§ Mr. SayeedTo ask the Chancellor of the Exchequer if he will publish a brief summary of the main differences between the Norwegian K/S investment scheme and the business expansion scheme in so far as they affect investment in shipping.
§ Mr. Norman LamontNorwegian K/S partnerships and the business expansion scheme are entirely different. K/S partnerships, which are usually involved in shipping, are in principle similar to United Kingdom limited partnerships. A K/S partnership is not itself chargeable to tax; instead, the individual partners are taxed on their share of the partnership's profits and are entitled to the tax allowances associated with the partnership's business. This carries certain tax advantages for investors. The Norwegian Government have recently made proposals to limit the use of such partnerships.
The business expansion scheme offers tax relief on investments made by outside investors in new full-risk equity of small United Kingdom unquoted companies, including companies which operate or let ships. The Government welcome the fact that more shipping companies are using the BES to raise finance this year.