HC Deb 17 July 1980 vol 988 cc1816-7
Mr. Peter Rees

I beg to move mendment No. 56, in page 36, leave out lines 34 and 35 and insert 'then, unless subsection (6) below applies, income tax shall be charged under this section in respect of the settlement.'.

Mr. Deputy Speaker

With this it will be convenient to take Government amendment No. 57.

Mr. Rees

The amendments are designed to extend a measure of income tax relief where funds are appointed out of one maintenance fund into another maintenance fund. This is in response to a point made in Committee upstairs, where it was recognised that it was illogical to extend capital transfer tax and capital gains tax relief in that situation, but to deny a certain measure of income tax and stamp duty relief. We dealt with the stamp duty points at an earlier stage. Amendments Nos. 56 and 57 deal with the income tax point.

Amendment agreed to.

Amendment made: No. 57, in page 37, line 27, at end insert— '(6) Tax shall not be chargeable under this section in respect of a settlement on an occasion when the whole of the property comprised in it is transferred tax-free into another settlement; but on the first occasion on which tax becomes chargeable under this section in respect of a settlement ("the current settlement") comprising property which was previously comprised in another settlement or settlements and has become comprised in the current settlement as a result of, or of a series of, tax-free transfers, the relevant period for the purposes of subsection (2) above shall, as respects that property, be treated as having begun—

  1. (a) on the last occasion on which tax became chargeable under this section in respect of the other settlement or any of the other settlements; or
  2. (b) if there has been no such occaison, when the other settlement or the first of the other settlements took effect.
(7) For the purposes of subsection (6) above property is transferred tax-free from one settlement into another if it ceases to be comprised in the first-mentioned settlement and becomese comprised in the other settlement in circumstances such that by virtue of section 88(4)(d) below there is no charge to capital transfer tax by reference to its value.'.—[Mr. Peter Rees.]

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