Schedule 7
Finance Bill
12:30 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
As I indicated on clause 37, this is a simplification that has proceeded with the support of the insurance sector, and the engagement of its advisers. As the Economic Secretary rightly pointed out, this new spirit of openness and consultation comes from the consequences of the announcement made in autumn 2005, which caused considerable unhappiness and uncertainty in the life insurance sector. This is the second year running that we have discussed changes to the insurance sector. There were significant reforms in 2003, 2004, 2005, 2006 and 2007. It would be helpful if Economic Secretary could indicate whether we are going to have to go back round the hurdles on the matter in 2008, or whether he feels that this is a settled set of reforms that are unlikely to see major changes.
I have a detailed question about schedule 7. As I understand it, the losses of the gross roll-up business cannot be carried back for 12 months, whereas losses of ordinary businesses and enterprises can be. Why are life assurance businesses being treated differently in this context from other types of business? Can the Economic Secretary illuminate the Committee a little more on the issue of transfers, to which he alluded in the first group of amendments? My assumption is that transfers within a life insurance company should not give rise to a tax loss or gain. He gave the impression that that aspect of these rules has not been pinned down yet. It would he helpful to have greater clarity on that matter.