§ Mr. BellinghamTo ask the Chancellor of the Exchequer if he will make a further statement about measures to combat tax avoidance.
§ Mr. MaplesThe Government intend to bring forward measures in the current Finance Bill aimed at preventing302W the circumvention of the corporation tax ring fence around profits from North Sea oil, by schemes involving the use of stapled stock.
Section 497 of the Taxes Act 1988 prevents a company from setting off advance corporation tax on distributions made to an associated company against corporation tax on its ring fence profits—broadly the profits from exploring for and producing oil and gas in the United Kingdom and United Kingdom continental shelf. The Government propose to extend this provision to cover distributions made to any shareholder in respect of securities the ownership of which is linked in the form of stapled stock or otherwise to the ownership of shares in an associated company. The proposals will take effect for distributions made on or after today.