Schedule 4

Part of Finance (No. 2) Bill – in a Public Bill Committee am 6:30 pm ar 19 Hydref 2010.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury) 6:30, 19 Hydref 2010

I beg to move amendment 6, in schedule 4, page 41, line 25, at end add—

‘13. The Treasury shall publish a report in the 2011 Budget detailing the projected revenue implications of the provisions of this Schedule for the five financial years after commencement.’.

The meat of the matter within schedule 4 is specifically related to the whole point of the changes. Currently, the REIT arrangements take the yield of tax on the cash dividend of payment, and yet the change in the clause seeks to allow companies to make that dividend payment in stock. My questions for the Minister are pretty obvious. Will she tell the Committee what the current tax yield is from the cash dividend taxation regime on REITs? Perhaps she could give us the figures for the last available financial year. Will she give us a sense of what we are talking about here? As I understand it, allowing stock dividend arrangements means that the tax on those changes will only be crystallised at the point at which the stock is then sold or disposed of. Under the current arrangements, there is a revenue yield to the Exchequer at the point at which the dividend is distributed, which is not the case under the stock dividend route.

Amendment 6 calls on the Treasury to produce a report in the 2011 Budget, detailing the projected revenue implications of the provision for the next five financial years after the commencement of the Act. We feel that that would be helpful in ensuring that we keep track of the implications of this particular change for the Exchequer. Moreover, an estimate of the volume that is likely to be created by the stock dividend route would be useful. I hope that officials will not be recommending the introduction of such a change without having some idea of where the industry might go. I would be grateful if the Minister could clarify those points.