Clause 64 - Postponement of change to mark-to-market in certain cases
Finance Bill
5:30 pm
Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)
I am grateful to the hon. Gentleman for setting out the purpose of the clause. I shall not repeat it because I am sure that the Committee has heard enough. The hon. Gentleman merely queries whether the industry is happy with the dates in the clause.
The clause provides insurance companies with a special rule to allow them to postpone the move to a mark-to-market basis for tax purposes until 2002—a strict application law would make them go back to 1998. To be more precise, the previous basis of tax will still be available for periods of accounts that begin before 1 August 2001, which was the date of the announcement of the changes, and end before 31 July 2002.
The clause has been the subject of detailed consultation with the industry, the Association of British Insurers and others; they have expressed no desire to extend the transitional arrangements. The Bill reflects many of the points that they raised about the draft clauses published on 9 August. I hope that the assurances that I have given will persuade the hon. Gentleman to withdraw his amendment.