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Public Bill Committee: 19th June 2008                  

457

 

Finance Bill, continued

 
 

(a)    

treat the section 2(2) amount for the year of transfer or any earlier tax

 

year as the amount calculated by taking Steps 1 and 5 above, and

 

(b)    

reduce the total deemed gains by the amount of the total deemed gains

 

calculated by taking Step 1 above.

 

            

Step 7

 

            

Take the steps in paragraph 108(2) for the purpose of calculating the section

 

2(2) amount for the transferee settlement for the tax year 2007-08 and earlier

 

tax years.

 

            

For this purpose—

 

(a)    

treat the section 2(2) amount for the year of transfer or any earlier tax

 

year as the amount calculated by taking Steps 2 to 4 above, and

 

(b)    

reduce the total deemed gains by the amount of the total deemed gains

 

calculated by taking Step 2 above.

 

      (4)  

This paragraph applies with any necessary modifications in relation to a

 

settlement as respects which more than one relevant transfer was made.

 

      (5)  

In sub-paragraph (4) “relevant transfer” means a transfer—

 

(a)    

made before 6 April 2008, and

 

(b)    

to which section 90 of TCGA 1992 applied.

 

      (6)  

If, before 6 April 2008, the trustees of the transferor or transferee settlement

 

made a transfer of value to which Schedule 4B to TCGA 1992 applied, this

 

paragraph has effect subject to such modifications as are just and reasonable

 

on account of Schedule 4C to that Act having applied in relation to the

 

settlement.’.

 

Jane Kennedy

 

433

 

Schedule  7,  page  195,  line  32,  leave out sub-paragraph (1).

 

Jane Kennedy

 

434

 

Schedule  7,  page  195,  line  41,  after ‘of’ insert ‘, or paragraph 8 of Schedule 4C to,’.

 

Jane Kennedy

 

435

 

Schedule  7,  page  196,  line  3,  at end insert—

 

    ‘(5)  

References in this paragraph to section 87(6) of TCGA 1992 include that

 

provision as it would (but for the amendments made by this Schedule) have

 

applied by virtue of section 762(3) of ICTA (offshore income gains).

 

      (6)  

References in this paragraph to chargeable gains include offshore income

 

gains.

 

109A      

Section 89(2) of TCGA 1992 as substituted applies to a settlement for the tax

 

year 2008-09 (and subsequent tax years) if section 89(2) of that Act as

 

originally enacted would (but for the amendments made by this Schedule) have

 

applied to the settlement for the tax year 2008-09.

 

109B      

In section 90(1)(a) of TCGA 1992, the reference to section 87 of TCGA 1992

 

includes that section as originally enacted.’.

 

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-


 
 

Public Bill Committee: 19th June 2008                  

458

 

Finance Bill, continued

 
 

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’.

 

Jane Kennedy

 

436

 

Schedule  7,  page  196,  line  37,  leave out ‘part (but not all)’ and insert ‘all or part’.

 

Jane Kennedy

 

437

 

Schedule  7,  page  196,  line  39,  at end insert—

 

  ‘(2A)  

For a tax year as respects which the settlement has a Schedule 4C pool, the

 

reference in sub-paragraph (2)(a) above to a capital payment received (or

 

treated as received) by a beneficiary of the settlement is to be read as a capital

 

payment received (or treated as received) by a beneficiary of a relevant

 

settlement from the trustees of a relevant settlement.

 

    (2B)  

Paragraph 8A of that Schedule (relevant settlements) applies for the purposes

 

of sub-paragraph (2A) above.’.

 

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.’.

 

Jane Kennedy

 

438

 

Schedule  7,  page  197,  line  1,  after ‘of’ insert ‘, or paragraph 8 of Schedule 4C to,’.


 
 

Public Bill Committee: 19th June 2008                  

459

 

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.

 

Jane Kennedy

 

439

 

Schedule  7,  page  197,  line  29,  leave out ‘the same part (or a larger part)’ and insert

 

‘part’.

 

Jane Kennedy

 

440

 

Schedule  7,  page  197,  line  34,  at end insert—

 

  ‘(11)  

If—

 

(a)    

by reason of an asset which would not otherwise be a relevant asset

 

(“the new asset”), chargeable gains or allowable losses accrue, or are

 

treated under section 13 as accruing, to the trustees in the relevant tax

 

year,

 

(b)    

the value of the new asset derives wholly or in part from another asset

 

(“the original asset”), and

 

(c)    

section 43 of TCGA 1992 applies in relation to the calculation of the

 

chargeable gains or allowable losses,

 

            

the new asset (or part of that asset) is a “relevant asset” if the condition in sub-

 

paragraph (8)(b) or the conditions in sub-paragraph (9)(b) and (c) would be

 

met were the references there to the asset to be read as references to the new

 

asset or the original asset.

 

    (12)  

If—

 

(a)    

on or after 6 April 2008, a company (“company A”) disposes of an

 

asset to another company (“company B”), and

 

(b)    

section 171 of TCGA (transfers within groups) (as applied by section

 

14(2) of that Act) applies in relation to the disposal,

 

            

for the purposes of sub-paragraph (9) (and this sub-paragraph) treat company

 

B as having owned the asset throughout the period when company A owned it.

 

    (13)  

If an asset is a relevant asset by virtue of sub-paragraph (12), for the purposes

 

of sub-paragraph (7)—

 

(a)    

treat the chargeable gains as having accrued to the company which

 

owned the asset at the beginning of 6 April 2008, and

 

(b)    

treat the proportion of those chargeable gains attributable under

 

section 13 of TCGA 1992 to the trustees as being the proportion of the

 

chargeable gains actually accruing that are so attributable.

 

    (14)  

If—

 

(a)    

an asset would otherwise be a “relevant asset” within sub-paragraph

 

(9), and


 
 

Public Bill Committee: 19th June 2008                  

460

 

Finance Bill, continued

 
 

(b)    

the proportion of chargeable gains treated under section 13 of TCGA

 

1992 as accruing to the trustees by reason of the asset (“the relevant

 

proportion”) is greater than the minimum proportion,

 

            

for the purposes of sub-paragraph (7) treat the appropriate proportion of the

 

asset as a relevant asset and the rest of the asset as if it were not a relevant asset.

 

    (15)  

“The minimum proportion” is the smallest proportion of chargeable gains (if

 

any) that would have been attributable to the trustees on a disposal of the asset

 

at any time in the relevant period (as defined by sub-paragraph (10)).

 

    (16)  

“The appropriate proportion” is the minimum proportion divided by the

 

relevant proportion.’.

 

Jane Kennedy

 

441

 

Schedule  7,  page  197,  line  46,  after ‘of’ insert ‘, or paragraph 8 of Schedule 4C to,’.

 

Jane Kennedy

 

442

 

Schedule  7,  page  198,  line  2,  at end insert—

 

  ‘(1A)  

If the trustees of the transferee settlement have made an election under

 

paragraph 112(1), paragraph 112(5) to (7) have effect in relation to the

 

transferee settlement for that year as if the reference in paragraph 112(7) to

 

relevant assets included relevant assets within the meaning of this paragraph.’.

 

Jane Kennedy

 

443

 

Schedule  7,  page  198,  line  3,  at beginning insert ‘If the trustees of the transferee

 

settlement have not made an election under paragraph 112(1),’.

 

Jane Kennedy

 

444

 

Schedule  7,  page  198,  line  4,  after first ‘gains’ insert ‘mentioned in sub-paragraph

 

(1)(d) above’.

 

Jane Kennedy

 

445

 

Schedule  7,  page  198,  line  15,  leave out ‘sub-paragraph (3)’ and insert ‘this

 

paragraph’.

 

Jane Kennedy

 

446

 

Schedule  7,  page  198,  line  23,  leave out ‘the same part (or a larger part)’ and insert

 

‘part’.

 

Jane Kennedy

 

447

 

Schedule  7,  page  198,  line  31,  at end insert—

 

    ‘(6)  

Sub-paragraphs (11) to (16) of paragraph 112 apply for the purposes of this

 

paragraph (with such modifications as are necessary) as they apply for the

 

purposes of that paragraph.’.

 

Jane Kennedy

 

448

 

Schedule  7,  page  198,  line  35,  after ‘losses)’ insert ‘—


 
 

Public Bill Committee: 19th June 2008                  

461

 

Finance Bill, continued

 
 

(a)    

after subsection (2) insert—

 

“(2A)    

For the purposes of sections 87 to 89, no account is to be taken

 

of any section 2(2) amount in a Schedule 4C pool (see

 

paragraph 1 of Schedule 4C).”, and

 

(b)    

’.

 

Jane Kennedy

 

449

 

Schedule  7,  page  199,  line  4,  at end insert—

 

‘(5)    

The reference in subsection (4)(b) to chargeable gains treated as

 

accruing includes offshore income gains treated as arising.”’.

 

Jane Kennedy

 

450

 

Schedule  7,  page  199,  line  12,  after ‘the’ insert ‘original’.

 

Jane Kennedy

 

451

 

Schedule  7,  page  199,  line  26,  leave out from second ‘for’ to first ‘as’ in line 28 and

 

insert ‘the relevant tax year and earlier tax years,’.

 

Jane Kennedy

 

452

 

Schedule  7,  page  199,  line  37,  at end insert—

 

‘(1A)  

For the purposes of Step 1 of sub-paragraph (1) take into account

 

the effect of section 90 in relation to any transfer of settled property

 

from or to the trustees of the settlement made in or before the

 

relevant tax year.’.

 

Jane Kennedy

 

453

 

Schedule  7,  page  199,  line  40,  at end insert—

 

‘119A    

In paragraph 4(2) (chargeable amount: non-resident settlement), at the end

 

insert “(and had made the disposals which Schedule 4B treats them as having

 

made)”.

 

119B      

In paragraph 5(2)(a) (chargeable amount: dual resident settlement), after

 

“apply” insert “(and the disposals which Schedule 4B treats them as having

 

made were made)”.’.

 

Jane Kennedy

 

454

 

Schedule  7,  page  200,  leave out lines 41 and 42.

 

Jane Kennedy

 

455

 

Schedule  7,  page  200,  leave out lines 46 and 47.

 

Jane Kennedy

 

456

 

Schedule  7,  page  201,  line  3,  after ‘paragraph’ insert ‘; but this is subject to sub-

 

paragraph (5).


 
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