Draft Limited Liability Partnerships Regulations 2001 Draft Limited Liability (fees) Regulations 2001

[back to previous text]

Mr. Burnett: I do not want to ask further questions, but I want an answer to one unanswered question. I congratulate the Minister, who has jumped through hoops this afternoon. I want to take him back to the subject of capital gains tax and rollover relief, which I know enthrals him. If an asset is rolled over into an LLP, and, thereafter, the LLP ceases to trade, or its business activity ceases, is there a crystallisation of the charge to capital gains tax? It might help the Minister if I add the point that, clearly, there is a charge if the LLP goes into liquidation. However, we are considering not liquidation but the cesser of a trade or the cesser of its business activities. In those circumstances, will there be a crystallisation of a charge to capital gains tax?

5.51 pm

Dr. Howells: Clearly, the detail of tax is a matter for Treasury Ministers. I cannot confirm that the gain on an asset rolled over into an LLP will not crystallise when the LLP ceases to trade. If I gave that confirmation, the way would be open to move assets into LLPs and to engineer the cessation of trade to avoid a capital gains tax liability. For that little gem, the hon. Member for Torridge and West Devon owes me a lunch.

Question put and agreed to.

Resolved,

    That the Committee has considered the draft Limited Liability Partnerships Regulations 2001.

Draft Limited Liability Partnerships (Fees) Regulations 2001

The Chairman: I am required to put the question relating to the second statutory instrument. Whether or not the question is agreed, I am required to report the statutory instrument to the House.

Question, That the Committee has considered the draft Limited Liability Partnerships (Fees) Regulations 2001, put and negatived.

Committee rose at seven minutes to Six o'clock.

The following Members attended the Committee:
Cunningham, Mr. Jim (Chairman)
Burnett, Mr.
Corbyn, Mr.
Davidson, Mr.
Gibb, Mr.
Gray, Mr.
Howells, Dr.
Jackson, Mr. Robert
Michie, Mr. Bill
Organ, Mrs.
Pope, Mr.
Temple-Morris, Mr.
Walley, Ms

 
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