COMPANY RECONSTRUCTIONS (Hansard, 17 July 1986)

HC Deb 17 July 1986 vol 101 cc1274-6 1274

§ Amendment proposed: No. 81, in page 139, line 13, leave out from 'for' to end of line 14 and insert— 'the words from "any", in the second place where it occurs, to the end there shall be substituted "such apportionments of receipts, expenses, assets or liabilities shall be made as may be just."'.—[Mr. Norman Lamont.]

§ Mr. Bermingham
On a point of order, Mr. Deputy Speaker. It is a technical point of order. My point is that amendments cannot be discussed if they are moved formally. The amendment as it stands may go through but I would suggest, with the greatest respect, that it would seem to be fair that the next amendment or the group should then be formally moved. I know that it is a technical point, but it would give any hon. Member who particularly wants to speak on an amendment the right to do so.

Mr. Deputy Speaker
I am not quite sure which amendment the hon. Gentleman is speaking to. If he is speaking to an amendment which has been discussed with another amendment, he should speak on the amendment which was called first. Will the hon. Gentleman tell me which amendment he is referring to?

§ Mr. Bermingham
Without seeking to be discourteous, Mr. Deputy Speaker, I think that your learned Clerk appreciates my point. Amendment No. 81 has just been formally moved. It may have been bracketed for convenience in the order of selection with other matters, but when we come to amendment No. 82, which is the next one, it in turn has to be formally moved to enable an hon. Member to speak.

Mr. Deputy Speaker
The hon. Gentleman is perfectly in order to speak to amendment No. 81, together with other amendments which are grouped with it. Does he wish to do so?

§ Mr. Bermingham
All I seek to do in raising this point of order is to be utterly formal. I know that it may be boring to certain hon. Members, but I do not seek to worry about that at this stage.
One is setting a precedent. All that I am asking is that—

Mr. Deputy Speaker
We are on Government amendment No. 81, which is grouped with other amendments. Perhaps I dealt with it in too telescoped a manner, but the group includes amendment No 82. The hon. Gentleman is in order to speak to it, and I shall call him now if he wishes to do so.

§ Mr. Bermingham
I seek not to speak on any particular amendment. I am saying that a matter of principle is involved. After amendment No. 81 has been agreed to, we then move on to Government amendments Nos. 82 to 87. If the Government wish to move them formally, I have no objection to it, but it sets a precedent. It is just sloppiness. We have had enough problems on the Bill as it is. I seek merely to have each amendment put in turn.

Mr. Deputy Speaker
It is a well-established procedure. The grouping of amendments is on the Amendment Paper, which the hon. Gentleman no doubt has. It has been in the No Lobby for some time. I do not wish to rush the House, but it is customary, if a Minister moves an amendment 1275 formally, for me to see whether anyone rises. No one rose. I do not want to embarrass the hon. Gentleman. Again, I invite him to speak on any of this group of amendments. If he wishes to do so, I shall be glad to hear him.

§ Mr. Bermingham
I am grateful to you, Mr. Deputy Speaker. I merely wanted to say this. Amendment No. 146 is the last of the group. I wanted to ask the Minister why it was necessary to table the amendment. It is as simple as that.

§ 9 pm

§ Mr. Norman Lamont
Amendment No. 146 is consequential on amendment No. 81. Amendment No. 81 slightly changes the wording of a provision that enables apportionments to be made where the predecessor company ceases to carry on only part of its trade and continues to carry on the other part. The amendment replaces the reference to "necessary apportionment" by a reference to such apportionments … as may be just.

§ Mr. Bermingham
What worries me is when a large conglomerate with some subsidiaries decides to fold one to the advantage of another. Who would determine what was necessary and what was not?

§ Mr. Lamont
As I said, the question of necessity will not arise, but obviously there are ways in which the loans—which are the object of the hon. Gentleman's question—can be apportioned between different companies to continue the losses that are to be available for tax relief purposes. Amendment No. 81 is a relieving provision. It does not make it more restrictive. I would be treading in difficult territory if I attempted to define apportionments … as may be just, but those are the words that are written into the Bill.

§ Mr. Bermingham
I thank the Minister for that reply. Perhaps he will see the point that I am driving at. By the very apportionment of loans between companies A, B and C, it is possible to shift tax losses, or reliefs, perhaps to the most profitable sector, to the detriment of the Revenue. I hope that the Revenue will keep that matter very much under observation.

§ Mr. Lamont
Of course we will. The purpose of this series of amendments is to restrict the relief that has been available. It is also designed to discourage the double counting of relief in those situations.

§ Amendment agreed to.

§ Amendments made: No. 82, in page 139, line 23, leave out 'and'.

§ No. 83, in line 24, after 'successor' insert— 'and which, in a case where the predecessor was the predecessor on a previous application of section 252 above, were not by virtue of section 252(8) above apportioned to a trade carried on by the company which was the successor on that application'.

§ No. 84, in line 34, leave out 'and'.

§ No. 85, in line 35, after 'successor', insert— 'and which in a case where the predecessor was the predecessor on a previous application of section 252 above, were not by virtue of section 252(8) above apportioned to a trade carried on by the company which was the successor on that application'.

§ No. 86, in page 140, line 16, leave out 'attributable to the trade and'.

§ No. 87, in line 24, at end insert— '3. The following shall be inserted after sub-paragraph (5) of paragraph 17 of Schedule 9 to the Finance Act 1981 (restriction of carry forward of unused relief)— 1276 (5A) Where an amount for which a company is entitled to relief by virtue of section 252(3) of the Taxes Act (company reconstructions: successor's entitlement to carry forward predecessor's loss) is reduced by virtue of section 252(3A) of that Act, the part of the amount in respect of which, by reason of the reduction, there is no relief shall for the purposes of this paragraph be taken to consist—

(a) first of capital allowances for accounting periods of the predecessor ending not earlier than 14th November 1980;
(b) next of relief under this Part of this Schedule, taking relief in respect of a later period of account before relief in respect of an earlier one;
(c) next of losses incurred in the trade in accounting periods of the predecessor ending not earlier than 14th November 1980 (calculated without regard to capital allowances or relief falling within paragraphs (a) and (b) above) and including any losses treated under section 254(5) of the Taxes Act as incurred in such accounting periods;: and
(d) lastly of other losses, capital allowances and reliefs.

(5B) In sub-paragraph (5A) above "the predecessor" has the same meaning as, in section 252 of the Taxes Act.".'.—[Mr. Norman Lamont.]