House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee: 12th June 2008
327

Finance Bill, continued

(2)
In the case of section 832B(1)(a) the same deductions are allowed as are allowed

under the Income Taxes Acts where the trade, profession or vocation is carried

out in the United Kingdom.

(3)
In the case of section 832B(1)(b) the same deductions are allowed as are allowed

under the Income Taxes Acts where the property business is carried on overseas

and taxed on the arising basis.”’.

Jane Kennedy

348

Schedule  7,  page  180,  line  25,  at end insert—

‘(3A)
Sections 42 and 43 of the Management Act (procedure and time limit

for making claims), except section 42(1A) of that Act, apply in

relation to an election under this section as they apply in relation to a

claim for relief.’.

Jane Kennedy

335

Schedule  7,  page  182,  line  40,  at end insert—

‘58A
In section 119A (increase in expenditure by reference to tax charged in relation

to employment-related securities), after subsection (5) insert—

“(5A)
See also section 119B (unremitted foreign securities income).”

58B
After that section insert—

“119B
Section 119A: unremitted foreign securities income

(1)
For the purposes of section 119A reduce the amount that counts as

employment income by so much of that amount (if any) as is

unremitted foreign securities income.

(2)
In this section “unremitted foreign securities income” means income

that—

(a)
is foreign securities income for the purposes of section 41A of

ITEPA 2003 (employment income from ERS charged on

remittance basis), and

(b)
has not been remitted to the United Kingdom by the end of the

tax year in which the disposal mentioned in section 119A(1)

occurs.

(3)
The following provisions apply if any of the unremitted foreign

securities income is remitted to the United Kingdom after the end of

the tax year referred to in subsection (2)(b).

(4)
The person liable for the capital gains tax on any chargeable gains

arising on the disposal may make a claim for section 119A(2) to have

effect as if the remitted income had been remitted before the end of

that tax year.

(5)
All adjustments (by way of repayment of tax, assessment or otherwise)

are to be made which are necessary to give effect to a claim under

subsection (4).

(6)
Those adjustments may be made at any time, despite anything to the

contrary in any enactment relating to capital gains tax.”’.

Public Bill Committee: 12th June 2008
328

Finance Bill, continued

Jane Kennedy

349

Schedule  7,  page  184,  line  6,  leave out paragraph 70.

Jane Kennedy

350

Schedule  7,  page  184,  line  20,  leave out paragraph 73.

Jane Kennedy

336

Schedule  7,  page  184,  line  35,  leave out ‘and 32’ and insert ‘to 32, 34C and 58B’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

399


Schedule  7,  page  184,  line  37,  leave out ‘2008’ and insert ‘2009’.

Jane Kennedy

337

Schedule  7,  page  184,  line  37,  at end insert ‘(except employment-related securities

acquired pursuant to a securities option acquired before 6 April 2008).’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

400


Schedule  7,  page  184,  line  39,  leave out ‘2008-09’ and insert ‘2009-10’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

401


Schedule  7,  page  184,  line  39,  at end insert ‘, except for the amendment made by

paragraph 1 to insert a new section 809G in Part 14 of ITA 2007, which has effect for the

tax year 2008-09 and subsequent tax years.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

383


Schedule  7,  page  187,  leave out lines 1 to 9 and insert ‘, and

(b)
before 6 April 2008 the money was received in the United Kingdom.’.

Public Bill Committee: 12th June 2008
329

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

386


Schedule  7,  page  187,  leave out lines 1 to 3 and insert—

‘(b)
the loan was made for the purpose of enabling the individual to—

(i)
acquire an interest in residential property in the United Kingdom,

(ii)
carry out a remortgaging exercise with respect to residential

property in the United Kingdom, or

(iii)
furnish, decorate, repair or enhance a residential property in the

United Kingdom, and’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

387


Schedule  7,  page  187,  line  6,  leave out from ‘money’ to ‘and’ in line 7 and insert

‘for any of the purposes referred to in subsection (1)(b),’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

384


Schedule  7,  page  187,  line  10,  leave out ‘Relevant foreign income’ and insert

‘Foreign income gains’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

388


Schedule  7,  page  187,  line  10,  leave out ‘Relevant foreign income’ and insert

‘Foreign income and gains’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

385


Schedule  7,  page  187,  leave out lines 13 to 21.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

389


Schedule  7,  page  187,  leave out lines 13 to 19.

Public Bill Committee: 12th June 2008
330

Finance Bill, continued

Jane Kennedy

338

Schedule  7,  page  187,  line  21,  at end insert—

‘86A (1)
This paragraph applies in relation to employment-related securities if—

(a)
the date of the acquisition is on or after 6 April 2008 and on or before

31 July 2008, and

(b)
Chapter 2 of Part 7 of ITEPA 2003 (restricted securities) applies in

relation to the securities by virtue only of amendments made by this

Schedule.

      (2)
Section 431 of ITEPA 2003 (election for full or partial disapplication of

Chapter) has effect in relation to the employment-related securities as if in

subsection (5)(b) for “more than 14 days after the acquisition” there were

substituted “after 14 August 2008”.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

390


Schedule  7,  page  189,  line  17,  leave out from ‘12’ to end of line 18.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

391


Schedule  7,  page  189,  line  36,  at end insert—

‘93A (3)
The following provisions apply to a company if—

(a)
section 13 of TCGA 1992 applies to the company for the tax year

2008-09, and

(b)
the directors of the company have not opted out from the provisions

within this paragraph.

      (4)
An election to opt out from the provisions within this paragraph may only be

made on or before the anniversary of the first 31 January to occur after the end

of the first tax year (beginning with the tax year 2008-09) in which chargeable

gains are attributed under section 13 of TCGA 1992 to a participant in the

offshore company.

      (5)
An election under sub-paragraph (2) is irrevocable and must be made in the

way and form specified by the Commissioners for Her Majesty’s Revenue and

Customs.

      (6)
The only information that need be provided in the course of making the

election is the name of the offshore company and the name of the director

making the election.

      (7)
Sub-paragraph (7) applies if—

(a)
chargeable gains are treated under section 13 of TCGA 1992 as

accruing to an individual in a tax year, and

(b)
the individual is resident, but not domiciled, in the United Kingdom in

that year.

      (8)
The individual is not charged to capital gains tax on so much of the aggregate

chargeable gains attributed to him in the tax year as exceeds the relevant

proportion of the gains.

      (9)
The relevant proportion is A/B where—

Public Bill Committee: 12th June 2008
331

Finance Bill, continued

  A is the portion of the gain that would what have been treated as accruing

to the participator, if immediately before 6 April 2008 every relevant

asset had been sold by the directors and immediately re-acquired by them

at the market value at that time; and

  B is the actual gain attributed to the individual.

    (10)
For the purposes of sub-paragraph (7) an asset is a “relevant asset” if—

(a)
by reason of the asset, a chargeable gain or allowable loss accrues to

the trustees in the relevant tax year, and

(b)
the asset has been comprised in the company from the beginning of 6

April 2008 until the time of the event giving rise to the chargeable gain

or allowable loss.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

392


Schedule  7,  page  196,  line  28,  leave out ‘made an election under this sub-

paragraph’ and insert ‘have not opted out from the provisions within this paragraph’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

393


Schedule  7,  page  196,  line  30,  leave out ‘An election under sub-paragraph (1)’ and

insert ‘An election to opt out from the provisions within this paragraph’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

394


Schedule  7,  page  196,  line  30,  after ‘the’, insert ‘anniversary of the’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

395


Schedule  7,  page  196,  line  40,  leave out ‘(1)’ and insert ‘(2)’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

396


Schedule  7,  page  196,  line  42,  at end insert—

  ‘(4A)
The only information that need be provided in the course of making the

election is the name of the trust and the name of the trustee making the

election.’.

Public Bill Committee: 12th June 2008
332

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

397


Schedule  7,  page  197,  line  24,  at end insert ‘and’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

398


Schedule  7,  page  197,  line  27,  leave out from ‘gains’ to end of line 34.

New ClauseS

Gifts inter vivos

Jane Kennedy

NC6

To move the following Clause:—

‘(1)
Omit section 82(5) and (9) of FA 1985 (adjudication of certain gifts inter vivos).

(2)
Accordingly, omit paragraph 9 of Schedule 14 to FA 1999.

(3)
The amendments made by this section have effect in relation to instruments

executed on or after 13 March 2008, other than instruments effecting a land

transaction (within the meaning of paragraph 22 of Schedule 32).

(4)
For the purposes of section 14(4) of the Stamp Act 1891 (instruments not to be

given in evidence etc unless stamped in accordance with the law in force at the

time of first execution), the law in force at the time of execution of such an

instrument shall be deemed to be the law as varied in accordance with this

section.’.

Abandonment expenditure: deductions from ring fence income

Jane Kennedy

NC7

To move the following Clause:—

‘(1)
FA 1991 is amended as follows.

(2)
Section 64 (relief for expenditure incurred by a participator in meeting defaulter’s

abandonment expenditure) is amended as follows.

(3)
In subsection (1)(a)—

(a)
omit “(as set out in section 107 of this Act)”, and

(b)
for “sub-paragraph (1)(a)” substitute “sub-paragraph (2)”.

(4)
In subsection (1)(b)—

Public Bill Committee: 12th June 2008
333

Finance Bill, continued

(a)
for “sub-paragraph (4)” substitute “sub-paragraph (2)”, and

(b)
for “qualifying” substitute “contributing”.

(5)
In subsections (2), (3), (4) and (5) (in each place), for “qualifying” substitute

“contributing”.

(6)
Section 65 (reimbursement by defaulter in respect of certain abandonment

expenditure) is amended as follows.

(7)
In subsection (1)(a)—

(a)
omit “(as set out in section 107 of this Act)”, and

(b)
for “sub-paragraph (1)(a)” substitute “sub-paragraph (2)”.

(8)
In subsection (1)(b), for “sub-paragraph (4)” substitute “sub-paragraph (2)”.

(9)
In subsections (1) (in each place), (4), (5) (in each place), (6), (7) (in each place)

and (8), for “qualifying” substitute “contributing”.

(10)
The amendments made by this section have effect in relation to expenditure

incurred after 30 June 2008.’.

Qualifying expenditure: R&D relief and vaccine research relief

Jane Kennedy

NC8

To move the following Clause:—

‘(1)
Paragraph 5 of Schedule 20 to FA 2000 (R&D tax relief: staffing costs) is

amended as follows.

(2)
In sub-paragraph (1)(b), after “company;” insert—

“(ba)
the compulsory contributions paid by the company in respect

of benefits for directors or employees of the company under

the social security legislation of an EEA State (other than the

United Kingdom) or Switzerland;”.

(3)
Before sub-paragraph (1A) insert—

“(1ZB)
In sub-paragraph (1)(ba) “social security legislation” means

legislation relating to any of the branches of social security listed in

Article 3(1) of Regulation (EC) No 883/2004 of the European

Parliament and of the Council of 29 April 2004 on the co-ordination

of social security systems (as amended from time to time).”

(4)
Schedule 13 to FA 2002 (vaccine research relief) is amended as follows.

(5)
In paragraph 2 (qualifying expenditure)—

(a)
in sub-paragraph (1)(a), at the end insert “or”,

(b)
omit sub-paragraph (1)(c) (and the “or” before it), and

(c)
omit sub-paragraph (4).

(6)
In paragraph 6 (qualifying expenditure on sub-contracted research and

development), omit—

(a)
in sub-paragraph (1), the second sentence, and

(b)
sub-paragraph (3) (expenditure on research sub-contracted to a charity, a

university or a scientific research organisation).

(7)
Omit paragraph 12 (qualifying expenditure on contributions to independent

research and development).