House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee: 20th May 2008
135

Finance Bill, continued

“Disposals for consideration not fully recognised by accounting practice

11B(1)
This paragraph applies where in any accounting period (“the

relevant accounting period”) a company, with the relevant

avoidance intention, disposes of rights under a creditor relationship

(in whole or in part) for consideration which—

(a)
is not wholly in the form of money or a debt that falls to be

settled by the payment of money, and

(b)
is not fully recognised.

      (2)
The relevant avoidance intention is the intention of eliminating or

reducing the credits to be brought into account for the purposes of

this Chapter.

      (3)
Consideration is not fully recognised if, as a result of the application

of generally accepted accounting practice, the full amount or value

of the consideration is not recognised in determining the company’s

profit or loss for the relevant accounting period or any other

accounting period.

      (4)
In determining the credits to be brought into account by the

company for the period for the purposes of this Chapter, it is to be

assumed that the whole of the consideration is recognised in

determining the company’s profit or loss for the relevant

accounting period.

      (5)
But this paragraph does not apply if paragraph 1(2) of Schedule

28AA to the Taxes Act 1988 (provision not at arm’s length)

operates in relation to the disposal so as to increase the tax liability

of the company.”

      (2)
In Schedule 26 to FA 2002 (derivative contracts), after paragraph 27 insert—

“Disposals for consideration not fully recognised by accounting practice

27A(1)
This paragraph applies where in any accounting period (“the

relevant accounting period”) a company, with the relevant

avoidance intention, disposes of rights or liabilities under a

derivative contract (in whole or in part) for consideration which—

(a)
is not wholly in the form of money or a debt that falls to be

settled by the payment of money, and

(b)
is not fully recognised.

      (2)
The relevant avoidance intention is the intention of eliminating or

reducing the credits to be brought into account for the purposes of

this Schedule.

      (3)
Consideration is not fully recognised if, as a result of the application

of generally accepted accounting practice, the full amount or value

of the consideration is not recognised in determining the company’s

profit or loss for the relevant accounting period or any other

accounting period.

      (4)
In determining the credits to be brought into account by the

company for the period for the purposes of this Schedule, it is to be

assumed that the whole of the consideration is recognised in

determining the company’s profit or loss for the relevant

accounting period.

Public Bill Committee: 20th May 2008
136

Finance Bill, continued

      (5)
But this paragraph does not apply if paragraph 1(2) of Schedule

28AA to the Taxes Act 1988 (provision not at arm’s length)

operates in relation to the disposal so as to increase the tax liability

of the company.”

      (3)
The amendments made by this paragraph have effect in relation to disposals on

or after 16 May 2008.’.

Jane Kennedy

128

Schedule  22,  page  279,  line  34,  at end insert—

‘Avoidance relying on continuity of treatment provisions

3B  (1)
In paragraph 12 of Schedule 9 to FA 1996 (loan relationships: continuity of

treatment), after sub-paragraph (2C) insert—

“(2D)
This paragraph does not apply where—

(a)
the transferor company is party to arrangements in

accordance with which there is likely to be a transfer of

rights or liabilities under the loan relationship by the

transferee company to another person in circumstances in

which this paragraph would not apply, and

(b)
the purpose, or one of the main purposes, of the

arrangements is to secure a tax advantage for the transferor

company or a person connected with it.

    (2E)
In sub-paragraph (2D) above—

(a)
“arrangements” includes any agreement, understanding,

scheme, transaction or series of transactions,

(b)
“tax advantage” has the meaning given by section 840ZA

of the Taxes Act 1988, and

(c)
“transfer” includes any arrangement which equates in

substance to a transfer (including an acquisition or

disposal, or increase or decrease, in a share of the profits or

assets of a partnership);


and section 839 of the Taxes Act 1988 (connected persons) applies

for the purposes of that sub-paragraph.

    (2F)
This paragraph does not apply in relation to a disposal if paragraph

11B above applies in relation to it.”

      (2)
In paragraph 28 of Schedule 26 to FA 2002 (derivative contracts: continuity of

treatment), after sub-paragraph (3ZA) insert—

“(3ZB)
This paragraph does not apply where—

(a)
the transferor company is party to arrangements in

accordance with which there is likely to be a transfer of

rights or liabilities under the derivative contract by the

transferee company to another person in circumstances in

which this paragraph would not apply, and

(b)
the purpose, or one of the main purposes, of the

arrangements is to secure a tax advantage for the transferor

company or a person connected with it.

  (3ZC)
In sub-paragraph (3ZB) above—

(a)
“arrangements” includes any agreement, understanding,

scheme, transaction or series of transactions,

Public Bill Committee: 20th May 2008
137

Finance Bill, continued

(b)
“tax advantage” has the meaning given by section 840ZA

of the Taxes Act 1988, and

(c)
“transfer” includes any arrangement which equates in

substance to a transfer (including an acquisition or

disposal, or increase or decrease, in a share of the profits or

assets of a partnership);


and section 839 of the Taxes Act 1988 (connected persons) applies

for the purposes of that sub-paragraph.

  (3ZD)
This paragraph does not apply in relation to a disposal if paragraph

27A applies in relation to it.”

      (3)
The amendments made by this paragraph have effect in relation to transactions

taking place, or a series of transactions of which the first takes place, on or after

16 May 2008.’.

Mr Phillip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

139


Schedule  22,  page  280,  line  7,  at end insert ‘to the extent that such debits exceed

the aggregate amount of credits brought into account under this Chapter in that or any

previous accounting period in respect of that share’.

Mr Phillip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

140


Schedule  22,  page  280,  leave out line 8.

Mr Phillip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

141


Schedule  22,  page  280,  line  13,  at end insert ‘to the extent that such debits exceed

the aggregate amount of credits brought into account under this Chapter in that or any

previous accounting period in respect of that share.’.

Mr Phillip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

142


Schedule  22,  page  280,  leave out line 14.

Jane Kennedy

129

Schedule  22,  page  280,  line  40,  at end insert—

Public Bill Committee: 20th May 2008
138

Finance Bill, continued

‘Non-qualifying shares

10A(1)
In section 91B(5)(a) of FA 1996 (debits and credits to be brought into account

where Condition 3 in section 91E is satisfied), omit “by the investing

company”.

      (2)
The repeal made by sub-paragraph (1) has effect in relation to credits and

debits relating to any time on or after 16 May 2008.’.

Jane Kennedy

130

Schedule  22,  page  280,  line  40,  at end insert—

‘Income producing assets

10B(1)
In section 91C(3) of FA 1996 (assets which are income producing), for

paragraph (c) substitute—

“(c)
any share as respects which the condition in section 91D(1)(b)

below is satisfied;”.

      (2)
The amendment made by sub-paragraph (1) has effect in relation to times on

or after 16 May 2008.’.

Jane Kennedy

131

Schedule  22,  page  284,  line  28,  after ‘Accordingly’, insert—

‘(a)
in section 91A(7)(a) of FA 1996, omit “(see section 103(3A))”, and

(b)
’.

Mr Phillip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

143


Schedule  22,  page  284,  line  28,  at end insert—

‘(2A)
In section 91A(7) FA 1996 omit the words ‘(see section 103(3A)).’.

Jane Kennedy

119

Clause  61,  page  30,  line  26,  leave out paragraph (b) and insert—

‘(b)
any income which accrues during that period to a partnership of which

the company is a partner, apportioned between the company and the other

partners on a just and reasonable basis.’.

Jane Kennedy

120

Clause  61,  page  30,  line  33,  at end insert—

  ‘(4D)
In sub-paragraph (4B)(b), “partnership” includes an entity established under

the law of a country or territory outside the United Kingdom of a similar

character to a partnership; and “partner” is to be read accordingly.”’.

Public Bill Committee: 20th May 2008
139

Finance Bill, continued

Jane Kennedy

121

Clause  61,  page  30,  line  42,  leave out paragraph (b) and insert—

‘(b)
any income which accrues during that period to a partnership of which

the company is a partner, apportioned between the company and the other

partners on a just and reasonable basis.’.

Jane Kennedy

122

Clause  61,  page  30,  line  48,  at end insert—

  ‘(5E)
In sub-paragraph (5C)(b), “partnership” includes an entity established under

the law of a country or territory outside the United Kingdom of a similar

character to a partnership; and “partner” is to be read accordingly.”’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

47

Clause  22,  page  12,  line  4,  at end insert—

‘(1C)
Subsection (1) does not apply to an individual who is enrolled in a higher

education institution in the United Kingdom.’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

49

Schedule  7,  page  151,  line  30,  leave out ‘£2,000’ and insert ‘£5,435’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

50

Schedule  7,  page  151,  line  36,  leave out ‘£2,000’ and insert ‘£5,435’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

51

Schedule  7,  page  152,  line  2,  at end insert—

‘(4)
The Chancellor of the Exchequer shall review, on an annual basis, the amount

specified under subsection (1)(c).

(5)
Any review conducted under subsection (4) is subject to approval by resolution

of the House of Commons.’.

Public Bill Committee: 20th May 2008
140

Finance Bill, continued

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

48

Schedule  7,  page  153,  line  19,  at end insert ‘(excluding each year the individual

was enrolled in full-time higher education in the UK)’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

52

Schedule  7,  page  153,  line  37,  at end insert—

‘(6)
Subsection (4) shall not have effect until—

(a)
the Treasury has laid before the House of Commons a report setting out

its assessment of the impact of the charge on—

(i)
foreign nationals in low-paid employment,

(ii)
small businesses employing foreign nationals, and

(iii)
higher education institutions; and

(b)
the report has been approved by resolution of the House of Commons.’.

New ClauseS

Small business rates relief

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

John Thurso

NC1

To move the following Clause:—

‘(1)
A small business with a rateable value of less than £25,000 may claim a business

rate allowance.

(2)
The Treasury shall, by regulations, define the level of business rate allowance and

the circumstances in which that allowance may be claimed.

(3)
Regulations under subsection (2) shall be made by statutory instrument.

(4)
A statutory instrument containing regulations under subsection (2) may not be

made unless a draft of it has been laid before and approved by resolution of the

House of Commons.’.

Public Bill Committee: 20th May 2008
141

Finance Bill, continued

Overpayment of tax credits

Mr Simon Hughes

Mr Jeremy Browne

NC2

To move the following Clause:—

‘If HMRC have overpaid tax credits to any person, they may not reclaim such

overpayments where—

(a)
the amount overpaid is £5,000 or less and the person’s annual income is

less than £10,000, or

(b)
the amount overpaid is £2,500 or less and the person’s annual income is

less than £20,000.’.

Exemption for bingo

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

John Thurso

NC3

To move the following Clause:—

‘(1)
Group 4 (betting, gaming and lotteries) of Schedule 9 to the Value Added Tax Act

1994 is amended as follows.

(2)
After Note (5)(e) insert “, or

(f)
bingo which is played pursuant to a bingo operating licence.”.

(3)
After Note (11) insert—

“(12)
In Note (5)(f) “bingo operating licence” means such a licence as is

provided for in section 65(2)(b) of the Gambling Act 2005.”’.

Fuel duty regulator

Mr Stewart Hosie

NC4

To move the following Clause:—

‘In the HODA 1979 (c. 5) in section 6 (excise duty on hydrocarbon oil) there is

inserted after subsection (1A)—

“(1AA)
In every Budget Statement and pre-Budget Report the Chancellor of the

Exchequer shall provide his forecast for the price of oil and set out

anticipated yield from fuel duty and VAT on fuel for that price and for a

range of prices up to 50 per cent. above his forecast.