Public Bill Committee: 17th June 2008

374

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

373

Schedule  7,  page  160,  line  28,  at end insert—

‘(6A)

The references in subsection (6) above to the spouse or civil partner of the

individual do not include—

(a)	a person to whom the individual is not for the time being married but may

later marry, or a person of whom the individual is not for the time being

the civil partner but of whom he may later be a civil partner, or

(b)	a spouse or civil partner from whom the individual is separated under an

order of a court or under a separation agreement or in such circumstances

that the separation is likely to be permanent, or

(c)	the widow or widower or surviving civil partner of the individual.

(6B)	In this section—

(a)	“dependent child” means a child who—

(i)	is under the age of 18 years,

(ii)	is unmarried, and

(iii)

does not have a civil partner, and

(b)	“child” includes a stepchild.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

374

Schedule  7,  page  162,  line  42,  leave out from beginning to end of line 7 on page

163 and insert—

‘(4)	The kinds of income and capital are—

(a)	income and gains subject to a UK tax,

(b)	employment income subject to a foreign tax,

(c)	relevant foreign income subject to a foreign tax,

(d)	foreign chargeable gains subject to a foreign tax,

(e)	relevant foreign earnings (other than income within paragraph (b)),

(f)	foreign specific employment income (other than income within

paragraph (b)),

(g)	relevant foreign income (other than income within paragraph (c)),

(h)	foreign chargeable gains (other than chargeable gains within paragraph

(d)), and

(i)	income or capital not within another paragraph of this subsection.

(4A)	Subsection (4) is subject to subsection (4B).

(4B)	Where an individual has insufficient information to be able to determine whether

foreign income or foreign gains has suffered foreign tax he shall not be deemed

to have made an incorrect return if he treats the funds as relating to the appropriate

income or gains paragraph with respect to which foreign tax has not been

suffered.’.

Public Bill Committee: 17th June 2008

375

Finance Bill, continued

Jane Kennedy

463

Schedule  7,  page  163,  leave out lines 20 to 23 and insert—

‘(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.’.

Public Bill Committee: 17th June 2008

376

Finance Bill, continued

Jane Kennedy

468

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

‘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.’.

Public Bill Committee: 17th June 2008

377

Finance Bill, continued

Jane Kennedy

354

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

‘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: 17th June 2008

378

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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Revised 17 June 2008