§ 8.15 p.m.
§ Mr. Denzil Davies
I beg to move amendment no. 131, in page 55, line 30 leave out '6(2) or'.
1841 This is a minor amendment, consequential on an amendment that was accepted in Standing Committee and moved by the Opposition. That amendment confined the operation of the clause to cases where the forfeiture occurs after 11th April 1978. The clause is concerned with forfeiture, and I accepted an amendment in Standing Committee that confined the operation of the clause to cases of forfeiture that occurred after 11th April 1978. There can, therefore, be no possibility of a charge arising on Budget day 1978 under paragraph 6(2) of schedule 5 to the Finance Act 1975. The relevant words in the clause are now unnecessary and can be deleted. The amendment is consequential on accepting the amendment moved by the Opposition in Committee.
§ Mr. Peter Rees
I rise to express gratitude to the Minister of State. I had a small hand in Standing Committee in moving the amendments to which amendment no. 131 is consequential.
I should be grateful to be told why it is that because the Minister accepted the amendment in Committee it is unlikely, or, as he said, impossible, that a charge could be raised under paragraph 6(2) of schedule 5. It would be of assistance to the House and to those outside who follow our debates to know why it is that no charge could now arise. Obviously the right hon. Gentleman would not wish to narrow any relief granted for those who might benefit under a protected trust.
§ Mr. Denzil Davies
I shall try to deal with the hon. and learned Gentleman's question. As he knows, it is a technical subject. In its original form, the clause applied where forfeiture occurred before Budget day 1978 as well as after that date. The switch to interest in possession status would have provoked an unwanted charge under paragraph 6(2) of schedule 5 of the Finance Act 1975. The clause therefore contained a provision to negate that charge.
The safeguard is no longer necessary, because in Standing Committee I accepted an Opposition amendment, no. 678, which confined the operation of the clause to cases where forfeiture occurs after 11th April 1978. Where a forfeiture has already occurred on or before that date the trust will continue to be governed by the old rules, which treated these matters 1842 as a discretionary trust. There will be no switch from discretionary trust to interest in possession status on 11th April 1978 as a result of the clause There is now no possibility of the clause provoking a charge under paragraph 6(2) of schedule 5 of the Finance Act 1975 on Budget day. Therefore, the reference to paragraph 6(2) in the last three lines of the clause is redundant and is deleted by the amendment.
I hope that that satisfies the hon. and learned Gentleman and his advisers.
§ Amendment agreed to.