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originally enacted would (but for the amendments made by this Schedule) have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includes that section as originally enacted.’.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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Revised 19 June 2008