69

House of Commons

Tuesday 9 June 2009

Public Bill Committee

New Amendments handed in are marked thus

Amendments which will comply with the required notice period at their next appearance

Finance Bill

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(Except Clauses 7, 8, 9, 11, 14, 16, 20 and 92)

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Note

The Amendments have been arranged according to the Order of the Committee

[19 May 2009].

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

19

Schedule  11,  page  108,  line  30,  at end insert—

‘2A	In section 45D(4) for “110” insert “160”’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

20

Schedule  11,  page  109,  line  32,  at end insert—

‘(5A)

An order under subsection (5) may not be made until 2 years after this Act has

passed and any subsequent change will be subject to a 2 year notice period.’.

Mr Stephen Timms

18

Schedule  12,  page  128,  line  5,  at end insert—

‘(1A)

In determining for the purposes of subsection (1)(c) whether subsection (1) of

section 171 would have applied, it is to be assumed that subsection (1A)(b) of that

section read—

Public Bill Committee: 9 June 2009

70

Finance Bill, continued

“(b)	that, at the time of the disposal, company B is resident in the

United Kingdom, or carrying on a trade in the United Kingdom

through a permanent establishment there.” ’.

Mr Stephen Timms

90

Schedule  13,  page  131,  line  28,  after ‘treated’ insert ‘under subsection (5)’.

Mr Stephen Timms

91

Schedule  13,  page  131,  leave out lines 30 to 34 and insert ‘The liability mentioned in

subsection (7)’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

43

Schedule  14,  page  133,  line  15,  after ‘nature’, insert ‘other than in the case of a

distribution within the meaning of section 209(2) of ICTA.’.

Mr Stephen Timms

92

Schedule  14,  page  134,  line  1,  leave out ‘any amount determined by reference to’.

Mr Stephen Timms

93

Schedule  14,  page  135,  line  17,  leave out ‘any amount determined by reference to’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

44

Schedule  14,  page  135,  line  32,  leave out ‘subsection 6(c) and (d)’ and insert ‘the

words “is resident in the United Kingdom and” after “person who” in each of paragraphs

(c) and (d) of subsection (6)’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

45

Schedule  14,  page  135,  line  36,  leave out from ‘of’ to end of line 38 and insert ‘an

ordinary share.’.

Mr Mark Hoban

170

Schedule  14,  page  136,  line  19,  after ‘dividend’, insert ‘or other distribution’.

Public Bill Committee: 9 June 2009

71

Finance Bill, continued

Mr Stephen Timms

94

Schedule  14,  page  136,  line  30,  leave out ‘apart from’ and insert ‘otherwise than by

virtue of’.

Mr Stephen Timms

95

Schedule  14,  page  136,  line  33,  leave out from beginning to ‘is’ in line 34 and

insert ‘Any other dividend’.

Mr Stephen Timms

96

Schedule  14,  page  137,  line  14,  leave out ‘apart from’ and insert ‘otherwise than by

virtue of’.

Mr Stephen Timms

97

Schedule  14,  page  137,  line  17,  leave out from beginning to ‘is’ in line 18 and

insert ‘Any other dividend’.

Mr Stephen Timms

98

Schedule  14,  page  138,  line  18,  leave out from ‘that’ to end of line 20 and insert

‘does not fall into an exempt class by virtue of section 930E but would, apart from this

section, fall into an exempt class otherwise than by virtue of that section.’.

Mr Stephen Timms

99

Schedule  14,  page  138,  line  46,  at end insert—

‘930MA

Schemes involving distributions for which deductions are given

(1)	This section applies to a dividend or other distribution that would,

apart from this section, fall into an exempt class.

(2)	The distribution does not fall into an exempt class if—

(a)	the distribution is made as part of a tax advantage scheme, and

(b)	the following condition is met.

(3)	The condition is that a deduction is allowed to a resident of any

territory outside the United Kingdom under the law of that territory in

respect of an amount determined by reference to the distribution.’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

46

Schedule  14,  page  139,  line  43,  leave out ‘dividend’ and insert ‘distribution’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

47

Schedule  14,  page  140,  line  2,  leave out ‘dividend’ and insert ‘distribution’.

Public Bill Committee: 9 June 2009

72

Finance Bill, continued

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

48

Schedule  14,  page  140,  line  36,  leave out ‘is in’ and insert ‘was in the accounting

period ending immediately before’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

49

Schedule  14,  page  141,  leave out lines 29 to 34.

Mr Stephen Timms

100

Schedule  14,  page  143,  line  9,  leave out sub-paragraphs (2) and (3) and insert—

‘()	In subsection (3) (as it has effect as amended by paragraph 8 of Schedule 30 to

FA 2000)—

(a)	before paragraph (a), insert—

“(za)

if the dividend is received in an accounting period of

the recipient in which the recipient is not a small

company, and the dividend is a relevant dividend, the

profits in respect of which the dividend is paid;’,

(b)	in paragraph (a), at the beginning, insert “in a case not falling under

paragraph (za),”, and

(c)	in paragraph (c), at the beginning, insert “in a case not falling under

paragraph (za),”.

()	After subsection (3) insert—

“(3A)

For the purposes of subsection (3)—

(a)	“small company” has the same meaning as in Part 9A of CTA

2009 (company distributions),

(b)	“relevant dividend” means a dividend that, for the purposes of

section 930H of that Act (dividends derived from transactions

not designed to reduce tax), is treated as paid in respect of

profits other than relevant profits (see subsection (4) of that

section), and

(c)	the profits in respect of which a dividend is paid are the profits

in respect of which the dividend is treated as paid for the

purposes of that section.”’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

50

Schedule  14,  page  143,  line  20,  leave out paragraph 9 and insert—

‘9	In section 806J, after subsection (7) insert—

(8)	Sections 806A to 806K shall not apply to any distribution paid after 1 July

2009 other than a distribution in respect of which an election has been made

under section 930Q of CTA 2009.”’.

Public Bill Committee: 9 June 2009

73

Finance Bill, continued

Mr Stephen Timms

101

Schedule  14,  page  144,  line  24,  leave out from beginning to ‘modification’ in line

32 and insert ‘modification.

(3B)

The’.

Mr Stephen Timms

102

Schedule  14,  page  145,  line  36,  leave out from ‘following’ to ‘modification’ in line

44 and insert ‘modification.

(4B)

The’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

51

Schedule  14,  page  147,  line  30,  leave out ‘expenditure’ and insert ‘territory’.

Mr Stephen Timms

103

Schedule  14,  page  148,  line  28,  leave out ‘apart from’ and insert ‘otherwise than by

virtue of’.

Mr Stephen Timms

104

Schedule  14,  page  148,  line  37,  leave out ‘apart from’ and insert ‘otherwise than by

virtue of’.

Mr Stephen Timms

105

Schedule  15,  page  149,  line  20,  at end insert—

‘(4A)

Part 5A contains rules connected with tax avoidance.’.

Mr Stephen Timms

106

Schedule  15,  page  150,  line  1,  at end insert—

‘(1A)

But a period of account that is within sub-paragraph (1) is not a period of

account to which this Schedule applies if the worldwide group is a qualifying

financial services group in that period (see paragraph 6A).’.

Mr Stephen Timms

107

Schedule  15,  page  151,  line  10,  leave out ‘finance income payable’ and insert

‘liabilities’.

Mr Stephen Timms

108

Schedule  15,  page  151,  line  19,  leave out ‘finance income receivable in respect of’

and insert ‘net investments, or net cash investments, in’.

Public Bill Committee: 9 June 2009

74

Finance Bill, continued

Mr Stephen Timms

109

Schedule  15,  page  151,  line  38,  leave out ‘finance income payable’ and insert

‘liabilities’.

Mr Stephen Timms

110

Schedule  15,  page  152,  line  28,  at end insert—

‘Qualifying financial services groups

6A  (1)

The worldwide group is a qualifying financial services group in a period of

account if the trading income condition—

(a)	is met in relation to that period, or

(b)	is not met in relation to that period, but only because of losses incurred

by the group in respect of activities that are normally reported on a net

basis in financial statements prepared in accordance with international

accounting standards.

(2)	The trading income condition is met in relation to a period of account if—

(a)	all or substantially all of the UK trading income of the worldwide

group for that period, or

(b)	all or substantially all of the worldwide trading income of the

worldwide group for that period,

is derived from qualifying activities (see paragraph 6B).

(3)	In this Part, in relation to a period of account of the worldwide group—

“UK trading income” means the sum of the trading income for that period

of each company that was a relevant group company at any time during

that period (see paragraph 6F);

“worldwide trading income” means the trading income for that period of the

worldwide group (see paragraph 6G).

Qualifying activities

6B	In this Part “qualifying activities” means—

(a)	lending activities and activities that are ancillary to lending activities

(see paragraph 6C),

(b)	insurance activities and insurance-related activities (see paragraph

6D), and

(c)	relevant dealing in financial instruments (see paragraph 6E).

Lending activities and activities ancillary to lending activities

6C  (1)

In this Part “lending activities” means any of the following activities—

(a)	acceptance of deposits or other repayable funds;

(b)	lending of money, including consumer credit, mortgage credit,

factoring (with or without recourse) and financing of commercial

transactions (including forfeiting);

(c)	finance leasing (as lessor);

(d)	issuing and administering means of payment;

(e)	provision of guarantees or commitments to provide money;

(f)	money transmission services;

(g)	provision of alternative finance arrangements;

Public Bill Committee: 9 June 2009

75

Finance Bill, continued

(h)	other activities carried out in connection with activities falling within

any of paragraphs (a) to (g).

(2)	Activities that are ancillary to lending activities are not qualifying activities for

the purposes of this Part if the income derived from the ancillary activities

forms a significant part of the total of—

(a)	that income,

(b)	the income derived from lending activities of the worldwide group in

the period of account.

(3)	In sub-paragraph (2) “income” means the gross income or net income that

would be taken into account for the purposes of paragraph 6A in calculating

the UK or worldwide trading income of the worldwide group for the period of

account.

(4)	The Commissioners may by order—

(a)	amend sub-paragraph (1), and

(b)	make other amendments of this paragraph in consequence of any

amendment of sub-paragraph (1).

(5)	In sub-paragraph (1)(h), and in the references to ancillary activities in this

paragraph and paragraph 6B(a), “activities” includes buying, holding,

managing and selling assets.

(6)	In this paragraph “alternative finance arrangements” has the same meaning as

in Chapter 6 of Part 6 of CTA 2009.

Insurance activities and insurance related activities

6D  (1)

In this Part “insurance activities” means—

(a)	the effecting or carrying out of contracts of insurance by a regulated

insurer, and

(b)	investment business that arises directly from activities falling within

paragraph (a).

(2)	In this Part “insurance-related activities” means—

(a)	activities that are ancillary to insurance activities, and

(b)	activities that—

(i)	are of the same kind as activities carried out for the purposes

of insurance activities,

(ii)	are not actually carried out for those purposes, and

(iii)

would not be carried out but for insurance activities being

carried out.

(3)	Sub-paragraph (2) is subject to sub-paragraph (4).

(4)	Activities that fall within sub-paragraph (2)(a) or (b) (“the relevant activities”)

are not insurance-related activities if the income derived from the relevant

activities forms a significant part of the total of—

(a)	that income,

(b)	the income derived from insurance activities of the worldwide group

in the period of account.

(5)	In sub-paragraph (4) “income” means the gross income or net income that

would be taken into account for the purposes of paragraph 6A in calculating

the UK or worldwide trading income of the worldwide group for the period of

account.

(6)	In this paragraph—

“activities” includes buying, holding, managing and selling assets;

“contract of insurance” has the same meaning as in Chapter 1 of Part 12 of

ICTA;

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Revised 9 June 2009