House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

339

House of Commons

Notices of Amendments

given on

Thursday 12th June 2008

For other Amendment(s) see the following page(s):

Finance Bill Committee 309-37

Public Bill Committee

Finance Bill

(Except Clauses 3, 5, 6, 15, 21, 49, 90 and 117

and new Clauses amending section 74 of the Finance Act 2003)

Jane Kennedy

402

Schedule  7,  page  187,  line  31,  at end insert—

  ‘(1A)
In subsection (1), after paragraph (a) insert—

“(aa)
any reference to anything accruing is to be read as a reference

to it arising (and similar references are to be read

accordingly);”.’.

Jane Kennedy

403

Schedule  7,  page  187,  line  32,  leave out ‘(4)’ and insert ‘(5)’.

Jane Kennedy

404

Schedule  7,  page  187,  line  33,  leave out from beginning to end of line 17 on page

188 and insert—

‘“(2)
If—

(a)
offshore income gains arise to the trustees of a settlement in a

tax year, and

(b)
section 87 of the 1992 Act (gains of non-resident settlements)

applies to the settlement for that year,


the OIG amount for the settlement for that year is the amount of the

offshore income gains.

(3)
Sections 87, 87A, 87C to 90 and 96 to 98 of, and Schedule 4C to, the

1992 Act apply in relation to OIG amounts as if—

Notices of Amendments: 12th June 2008
340

Finance Bill, continued

(a)
references to section 2(2) amounts (except those in paragraph

7B(2)(b) and (4) of Schedule 4C) were to OIG amounts,

(b)
references to chargeable gains (except the one in paragraph

1(5) of Schedule 4C) were to offshore income gains,

(c)
references to anything accruing were to it arising (and similar

references, except the one in paragraph 1(5) of Schedule 4C,

were read accordingly), and

(d)
sections 87(4), 88(2) to (5), 89(4) and 97(6) and paragraphs

1(3A), 3 to 7, 8AA, 12 and 13 of Schedule 4C were omitted.

(4)
Section 87A of the 1992 Act applies for a tax year by virtue of

subsection (3) before it applies for that year otherwise than by virtue

of that subsection.

(5)
If, by virtue of subsection (1) or (3), offshore income gains are treated

as arising to a person, for the purposes of section 761 as it applies in

relation to the offshore income gains treat the person as having made

the disposal in question.’.

Jane Kennedy

405

Schedule  7,  page  188,  line  18,  leave out from ‘(6)’ to end and insert ‘—

(a)
for “subsection (2) above” substitute “(3)”,

(b)
for “accrued” substitute “arisen”, and

(c)
omit “Chapter 2 of Part 13 of ITA 2007 or”.’.

Jane Kennedy

406

Schedule  7,  page  188,  leave out line 20 and insert—

‘“762ZA
Offshore income gains: application of transfer of assets abroad

provisions

(1)
Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad) applies in

relation to an offshore income gain arising to a person resident or

domiciled outside the United Kingdom (and not resident or ordinarily

resident in the United Kingdom) as if the offshore income gain were

income becoming payable to the person.

(2)
Income treated as arising under that Chapter by virtue of subsection

(1) is regarded as “foreign” for the purposes of section 726, 730 or 735

of that Act.

(3)
Subsection (1) does not apply in relation to an offshore income gain if

(and to the extent that) it is treated, by virtue of section 762(1), as

arising to a person resident or ordinarily resident in the United

Kingdom.

(4)
The following provisions apply if section 762(2) applies in relation to

an offshore income gain (“the relevant offshore income gain”).

(5)
If—

(a)
by virtue of section 762(3) an offshore income gain is treated

as arising in a tax year to a person resident or ordinarily

resident in the United Kingdom, and

Notices of Amendments: 12th June 2008
341

Finance Bill, continued

(b)
it is so treated by reason of the relevant offshore income gain

(or part of it),


for that and subsequent tax years subsection (1) does not apply in

relation to the relevant offshore income gain (or that part).

(6)
If, by virtue of subsection (1) as it applies in relation to the relevant

offshore income gain, income is treated under Chapter 2 of Part 13 of

ITA 2007 as arising in a tax year, reduce (with effect from the

following tax year) the OIG amount in question by the amount of the

income.’.

762ZB
Income treated as arising under section 761(1): remittance basis’.

Jane Kennedy

407

Schedule  7,  page  188,  leave out lines 27 to 32 and insert—

‘(2)
Treat the income as relevant foreign income of the individual.’.

Jane Kennedy

408

Schedule  7,  page  188,  line  33,  leave out ‘those sections’ and insert ‘sections 809K

to 809Q of ITA 2007 (meaning of “remitted to the United Kingdom” etc)’.

Jane Kennedy

409

Schedule  7,  page  188,  line  45,  at end insert—

‘90A
In section 830(4) of ITTOIA 2005 (meaning of “relevant foreign income”),

after paragraph (a) insert—

“(aa)
section 762ZB(2) of ICTA (offshore income gains),”.

90B
In section 734 of ITA 2007 (reduction in amount charged: previous capital

gains tax charge), after subsection (4) insert—

“(5)
References in this section to chargeable gains treated as accruing to an

individual include offshore income gains treated as arising to the

individual (see section 762 of ICTA).”’.

Jane Kennedy

410

Schedule  7,  page  189,  line  1,  leave out ‘90’ and insert ‘90B’.

Jane Kennedy

411

Schedule  7,  page  189,  line  2,  at end insert—

‘91A
Paragraph 108 or 108A applies in relation to offshore income gains as if—

(a)
references to section 2(2) amounts were to OIG amounts,

(b)
references to chargeable gains were to offshore income gains,

(c)
Step 1 of paragraph 108(2) provided that OIG amounts are to be

calculated in accordance with—

(i)
section 762(2) of ICTA (the reference in the second sentence

of that Step to section 87(4) of TCGA 1992 being read as a

reference to section 762(2) of ICTA), or

Notices of Amendments: 12th June 2008
342

Finance Bill, continued

(ii)
section 87(5) of TCGA 1992 as applied by section 762(3) of

ICTA.

91B(1)
This paragraph applies if—

(a)
by virtue of section 87 or 89(2) of, or Schedule 4C to, TCGA 1992 as

applied by section 762 of ICTA, income is treated under section 761

of ICTA as arising to an individual in the tax year 2008-09 or any

subsequent tax year, and

(b)
the individual is not domiciled in the United Kingdom in that year.

      (2)
The individual is not charged to income tax on the income if and to the extent

that it is treated as arising by reason of—

(a)
a capital payment received (or treated as received) by the individual

before 6 April 2008, or

(b)
the matching of any capital payment with the OIG amount for the tax

year 2007-08 or any earlier tax year.

91C(1)
This paragraph applies if—

(a)
the trustees of a settlement have made an election under paragraph

112(1) (re-basing election),

(b)
income is treated under section 761 of ICTA as arising to an individual

in the tax year 2008-09 or any subsequent tax year (“the relevant tax

year”) by reason of the matching, under section 87A of TCGA 1992

as applied by section 762 of ICTA, of an OIG amount with a capital

payment received by the individual from the trustees, and

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

the United Kingdom in the relevant tax year.

      (2)
The individual is not charged to income tax on so much of the income as

exceeds the relevant proportion of that income.

      (3)
Sub-paragraphs (7) to (16) of paragraph 112 (meaning of “the relevant

proportion”) apply for the purposes of sub-paragraph (2) above as if—

(a)
references to section 2(2) amounts were to OIG amounts,

(b)
references to chargeable gains were to offshore income gains,

(c)
references to allowable losses were omitted, and

(d)
references to anything accruing were to it arising (and similar

references were read accordingly).

91D(1)
This paragraph applies if—

(a)
in the tax year 2008-09 or any subsequent tax year, the trustees of a

settlement (“the transferor settlement”) transfer all or part of the

settled property to the trustees of another settlement (“the transferee

settlement”),

(b)
section 90 of TCGA 1992 applies in relation to the transfer,

(c)
the trustees of the transferor settlement have made an election under

paragraph 112(1),

(d)
by virtue of the matching (under section 87A of TCGA 1992 as

applied by section 762 of ICTA) of a capital payment with an OIG

amount of the transferee settlement, income is treated under section

761 of ICTA as arising to an individual in a tax year (“the relevant tax

year”), and

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

the United Kingdom in the relevant tax year.

      (2)
If paragraph 91C applies in relation to the transferee settlement, paragraph

112(7) as applied by paragraph 91C(3) has effect as if the reference there to

relevant assets included relevant assets within the meaning of paragraph

113(4) (as modified by sub-paragraph (4)(b) below).

Notices of Amendments: 12th June 2008
343

Finance Bill, continued

      (3)
If paragraph 91C does not apply in relation to the transferee settlement, the

individual is not charged to income tax on so much of the income mentioned

in sub-paragraph (1)(d) above as exceeds the relevant proportion of that

income.

      (4)
Sub-paragraphs (3) to (6) of paragraph 113 (meaning of “the relevant

proportion”) apply for the purposes of sub-paragraph (3) above as if—

(a)
references section 2(2) amounts were to OIG amounts,

(b)
references to chargeable gains were to offshore income gains, and

(c)
references to anything accruing were to it arising.’.

Jane Kennedy

412

Schedule  7,  page  190,  line  18,  leave out ‘tax year’ and insert ‘settlement for a tax

year for which this section applies to the settlement’.

Jane Kennedy

413

Schedule  7,  page  190,  line  19,  after ‘trustees’ insert ‘of the settlement’.

Jane Kennedy

414

Schedule  7,  page  190,  line  25,  at end insert—

‘(5)
The section 2(2) amount for a settlement for a tax year for which this

section does not apply to the settlement is nil.

(6)
For the purposes of this section a settlement arising under a will or

intestacy is treated as made by the testator or intestate at the time of

death.’.

Jane Kennedy

415

Schedule  7,  page  191,  line  21,  leave out from ‘tax year’ to end of line 25 and insert

‘—

(a)
which is before the last tax year for which Steps 1 to 4 have

been undertaken, and

(b)
for which the section 2(2) amount is not nil.’.

Jane Kennedy

416

Schedule  7,  page  191,  line  31,  leave out ‘to which section 87 applies to the

settlement’.

Jane Kennedy

417

Schedule  7,  page  191,  line  33,  leave out from ‘(2)’ to end of line 36 and insert ‘is to

be taken into account in any subsequent application of this section.’.

Jane Kennedy

418

Schedule  7,  page  191,  line  38,  leave out from ‘applies’ to end of line 39 and insert

‘if—