Amendments made: No. 101, in page 50, line 1, leave out 'subsections (2) and (3) below' and insert:
'the provisions of this section'.
No. 102, in page 50, line 26, at end insert:
(3) Where the company has shares or securities of any class giving powers of voting limited to either or both of the following—
§ Mr. Denzil Davies
I beg to move amendment no. 103, in page 51, line 23, after 'section', insert—'and Chapter III of Part III above '.
§ Mr. Davies
Amendment no. 103 is consequential on amendments nos. 125, 104 and 105, which deal with the interaction between the employee trust rules and those relating to profit-sharing schemes. Those amendments give effect to an undertaking given in Standing Committee to consider the interaction between the conditions relating to profit-sharing schemes and employee trusts. They ensure that no capital transfer tax charges will arise on distributions out of employee trusts where the distributions are appropriations of shares to persons participating in profit-sharing schemes. In addition, they amend the conditions relating to the capital transfer tax and capital gains tax exemptions for transfers by companies to employee trusts.
The hon. and learned Member for Dover and Deal (Mr. Rees) raised these matters in Standing Committee. At that time I said that we would consider the interaction. I hope that the amendments go a considerable way to allay his fears and to meet the point that he raised.
§ Mr. Peter Rees
It is true that the amendment attempts to meet the doubts that I raised about the capital transfer tax implications of the profit-sharing schemes that may be set up under the relieving provisions of the Bill. I am grateful to the right hon. Gentleman for having met the point. It would be a rash man who said at this stage that the amendment completely meets the point. This is an 1840 area that bristles with technical difficulties, as the right hon. Gentleman recognised. However, the amendment is the first instalment. I have no doubt that we shall be able to draw the right hon. Gentleman's attention in the months and years to come—if he is in his present position—
§ Mr. Rees
As my hon. Friend suggests it may be that I am being unduly kind to the right hon. Gentleman. I think that I am. In any event, I am sure that there will be difficulties in respect of capital transfer tax, capital gains tax, income tax and additional rate tax when dealing with profit-sharing schemes. However, as a first instalment, as an earnest that the Administration recognises that this is a rather thorny area, the Opposition welcome this group of amendments.
§ Amendment agreed to.