Mr.
Gauke: I am grateful for that information, but it suggests
a sum of about £1 million per person, which seems
extraordinarily high, and I cannot believe that it is right. I do not
know whether that is a sample from which the figures were extrapolated,
but if we are talking about £1 million per person, it is quite a
consideration.
Mr.
Timms: My advice is that the costings are based on 47
cases of 19 trusts gaining a tax advantage. They are based on actual
cases in which employers have used the lease premium arrangements, and
the estimate that I gave does not involve extrapolating from those
cases to assume higher levels of tax avoidance. We are indeed
discussing some very up-market
accommodation. Amendment
213 agreed to.
Amendments
made: 214, in clause 70, page 34, leave
out lines 35 to 37 and
insert— ‘(d) the net amount
payable by P in relation to the lease by way of lease premium is
greater than
zero.’. 215,
in
clause 70, page 34, line 43, leave
out from ‘the’ to end of line 21 on page 35 and
insert ‘net amount
payable by P in relation to the lease by way of lease
premium. (3) For provision about the
application of this section in relation to certain leases with break
clauses, see section 105B. (4)
For the purposes of this section the net amount payable by P in
relation to a lease by way of lease premium
is— (a) the total amount
(if any) that has been paid, or is or will become payable, by P in
relation to the lease by way of lease premium,
less (b) any amount within
paragraph (a) that has been repaid or is or will become
repayable. (5) In this section
and section 105B “lease premium” means any premium
payable— (a) under a
lease, or (b) otherwise under
the terms on which a lease is
granted. (6) In the application
of this section to Scotland, “premium” includes a
grassum. 105B Lease premiums in
the case of leases with break
clauses (1) This section
applies to a lease (“the original lease”) that contains
one or more relevant break
clauses. (2) For the purposes
of this section— (a)
“break clause” means a provision of a lease that gives a
person a right to terminate it so that its term is shorter than it
otherwise would be, and (b) a
break clause contained in the original lease is
“relevant” if the right to terminate the lease that it
confers is capable of being exercised in such a way that the term of
the original lease is 10 years or
less. (3) For the purposes of
section 105A— (a) the
term of the original lease,
and (b) the net amount payable
by P in relation to the lease by way of lease
premium, are to be determined
on the assumption that any relevant break clause is exercised in such a
way that the term of the lease is as short as
possible. (4) If a relevant
break clause is not in fact exercised in such a way that the term of
the original lease is as short as possible, the parties to the lease
are treated for the purposes of section 105A as if they were parties to
another lease (a “notional lease”) the term of
which— (a) begins
immediately after the time at which the term of the original lease
would have ended, if that break clause had been so exercised,
and (b) ends at the time
mentioned in subsection
(5). (5) The term of a notional
lease ends— (a) at the
time the term of the original lease would end, on the assumption that
any relevant break clause that is exercisable only after the beginning
of the term of the notional lease is exercised in such a way that the
term of the original lease is as short as possible,
or (b) if earlier, the tenth
anniversary of the beginning of the term of the original
lease. (6) For the purposes of
section 105A, the net amount payable by P in relation to a notional
lease by way of lease premium is, in the case of a notional lease the
term of which ends under paragraph (a) of subsection
(5)— (a) the net amount
that would be payable by P in relation to the original lease by way of
lease premium on the assumption mentioned in that paragraph,
less
(b) any part of that amount that has already been
attributed to a period in respect of a lease premium under section
105(4B)(b). (7) For the
purposes of section 105A, the net amount payable by P in relation to a
notional lease by way of lease premium is, in the case of notional
lease the term of which ends under paragraph (b) of subsection (5), the
relevant proportion
of— (a) the net amount
that would be payable by P in relation to the original lease by way of
lease premium, on the assumption that no break clause is exercised,
less (b) any part of that
amount that has already been attributed to a period in respect of a
lease premium under section
105(4B)(b). (8) In subsection
(7) “the relevant proportion”
means—
D
E
where— D
is the term of the notional lease (in
days); E is the sum
of— (a) the term of the
notional lease (in days),
and (b) the number of days by
which the term of the original lease would exceed 10 years, on the
assumption that no break clause is
exercised.”’. 216,
in
clause 70, page 35, line 32, leave
out ‘section 105A’ and insert ‘sections 105A and
105B’.—(Mr.
Timms.) Clause
70 ordered to stand part of the
Bill. Ordered,
That further consideration be now adjourned.—[Mr.
Blizzard.] 6.38
pm
Adjourned
till Thursday 18 June at Nine
o’clock.
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