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Public Bill Committee: 19th June 2008                  

432

 

Finance Bill, continued

 
 

‘(2)    

If property which derives (wholly or in part, and directly or indirectly)

 

from an individual’s income or gains within a relevant paragraph (and

 

for a tax year) is transferred to a mixed fund, treat the transfer as

 

consisting of or containing the income or gains.’.

 

Jane Kennedy

 

464

 

Schedule  7,  page  163,  line  25,  leave out ‘has been’ and insert ‘is’.

 

Jane Kennedy

 

484

 

Schedule  7,  page  163,  line  26,  leave out ‘capital’ and insert ‘gains’.

 

Jane Kennedy

 

485

 

Schedule  7,  page  163,  line  29,  leave out ‘capital’ and insert ‘gains’.

 

Jane Kennedy

 

465

 

Schedule  7,  page  163,  line  30,  leave out from ‘treat’ to end of line 31 and insert ‘the

 

income or gains as transferred to the fund.

 

(3A)    

Treat an offshore transfer from a mixed fund as containing the

 

appropriate proportion of each kind of income or capital in the fund

 

immediately before the transfer.

 

    

“The appropriate proportion” means the amount (or market value) of

 

the transfer divided by the market value of the mixed fund

 

immediately before the transfer.’.

 

Jane Kennedy

 

466

 

Schedule  7,  page  163,  line  33,  leave out ‘(d)’ and insert ‘(h)’.

 

Jane Kennedy

 

467

 

Schedule  7,  page  163,  line  33,  at end insert—

 

‘(4A)    

A transfer from a mixed fund is an “offshore transfer” for the purposes

 

of subsection (3A) if and to the extent that section 809P does not apply

 

in relation to it.

 

(4B)    

Treat a transfer from a mixed fund as an “offshore transfer” (and

 

section 809P as not applying in relation to it, if it otherwise would do)

 

if and to the extent that, at the end of a tax year in which it is made—

 

(a)    

section 809P does not apply in relation to it, and

 

(b)    

on the basis of the best estimate that can reasonably be made

 

at that time, section 809P will not apply in relation to it.’.

 

Jane Kennedy

 

468

 

Schedule  7,  page  163,  line  38,  at end insert—


 
 

Public Bill Committee: 19th June 2008                  

433

 

Finance Bill, continued

 
 

‘809QA 

Section 809P: anti-avoidance

 

(1)    

This section applies if, by reason of an arrangement the main purpose

 

(or one of the main purposes) of which is to secure an income tax

 

advantage or capital gains tax advantage, a mixed fund would

 

otherwise be regarded as containing income or capital within any of

 

paragraphs (f) to (i) of section 809P(4).

 

(2)    

Treat the mixed fund as containing so much (if any) of the income or

 

capital as is just and reasonable.

 

(3)    

“Arrangement” includes any scheme, understanding, transaction or

 

series or transactions (whether or not enforceable).

 

(4)    

“Income tax advantage” has the meaning given by section 683.

 

(5)    

“Capital gains tax advantage” means—

 

(a)    

a relief from capital gains tax or increased relief from capital

 

gains tax,

 

(b)    

a repayment of capital gains tax or increased repayment of

 

capital gains tax,

 

(c)    

the avoidance or reduction of a charge to capital gains tax or

 

an assessment to capital gains tax, or

 

(d)    

the avoidance of a possible assessment to capital gains tax.’.

 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

375

 

Schedule  7,  page  164,  line  2,  at end insert—

 

‘(3)    

This section shall not have effect with respect to gains accruing to an individual

 

on the disposal of an asset if the disposal took place prior to 6 April 2008.’.

 

Jane Kennedy

 

486

 

Schedule  7,  page  164,  line  2,  at end insert—

 

‘809RA 

Deemed income or gains not to be regarded as remitted before time

 

when they are treated as arising or accruing

 

Where—

 

(a)    

income or foreign chargeable gains are treated as arising or

 

accruing, and

 

(b)    

by virtue of anything done in relation to anything regarded as

 

deriving from the income or chargeable gains, the income or

 

chargeable gains would otherwise be regarded as remitted to

 

the United Kingdom before the time when they are treated as

 

arising or accruing,

 

treat the income or chargeable gains as remitted to the United

 

Kingdom at that time.’.

 

Jane Kennedy

 

354

 

Schedule  7,  page  164,  line  12,  at end insert—


 
 

Public Bill Committee: 19th June 2008                  

434

 

Finance Bill, continued

 
 

‘809SA 

  Consideration for certain services

 

(1)    

This section applies to income or chargeable gains if—

 

(a)    

the income or gains would (but for subsection (2)) be taken to

 

be remitted to the United Kingdom because conditions A and

 

B in section 809K are met,

 

(b)    

condition A in section 809K is met because a service is

 

provided in the United Kingdom (“the relevant UK service”),

 

and

 

(c)    

condition B in section 809K is met because section

 

809K(3)(a) or (b) applies to the consideration for the relevant

 

UK service (“the relevant consideration”).

 

(2)    

The income or chargeable gains are to be treated as not remitted to the

 

United Kingdom if the following conditions are met.

 

(3)    

Condition A is that the relevant UK service relates wholly or mainly

 

to property situated outside the United Kingdom.

 

(4)    

Condition B is that the whole of the relevant consideration is given by

 

way of one or more payments to one or more bank accounts held

 

outside the United Kingdom by or on behalf of the person who

 

provides the relevant UK service.

 

(5)    

Sections 275 to 275C of TCGA 1992 (location of assets) apply for the

 

purposes of subsection (3) as they apply for the purposes of TCGA

 

1992.’.

 

Jane Kennedy

 

355

 

Schedule  7,  page  164,  line  19,  leave out from ‘rule’ to end of line 28 and insert

 

‘(see sections 809V and 809VA).

 

(4)    

Clothing, footwear, jewellery and watches that derive from relevant

 

foreign income are exempt property if they meet the personal use rule

 

(see section 809VB).

 

(5)    

Property of any description that derives from relevant foreign income

 

is exempt property if—

 

(a)    

the property meets the repair rule (see section 809VC),

 

(b)    

the property meets the temporary importation rule (see section

 

809W), or

 

(c)    

the notional remitted amount (see section 809X) is less than

 

£1,000.’.

 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

376

 

Schedule  7,  page  164,  line  21,  leave out ‘that derive from relevant foreign income’.


 
 

Public Bill Committee: 19th June 2008                  

435

 

Finance Bill, continued

 
 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

377

 

Schedule  7,  page  164,  line  24,  leave out ‘that derives from relevant foreign

 

income’.

 

Jane Kennedy

 

487

 

Schedule  7,  page  164,  line  35,  after ‘where’ insert ‘the whole or part of’.

 

Jane Kennedy

 

488

 

Schedule  7,  page  164,  line  35,  after ‘sold’ insert ‘, or otherwise converted into

 

money’.

 

Jane Kennedy

 

489

 

Schedule  7,  page  164,  line  43,  leave out ‘“relevant rule” means—’ and insert ‘—

 

“money” includes—

 

(a)    

a traveller’s cheque,

 

(b)    

a promissory note,

 

(c)    

a bill of exchange, and

 

(d)    

any other—

 

(i)    

instrument that is evidence of a debt, or

 

(ii)    

voucher, stamp or similar token or document

 

which is capable of being exchanged for money,

 

goods or services, and

 

“relevant rule” means—’.

 

Mr Philip Hammond

 

Mr Mark Hoban

 

Mr David Gauke

 

Justine Greening

 

378

 

Schedule  7,  page  165,  line  4,  at end insert—

 

‘(6)    

For the purpose of subsection (4) property is to be treated as not ceasing to meet

 

a relevant rule if it is lost, stolen, destroyed, scrapped or otherwise ceases to exist

 

or it is disposed of by way of gift other than to a relevant person; and property

 

gifted to a relevant person that is exempt property in the hands of that person

 

immediately after the gift shall not be treated as ceasing to be exempt property

 

solely by reason of that person subsequently ceasing to be a relevant person.

 

(7)    

If exempt property ceases to meet one of the relevant rules because it is sold to

 

someone other than a connected person, the amount chargeable to tax shall be the

 

sale proceeds received and not the amount referred to in section 809O above.’.

 

Jane Kennedy

 

356

 

Schedule  7,  page  165,  line  5,  leave out from beginning to end of line 11 on page

 

167 and insert—


 
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