House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee Proceedings: 19th June 2008
104

Finance Bill, continued

      (7)
“Money” has the same meaning as in section 809U of ITA 2007.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Withdrawn  383

Schedule  7,  page  187,  leave out lines 1 to 9 and insert ‘, and

(b)
before 6 April 2008 the money was received in the United Kingdom.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  386

Schedule  7,  page  187,  leave out lines 1 to 3 and insert—

‘(b)
the loan was made for the purpose of enabling the individual to—

(i)
acquire an interest in residential property in the United Kingdom,

(ii)
carry out a remortgaging exercise with respect to residential

property in the United Kingdom, or

(iii)
furnish, decorate, repair or enhance a residential property in the

United Kingdom, and’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  387

Schedule  7,  page  187,  line  6,  leave out from ‘money’ to ‘and’ in line 7 and insert

‘for any of the purposes referred to in subsection (1)(b),’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  384

Schedule  7,  page  187,  line  10,  leave out ‘Relevant foreign income’ and insert

‘Foreign income gains’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  388

Schedule  7,  page  187,  line  10,  leave out ‘Relevant foreign income’ and insert

‘Foreign income and gains’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  385

Schedule  7,  page  187,  leave out lines 13 to 21.

Public Bill Committee Proceedings: 19th June 2008
105

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  389

Schedule  7,  page  187,  leave out lines 13 to 19.

Jane Kennedy

Agreed to  492

Schedule  7,  page  187,  line  17,  at end insert ‘or

(d)
the interest ceases to be owned by the individual,’.

Jane Kennedy

Agreed to  493

Schedule  7,  page  187,  line  19,  at end insert—

  ‘(3A)
If—

(a)
before 12 March 2008, money was lent to the individual outside the

United Kingdom (“the subsequent loan”),

(b)
the subsequent loan was made for the purpose of enabling the

individual to repay—

(i)
the loan mentioned in sub-paragraph (1), or

(ii)
another loan in relation to which sub-paragraphs (2) and (3)

apply (by virtue of this sub-paragraph),


and for no other purpose, and

(c)
before 6 April 2008—

(i)
the money was received in the United Kingdom,

(ii)
the individual used the money to repay the loan referred to in

paragraph (b)(i) or (ii), and

(iii)
repayment of the subsequent loan was secured on the interest

referred to in sub-paragraph (1)(c),


sub-paragraphs (2) and (3) apply in relation to the subsequent loan (and for this

purpose references there to the debt or the loan are to be read as references to

the subsequent loan).’.

Jane Kennedy

Agreed to  338

Schedule  7,  page  187,  line  21,  at end insert—

‘86A (1)
This paragraph applies in relation to employment-related securities if—

(a)
the date of the acquisition is on or after 6 April 2008 and on or before

31 July 2008, and

(b)
Chapter 2 of Part 7 of ITEPA 2003 (restricted securities) applies in

relation to the securities by virtue only of amendments made by this

Schedule.

      (2)
Section 431 of ITEPA 2003 (election for full or partial disapplication of

Chapter) has effect in relation to the employment-related securities as if in

subsection (5)(b) for “more than 14 days after the acquisition” there were

substituted “after 14 August 2008”.’.

Jane Kennedy

Agreed to  402A

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

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

Public Bill Committee Proceedings: 19th June 2008
106

Finance Bill, continued

“(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

Agreed to  403

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

Jane Kennedy

Agreed to  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—

(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

Agreed to  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

Agreed to  406

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

Public Bill Committee Proceedings: 19th June 2008
107

Finance Bill, continued

‘“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

(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

Agreed to  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

Agreed to  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

Agreed to  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),”.

Public Bill Committee Proceedings: 19th June 2008
108

Finance Bill, continued

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

Agreed to  410

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

Jane Kennedy

Agreed to  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

(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,

Public Bill Committee Proceedings: 19th June 2008
109

Finance Bill, continued

(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).

      (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.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  390

Schedule  7,  page  189,  line  17,  leave out from ‘12’ to end of line 18.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  494

Schedule  7,  page  189,  line  36,  at end insert—

    ‘(5)
In computing gains to which this section applies, those gains shall, if the

company so elects, be calculated by reference to the value of the asset

concerned at 6 April 2008.

      (6)
An election under subsection (5) is irrevocable and shall be made within two

years of the end of the first accounting period ending after 5 April 2008.

      (7)
An election under subsection (5) shall be made in the way and form specified

by the Commissioners for Her Majesty’s Revenue and Customs.’.

Public Bill Committee Proceedings: 19th June 2008
110

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  391

Schedule  7,  page  189,  line  36,  at end insert—

‘93A (1)
The following provisions apply to a company if—

(a)
section 13 of TCGA 1992 applies to the company for the tax year

2008-09, and

(b)
the directors of the company have not opted out from the provisions

within this paragraph.

      (2)
An election to opt out from the provisions within this paragraph may only be

made on or before the anniversary of the first 31 January to occur after the end

of the first tax year (beginning with the tax year 2008-09) in which chargeable

gains are attributed under section 13 of TCGA 1992 to a participant in the

offshore company.

      (3)
An election under sub-paragraph (2) is irrevocable and must be made in the

way and form specified by the Commissioners for Her Majesty’s Revenue and

Customs.

      (4)
The only information that need be provided in the course of making the

election is the name of the offshore company and the name of the director

making the election.

      (5)
Sub-paragraph (7) applies if—

(a)
chargeable gains are treated under section 13 of TCGA 1992 as

accruing to an individual in a tax year, and

(b)
the individual is resident, but not domiciled, in the United Kingdom in

that year.

      (6)
The individual is not charged to capital gains tax on so much of the aggregate

chargeable gains attributed to him in the tax year as exceeds the relevant

proportion of the gains.

      (7)
The relevant proportion is A/B where—

  A is the portion of the gain that would what have been treated as accruing

to the participator, if immediately before 6 April 2008 every relevant

asset had been sold by the directors and immediately re-acquired by them

at the market value at that time; and

  B is the actual gain attributed to the individual.

      (8)
For the purposes of sub-paragraph (7) an asset is a “relevant asset” if—

(a)
by reason of the asset, a chargeable gain or allowable loss accrues to

the trustees in the relevant tax year, and

(b)
the asset has been comprised in the company from the beginning of 6

April 2008 until the time of the event giving rise to the chargeable gain

or allowable loss.’.

Jane Kennedy

Agreed to  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

Agreed to  413

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