Stock Lending: Power to Modify Rules

New clause 8 – in the House of Commons at 4:20 pm on 3rd April 1995.

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'.—(1) In subsection (1) of section 129 of the Taxes Act 1988 (description of stock lending arrangements)—

  1. (a) for "subsection (4)" there shall be substituted "subsections (2B) and (4)"; and
  2. (b) the words "has contracted to sell securities, and to enable him to fulfil the contract, he" shall be omitted.

(2) In subsection (2A) of that section, for "A to fulfil his contract" there shall be substituted "B to make the transfer to A or his nominee".

(3) After subsection (2A) of that section there shall be inserted the following subsection— (2B) Except in so far as the Treasury by regulations otherwise provide, this section applies only if A enters into the arrangement mentioned in subsection (1) above to enable him to fulfil a contract under which he is required to sell securities.

(4) After subsection (4) of that section there shall be inserted the following subsections— (4A) Regulations under subsection (4) above relating to section 271(9) of the 1992 Act may include provision modifying the operation of that Act in relation to cases where, by virtue of the regulations, any acquisition or disposal is excluded from those which are to be disregarded for the purposes of capital gains tax.(4B) In such cases as the Treasury may by regulations provide, this section shall have effect as if references to a transfer of securities of the same kind and amount as those subject to a previous transfer included references to the grant of equivalent rights in respect of benefits accruing from the redemption of securities of the same kind and amount.

(5) For subsection (9) of section 271 of the Taxation of Chargeable Gains Act 1992 (exemption for arrangements to which section 129 applies) there shall be substituted the following subsection— (9) Subject to any regulations under subsection (4) of section 129 of the Taxes Act, any disposal and acquisition made in pursuance of an arrangement mentioned in subsection (1). (2) or (2A) of that section shall be disregarded for the purposes of capital gains tax unless it is one in the case of which subsection (2B) of that section has the effect of preventing that section from applying.—[Mr. Nelson.]

Brought up, read the First and Second time, and added to the Bill.