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Notices of Amendments
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Finance Bill Committee 34-37 and 39-45
Public Bill Committee
(Except Clauses 7, 8, 9, 11, 14, 16, 20 and 92)
Mr Stephen Timms
Clause 39, page 19, line 43, at end insert—
Accordingly, in section 367 of ITTOIA 2005 (priority between Chapters within
Part 4), in subsection (3)—
in paragraph (a), after "dividends)" insert ", 378A (offshore fund
distributions)", and
in paragraph (b), insert at the end "or Chapter 4 (or both)".'.
Schedule 13, page 131, line 28, after 'treated' insert 'under subsection (5)'.
Schedule 13, page 131, leave out lines 30 to 34 and insert 'The liability mentioned in
subsection (7)'.
Schedule 14, page 134, line 1, leave out 'any amount determined by reference to'.
Schedule 14, page 135, line 17, leave out 'any amount determined by reference to'.
Notices of Amendments: 4 June 2009
Finance Bill, continued
Schedule 14, page 136, line 30, leave out 'apart from' and insert 'otherwise than by
virtue of'.
Schedule 14, page 136, line 33, leave out from beginning to 'is' in line 34 and
insert 'Any other dividend'.
Schedule 14, page 138, line 18, leave out from 'that' to end of line 20 and insert
'does not fall into an exempt class by virtue of section 930E but would, apart from this
section, fall into an exempt class otherwise than by virtue of that section.'.
Schedule 14, page 138, line 46, at end insert—
'930MA
Schemes involving distributions for which deductions are given
This section applies to a dividend or other distribution that would,
apart from this section, fall into an exempt class.
The distribution does not fall into an exempt class if—
the distribution is made as part of a tax advantage scheme, and
the following condition is met.
The condition is that a deduction is allowed to a resident of any
territory outside the United Kingdom under the law of that territory in
respect of an amount determined by reference to the distribution.'.
Schedule 14, page 143, line 9, leave out sub-paragraphs (2) and (3) and insert—
'()
In subsection (3) (as it has effect as amended by paragraph 8 of Schedule 30 to
FA 2000)—
before paragraph (a), insert—
"(za)
if the dividend is received in an accounting period of
the recipient in which the recipient is not a small
company, and the dividend is a relevant dividend, the
profits in respect of which the dividend is paid;',
in paragraph (a), at the beginning, insert "in a case not falling under
paragraph (za),", and
in paragraph (c), at the beginning, insert "in a case not falling under
paragraph (za),".
After subsection (3) insert—
For the purposes of subsection (3)—
"small company" has the same meaning as in Part 9A of CTA
2009 (company distributions),
"relevant dividend" means a dividend that, for the purposes of
section 930H of that Act (dividends derived from transactions
not designed to reduce tax), is treated as paid in respect of
profits other than relevant profits (see subsection (4) of that
section), and
the profits in respect of which a dividend is paid are the profits
in respect of which the dividend is treated as paid for the
purposes of that section."'.
Schedule 14, page 144, line 24, leave out from beginning to 'modification' in line
32 and insert 'modification.
The'.
Schedule 14, page 145, line 36, leave out from 'following' to 'modification' in line
Part 5A contains rules connected with tax avoidance.'.
Schedule 15, page 150, line 1, at end insert—
But a period of account that is within sub-paragraph (1) is not a period of
account to which this Schedule applies if the worldwide group is a qualifying
financial services group in that period (see paragraph 6A).'.
Schedule 15, page 151, line 10, leave out 'finance income payable' and insert
'liabilities'.
Schedule 15, page 151, line 19, leave out 'finance income receivable in respect of'
and insert 'net investments, or net cash investments, in'.
'Qualifying financial services groups
The worldwide group is a qualifying financial services group in a period of
account if the trading income condition—
is met in relation to that period, or
is not met in relation to that period, but only because of losses incurred
by the group in respect of activities that are normally reported on a net
basis in financial statements prepared in accordance with international
accounting standards.
The trading income condition is met in relation to a period of account if—
all or substantially all of the UK trading income of the worldwide
group for that period, or
all or substantially all of the worldwide trading income of the
worldwide group for that period,
is derived from qualifying activities (see paragraph 6B).
In this Part, in relation to a period of account of the worldwide group—
"UK trading income" means the sum of the trading income for that period
of each company that was a relevant group company at any time during
that period (see paragraph 6F);
"worldwide trading income" means the trading income for that period of the
worldwide group (see paragraph 6G).
Qualifying activities
In this Part "qualifying activities" means—
lending activities and activities that are ancillary to lending activities
(see paragraph 6C),
insurance activities and insurance-related activities (see paragraph
6D), and
relevant dealing in financial instruments (see paragraph 6E).
Lending activities and activities ancillary to lending activities
In this Part "lending activities" means any of the following activities—
acceptance of deposits or other repayable funds;
lending of money, including consumer credit, mortgage credit,
factoring (with or without recourse) and financing of commercial
transactions (including forfeiting);
finance leasing (as lessor);
issuing and administering means of payment;
provision of guarantees or commitments to provide money;
money transmission services;
provision of alternative finance arrangements;
other activities carried out in connection with activities falling within
any of paragraphs (a) to (g).
Activities that are ancillary to lending activities are not qualifying activities for
the purposes of this Part if the income derived from the ancillary activities
forms a significant part of the total of—
that income,
the income derived from lending activities of the worldwide group in
the period of account.
In sub-paragraph (2) "income" means the gross income or net income that
would be taken into account for the purposes of paragraph 6A in calculating
the UK or worldwide trading income of the worldwide group for the period of
The Commissioners may by order—
amend sub-paragraph (1), and
make other amendments of this paragraph in consequence of any
amendment of sub-paragraph (1).
In sub-paragraph (1)(h), and in the references to ancillary activities in this
paragraph and paragraph 6B(a), "activities" includes buying, holding,
managing and selling assets.
In this paragraph "alternative finance arrangements" has the same meaning as
in Chapter 6 of Part 6 of CTA 2009.
Insurance activities and insurance related activities
In this Part "insurance activities" means—
the effecting or carrying out of contracts of insurance by a regulated
insurer, and
investment business that arises directly from activities falling within
paragraph (a).
In this Part "insurance-related activities" means—
activities that are ancillary to insurance activities, and
activities that—
are of the same kind as activities carried out for the purposes
of insurance activities,
are not actually carried out for those purposes, and
would not be carried out but for insurance activities being
carried out.
Sub-paragraph (2) is subject to sub-paragraph (4).
Activities that fall within sub-paragraph (2)(a) or (b) ("the relevant activities")
are not insurance-related activities if the income derived from the relevant
activities forms a significant part of the total of—
the income derived from insurance activities of the worldwide group
in the period of account.
In this paragraph—
"activities" includes buying, holding, managing and selling assets;
"contract of insurance" has the same meaning as in Chapter 1 of Part 12 of
ICTA;
"regulated insurer" means a member of the worldwide group that—
is authorised under the law of any territory to carry on insurance
business, or
is a member of a body or organisation that is so authorised.
Relevant dealing in financial instruments
In this Part "financial instrument" means anything that is a financial instrument
for any purpose of the FSA Handbook.
For the purposes of this Part, a dealing in a financial instrument is a "relevant
dealing" if—
it is a dealing other than in the capacity of a broker, and
profits or losses on the dealing form part of the trading profits or losses
of a business.
In this paragraph "broker" includes any person offering to sell securities to, or
purchase securities from, members of the public generally.
UK trading income of the worldwide group
6F (1)
This paragraph applies in relation to paragraph 6A for calculating the UK
trading income of the worldwide group for a period of account.
The trading income for that period of a relevant group company is the
aggregate of—
the gross income calculated in accordance with sub-paragraph (3), and
the net income calculated in accordance with sub-paragraph (4).
The income referred to in sub-paragraph (2)(a) is the gross income—
arising from the activities of the relevant group company (other than
net-basis activities), and
accounted for as such under generally accepted accounting practice,
without taking account of any deductions (whether for expenses or otherwise).
The income referred to in sub-paragraph (2)(b) is the net income arising from
the net-basis activities of the relevant group company that—
is accounted for as such under generally accepted accounting practice,
would be accounted for as such if income arising from such activities
were accounted for under generally accepted accounting practice.
Sub-paragraphs (3) and (4) are subject to sub-paragraph (6).
In a case where a proportion of an accounting period of a relevant group
company does not fall within the period of account of the worldwide group, the
gross income or net income for that accounting period of the company is to be
reduced, for the purposes of this paragraph, by that proportion.
Gross income or net income is to be disregarded for the purposes of sub-
paragraph (2) if the income arises in respect of an amount payable by another
member of the worldwide group that is either a UK group company or a
relevant group company.
In this paragraph "net-basis activity" means activity that is normally reported
on a net basis in financial statements prepared in accordance with generally
accepted accounting practice.
Worldwide trading income of the worldwide group
This paragraph applies in relation to paragraph 6A for calculating the
worldwide trading income of the worldwide group for a period of account.
The trading income for that period of the worldwide group is the aggregate
The income referred to in sub-paragraph (2)(a) the gross income—
arising from the activities of worldwide group (other than net-basis
activities), and
disclosed as such in the financial statements of the worldwide group,
the net-basis activities of the worldwide group that—
is accounted for as such under international accounting standards, or
were accounted for under international accounting standards.
on a net basis in financial statements prepared in accordance with international
For provision about references in this Schedule to financial statements of the
worldwide group, and amounts disclosed in financial statements, see
paragraphs 69 to 72.'.
Schedule 15, page 152, line 39, after first 'currency' insert '("the relevant foreign
currency")'.
Schedule 15, page 152, line 40, after 'applies' insert '—
Schedule 15, page 152, line 42, leave out from 'the' to end of line 43 and insert
'relevant foreign currency, and—
for the purposes of determining under paragraph 3 the net debt amount
of a company, the reference in sub-paragraph (3) of that paragraph to
£3 million is to be read as a reference to the relevant amount.
For this purpose "the relevant amount" means the average of—
£3 million expressed in the relevant foreign currency, translated by
reference to the spot rate of exchange for the company's start date, and
Revised 5 June 2009