line  12  [Vol  II],  after ‘interest’, insert ‘or an immediate

 

self-settled interest’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  243

 

Schedule  20,  page  120,  line  20  [Vol II],  leave out ‘22nd March 2006’ and insert

 

‘6th April 2007’.

 

Mrs Theresa Villiers

 

Mr Mark Francois

 

Mr Mark Hoban

 

Mr Paul Goodman

 

Andrew Selous

 

Not called  307

 

Schedule  20,  page  120,  line  25  [Vol  II],  at end insert ‘or

 

(d)    

an immediate self-settled interest.’.


 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2006
Revised 16 June 2006