Finance Bill — New Clause 1 — Review of Conditions Under which Business Investment Relief is Available — 11 Oct 2017 at 16:15
The majority of MPs voted against carrying out a review of the operation of the Business Investment Relief scheme; a scheme which reduces the tax implications of investing foreign income and gains in the UK.
Section 809VA of Chapter A1 of Part 14 of the Income Tax Act 2007 which provides for Business investment relief was introduced by Schedule 12 PART 2 Paragraph 7 of the Finance Act 2012.
Business investment relief enables foreign income and gains to be invested in the UK without becoming subject to taxation under the "remittance basis" alternative tax treatment available to individuals who are resident, but not domiciled, in the UK. "Remittance basis" is an alternative to paying to UK tax on worldwide income and gains, and instead paying tax on UK income and gains and foreign income and gains if and when they are brought to the UK.
MPs were considering the Finance Bill.
The proposed new clause rejected in this vote was titled: "Review of conditions under which business investment relief is available" and stated:
- ‘(1) Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.
- (2) After section 809VO (investments made from mixed funds), insert—
“809VP Review of conditions under which business investment relief is available
- (1) Within six months of the coming into force of section 15 of the Finance (No. 2) Act 2017, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review of the conditions under which business investment relief is available.
- (2) For the purposes of this section “the conditions” means—
- (a) Condition A as defined in section 809VD,
- (b) Condition B as defined in section 809VF.
- (3) The review shall make an estimate of the value of the reliefs granted as a result of the conditions in respect of each tax year for which the relief has been available.
- (4) The review shall make an estimate of the change in the value of the reliefs granted as a result of—
- (a) changes to the conditions relating to eligible hybrid companies,
- (b) changes to the periods specified in sections 809VD and 809VH,
- (c) changes to the grace period in section 809VJ.
- (5) The review shall make an assessment of the effectiveness of the conditions in relation to the stated policy aims of the Government in relation to business investment relief.
- (6) The review shall prepare an analysis of the characteristics of beneficiaries of reliefs having particular regard to—
- (a) income distribution,
- (b) gender and other protected characteristics under the Equality Act 2010,
- (c) domicile (including deemed domicile).
- (7) A report of the review under this section shall be laid before the House of Commons within one calendar month of its completion.”
The rejected new clause was accompanied by the following explanatory note:
- This new clause requires HMRC to carry out a review of the conditions under which business investment relief is available, including estimates of the value of the reliefs (before and after the changes proposed in this Bill) and an analysis of the characteristics of those using the relief, including their domicile status.
-  HM Revenue and Customs, Guidance Note: Residence, Domicile and the Remittance Basis
-  Parliament's webpage on the Finance Bill 2017-19
Votes by party, red entries are votes against the majority for that party.
What is Tell? '+1 tell' means that in addition one member of that party was a teller for that division lobby.
What are Boths? An MP can vote both aye and no in the same division. The boths page explains this.
What is Turnout? This is measured against the total membership of the party at the time of the vote.
|Party||Majority (No)||Minority (Aye)||Both||Turnout|
|Con||299 (+2 tell)||0||0||95.0%|
|Lab||0||228 (+2 tell)||0||87.8%|