Public Bill Committee: 18 June 2009

152

Finance Bill, continued

(3)	As regards the licence, or each licence, which the company disposes

of, the company is to be treated as if it had disposed of that licence for

a consideration of such amount as to secure that on the disposal neither

a gain nor a loss accrues to the company.

(4)	In a case where the company acquires only one licence, the company

is to be treated as if it had acquired the licence for a consideration of

the same amount as the deemed disposal consideration.

(5)	In a case where the company acquires two or more licences, as regards

each licence acquired, the company is to be treated as if it had acquired

that licence for a consideration of—

DDC x A

TA

where—

DDC is the deemed disposal consideration;

A is the value of the licence acquired;

TA is total value of all the licences acquired.

(6)	In this section “deemed disposal consideration”, in relation to a

company participating in the swap, means—

(a)	the amount of the consideration for which the company is,

under subsection (3), treated as having disposed of its licence

(if the company disposes of only one licence), or

(b)	the aggregate of all such amounts (if the company disposes of

two or more licences).’.

Mr Stephen Timms

240

Schedule  40,  page  316,  line  7,  after ‘swap’ insert ‘if—

(a)	the no gain/no loss amount (“N”) of the company that receives

the mixed consideration (“company R”) exceeds

(b)	the amount of non-licence consideration (“C”) which

company R receives’.

Mr Stephen Timms

241

Schedule  40,  page  316,  leave out lines 8 to 12 and insert—

‘(2)	In a case where company R acquires only one licence, company R is

to be treated as if it had acquired the licence for a consideration of—

N - C

(3)	In a case where company R acquires two or more licences, as regards

each licence acquired, company R is to be treated as if it had acquired

the licence for a consideration of—

(N - C) x A

    TA

where—

A is the value of the licence acquired;

TA is total value of all the licences acquired.’.

Public Bill Committee: 18 June 2009

153

Finance Bill, continued

Mr Stephen Timms

242

Schedule  40,  page  316,  line  13,  leave out ‘its licence’ and insert ‘a licence under

the swap’.

Mr Stephen Timms

243

Schedule  40,  page  316,  line  19,  leave out from ‘acquires’ to ‘company’ in line 20

and insert ‘a licence under the swap (“company G”) subsequently disposes of the

licence,’.

Mr Stephen Timms

244

Schedule  40,  page  316,  leave out lines 22 to 25 and insert—

‘(7)	In this section the reference to the no gain/no loss amount of company

R is a reference to—

(a)	in a case where company R disposes of only one licence,

company R’s no gain/no loss amount in relation to that

disposal, or

(b)	in a case where company R disposes of two or more licences,

the aggregate of company R’s no gain/no loss amounts in

relation to all of those disposals.’.

Mr Stephen Timms

245

Schedule  40,  page  316,  line  27,  after ‘swap’ insert ‘if—

(a)	the no gain/no loss amount (“N”) of the company that receives

the mixed consideration (“company R”) does not exceed

(b)	the amount of non-licence consideration (“C”) which

company R receives’.

Mr Stephen Timms

246

Schedule  40,  page  316,  leave out lines 28 to 44 and insert—

‘(2)	As regards the licence, or each licence, which company R acquires,

company R is to be treated as if it had acquired the licence for nil

consideration.

(3)	In a case where company R disposes of only one licence, company R

is to be treated as if, on the disposal of the licence, there had arisen a

gain of—

C - N

(4)	In a case where company R disposes of two or more licences, as

regards each licence disposed of, company R is to be treated as if, on

the disposal of the licence, there had arisen a gain of—

(C - N) x D

    TD

where—

D is the value of the licence disposed of;

TD is total value of all the licences disposed of.’.

Public Bill Committee: 18 June 2009

154

Finance Bill, continued

Mr Stephen Timms

247

Schedule  40,  page  317,  line  2,  after ‘swap’ insert ‘—

(a)	whatever the no gain/no loss amount (“N”) of the company

that gives the mixed consideration (“company G”), and

(b)	whatever the amount of the non-licence consideration (“C”)

which company G gives’.

Mr Stephen Timms

248

Schedule  40,  page  317,  leave out lines 3 to 7 and insert—

‘(2)	In a case where company G acquires only one licence, company G is

to be treated as if it had acquired the licence for a consideration of—

N + C

(3)	In a case where company G acquires two or more licences, as regards

each licence acquired, company G is to be treated as if it had acquired

the licence for a consideration of—

(N + C) x A

    TA

where—

A is the value of the licence acquired;

TA is total value of all the licences acquired.’.

Mr Stephen Timms

249

Schedule  40,  page  317,  line  8,  leave out ‘its licence’ and insert ‘a licence under the

swap’.

Mr Stephen Timms

250

Schedule  40,  page  317,  line  14,  leave out from ‘acquires’ to ‘company’ in line 15

and insert ‘a licence under the swap (“company R”) subsequently disposes of the

licence,’.

Mr Stephen Timms

251

Schedule  40,  page  317,  leave out lines 17 to 20 and insert—

‘(7)	In this section the reference to the no gain/no loss amount of company

G is a reference to—

(a)	in a case where company G disposes of only one licence,

company G’s no gain/no loss amount in relation to that

disposal, or

(b)	in a case where company G disposes of two or more licences,

the aggregate of company G’s no gain/no loss amounts in

relation to all of those disposals.’.

Mr Stephen Timms

252

Schedule  40,  page  317,  line  22,  at end insert—

‘(2A)

In subsection (1), after “section 194” insert “and this section”.’.

Public Bill Committee: 18 June 2009

155

Finance Bill, continued

Mr Stephen Timms

253

Schedule  40,  page  317,  line  32,  leave out ‘only’ and insert ‘consideration’.

Mr Stephen Timms

254

Schedule  40,  page  318,  line  2,  after ‘licence’ insert ‘, as determined at the time the

swap arrangements are entered into’.

Mr Stephen Timms

255

Schedule  40,  page  318,  line  2,  at end insert—

‘“swap arrangements”, in relation to a licence-consideration swap

or a mixed-consideration swap, means the arrangements under

which the swap takes place;”.

(7)	After subsection (5A) insert—

“(5B)

In any of sections 195B to 195E, a reference to the value of a licence

comprised in disposal A or disposal B (see section 195A) is a reference

to the value of the licence as determined under the swap arrangements

at the time the swap arrangements are entered into.”.’.

Mr Stephen Timms

256

Schedule  40,  page  320,  line  36,  at end insert ‘and disposal consideration’.

Mr Stephen Timms

257

Schedule  40,  page  320,  line  37,  leave out ‘198C’ and insert ‘198G’.

Mr Stephen Timms

258

Schedule  40,  page  320,  line  46,  leave out ‘P’s ring fence trade’ and insert ‘one or

more of the following trades—

(i)	P’s ring fence trade;

(ii)	if P is a member of a group of companies (within the

meaning given in section 170), a ring fence trade of

another member of that group’.

Mr Stephen Timms

259

Schedule  40,  page  321,  line  1,  at end insert—

‘(2A)

If the disposal consists of—

(a)	disposal of a licence to which section 195D(3) applies, or

(b)	disposal of two or more licences to which section 195D(4)

applies,

the consideration for the disposal is to be taken to be the whole of the

non-licence consideration obtained on the disposal (which is referred

to as “C” in section 195D).

(2B)	Accordingly, in sections 198A to 198G (including section 198A(4)),

any reference to the consideration obtained on the disposal has effect

subject to subsection (2A).’.

Public Bill Committee: 18 June 2009

156

Finance Bill, continued

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

263

Schedule  40,  page  321,  line  34,  leave out ‘(6)’ and insert ‘(7)’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

262

Schedule  40,  page  321,  line  39,  at end insert—

‘(7)	For the purposes of this section it shall be deemed that section 155 includes an

additional class, “Class 9 - well costs incurred as part of exploration or

exploitation activities”.’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

265

Schedule  40,  page  322,  line  7,  leave out ‘(6)’ and insert ‘(7)’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

264

Schedule  40,  page  322,  line  12,  at end insert—

‘(7)	For the purposes of this section it shall be deemed that section 155 includes an

additional class, “Class 9 - well costs incurred as part of exploration or

exploitation activities”.’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

266

Schedule  40,  page  322,  line  12,  at end insert—

‘198H

Qualification for section 175 relief

(1)	This section applies for the purposes of sections 198A to 198G.

(2)	Section 175 shall apply for the purposes of this section as it applies for the

purposes of sections 152 to 158.’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

267

Schedule  44,  page  336,  line  37,  leave out ‘and’ and insert ‘or’. 

Public Bill Committee: 18 June 2009

157

Finance Bill, continued

Mr David Gauke

Mr Mark Hoban

Mr Greg Hands

75

Clause  91,  page  45,  line  2,  leave out ‘aspire’ and insert ‘use all reasonable

endeavours to achieve’.

Mr David Gauke

Mr Mark Hoban

Mr Greg Hands

76

Clause  91,  page  45,  line  3,  at end insert ‘and set out the rights and responsibilities

of taxpayers and other persons with whom HMRC deals’.

Mr David Gauke

Mr Mark Hoban

Mr Greg Hands

77

Clause  91,  page  45,  line  5,  leave out ‘regularly’.

Mr David Gauke

Mr Mark Hoban

Mr Greg Hands

78

Clause  91,  page  45,  line  5,  after ‘review’, insert ‘at least once every year’.

Mr David Gauke

Mr Mark Hoban

Mr Greg Hands

79

Clause  91,  page  45,  line  5,  after ‘review’, insert ‘at least once every 3 years’.

Mr David Gauke

Mr Mark Hoban

Mr Greg Hands

80

Clause  91,  page  45,  line  5,  leave out ‘and’ and insert—

‘(b)	consult with stakeholders in carrying out the review, and’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

223

Schedule  46,  page  339,  line  6,  at end insert—

‘(3)	The Treasury may by regulations define appropriate accounting arrangements.’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

219

Schedule  46,  page  339,  line  8,  leave out paragraph 2.

Public Bill Committee: 18 June 2009

158

Finance Bill, continued

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

220

Schedule  46,  page  339,  line  19,  leave out ‘Type A or Type B’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

221

Schedule  46,  page  339,  line  21,  leave out subsection (2).

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

222

Schedule  46,  page  339,  line  24,  leave out ‘Type B’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

224

Schedule  46,  page  341,  line  28,  at end insert—

‘(3)	For the purposes of this Schedule a reasonable excuse for failure to comply

includes any circumstance where the failure is attributable to any matter outside

the person’s control or any matter of which a person could not reasonably be

expected to be aware.’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

225

Schedule  46,  page  341,  line  41,  at end insert—

‘(3)	No penalty may be assessed under paragraphs 5 to 7 of this Schedule if the matter

in question has given rise to any civil or criminal penalty under any other

legislation or enactment whatsoever.’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

226

Schedule  46,  page  343,  line  4,  after ‘calculated’, insert ‘reasonably’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

227

Schedule  46,  page  343,  line  8,  at end insert—

‘(4)	Accounting arrangements are to be regarded as enabling the liability to taxes and

duties of the company to be calculated reasonably accurately if the accuracy with

which those liabilities can be calculated is within the normal bounds of

materiality as that principle is defined for accounting purposes.’.

---

Revised 18 June 2009