HC Deb 27 October 1966 vol 734 cc1557-62

Introductory

1. For the purposes of this Part of this Schedule—

  1. (a) 'company' means a body which, being either a company within the meaning of the Companies Act 1948 or the corresponding enactment in force in Northern Ireland or a registered industrial and provident society, is resident in the United Kingdom;
  2. (b) a principal company and all its subsidiaries form a group, and where a principal company is a member of a group as being itself a subsidiary, that group shall comprise all its subsidiaries;
  3. (c) 'subsidiary' has the meaning which in section 42 of the Finance Act 1938 it is expressed to have for the purposes of that section, except that in the application of that section any share capital of a registered industrial and provident society shall be treated as within the definition of ordinary share capital, and 'principal company' means a company of which another company is a subsidiary; and
  4. (d) 'registered industrial and provident society' means a society registered under the Industrial and Provident Societies Act 1965 or under the enactments repealed by that Act or registered under any corresponding enactment in force in Northern Ireland.

Dispositions within the group

2.—(1) Notwithstanding anything in Part III of this Act, a disposition made by a member of a group of companies to another member of the group, if apart from this paragraph it would constitute a chargeable act or event, shall be treated as not being a chargeable act or event for the purposes of that Part of this Act.

(2) Any provisions of sections 37. 41 and 42 of this Act which would be applicable apart from this paragraph shall not have effect in relation to any such disposition.

Liability for levy

3.—(1) The provisions of this paragraph shall have effect in relation to any chargeable act or event not falling within the last preceding paragraph, where—

  1. (a) a notice of assessment of levy has resulted in an operative assessment of levy, and 1558 the person who, apart from this paragraph, is liable to pay the levy is a member of a group of companies, and
  2. (b) at the end of the period of six months beginning with the date on which, in accordance with section 50 of this Act, the principal amount of the levy or part of it falls due the amount so falling due or part of it remains unpaid.

(2) Subject to sub-paragraph (4) of this paragraph, the sum remaining unpaid as mentioned in sub-paragraph (1)(b) of this paragraph shall be recoverable by the Commission—

  1. (a) from the company which at the relevant date was the principal company of the group, or
  2. (b) from any other company which in any part of the period of two years ending with the relevant date was a member of the group and was then entitled to the chargeable interest.

(3) Subject to the next following sub-paragraph, section 53 of this Act shall have effect in relation to any amount recoverable by virtue of this paragraph.

(4) No action shall, after the end of the period of two years beginning with the date specified in sub-paragraph (1)(b) of this paragraph, be brought for the recovery of any sum which is recoverable by virtue of this paragraph.

(5) This paragraph shall have effect without prejudice to the recovery of any sum by the Commission otherwise than by virtue of this paragraph.

(6) In this paragraph, in relation to a chargeable act or event, 'the chargeable interest' has the meaning assigned to it by paragraph 2(1) of Schedule 5 to this Act.

4. A company from whom any sum is recovered by the Commission by virtue of paragraph 3 of this Schedule shall be entitled to recover the amount of that sum—

  1. (a) from the company which is liable to pay the levy apart from that paragraph, or
  2. (b) if that company is not the company which was the principal company of the group at the relevant date, from that principal company.

This Amendment is to give effect to an undertaking that I gave in the Standing Committee that transfers of land between members of groups of companies should not be liable for levy.

Provisions are also added for the prevention of evasion of the levy by collusion between members of a group of companies. I think that hon. Gentlemen will accept this as consequential to accepting the undertaking we gave.

For convenience, the new provisions are to be inserted as Part I of the Schedule to replace the provisions relating to close companies which are being replaced by an extension to the provisions in Part II dealing with connected persons.

Mr. Graham Page

I am very grateful to the Minister for bringing forward this Amendment and it now forms a separate part of one of the Schedules. I have had the opportunity, through the courtesy of the right hon. Gentleman, of studying the wording of this Schedule, and it seemed to me to cover all the points we had in mind in raising the question of group companies.

There is no doubt that the full purport of this had not been gathered when the Bill was first drafted, but now I am sure it has been gathered. I have had the opportunity of taking advice on it outside the House, which is something we like to do with complicated Schedules of this sort and have not had the opportunity of doing with some others put before us. I am happy to accept the Amendment.

Mr. Willey

I should like to thank the hon. Gentleman for his assistance.

Amendment agreed to.

Mr. Skeffington

I beg to move, Amendment No. 178, in page 136, line 40 leave out 'paragraph' and insert 'Part of this Schedule'.

I suggest that we discuss at the same-time Amendment No. 179, which is another rather long Amendment although the provisions follow very much from what has been said by my right hon. Friend. Again, the Amendment gives effect to an undertaking which was given in the Standing Committee as will be seen from columns 936–946 in relation to these matters.

Mr. Graham Page

I am grateful for the Amendment. Again, we on this side had an opportunity of looking at it to see whether it met the points which had been raised. It seems to do so. There were some serious points, and great hardship might have been caused if we had not had the Amendment.

Amendment agreed to.

Further Amendment made: In page 136, line 50, at end insert: 6.—(1) The provisions of this paragraph shall have effect in relation to any chargeable act or event falling within any Case other than Case C (in this paragraph referred to as 'the chargeable act or event') where—

  1. (a) a notice of assessment of levy has resulted in an operative assessment of levy, 1560 and the person who, apart from this paragraph, is liable to pay the levy is a company resident in the United Kingdom (in this paragraph referred to as 'the company'), and
  2. (b) at the end of the period of six months beginning with the date on which, in accordance with section 50 of this Act, the principal amount of the levy or part of it falls due the amount so falling due or part of it remains unpaid.

(2) For the purposes of this paragraph a person is a contributory if, at any time on or after the relevant date (whether before or after the date specified in sub-paragraph (1)(b) of this paragraph) when he is a person connected with the company, he receives or becomes entitled to receive in respect of shares in the company any capital distribution from the company, other than a capital distribution representing a reduction of capital, and—

  1. (a) where the chargeable act or event consists of a disposition made by the company and falling within any of Cases A, B, E and F, the capital so distributed derives from the consideration given for that disposition, or
  2. (b) where the chargeable act or event consists of the accrual of a right to compensation falling within Case D or Case F, the capital distribution derives from the compensation received by the company in pursuance of that right.

(3) Subject to the next following sub-paragraph, the sum remaining unpaid as mentioned in sub-paragraph (1)(b) of this paragraph—

  1. (a) if there is only one contributory, shall be recoverable by the Commission from him, and
  2. (b) if there are two or more contributories, shall be recoverable by the Commission from all or any of them, as being persons jointly and severally liable to pay that sum to the Commission.

(4) The amount recoverable by virtue of this paragraph from any one person who is a contributory by virtue of a capital distribution made in the circumstances mentioned in sub-paragraph (2) of this paragraph—

  1. (a) shall not exceed the amount or value of the capital distribution which he has received or has become entitled to receive, and
  2. (b) shall not exceed a proportion of the sum referred to in the last preceding subparagraph which is greater than the proportion which his share of the total capital distribution made by the company in those circumstances bears to the whole of that distribution.

(5) Section 53 of this Act shall have effect in relation to any amount recoverable by virtue of this paragraph.

(6) This paragraph shall have effect without prejudice to the recovery of any sum by the Commission otherwise than by virtue of this paragraph.

(7) In this paragraph 'capital distribution' means any distribution from a company (including a distribution in the course of dissolving or winding up the company) in money or money's worth except a distribution which in the hands of the recipient constitutes income for the purposes of income tax.

7. A person from whom any amount is recovered by the Commission by virtue of the last preceding paragraph, as being a contributory in relation to a company, shall be entitled

After subsection (5) … … … … … Insert the following subsection:—
'(6) In Schedule 2 to this Act "local authority", in relation to England and Wales, has the same meaning as in the Town and Country Planning Act 1962, and, in relation to Scotland, has the same meaning as in the Town and Country Planning (Scotland) Act 1947'.

If it would be for the convenience of the House, Mr. Deputy Speaker, we could discuss at the same time the remaining four Amendments—Nos. 181, 245, 182 and 183—as they deal with the same point.

Mr. Deputy Speaker

I think that would be convenient.

Mr. Page

If I may give the background, these Amendments deal with the little form which, I have said, both in Committee and on Report, I hate, the little form which the conveyancers file at the Stamp Duty Office even though they do not have to stamp the conveyances. They fill up this little form, which we call "particulars delivered", under the Finance Act, 1931. As the Parliamentary Secretary has said, whatever they did with that form before—and I have my suspicions—they will use it now.

Unfortunately, in the Bill there were to be added to the form two questions which the solicitor would have to answer about the conveyance the particulars of which he was giving; they were on page 140 of the Bill and they were questions (viii) and (ix). In question (viii), the solicitor was asked to give for his client particulars of any application which has been made for planning permission for any development of the land which is the subject of the transaction and in answer to question (ix) he had to give particulars of any development of that land intended to be carried out by the person by or on whose behalf the document is furnished. To answer the first of these questions would have needed considerably more to recover that amount from the company.—[Mr. Willey.]