(Except Clauses 1, 4, 5, 9, 14, 22, 42, 56, 57, 124, 130 to 135, 138, 139, 148 and 184 and Schedules 5, 6, 19 and 25, and any new Clauses and Schedules tabled by Friday 9th May 2003 relating to excise duty on spirits or RÿD tax credits for oil exploration.) - Schedule 22 - Employee securities and options
Finance Bill
2:30 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
You add some humour to a dry subject, Mr. McWilliam, for which I thank you.
On the first group of amendments, which includes amendments Nos. 107 and 108, the objective is to make it clear that warrants are not to be treated as securities for the purposes of chapters 2 to 4, which are the provisions dealing with restricted shares, convertible securities, securities with artificially depressed values, securities disposed of for more
than market value, and post-acquisition benefits from securities. Although warrants are not the same as options, there is good reason for distinguishing them. The point illustrates the need for clearer drafting.
I move on to amendment No. 108 and the definition of securities being expanded to include rights under contracts for differences or contracts similar to contracts for differences, which ensures that the provisions relating to shares are not avoided by other types of interest or securities providing similar benefits, but having different characteristics. The definition of contracts similar to contracts for differences appears to go too far in referring to a ''pretended purpose.'' Amendment No. 108 corrects that drafting error.
Amendments Nos. 105 and 106 go together. They relate to an important area. They ensure that venture capital partnerships are outside the scope of the Bill. We hope that the Paymaster General will make a statement saying that the terms of the joint Inland Revenue and British Venture Capital Association letter will continue to apply, or else state what practice will. The amendments are designed to exclude interests in a limited partnership from the definition of units in a collective investment scheme.
On amendment No. 24, it is inappropriate for the Treasury to have the right to rewrite fundamentally the basis of tax legislation by order, which is what the relevant provision allows.
To summarise, the important territory is venture capital. I cannot believe that the Government intend to catch it in all the complexities, nightmares and traps of the schedule.