Clause 51 - Chargeable gains
Finance Bill
4:15 pm
Brooks Newmark (Braintree, Conservative)
Will the Minister clarify one point? Why do the Government allow transactions under these provisions to benefit from the formal and legally binding advance clearance system established in clause 51, in respect of whether there was a main purpose of tax avoidance in using the provisions, while refusing to extend such a mechanism, despite taxpayers' desire for this, for the new tax arbitrage regime? Can the Minister reconcile that with the Paymaster General's comment last week, when she was asked to introduce a pre-clearance mechanism in respect of arbitrage rules? She said:
''By adopting an informal process, which works well for other anti-avoidance measures, companies are provided with the flexible system that they want, under which they will not feel obliged or pressured to seek formal clearance in every case, with all the costly bureaucracy and fees that go with ensuring that their approach is agreed. Instead, they need only ask for assistance when they are uncertain of the operation or application of the rules . . . If there is a statutory regime for clearance where even schemes that do not need it, because they are perfectly straightforward and no dispute is involved, go into that system and resources are consumed, the choice is a longer delay or not to do something else in the tax system.''—[Official Report, 23 June 2005; Vol. 435, c. 149–150]