One point that the Law Society made was that non-trading losses on intangible fixed assets to be carried forward to the next accounting period should be added to the list of carry-forward provisions. Is the Minister saying that the tax treatment of such assets should fall under the capital gains tax regime, not the proposed regime?
John Healey: If I may, I shall return to that at the appropriate point in my remarks.
Schedule 29 sets out the detail of the provisions, and schedule 30 sets out the consequential amendments that are needed to other taxation legislation. Government amendments Nos. 212 to 214 are not substantive; they simply correct minor drafting errors that we have picked up over the past few days. They therefore form a proper part of schedule 30.
The legislation has been drafted in the new style that we adopted for the tax law rewrite project. The consultation draft that the Inland Revenue published at the time of the 2001 pre-Budget report was widely welcomed for its clarity and, by tax legislation standards, for its relatively plain English. That certainly helped the recent consultation process.
The reform in clause 83 and the accompanying schedules marks an important step on the road to a modern and competitive UK corporate tax system. As the hon. Member for Arundel and South Downs explained, the amendments would make capital gains roll-over relief available to companies that dispose of their pre-commencement intangible assets—those that pre-date 1 April—as an alternative to the roll-over relief provided by the new intangibles regime. That gives companies the scope to reinvest gains in a wider range of assets—tangibles and intangibles—and, in some cases, to defer tax on such gains for longer.
By way of background, I should explain that the roll-over relief provisions and the rules for dealing with companies' existing assets were the product of the extensive consultation process. The rules were designed to respond to the issues that business raised with us. They have, therefore, been widely welcomed. In particular, the facility to roll-over gains that are taxed as income under the new rules against the acquisition of further intangibles is unprecedented and generous.
The transitional arrangements, too, are already generous to companies. Companies are able to benefit from capital gains loss relief, indexation and 1982 values on the disposal of their existing assets at the same time as enjoying the new relief against current income on the assets that they buy.