The amendments would delete part of a provision that rats on what was agreed in last year's Finance Bill. There is relief for transferring land around within a corporate group, and sections 111 and 113 provide for that relief to be withdrawn if, within two years of a transfer, the receiving company is sold out of the group. The amendments relate to clauses 126 and 127 where the period is extended to three years, contrary to the assurances made last year. Three years is too long and presents a genuine barrier to commercial turnover of property. The provision is widely regarded by the industry as dishonouring the understanding that was reached last year. The amendments would delete the relevant part of the provision.
As part of the Government's commitment to tackling stamp duty avoidance, clauses 126 and 127 contain a number of changes to tighten the clawback of group and reconstruction relief that we introduced in last year's Finance Bill. We make no apology for that. One of the changes is to increase to three years the time within which clawback of the reliefs can be triggered. The amendments would remove that increased time limit.
We have chosen to increase the time limit for the clawback provisions to three years. There is no reason to delay implementation of the changes until stamp duty land tax takes effect. This is a direct response to continued avoidance using special purpose vehicles to avoid the full rate of stamp duty on transfers of UK land. A three-year time limit offers further protection, and I commend the provision to the Committee. It is an important part of the Government's strategy to counter stamp duty avoidance.
The points raised illustrate how not to govern, in that a lot of time and effort was expended last year on the negotiations on stamp duty and the three-year principle was established. The Government are unwise to come back and say, ''Hard luck, chums; we are tightening the time'', particularly in the context of all the other changes. We shall therefore vote against the change from two to three years.
Question put, That the amendment be made:—
The Committee divided: Ayes 7, Noes 14.
Question accordingly negatived.
It being after Five o'clock, The Chairman proceeded, pursuant to the Sessional Order D [28 June 2001] and the Order of the Committee [this day], to put forthwith the Questions necessary to dispose of the business to be concluded at that time.
Question put, That clauses 126 to 129 stand part of the Bill:—
The Committee divided: Ayes 13, Noes 9.