Clause 163 - Avoidance affecting proceeds
Finance Bill
5:15 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
Sir Nicholas, may I add my welcome to your chairmanship of the proceedings? You may have to listen to my voice for the next two sittings, so I shall be speedy.
Clause 163 introduces measures to counter an avoidance scheme, which should be blocked. The remedy it proposes is disproportionate to the abuse, however, because it denies the full amount of any balancing allowance that the asset owner claims rather than the proportion attributable to the scheme. The explanatory note is not strictly accurate because the detailed explanation refers to the denial of a balancing allowance on a fall in value, which is incorrect because the clause would entirely deny any allowance.
The Paymaster General knows that the amendment has the broad support of the Law Society and other professionals. She may argue that we should not pussyfoot around because the Government are trying to block tax avoidance, but it is traditional in British law that remedies should be proportionate. The amendment is designed to reduce the balancing allowance by the reduction in proceeds caused by the tax avoidance scheme, which is proportionate.