Session 2010 - 12
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Other Bills before Parliament

Public Bill Committee: 17 May 2011

81

Finance (No. 3) continued

David Gauke

79

Schedule  2,  page  77,  line  39,  leave out from beginning to end of line 40 and

insert—

‘(d)	subsection (1A) does not apply.

(1A)	This subsection applies if it is reasonable to suppose that, in essence—

(a)	at the time of the acquisition of sum or asset T, the value of

sum or asset T is greater or less than the value of sum or asset

S, and

(b)	the difference (or any part of the difference) in the values

might not have been expected applying the assumption that all

relevant connected persons are acting at arm’s length of each

other.

(1B)	In subsection (1A)—

(a)	the reference to sum or asset S is to sum or asset S so far as

sum or asset T is acquired out of it, and

(b)	“relevant connected person” means a person with a

connection (direct or indirect) to the arrangement under which

sum or asset T is acquired.’.

David Gauke

80

Schedule  2,  page  77,  line  43,  at end insert—

‘(2A)

Subsection (3) applies if, on its acquisition, sum or asset T is the

subject of a relevant step within section 554B taken by P.’.

David Gauke

81

Schedule  2,  page  77,  line  44,  leave out ‘mentioned in subsection (1)(d)’.

David Gauke

82

Schedule  2,  page  78,  line  4,  at end insert ‘and’.

David Gauke

83

Schedule  2,  page  78,  line  7,  leave out from ‘(b)’ to end of line 18.

David Gauke

84

Schedule  2,  page  78,  line  20,  leave out from beginning to ‘and’ in line 23 and

insert—

‘(a)	on its acquisition, sum or asset T—

(i)	is the subject of a relevant step within section 554B

taken by P by reason of which Chapter 2 applies or

would apply apart from subsection (3) above or any of

sections 554H to 554LA, 554P or 554S, or

(ii)	if sub-paragraph (i) does not apply, is held by or on

behalf of P on the same basis as that on which sum or

asset S was held by or on behalf of P immediately

before the acquisition,’.

Public Bill Committee: 17 May 2011

82

Finance (No. 3) continued

David Gauke

85

Schedule  2,  page  84,  line  42,  at end insert—

‘(5A)

And for that purpose, section 170(2) to (11) is to be read as if for “75

per cent” (wherever occurring) there were substituted “51 per cent”

(with section 1154(2) of CTA 2010 applying accordingly).’

David Gauke

86

Schedule  2,  page  88,  line  8,  after ‘section’ insert ‘or section 554Z6’.

David Gauke

87

Schedule  2,  page  88,  line  9,  leave out ‘sections 554Z5 to’ and insert ‘section 554Z5

or’.

David Gauke

88

Schedule  2,  page  88,  line  43,  after ‘(10)’ insert ‘or 554LA(4), (6) or (8)’.

David Gauke

89

Schedule  2,  page  89,  line  2,  leave out ‘B may grant A a right (“a relevant share

option”)’ and insert ‘a right (“a relevant share option”) may be granted to A’.

David Gauke

90

Schedule  2,  page  89,  line  36,  after ‘554L(10)’ insert ‘or 554LA(8)’.

David Gauke

91

Schedule  2,  page  90,  line  9,  leave out ‘which is three months after’ and insert

‘falling immediately after the period of three months starting with’.

David Gauke

92

Schedule  2,  page  90,  line  11,  after ‘at’ insert ‘the end of’.

David Gauke

93

Schedule  2,  page  96,  line  20,  at end insert—

‘(10)

In relation to times after the relief is given, the Tax Acts have effect as

if this Chapter had never applied by reason of the original relevant

step.’.

Public Bill Committee: 17 May 2011

83

Finance (No. 3) continued

David Gauke

105

Schedule  2,  page  96,  line  29,  at end insert—

‘Chapter 3

Undertakings given by employers etc in relation to retirement

benefits etc

554Z15

Application etc

(1)	This Chapter applies if there is an undertaking (“the relevant

undertaking”) that a contribution to which subsection (2) would apply

will be paid.

(2)	This subsection applies to a contribution if—

(a)	the contribution is paid to an arrangement which is not a

registered pension scheme,

(b)	in connection with that arrangement (directly or indirectly),

relevant benefits are to be provided (directly or indirectly) out

of the contribution by a relevant third person,

(c)	the provision of the relevant benefits would be a relevant step,

and

(d)	the contribution is neither a tax-relieved contribution nor tax-

exempt provision.

(3)	In subsection (2)—

“relevant benefits” has the same meaning as in Chapter 2 of Part 6, but

ignoring section 393B(2)(a),

“relevant third person” means a person within section 554A(7)(a) to (c)

(ignoring this Chapter), and

“tax-exempt provision” and “tax-relieved contribution” have the

meaning given by paragraph 3(3) and (4) of Schedule 34 to FA 2004.

(4)	In this Chapter references to an undertaking include references to—

(a)	an undertaking which is not legally enforceable, and

(b)	an undertaking which is to be performed only on or following

the meeting of a condition (including a condition which might

never be met).

554Z16

Employer etc to be treated as relevant third person etc

(1)	If B takes a step within section 554Z17 or 554Z18, Chapters 1 and 2

have effect in relation to the step—

(a)	as if B were a relevant third person for the purposes of section

554A(1)(d), and

(b)	as if the step were a relevant step within section 554B (if it

would not otherwise be).

(2)	For the purpose of determining whether Chapter 2 applies by reason

of the step, Chapter 1 has effect—

(a)	as if sections 554F to 554N, 554R to 554T, 554V and 554W

were omitted,

(b)	if the step is within section 554Z17, as if sections 554P(2)(d),

(3) and (4) and 554Q(1)(c) and (d), (1A) and (1B) were

omitted, and

Public Bill Committee: 17 May 2011

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Finance (No. 3) continued

(c)	if the step is within section 554Z18, as if sections 554P and

554Q were omitted.

(3)	If Chapter 2 applies by reason of the step, Chapter 2 has effect as if

sections 554Z6 to 554Z11 were omitted.

(4)	If Chapter 2 does not apply by reason of the step by virtue of section

554E(3) or (5A), section 554E(6) and (7) does not apply in relation to

the step.

(5)	For further modifications of Chapters 1 and 2, see sections 554Z17(3)

and (4), 554Z18(5) and (6), 554Z19 and 554Z20.

(6)	Regulations under section 554X may (in particular) make provision

covering cases in which Chapters 1 and 2 have effect as provided for

by this section.

(7)	In this Chapter—

(a)	references to B do not include references to B acting as a

trustee,

(b)	if B is a company and is a member of a group of companies,

references to B are to be read as including references to any

other company which is a member of that group, and

(c)	if B is a limited liability partnership, references to B are to be

read as including references to any company which is a

wholly-owned subsidiary (as defined in section 1159(2) of the

Companies Act 2006) of B.

554Z17

Earmarking etc

(1)	B takes a step within this section if—

(a)	a sum of money or asset held by or on behalf of B is earmarked

(however informally) by B with a view to the relevant

undertaking being performed at a later time (wholly or partly)

out of—

(i)	that sum of money or asset, or

(ii)	any sum of money or asset which may arise or derive

(directly or indirectly) from it, or

(b)	a sum of money or asset otherwise starts being held by or on

behalf of B, specifically with a view, so far as B is concerned,

to the relevant undertaking being performed at a later time

(wholly or partly) out of—

(i)	that sum of money or asset, or

(ii)	any sum of money or asset which may arise or derive

(directly or indirectly) from it.

(2)	For the purposes of subsection (1)(b) it does not matter whether or not

the sum of money or asset in question has previously been held by or

on behalf of B on a basis which is different to that mentioned in

subsection (1)(b).

(3)	Subsection (4) applies if, in the application of section 554P or 554Q in

any case, the relevant step mentioned in section 554P(2)(a) or

554Q(3)(a) is a step within this section taken by B.

(4)	In section 554P(2)(c) or 554Q(3)(c) (as the case may be) the reference

to section 554B(1)(a) or (b) is to be read as a reference to subsection

(1)(a) or (b) above.

© Parliamentary copyright	Revised 17 May 2011