Simon Harris (Wicklow, Fine Gael)
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I move amendment No. 63:

In page 60, to delete lines 7 to 38, and in page 61, to delete line 1 and substitute the following:"597AA.(1) (a) In this section—

'51 per cent subsidiary' has the same meaning as it has in section 9(1)(a);

'development land' has the same meaning as it has in section 648;

'group' means a holding company and one or more companies which are 51 per cent subsidiaries of the holding company;

'holding company' means a company whose business consists wholly or mainly of the holding of shares of one or more companies which are its 51 per cent subsidiaries;

'qualifying business' means a business other than—

(a) the holding of securities or other assets as investments,

(b) the holding of development land, or

(c) the development or letting of land;

'qualifying group' means a group, the business of each 51 per cent subsidiary (other than a holding company) in which consists wholly or mainly of the carrying on of a qualifying business;

'qualifying person' means an individual who is or has been a director or employee of a company (or companies in a qualifying group) who—

(a) is or was required to spend not less than 50 per cent of that individual’s working time in the service of that company (or those companies) in a managerial or technical capacity, and

(b) has served in that capacity for a continuous period of 3 years in the period of 5 years immediately prior to the disposal of the chargeable business assets of which the disposal of shares in the company (or one of those companies) forms the whole or part;

'relevant individual' means an individual who has been the beneficial owner of the chargeable business assets for a minimum period of 3 years immediately prior to the disposal of those assets;

'target company' means a company (including a company in a qualifying group) the disposal of shares in which forms the whole or part of the disposal of chargeable business assets;

'working time' means any time that an employee or director is—

(a) at his or her place of work or, in the case of an employee, at his or her employer’s disposal, and

(b) carrying on or performing the activities or duties of his or her work.

(b)(i) For the purposes of the definition of ‘qualifying person’ in paragraph (a), any period during which the individual was a director or employee of—

(I) a company that was treated as being the same company, for the purposes of section 586, as a target company, or

(II) a company involved in a scheme of reconstruction or amalgamation under section 587 with a target company,

shall be taken into account in calculating the periods during which the individual was a director or employee.

(ii) For the purposes of the definition of ‘relevant individual’ in paragraph (a), any period during which the individual owned shares in—

(I) a company that was treated as being the same company, for the purposes of section 586, as a target company, or

(II) a company involved in a scheme of reconstruction or amalgamation under section 587 with a target company,

shall be taken into account in calculating the periods during which the individual was a beneficial owner.

(2) (a) Subject to paragraph (b), ‘chargeable business asset’ means an asset, including goodwill which—

(i) is, or is an interest in, an asset used for the purposes of a qualifying business carried on by an individual, or

(ii) is a holding of ordinary shares in—

(I) a company whose business consists wholly or mainly of carrying on a qualifying business, or

(II) a holding company of a qualifying group,

in respect of which an individual—

(A) owns not less than 5 per cent of the ordinary share capital, and

(B) is a qualifying person in respect of the company or, if the company is a member of a qualifying group, of one or more companies which are members of the qualifying group.".

This amendment relates to section 33 of the Bill.

The amendment makes the following changes to that section in order to align the capital gains tax relief provisions more fully with business structures on the ground: the minimum shareholding requirement to be satisfied by an individual is reduced from 15% to 5%; the definition of “holding company” is modified to reflect the commercial reality of a company group carrying on a qualifying business or businesses where a holding company may have less than a 100% shareholding in its subsidiaries; the definition of “full-time working director” is deleted and a new definition is included, that is a definition of “qualifying person”, to reflect the commercial reality of the involvement of an individual entrepreneur with the company or companies he or she has founded, either as a director or as an employee, and with the time given to these roles which may be satisfied over the minimum holding period of three years within a longer five year period ending with the disposal of the shareholding in the company or companies; the exclusion from the relief of disposals by entrepreneurs of shareholdings in a company or companies which they started and which may become a quoted or public company is removed; and the amendment ensures that the relief should not be denied in cases of a reconstruction or reorganisation of a business where an original company or shareholding is replaced with a new company or new shares.

I commend the amendment to the Committee.