Amendments proposed to the Finance Bill - continued House of Commons

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Investment companies and trading companies

   

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

NC10

To move the following Clause:—

    '.—(1)   Schedule A1 to the Taxation of Chargeable Gains Act 1992 shall be amended as follows—

    (2)   In paragraph 6, subparagraphs (1)(a), (1A), (2)(a), (2A), (3)(a), (4), (5) and (6) shall cease to have effect.

    (3)   In paragraph 6(7), the words in brackets shall cease to have effect.

    (4)   In paragraph 22(1), the definitions of "trade", "trading company" and "trading group" shall cease to have effect.

    (5)   For paragraph 6A there shall be substituted—

      "6A(1) A company does not rank as a qualifying company for the purposes of paragraph 6 by reference to an individual at any time when it is his Private Investment Company;

      (2) A Private Investment Company is a company as a whole, or substantially the whole, of whose share capital is held by an individual or persons connected with him;

      (3) A company is not a Private Investment Company if, notwithstanding the previous subparagraph, it has five or more full time employees other than the individual concerned in subparagraph (1)."

    (6)   This section shall have effect from 6 April 2002.'.


Schedule D Cases I and II

   

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

NC11

To move the following Clause:—

    '.—   After section 577A of the Taxes Act 1988 insert—

    "577B   Expenditure involving the purchase of favours or honours

    (1)   Following each financial year the Treasury shall report to Parliament on the level of expenditure constituting payments in return for favours incurred during that year by any person subject to tax under Case I or II of Schedule D. The report shall give details of the aggregate amount of such expenditure and the number of persons making payments in return for favours.

    (2)   For the purposes of sub-section (1) above, expenditure constitutes a payment in return for favours if it is a gift or payment, whether allowable or not as a deduction for the purposes of section 74 (general rule as to deductions not allowable), made to a qualifying political party where the person mentioned in subsection (1) above makes that gift or payment with a view to obtaining—

      (a) any change in law (whether by statute, regulation or otherwise); or

      (b) any decision, resolution, ruling or determination by a public body;

       where the purpose or one of the purposes of the person mentioned in subsection (1) above was or might be expected to be the obtaining of a benefit (whether that benefit is pecuniary in nature or otherwise).

    (3)   For the purpose of this section, a political party shall be a qualifying political party if it is a political party for the purposes of section 24 of the Inheritance Act 1984 whose leader (determined by reference to its constitutional documents) is a Minister of the Crown at the time of the making of the payment.

    (4)   For the purposes of this section a "public body" means the Crown or any government or public or local authority of the United Kingdom.

    (5)   Without prejudice to the generality of sub-paragraph (2)(b) above, a decision, resolution, ruling or determination includes:

      (a) the exemption of motor car racing from any prohibition on payments received directly or indirectly from manufacturers of tobacco products (as defined in the Tobacco Products Duty Act 1979) in return for the placing of advertisements;

      (b) a determination that a pornographer is a fit and proper person to become the proprietor of a newspaper;

      (c) a decision that a person should receive a contract to produce or procure that vaccines are available for a public body;

      (d) a recommendation of the conferment of honours, such as (but not limited to) a knighthood, on a person (or if the person concerned is a company, an officer, employee of that person or a shareholder in that person);

      (e) a decision that a public body will procure goods or services over the internet;

      (f) entry into finance or asset transfer arrangements with any person for the provision by them of any public services, or the construction or renovation of assets to be used in any public service;

      (g) the criminalisation of any traditional rural activity on purported grounds of animal welfare;

      (h) a recommendation of the making of loans (whether by any public body or not) for the purpose of acquiring steel manufacturing concerns in less developed countries;

      (i) lobbying by a Minister of the Crown that a foreign government not prohibit the sale of a media business;

      (j) a decision to permit any person to engage in the supply of energy;

      (k) the conferment of a British passport on any person.

    (6)   This section shall apply to the making of any qualifying payment on or after the day on which this Act is passed.".'.

Gift-aid: carry-forward of excess allowances
   

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

NC12

*To move the following Clause:—

    '.—(1)   Section 25 of the Finance Act 1990 shall be amended as follows with effect from the year 2002-03.

    (2)   After subsection (6) of that section insert—

          "(6A)   For the purposes of the Income Tax Acts and the Taxation of Chargeable Claims Act 1992, if the basic rate limit for the year of assessment referred to in subsection (6) above, as increased by subsection (6)(a)(ii) above, exceeds the income and the capital gains of the donor which are chargeable at the starting rate, lower rate or basic rate for that year of assessment, the excess, in so far as it arises from the operation of subsection (6)(a)(ii), shall be carried forward to the next following year of assessment and the basic rate limit of that year shall be increased by the amount of the excess so carried forward, and if the basic rate limit of the next following year, as so increased, exceeds the income and capital gains of the donor which are chargeable at the starting rate, lower rate or basic rate for that year of assessment, the excess so arising for that year shall be carried forward and so on, until no excess remains.

          (6B)   In a case where an excess is carried forward under subsections (6A) above, the reference to profits or gains chargeable to income tax or capital gains tax in subsection (2)(i)(i) above shall include a reference to profits or gains chargeable to income tax and capital gains tax for any year of assessment to which such an excess is so carried forward."

    (3)   Section 587B of the Taxes Act 1988 shall be amended as follows with effect from the year 2002-03.

    (4)   After subsection (2) of that section insert—

          "(2A)   In the case of a disposal by an individual, if the relief that may be claimed for the year of assessment referred to in subsection (2)(a)(i) above exceeds the total income of the individual for that year of assessment, the excess after making a claim for that year of assessment and the individual may make a claim for relief under this section for the amount of the excess in the next following year, and if the relief that may be claimed in the next following year, after making such a claim, exceeds the total income of the individual for that year of assessment, the excess shall be carried forward to the next following year and so on until no excess remains.

          (2B)   In the case of a disposal by an individual, if the relief that may be claimed for a given year of assessment under subsection (2) or (2A) above exceeds the total income of the individual for that year of assessment, the individual may make a claim for that year of assessment to treat the excess as increasing the annual exempt amount for that year for the purposes of charging capital gains tax under section 3(2) of the Taxation of Chargeable Gains Act 1992. To the extent of that relief is so given as a result of such a claim, the amount of any excess which may be carried forward to the next following year under subsection (2A) shall be reduced.".'.


NEW SCHEDULE

   

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

NS1

To move the following Schedule:—

    'Chargeable gains: set off of losses treated as accruing to settlors

    Introduction

    1   The Taxation of Chargeable Gains Act 1992 (c. 12) is amended in accordance with paragraphs 2 to 6.

    Section 2

    2(1)   Section 2 (persons and gains chargeable to capital gains tax, and allowable losses) is amended as follows.

    (2)   In subsection (2) (computation of capital gains tax), for the word "and" at the end of paragraph (a) substitute—

      "(aa) any attributed loss accruing to that person, and".

    (3)   After that subsection insert—

          "(2A)   Where on a disposal a loss accrues to trustees of a settlement in circumstances where, had it been a gain that gain would have been attributed to another person by virtue of sections 77 or 86, then that person may elect for that loss to be an attributed loss accruing to that person for the purposes of subsection (2) above for the year of assessment in which the disposal occurs.

          (2B)   Attributed losses must be deducted first from any gains accruing to a person by virtue of sections 77 and 86 chargeable for the year in question before they may be deducted from any other chargeable gain.".

    Section 77

    3   In section 77 (charge on settlor with interest in settlement), in subsection (1) at the end insert "No deduction of any loss shall be made by the trustees in respect of any disposal which gives rise to a loss which the settlor informs them is to be regarded as an attributed loss for the purposes of section 2(2).".

    Section 86

    

4   In section 86 (attribution of gains to settlers with interest in non-resident or dual resident settlements), after subsection (1), insert—

          "(1A)   For the purposes of subsection (1)(e) above no account shall be taken of any disposal which gives rise to a loss which the settlor informs the trustees is to be regarded as an attributed loss for the purposes of section 2(2).".

    

Section 86A

    

5   In section 86A (attribution of gains to settlor in section 10A cases), after subsection (8) insert—

          "(8A)   For the purposes of this section, no account shall be taken of any disposal which gives rise to a loss which the settlor informs the trustees is to be regarded as an attributed loss for the purpose of section 2(2).".

    

Section 87

    

6   In section 87 (attribution of gains to beneficiaries), before subsection (4) insert—

          "(3Z)   In making any computations under this section, no account shall be taken of any disposal which gives rise to a loss which the settlor informs the trustees shall be regarded as an attributed loss for the purpose of section 2(2).".

    

Commencement

    7   This Schedule applies to persons and gains chargeable to capital gains tax and allowable losses in the year 2003-04 and subsequent years of assessment.

    

Election for Schedule to apply for years earlier than 2003-04

    8(1)   This Schedule also applies, if the person so elects, in relation to chargeable gains and attributed losses accruing to a person in any of the years of assessment 2000-01, 2001-02 and 2002-03.

    (2)   An election under this paragraph—

      (a) must be made by notice given to an officer of the Board no later than 31st January 2005;

      (b) where attributed losses may be regarded as arising in respect of two or more settlements, may be restricted to those regarded as arising in respect of the settlement or settlements specified in the election.

    (3)   All such adjustments shall be made, whether by way of discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to an election under this paragraph.

    (4)   Where—

      (a) a person makes an election under this paragraph for any one or more of the years of assessment 2000-01, 2001-02 and 2002-03, and

      (b) the effect of the election, or (as the case may be) both or all of them taken together, is to increase the total amount of tax that the person is entitled to recover from the trustees of a particular settlement for those three years under section 78(1)(a) of the Taxation of Chargeable Gains Act 1992 (c. 12) or paragraph 6 of Schedule 5 to that Act,

       the trustees of that settlement must join in the election, or (as the case may be) each of them that has that effect or contributes to it.'.


   

Mr Andrew Smith

154

Schedule     39,     page     483,     line     47,     column 2, leave out '17(5)' and insert '17—

      (a) in sub-paragraph (5),'.

   

Mr Andrew Smith

155

Schedule     39,     page     483,     line     51,     column 2, at end insert—

      '(b) sub-paragraphs (6) and (7).'.

   

Mr Andrew Smith

156

Schedule     39,     page     483,     line     52,     column 2,     leave out '18(4),' and insert '18—

      (a) in sub-paragraph (1), the word "and" immediately preceding paragraph (b);

      (b) in sub-paragraph (4),'.


 
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