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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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

389

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

395

 

Parliamentary Star - white    

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

 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

396

 

Parliamentary Star - white    

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

 

Parliamentary Star - white    

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

 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

398

 

Parliamentary Star - white    

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).


 
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