House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee Proceedings: 19th June 2008
90

Finance Bill, continued

Jane Kennedy

Agreed to  464

Schedule  7,  page  163,  line  25,  leave out ‘has been’ and insert ‘is’.

Jane Kennedy

Agreed to  484

Schedule  7,  page  163,  line  26,  leave out ‘capital’ and insert ‘gains’.

Jane Kennedy

Agreed to  485

Schedule  7,  page  163,  line  29,  leave out ‘capital’ and insert ‘gains’.

Jane Kennedy

Agreed to  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

Agreed to  466

Schedule  7,  page  163,  line  33,  leave out ‘(d)’ and insert ‘(h)’.

Jane Kennedy

Agreed to  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

Agreed to  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).

Public Bill Committee Proceedings: 19th June 2008
91

Finance Bill, continued

(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.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Withdrawn  375

Schedule  7,  page  164,  line  2,  at end insert—

‘(3)
This section shall not have effect with respect to gains accruing to an individual

on the disposal of an asset if the disposal took place prior to 6 April 2008.’.

Jane Kennedy

Agreed to  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

Agreed to  354

Schedule  7,  page  164,  line  12,  at end insert—

‘809SA
  Consideration for certain services

(1)
This section applies to income or chargeable gains if—

(a)
the income or gains would (but for subsection (2)) be taken to

be remitted to the United Kingdom because conditions A and

B in section 809K are met,

Public Bill Committee Proceedings: 19th June 2008
92

Finance Bill, continued

(b)
condition A in section 809K is met because a service is

provided in the United Kingdom (“the relevant UK service”),

and

(c)
condition B in section 809K is met because section

809K(3)(a) or (b) applies to the consideration for the relevant

UK service (“the relevant consideration”).

(2)
The income or chargeable gains are to be treated as not remitted to the

United Kingdom if the following conditions are met.

(3)
Condition A is that the relevant UK service relates wholly or mainly

to property situated outside the United Kingdom.

(4)
Condition B is that the whole of the relevant consideration is given by

way of one or more payments to one or more bank accounts held

outside the United Kingdom by or on behalf of the person who

provides the relevant UK service.

(5)
Sections 275 to 275C of TCGA 1992 (location of assets) apply for the

purposes of subsection (3) as they apply for the purposes of TCGA

1992.’.

Jane Kennedy

Agreed to  355

Schedule  7,  page  164,  line  19,  leave out from ‘rule’ to end of line 28 and insert

‘(see sections 809V and 809VA).

(4)
Clothing, footwear, jewellery and watches that derive from relevant

foreign income are exempt property if they meet the personal use rule

(see section 809VB).

(5)
Property of any description that derives from relevant foreign income

is exempt property if—

(a)
the property meets the repair rule (see section 809VC),

(b)
the property meets the temporary importation rule (see section

809W), or

(c)
the notional remitted amount (see section 809X) is less than

£1,000.’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  376

Schedule  7,  page  164,  line  21,  leave out ‘that derive from relevant foreign income’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  377

Schedule  7,  page  164,  line  24,  leave out ‘that derives from relevant foreign

income’.

Public Bill Committee Proceedings: 19th June 2008
93

Finance Bill, continued

Jane Kennedy

Agreed to  487

Schedule  7,  page  164,  line  35,  after ‘where’ insert ‘the whole or part of’.

Jane Kennedy

Agreed to  488

Schedule  7,  page  164,  line  35,  after ‘sold’ insert ‘, or otherwise converted into

money’.

Jane Kennedy

Agreed to  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—’.

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  378

Schedule  7,  page  165,  line  4,  at end insert—

‘(6)
For the purpose of subsection (4) property is to be treated as not ceasing to meet

a relevant rule if it is lost, stolen, destroyed, scrapped or otherwise ceases to exist

or it is disposed of by way of gift other than to a relevant person; and property

gifted to a relevant person that is exempt property in the hands of that person

immediately after the gift shall not be treated as ceasing to be exempt property

solely by reason of that person subsequently ceasing to be a relevant person.

(7)
If exempt property ceases to meet one of the relevant rules because it is sold to

someone other than a connected person, the amount chargeable to tax shall be the

sale proceeds received and not the amount referred to in section 809O above.’.

Jane Kennedy

Agreed to  356

Schedule  7,  page  165,  line  5,  leave out from beginning to end of line 11 on page

167 and insert—

‘809V
Public access rule: general

(1)
Property meets the public access rule if conditions A to D are met.

(2)
Condition A is that the property is—

(a)
a work of art,

(b)
a collectors’ item, or

(c)
an antique,


within the meaning of Council Directive 2006/112/EC (see, in

particular, Annex IX to that Directive).

Public Bill Committee Proceedings: 19th June 2008
94

Finance Bill, continued

(3)
Condition B is that—

(a)
the property is available for public access at an approved

establishment,

(b)
the property is to be available for public access at an approved

establishment and, in connection with its being so available, is

in transit to, or in storage at, public access rule premises, or

(c)
the property has been available for public access at an

approved establishment and, in connection with its having

been so available, is in transit from, or in storage at, public

access rule premises.

(4)
Property is “available for public access” at an approved establishment

if the property is—

(a)
on public display at the establishment,

(b)
held by the establishment and made available to the public on

request for viewing or for educational use, or

(c)
held by the establishment for public exhibition in connection

with the sale of the property.

(5)
An “approved establishment” is—

(a)
an approved museum, gallery or other institution within the

meaning of Group 9 of Schedule 2 to the Value Added Tax

(Imported Goods) Relief Order 1984, or

(b)
any other person, premises or institution designated (or of a

description designated) by the Commissioners.

(6)
“Public access rule premises” are—

(a)
premises in the United Kingdom at which the property is to

be, or has been, available for public access, or

(b)
other commercial premises in the United Kingdom used by

the approved establishment for the storage of property in

advance of its being, or after its having been, available for

public access at the approved establishment.

(7)
Condition C is that, during the relevant period, the property meets

condition B for no more than—

(a)
two years, or

(b)
such longer period as the Commissioners may specify.

(8)
“The relevant period” means the period—

(a)
beginning with the importation of the property, and

(b)
ending when it ceases to be in the United Kingdom after that

importation.

(9)
“Importation” means the property being brought to, or received or

used in, the United Kingdom in circumstances in which section

809K(2)(a) applies.

(10)
Condition D is that the property attracts a relevant VAT relief (see

section 809VA).

809VA
Public access rule: relevant VAT relief

(1)
Property “attracts a relevant VAT relief” if any of conditions 1 to 4 are

met.

Public Bill Committee Proceedings: 19th June 2008
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Finance Bill, continued

(2)
Condition 1 is that article 5(1) of the Value Added Tax (Imported

Goods) Relief Order 1984 applies in relation to the importation of the

property by virtue of Group 9 of Schedule 2 to that Order (importation

of works of art or collectors’ pieces by museums etc).

(3)
Condition 2 is that article 5(1) would so apply if the following

requirements were disregarded—

(a)
the requirement that the importation be from a third country,

and

(b)
the requirement that the purpose of the importation be a

purpose other than sale.

(4)
Condition 3 is that article 576(3)(a) of Commission Regulation (EEC)

No 2454/93 (relief from import duties for works of art etc imported for

the purposes of exhibition, with a view to possible sale) applies in

relation to the importation of the property.

(5)
Condition 4 is that article 576(3)(a) would so apply if the requirement

that the importation be from a third country were disregarded.

(6)
Where the property does not meet condition B in section 809V at the

time of its importation it is to be assumed for the purposes of this

section that the property was imported on the day during the relevant

period when the property first meets that condition.

(7)
“The relevant period” and “importation” have the same meaning as in

section 809V and “imported” is to be read accordingly.

809VB
Personal use rule

(1)
Clothing, footwear, jewellery or watches meet the personal use rule if

they—

(a)
are property of a relevant person, and

(b)
are for the personal use of a relevant individual.

(2)
In this section—

(a)
“relevant person” has the meaning given by section 809L, and

(b)
“relevant individual” means an individual who is a relevant

person by virtue of section 809L(2)(a), (b), (c) or (d) (the

individual with income or gains, or a husband, wife, civil

partner, child or grandchild).

809VC
Repair rule

(1)
Property meets the repair rule for the whole of the relevant period if,

during the whole of that period, the property meets the repair

conditions.

(2)
Property meets the repair rule for a part of the relevant period if—

(a)
during the whole of that part of that period, the property meets

the repair conditions, and

(b)
during the whole of the other part of that period, or the whole

of each other part of that period, the property meets the repair

conditions or the public access rule.

(3)
Property meets the repair conditions if the property—

(a)
is under repair or restoration,

Public Bill Committee Proceedings: 19th June 2008
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Finance Bill, continued

(b)
is in transit from a place outside the United Kingdom to repair

rule premises, in transit between such premises, or in storage

at such premises, in advance of repair or restoration, or

(c)
is in storage at such premises, in transit between such

premises, or in transit from such premises to a place outside

the United Kingdom, following repair or restoration.

(4)
“Repair rule premises” means—

(a)
premises in the United Kingdom that are to be used, or have

been used, for the repair or restoration referred to in

subsection (3)(b) or (c), or

(b)
other commercial premises in the United Kingdom used by

the restorer for the storage of property in advance of, or

following, repair or restoration of property by the restorer.

(5)
“Restorer” means the person who is to carry out, or has carried out, the

repair or restoration referred to in subsection (3)(b) or (c).

(6)
Property meets the repair conditions, or the public access rule, during

the whole of a period, or the whole of part of a period, if the property

meets those conditions or that rule—

(a)
on the whole of, or on part of, the first day of that period or

part period,

(b)
on the whole of, or on part of, the last day of that period or part

period, and

(c)
on the whole of each other day of that period or part period.

(7)
“The relevant period” has the same meaning as in section 809V.

809W
Temporary importation rule

(1)
Property meets the temporary importation rule if the total number of

countable days is 275 or fewer.

(2)
A “countable day” is a day on which, or on part of which, the property

is in the United Kingdom by virtue of being brought to, or received or

used in, the United Kingdom in circumstances in which section

809K(2)(a) applies (whether the current case, or a past case, when the

property was so brought, received or used).

(3)
A day is not a countable day if, on that day or any part of that day—

(a)
the property meets the personal use rule,

(b)
the property meets the repair rule, or

(c)
the notional remitted amount in relation to the property is less

than £1,000.

(4)
A day on which, or on part of which, the property meets the public

access rule (the “relevant day”) is not a countable day if any of

conditions A to C is met.

(5)
Condition A is that the property meets the public access rule during the

whole of the period of importation in which the relevant day falls.

(6)
Condition B is that—

(a)
the property does not meet the public access rule during the

whole of the period of importation in which the relevant day

falls, and

(b)
that period of importation—