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Session 2006-07
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Thursday 17th May 2007

Public Bill Committee


      New Amendments handed in are marked thus *

      Other Amendments not tabled within the required notice period are marked thus #

Finance Bill


(except Clauses 1, 3, 7, 8, 12, 20, 21, 25, 67 and 81 to 84, Schedules 1, 18, 22 and 23, and New Clauses relating to Microgeneration)


Note

The amendments have been arranged in accordance with the Order of the Committee [8th May].


Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

31

Clause 27, page 17, line 28, at end insert—

      ‘(A1) The purpose of this section is that relief for allowable losses shall not be granted where a person deliberately and knowingly enters into complex arrangements intended to avoid liability to capital gains tax, income tax or corporation tax.

      (A2) This section shall be construed purposively in line with the principles set out in the statement of principles issued by Her Majesty’s Revenue and Customs on 6 December 2006.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

34

Clause 27, page 17, line 29, at beginning insert ‘Subject to section 16B below,’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

30

Clause 27, page 17, line 33, leave out ‘, or one of the main purposes,’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

29

Clause 27, page 17, line 34, after ‘arrangements’, insert ‘taken as a whole’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

27

Clause 27, page 17, line 34, leave out ‘secure a tax advantage’ and insert ‘avoid a liability to capital gains tax, corporation tax or income tax’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

32

Clause 27, page 17, line 34, at end insert ‘; and

        (c) the arrangements are not prescribed arrangements.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

36

Clause 27, page 17, line 34, at end insert ‘; and

        (c) the arrangements, taken as a whole, are not genuine commercial arrangements.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

37

Clause 27, page 17, line 34, at end insert—

      ‘(1A) This section does not apply where the aggregate of a person’s allowable losses does not exceed £25,000 in the year of assessment.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

26

Clause 27, page 17, line 38, leave out from ‘enforceable),’ to end of line 7 on page 18.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

33

Clause 27, page 17, line 38, leave out ‘and’ and insert—

      ‘ “prescribed” means set out in regulations made by the Commissioners for Her Majesty’s Revenue and Customs.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

28

Clause 27, page 18, line 11, leave out ‘tax advantage is secured for’ and insert ‘avoidance of liability to taxation relates to’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

35

Clause 27, page 18, line 12, at end insert—

    16B Clearance procedure

      (1) Section 16A shall not affect the operation of section 135 or 136 in any case where, before the issue is made, the Board have, on the application of either company mentioned in section 137(1), notified the Company that the Board are satisfied that the exchange, reconstruction or amalgamation will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as are mentioned in section 137(1).

      (2) Any application under subsection (1) above shall be in writing and shall contain particulars of the operations that are to be effected; and the Board may, within 30 days of the receipt of the application or of any further particulars previously required under this subsection, by notice require the applicant to furnish further particulars for the purpose of enabling the Board to make their decision; and if any such notice is not complied with within 30 days or such longer period as the Board may allow, the Board need not proceed further on the application.

      (3) The Board shall notify their decision to the applicant within 30 days of receiving the application or, if they give a notice under subsection (2) above, within 30 days of the notice being complied with.

      (4) If the Board notify the applicant that they are not satisfied as mentioned in subsection (1) above or do not notify their decision to the applicant within the time required by subsection (3) above, the applicant may within 30 days of the notification or of that time require the Board to transmit the application, together with any notice given and further particulars furnished under subsection (2) above, to the Special Commissioners; and in that event any notification by the Special Commissioners shall have effect for the purposes of subsection (1) above as if it were a notification by the Board.

      (5) If any particulars furnished under this section do not fully and accurately disclose all facts and considerations material for the decision of the Board or the Special Commissioners, any resulting notification that the Board or Commissioners are satisfied as mentioned in subsection (1) above shall be void.’.


Mr Stephen Timms

68

Schedule 5, page 109, line 10, at end insert—

    Loan relationships: amounts not fully recognised for accounting purposes

    10A (1) Section 85C of FA 1996 (amounts not fully recognised for accounting purposes) is amended as follows.

    (2) In subsection (1)—

      (a) in paragraph (c), for the words from “has at any time” to “liability”)” substitute “an amount (a “relevant capital contribution”) has at any time been contributed to the company which forms part of its capital (whether share or other capital)”, and

      (b) in paragraphs (d) and (e), for “relevant accounting liability” substitute “relevant capital contribution”.

    (3) In subsection (2)—

      (a) for “or relevant accounting liability of the company” substitute “of the company or any relevant capital contribution made to the company”, and

      (b) for “or liability” (in both places) substitute “or contribution”.

    (4) The amendments made by this paragraph have effect in relation to periods of account ending on or after 9th May 2007.

    (5) But, in relation to periods of account beginning before that date, amounts are to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 as a result of those amendments only if the amounts relate to any time on or after that date.’.

Mr Stephen Timms

69

Schedule 5, page 111, line 15, after ‘investment’ insert ‘or liability’.

Mr Stephen Timms

70

Schedule 5, page 111, line 16, after ‘made’ insert ‘, or the liability was incurred,’.

Mr Stephen Timms

71

Schedule 5, page 111, line 19, after ‘investment’ insert ‘or liability’.

Mr Stephen Timms

72

Schedule 5, page 111, line 26, at beginning insert ‘In the case of amounts relating to investments,’.

Mr Stephen Timms

73

Schedule 5, page 111, line 28, after ‘But’ insert ‘in that case’.

Mr Stephen Timms

74

Schedule 5, page 111, line 30, at end insert—

    ‘(6) In the case of amounts relating to liabilities, those amendments have effect in relation to accounting periods ending on or after 9th May 2007.

    (7) But in that case, in relation to accounting periods beginning before that date, amounts are to be left out of account as a result of those amendments only if they relate to any time on or after that date.’.


Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

67

Schedule 6, page 115, line 5, leave out ‘paragraph 41(8) of that Schedule’ and insert ‘section 577 of the Capital Allowances Act 2001’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

66

Schedule 6, page 115, line 11, after ‘2006’, insert ‘but where either the predecessor or the successor has no principal company as therein provided (because it is itself a principal company) it shall be deemed for the purposes of this section to be its own principal company’.


Mr Stephen Timms

79

Clause 31, page 23, line 7, leave out ‘and’.

Mr Stephen Timms

80

Clause 31, page 23, line 7, at end insert—

        ‘(ca) after that paragraph insert—

        “(ca) no qualifying change of ownership occurs at any time in relation to the principal company of that group for the purposes of section 184A of TCGA 1992 directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage falling within subsection (1)(d) of that section, and”,’.

Mrs Theresa Villiers
Mr Mark Hoban
Mr Paul Goodman
Mr Mark Francois
Mr David Evennett

83

Clause 31, page 23, line 34, leave out ‘that date’ and insert ‘5th December 2005’.

Mr Stephen Timms

81

Clause 31, page 23, line 34, at end insert ‘; but the amendment made by subsection (5)(ca) has no effect in relation to disposals made before 9th May 2007.’.


Mr Stephen Timms

75

Clause 32, page 24, line 15, after ‘premium’ insert ‘or other consideration’.


Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

15

Clause 35, page 26, line 30, after ‘No’, insert ‘qualifying expenditure shall form any part of the residue of qualifying expenditure when a’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

16

Clause 35, page 26, line 33, after ‘Part,’, insert—

        ‘(ab) the qualifying expenditure in question is incurred after 21st March 2007 otherwise than pursuant to a relevant pre-commencement contract (see subsection (7));’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

17

Clause 35, page 26, line 38, leave out ‘before 1st April 2011’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

18

Clause 35, page 26, line 40, leave out subsections (2) and (3).

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

19

Clause 35, page 27, line 9, after ‘No’, insert ‘qualifying expenditure shall form any part of the residue of qualifying expenditure when a’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

20

Clause 35, page 27, line 10, after ‘if’, insert—

        ‘(a) the qualifying expenditure in question is incurred after 21st March 2007 otherwise than pursuant to a relevant pre-commencement contract; and

        (b) ’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

21

Clause 35, page 27, line 12, leave out subsection (5).

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

22

Clause 35, page 27, line 16, leave out ‘subsections (4) and (5)’ and insert ‘subsection (4)’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

23

Clause 35, page 27, line 19, leave out ‘before 1st April 2011’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

24

Clause 35, page 27, line 28, at end add—

      ‘(8) This section shall not come into force unless the Treasury have laid before Parliament a report setting out the impact of the abolition of balancing adjustments and of the agricultural and industrial buildings allowances.’.


Mr Stephen Timms

105

Schedule 7, page 123, line 37, leave out ‘linked assets’ and insert ‘assets linked to the relevant business so far as so referable’.

Mr Stephen Timms

87

Schedule 7, page 132, line 8, after ‘(b)’ insert ‘of subsection (6)’.


Mr Stephen Timms

88

Schedule 8, page 144, line 39, leave out from beginning to ‘charged’ in line 41 and insert ‘the profits of the life assurance business of the company for the preceding accounting period were’.


Mr Stephen Timms

89

Schedule 9, page 159, line 13, leave out from ‘to’ to end of line 14 and insert ‘periods of account beginning on or after 1st January 2007 where the transfer of business or demutualisation concerned took place before 21st March’.


Mr Stephen Timms

90

Schedule 10, page 159, line 22, leave out from beginning to end of line 10 on page 163 and insert—

    Contingent loans

11 In section 83ZA(4) of FA 1989 (contingent loans), for “the end of the” substitute “any time during a”.’.

Mr Stephen Timms

91

Schedule 10, page 164, line 20, at end insert—

    ‘(4) In section 211 of TCGA 1992 (transfers of business: application of section 139 of that Act), as amended by paragraph 14 of Schedule 9 to this Act, after subsection (2) insert—

      “(2A) The reference in subsection (2) above to assets included in the transfer does not include structural assets within the meaning of section 83XA of the Finance Act 1989.”

    (5) In paragraph 17 of Schedule 7AC to TCGA 1992 (substantial shareholdings exemption: special rules for assets of insurance company’s long-term insurance fund), after sub-paragraph (4) insert—

    “(4A) The reference in sub-paragraph (2) to an asset of the investing company’s long-term insurance fund, and the references in sub-paragraphs (3) and (4) to shares or an interest in shares held as assets of its long-term insurance fund, do not include a structural asset, or structural assets, within the meaning of section 83XA of the Finance Act 1989.”.’.

Mr Stephen Timms

92

Schedule 10, page 170, line 33, leave out ‘amendments made by paragraph 1 to 3’ and insert ‘amendment made by paragraph 1 has effect on and after 10th May 2007.

    ( ) The amendments made by paragraphs 3,’.

Mr Stephen Timms

93

Schedule 10, page 170, line 35, at end insert—

    ‘( ) But the amendment made by paragraph 3(4) does not apply where the transfer of business concerned took place before 10th May 2007.’.


Mr Stephen Timms

76

Schedule 11, page 172, line 38, leave out from first ‘the’ to ‘and’ in line 40 and insert ‘reinsurance to close amounts of the members,’.

Mr Stephen Timms

77

Schedule 11, page 173, leave out lines 1 to 6 and insert—

      ‘(a) the reference to reinsurance to close amounts of any member of a Lloyd’s syndicate is to any consideration which, in accordance with the rules or practice of Lloyd’s, is given (or any amount which, in accordance with those rules or practice, is treated as consideration given) by the member in respect of the liabilities arising from the member’s underwriting business in an underwriting year for the purpose of closing the accounts of the business for that year, and’.

Mr Stephen Timms

78

Schedule 11, page 173, line 19, at end insert—

    ‘(10A) The Commissioners for Her Majesty’s Revenue and Customs may by regulations—

      (a) provide in prescribed circumstances for paragraph 1 not to apply in relation to any member of a Lloyd’s syndicate, or

      (b) provide in prescribed circumstances for a reduction in relation to any member of a Lloyd’s syndicate of the amount which (as a result of that paragraph) is not to be taken into account in the calculation mentioned in sub-paragraph (2) of that paragraph.’.


Mr Stephen Timms

102

Schedule 13, page 180, line 9, after ‘that’, insert ‘or any other’.

Mr Stephen Timms

103

Schedule 13, page 180, line 9, after ‘period’, insert ‘or taken into account in calculating the amounts which are so recognised’.

Mr Stephen Timms

104

Schedule 13, page 183, line 21, after ‘that’, insert ‘or any other’.


Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

108

# Schedule 15, page 196, line 5, leave out from first ‘amount’ to end of line 7 and insert ‘is created directly by genuine business activities, and which—’

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

109

# Schedule 15, page 196, line 11, leave out subsection (5).

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

110

# Schedule 15, page 196, line 27, leave out from ‘subsection (4)’ to end of line 33 and insert “genuine business activities” means business activities which—

        (a) are actually carried on in any EEA territory in which the controlled foreign company has a business establishment in any part of the relevant accounting period, and

        (b) are actually carried on in that territory through that establishment, having regard to premises, staff, equipment and assets.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

111

# Schedule 15, page 196, line 39, leave out subsection (9).


Mr Stephen Timms

84

Clause 52, page 33, line 32, leave out sub-paragraph (ii) and insert—

          ‘(ii) to make a repayment of the capital (“the redemption payment”) to the bond-holder during or at the end of the bond-term (whether or not in instalments),’.

Mr Stephen Timms

85

Clause 52, page 35, line 50, at end insert—

      ‘(7) For the purposes of section 417 of ICTA (close companies)—

        (a) a bond-holder is a loan creditor in respect of the bond-issuer;

        (b) arrangements falling within section 48A shall be disregarded in the application of section 417(1)(d).

      (8) For the purposes of Schedule 18 to ICTA (group relief)—

        (a) a bond-holder is a loan creditor in respect of the bond-issuer;

        (b) paragraph 1(5)(b) shall be disregarded in determining whether a person is an equity holder by virtue of arrangements falling within section 48A.”’.


Mr Stephen Timms

116

* Clause 56, page 38, line 33, at end insert—

      ‘(4) But the reference to offshore funds in section 760(3)(a) does not include any arrangements which are not a collective investment scheme for the purposes of that Part of that Act.”.’.

Mr Stephen Timms

117

* Clause 56, page 39, line 5, leave out subsection (7).


 
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Prepared: 17 May 2007