Limited Partners: Restriction of Reliefs

Orders of the Day — Finance Bill – in the House of Commons at 9:30 pm on 10th July 1985.

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Photo of Mr Peter Rees Mr Peter Rees , Dover 9:30 pm, 10th July 1985

I beg to move amendment No. 31, in page 47, line 22, leave out from `restriction' to end of line 37 and insert 'in case of limited partners and others of reliefs in respect of losses, interest and charges and of allowances for expenditure) shall have effect where the chargeable period—

  1. (a) in which the loss in question is sustained or incurred, or the interest or charges in question paid, or
  2. (b) for which the allowance in question falls to be made, begins after 19th March 1985.
(2) That Schedule shall also have effect where that period begins on or before that date and ends after it if the person sustaining or incurring the loss or paying the interest or charges, or to whom the allowance falls to be made, begins after that date to carry on as a limited partner the trade—
  1. (a) in which, or in connection with which, the loss is sustained or incurred or the interest or charges paid, or
  2. (b) in taxing which, or by reason of participation in which, the allowance falls to be made,
and it is immaterial whether or not he was carrying on the trade otherwise than as a limited partner on or before that date.'.

Photo of Mr Ernest Armstrong Mr Ernest Armstrong , North West Durham

It will be convenient also to take Government amendments Nos. 67 to 73.

Photo of Mr Peter Rees Mr Peter Rees , Dover

The purpose of the amendment is to allow the taxpayer to elect for the indexation of allowances to be based on the value of an asset at 31 March 1982 where the taxpayer making the disposal did not hold the asset at that time and each disposal of the asset since that time has been subject to a particular provision specifying that neither a gain nor a loss should arise. I am sure that the good sense of that will commend itself to the House and I hope that on that basis the House will accept the amendment.

Photo of Tony Blair Tony Blair , Sedgefield

I should like the Chief Secretary's assurance that we have understood the effect of the interlocking amendments. As I understand it, they tighten the anti-avoidance provisions in relation to limited partnerships by ensuring that they cover losses created by capital allowances as well as losses created by income. On that basis, the Opposition are happy to support the amendments. I wanted to ensure that we had understood the amendments correctly.

Photo of Mr Peter Rees Mr Peter Rees , Dover

I am happy to give the hon. Gentleman that assurance. The provision is designed to include capital allowances as well as charges on income and losses.

Amendment agreed to.