Session 2010 - 12
Internet Publications
Other Bills before Parliament

127

House of Commons

Tuesday 24 May 2011

Public Bill Committee

New Amendments handed in are marked thus

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

Finance (No. 3) Bill

---

(except Clauses 4, 7, 10, 19, 35 and 72)

---

Note

The Amendments have been arranged in accordance with the order of the

Committee [10 May].

Ordered, That the order in which proceedings are taken shall be: Clauses 1 to 3;

Clauses 5 and 6; Clauses 8 and 9; Clauses 11 to 15; Schedule 1; Clauses 16 to 18; Clauses

20 to 26; Schedule 2; Clause 27; Schedule 3; Clause 28; Schedule 4; Clauses 29 and 30;

Schedule 5; Clauses 31 and 32; Schedule 6; Clauses 33 and 34; Schedules 7 and 8; Clauses

36 to 44; Schedule 9; Clause 45; Schedule 10; Clause 46; Schedule 11; Clause 47;

Schedule 12; Clause 48; Schedule 13; Clauses 49 to 52; Schedule 14; Clauses 53 to 64;

Schedule 15; Clause 65; Schedule 16; Clause 66; Schedule 17; Clause 67; Schedule 18;

Clauses 68 to 71; Schedule 19; Clauses 73 to 77; Schedule 20; Clauses 78 to 82; Schedule

21; Clause 83; Schedule 22; Clauses 84 to 86; Schedules 23 and 24; Clause 87; Schedule

25; Clauses 88 to 91; Schedule 26; new Clauses; new Schedules; Clauses 92 and 93.

David Gauke

108

Schedule  8,  page  159,  line  11,  leave out from ‘earnings’ to end of line 12 and insert

‘specified in regulations made by the Treasury under this paragraph.’.

David Gauke

109

Schedule  8,  page  159,  leave out lines 13 to 33 and insert—

‘(4)	In subsection (1)(b) “excluded amounts” means amounts specified in regulations

made by the Treasury under this subsection.’.

Public Bill Committee: 24 May 2011

128

Finance (No. 3) Bill, continued

David Gauke

110

Schedule  8,  page  160,  leave out lines 40 to 43 and insert—

‘( )	In subsection (1)—

“relevant earnings” has the same meaning as in subsection (1)(a) of section

270B (see subsection (3) of that section), and

“excluded amounts” has the same meaning as in subsection (1)(b) of section

270B (see subsection (4) of that section).’.

David Gauke

111

Schedule  8,  page  161,  line  38,  at end insert—

‘	Regulations made under section 270B(3)(b) or (4) of ITEPA 2003 (inserted by

paragraph 3) on or before 31 December 2011 may have retrospective effect in

relation to the tax year 2011-12.’.

David Hanson

Kerry McCarthy

97

Clause  40,  page  26,  line  6,  at end add—

‘(7)	The Treasury shall, within three months of the passing of this Act publish final

details of a new UK-wide Government contribution-based tax-free children’s

savings scheme for looked-after children.’.

David Hanson

Kerry McCarthy

98

Clause  40,  page  26,  line  6,  at end add—

‘(7)	The Government will, by 30 September 2011, publish a report on—

(a)	children’s savings accounts, and

(b)	saving across society,

including the impact of Government policy.’.

David Hanson

Kerry McCarthy

99

Clause  43,  page  27,  line  18,  leave out subsection (6).

Public Bill Committee: 24 May 2011

129

Finance (No. 3) Bill, continued

David Gauke

112

Schedule  10,  page  171,  line  22,  at end insert—

‘(4)	But where an early commencement election is made in relation to a group—

(a)	sub-paragraphs (1) and (3) apply in relation to that group as if the

references in those sub-paragraphs to the passing of this Act were

references to 1 April 2011, and

(b)	sub-paragraph (2) applies in relation to any disposal of shares by a

member of that group as if the reference in that sub-paragraph to the

passing of this Act were a reference to 1 April 2011.

(5)	An early commencement election in relation to a group means an election

made for the purposes of this paragraph by the principal company of the group.

(6)	If a company ceases to be a member of a group in the period which begins with

1 April 2011 and ends with the passing of this Act, an early commencement

election may be made or revoked in relation to the group only with the consent

of that company contained in a notice which accompanies the election or

revocation.

(7)	Where an early commencement election is revoked, the election is treated as

never having had effect.

(8)	An early commencement election may not be made or revoked after 31 March

2012 (and paragraph 3(1)(b) of Schedule 1A to the Management Act

(amendment of elections etc) does not apply in relation to an early

commencement election).’

David Hanson

Kerry McCarthy

100

Clause  47,  page  28,  line  11,  at end add—

‘(2)	Notwithstanding the provisions of paragraph 14 of Schedule 12, the Schedule will

not come into force until a full impact assessment on developing countries’ tax

revenue has been laid before and approved by the House of Commons.’.

David Gauke

118

Schedule  12,  page  189,  leave out lines 8 to 13 and insert—

‘15B (1)

An exempt period begins in relation to a company (“X”) at a time (“the

relevant time”) when—

(a)	X is resident outside the United Kingdom,

(b)	X is controlled by persons resident in the United Kingdom,

(c)	there is at least one relevant UK corporate investor in X, and

(d)	the requirements of paragraph 15C or 15D are met.

(2)	There is a “relevant UK corporate investor in X” at a particular time if, at that

time, there is a company which—

(a)	is resident in the United Kingdom, and

(b)	would, on the assumptions set out in sub-paragraph (3), be a company

to which an apportionment of X’s chargeable profits for the relevant

Public Bill Committee: 24 May 2011

130

Finance (No. 3) Bill, continued

accounting period would fall to be made in circumstances where

section 747(5) would not prevent tax being chargeable on the

company under section 747(4).

(3)	The assumptions are—

(a)	X has chargeable profits for the relevant accounting period,

(b)	an apportionment of those profits falls to be made under section 747(3)

for that period, and

(c)	no reduction of those profits arises under section 751A, 751AA or

751AB.

(4)	“The relevant accounting period” means the accounting period of X in which

the time mentioned in sub-paragraph (2) falls.

15C(1)

The requirements of this paragraph are that—

(a)	no company was, at any time before the relevant time, a relevant UK

corporate investor in X,’.

David Gauke

119

Schedule  12,  page  189,  line  17,  leave out ‘such control’ and insert ‘the control of

persons resident in the United Kingdom’.

David Gauke

120

Schedule  12,  page  190,  leave out lines 16 to 19 and insert—

‘(c)	no company was, at any time during that accounting period, a relevant

UK corporate investor in X,

(d)	no company was, immediately before the relevant time, a relevant UK

corporate investor in X,’.

David Gauke

121

Schedule  12,  page  190,  line  26,  at end insert—

‘(2)	In determining for the purposes of sub-paragraph (1)(e)(ii) whether a company

is under the control of two or more bodies corporate taken together, a body

corporate which holds less than 10% of the issued ordinary shares of that

company is to be disregarded.

(3)	For the purposes of sub-paragraph (2), a body corporate is treated as holding

any shares held by persons who are connected or associated with the body

corporate.’.

David Gauke

122

Schedule  12,  page  192,  line  14,  at end insert—

‘“relevant UK corporate investor in X” has the meaning given by paragraph

15B(2);’.

David Gauke

123

Schedule  13,  page  199,  line  2,  leave out ‘the relevant profits’ and insert ‘that’.

Public Bill Committee: 24 May 2011

131

Finance (No. 3) Bill, continued

David Gauke

124

Schedule  13,  page  205,  leave out lines 3 to 12 and insert—

‘(b)	there is a transferred total opening negative amount in relation to the

business transferred.

(2)	In a case where the transferor had not made an election under section 18A before

the transfer took place, or such an election had not had effect before that time, the

“transferred total opening negative amount” is the amount that would have been

the total opening negative amount in the case of the transferor at the beginning of

the transferor’s first relevant accounting period if—

(a)	the only business carried on by the transferor was the business

transferred,

(b)	the transfer had not taken place,

(c)	the transferor’s first relevant accounting period had begun on the day

after the transfer day, and

(d)	any reference in section 18J(3) to the accounting period in which the

election is made were a reference to the period beginning with the

accounting period in which the transfer took place and ending with the

transfer day.

(3)	In a case where an election made by the transferor under section 18A had effect

before the transfer took place, the “transferred total opening negative amount”

is—

(a)	the amount that would have been the total opening negative amount in the

case of the transferor on the transfer day if the accounting period in which

the transfer took place had ended on that day (the “remaining total

opening negative amount”), less

(b)	the amount that would have been the remaining total opening negative

amount if the transferor had never carried on the business transferred.

But the transferred total opening negative amount cannot be below nil.

(4)	In a case where—

(a)	an election made by the transferee under section 18A first has effect after

the transfer takes place, and

(b)	the accounting period of the transferee in which the transfer took place is

an affected prior accounting period for the purposes of section 18J(2),

there is to be added to the adjusted foreign permanent establishments amount in

relation to that accounting period a negative amount equal to so much (if any) of

the transferred total opening negative amount as is attributable to profits or losses

arising after the beginning of the earliest affected prior accounting period of the

transferee.

(5)	In a case where an election made by the transferee under section 18A had effect

before the transfer took place, sections 18K to 18N have effect in relation to the

transferee and the transferred total opening negative amount as if—

(a)	any reference to the total opening negative amount were a reference to

the transferred total opening negative amount,

(b)	any reference to the first relevant accounting period were a reference to

the period beginning with the day after the transfer day and ending

immediately before the start of the next accounting period of the

transferee, and

(c)	the requirement in section 18L(2) that a streaming election be made at the

same time as the company’s election under section 18A did not apply.

(6)	Where for the purposes of this section it is necessary to apportion the profits and

losses for any accounting period to different parts of that period, that

apportionment is to be made on a just and reasonable basis.

Public Bill Committee: 24 May 2011

132

Finance (No. 3) Bill, continued

(7)	Any amount included in a transferred total opening negative amount is to be

disregarded in the application of sections 18J to 18N in the case of the transferor

after the transfer day.

(8)	In this section “the transfer day” means the day on which the transfer of the

business takes place.’.

David Gauke

125

Schedule  13,  page  206,  leave out from the beginning of line 43 to the end of line 6 on

page 207.

David Gauke

126

Schedule  13,  page  207,  line  8,  at end insert—

‘7A	In section 845(4) (exceptions to rule that transfer between company and related

party treated as being at market value)—

(a)	omit the “and” at the end of paragraph (c), and

(b)	after that paragraph insert—

“(ca)

section 848A (assets held for purposes of exempt

foreign permanent establishments), and”.

7B	After section 848 insert—

“848A

Assets held for purposes of exempt foreign permanent establishments

(1)	This section applies if—

(a)	subsection (1) of section 775 (transfers within a group) would

apply in relation to the transfer but for paragraph (c) of

subsection (4) of that section, and

(b)	the asset has not at all times when the election under section

18A had effect been held by the transferor wholly for the

purposes of a permanent establishment such as is mentioned

in that paragraph.

(2)	The transfer is treated for the purposes of this Part as being at the

following value—

where—

WDV is the tax written-down value of the asset, and

FPEA is the amount which, for the purposes of Chapter 3A of Part 2,

would in the case of the transferor be the foreign permanent

establishments amount attributable to the transfer for the accounting

period in which it took place if the transfer were at market value.”’.

David Gauke

127

Schedule  13,  page  208,  line  18,  at end insert ‘(with the result that that amount

includes the amount which for the purposes of that Chapter would in the case of the

company be the foreign permanent establishments amount attributable to the disposal for

the accounting period in which it was made if the disposal were not a no gain/no loss

disposal).

( )	For the purposes of this section a no gain/no loss disposal is one on which by

virtue of section 152 or any of the no gain/no loss provisions neither a gain nor a

loss accrues to the company making the disposal.”’.

Public Bill Committee: 24 May 2011

133

Finance (No. 3) Bill, continued

David Hanson

Kerry McCarthy

101

Schedule  13,  page  213,  line  31,  leave out ‘on the day on which this Act is passed’

and insert ‘when a full impact assessment on developing countries’ tax revenue has been

laid before and approved by the House of Commons.’.

David Gauke

128

Schedule  13,  page  215,  line  28,  at end insert—

‘33A (1)

This paragraph applies if—

(a)	section 18O of CTA 2009 (as inserted by this Schedule) applies in

relation to a transfer of business, and

(b)	(apart from this paragraph) the effect of subsection (4) of that section

would be that a relevant losses amount falling within paragraph

33(1)(a) would be ignored for the purposes of section 18J(2) of that

Act.

(2)	There is to be added to the adjusted foreign permanent establishments amount

in relation to the accounting period of the transferee in which the transfer took

place a negative amount equal to that relevant losses amount.’.

David Gauke

129

Schedule  17,  page  277,  line  23,  leave out from ‘adjustment’ to end of line 25 and

insert ‘is reflected in the closing amount the amount of the adjustment is to be added to

the closing amount.

(8D)	But no amount is to be added under subsection (8C) by reason of an adjustment

made in consequence of the scheme administrator satisfying a liability under

section 237B in a case where subsection (6) of that section applied.”’.

David Gauke

130

Schedule  17,  page  280,  line  2,  after ‘reduction’ insert ‘(to the extent that it is not

reflected in an amount added under subsection (8A))’.

David Gauke

131

Schedule  17,  page  280,  line  16,  leave out from ‘event 2,’ to end of line 17 and insert

‘the annual rate of the pension to which the individual became entitled,’.

David Gauke

132

Schedule  17,  page  280,  line  27,  leave out from ‘adjustment’ to end of line 28 and

insert ‘is reflected in PE or LSE the amount of the adjustment is to be added to PE or LSE.

(8D)	But no amount is to be added under subsection (8C) by reason of an adjustment

made in consequence of the scheme administrator satisfying a liability under

section 237B in a case where subsection (6) of that section applied.”’.

© Parliamentary copyright	Revised 24 May 2011