Finance Bill 2002
Amendment 133 Page 300 Line 38
Amendment 134 Page 300 Line 40
Amendment 135 Page 300 Line 43
Amendment 136 Page 300 Line 45
Amendment 137 Page 301 Line 8
Amendment 138 Page 301 Line 19
Amendment 139 Page 301 Line 37
Amendment 140 Page 301 Line 41
Amendment 141 Page 301 Line 43
Amendment 142 Page 301 Line 49
Amendment 143 Page 302 Line 1
Mr Andrew Smith (Labour, Oxford East)
133
Schedule 25, page 300, line 38, leave out ?(9)? and insert ?(7)?.
134
Schedule 25, page 300, line 40, after ?if? insert ?(a)?.
135
Schedule 25, page 300, line 43, leave out ?(within the meaning of section 87 of this Act)?.
136
Schedule 25, page 300, line 45, at end insert ?; and
(b) the first accounting period of the creditor company for which there is or was such a connection is an accounting period beginning on or after 1st October 2002?.
137
Schedule 25, page 301, line 8, leave out from ?the? to end of line 10 and insert ?accounting period mentioned in sub-paragraph (2)(b) above.?.
138
Schedule 25, page 301, line 19, leave out from ?connection? to ?between? in line 20.
139
Schedule 25, page 301, line 37, leave out 'sub-paragraph (6) above? and insert ?this paragraph?.
140
Schedule 25, page 301 line 41, at end insert ?or?.
141
Schedule 25, page 301 line 43, leave out from ?person? to end of line 46.
142
Schedule 25, page 301, line 49, leave out ?paragraphs (a) to (c)? and insert ?paragraph (a) or (b)?.
143
Schedule 25, page 302, line 1, leave out from ?above? to end of line 10 and insert ??control? has the meaning given for the purposes of section 87 by section 87A of this Act.?.?.
EXPLANATORY NOTE
SUMMARY
1. The purpose of the amendments is to ensure that
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for the whole of paragraph 6B Schedule 9 FA 1996 the term ?connection? has the same meaning.
- the new rules in paragraph 6B(2) to (4) Schedule 9 FA 1996 only apply where a creditor company becomes connected with a debtor company in a period that begins on or after 1 October 2002
DETAILS OF THE AMENDMENTS
2. Amendments 134, 136 and 137 modify paragraphs 6B(2) and (4) Schedule 9 FA 1996 (inserted by paragraph 26 of Schedule 25 to the Bill). Paragraph 6B(2) with 6B(3) and (4) set out a new rule which allows a company which
-
becomes connected with a debtor company
- has already recognised a bad or doubtful debt in respect of the amount owed by that debtor
to keep the relief and not have it clawed back as would be required by the rules applying where a creditor is connected with a debtor.
3. This rule, like all the other new rules in paragraph 25 was intended to apply only for periods beginning on or after 1 October 2002, and only where the connection between the two companies was established for the first time in such a period. But the legislation as included in the Bill is capable of being read as meaning that it applies even when the connection was first established at an earlier time.
4. The amendments clarify the paragraph so that it clearly applies only where the connection is established in a period beginning on or after 1 October 2002.
5. Amendments 133, 135 and 138 to 143 change the meanings of connection in the paragraph. As it stands connection has a different meaning in
- paragraphs 6B(2) to 6B(4) (where it means a new version of section 87 and 87A FA 1996) and
- paragraphs 6B(5) to (7) (which deal with the situation where a creditor becomes connected with a debtor as a result of buying the debt, where it has the meaning in the original legislation).
6. The meaning now used throughout paragraph 6B is the new one, and that applies even where ?connection? is determined for a pre-1 October 2002 period.
BACKGROUND
7. The measures included in the Finance Bill as Schedule 25 represent the outcome of a major consultative process between the Government and representatives of, and advisers to, business. Two Consultative documents and a Technical Note have been produced, and two rounds of draft clauses have been published, most recently on 19 December 2001.
8. These amendments take account of representations made in response to the publication of the Bill.