House of Commons Amendments
          
House of Commons
Session 2005-06
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Index of Amendments

Tuesday 4th July 2006

Consideration of Bill


Finance (No. 2) Bill, As Amended


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 Finance (No.2) Bill, as amended, be considered in the following order, namely, new Clauses relating to Part 6, new Schedules relating to Part 6, amendments relating to Clauses 155 and 156, Schedule 20, Clause 157, remaining new Clauses, remaining new Schedules, amendments relating to Clauses 1 to 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 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, Clauses 90 and 91, Schedule 14, Clauses 92 to 102, Schedule 15, Clauses 103 and 104, Schedule 16, Clauses 105 to 134, Schedule 17, Clauses 135 to 146, Schedule 18, Clauses 147 to 154, Schedule 19, Clause 158, Schedule 21, Clauses 159 and 160, Schedule 22, Clause 161, Schedule 23, Clauses 162 and 163, Schedule 24, Clause 164, Schedule 25, Clauses 165 to 178, Schedule 26, and Clauses 179 and 180.

       

NEW CLAUSES RELATING TO PART 6

Trusts relating to divorce, life protection policies and disabled persons

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

NC2

    To move the following Clause:—

      ‘The provisions of Schedule 20 shall not operate so as to discourage, impede or prevent the use of trusts which are set up—

        (a) as a result of relationship breakdown and create a “relationship breakdown settlement interest”, as defined in section 59A of the Inheritance Tax Act 1984; or

        (b) in relation to the proceeds of life protection policies, as defined in section 58(4) of the Inheritance Tax Act 1984; or

        (c) by or in favour of disabled persons within the definition set out in section 89 of the Inheritance Tax Act 1984.’.


Information relating to section 157 and Schedule 20

Julia Goldsworthy

NC18

    To move the following Clause:—

      ‘The Chancellor of the Exchequer shall provide the House with the information relating to section 157 of and Schedule 20 to this Act requested by the Treasury Committee in its Report on the 2006 Budget at page 56 paragraph 109.’.


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

58

Page 377, line 21 [Schedule 20], after ‘minor’, insert ‘(whether by exercise of trustees’ powers under such a will or otherwise).’.


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

56

Page 380, line 30 [Schedule 20], at end insert—

      ‘(4A) Where—

        (a) section 71 above applied to settled property immediately before 22nd March 2006,

        (b) on or after that date a beneficiary (within the meaning of section 71 above) (“B”) became entitled to an interest in possession in that settled property, and

        (c) before that interest in possession had come to an end and while B was under the age of 25 and before [6th April 2008] that settled property became held for the benefit of B on trusts such as are mentioned in subsection (3)(b)(i) above,

      subsections (3) and (4) above shall apply as though the settled property had become held on the trusts referred to in paragraph (c) above immediately at the time B in fact became entitled to the interest in possession referred to in paragraph (b) above.’.


Mr Chancellor of the Exchequer

70

Page 384, line 38 [Schedule 20], at end insert—

      ‘(2) For the purposes of sections 71A to 71G above, a deceased individual (“D”) shall be taken to have been a parent of another individual (“Y”) if, immediately before D died, D had—

        (a) parental responsibility for Y under the law of England and Wales,

        (b) parental responsibilities in relation to Y under the law of Scotland, or

        (c) parental responsibility for Y under the law of Northern Ireland.

      (3) In subsection (2)(a) above “parental responsibility” has the same meaning as in the Children Act 1989.

      (4) In subsection (2)(b) above “parental responsibilities” has the meaning given by section 1(3) of the Children (Scotland) Act 1995.

      (5) In subsection (2)(c) above “parental responsibility” has the same meaning as in the Children (Northern Ireland) Order 1995.”.’.


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

34

Page 386, line 3 [Schedule 20], after ‘interest’, insert ‘, or

        (d) a relationship breakdown settlement interest.’.

Mr Chancellor of the Exchequer

71

Page 386, line 29 [Schedule 20], leave out ‘(“B”)’.

Mr Chancellor of the Exchequer

72

Page 386, line 30 [Schedule 20], leave out ‘(“the current interest”)’.

Mr Chancellor of the Exchequer

73

Page 386, line 33 [Schedule 20], leave out ‘the following conditions are met’ and insert ‘section 49BA or 49BB below so provides’.

Mr Chancellor of the Exchequer

74

Page 386, line 34 [Schedule 20], at end insert—

    49BA  Transitional serial interest: interest to which person becomes entitled during period 22nd March 2006 to 5th April 2008

      (1) Where a person (“B”) is beneficially entitled to an interest in possession in settled property (“the current interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met.’.

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

59

Page 386, line 42 [Schedule 20], after ‘but’, insert ‘(unless B was the spouse or civil partner of the person entitled to the prior interest)’.


Mr Chancellor of the Exchequer

75

Page 387, line 6 [Schedule 20], at end insert—

    49BB  Transitional serial interest: interest to which person becomes entitled on death of spouse or civil partner on or after 6th April 2008

      (1) Where a person (“E”) is beneficially entitled to an interest in possession in settled property (“the successor interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met.

      (2) Condition 1 is that—

        (a) the settlement commenced before 22nd March 2006, and

        (b) immediately before 22nd March 2006, the property then comprised in the settlement was property in which a person other than E was beneficially entitled to an interest in possession (“the previous interest”).

      (3) Condition 2 is that the previous interest came to an end on or after 6th April 2008 on the death of that other person (“F”).

      (4) Condition 3 is that, immediately before F died, F was the spouse or civil partner of E.

      (5) Condition 4 is that E became beneficially entitled to the successor interest on F’s death.

      (6) Condition 5 is that—

        (a) section 71A below does not apply to the property in which the successor interest subsists, and

        (b) the successor interest is not a disabled person’s interest.’.

Mr Chancellor of the Exchequer

76

Page 387, line 47 [Schedule 20], leave out ‘49B(1)(a)’ and insert ‘49BA’.


Mr Chancellor of the Exchequer

77

Page 388, line 4 [Schedule 20], leave out ‘49B(1)(a)’ and insert ‘49BA’.

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

5

Page 388, line 18 [Schedule 20], at beginning insert—

    ‘6 (1) In section 89 (trusts for disabled persons)—

      (a) in subsection (4)(a) at end insert—

        “(aa) a person who lacked capacity within the meaning of section 272 below, or”;

      (b) in subsection (4)(c), leave out “or middle” and insert “middle or lower”; and

      (c) after subsection (4)(c) at end insert—

        “(d) a person who satisfies the Commissioners for Her Majesty’s Revenue and Customs that he had a condition that it was at that time reasonable to expect would have such effects on him as to lead to him becoming a person—

          (i) falling within subsection (4)(a) or (aa) above, or

          (ii) in receipt of an attendance allowance mentioned in subsection (4)(b) above, or

          (iii) in receipt of a disability living allowance mentioned in subsection (4)(c) above.”.’.

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

6

Page 388, line 29 [Schedule 20], after ‘89(4)(a)’, insert ‘or (aa)’.

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

7

Page 388, line 34 [Schedule 20], leave out ‘or middle’ and insert ‘, middle or lower’.


Mr Chancellor of the Exchequer

78

Page 389, line 36 [Schedule 20], leave out from ‘person’ to ‘on’ in line 37 and insert ‘becomes beneficially entitled’.


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

8

Page 390, line 26 [Schedule 20], leave out ‘or middle’ and insert ‘, middle or lower’.

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

9

Page 390, line 46 [Schedule 20], leave out ‘or middle’ and insert ‘, middle or lower’.


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

10

Page 391, line 2 [Schedule 20], at end insert—

      ‘(7) The reference in subsection (1) above to a disabled person includes, in relation to any settled property, a reference to a person who satisfied Her Majesty’s Revenue and Customs that he would, when the property was transferred into settlement, have been entitled to an attendance allowance or disability living allowance, by virtue of entitlement to the care component at the highest, middle or lower rate, whether or not such an allowance was actually claimed.’.


Mr Chancellor of the Exchequer

79

Page 392, line 10 [Schedule 20], leave out ‘or 89A’.


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

35

Page 393, line 9 [Schedule 20], at end insert ‘, and

          (iv) not a relationship breakdown settlement interest.”’.

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

32

Page 393, line 9 [Schedule 20], after ‘interest’, insert—

    ‘10A (1) Section 10 of IHTA 1984 is amended as follows.

    (2) In subsection (1)(b) after “with each other”, insert “, or

        (c) it is made in accordance with or pursuant to a court order in proceedings for the following types of provision—

          (i) financial relief for the parties to a marriage and any children of the family in connection with proceedings for divorce, nullity of marriage or judicial separation including, but not limited to, property adjustment orders or variation of settlement orders under section 24 of the Matrimonial Causes Act 1973 or orders under section 8 of the Family Law (Scotland) Act 1985 and any successive legislation; or

          (ii) financial relief for the parties of a civil partnership in connection with proceedings for dissolution of the civil partnership including, but not limited to, property adjustment orders or variation of settlement orders under Schedule 5 of the Civil Partnership Act 2004 and any successive legislation; or

          (iii) where a marriage has been dissolved or annulled or the parties to a marriage have been legally separated, by means of judicial or other proceedings in an overseas country and the divorce, annulment or legal separation is entitled to be recognised as valid in England and Wales, in Scotland or in Northern Ireland, financial relief for the parties to the marriage and any children of the family including, but not limited to, property adjustment orders or variation of settlement orders under section 17 of the Matrimonial and Family Proceedings Act 1984 or orders under section 8 of the Family Law (Scotland) Act 1985 and any successive legislation; or

          (iv) financial relief for the benefit of a child including, but not limited to, a transfer or settlement of property under paragraph 1 of Schedule 1 of the Children Act 1989 and any successive legislation.”.’.


Mr Chancellor of the Exchequer

80

Page 396, line 14 [Schedule 20], at end insert—

        ‘(ab) a disabled person’s interest within section 89B(1)(c) or (d) below, or’.

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

36

Page 396, line 15 [Schedule 20], at end insert ‘, or

        (c) a relationship breakdown settlement interest.”’.

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

37

Page 396, line 30 [Schedule 20], at end insert ‘, or

        (d) a relationship breakdown settlement interest.”’.

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

38

Page 396, line 39 [Schedule 20], at end insert ‘, or

        (d) a relationship breakdown settlement interest.”’.


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

39

Page 397, line 24 [Schedule 20], at end insert ‘, or

        (c) a relationship breakdown settlement interest.”’.


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

40

Page 398, line 10 [Schedule 20], at end insert ‘, or

        (c) a relationship breakdown settlement interest.”’.

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

41

Page 398, line 28 [Schedule 20], at end insert ‘, or

        (d) a relationship breakdown settlement interest.”’.

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

3

Page 398, line 39 [Schedule 20], at end insert—

      ‘(2A) After sub-paragraph 1(f) insert—

        “(g) a life protection policy as defined in subsection 4 below;

        (h) property representing directly or indirectly any sum paid under a life protection policy, within two years following the death of any person giving rise to that sum.”.’.


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

42

Page 399, line 11 [Schedule 20], at end insert ‘, and

          (iv) not a relationship breakdown settlement interest.’.

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

4

Page 399, line 25 [Schedule 20], at end insert—

      ‘(4) After section 58(3) insert—

“58(4) In subsections 1(g) and 1(h) above a “life protection policy” is a policy of insurance where the sum payable on the death or disability of any person is at all times no less than a number of equal to ten multiplied by the highest total sum of premiums paid in any period of twelve months.”.’.

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

43

Page 399, line 37 [Schedule 20], after first ‘interest’, insert ‘, or a relationship breakdown settlement interest’.

Mr Chancellor of the Exchequer

81

Page 399, line 44 [Schedule 20], after ‘interest,’ insert ‘or a disabled person’s interest within section 89B(1)(c) or (d) below’.


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

33

Page 400, line 6 [Schedule 20], at end insert—

‘20A In IHTA 1984 after section 59 IHTA 1984 insert—

    59A Relationship breakdown settlement interest

      (1) Where a person (“L”) is beneficially entitled to an interest in possession in settled property, for the purposes of this Chapter that interest is a “relationship breakdown settlement interest” only if the following conditions are satisfied.

      (2) Condition 1 is that the settlement was effected, or if there was a prior settlement it was confirmed or varied, by a court order, in proceedings of the type mentioned in section 10(1)(c).

      (3) Condition 2 is that L became beneficially entitled to the interest in possession on or before the date on which the court order came into effect.’.

Mr Chancellor of the Exchequer

82

Page 400, line 42 [Schedule 20], leave out from ‘applies’ to end of line 44 and insert ‘—

        (a) as though for “an interest in possession” in each place where that appears in subsection (1) above there were substituted “a postponing interest”, and

        (b) as though, for the purposes of that subsection, each of the following were a “postponing interest”—

          (i) an immediate post-death interest;

          (ii) a disabled person’s interest.”.’.

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

57

Page 400, line 44 [Schedule 20], at end insert ‘or a disabled person’s interest’.


Mr Chancellor of the Exchequer

83

Page 401, line 20 [Schedule 20], at end insert—

          ‘(ia) a disabled person’s interest within section 89B(1)(c) or (d) below, or’.

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

44

Page 401, line 21 [Schedule 20], after ‘interest’, insert ‘, or

          (iii) a relationship breakdown settlement interest.’.

Mr Chancellor of the Exchequer

84

Page 401, line 27 [Schedule 20], after first ‘interest’ insert ‘, disabled person’s interest’.

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

45

Page 401, line 27 [Schedule 20], after second ‘interest’, insert ‘or a relationship breakdown settlement interest’.

Mr Chancellor of the Exchequer

85

Page 401, line 29 [Schedule 20], after ‘or’ insert ‘disabled person’s interest or’.

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

46

Page 401, line 30 [Schedule 20], after ‘interest’, insert ‘or a relationship breakdown settlement interest’.

Mr Chancellor of the Exchequer

86

Page 401, line 37 [Schedule 20], leave out ‘neither’ and insert ‘—

          (i) not’.

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

47

Page 401, line 37 [Schedule 20], leave out ‘neither’ and insert ‘not’.

Mr Chancellor of the Exchequer

87

Page 401, line 37 [Schedule 20], leave out ‘nor’ and insert ‘,

          (ii) not a disabled person’s interest within section 89B(1)(c) or (d) below, and

          (iii) not’.

 
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Prepared: 4 July 2006