HC Deb 04 July 2002 vol 388 cc459-60
John Healey

I beg to move amendment No. 14, in page 434, line 22, leave out sub-paragraph (4) and insert— '(4) Sub-paragraph (1) has effect subject to—

  1. paragraph 126 (application of Schedule to fungible assets), and
  2. paragraph 126A (certain assets acquired on transfer of a business treated as existing assets).'.

Mr. Deputy Speaker

With this it will be convenient to discuss Government amendments Nos. 15 to 18.

John Healey

I shall be brief. Amendments Nos. 14, 15 and 18 are designed to correct a mismatch which has come to light between schedule 29 and the capital gains rules on company reconstructions. Amendments Nos. 16 and 17 deal with a problem in the drafting that was identified by the hon. Member for Arundel and South Downs (Mr. Flight) in Committee. The hon. Gentleman was assiduous throughout our proceedings in Committee, paying great attention to detail. I promised further consideration when he withdrew his amendments in Committee. Amendments Nos. 16 and 17 are the result of that further consideration. They will help to ensure that the major reform of corporation tax treatment of intangible assets will now work in a way that all those with an interest in these matters would wish.

Amendment agreed to.

Amendments made: No. 15, in page 437, line 28, at end insert— 126A (1) This paragraph applies where—

  1. an asset that is an existing asset in the hands of a company ("the transferor company") is transferred to another company ("the transferee company"), and
  2. the transfer is one in relation to which—
    1. section 139 of the Taxation of Chargeable Gains Act 1992 (reconstruction or amalgamation involving transfer of business), or
    2. section 140A of that Act (transfer of UK trade to company resident in another member State),
applies with the effect that the transferor company is treated for the purposes of that Act as disposing of the asset for a consideration that secures that neither a gain nor a loss accrues to that company. (2) Where this paragraph applies the asset shall be treated for the purposes of this Schedule as an existing asset in the hands of the transferee company. (3) This paragraph does not apply where the transfer mentioned in sub-paragraph (1) occurred before 28th June 2002.'.

No. 16, in page 437, line 39, leave out sub-paragraph (3) and insert— '(3) If the asset—

  1. (a)was acquired before the beginning of the first accounting period to which this Schedule applies in relation to it, and
  2. (b)is a chargeable intangible asset immediately after the beginning of that period,
it shall be treated for the purposes of Part 7 (roll-over relief on realisation and reinvestment) as if it had been a chargeable intangible asset at all material times between its acquisition and the beginning of that period.'.

No. 17, in page 438, line 16, leave out sub-paragraph (4) and insert— '(4) If the asset—

  1. was acquired before the beginning of the first accounting period to which this Schedule applies in relation to it, and
  2. is a chargeable intangible asset immediately after the beginning of that period,
it shall be treated for the purposes of Part 7 (roll-over relief on realisation and reinvestment) as if it had been a chargeable intangible asset at all material times between its acquisition and the beginning of that period.'.

No. 18, in page 444, line 5, at end insert "(and see paragraph 126A)".—[Dawn Primarolo.]

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