Clause 51 - Contingent, uncertain or unascertained consideration

Finance Bill – in a Public Bill Committee at 9:30 am on 5th June 2003.

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Question proposed, That the clause stand part of the Bill.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

The clause deals with contingent, uncertain or unascertained consideration, the most obvious examples of which would be the variable or turnover rents paid by shops, bars and hotels. Therefore, the clause, which appears rather narrow, is actually of great concern to many businesses in our constituencies.

The varying rents directly relate to the level of business that the enterprise achieves and reflect the widely fluctuating market within which such businesses operate. However, the clause also applies in other circumstances, such as a situation in which a landlord collects varying rents from several different tenants in a block; for example, that may occur in a shopping mall or an office block.

The contingency principle, as is recognised in the existing stamp duty, does cause problems. I welcome the fact that allowance has been made to enable those affected either to reclaim over-payments or to pay outstanding amounts at a later point, which we would welcome.

I would like to raise one or two concerns. Although we welcome the move from the description of best estimate to reasonable estimate—that is found on the last line of paragraph 2—will the Chief Secretary be more precise about the meaning of reasonable estimate in this context? We recognise the applicability of the terms ''contingent'' and ''uncertain'', but there is a real question about ''unascertained''. If a consideration is unascertained, how will it be estimated? When should that reasonable estimate be made? In matters of property, time is of the essence. It is assumed by many in the marketplace that the correct date will be what is termed elsewhere in the Bill as the effective date. I would appreciate it if the Chief Secretary would confirm that. If it is not, what is the date? Will he explain why, given the importance of the timing of the process, the term ''effective date'' is not included in the clause, because that would remove much uncertainty.

For multi-occupied properties, the clause will represent a significant administrative burden. If one thinks of a shopping mall of, for example, about 100 tenants, each with their own lease terms and their own rent review patterns, the clause would mean that occupiers would have to pay tax up front based on their reasonable estimate. Each would be subject to regular revision and new tax returns would be filed quarterly in some cases, and in some cases monthly. As rents changed, they would need to fill in new returns and correct their tax liabilities, then make applications

to reclaim the money that was not there. That is a huge burden, which also hits cash flow.

There is a combination of damage to cash flow for businesses, many of which are struggling at this stage in the economic cycle, and a heavy compliance burden for many small businesses that incur the tax. In conjunction with clause 80(4), the cost of reclaiming a rebate may cause a number of taxpayers to forego it. I was not entirely sure about that, but a number of professional bodies explained to me that the sheer complexity of the provision and the cost in management time for small businesses of having to go over that hurdle will be very significant. I hope that the Chief Secretary will comment on that.

One professional organisation, the Chartered Institute of Taxation, suggested a simpler approach, and I would like to describe it briefly to the Committee. The Inland Revenue should accept that the reasonable estimate is final at the taxpayers' option, leaving them to take the chance of not being able to ask for a refund. They would thereby be relieved of the administrative burden of filing regular returns. There may be some merit in that, and I hope that during the consultation process, which is outside our purview but running parallel to our discussions, the Government and the Chief Secretary will respond to that. I look forward to the Chief Secretary's reply.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

I reiterate the point made by the hon. Member for Hertford and Stortford, which has also been drawn to my and the Committee's attention by the Law Society revenue law committee. The clause does not provide for the date on which the estimate should be made. We should know that; it is essential for the purposes of valuation that the due date is known. I hope that the Chief Secretary will assure us that the necessary amendment will be tabled on Report.

Will the Chief Secretary confirm that the usual appeals processes apply in valuation matters? If the value cannot be agreed between the parties and the district valuer, an appeal is available to the Lands Tribunal. That is also important for taxpayers.

Several hon. Members rose—

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon 9:45 am, 5th June 2003

Order. Before I call the next speaker, may I caution right hon. and hon. Members, as I did during an earlier sitting, about reiterating arguments. It is in order to say that one agrees with a previous argument, but reiterating it is not in order.

Photo of John Baron John Baron Conservative, Billericay

Thank you, Mr. McWilliam. I welcome you to the Chair.

Subsection (2) provides for the chargeable consideration to be determined on the basis of a reasonable estimate, which is fine. However, in practice it is likely to be difficult, if not impossible, for the purchaser to make any meaningful estimate of the amount of the further consideration that would be chargeable, especially when the further consideration may fall due many years after the transaction. The Committee should be concerned about the need to estimate unascertainable consideration on a reasonable basis. My hon. Friend the Member for

Hertford and Stortford made the valid point that if something cannot be ascertained, we doubt whether it can, in most cases, be estimated. I would appreciate the Chief Secretary's view on how to square that, because it seems to be a difficult problem. There is immense scope for disagreement about what estimate is reasonable in such circumstances. It may seem that we are playing with words, but the matter is important in the commercial world, and I would appreciate it if the Chief Secretary could address the point directly. It is difficult to estimate something that cannot be ascertained.

I want to stray a little, but not too far, Mr. McWilliam, and ask the Chief Secretary whether it would be in order for clause 90, which deals with an application to defer payment when there is contingent or uncertain consideration, to be widened to include any transaction to get round the issue and ensure that all transactions under clause 51 are widened or included to remove the uncertainty? I look forward to hearing the Chief Secretary's response.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

In dealing with contingent consideration, my hon. Friend the Member for Hertford and Stortford referred to rents attaching to turnover. In some cases, rents will be attached to profits. My hon. Friend referred to the clause applying to larger companies such as shopping malls as turnover clauses are often attached to rents. However, it also applies to small companies not only taking rents but taking leases in less prestigious locations, often when landlords cannot rent properties easily so they do a deal with a company that is moving in. That is a different concept from that to which my hon. Friend referred, and is particularly the case with start-up companies and companies with a single income—for example, from a licence—when there will be an estimable stream of income. The success of start-up companies cannot be ascertained on day one, and it will be very difficult to provide a valuation on which to base stamp duty. In addition, those companies will have the worst cash position, the tightest cash control and will be least able to risk putting out money in advance. Such companies look to deferring payments rather than paying up front. The provision will have implications for smaller companies, and, as such, it is a tax on enterprise that could have a significant impact on that sector.

On the valuation mechanism, I noted that my hon. Friend mentioned that if the turnover or profits are not achieved, the tax can be paid back later. There is a cash-flow problem in that situation. If the stamp duty rebate is given later, will the interest that has been lost be paid back with the stamp duty?

Photo of Michael Jack Michael Jack Conservative, Fylde

I have a simple question. Will the Chief Secretary tell the Committee what happens about SDLT when a consideration is dependent on a performance aspect of a business, the business fails and therefore no money passes between the user of the leased property and the provider?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

The debate has been useful. The clause provides rules to enable taxpayers to establish a chargeable consideration for a land transaction when the consideration is unknown at the outset because the final amount remains to be paid. The amount could

depend on a contingency, such as obtaining planning permission on the land, or it could be uncertain because it depends on some future event. It might not have been ascertained. The hon. Member for Huntingdon (Mr. Djanogly) made the point that it could depend on profits for an accounting period when the accounts are not yet finalised.

As a transaction tax, SDLT needs rules that set out how the tax should be calculated when future events might affect the final amount of consideration to be paid. Under the clause, when contingencies affect the eventual amount of consideration, the purchaser may calculate the consideration on the basis that the amount that relates to the contingency will be payable. When the consideration is uncertain or still to be ascertained, the purchaser must make ''a reasonable estimate''—I will come to the definition of that—of the final consideration when the transaction takes place.

If it turns out that there is more or less tax to be paid, clause 80 provides for further payment or repayment of tax. In certain circumstances, clause 90 is relevant. The hon. Member for Billericay (Mr. Baron) referred to that. Clause 90 allows taxpayers to apply to the Inland Revenue to defer payment to tax.

Clause 51 provides a mechanism to allow taxpayers to pay the right amount at the right time. That is its purpose and what makes it so important to the consideration of this range of measures.

The hon. Member for Hertford and Stortford asked what is meant by ''reasonable estimate''. As is the case with self-assessment generally, it will be up to the taxpayer to supply the most appropriate estimate. The evidence that is appropriate to support the estimate will depend on the facts of the case. For a good reason, and to the great benefit of lawyers, the law always shies clear of defining ''reasonable''. In reality, a commercial tenant will usually have a good idea of the amount that they expect to pay over the term of the lease. There are business forecasts and management accounts, for example. The Revenue does not intend to challenge bona fide estimates, as long as they are reasonable, based on the facts available at the time. Issues that enable taxpayers to make a judgment will be laid out in guidance.

The hon. Member for Torridge and West Devon asked me to give an assurance about people who are dissatisfied. I am happy to do so. The normal appeals process will apply under the clause and it will be possible to make an appeal on the valuation to the Lands Tribunal.

As was mentioned, it is a concern to anyone who is running a business that there may be cash-flow problems if tax is paid in advance of paying the consideration. That is the inevitable consequence of SDLT being a transaction tax, but it does not differ from stamp duty. Businesses will be no more or less disadvantaged as a result of the measure than they would be under the existing rules, but, unlike stamp duty, they will be able to claim repayment if it transpires that they have overpaid. That is an

attractive element of the provision. The rules are designed to provide a workable and fair system for cases in which the amount is not clear at the outset, and if the transaction meets the criteria, application can be made for tax deferral.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

My understanding was that, if someone sold an asset with a contingent consideration, stamp duty would be payable on the ascertainable consideration and there would be a rebate. Of course, the difference is that in most cases people would get cash in their hands at the time of the transaction, which would mean that the deal had been done.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I do not think that that takes away from the central point that the measure is fair. It will be possible to claim a repayment, and businesses will not be unduly disadvantaged by anything introduced under the new system. If the criteria are met, there is an opportunity to apply for a tax deferral.

The suggestion has been made that the tax is too complicated. That was the nub of the accusation by the hon. Member for Hertford and Stortford. This is complex legislation. It is bound to be complex, because of the number of different circumstances in which it may prove difficult to work out how much SDLT to pay at the outset. The legislation has to cater for them all. If it did not do that, there would be the dreaded lacunae, which the hon. Member for Torridge and West Devon would be only too ready to point out.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

I hope that the Chief Secretary addresses the point that the Law Society, the hon. Member for Hertford and Stortford and I made about the trigger date for the tax, but I also ask him to reflect on the fact that valuation is an art, not a science. It is a double-edged sword for the taxpayer. If the figures are hugely wrong and far too much or too little tax is paid, what rights, if any, are there for the Inland Revenue stamp duty office or the taxpayer to put in a substituted value on ascertainment of the consideration?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

The hon. Gentleman is absolutely right that valuation is an art rather than a science. That must be a great comfort to valuers, because they do not find themselves in danger of losing out to some mechanistic formula or calculating machine.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

Smaller companies are the ones that will hurt, as they will have to pay valuers to make the assessments in the first place. It is an important point. The Chief Secretary laughs off the impact of valuers, but they cost money. The implication of the clause is that small companies will have to pay for valuers as well.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury 10:00 am, 5th June 2003

I am not laughing it off. I was having a gentle dig at the hon. Member for Torridge and West Devon, but I certainly do not laugh it off. I shall deal in more detail in a moment with small companies, because the hon. Member for Huntingdon makes an interesting point that we shall need to consider in assessing the impact of the clause. It is hard to value future contingencies. The concern is that such valuations are based on an educated guess, involve many expensive assessments and a great deal of administration, and may not be cost effective.

I understand those concerns, but any purchaser will have some idea of the amount that they expect to pay for land. For a commercial purchaser, that will inevitably be relevant to their business forecast. They need to make a reasonable estimate of the final amount that they will pay to work out how much to pay at the outset. In addition, the purchaser may apply to defer the payment of tax if they meet the conditions. It would not be reasonable to allow that to happen automatically, as the purchaser must show, as seems fair, that the amount of payment is uncertain and must work out when future payments will be due.

That applies to businesses of all sizes. How can a person who does not know how much the eventual consideration for a land transaction will be submit a return and pay their SDLT? That concern was raised by the hon. Member for Billericay. If the consideration for the land is not fixed at the time that a land transaction return and payment are due, there will be two ways to pay, which are outlined by the Revenue. The first way is by estimating the amount that will eventually be payable, and using that to calculate the tax due 30 days from the date of the transaction. If the maximum amount can be calculated at the outset, that should be the basis of the estimate. The amount must be adjusted later, if it proves to be too little, and a repayment can be claimed if too much tax has been paid.

Photo of George Osborne George Osborne Opposition Whip (Commons), Shadow Minister (Treasury)

This is a good moment for the Chief Secretary to address the point raised by my hon. Friend the Member for Huntingdon. If tax is overpaid, will the Inland Revenue pay interest on that tax when the rebate comes?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

That is not the normal custom and practice, but in this case there is an argument for interest to be paid, and I would expect it to be paid when that problem occurs. I must keep going before I return to the general point made by the hon. Member for Huntingdon about smaller businesses.

That is the first way to pay. The second is by applying to the Revenue to pay as and when the consideration is decided. If the Revenue does not accept the application, tax must be paid up front, based on the maximum of a reasonable estimate, and what I have just said applies. That does not apply to annuity payments. In such cases, 12 years' worth of payments will be used to calculate a single payment 30 days from the date of transaction, and there will be no further adjustment. We shall come to annuities in due course, but before anyone gets up to intervene, I think that we are right to alight on a 12-year payment in this

case. Survival could be longer or shorter, but 12 years represents the right balance—although I accept that it is a balance.

I turn to the point made by the hon. Member for Huntingdon. I want to reflect on that, and whether more needs be done in relation to small and medium-sized enterprises and the circumstances of start-ups. We have done more than has ever been done for those companies by raising the zero rate threshold to £150,000 for commercial and mixed-use property, as we propose to do in relation to lease duty. That is a major change because a significant proportion of those businesses will no longer be subject to SDLT at all.

I do not think that we can escape the fact that valuation is a normal tax process, and it is important for anyone starting a business to keep that in mind. SDLT is not the only reason that a small business would need to value its assets; there are others. That is no different from existing stamp duty, which any person starting a small business would have to bear in mind, except that the new £150,000 limit means that significant numbers of small businesses are not within the charge.

The Government have put in place a range of measures to support and encourage small businesses starting up in disadvantaged areas. It would not be in order to go into that, but it is safe to say that it is important that all Committee members are vigilant about the impact of all measures on small and medium-sized enterprises. Those are precisely the sort of business start-ups that we want to see. In being vigilant on their behalf, it would be quite wrong to exempt them from the usual disciplines of starting up a business. We have made a major step forward with respect to the zero rate threshold.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

I share the Chief Secretary's view on the importance of small businesses. However, I am bemused by what he is saying now and what he said earlier. He has now admitted that the arrangements are complex and difficult—those are the words he used—and yet his own partial regulatory impact assessment says that the proposal will simplify things. Which view is correct?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I do not want to labour the point, but overall this is a modernising measure, the impact of which is such as to simplify very complex areas. The complexity of those areas has been used for the mischief of avoidance. That is the general message, and this is a valuable reforming measure.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

Simple or complex? It cannot be both.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

It can. [Interruption.] I shall not respond to points mumbled or muttered from a sedentary position. I would simply say that we should not kid ourselves, because in the real world of legislation some aspects are complex. They are complex for us, whose job it is to consider such matters, because we are dealing with complex areas. The rules are simple enough, but the area is complex. The two aspects together make for complexity. I would have thought that that was self-evident. I take the point that the hon. Gentleman makes, and I know its motivation, but it is not worthy of him. If we are to consider such matters seriously, we need to accept that

some areas are complex and require our particular attention. Even though we seek to make the rules simplicity itself, it does not help matters to deny the complexity of the subject matter with which we are dealing.

Photo of George Osborne George Osborne Opposition Whip (Commons), Shadow Minister (Treasury)

On this complex subject, my right hon. Friend the Member for Fylde (Mr. Jack), who is not in his place at the moment, raised a point about what happens when a company goes bust or a business fails. Perhaps the Chief Secretary would answer that point, which was interesting and concerns a situation that would arise quite often.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

It is an interesting point. When consideration depends on performance and a business fails, so no money changes hands, the outcome depends on a number of different scenarios. If nothing further is to be paid, but the purchaser has paid up front on an estimate, it seems reasonable that they should be able to claim a repayment with interest. Indeed, that is the case. If, however, Opposition Members are concerned about what occurs on liquidation, that forms part of the usual way of dealing with liabilities in a liquidation, as many of them will know from their professional experience. That is the way that we intend to proceed on that matter.

To consider the matter in totality, although we accept that the area is complex, I think that the rules are fair and simple.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

I sincerely hope that the Chief Secretary will address the two points that I raised in an intervention earlier on the trigger date for an evaluation, which was also raised by the hon. Member for Hertford and Stortford. That is a very important point for taxpayers. My other point concerned when tax had been paid and agreed, and the consideration had been ascertained. If the values were so incredibly different, would there be a right to revisit the valuation?

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. I thank the hon. Member for Torridge and West Devon for bringing us back to the clause we are actually debating. We have been somewhat wide of it of late.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I am grateful to you, Mr. McWilliam. On the point of the hon. Member for Billericay about clause 90 and allowing deferred payments more widely, the purchaser can always apply to defer the payment of tax if they meet the conditions. It would not be reasonable to allow that to happen automatically, as the purchaser has to show that the amount of payment is uncertain and has to work out when future payments will be due. Deferred payments are not available when the amount can be ascertained from the start if the sums have not yet been done. If we were to allow deferred payments in such instances, it would be only too easy to exploit the rule by not carrying out the calculation in the first place in order to pay the tax on easy payment terms. That would not be right.

The hon. Member for Torridge and West Devon asked me about the right to have the valuation

revisited. When the consideration is ascertained, the taxpayer makes a new return. If the original payment was too high because of a high valuation, they will receive repayment with interest. That development applying to SDLT meets the point made by the hon. Gentleman, and I hope that he welcomes it.

On the date of the estimate, about which the hon. Gentleman is also concerned, it is not necessary to be prescriptive as long as it is made in time for the tax to be paid 30 days after the effective date of the transaction. That is how we intend to deal with the two points made by the hon. Gentleman.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon 10:15 am, 5th June 2003

What is important is that taxpayers, valuers and the district valuer know what the valuation date is. Economic circumstances change and the value of an asset may rise and fall during a year. Taxpayers and valuers want to know how the date for making the valuation, which fixes the tax, is ascertained.

My second point concerned not just when values are agreed. If a contingent value is agreed and the tax is paid, or not paid because it is deferred, but there is, when the transaction unfolds some years later, a huge disparity between what had been agreed and what eventually turned out to be the true value, will there be a chance to revisit the valuation then?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I understand and respect the hon. Gentleman's professional acquaintanceship with those issues. He said that the legislation should provide the date on which a reasonable estimate should be made, but our view is that that is not necessary. The point that I urge on him is that as long as the estimate is made in time for the tax to be paid 30 days after the effective date of the transaction, it is unnecessary to be prescriptive about when the estimate is made. I understand that the hon. Gentleman may have a different view, but our view is that the effective date of the transaction will be 30 days before the tax is paid but that we need not say more than that. I am prepared to listen to the hon. Gentleman's points, but our view is that when the reasonable estimate is actually made is not important if it is in time for the return. That is how the judgment will be made on whether the return is due, as long as the estimate is made in time for the tax to be paid 30 days after the effective date of the transaction. That is our view. He clearly has a different one.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

I am not sure that the Chief Secretary's answer has given any great assurance. Indeed, it may cause greater consternation in the marketplace. As the hon. Member for Torridge and West Devon has said, and as I know from being a non-practising chartered surveyor, the date is critical. I hope that the Chief Secretary will respond positively when I say that this is a crucial area in which professionals will want much closer guidance. I hope that that guidance will come through the parallel consultation process, but I also hope that the Chief Secretary will be able to give us greater clarity on Report. Without that, significant problems could arise with the implementation of the clause.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I hear the hon. Gentleman, and I shall reflect on the points that he makes.

We are asked to provide a date on which a reasonable estimate should be made. Our view is that it is not necessary to do so, as long as the estimate is made in time for the tax to be paid 30 days after the effective date of the transaction, but we do not need to be prescriptive about when it is made. We are urged, perhaps somewhat surprisingly, to be prescriptive, but our attitude is that the date when the estimate is made is obviously before the return is due. The date of valuation is the effective date of the transaction. That is the view that we have taken. If the hon. Member for Torridge and West Devon takes a different view, I should like to hear what it is.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

Will the Chief Secretary define for us the effective date of the transaction?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I am not sure that it needs to be defined. I cannot give a hypothetical and generalised response to that. The effective date of the transaction is just that: it is the date when the transaction becomes effective. I simply urge the hon. Gentleman to look at the substance of the transaction and not its form. I go back to this tried and tested formula, which I am driven back to on occasions, because such questions open up a can of worms and a range of possibilities.

We set out the effective date in the Bill in some detail, to enable the hon. Gentleman to judge from the transaction in question what the effective date is by applying the Bill to the substance of the transaction. Does that, Mr. McWilliam, help the hon. Gentleman?

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. Don't ask me. I have never heard metaphysics discussed in a Finance Bill before.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

Both Opposition parties represented here, and perhaps even the Welsh Nationalist party, will, as on other matters that have arisen in the debates on stamp duty land tax and in the Finance Bill, want to read Hansard to see exactly what the Chief Secretary has said. It may be that we will have to revisit this matter on Report.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I am only too happy for the matter to be revisited on Report. I will turn up, if the hon. Gentleman does, because these are important issues. I hope that when he reads what I have said in juxtaposition with the statute, the matter will be clearer than it has been this morning. We have canvassed at some length all the issues that have arisen in what has been an interesting debate. I hope that we can move on.

When the hon. Member for Torridge and West Devon examines the legislation, he may find one aspect particularly helpful. I do not have a copy of the Bill to hand—

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East

I have listened as a former humble engineer to this series of exchanges. What strikes me as fairly obvious is that the effective date of the transaction is the date on which whatever transaction is made comes into effect. I would imagine that that would be made

clear in any documentation attached to any transaction.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

My hon. Friend, with whom I have had the pleasure to share many happy hours in Queen Anne's Gate has once again gone straight to the heart of the matter—

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

He most certainly has not gone to the heart of the matter; the document can have many effects.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I did not meant to provoke that response. I was hoping to shed some peace and light. I refer the hon. Gentleman to clause 119, on the meaning of an effective date of a transaction. That is perhaps the most helpful aspect. Essentially, the effective date will be completion, substantial performance or special provision for options. That is the answer to his question; we got there, and I do not think one could be clearer than that. Having responded in that way, I hope that we can give the provision a fair wind and move on.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

I hope that when we come to clause 119, we do not have the same debate again.

Question put and agreed to.

Clause 51 ordered to stand part of the Bill.