Schedule 10 - Chargeable gains: taper relief: minor amendments
Finance Bill
4:30 pm
Ms Ruth Kelly (Economic Secretary, HM Treasury; Bolton West, Labour)
Welcome to the Chair this afternoon, Mr. Gale. The hon. Member for Arundel and South Downs (Mr. Flight) has moved, as he said, a technical amendment. His concern, however, is not valid and I hope that I can persuade him of that.
The definition of an interest in shares that will be introduced into the taper relief rules by schedule 10 corresponds exactly to that which applies to the new substantial shareholdings provisions, and does not represent any change for taper relief. It focuses on an interest in shares that people have if they own them together with someone else, which is exactly what we had in mind when we framed the taper rule. The reason why we have included a definition in the substantial
shareholdings provisions is because we were urged to do so by representative bodies that commented on the draft legislation that was published at the time of the pre-Budget report—they wanted clarity, and we have given it to them. Schedule 10 provides the same clarity for taper relief.
The hon. Gentleman suggested that a person who holds shares subject to forfeiture holds an interest in those shares as distinct from holding the shares themselves. The Inland Revenue's view is clear: for tax purposes the taxpayer holds the shares, and what matters is the beneficial ownership of the shares. The amendment would create uncertainty in an area in which we are bringing clarity, as it would leave wide open the question of what constitutes an interest in shares for taper relief. On those grounds, I suggest that the Committee rejects the amendment. I hope that the hon. Gentleman accepts my points and withdraws it.