1. Ian Menzies-Conacher CT Reform Proposals CIOT Commerce & Industry Group Meeting 27th January 2005 Ian Menzies-Conacher

2. 27th January 2005 - CIOT London branch meeting Issues for discussion Schedular reform Taxation of capital assets Leasing Trading and investment companies

3. 27th January 2005 - CIOT London branch meeting Schedular reform General consensus that are historic anachronism and support for abolition But appears to be significant Exchequer cost in removal, due to greater loss utilisation Therefore limited proposal for ‘operating business profits’ Life companies Is option of limited reform worthwhile? (2.21)

4. 27th January 2005 - CIOT London branch meeting Schedular reform - issues Systems Transitional issues, especially losses at commencement date Property companies and CGT gains Abolition of charges?

5. 27th January 2005 - CIOT London branch meeting Taxation of capital assets Given concerns expressed re IAS etc over previous proposals to follow accounts capital allowances regime to be kept – proposals here look to build on this –Deal with all on an income basis –Modernise regimes for plant and buildings Expensive cars –Rate; need for separate pool? Abortive capital expenditure

6. 27th January 2005 - CIOT London branch meeting Plant and buildings End CGT treatment for plant proceeds in excess of original cost Buildings allowance Treatment of land in pool Loss of indexation Set list of items as ‘building’ Rate of allowance for pool, 4-6%? Transitional provisions

7. 27th January 2005 - CIOT London branch meeting Leasing Start date Long funding lease Aim to exclude most SME leases Scope wider than thought – commercial vehicles Includes some operating leases Test at lessor or lessee level –Lessor decide and advise lessee? Ending of apportionment? Cross border leasing

8. 27th January 2005 - CIOT London branch meeting Trading and investment companies No formal new proposals Government will continue to consider the case for extending the substantial shareholding exemption to disposals by investment companies – but not of shares in investment companies Use opportunity of this round of consultation to explore further the behavioural effects of extending the exemption with the venture capital industry