Clause 43 - Exemptions for disposals by companies
Finance Bill
10:45 am
Ms Ruth Kelly (Economic Secretary, HM Treasury; Bolton West, Labour)
I thank the hon. Gentleman for his words of welcome. There has indeed been very extensive consultation on the clause. It was announced in Budget 2000 that the Government would consult on the possibility of introducing a roll-over relief for gains on substantial shareholdings held by companies. In June of that year, the Inland Revenue issued a technical note outlining possible roll-over relief. In November, another technical note was issued outlining the form of the roll-over relief and raising the possibility of an exemption as an alternative to that. In the following Budget there was an announcement that the exemption for company gains would be examined in the context of wide-ranging consultation on the direction of company tax reform. That was followed in June by a substantial consultative document on large business taxation, which discussed both roll-over relief and exemption in a wider context. At around the same time, draft clauses were published for comment in the pre-Budget report. In March this year the Chancellor confirmed that exemption would be introduced from 1 April and the final draft legislation was published. The provision has been welcomed by the business community and is an integral part of our programme for modernising company taxation. The new regime will enable United Kingdom companies to restructure rapidly and flexibly in response to emerging global opportunities without being constrained by the tax system.
Question put and agreed to.
Clause 43 ordered to stand part of the Bill.