Clause 141 - Ending of relief for contributions to QUESTS

Part of Finance Bill – in a Public Bill Committee at 4:15 pm on 12 June 2003.

Alert me about debates like this

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury 4:15, 12 June 2003

I am certainly content with your advice, and I dare say that all the other members of the Committee are too, Mr. McWilliam. We can treat this as a combined discussion.

The Chartered Institute of Taxation has also picked up on the matter and has suggested that an amendment should be made. It states:

''It will make it easier for companies to stop using QUESTs if the definition of 'original funds' in''—

section 69(3AD) of the Finance Act 1989

''is expanded to include cash received from option-holders on the exercise of SAYE options granted before 27 November 2002 (but not options granted or company contributions made after that date). For example, if a company wants to stop using a QUEST on 1 February 2003, it will have to deal separately with any cash that may arise on the exercise of options between November 2002 and 1 February 2003.''

Amendment No. 243 is being taken at the same time for the convenience of the Committee. The background arguments are exactly the same and, as you have rightly indicated, Mr. McWilliam, they effectively contribute to a stand-part debate. Given that QUESTs have now gone, the amendment removes one of the draconian aspects by allowing trustees simply to clear out whatever is in the trust, transfer it to a less restrictive common-law trust and start again.

Those are common-sense proposals and I hope that the Paymaster General will consider them a useful contribution.