House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee Proceedings: 19th June 2008
111

Finance Bill, continued

Jane Kennedy

Agreed to  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

Agreed to  415

Schedule  7,  page  191,  line  21,  leave out from second ‘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

Agreed to  416

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

settlement’.

Jane Kennedy

Agreed to  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

Agreed to  418

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

‘if—

(a)
chargeable gains are treated under section 87 as accruing to an

individual in a tax year,

(b)
section 809B, 809C or 809D (remittance basis) applies to the

individual for that year, and

(c)
the individual is not domiciled in the United Kingdom in that

year.’.

Jane Kennedy

Agreed to  419

Schedule  7,  page  192,  leave out lines 41 to 44.

Jane Kennedy

Agreed to  420

Schedule  7,  page  193,  line  15,  leave out from ‘transfer)’ to ‘as’ in line 16.

Jane Kennedy

Agreed to  421

Schedule  7,  page  193,  leave out lines 41 to 43 and insert—

Public Bill Committee Proceedings: 19th June 2008
112

Finance Bill, continued

‘(9)
When calculating the market value of property for the purposes of this

section or section 90A in a case where the property is subject to a debt,

reduce the market value by the amount of the debt.’.

Jane Kennedy

Agreed to  422

Schedule  7,  page  194,  line  2,  at end insert—

‘90A
Section 90: transfers made for consideration in money or money’s

worth

(1)
Section 90 does not apply to a transfer of settled property made for

consideration in money or money’s worth if the amount (or value) of

that consideration is equal to or exceeds the market value of the

property transferred.

(2)
The following provisions apply if—

(a)
section 90 applies to a transfer of settled property made for

consideration in money or money’s worth, and

(b)
the amount (or value) of that consideration is less than the

market value of the property transferred.

(3)
If the transfer is of all of the settled property, for the purposes of

section 90 treat the transfer as being of part only of the settled

property.

(4)
Deduct the amount (or value) of the consideration from the amount of

the market value referred to in section 90(4)(a).’.

Jane Kennedy

Agreed to  423

Schedule  7,  page  194,  line  23,  after ‘1998,’ insert ‘section 130(1) and (4), and’.

Jane Kennedy

Agreed to  424

Schedule  7,  page  194,  line  32,  leave out paragraph (a).

Jane Kennedy

Agreed to  425

Schedule  7,  page  194,  line  40,  at end insert—

‘106A (1)
This paragraph applies if—

(a)
section 87 of TCGA 1992 applies to a settlement for the tax year 2008-

09 or any subsequent tax year (“the tax year”),

(b)
the settlement was made before 17 March 1998,

(c)
none of the settlors fulfilled the residence requirements when the

settlement was made, and

(d)
none of the settlors fulfils the residence requirements in the tax year.

      (2)
For the purposes of that section as it applies to the settlement for the tax year,

no account is to be taken of—

(a)
any gains or losses accruing to the trustees of the settlement before 17

March 1998, or

(b)
any capital payments received before that date.

      (3)
A settlor “fulfils the residence requirements” when the settlor is—

(a)
resident or ordinarily resident in the United Kingdom, and

Public Bill Committee Proceedings: 19th June 2008
113

Finance Bill, continued

(b)
domiciled in any part of the United Kingdom.’.

Jane Kennedy

Agreed to  426

Schedule  7,  page  195,  leave out lines 1 to 6 and insert ‘section 87 or 89(2) of TCGA

1992 applied to it for the tax year 2007-08 or any earlier tax year.’.

Jane Kennedy

Agreed to  427

Schedule  7,  page  195,  line  8,  leave out ‘or any earlier tax year’ and insert ‘and

earlier tax years’.

Jane Kennedy

Agreed to  428

Schedule  7,  page  195,  line  11,  leave out from ‘for’ to end of line 12 and insert ‘the

settlement for the tax year 2007-08 and earlier tax years.’.

Jane Kennedy

Agreed to  429

Schedule  7,  page  195,  line  12,  at end insert—


‘For this purpose, references in section 87(4) and (5) of TCGA 1992 (as

substituted) to section 87 of that Act applying to a settlement for a tax year are

to be read as references to section 87 of that Act (as it had effect before that

substitution) applying to a settlement for a tax year.’.

Jane Kennedy

Agreed to  430

Schedule  7,  page  195,  leave out lines 18 to 20 and insert—


‘Find the earliest tax year for which the section 2(2) amount is not nil.


If the section 2(2) amount for that year is less than or equal to the total deemed

gains, reduce that section 2(2) amount to nil.’.

Jane Kennedy

Agreed to  431

Schedule  7,  page  195,  leave out lines 28 to 31 and insert—


‘For this purpose, read references to the earliest tax year for which the section

2(2) amount is not nil as references to the earliest tax year—

(a)
which is after the last tax year for which Steps 3 and 4 have been

undertaken, and

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

Jane Kennedy

Agreed to  432

Schedule  7,  page  195,  line  31,  at end insert—

    ‘(3)
If, before 6 April 2008, the trustees of the settlement made a transfer of value

to which Schedule 4B to TCGA 1992 applied, sub-paragraph (2) 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.

      (4)
This paragraph does not apply if section 90 of TCGA 1992 applied to a transfer

of settled property by or to the trustees of the settlement that was made before

6 April 2008 (see paragraph 108A).

Public Bill Committee Proceedings: 19th June 2008
114

Finance Bill, continued

108A (1)
If section 90 of TCGA 1992 (as originally enacted) applied to a transfer of

settled property made before 6 April 2008, this paragraph applies in relation to

the transferor settlement and the transferee settlement.

      (2)
In this paragraph “the year of transfer” means the tax year in which the transfer

occurred.

      (3)
The following steps are to be taken for the purpose of calculating the section

2(2) amount for the transferor and transferee settlements for the tax year 2007-

08 and earlier tax years.


Step 1


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

2(2) amount (at the end of the year of transfer) for the transferor settlement for

the year of transfer and earlier tax years.


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

the year of transfer.


Step 2


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

2(2) amount (before the year of transfer) for the transferee settlement for the

tax year before the year of transfer and earlier tax years.


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

Public Bill Committee Proceedings: 19th June 2008
115

Finance Bill, continued

(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

Agreed to  433

Schedule  7,  page  195,  line  32,  leave out sub-paragraph (1).

Jane Kennedy

Agreed to  434

Schedule  7,  page  195,  line  41,  after ‘of’ insert ‘, or paragraph 8 of Schedule 4C to,’.

Jane Kennedy

Agreed to  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

Not called  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

Not called  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’.

Public Bill Committee Proceedings: 19th June 2008
116

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  394

Schedule  7,  page  196,  line  30,  after ‘the’, insert ‘anniversary of the’.

Jane Kennedy

Agreed to  436

Schedule  7,  page  196,  line  37,  leave out ‘part (but not all)’ and insert ‘all or part’.

Jane Kennedy

Agreed to  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.

    (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

Not called  395

Schedule  7,  page  196,  line  40,  leave out ‘(1)’ and insert ‘(2)’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  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

Agreed to  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

Not called  397

Schedule  7,  page  197,  line  24,  at end insert ‘and’.

Public Bill Committee Proceedings: 19th June 2008
117

Finance Bill, continued

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  398

Schedule  7,  page  197,  line  27,  leave out from ‘gains’ to end of line 34.

Jane Kennedy

Agreed to  439

Schedule  7,  page  197,  line  29,  leave out ‘the same part (or a larger part)’ and insert

‘part’.

Jane Kennedy

Agreed to  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

(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)).