House of Commons Amendments

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Notices of Amendments: 12th June 2008
351

Finance Bill, continued

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).

      (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.

Notices of Amendments: 12th June 2008
352

Finance Bill, continued

      (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.’.

Jane Kennedy

460

Schedule  7,  page  202,  line  3,  after ‘2008’ insert ‘(“existing Schedule 4C pools”)’.

Jane Kennedy

461

Schedule  7,  page  202,  line  3,  after ‘7B’ insert ‘and 9(2)’.

Jane Kennedy

462

Schedule  7,  page  202,  line  3,  at end insert—

‘130A
Any reduction in the amount of a capital payment has effect for the purposes

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

pools (as well as for other purposes).

130B (1)
If all of a capital payment ceases (in the tax year 2008-09 or any subsequent

tax year) to be available, the amount of the capital payment is reduced to nil.

Notices of Amendments: 12th June 2008
353

Finance Bill, continued

      (2)
If part of a capital payment ceases (in the tax year 2008-09 or any subsequent

tax year) to be available, the amount of the capital payment is reduced by the

amount of that part.

      (3)
A capital payment “ceases to be available” in a tax year if and to the extent that,

by reason of the capital payment, chargeable gains are treated under paragraph

8 of Schedule 4C to TCGA 1992 (as it has effect in relation to existing

Schedule 4C pools) as accruing in that year to the recipient.

      (4)
If—

(a)
chargeable gains are treated under paragraph 8 of Schedule 4C to

TCGA 1992 (as it has effect in relation to existing Schedule 4C pools)

as accruing in a tax year,

(b)
more than one capital payment that the beneficiary has received is

taken into account for the purposes of determining the amount of

chargeable gains treated as accruing to the beneficiary, and

(c)
the amount of the chargeable gains is less than the total amount of

capital payments taken into account,


sub-paragraph (3) applies in relation to earlier capital payments before later

ones.

130C
In any tax year—

(a)
Schedule 4C to TCGA 1992 (as amended by paragraphs 114 to 128)

applies in relation to a settlement before that Schedule (as it has effect

without those amendments) applies in relation to the settlement, and

(b)
that Schedule (as it has effect without those amendments) applies in

relation to the settlement before section 87 or 89(2) of that Act applies

in relation to the settlement.’.

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

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)’.

Notices of Amendments: 12th June 2008
354

Finance Bill, continued

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.’.

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.’.

Jane Kennedy

469

Schedule  7,  page  202,  line  7,  leave out ‘, and’.

Jane Kennedy

470

Schedule  7,  page  202,  leave out lines 23 to 29 and insert—

‘(2)
Treat the accrued income profits as relevant foreign income of the

individual.’.

Notices of Amendments: 12th June 2008
355

Finance Bill, continued

Jane Kennedy

471

Schedule  7,  page  202,  line  41,  leave out ‘any’.

Jane Kennedy

472

Schedule  7,  page  203,  line  3,  at end insert—

‘135A
In section 46B(4)(c) of TMA 1970 (questions to be determined by Special

Commissioners), for “sections 720, 727 and 731” substitute “any provision of

Chapter 2 of Part 13”.

135B
In section 830(4) of ITTOIA 2005 (meaning of “relevant foreign income”),

after paragraph (h) insert “, and

(i)
sections 726, 730 and 735 of that Act (transfer of assets

abroad: foreign deemed income).”’.

Jane Kennedy

473

Schedule  7,  page  203,  leave out lines 19 to 26 and insert—

‘(3)
Treat the foreign deemed income as relevant foreign income of the

individual.’.

Jane Kennedy

474

Schedule  7,  page  203,  line  27,  leave out ‘those sections’ and insert ‘sections 809K

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

Jane Kennedy

475

Schedule  7,  page  204,  leave out lines 4 to 11 and insert—

‘(3)
Treat the foreign deemed income as relevant foreign income of the

individual.’.

Jane Kennedy

476

Schedule  7,  page  204,  line  12,  leave out ‘those sections’ and insert ‘sections 809K

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

Jane Kennedy

477

Schedule  7,  page  204,  leave out lines 31 to 38 and insert—

‘(3)
Treat the foreign deemed income as relevant foreign income of the

individual.’.

Jane Kennedy

478

Schedule  7,  page  204,  line  39,  leave out ‘those sections’ and insert ‘sections 809K

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

Jane Kennedy

479

Schedule  7,  page  205,  line  8,  leave out from ‘order’ to end of line 9 and insert

Notices of Amendments: 12th June 2008
356

Finance Bill, continued

‘determined under subsection (3),’.

Jane Kennedy

480

Schedule  7,  page  205,  line  23,  at end insert—

‘(3)
The order referred to in subsection (1)(c) is arrived at by taking the

following steps.


Step 1


Find the relevant income for the earliest tax year (of the tax years

referred to in subsection (1)(c)).


Step 2


Place so much of that income as is not foreign in the order in which it

arose (starting with the earliest income to arise).


Step 3


After that, place so much of that income as is foreign in the order in

which it arose (starting with the earliest income to arise).


Step 4


Repeat Steps 1 to 3.


For this purpose, read references to the relevant income for the earliest

tax year as references to the relevant income for the first tax year after

the last tax year in relation to which those Steps have been undertaken.

(4)
For the purposes of subsection (3) relevant income is “foreign” where

it would be relevant foreign income if it were the individual’s.

(5)
Subsection (1)(d) does not apply if the income may not be taken into

account because the individual has been charged to income tax under

section 731 by reason of the income.’.

Jane Kennedy

481

Schedule  7,  page  205,  line  24,  leave out ‘137’ and insert ‘135A’.

Jane Kennedy

482

Schedule  7,  page  157,  line  39,  at end insert—

‘(9A)
The cases in which income or chargeable gains are used in respect of

a debt include cases where income or chargeable gains are used to pay

interest on the debt.’.

Jane Kennedy

483

Schedule  7,  page  158,  line  12,  leave out ‘settlor or’.

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’.

Notices of Amendments: 12th June 2008
357

Finance Bill, continued

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.’.

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—’.

Jane Kennedy

490

Schedule  7,  page  167,  line  28,  at end insert—

‘( )
In subsection (2) “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