HL Deb 11 July 1995 vol 565 c1569

[Page and line refers to Bill 118 as first printed by the Commons.]

1 Clause 7, page 4, line 13, at end insert: `(2) The existence or exercise of the powers of the Secretary of State under section 1 shall not be regarded as constituting or creating arrangements within the meaning of section 410 of the Income and Corporation Taxes Act 1988 (arrangements for the transfer of a company to another group or consortium) or as constituting or creating option arrangements for the purposes of paragraph 5B of Schedule 18 to that Act. (3) Any debt assumed under section 2 shall be treated for the purposes of the Corporation Tax Acts as if it had been assumed—

  1. (a) wholly in consideration of a loan made to the Crown Agents of an amount equal to the principal sum payable under the debt, and
  2. (b) wholly and exclusively for the purposes of the trade carried on by them.
If the terms of any such debt include provision for the payment of a sum expressed as interest in respect of a period which falls wholly or partly before the debt was assumed, any payment made in pursuance of that provision in respect of that period shall be treated for the purposes of the Corporation Tax Acts as if the debt had been assumed at the commencement of that period and, accordingly, as interest on the principal sum payable under the debt. (4) Any security (other than a share) issued by the successor company in pursuance of section 3 shall be treated for the purposes of the Corporation Tax Acts as if it had been issued—
  1. (a) wholly in consideration of a loan made to the company of an amount equal to the principal sum payable under the security, and
  2. (b) wholly and exclusively for the purposes of the trade carried on by that company.
If the terms of any such security include provision for the payment of a sum expressed as interest in respect of a period which falls wholly or partly before the security was issued, any payment made in pursuance of that provision in respect of that period shall be treated for the purposes of the Corporation Tax Acts as if the security had been issued at the commencement of that period and, accordingly, as interest on the principal sum payable under the security. (5) Any share issued by the successor company in pursuance of section 3 shall be treated for the purposes of the Corporation Tax Acts as if it had been issued wholly in consideration of a subscription paid to the company of an amount equal to the nominal value of the share.'.

Baroness Chalker of Wallasey

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1.

Moved, That the House do agree with the Commons in their Amendment No. 1.—(Baroness Chalker of Wallasey.)

On Question, Motion agreed to.