Clause 4 - Tax
Horserace Betting and Olympic Lottery Bill
10:30 am

Mr James Paice (South East Cambridgeshire, Conservative)

I beg to move amendment No. 30, in

clause 4, page 3, line 4, after second 'tax', insert

', stamp duty land tax'.

Mr Jonathan Sayeed (Mid Bedfordshire, Conservative)

With this it will be convenient to discuss the following:

Amendment No. 31, in

clause 4, page 3, line 12, after 'enactment', insert 'or regulation'.

Government amendment No. 42.

Amendment No. 32, in

clause 4, page 3, line 12, after 'duty', insert

'and Stamp Duty Land Tax'.

Mr James Paice (South East Cambridgeshire, Conservative)

I must confess that I am not in the habit of writing to my wife very often, or even to other parties, but if I were to follow the example of the hon. Member for Bath and do so, I have a small degree of optimism that I might be able to on this group of amendments, not least because the Government have tabled an amendment, which simply serves to point out an omission that I made in not covering all the avenues. The amendments are simple. The clause, which relates to the tax impact of the sale and transfer of the Tote, should include reference to the new stamp duty land tax. The approach underlying the clause and the Bill is intended to ensure that the conversion of the existing board into a plc has no tax consequences. We have a new tax—believe it or not—from this Chancellor: stamp duty land tax, which came into

effect on 1 December 2003. That was probably after this Bill had gone to the printers, and therefore it is not included, but it clearly needs to be if we are to retain the planned neutral impact of the Bill. I understand that the Inland Revenue has acknowledged the need for the clause to be amended. Our proposals are simply intended to correct the omission, and I look forward to the Minister's acceptance.

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

The aim of clause 4 is to preserve the tax neutrality of the transfer, which is what the hon. Gentleman was getting at. Amendments Nos. 30 and 32 insert express references to stamp duty land tax. The Government accept that stamp duty land tax needs to be mentioned, but it is sufficient for that to be in subsection (2). Therefore, I commend amendment No. 42 to the Committee and ask the hon. Gentleman to seek to withdraw his amendment.

Amendment No. 31 ensures that the transfer to the successor company will not give rise to a liability under an enactment or regulation about stamp duty. The word ''enactment'' is capable of covering secondary legislation, and we do not believe that an arbitrary distinction could be drawn between tax liabilities in primary legislation and those in regulations. For that reason, I hope that the hon. Gentleman will not press the amendment.

Mr James Paice (South East Cambridgeshire, Conservative)

I should be interested if the Minister could explain why he believes that it can all be covered under subsection (2), as in most clauses the opening lines are important. Clause 4 says that

''for the purposes of any enactment about income tax, corporation tax or capital gains tax—

(a) the successor company and the Horserace Totalisator Board shall be treated as the same person''.

The Minister appears to be saying that it is not necessary to put stamp duty land tax into that statement, but it can go in, as he proposes, in line 12, at the end of the clause. I do not know why that is, as all the other taxes are covered in the opening line of the clause. I should be grateful for an explanation.

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

The explanation that I have is that subsection (2) deals with stamp duty and stamp duty land tax. Subsection (1) is about the rest.

Mr James Paice (South East Cambridgeshire, Conservative)

I shall not argue the point, as I suspect that the Minister and I would quickly strip open Revenue legislation, but I am grateful to him for his response. If the Government's view is that his amendment will suffice to ensure the neutrality of the taxation regime, which we both seek to achieve, I should be prepared to support it. It probably goes down as worth half a postcard. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 42, in

clause 4, page 3, line 12, after duty, insert

'or stamp duty land tax'.—[Mr. Caborn.]

Question proposed, That the clause, as amended, stand part of the Bill.

Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)

The clause deals with two sets of taxation. Subsection (1) provides that for all income tax, corporation tax and capital gains tax purposes the

successor company is to be treated as if it had always been the Tote, and the transfer will not have any tax consequences. I think that that answers the hon. Gentleman's question. Subsection (2) ensures that liability to stamp duty or stamp duty land tax does not arise on the vesting of the Tote's property in the successor company, or on certain preliminary transactions. Together, the measures will provide tax neutrality for the sale of the Tote.

Question put and agreed to.

Clause 4, as amended, ordered to stand part of the Bill