House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee: 17th June 2008
400

Finance Bill, continued


For this purpose, read references there to the tax year 2007-08 as references to

the tax year before the year of transfer.


Step 3


Calculate the section 2(2) amount for the transferee settlement for the year of

transfer.


Step 4


Treat the section 2(2) amount for the transferee settlement for the year of

transfer or any earlier tax year (as calculated under Step 2 or 3) as increased

by—

(a)
the section 2(2) amount for the transferor settlement for that year (as

calculated under Step 1), or

(b)
if part only of the settled property was transferred, the relevant

proportion of the amount mentioned in paragraph (a).


“The relevant proportion” here has the same meaning as in section 90(4) of

TCGA 1992 (as substituted by this Schedule).


Step 5


Treat the section 2(2) amount for the transferor settlement for any tax year as

reduced by the amount by which the section 2(2) amount for the transferee

settlement for that year is increased under Step 4.


Step 6


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

2(2) amount for the transferor 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 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).

Public Bill Committee: 17th June 2008
401

Finance Bill, continued

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-

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.

Public Bill Committee: 17th June 2008
402

Finance Bill, continued

    (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,’.

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

Public Bill Committee: 17th June 2008
403

Finance Bill, continued

(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

(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),’.

Public Bill Committee: 17th June 2008
404

Finance Bill, continued

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 ‘—

(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

Public Bill Committee: 17th June 2008
405

Finance Bill, continued

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).

    (5)
If section 87A applies for a tax year by virtue of section 762(3) of

the Taxes Act (offshore income gains), it applies for that year by

virtue of that provision before it applies for that year by virtue of

this paragraph.’.

Jane Kennedy

457

Schedule  7,  page  201,  line  3,  at end insert—

‘122A
After paragraph 8A insert—

“Attribution of gains: remittance basis

8AA
Section 87B (remittance basis) applies in relation to chargeable

gains treated under paragraph 8 as accruing as it applies in relation

to chargeable gains treated under section 87 as accruing.”’.

Jane Kennedy

458

Schedule  7,  page  201,  line  5,  leave out paragraph 124 and insert—

‘124
For paragraph 9 (and the heading before it) substitute—

“Attribution of gains: disregard of certain capital payments

9    (1)
For the purposes of paragraph 8 (and section 87A as it applies for

the purposes of that paragraph), no account is to be taken of a

capital payment to which any of sub-paragraphs (2) to (4) applies

(or a part of a capital payment to which sub-paragraph (4) applies).

Public Bill Committee: 17th June 2008
406

Finance Bill, continued

      (2)
This sub-paragraph applies to a capital payment received before the

tax year preceding the tax year in which the original transfer is

made.

      (3)
This sub-paragraph applies to a capital payment that—

(a)
is received by a beneficiary of a settlement from the

trustees in a tax year during the whole of which the

trustees—

(i)
are resident and ordinarily resident in the United

Kingdom, and

(ii)
are not Treaty non-resident,

(b)
was made before any transfer of value to which Schedule

4B applies was made, and

(c)
was not made in anticipation of the making of any such

transfer of value or of chargeable gains accruing under that

Schedule.

      (4)
This sub-paragraph applies to a capital payment if (and to the extent

that) it is received (or treated as received) in a tax year from the

trustees by a company that—

(a)
is not resident in the United Kingdom in that year, and

(b)
would be a close company if it were resident in the United

Kingdom,


(and is not treated under any of subsections (3) to (5) of section 96

as received by another person).

124A
In paragraph 10 (residence of trustees from whom capital payment received)—

(a)
in sub-paragraph (1) for “sub-paragraph (2) below” substitute

“paragraph 9(3)”, and

(b)
omit sub-paragraphs (2) and (3).’.

Jane Kennedy

459

Schedule  7,  page  201,  line  43,  at end insert—

‘129A
For the purposes of paragraph 8 of Schedule 4C to TCGA 1992 (and section

87A of that Act as it applies for the purposes of that paragraph), no account is

to be taken of any capital payment received before 21 March 2000.

129B
A capital payment received before 6 April 2008 is not within paragraph 9(4)

of Schedule 4C to TCGA 1992 (if it otherwise would be).

129C
Paragraph 110 applies in relation to chargeable gains treated under paragraph

8 of Schedule 4C to TCGA 1992 as accruing as it applies in relation to

chargeable gains treated under section 87 as accruing.

129D (1)
This paragraph applies for the tax year 2008-09 or any subsequent tax year

(“the relevant tax year”) if—

(a)
an individual who was resident or ordinarily resident, but not

domiciled, in the United Kingdom in the tax year 2007-08 received a

capital payment from the trustees of a settlement on or after 12 March

2008 but before 6 April 2008, and

(b)
the individual is resident or ordinarily resident, but not domiciled, in

the United Kingdom in the relevant tax year.

      (2)
For the purposes of paragraph 8 of Schedule 4C to TCGA 1992 as it applies

for the relevant tax year (and section 87A of that Act as it applies for those

purposes), no account is to be taken of the capital payment.’.