House of Commons Public Bill Committee Proceedings

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Public Bill Committee Proceedings: 18 June 2009
52

Finance Bill, continued

Mr Stephen Timms

Agreed to  239

Schedule  40,  page  315,  line  36,  leave out from ‘a’ to end of line 5 on page 316 and

insert ‘licence-consideration swap.

(2)
Each company participating in the swap is to be treated as follows.

(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—

A

DDC   x

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

Agreed to  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

Agreed to  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—

A

(N - C)   x

TA

Public Bill Committee Proceedings: 18 June 2009
53

Finance Bill, continued


where—

A is the value of the licence acquired;

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

Mr Stephen Timms

Agreed to  242

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

the swap’.

Mr Stephen Timms

Agreed to  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

Agreed to  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

Agreed to  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

Agreed to  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—

D

(C - N)   x

TD

Public Bill Committee Proceedings: 18 June 2009
54

Finance Bill, continued


where—

D is the value of the licence disposed of;

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

Mr Stephen Timms

Agreed to  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

Agreed to  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—

A

(N + C)   x

TA


where—

A is the value of the licence acquired;

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

Mr Stephen Timms

Agreed to  249

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

swap’.

Mr Stephen Timms

Agreed to  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

Agreed to  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.’.

Public Bill Committee Proceedings: 18 June 2009
55

Finance Bill, continued

Mr Stephen Timms

Agreed to  252

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

  ‘(2A)
In subsection (1), after “section 194” insert “and this section”.’.

Mr Stephen Timms

Agreed to  253

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

Mr Stephen Timms

Agreed to  254

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

swap arrangements are entered into’.

Mr Stephen Timms

Agreed to  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

Agreed to  256

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

Mr Stephen Timms

Agreed to  257

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

Mr Stephen Timms

Agreed to  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

Agreed to  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,

Public Bill Committee Proceedings: 18 June 2009
56

Finance Bill, continued


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).’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Not called  263

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

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Not called  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

Not called  265

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

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Not called  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

Not called  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.’.

Schedule, as amended, Agreed to.

Clause 86 Agreed to.

Schedule 41 Agreed to.

Public Bill Committee Proceedings: 18 June 2009
57

Finance Bill, continued

Clause 87 Agreed to.

Schedule 42 Agreed to.

Clause 88 Agreed to.

Schedule 43 Agreed to.

Clause 89 Agreed to.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Negatived on division  267

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

Schedule Agreed to.

Clause 90 Agreed to.

Schedule 45 Agreed to.

[Adjourned until Tuesday 23 June at 10.30 am.