House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee Proceedings: 19th June 2008
118

Finance Bill, continued

    (16)
“The appropriate proportion” is the minimum proportion divided by the

relevant proportion.’.

Jane Kennedy

Agreed to  441

Schedule  7,  page  197,  line  46,  after ‘of’ insert ‘, or paragraph 8 of Schedule 4C to,’.

Jane Kennedy

Agreed to  442

Schedule  7,  page  198,  line  2,  at end insert—

  ‘(1A)
If the trustees of the transferee settlement have made an election under

paragraph 112(1), paragraph 112(5) to (7) have effect in relation to the

transferee settlement for that year as if the reference in paragraph 112(7) to

relevant assets included relevant assets within the meaning of this paragraph.’.

Jane Kennedy

Agreed to  443

Schedule  7,  page  198,  line  3,  at beginning insert ‘If the trustees of the transferee

settlement have not made an election under paragraph 112(1),’.

Jane Kennedy

Agreed to  444

Schedule  7,  page  198,  line  4,  after first ‘gains’ insert ‘mentioned in sub-paragraph

(1)(d) above’.

Jane Kennedy

Agreed to  445

Schedule  7,  page  198,  line  15,  leave out ‘sub-paragraph (3)’ and insert ‘this

paragraph’.

Jane Kennedy

Agreed to  446

Schedule  7,  page  198,  line  23,  leave out ‘the same part (or a larger part)’ and insert

‘part’.

Jane Kennedy

Agreed to  447

Schedule  7,  page  198,  line  31,  at end insert—

    ‘(6)
Sub-paragraphs (11) to (16) of paragraph 112 apply for the purposes of this

paragraph (with such modifications as are necessary) as they apply for the

purposes of that paragraph.’.

Jane Kennedy

Agreed to  448

Schedule  7,  page  198,  line  35,  after ‘losses)’ insert ‘—

(a)
after subsection (2) insert—

“(2A)
For the purposes of sections 87 to 89, no account is to be taken

of any section 2(2) amount in a Schedule 4C pool (see

paragraph 1 of Schedule 4C).”, and

(b)
’.

Public Bill Committee Proceedings: 19th June 2008
119

Finance Bill, continued

Jane Kennedy

Agreed to  449

Schedule  7,  page  199,  line  4,  at end insert—

‘(5)
The reference in subsection (4)(b) to chargeable gains treated as

accruing includes offshore income gains treated as arising.”’.

Jane Kennedy

Agreed to  450

Schedule  7,  page  199,  line  12,  after ‘the’ insert ‘original’.

Jane Kennedy

Agreed to  451

Schedule  7,  page  199,  line  26,  leave out from second ‘for’ to first ‘as’ in line 28 and

insert ‘the relevant tax year and earlier tax years,’.

Jane Kennedy

Agreed to  452

Schedule  7,  page  199,  line  37,  at end insert—

‘(1A)
For the purposes of Step 1 of sub-paragraph (1) take into account

the effect of section 90 in relation to any transfer of settled property

from or to the trustees of the settlement made in or before the

relevant tax year.’.

Jane Kennedy

Agreed to  453

Schedule  7,  page  199,  line  40,  at end insert—

‘119A
In paragraph 4(2) (chargeable amount: non-resident settlement), at the end

insert “(and had made the disposals which Schedule 4B treats them as having

made)”.

119B
In paragraph 5(2)(a) (chargeable amount: dual resident settlement), after

“apply” insert “(and the disposals which Schedule 4B treats them as having

made were made)”.’.

Jane Kennedy

Agreed to  454

Schedule  7,  page  200,  leave out lines 41 and 42.

Jane Kennedy

Agreed to  455

Schedule  7,  page  200,  leave out lines 46 and 47.

Jane Kennedy

Agreed to  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.’.

Public Bill Committee Proceedings: 19th June 2008
120

Finance Bill, continued

Jane Kennedy

Agreed to  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

Agreed to  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.

      (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).’.

Public Bill Committee Proceedings: 19th June 2008
121

Finance Bill, continued

Jane Kennedy

Agreed to  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

Agreed to  460

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

Jane Kennedy

Agreed to  461

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

Jane Kennedy

Agreed to  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.

      (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

Public Bill Committee Proceedings: 19th June 2008
122

Finance Bill, continued

(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

Agreed to  469

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

Jane Kennedy

Agreed to  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.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  495

Schedule  7,  page  202,  line  30,  after ‘809Q’, insert ‘and 809S’.

Jane Kennedy

Agreed to  471

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

Jane Kennedy

Agreed to  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

Agreed to  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.’.

Public Bill Committee Proceedings: 19th June 2008
123

Finance Bill, continued

Jane Kennedy

Agreed to  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

Agreed to  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

Agreed to  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

Agreed to  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

Agreed to  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

Agreed to  479

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

‘determined under subsection (3),’.

Jane Kennedy

Agreed to  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.

Public Bill Committee Proceedings: 19th June 2008
124

Finance Bill, continued

(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

Agreed to  481

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

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  402

Schedule  7,  page  205,  line  25,  at end insert—

‘Cost of administering domicile regime

144(1)
The Treasury must lay before the House of Commons annually a report setting

out the cost of administering the domicile regime.

      (2)
Each report made under subsection (4) must identify the level of unremitted

foreign income and gains at which the revenue raised exceeds both the cost of

collection by HMRC and the cost of compliance by the taxpayers.’.

Schedule, as amended, Agreed to.

New ClauseS

Gifts inter vivos

Jane Kennedy

Added  NC6

To move the following Clause:—

‘(1)
Omit section 82(5) and (9) of FA 1985 (adjudication of certain gifts inter vivos).

(2)
Accordingly, omit paragraph 9 of Schedule 14 to FA 1999.

(3)
The amendments made by this section have effect in relation to instruments

executed on or after 13 March 2008, other than instruments effecting a land

transaction (within the meaning of paragraph 22 of Schedule 32).

(4)
For the purposes of section 14(4) of the Stamp Act 1891 (instruments not to be

given in evidence etc unless stamped in accordance with the law in force at the

time of first execution), the law in force at the time of execution of such an

instrument shall be deemed to be the law as varied in accordance with this

section.’.