Amendments proposed to the Finance Bill - continued House of Commons

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Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

184

*Schedule     29,     page     405,     line     44,     at end insert—

    '71A   (1) This paragraph makes provision for the application of this Schedule where a controlling interest is acquired in a company (the first company) by another company (the second company), such that the first company becomes a member of a group of companies of which the second company—

      (a) was already a member; or

      (b) is or becomes the principal company.

    (2)   Immediately before the time when the second company acquires a controlling interest in the first company, where the first company owns intangible fixed assets, the first company shall immediately before that time be deemed to have disposed of those intangible fixed assets for a sum equal to such amount as shall result in neither a gain nor loss for capital gains tax purposes nor a credit or debit for the purposes of this Schedule as the case may be.

    (3)   Immediately after the time when the second company acquires a controlling interest in the first company, such part of the expenditure (the apportioned expenditure) by the second company on the acquisition of a controlling interest in the first company shall be treated as expenditure on acquiring the intangible fixed assets of the first company, as shall be just and reasonable. The tax written down value of the intangible fixed assets of the first company shall be deemed to be equal to the expenditure so apportioned.

    (4)   The third person is a company or other person from whom the second company acquired the controlling interest in the first company. Where this paragraph applies—

      (a) the third person shall be deemed to have disposed of an intangible fixed asset for a sum equal to the expenditure deemed to have been incurred by the second company pursuant to sub-paragraph (3) above;

      (b) the disposal by the third person of the intangible fixed asset pursuant to this sub-paragraph (4) shall be deemed to be a separate asset from the shares in the first company; and

      (c) any chargeable gains that accrues to the third person as a result of the disposal of the shares in the first company shall be treated for all the purposes of the Tax Acts as reduced by an amount equal to the expenditure deemed to have been incurred by the second company pursuant to sub-paragraph (3) above (and an allowable loss will be deemed to be increased by a like amount, as the case may be).

    (5)   The intangible fixed asset deemed to have been disposed of by the third person for the purposes of sub-paragraph (4) above shall be treated as having been created or acquired (as the case may be) at the time that the intangible fixed asset owned by the first company was acquired or created by the first company.

    (6)   In sub-paragraph (2), (3) and (5) above, references to the first company shall include references to one or more companies that were not in the same group as the second company before its acquisition of a controlling interest in the first company but as a result of that acquisition are in the same group as the second company after the acquisition.

    (7)   For the purposes of this paragraph, the second company acquires a controlling interest in the first company if the two companies are not in the same group and there is an acquisition by the second company of shares in the first company such that those two companies are in the same group immediately after the acquisition.

    (8)   This paragraph shall apply only if an election in writing is made jointly by the second company and the third person, such election to be made within the period commencing with the acquisition of the controlling interest in the first company and ending two years later.'.


   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

185

*Clause     104,     page     81,     line     29,     after 'assets', insert 'to a connected person'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

186

*Clause     104,     page     81,     line     25,     leave out Clause 104.


   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

105

Schedule     32,     page     453,     line     3,     after 'effect', insert 'in the corresponding underwriting year'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

106

Schedule     32,     page     453,     line     16,     at end insert 'and for the purposes of section 172 above shall be treated as a payment made at the time the contract takes effect.'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

107

Schedule     32,     page     454,     line     5,     after 'effect', insert 'in the accounting period'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

108

Schedule     32,     page     454,     line     22,     after 'contract', insert 'at the time the contract takes effect'.


   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

187

*Clause     86,     page     60,     line     35,     at end insert—

    '(1A)   Section 539 (introductory) is amended as follows.

    (1B)   In subsection (1) (scope of Chapter II of Part XIII of the Taxes Act 1988) after "policies of life insurance, contracts for life annuities and capital redemption policies", insert "but any gain falling to be treated as taxable income by virtue of this Chapter shall be disregarded from total income in applying section 257(5) (reduction in personal allowance for elderly taxpayers by reference to total income).".'.


   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

188

*Clause     93,     page     70,     line     9,     leave out '1st October 2002' and insert 'the day on which this Act is passed.'.


   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

189

*Clause     94,     page     70,     line     35,     leave out '1st October 2002' and insert 'the day on which this Act is passed.'.


   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

55

Clause     95,     page     70,     line     40,     leave out 'of a royalty'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

56

Clause     95,     page     70,     line     41,     after 'section 349(1)', insert 'or (2)'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

57

Clause     95,     page     71,     line     4,     after 'section 349(1)', insert 'or (2)'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

58

Clause     95,     page     71,     line     17,     leave out from 'made;' to end of line 24.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

190

*Clause     95,     page     71,     line     24,     at end insert ', or

      (c) any payment being yearly interest of money chargeable to tax under Case III of Schedule D (as that Schedule has effect apart from the modification made for the purposes of corporation tax by section 18(3A).'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

59

Clause     95,     page     71,     line     42,     after 'section 349(1)' insert 'or (2)'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

60

Clause     95,     page     72,     line     2,     after 'section 349(1)', insert 'or, as the case may be, section 349(2)'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

191

*Clause     95,     page     72,     line     9,     leave out '1st October 2002' and insert 'the day on which this Act is passed.'.


   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

90

Clause     96,     page     72,     line     17,     leave out 'and'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

91

Clause     96,     page     72,     line     18,     at end insert '; and

      (f) a qualifying work of art'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

98

Clause     96,     page     72,     line     23,     leave out 'where' and insert 'whether or not'.

   

Mr Michael Howard
Mr John Bercow
Mr Howard Flight
Mr Christopher Chope
Mr Peter Luff

92

Clause     96,     page     72,     line     32,     at end insert—

    '(9D)   In this section "qualifying work of art" shall mean any object or group of objects designated by the Secretary of State, either specifically or as a class, and the provisions of section 31(1)(a), (aa), and (e) of the Inheritance Tax Act 1984 shall apply for the purposes of determining the category or class of object to be so specified as they apply for the purposes of that Act.'.

 
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Prepared 7 Jun 2002