73

House of Commons

Tuesday 13th May 2008

Public Bill Committee

New Amendments handed in are marked thus

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

Finance Bill

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(Except Clauses 3, 5, 6, 15, 21, 49, 90 and 117

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and new Clauses amending section 74 of the Finance Act 2003)

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Note

The Amendments have been arranged in accordance with the Order of the

Committee [6th May 2008].

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

23

Schedule  3,  page  120,  line  41,  leave out from ‘group’ to end of line 44.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

24

Schedule  3,  page  121,  line  1,  leave out from ‘the’ to end and insert ‘condition in’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

25

Schedule  3,  page  121,  line  2,  leave out ‘are’ and insert ‘is’.

Public Bill Committee: 13th May 2008

74

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

20

Schedule  3,  page  121,  line  2,  leave out from ‘throughout’ to end and insert ‘a 12-

month period beginning not more than two years before’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

26

Schedule  3,  page  121,  line  36,  after ‘possession’, insert ‘, including a defeasible

life interest,’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

27

Schedule  3,  page  122,  line  31,  leave out ‘as part of’ and insert ‘subsequently to’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

28

Schedule  3,  page  122,  leave out lines 37 to 39 and insert ‘date of the disposal referred

to in subsection (3)’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

John Thurso

8

Schedule  3,  page  124,  line  5,  leave out ‘£1 million’ and insert ‘the entrepreneurs’

relief limit’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

29

Schedule  3,  page  124,  line  5,  leave out ‘£1 million’ and insert ‘the entrepreneur’s

relief limit’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

John Thurso

9

Schedule  3,  page  124,  line  7,  leave out ‘£1 million’ and insert ‘the entrepreneurs’

relief limit’.

Public Bill Committee: 13th May 2008

75

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

30

Schedule  3,  page  124,  line  7,  leave out ‘£1 million’ and insert ‘the entrepreneur’s

relief limit’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

32

Schedule  3,  page  124,  line  49,  at end insert—

‘(10)

The Treasury shall prepare and publish not later than 31st March 2010 an

assessment of the impact of the provisions of subsection (3) on the activity of

serial entrepreneurs.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

33

Schedule  3,  page  125,  line  41,  at end insert ‘in respect of any period commencing

on or after 6th April 2006’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

35

Schedule  3,  page  126,  line  7,  at end insert ‘and’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

34

Schedule  3,  page  126,  line  13,  leave out from ‘business’ to end of line 17.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

37

Schedule  3,  page  126,  line  24,  at end insert ‘and’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

36

Schedule  3,  page  126,  leave out lines 28 to 31.

Public Bill Committee: 13th May 2008

76

Finance Bill, continued

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

John Thurso

10

Schedule  3,  page  127,  line  27,  at end insert—

‘169RA

Entrepreneurs’ relief limit

The entrepreneurs’ relief limit is £1 million.

169RB

Indexation of the entrepreneurs’ relief limit

(1)	This section applies if the retail prices index for the September before the start of

a tax year is higher than it was for the previous September.

(2)	The entrepreneurs’ relief limit for the tax year is the amount found as follows.

Step 1

Increase the entrepreneurs’ relief limit for the previous tax year by the same

percentage as the percentage increase in the retail prices index.

Step 2

If the result of Step 1 is a multiple of £10, it is the entrepreneurs’ relief limit for

the tax year.

If the result of Step 1 is not a multiple of £10, round it up to the nearest amount

which is a multiple of £10.

That amount is the entrepreneurs’ relief limit for the tax year.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

22

Schedule  3,  page  127,  leave out lines 37 to 42.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

38

Schedule  3,  page  127,  line  37,  leave out from ‘company”’ to end of line 42 and

insert ‘has the same meaning as in section 165(8).’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

39

Schedule  3,  page  127,  line  39,  leave out ‘5%’ and insert ‘1%’.

Public Bill Committee: 13th May 2008

77

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

40

Schedule  3,  page  127,  line  41,  leave out ‘5%’ and insert ‘1%’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

41

Schedule  3,  page  127,  line  42,  at end insert ‘, or

(c)	in which he holds shares under an approved HMRC

share scheme.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

42

Schedule  3,  page  127,  line  42,  at end insert ‘, or

(c)	in respect of shares in which he holds EMI qualifying

options.’.

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

John Thurso

5

Schedule  3,  page  127,  line  42,  at end insert—

‘(3A)

Shares held by an individual through an employee profit sharing scheme or a

share-ownership scheme shall be exempt from the requirements of subsection

(3).’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

43

Schedule  3,  page  128,  line  9,  at end insert—

‘“EMI qualifying options” has the meaning given in section 527(4) of the

Income Tax (Earnings and Pensions) Act 2003,’.

Public Bill Committee: 13th May 2008

78

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

31

Schedule  3,  page  128,  line  13,  at end insert—

‘“entrepreneur’s relief limit” means £1 million or such greater sum as the

Treasury may from time to time by order specify,’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

62

Schedule  4,  page  131,  line  39,  leave out from begining to end of line 7 on page 132

and insert—

‘(3)	Where a claim is made under this section, the nil-rate band maximum at the

relevant time is to be treated for the relevant purposes as increased by the relevant

percentage specified in subsection (4) below (but subject to subsection (5) and

section 8C below).

(3A)	For the purposes of subsection (3) above—

(a)	where the claim specifies that it is made in relation to the death of the

survivor (“a death claim”)—

(i)	“the relevant time” is the time of the survivor’s death, and

(ii)	“the relevant purposes” are the purposes of the change to tax or

additional tax on or by reason of the death of the survivor;

and

(b)	where the claim specifies that it is made in relation to an immediately

chargeable lifetime transfer (meaning a chargeable transfer which is not

made on death and which was not a potential exempt transfer) (“a

lifetime claim”)—

(i)	“the relevant time” is the date on which that chargeable transfer

was made, and

(ii)	“the relevant purposes” are the purposes of the charge to tax on

that chargeable transfer (not being additional tax payable by

reason of the death of the survivor).

(4)	For the purposes of subsection (3) above, but subject to subsection (4A) below,

“the relevant percentage” is—

E
	X	100
NRBM

where—

E is the amount by which M is greater than VT in the case of the deceased person;

and

NRBM is the nil-rate band maximum at the relevant time.

(4A)	Where a claim has been made under this section in relation to an immediately

chargeable lifetime transfer (“the spent transfer”) and the survivor’s death did not

Public Bill Committee: 13th May 2008

79

Finance Bill, continued

occur within 7 years after the date on which that chargeable transfer was made

(“the spent transfer date”), then for the purpose of all claims under this section in

relation to occasions (whether immediately chargeable lifetime transfers or the

death of the survivor) on or after the seventh anniversary of the spent transfer date

the adjustment specified in subsection (4B) below shall be made for the purpose

of calculating the relevant percentage under subsection (4) above.

(4B)	Subject to subsection (4C) below, E for the purpose of the formula in subsection

(4) above shall be reduced by R per cent of itself where—

	ELT
R =		X 100
	TNRB - PNRB

PNRB is the amount which would have been survivor’s nil-rate band maximum

at the time of the spent transfer if no claim had been made under this section in

relation to the spent transfer;

TNRB is the survivor’s nil-rate band maximum as computed in the light of the

claim made under this section in relation to the spent transfer; and

ELT is the amount by which the value transferred by the spent transfer, added to

the value transferred by any chargeable transfers made by the survivor within 7

years before the spent transfer, exceeded PNRB.

(4C)	Where an adjustment was made under subsection (4A) above in calculating the

relevant percentage in relation to the spent transfer, the adjustment specified in

subsection (4B) above shall be made in relation to the amount to which E was

adjusted on that occasion; and this subsection shall apply cumulatively where

lifetime claims have been made in relation to successive spent transfers each of

which has given rise to an adjustment under subsection (4B) above.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

61

Schedule  4,  page  131,  line  41,  leave out ‘on’ and insert ‘or additional tax on or by

reason of’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Mr Brooks Newmark

44

Schedule  4,  page  132,  line  25,  at end insert—

‘(8)	For the purposes of the operation of this section, section 18(2) shall be

ignored.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

63

Schedule  4,  page  132,  line  28,  leave out from beginning to ‘(if’ in line 30 and

insert—

‘(a)	in the case of a lifetime claim,

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Revised 13 May 2008