Finance Bill - continued        House of Lords
PART III, INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAX - continued
Relief for interest payments - continued

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Annuity loans: residence requirements and re-mortgages.     40. - (1) Section 365 of the Taxes Act 1988 (relief for interest on loans to buy life annuities) is amended as follows.
 
      (2) In subsection (1)(d) (residence requirement for land on which loan is secured), for "uses the land on which it was secured as his only or main residence at the time the interest is paid" substitute "used the land on which it was secured as his only or main residence immediately before 9th March 1999".
 
      (3) After subsection (1AA) (inserted by section 39 of this Act) insert-
 
 
    "(1AB) Subject to subsection (1AC) below, the conditions in paragraphs (aa) and (a) of subsection (1) above shall be treated as satisfied in relation to a loan ("the new loan") if-
 
 
    (a) the new loan was made on or after the day on which the Finance Act 1999 was passed;
 
    (b) the new loan was made as part of a scheme ("the scheme") under which the whole or any part of the proceeds of the loan was used to defray money applied in paying off another loan ("the old loan"); and
 
    (c) the conditions in subsection (1) above were, or were treated by virtue of this subsection as, satisfied with respect to the old loan.
      (1AC) If only part of the proceeds of the new loan was used to defray money applied in paying off the old loan, subsection (1AB) above applies only if, under the scheme, not less than nine-tenths of the remaining part of the proceeds of the new loan was applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons who include him.
 
      (1AD) In subsection (1AC) above "the remaining part" means the part of the proceeds of the new loan that was not used to defray money applied in paying off the old loan."
 
      (4) For subsection (1A) substitute-
 
 
    "(1A) The condition in subsection (1)(d) above shall be treated as satisfied in relation to a loan if-
 
 
    (a) the person to whom the loan was made, or any of the annuitants, ceased to use the land as his only or main residence at a time falling within the period of twelve months ending with 8th March 1999, and
 
    (b) the intention at that time of the person to whom the loan was made, or each of the annuitants owning an estate or interest in the land, was to take steps, before the end of the period of twelve months after the day on which the land ceased to be so used, with a view to the disposal of his estate or interest."
      (5) This section has effect in relation to any payment of interest (whenever falling due) made on or after the day on which this Act is passed.
 
Repayments attracting repayment supplement.     41. - (1) Section 824 of the Taxes Act 1988 (repayment supplements for individuals) shall have effect, and be deemed always to have had effect, with the following amendments.
 
      (2) Before subsection (3) insert-
 
 
    "(2B) Subsection (1) above shall apply to a payment made by the Board under section 375(8) (payment of amount which borrower would have been able to deduct from interest payment under section 369(1)) as if the payment were a repayment falling within that subsection."
 
      (3) In subsection (3), before paragraph (a) insert-
 
 
    "(aa) if the repayment is a payment made by the Board under section 375(8), the relevant time is-
 
      (i) if the interest payment was made in the year 1996-97 or a subsequent year of assessment, the 31st January next following that year;
 
      (ii) if the interest payment was made in an earlier year of assessment, the 5th April next following that year;".
      (4) This section shall be deemed to have had effect in relation to provisions corresponding to section 824 of the Taxes Act 1988 directly or indirectly re-enacted in that section as it has effect in relation to that section, subject to subsections (5) and (6) below.
 
      (5) For the purposes of subsection (4) above the references in the amendments of section 824 of the Taxes Act 1988 made by this section to provisions of that Act shall be taken to include references to any corresponding provision contained in the enactments directly or indirectly re-enacted in those provisions.
 
      (6) Subsection (4) above applies only if the payments corresponding to payments under section 375(8) of the Taxes Act 1988 were made in the year 1984-85 or a subsequent year of assessment.
 
 
Employee benefits etc.
Conditional acquisition of shares.     42. - (1) Section 140A of the Taxes Act 1988 (conditional acquisition of shares) is amended as follows.
 
      (2) Omit subsection (2).
 
      (3) In subsection (3), for "In any other case" substitute "If the terms on which the employee acquires the employee's interest are such that his interest in the shares in question will cease to be only conditional within five years after his acquisition of the interest".
 
      (4) In subsection (4), for ", in a case falling within subsection (2) or (3) above" substitute "(whether or not subsection (3) above applies)".
 
      (5) This section applies in relation to shares acquired on or after the day on which this Act is passed.
 
Meaning of conditional interests in shares.     43. - (1) Section 140C of the Taxes Act 1988 (which describes the cases in which an interest in shares is, or is not, to be treated as only conditional) is amended as follows.
 
      (2) After subsection (1) insert-
 
 
    "(1A) A person shall not for the purposes of sections 140A and 140B be taken, in relation to any shares in a company or any security, to have an interest which is only conditional by reason only that one or more of subsections (2) to (4) below applies in relation to him."
 
      (3) In subsections (2), (3) and (4) for the words from the beginning to "by reason only that" substitute "This subsection applies in relation to a person if".
 
      (4) In subsection (3)-
 
 
    (a) after "offer the shares for sale" insert "or transfer them"; and
 
    (b) for the words from "if he ceases" to the end substitute "if he ceases to be an officer or employee of the company or of one or more group companies or of any group company."
      (5) After that subsection insert-
 
 
    "(3A) This subsection applies in relation to a person if he may be required to offer the shares for sale or transfer them, if, as a result of misconduct, he ceases to be an officer or employee of the company or of one or more group companies or of any group company."
 
      (6) After subsection (5) add-
 
 
    "(6) For the purposes of this section-
 
 
    (a) a company is a "group company" in relation to another company if they are members of the same group, and
 
    (b) companies are taken to be members of the same group if, and only if, one is a 51 per cent. subsidiary of the other or both are 51 per cent. subsidiaries of a third company."
      (7) The amendments made by this section shall be deemed always to have had effect.
 
Exemption for mobile telephones.     44. - (1) The following section shall be inserted after section 155 of the Taxes Act 1988 (exception of certain benefits in kind from the general charge to tax)-
 
 
"Mobile telephones.     155AA. - (1) Section 154 does not apply where the benefit consists in a mobile telephone being made available (without any transfer of the property in it) to the employee or to a member of his family or household.
 
    (2) In this section "mobile telephone" means wireless telegraphy apparatus designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a telephone which-
 
 
    (a) is connected to a public telecommunication system (within the meaning of the Telecommunications Act 1984); and
 
    (b) is not physically connected to a land-line;
  but does not include any cordless telephone or any telepoint telephone.
 
      (3) The mobile telephones to which the exemption provided by this section applies include any mobile telephone provided in connection with a car, van or heavier commercial vehicle, notwithstanding that the vehicle is made available as mentioned in section 157, section 159AA or, as the case may be, section 159AC.
 
      (4) In this section "cordless telephone" means wireless telegraphy apparatus which (whether or not provided in connection with a car, van or heavier commercial vehicle)-
 
 
    (a) is designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a wireless extension to a telephone, and
 
    (b) is used only as such an extension to a telephone that is physically connected to a land-line.
      (5) In this section "telepoint telephone" means wireless telegraphy apparatus which (whether or not provided in connection with a car, van or heavier commercial vehicle) is used for the purpose of a short-range radio communications service utilising frequencies between 864 and 868 megahertz (inclusive).
 
      (6) In this section "heavier commercial vehicle" has the same meaning as in section 159AC."
 
      (2) Section 159A of that Act (charge on mobile telephones) shall cease to have effect.
 
      (3) In section 154 of that Act (general charging provision for benefits in kind), in subsection (2)-
 
 
    (a) in paragraph (b), "159A," shall be omitted; and
 
    (b) after "sections 155" there shall be inserted ", 155AA".
      (4) In section 168A of that Act (price of a car as regards a year), in subsection (11), for "section 159A(8)(a)" there shall be substituted "section 155AA(2)".
 
      (5) In section 200AA of that Act (incidental benefits for holders of certain offices etc.), subsection (3) shall cease to have effect.
 
      (6) This section has effect for the year 1999-00 and subsequent years of assessment.
 
Limited exemption for computer equipment.     45. - (1) After section 156 of the Taxes Act 1988 there shall be inserted the following section-
 
 
"Limited exemption for computer equipment.     156A. - (1) This section applies to a benefit consisting in the provision of computer equipment if, in the case of a person ("the employee") who is in employment to which this Chapter applies-
 
    (a) that equipment is provided by being made available to the employee or to a member of his family or household;
 
    (b) it is so made available without any transfer of property in the equipment to the employee or to a member of his family or household; and
 
    (c) it is so made available in a case in which the arrangements for providing employees of the employer with the benefit of computer equipment comply with subsection (2) below.
      (2) The arrangements for providing the employees of the employer with the benefit of computer equipment comply with this subsection unless-
 
 
    (a) the only arrangements for making computer equipment available to such employees, or to members of their families or households, are arrangements that are confined to cases where the employee in question is a director of a company; or
 
    (b) the arrangements (taking them all together) for making computer equipment available to employees of the employer, or to members of their families or households, are such that it is made available on terms that are more favourable in some or all of the cases where the employee in question is a director of a company than in one or more cases where he is not.
      (3) Section 154 applies for any year of assessment to-
 
 
    (a) the benefits to which this section applies that are provided in that year and consist in the making available to the employee of any equipment, and
 
    (b) the benefits to which this section applies that are provided in that year and consist in the making available to members of his family or household of any equipment,
  to the extent only that the amount which (disregarding this section) would be taken to be the aggregate cash equivalent of the benefits falling within paragraphs (a) and (b) above exceeds £500.
 
      (4) For the purposes of this section "computer equipment" includes printers, scanners, modems, discs and other peripheral devices designed to be used by being connected to or inserted in a computer.
 
      (5) In this section references to making computer equipment available-
 
 
    (a) include references to the provision, together with any computer equipment made available, of a right to use computer software; but
 
    (b) do not include references to the provision of a benefit consisting in access to, or the use of, any public telecommunication system (within the meaning of the Telecommunications Act 1984)."
      (2) In section 154(2) of that Act, for "and 155A" there shall be substituted ", 155A and 156A".
 
      (3) This section applies for the year 1999-00 and subsequent years of assessment.
 
 
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