Schedule 21 - Approved share plans and schemes
Finance Bill
10:00 am
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
We might call this a score draw between the Government and the Opposition, given the way in which the amendments would operate. Government amendment No. 166 withdraws the proposal to alter the tax-free holding period for dividend shares in a share incentive plan. That is the period during which the dividend shares must be held in a plan before they can be taken out tax free. Although the proposed change achieves the simplification that the industry asked for, it seems that those asking for the change did not establish with the administrators the full impact of the change. Feedback from the industry is that the proposed change would increase rather than decrease the amount of administration for employers, and they would prefer to remain with the existing rules. Our amendment responds to that and withdraws the new rules.
Amendments Nos. 14 and 15, which were tabled by the hon. Member for Arundel and South Downs, refer to the proposed changes to the rules of SIP dividend shares.
I said that this was a score draw, because the Government have the advantage of parliamentary draftsmen. Amendment No. 14 seeks to remove the proposed changes to the tax-free period for dividend shares. It is defective because it would fail to remove the consequential changes to paragraphs 10 to 15 in schedule 21. Amendment No. 15 would redefine the tax period, but Government amendment No. 166 also does that.
I hope that the hon. Member for Arundel and South Downs will welcome our action in tabling Government amendment No. 166, and will understand why we needed to table it. However, he can take some comfort from the fact that had he had access to parliamentary draftsmen he might have beaten us to it, and I might have been accepting his amendment. None the less, I hope that he welcomes our amendment.