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11

 

House of Commons

 
 

Tuesday 9 June 2009

 

Public Bill Committee Proceedings

 

Finance Bill


 

[Seventh and Eighth Sittings]


 

Clause 30 Agreed to.

 

Mr Mark Hoban

 

Mr David Gauke

 

Mr Greg Hands

 

Withdrawn  19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

 

Withdrawn  20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.’.

 

Schedule Agreed to.

 

Clause 31 Agreed to.

 


 

Mr Stephen Timms

 

Agreed to  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—

 

“(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.” ’.

 

Schedule, as amended, Agreed to.


 
 

Public Bill Committee Proceedings: 9 June 2009            

12

 

Finance Bill, continued

 
 

Clause 32 Agreed to.

 


 

Mr Stephen Timms

 

Agreed to  90

 

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

 

Mr Stephen Timms

 

Agreed to  91

 

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

 

subsection (7)’.

 

Schedule, as amended, Agreed to.

 

Clauses 33 and 34 Agreed to.

 


 

Mr Mark Hoban

 

Mr David Gauke

 

Mr Greg Hands

 

Withdrawn  43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

 

Agreed to  92

 

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

 

Mr Stephen Timms

 

Agreed to  93

 

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

 

Mr Mark Hoban

 

Mr David Gauke

 

Mr Greg Hands

 

Withdrawn  44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

 

Not called  45

 

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

 

ordinary share.’.


 
 

Public Bill Committee Proceedings: 9 June 2009            

13

 

Finance Bill, continued

 
 

Mr Mark Hoban

 

Not called  170

 

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

 

Mr Stephen Timms

 

Agreed to  94

 

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

 

virtue of’.

 

Mr Stephen Timms

 

Agreed to  95

 

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

 

insert ‘Any other dividend’.

 

Mr Stephen Timms

 

Agreed to  96

 

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

 

virtue of’.

 

Mr Stephen Timms

 

Agreed to  97

 

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

 

insert ‘Any other dividend’.

 

Mr Stephen Timms

 

Agreed to  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

 

Agreed to  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

 

Agreed to  46

 

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


 
 

Public Bill Committee Proceedings: 9 June 2009            

14

 

Finance Bill, continued

 
 

Mr Mark Hoban

 

Mr David Gauke

 

Mr Greg Hands

 

Agreed to  47

 

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

 

Mr Mark Hoban

 

Mr David Gauke

 

Mr Greg Hands

 

Not called  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

 

Not called  49

 

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

 

Mr Stephen Timms

 

Agreed to  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.”’.


 
 

Public Bill Committee Proceedings: 9 June 2009            

15

 

Finance Bill, continued

 
 

Mr Mark Hoban

 

Mr David Gauke

 

Mr Greg Hands

 

Not called  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.”’.

 

Mr Stephen Timms

 

Agreed to  101

 

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

 

32 and insert ‘modification.

 

  (3B)  

The’.

 

Mr Stephen Timms

 

Agreed to  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

 

Agreed to  51

 

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

 

Mr Stephen Timms

 

Agreed to  103

 

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

 

virtue of’.

 

Mr Stephen Timms

 

Agreed to  104

 

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

 

virtue of’.

 

Schedule, as amended, Agreed to.

 

Clause 35 Agreed to.

 


 

Mr Stephen Timms

 

Agreed to  105

 

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

 

  ‘(4A)  

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

 

Mr Stephen Timms

 

Agreed to  106

 

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


 
 

Public Bill Committee Proceedings: 9 June 2009            

16

 

Finance Bill, continued

 
 

  ‘(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

 

Agreed to  107

 

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

 

‘liabilities’.

 

Mr Stephen Timms

 

Agreed to  108

 

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

 

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

 

Mr Stephen Timms

 

Agreed to  109

 

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

 

‘liabilities’.

 

Mr Stephen Timms

 

Agreed to  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).


 
 

Public Bill Committee Proceedings: 9 June 2009            

17

 

Finance Bill, continued

 
 

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;

 

(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).


 
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