Finance Bill

Indeed. I sometimes suspect that the Government found the draft rather than the final idea, but we will leave that to one side. The three amendments that I tabled deal with offshore mortgages, which we debated in Committee. I appreciate that the Minister is not minded to extend the provisions to all pre-12 March 2008 offshore mortgages or to cases in which funds were used both to acquire an interest in the property and to finance enhancement work. We also know that she is not minded to remove or modify the conditions set out in paragraph 90(3). However, there is a lingering concern for the unrepresented taxpayer who may unwittingly take out a further loan and, by doing so, forfeit any entitlement to relief. I hope that the Minister will think again about the position of that unrepresented taxpayer, and consider whether it is fair that a minor variation in the loan terms—taking out additional loan funds secured on the property—should result in the loss of all relief. The Minister did allow for relief when straightforward remortgaging took place before 12 March 2008, but one of the conditions is that the funds should have been received in the United Kingdom before 6 April 2008. We understand that in the case of at least two offshore mortgage providers it would be unlikely for the funds to be received in the United Kingdom. It would be more likely for the new mortgage provider to transfer the funds straight to the original provider. It is on that basis that we tabled amendment No. 8, which the Government are minded to accept. That should ensure that the legislation works in those cases, but we are still concerned about the wording of line 6 of schedule 7. We feel that it should be made clear that the individual will benefit from the provisions when he or she directs a new offshore mortgage provider to use the funds to repay the original mortgage. To my relief and, perhaps, that of others, amendment No. 16 is the last that I have tabled, although I will speak briefly about amendments tabled by the Liberal Democrats at the end of my speech. We are happy about that extensions have been made to re-basing as a result of the Government amendments. However, we have tabled an amendment to clarify the position when reorganisation has taken place under section 127 of the Taxation of Chargeable Gains Act 1992. Let me give an example. Let us suppose that X offshore settlement has held 20 per cent. share in UK trading since 1990. The shares were worth £4 million immediately before 6 April 2008. On 17 May 2008, the company was acquired by Big plc in a share-for-share exchange, such that the provisions of section 127 of the Act applied and there was no disposal for chargeable gains tax purposes. The X offshore settlement sells its shares in Big plc on 25 October 2009 for £5 million. We would welcome the clarification that the provisions of section 127 of the 1992 Act mean that the holding of Big plc is identified with the original holding in UK Trading Ltd such that the terms of paragraph 127(10)(b) or (11)(b) and (c) of schedule 7 are deemed to have been met, and relief under that paragraph would be available, should the trust make a capital payment to a foreign domicile who remits funds to the UK. Amendments Nos. 94 to 99 and 101 reflect the difficulty the Government have had in framing the legislation over the past few months. The problems have arisen not so much in respect of the charge—although that has created some amendments—but the steps the Government have taken to tackle various anomalies in the remittance rules, which has generated a series of concerns from, for example, trade bodies, the art market and investment management companies. They were triggered by the draft legislation, which led to an initial climbdown by the Government. The complexity of the Government's proposed changes has led to the raft of amendments tabled not only today, but in Committee. A fuller and better consultation process could have dealt with some of the problems created by the Government's desire to tackle the anomalies. Although we disagree with how the Government have developed their policy in this area, it is important to get this right, and I acknowledge that the Minister sought to do so and listened to the representations. One of the drivers of our concerns throughout the process is that the proposed legislation will affect not only high net-worth individuals who have access to very good quality advice to help them comply, but migrant workers, Commonwealth soldiers serving in our armed forces and those working in our health care system—people who will need to understand the choices that they have made. The Minister made it clear in Committee that people had a choice about whether to apply the remittance basis or the arising basis, but that to apply that choice they needed information, guidance and support. I know that the Financial Secretary said that that guidance was being prepared, but we are asking people to comply with legislation from 6 April that is only today to be finalised. Effectively, this is the final shape of the Bill. That is why there is continuing concern about this. The Institute of Chartered Accountants said in its Committee stage brief, ““We wish to place on record our concern that there has been insufficient time to achieve legislation that is fit for purpose and to inform taxpayers adequately of the changes that take effect from 6 April 2008. We are very concerned that in places the legislation we have currently works in a capricious or unintended manner and/or is either so complicated or so impractical that taxpayers will not be able to adequately self assess.”” I understand the thrust behind the Liberal amendments to defer the implementation of this, because I think there is a lot of work to be done. While the Government are right to say that that guidance will be available, it is not yet available and people are having to comply with the rules now. That is why interested bodies have consistently argued for a delay in commencement and that the remittance rules should be postponed to the start of the 2009-10 year. We argued about that in Committee. Some thought needs to be given to how these implementation issues will be debated and discussed in the future. The Institute of Chartered Accountants has suggested a body to work in conjunction with HMRC and the Treasury, with representatives of stakeholder groups, to consider the issues that will be thrown up over the course of the next year. I would be glad if the Financial Secretary accepted that as a way forward—