113

House of Commons

Notices of Amendments

given on

Thursday 15th May 2008

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

Finance Bill Committee 95-111

Public Bill Committee

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Finance Bill

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

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

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Jane Kennedy

119

Clause  61,  page  30,  line  26,  leave out paragraph (b) and insert—

‘(b)	any income which accrues during that period to a partnership of which

the company is a partner, apportioned between the company and the other

partners on a just and reasonable basis.’.

Jane Kennedy

120

Clause  61,  page  30,  line  33,  at end insert—

‘(4D)

In sub-paragraph (4B)(b), “partnership” includes an entity established under

the law of a country or territory outside the United Kingdom of a similar

character to a partnership; and “partner” is to be read accordingly.”’.

Jane Kennedy

121

Clause  61,  page  30,  line  42,  leave out paragraph (b) and insert—

‘(b)	any income which accrues during that period to a partnership of which

the company is a partner, apportioned between the company and the other

partners on a just and reasonable basis.’.

Jane Kennedy

122

Clause  61,  page  30,  line  48,  at end insert—

‘(5E)

In sub-paragraph (5C)(b), “partnership” includes an entity established under

the law of a country or territory outside the United Kingdom of a similar

character to a partnership; and “partner” is to be read accordingly.”’.

Notices of Amendments: 15th May 2008

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Finance Bill, continued

Jane Kennedy

123

Schedule  12,  page  215,  line  17,  after ‘company,’, insert ‘provided that—

(a)	the company is not an offshore fund (within the meaning of section 756A

of ICTA),’.

Jane Kennedy

124

Schedule  12,  page  215,  line  18,  after ‘(b)’, insert ‘the person’.

Jane Kennedy

125

Schedule  12,  page  216,  line  40,  after ‘company’, insert ‘that is not an offshore

fund’.

Jane Kennedy

126

Schedule  20,  page  264,  line  36,  leave out paragraph (a).

Jane Kennedy

127

Schedule  22,  page  279,  line  34,  at end insert—

‘Disposals for consideration not recognised by accounting practice

3A  (1)

In Schedule 9 to FA 1996 (loan relationships: special computational

provisions), after paragraph 11A insert—

“Disposals for consideration not fully recognised by accounting practice

11B(1)

This paragraph applies where in any accounting period (“the

relevant accounting period”) a company, with the relevant

avoidance intention, disposes of rights under a creditor relationship

(in whole or in part) for consideration which—

(a)	is not wholly in the form of money or a debt that falls to be

settled by the payment of money, and

(b)	is not fully recognised.

(2)	The relevant avoidance intention is the intention of eliminating or

reducing the credits to be brought into account for the purposes of

this Chapter.

(3)	Consideration is not fully recognised if, as a result of the application

of generally accepted accounting practice, the full amount or value

of the consideration is not recognised in determining the company’s

profit or loss for the relevant accounting period or any other

accounting period.

(4)	In determining the credits to be brought into account by the

company for the period for the purposes of this Chapter, it is to be

assumed that the whole of the consideration is recognised in

determining the company’s profit or loss for the relevant

accounting period.

(5)	But this paragraph does not apply if paragraph 1(2) of Schedule

28AA to the Taxes Act 1988 (provision not at arm’s length)

Notices of Amendments: 15th May 2008

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Finance Bill, continued

operates in relation to the disposal so as to increase the tax liability

of the company.”

(2)	In Schedule 26 to FA 2002 (derivative contracts), after paragraph 27 insert—

“Disposals for consideration not fully recognised by accounting practice

27A(1)

This paragraph applies where in any accounting period (“the

relevant accounting period”) a company, with the relevant

avoidance intention, disposes of rights or liabilities under a

derivative contract (in whole or in part) for consideration which—

(a)	is not wholly in the form of money or a debt that falls to be

settled by the payment of money, and

(b)	is not fully recognised.

(2)	The relevant avoidance intention is the intention of eliminating or

reducing the credits to be brought into account for the purposes of

this Schedule.

(3)	Consideration is not fully recognised if, as a result of the application

of generally accepted accounting practice, the full amount or value

of the consideration is not recognised in determining the company’s

profit or loss for the relevant accounting period or any other

accounting period.

(4)	In determining the credits to be brought into account by the

company for the period for the purposes of this Schedule, it is to be

assumed that the whole of the consideration is recognised in

determining the company’s profit or loss for the relevant

accounting period.

(5)	But this paragraph does not apply if paragraph 1(2) of Schedule

28AA to the Taxes Act 1988 (provision not at arm’s length)

operates in relation to the disposal so as to increase the tax liability

of the company.”

(3)	The amendments made by this paragraph have effect in relation to disposals on

or after 16 May 2008.’.

Jane Kennedy

128

Schedule  22,  page  279,  line  34,  at end insert—

‘Avoidance relying on continuity of treatment provisions

3B  (1)

In paragraph 12 of Schedule 9 to FA 1996 (loan relationships: continuity of

treatment), after sub-paragraph (2C) insert—

“(2D)

This paragraph does not apply where—

(a)	the transferor company is party to arrangements in

accordance with which there is likely to be a transfer of

rights or liabilities under the loan relationship by the

transferee company to another person in circumstances in

which this paragraph would not apply, and

(b)	the purpose, or one of the main purposes, of the

arrangements is to secure a tax advantage for the transferor

company or a person connected with it.

(2E)	In sub-paragraph (2D) above—

Notices of Amendments: 15th May 2008

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Finance Bill, continued

(a)	“arrangements” includes any agreement, understanding,

scheme, transaction or series of transactions,

(b)	“tax advantage” has the meaning given by section 840ZA

of the Taxes Act 1988, and

(c)	“transfer” includes any arrangement which equates in

substance to a transfer (including an acquisition or

disposal, or increase or decrease, in a share of the profits or

assets of a partnership);

and section 839 of the Taxes Act 1988 (connected persons) applies

for the purposes of that sub-paragraph.

(2F)	This paragraph does not apply in relation to a disposal if paragraph

11B above applies in relation to it.”

(2)	In paragraph 28 of Schedule 26 to FA 2002 (derivative contracts: continuity of

treatment), after sub-paragraph (3ZA) insert—

“(3ZB)

This paragraph does not apply where—

(a)	the transferor company is party to arrangements in

accordance with which there is likely to be a transfer of

rights or liabilities under the derivative contract by the

transferee company to another person in circumstances in

which this paragraph would not apply, and

(b)	the purpose, or one of the main purposes, of the

arrangements is to secure a tax advantage for the transferor

company or a person connected with it.

(3ZC)

In sub-paragraph (3ZB) above—

(a)	“arrangements” includes any agreement, understanding,

scheme, transaction or series of transactions,

(b)	“tax advantage” has the meaning given by section 840ZA

of the Taxes Act 1988, and

(c)	“transfer” includes any arrangement which equates in

substance to a transfer (including an acquisition or

disposal, or increase or decrease, in a share of the profits or

assets of a partnership);

and section 839 of the Taxes Act 1988 (connected persons) applies

for the purposes of that sub-paragraph.

(3ZD)

This paragraph does not apply in relation to a disposal if paragraph

27A applies in relation to it.”

(3)	The amendments made by this paragraph have effect in relation to transactions

taking place, or a series of transactions of which the first takes place, on or after

16 May 2008.’.

Jane Kennedy

129

Schedule  22,  page  280,  line  40,  at end insert—

‘Non-qualifying shares

10A(1)

In section 91B(5)(a) of FA 1996 (debits and credits to be brought into account

where Condition 3 in section 91E is satisfied), omit “by the investing

company”.

(2)	The repeal made by sub-paragraph (1) has effect in relation to credits and

debits relating to any time on or after 16 May 2008.’.

Notices of Amendments: 15th May 2008

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Finance Bill, continued

Jane Kennedy

130

Schedule  22,  page  280,  line  40,  at end insert—

‘Income producing assets

10B(1)

In section 91C(3) of FA 1996 (assets which are income producing), for

paragraph (c) substitute—

“(c)	any share as respects which the condition in section 91D(1)(b)

below is satisfied;”.

(2)	The amendment made by sub-paragraph (1) has effect in relation to times on

or after 16 May 2008.’.

Jane Kennedy

131

Schedule  22,  page  284,  line  28,  after ‘Accordingly’, insert—

‘(a)	in section 91A(7)(a) of FA 1996, omit “(see section 103(3A))”, and

(b)

’.

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Revised 16 May 2008