(Except clauses 11, 18, 40, 43, 44 and 69 and schedule 8) - Clause 24 - Deduction cases
Finance Bill
2:00 pm
Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
In his opening remarks, the hon. Member for Runnymede and Weybridge described the second set of amendments as sub-group two. Amendments Nos. 30 and 31 are not directly concerned with the issuing of notices. They relate to the conditions that determine when the legislation applies. The legislation sets out conditions A to D. Condition D limits the legislation to cases in which tax deductions arising from the scheme are of more than a minimal amount. Amendment No. 30 would replace condition D with a new one based on a comparison of tax effects with or without the arbitrage system. Condition C already requires that the main purpose, or one of the main purposes, of the scheme is to achieve a UK tax advantage.
As explained in the guidance, that condition requires a comparison to be drawn between tax deductions that arise under the scheme and those that would have arisen in the absence of the scheme. It appears that amendment No. 30 is intended to make the same comparison. If that is its intention, I am happy to give reassurance that condition C already requires a comparison to be drawn, but the same result is not achieved by the amendment as drafted. Let me explain why.