Amendments proposed to the Finance Bill - continued House of Commons

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Exemption from Capital Gains Tax

   

Mr Richard Ottaway
Mr James Clappison
Mr Howard Flight [R]
Mr Peter Luff

NC10

To move the following Clause:—

    '—. In section 271(1) of the Taxation of Chargeable Gains Act 1992 (concerning exemption from CGT) after subsection (j) insert—

    "(k) any gain accruing to a UK resident company, or to a non-resident company chargeable to UK corporation tax under section 10 of this Act, in respect of the disposal of a substantial shareholding in a trading company or a member of a trading group. For the purposes of this subsection a substantial shareholding is a shareholding of 20% or more held for a period of a year or more.".'.


Substantial shareholdings: deferral of capital gains tax

   

Mr Richard Ottaway
Mr James Clappison
Mr Howard Flight [R]
Mr Peter Luff

NC11

To move the following Clause:—

    '.—In section 155 of the Taxation of Chargeable Gains Act 1992 (concerning classes of assets for roll-over relief) Class 9, after Head B, insert new subsection.

    "CLASS 9

    Substantial shareholdings in trading companies or members of a trading group. For the purposes of this section, a substantial shareholding is a shareholding of 20 per cent. or more held for a period of a year or more.".'.


Environmental protection rebates scheme

   

Mr David Heath
Mr Matthew Taylor
Mr Edward Davey
Mr A. J. Beith
Mr Malcolm Bruce
Mrs Ray Michie

NC12

To move the following Clause:—

    (1) The Treasury may by order made by statutory instrument introduce a scheme of rebates to those persons charged with the aggregates levy and who have employed environmental protection measures in the process of commercial exploitation of aggregate;

    (2) Environmental protection measures in this part are those measures which the Secretary of State shall by order determine to be in the interests of protecting or enhancing the environment;

    (3) No rebate under this scheme shall be made unless the environmental protection measures:

    (a) relate directly to the process of commercial exploitation of aggregate; and

    (b) shall have been verified and certified by an external body prescribed for that purpose by the Secretary of State;

    (4) A statutory instrument containing an order under this section shall not be made without prior consultation with those persons appearing to the Secretary of State to be representative of those having an interest in:

            (i) the commercial exploitation of aggregate;

            (ii) the protection of the natural environment;

            (iii) the local communities affected.

    (5) A statutory instrument containing an order under this section shall be laid before Parliament and approved by resolution of the House of Commons.'.


Extension of carry back of trading losses

   

Mr Charles Kennedy
Mr Matthew Taylor
Mr Colin Breed
Mr Edward Davey
Mr John Burnett
Mr Malcolm Bruce

NC13

To move the following Clause:—

    '(1) Section 393A Income and Corporation Taxes Act 1988 (set-off of trading losses against profits of previous three years) shall be amended in accordance with subsections (2) and (3) below.

    (2) In subsection (2), after "(2A)", and before "below", insert the words "and (2D)".

    (3) After subsection (2C), insert the following new subsection—

    "(2D) this subsection shall have effect in relation to any loss incurred by a company which is not large (as defined by SI 1998/3175 as subsequently amended)—

    (a) as if in subsection (2) above, the words 'three years' were substituted for the words 'twelve months'; and

    (b) which is incurred in any accounting periods ending in the period beginning on 1 April 2000 and ending on or before 31 March 2003.".'.


Extension of carry back of excess interest costs

   

Mr Charles Kennedy
Mr Matthew Taylor
Mr Colin Breed
Mr Edward Davey
Mr John Burnett
Mr Malcolm Bruce

NC14

To move the following Clause:—

    '(1) Chapter II of Part IV of the Finance Act 1996 (loan relationships) shall be amended in accordance with subsections (2) and (3) below.

    (2) In paragraph 3(7) of Schedule 8 (permitted period of twelve months for carry-back of deficits), after "means" and before "the period" insert "subject to paragraph 3(7A) below".

    (3) After paragraph 3(7) of Schedule 8, insert the following new paragraph—

    "3(7A) This paragraph shall have effect in relation to a deficit, incurred by a company which is not large (as defined by SI 1998/3175 as subsequently amended)—

    (a) as if in paragraph 3(7) above, the words 'three years' were substituted for each case of the words 'twelve months'; and

    (b) which is incurred in any accounting periods ending in the period beginning on 1 April 2000 and ending on or before 31 March 2003.".'.


Supply of warden services

   

Mr Richard Ottaway
Mr Michael Jack

NC15

To move the following Clause:—

    'To Group 7 (Health and Welfare) of Schedule 9 to the Value Added tax Act 1994 there shall be added after item 11—

    "12. The supply of, or the supply of staff to perform, warden services to the occupier or occupiers, landlord or owner of the sheltered housing accommodation.";

    and there shall be added after Note (7)—

    "(8) For the purposes of item 12—

    "(a) 'warden services' means services which include or are directly related to the care and assistance in sheltered housing accommodation of the occupier or occupiers (not necessarily being or including personal care and assistance) and the monitoring, management and upkeep of the estate of the sheltered housing accommodation and building or buildings and grounds of which it forms part.

    (b) 'occupier' means any lawful occupier, tenant, licensee or similar person.

    (c) 'sheltered housing accommodation' means a self-contained dwelling being purpose built or converted principally for the residence of elderly persons and which forms part of a scheme comprising a group of similar dwellings on the same site.".'.


NEW SCHEDULES

   

Mr Andrew Smith

NS2

To move the following Schedule:—

'SCHEDULE

Limited liability partnerships: investment LLPs and property investment LLPs

Meaning of "investment LLP" and "property investment LLP"

    1.—(1) In Part XIX of the Taxes Act 1988 (supplementary provisions), after section 842A insert—

"Meaning of "investment LLP" and "property investment LLP".842B.—(1) In this Act—

    (a) an "investment LLP" means a limited liability partnership whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom; and

    (b) a "property investment LLP" means a limited liability partnership whose business consists wholly or mainly in the making of investments in land and the principal part of whose income is derived therefrom.

    (2) Whether a limited liability partnership is an investment LLP or a property investment LLP is determined for each period of account of the partnership.

    A "period of account" means any period for which accounts of the partnership are drawn up.".

    (2) In section 832(1) of that Act (interpretation of the Tax Acts), at the appropriate place insert—

          "investment LLP" and "property investment LLP" have the meaning given by section 842B;".

    (3) In section 288(1) of the Taxation of Chargeable Gains Act 1992 (interpretation), at the appropriate place insert—

          "property investment LLP" has the meaning given by section 842B of the Taxes Act;".

Pension funds, &c.: exclusion of exemptions from tax in case of income from property investment LLPs

    2. In Chapter VI of Part XIV of the Taxes Act 1988 (pension schemes, &c.: miscellaneous provisions), after section 659C insert—

"Treatment of income from property investment LLPs.659D.—(1) The exemptions specified below do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP.

    (2) The exemptions are those provided by—

    section 592(2) (exempt approved schemes),

    section 608(2)(a) (former approved superannuation funds),

    section 613(4) (Parliamentary pension funds),

    section 614(3) (certain colonial, &c. pension funds),

    section 614(4) (the Overseas Service Pension Fund),

    section 614(5) (other pension funds for overseas employees),

    section 620(6) (retirement annuity trust schemes), and

    section 643(2) (approved personal pension schemes).

    (3) The income to which subsection (1) above applies includes relevant stock lending fees, in relation to any investments, to which any of the provisions listed in subsection (2) above would apply by virtue of section 129B.

    (4) Section 659A (treatment of futures and options) applies for the purposes of subsection (1) above.".

Pension funds, &c.: exclusion of exemption from trusts rate in case of income from property investment LLPs

    3.—(1) Section 686 of the Taxes Act 1988 (accumulation and discretionary trusts: special rates of tax) is amended as follows.

    (2) In subsection (2)(c) (income excluded from trusts rate or Schedule F trusts rate), before the words "income from investments, deposits or other property" (which relate to income of certain pension funds or schemes) insert ", subject to subsection (6A) below,".

    (3) After subsection (6) insert—

            "(6A) The exemptions provided for by subsection (2)(c) above in relation to income from investments, deposits or other property held as mentioned in sub-paragraph (i) or (ii) of that paragraph do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP.".

Pension funds, &c.: exclusion of exemptions in case of gains from property investment LLPs

    4. In section 271 of the Taxation of Chargeable Gains Act 1992 (miscellaneous exemptions), after subsection (11) insert—

            "(12) Subsection (1)(b), (c), (d), (g) and (h) and subsection (2) above do not apply to gains accruing to a person from the acquisition and disposal by him of assets held as a member of a property investment LLP.".

Insurance companies: treatment of income or gains arising from property investment LLP

    5. In Chapter I of Part XII of the Taxes Act 1988 (insurance companies, &c.), after section 438A insert—

"Income or gains arising from property investment LLP.438B.—(1) Where an asset held by an insurance company as an asset of its long term business fund is held by the company as a member of a property investment LLP, the policy holders' share of any income arising from, or chargeable gains accruing on the disposal of, the asset which—

    (a) is attributable to the company, and

    (b) would otherwise be referable by virtue of section 432A to pension business,

    shall be treated for the purposes of the Corporation Tax Acts as referable to basic life assurance and general annuity business.

    (2) For the purposes of this section the property business of the insurance company for the purposes of which the asset is held shall be treated as a separate business.

    "Property business" means a Schedule A business or overseas property business.

    (3) Where (apart from this subsection) an insurance company would not be carrying on basic life assurance and general annuity business, it shall be treated as carrying on such business if any income or chargeable gains of the company are treated as referable to the business by virtue of subsection (1) above.

    (4) A company may be charged to tax by virtue of this section—

    (a) notwithstanding section 439A, and

    (b) whether or not the income or chargeable gains to which subsection (1) above applies is taken into account in computing the profits of the company for the purposes of any charge to tax in accordance with Case I of Schedule D.

    (5) The policy holders' share of income or chargeable gains to which subsection (1) above applies—

    (a) shall not be treated as relevant profits for the purposes of section 88 of the Finance Act 1989 (corporation tax on policy holders' fraction of profits), and

    (b) shall not be treated as part of the BLAGAB profits for the purposes of section 88A of that Act (lower corporation tax rate on certain profits);

    but the whole of the income or gains to which that subsection applies shall be chargeable to tax at the rate provided by section 88 of that Act.

    (6) So far as income is brought into account as mentioned in section 83(2) of the Finance Act 1989, sections 432B to 432F (apportionment of receipts brought into account) have effect as if subsection (1) above did not apply.

Determination of policy holders' share for purposes of s.438B.438C.—(1) For the purposes of section 438B the policy holders' share of any income or chargeable gains to which subsection (1) of that section applies is what remains after deducting the shareholders' share.

    (2) The shareholders' share is found by applying to the whole the fraction—

A

B

    where—

    A is the amount of the profits of the company for the period which are chargeable to tax under section 436; and

    B is an amount equal to the excess of—

            (a) the amount taken into account as receipts of the company in computing those profits (apart from premiums and sums received by virtue of a claim under a reinsurance contract), over

            (b) the amounts taken into account as expenses in computing those profits.

    (3) Where there is no such excess as is mentioned in subsection (2) above, or where the profits are greater than any excess, the whole of the income or gains is treated as the shareholders' share.

    (4) Subject to that, where there are no profits none of the income or gains is treated as the shareholders' share.".

Insurance companies: double taxation relief

    6. In section 804B of the Taxes Act 1988 (double taxation relief: company carrying on more than one category of life assurance business: restriction of credit)—

    (a) in subsection (2) after "sections 432ZA to 432E" insert "or section 438B", and

    (b) in subsection (4) after "section 432A" insert "or 438B".

Insurance companies: capital allowances

    7. In section 545 of the Capital Allowances Act 2001 (life assurance business: investment assets), for subsection (3) substitute—

            "(3) Any allowance under this Act in respect of an investment asset shall be treated as referable to the category or categories of business to which income arising from the asset is or would be referable.

            If income so arising is or would be referable to more than one category of business, the allowance shall be apportioned in accordance with sections 432ZA to 432E, or section 438B, of ICTA in the same way as the income.".

Friendly societies: exclusion of exemptions from tax

    8.—(1) In section 460 of the Taxes Act 1988 (friendly societies: exemption from tax in respect of life or endowment business), in subsection (2) (restrictions on exemption) after paragraph (ca), and before the word "and" following that paragraph, insert—

          "(cb) shall not apply to profits arising from investments, deposits or other property held as a member of a property investment LLP;".

    (2) In section 461 of that Act (registered friendly societies: exemption from tax on other business), after subsection (3) insert—

            "(3A) The exemption conferred by subsection (1) above does not apply to profits arising from investments, deposits or other property held as a member of a property investment LLP.".

    (3) In section 461B of that Act (incorporated friendly societies: exemption from tax on other business), after subsection (2) insert—

            "(2A) Subsection (1) above shall not apply to any profits arising or accruing to the society from or by reason of its membership of a property investment LLP.".

Exclusion of relief on loans to buy into investment LLP

    9. In section 362(2) of the Taxes Act 1988 (interest relief on loans to buy into partnership: conditions to be met), in paragraph (a) for the words from "otherwise" to "1907" substitute—

            "otherwise than—

                  (i) as a limited partner in a limited partnership registered under the Limited Partnerships Act 1907, or

                  (ii) as a member of an investment LLP;".'

 
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