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Films: restrictions of relief to films genuinely intended for theatrical release


Amendment made: No. 13, in page 76, line 13, leave out Clause 99.—[Dawn Primarolo.]

Clause 114

Contracts for the sale of an estate or interest in land chargeables as conveyances


Amendments made: No. 19, in page 92, line 9, leave out from first "of" to "exceeds" in line 10 and insert "the consideration".
No. 20, in page 92, line 13, leave out from "consideration" to "exceeds" in line 14.
No. 21, in page 93, line 1, leave out subsections (6) and (7).
No. 22, in page 93, line 15, at end insert—

'( ) Schedule [Stamp duty: contracts chargeable as conveyances: supplementary provisions] contains provisions supplementing this section.'.
No. 23, in page 93, line 16, leave out subsection (9).
No. 24, in page 93, line 17, leave out "applies" and insert "and that Schedule apply".—[Dawn Primarolo.]

New Schedule 1

Stamp duty: contracts chargeable as conveyances: supplementary provisions—

Subsales


Introduction

1 This Part of this Schedule has effect for affording relief from duty under section 114 (contracts chargeable as conveyances) on a subsale.

Meaning of "subsale"

2 For the purposes of this Schedule there is a subsale—

(a) where the purchaser under a contract or agreement for the sale of an estate or interest in land in the United Kingdom ("the original sale"), without having obtained a conveyance of the property contracted to be sold, contracts to sell the whole or part of the property to another person, or

(b) where the sub-purchaser under a subsale of an estate or interest in land in the United Kingdom, without having obtained a conveyance of the property contracted to be sold, contracts to sell to another person the whole or part of the property contracted to be sold by the original sale,

so as to entitle that person to call for a conveyance from the original seller.

Relief where duty paid on original sale or earlier subsale

3 (1) Where duty under section 114 has been paid—

(a) on the original sale, or

(b) on an intervening subsale,

duty under that section on a subsale, or subsequent subsale, is chargeable only in respect of the amount (if any) by which the chargeable consideration on that transaction exceeds the chargeable consideration on the earlier transaction.

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(2) If there is more than one such earlier transaction on which duty has been paid, the reference in sub–paragraph (1) to the chargeable consideration on the earlier transaction shall be read as a reference to the higher or highest amount of chargeable consideration on which duty has been paid.

(3) If the subsale does not relate to the whole of the property to which the earlier transaction related, the references in sub-paragraphs (1) and (2) to the chargeable consideration on an earlier transaction shall be read as references to an appropriate proportion of that consideration.

(4) What is an appropriate proportion shall be determined on a just and reasonable basis having regard to the subject matter of the subsale and of the earlier transaction.

(5) For the purposes of this paragraph the chargeable consideration on a transaction is the consideration that falls to be brought into account in determining the duty chargeable on it.

(6) Where under this paragraph duty on a subsale is chargeable in respect of part only of the consideration for the subsale, it is chargeable at the rate that would be applicable if the whole of the chargeable consideration on the subsale were taken into account.
Subsequent conveyance or transfer

Introduction

4 (1) This Part of this Schedule has effect for affording relief where ad valorem duty is chargeable both—

(a) under section 114 on a contract or agreement ("the original sale"), and

(b) on a subsequent conveyance or transfer by the original seller to the purchaser, or a sub–purchaser, in conformity with that contract or agreement.

(2) References in this Part to the purchaser under the original sale, or a sub–purchaser under a subsale, include a person by whom the rights of the purchaser, or a sub–purchaser, are exercisable by virtue of any assignment (in Scotland, assignation) or agreement (other than a subsale).

Conveyance or transfer of property contracted to be sold

5 (1) Where the original seller conveys the whole of the property contracted to be sold—

(a) to the purchaser, or

(b) to a sub-purchaser in circumstances in which section 58(4) of the Stamp Act 1891 (c. 39) applies (conveyance chargeable only on consideration moving from sub-purchaser),

the conveyance or transfer is chargeable with duty only to the extent (if any) that the ad valorem duty chargeable on it (apart from this sub-paragraph) exceeds the duty paid under section 114 on the original sale together with the amount of any such duty paid on an intervening subsale.

(2) Where—

(a) the original seller conveys the property contracted to be sold to different sub-purchasers in parts or parcels, and

(b) section 58(5) of the Stamp Act 1891 (c. 39) applies (conveyance chargeable only on consideration moving from sub-purchaser),

the conveyance or transfer of each part or parcel is chargeable with duty only to the extent (if any) that the ad valorem duty chargeable on it (apart from this sub-paragraph) exceeds an appropriate proportion of the ad valorem duty paid on the original sale together with an appropriate proportion of any such duty paid on an intervening subsale.

(3) What is an appropriate proportion shall be determined on a just and reasonable basis having regard to the subject matter of the conveyance or transfer and of the earlier transaction.

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(4) Where sub-paragraph (1) or (2) applies to reduce or extinguish the duty payable on a conveyance or transfer, the Commissioners shall, upon application and upon production of the earlier instrument or instruments, duly stamped, either—

(a) denote the payment of the whole of the ad valorem duty upon the conveyance or transfer, or

(b) transfer to the conveyance or transfer the ad valorem duty paid on the earlier instrument or instruments.

Repayment of duty in certain cases

6 (1) Where—

(a) duty is paid under section 114 on the original sale,

(b) one or more conveyances or transfers are executed in conformity with that contract or agreement so that the whole of the property contracted to be sold is duly conveyed to a purchaser or to one or more sub-purchasers,

(c) those conveyances or transfers are all duly stamped, and

(d) the aggregate amount of the duty that would have been paid on those conveyances or transfers but for duty having been previously paid on the original sale is less than the duty paid on the original sale,

the Commissioners shall repay the difference to the person by whom the duty was paid on the original sale.

(2) If duty has been paid under section 114 on one or more intervening subsales, sub-paragraph (1) has effect with the following modifications—

(a) the reference to duty having been paid on the original sale shall be read as a reference to duty having been paid either on the original sale or on an intervening subsale;

(b) the reference to the amount of duty paid on the original sale shall be read as a reference to the aggregate of the amounts paid on the original sale and any intervening subsales, and

(c) any repayment shall be apportioned among the persons by whom those amounts were paid.

(3) The apportionment mentioned in sub-paragraph (2)(c) shall be made on a just and reasonable basis having regard to the subject matter of the original sale and of the subsale or subsales in question.
General supplementary provisions

Construction of references to duty on transactions

7 Any reference in section 114 or this Schedule to duty chargeable or paid on a transaction is to duty chargeable or paid on the stamping of the instrument by which the transaction is effected.

Transactions relating to land in the UK and to other property

8 (1) Where a transaction relates both to land in the United Kingdom and to other property, section 114 and this Schedule apply as if there were separate transactions.

(2) Similarly, the reference in section 114(1)(b) to a series of transactions is to a series of transactions so far as relating to land in the United Kingdom.

(3) If, in a case where a transaction or series of transactions relates partly to land in the United Kingdom and partly to other property, the consideration is not apportioned in a manner that is just and reasonable, section 114 and this Schedule shall have effect as if the consideration had been apportioned in such a manner.

Person claiming relief to establish entitlement

9 It is for a person claiming any relief under this Schedule to prove to the satisfaction of the Commissioners that he is entitled to relief and in what amount.

Construction as one

10 Section 114 and this Schedule shall be construed as one with the Stamp Act 1891 (c. 39).'.—[Dawn Primarolo.]
Brought up, read the First and Second time, and added to the Bill.

4 Jul 2002 : Column 458

Schedule 8

Chargeable gains: exemptions in case of substantial shareholding


Amendment made: No. 12, in page 153, line 36, leave out paragraph 5 and insert—

5 (1) Where in pursuance of arrangements to which this paragraph applies—

(a) an untaxed gain accrues to a company ("company A") on a disposal of shares, or an interest in shares or an asset related to shares, in another company ("company B"), and

(b) before the accrual of that gain—

(i) company A acquired control of company B, or the same person or persons acquired control of both companies, or

(ii) there was a significant change of trading activities affecting company B at a time when it was controlled by company A, or when both companies were controlled by the same person or persons,

none of the exemptions in this Schedule applies to the disposal.

(2) This paragraph applies to arrangements from which the sole or main benefit that (but for this paragraph) could be expected to arise is that the gain on the disposal would, by virtue of this Schedule, not be a chargeable gain.

(3) For the purposes of sub-paragraph (1)(a) a gain is "untaxed" if the gain, or all of it but a part that is not substantial, represents profits that have not been brought into account (in the United Kingdom or elsewhere) for the purposes of tax on profits for a period ending on or before the date of the disposal.

(4) The reference in sub-paragraph (3) to profits being brought into account for the purposes of tax on profits includes a reference to the case where—

(a) an amount in respect of those profits is apportioned to a company resident in the United Kingdom by virtue of subsection (3) of section 747 of the Taxes Act 1988 (imputation of chargeable profits etc of controlled foreign companies), and

(b) a sum is chargeable on that company in respect of that amount by virtue of subsection (4) of that section for an accounting period of that company ending on or before the date of the disposal.

(5) For the purposes of sub-paragraph (1)(b)(ii) there is a "significant change of trading activities affecting company B" if—

(a) there is a major change in the nature or conduct of a trade carried on by company B or a 51% subsidiary of company B, or

(b) there is a major change in the scale of the activities of a trade carried on by company B or a 51% subsidiary of company B, or

(c) company B or a 51% subsidiary of company B begins to carry on a trade.

(6) In this paragraph—

"arrangements" includes any scheme, agreement or understanding, whether or not legally enforceable;

"major change in the nature or conduct of a trade" has the same meaning as in section 768 of the Taxes Act (change of ownership of company: disallowance of trading losses);

"profits" means income or gains (including unrealised income or gains).'.—[Dawn Primarolo.]

4 Jul 2002 : Column 459

Schedule 28

Derivative contracts: transitional provisions etc


Amendment made: No. 45, in page 375, line 11, leave out sub-paragraphs (4) and (5) and insert—

'(4) If the sum of the amounts that would, on the assumptions in sub-paragraph (6)(a) and (b), have fallen to be brought into account as regards the contract in accordance with—

(a) Chapter 2 of Part 2 of the Finance Act 1993 (c. 34), or

(b) Chapter 2 of Part 4 of the Finance Act 1994 (c. 9),

for the purposes of computing corporation tax for an old period of the company is different from the sum of the amounts that would, on the assumption in sub-paragraph (6)(c), have fallen to be brought into account as regards the contract in accordance with Schedule 26 for those purposes (if that Schedule had had effect in relation to that period), sub-paragraph (5) shall apply as regards the amount of that difference.

(5) Where this sub-paragraph applies, the amount of the difference shall be brought into account—

(a) as a credit under Schedule 26 in the company's first new period, if a greater profit or smaller loss would have been brought into account for the old period under that Schedule, or

(b) as a debit under that Schedule in the company's first new period, if a smaller profit or greater loss would have been brought into account for the old period under that Schedule.

(6) The assumptions referred to in sub-paragraph (4) are that—

(a) section 137 of the Finance Act 1993 (c. 34),

(b) sections 165 to 168A of the Finance Act 1994 (c. 9), and

(c) paragraphs 23 to 31 of Schedule 26,

would not have had effect in the case of the contract.'.—[Dawn Primarolo.]

Schedule 29

Gains and losses of a company from intangible fixed assets

John Healey: I beg to move amendment No. 14, in page 434, line 22, leave out sub-paragraph (4) and insert—


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