LEVY ON DISPOSALS OF LAND, ETC. (Hansard, 23 July 1991)

§ Mr. McLoughlin
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker
The amendment involves privilege.
With this it will be convenient to consider Lords amendments Nos. 8, 10, 16 and 36.

§ Mr. McLoughlin
Amendments Nos. 7, 8 and 16, and the amendment to the Bill's title are all in one way or another paving or consequential amendments of amendment No. 10, which is designed to close a serious potential loophole in the arrangements for a clawback levy contained in clauses 17 and 18 of the Bill. In its present form, that levy applies only to land which is transferred directly from a port authority to its successor company. But some of the larger trust ports own subsidiary companies and, even if they do not, may well have the power to establish them. These companies perform a variety of functions, including, in some cases, the owning of land. It is therefore clearly necessary that the Bill should provide for the levy on onward land disposals to apply not just to land owned by the successor company itself but to land owned by the port authority's subsidiaries, which after the transfer will become subsidiaries of the successor company.
The amendments tighten up a possible loophole. I commend them to the House.

§ Ms. Walley
Suffice it to say that this is just one more example of how in reality we are dealing with a finance Bill rather than a transport Bill. The fact that the Treasury did not understand the difference between the successor companies and the subsidiary companies at the outset of the proceedings of the Bill means that at this late stage this has had to be done to achieve consistency. Nevertheless, we agree that the amendments tighten up the loopholes.

§ Mr. McLoughlin
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker
The amendment involves privilege.
With this, it will be convenient to consider Lords amendments Nos. 11, 12, 13, and 15.

§ Mr. McLoughlin
The principal amendment in this group of five amendments is amendment No. 12, which is intended to close a technical but not insignificant gap in the provisions of the Bill relating to the clawbreak levy. The amendment refers to the meaning of the word "disposal" in the context of clause 17, and it is made necessary because of a discrepancy between the time factor in clause 17 of the Bill—specifically, the levy period of 10 years—and a time factor which is sometimes relevant for determining whether there has been a disposal for the purposes of the Capital Gains Tax Act 1979. This latter time factor may be referred to as the six-year time limit.
The Government have accepted that "disposal" should have the same meaning for clawback purposes as it has for the purposes of the 1979 Act—that is, the Capital Gains Tax Act—and this is expressed in subsection (4) of clause 17. One of the cases where there is a disposal for the purposes of the 1979 Act could, however, have anomalous effects if applied without modifications for the purpose of clause 17. The case in question would be where land or an interest in land was transferred by a successor company to another company within the same group—or, indeed, by a relevant port authority to a subsidiary company at some time before the property of the authority is transferred to a successor company under clause 2 of the Bill—and then, during the levy period, the company owning the land or interest in land leaves the group.

§ Mr. McLoughlin
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker
The amendment involves privilege.
With this, it will be convenient to consider Lords amendments Nos. 17 and 18.

§ Mr. McLoughlin
This amendment makes it possible for penalties to be imposed where the provisions concerning the clawback levy on subsequent disposals of land are not complied with. I am sure that it will be welcomed by the House.

§ Ms. Walley
I place on record the fact that this will be subject to affirmative orders in both Houses. We pressed for that in Committee and we very much welcome the amendment.