HC Deb 11 July 1984 vol 63 cc1320-4

Amendments made: No. 125, in page 170, line 4, at end insert— 'offshore income gain" has the same meaning as in Chapter VII of Part II of this Act. '.

No. 126, in page 173, line 1, at beginning insert 'Subject to sub-paragraph (2A) below'.

No. 127, in page 173, line 9, at end insert— '(2A) In any case where, apart from this sub-paragraph, subparagraph (2) above would bring into account, as a relevant benefit in relation to a claim, a capital payment received under or by reference to a related settlement, and either

  1. (a) on a claim relating to the related settlement, the payment falls to be taken into account under this paragraph as a relevant benefit, or
  2. (b) it appears to the Board to be likely that the payment will fall to be so taken into account on a claim relating to the related settlement.
the payment shall not be taken into account as a relevant benefit in relation to the claim referred to in sub-paragraph (2) above except to the extent that it constitutes a surplus benefit by virtue of paragraph 6(5) below.'.

No. 128, in page 174, line 10, at end insert— '(5) In any case where, by virtue of sub-paragraph (1) above, there is on a claim no postponement of the payment of capital gains tax, there shall be determined—

  1. (a) whether there would still be no postponement if there were left out of account all relevant benefits (if any) referable to capital payments received under or by reference to a related settlement, and
  2. (b) if so, what is the excess of all the other relevant benefits over 3⅓ times the aggregate of the tax referred to in paragraphs (a) and (b) of sub-paragraph (1) above,
and so much of those other relevant benefits as are referable to capital payments falling within sub-paragraph (2) of paragraph 5 above and equal (or do not exceed) that excess shall be regarded as a surplus benefit for the purposes of sub-paragraph (2A) of that paragraph.' .

No. 129, in page 174, line 19, leave out from 'which' to 'brought' in line 20 and insert 'is not a relevant benefit and has not been'.

No. 130, in page 174, line 23, after 'gains', insert 'or offshore income gains'.

No. 163, in page 174, line 24, leave out 'that' and insert 'any previous'.

No. 131, in page 174, line 37, leave out from beginning to 'above' in line 47 and insert— '(4) In any case where—

  1. (a) the amount of capital gains tax referred to in subparagraph (1)(a) above equals or exceeds 30 per cent. of the aggregate of those capital payments falling within sub-paragraph (1)(b) above which the beneficiary has received from the trustees of the settlement to which the claim relates, and
  2. (b) apart from this paragraph, those capital payments would fall to be brought into account under subsections (3) and (4) of section 80 of the Finance Act 1981 (new provisions as to gains of non-resident settlements) in determining whether chargeable gains or offshore income gains should be attributed to the beneficiary by reference to any trust gains for the year of assessment in which the claim is made,
then, as respects that year of assessment and any subsequent year, those capital payments shall be left out of account for the purposes of the said subsection (3) and (4).

(5) In any case where—

  1. (a) the condition in sub-paragraph (4)(a) above is not fulfilled, but
  2. (b) the condition in sub-paragraph (4)(b) above is fulfilled, then, as respects the year of assessment in which the claim is made and any subsequent year, so much of the capital payments referred to in sub-paragraph (4) above as is equal to 3⅓ times the amount of capital gains tax referred to in sub-paragraph (1)(a) above shall be left out of account for the purposes of subsections (3) and (4) of section 80 of the Finance Act 1981.

(6) Where, by virtue of sub-paragraph (4) or sub-paragraph (5)'.

No. 132, in page 175, line 1, after `sub-paragraph', insert— '(a) the payment shall to the same extent be left out of account for the purposes of the application on any other occasion of any provision of paragraphs 7 to 11 of this Schedule; and (b)'.

No. 133, in page 175, line 8, at end insert— '(7) Where any capital payments falling within sub-paragraph (1)(b) above which the beneficiary has received from the trustees of the settlement to which the claim relates are not such as are referred to in sub-paragraph (4)(b) above, sub-paragraph (6)(a) above shall apply to each of those payments in like manner as if it had been such a payment as is referred to in sub-paragraph (4)(b) above and the amount of it to be left out of account has been determined accordingly under sub-paragraph (4) or subparagraph (5) above. 7A.—(1) The provisions of this paragraph apply if, in a case where paragraph 7 above applies, the amount of capital gains tax referred to in sub-paragraph (1)(a) of that paragraph exceeds 30 per cent of the aggregate of those capital payments falling within sub-paragraph (1)(b) of that paragraph which the beneficiary has received from the trustees of the settlement to which the claim relates. (2) In the following provisions of this paragraph—

  1. (a) the capital payments falling within subparagraph (1)(b) of paragraph 7 above which the beneficiary has received otherwise than from the trustees of the settlement to which the claim relates are referred to as "related payments"; and
  2. (b) any of those related payments which, apart from this paragraph, would fall to be brought into account as mentioned in sub-paragraph (4)(b) of paragraph 7 above is referred to as a "related section 80 payment".
(3) If sub-paragraph (2) of paragraph 7 above applies, then—
  1. (a) as respects the year of assessment in which the claim is made and any subsequent year, any related section 80 payment shall be left out of account for the purposes of sub-paragraphs (3) and (4) of section 80 of the Finance Act 1981; and
  2. (b) all the related payments shall be left out of account for the purposes of the application on any other occasion of any provision of paragraphs 7 to 11 of this Schedule.
 (4) If sub-paragraph (3) of paragraph 7 above applies, then—
  1. (a) as respects the year of assessment in which the claim is made and any subsequest year, so much 1322 of any related section 80 payment as is equal to 3⅓ times the amount of capital gains tax released by that payment shall be left out of account for the purposes of subsections (3) and (4) of section 80 of the Finance Act 1981: and
  2. (b) so much of each of the related payments as is equal to 3⅓ times the amount of capital gains tax released by the payment shall be left out of account for the purposes mentioned in subparagraph (3)(b) above.
 (5) For the purposes of sub-paragraph (4) above, the amount of capital gains tax released by a related payment shall be detennined by the formula— (A-B) * C/D

where— A" is the capital gains tax referred to in subparagraph (1)(a) of paragraph 7 above; B" is an amount equal to 30 per cent. of the aggregate of those capital payments falling within sub-paragraph (1)(b) of that paragraph which the beneficiary has received from the trustees of the settlement to which the claim relates; C" is the related payment in question; and D" is the aggregate of all the related payments. (6) Where, by virtue of sub-paragraph (3)(a) or subparagraph (4)(a) above, the whole or any part of a related section 80 payment falls to be left out of account as mentioned in that sub-paragraph, section 45 of the Finance Act 1981 shall have effect in relation to the benefit received by the beneficiary which, in whole or in part, consists of that payment as if, in the year of assessnient in which the claim is made, chargeable gains equal to so much of that payment as falls to be so left out of account were, by reason of that payment, treated under section 80 of that Act as accruing to the beneficiary. '.

No. 164, in page 175, line 38, leave out from 'which' to 'brought' in line 39 and insert 'has not been'.

No. 165, in page 175, line 40, at end insert 'or offshore income gains'.

No. 166, in page 175, line 42, leave out 'that' and insert 'any previous'.

No. 167, in page 175, line 43, leave out from 'below' to `is' in line 44 and insert 'that capital payment'.

No. 136, in page 175, line 46, leave out from beginning to 'above' in line 2 on page 176 and insert — '(3) A capital payment falling within sub-paragraph (2) above is not a related benefit which falls to be taken into account as mentioned in that sub-paragraph to the extent that it has already been taken into account on any previous operation of subparagraph (4) or sub-paragraph (5) of paragraph 7'.

No. 137, page 176, leave out line 5 an insert— '(4) A capital payment falling within sub-paragraph (2) above is not a related benefit which falls to be taken into account as mentioned in that sub-paragraph'.

No. 138, in page 176, leave out lines 10 to 30 and insert— '(5) Sub-paragraphs (3) to (6) of paragraph 7A above shall have effect for the purposes of this paragraph—

  1. (a) as if any reference to a provision of paragraph 7 above were a reference to the corresponding provision of paragraph 8 above; and
  2. (b) as if any reference to a related payment were a reference to a related benefit which falls to be taken into account as mentioned in sub-paragraph (2) above; and
  3. (c) as if any reference to a related section 80 payment were a reference to a related benefit which falls to be taken into account as mentioned in sub-paragraph (2) above and which, apart from this paragraph, would fall to be taken into account under sub-paragraphs (3) and (4) of section 80 of the Finance Act 1981 in determining whether chargeable gains or offshore income gains should be attributed to the close relative concerned by reference to any trust gains for the year of assessment in which is made the claim referred to in subparagraph (2) above; and
    4. 1323
  4. (d) as if "B" in the formula in sub-paragraph (59) were nil; and
  5. (e) as if any reference in sub-paragraph (6) to the beneficiary were a reference to the close relative concerned.'.

No. 139, in page 177, line 1, at beginning insert 'Subject to paragraph 11 below'.

No. 140, in page 177, line 6, leave out from 'settlement' to end of line 8.

No. 141, in page 177, leave out line 18 and insert— (b) subject to paragraph 11 below, the capital payments received in that year as mentioned in sub-paragraph (39 above'.

No. 142, in page 177, line 20, leave out from 'year' to end of line 21.

No. 143, in page 177, line 34, leave out from beginning to 'fall' in line 43 and insert— '11.—(1) If any capital payments received in any year of assessment as mentioned in paragraph 10(3) above.'.

No. 144, in page 178, leave out lines 1 to 3 and insert 'those capital payments shall be disregarded for the purposes of sub-paragraph (5) or, as the case may be, sub-paragraph (69) of paragraph 10 above except to the extent that the aggregate of those payments exceeds the chargeable gains and offshore income gains which in that year are treated under the said section 80 as accruing to the beneficiary or, as the case may be, the close relative; and any such excess is in the following provisions of this paragraph referred to as the balance of section 80 payments for that year'.

No. 145, in page 178, line 6, leave out from 'which' to there' in line 7 and insert 'there is a balance of section 80 payments'.

No. 146, in page 178, line 9, leave out from 'payments' to 'as' in line 10.

No. 147, in page 178, line 13, leave out from 'which' to `then' in line 14 and insert 'there is a balance of section 80 payments'.

No. 148, in page 178, line 20, leave out from 'of' to end of line 25 and insert 'section 80 payments for that year shall be determined by the formula:— (E- F) *G/H where E" is the postponed tax, within the meaning of paragraph 10 above; F' is an amount equal to 30 per cent. of any consideration for that year which falls within sub-paragraph (5)(a) of that paragraph; G" is the balance of the section 80 payments for that year; and H" is the aggregate of the capital payments (including that balance) taken into account under sub-paragraph (5)(b) of that paragraph for that year'.

No. 149, in page 178, line 29, leave out 'capital' and insert 'section 80'.

No. 150, page 178, line 35, leave out 'other capital payments' and insert 'capital payments which made up the other balance'.

No. 168, in page 178, line 5, at end insert '11A. — (1) Where, by virtue of sub-paragraph (2) of paragraph 11 above, the whole or any part of a capital payment falls to be left out of account as mentioned in that sub-paragraph, it shall to the same extent be left out of account for the purposes of the application on any other occasion of any provision of paragraphs 7 to 11 of this Schedule. (2) Where sub-paragraph (6) of paragraph 10 above applies for any material year of assessment, any capital payments which—

  1. (a) fall to be taken into account under sub-paragraph (5)(b) of that paragraph for that year, and
  2. (b) are not such as to fall within paragraph (11)(1) above,
shall be left out of account for the purposes referred to in subparagraph (1) above (3) Where sub-paragraph (6) of paragraph 10 above does not apply for any material year of asessment, so much of any capital payment falling within paragraphs (a) and (b) of sub-paragraph(2) above is equal to 3⅓ times the amount of postponed tax released by that payment shall be left out of account for the purposes refered to in sub-paragraph (1) above. (4) The amount of postponed tax released by a capital payment shall be determined for the purposes of sub-paragraph(3) above, except that, in applying that formula for those purposes, "G" shall be the amount of the capital payment in question. (5) In this paragraph, "material year of assessment" shall be construed in accordance with paragraph 10(4) above.'.—[Mr. Hayhoe.]

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