Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government what guidance HMRC provides concerning whether fractional shares may be held in individual savings accounts; and whether they have made any assessment of any discrepancy between (1) such guidance, and (2) the contents of the Autumn Statement, guidance from the Financial Conduct Authority, and the consensus of the investment community.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
At Autumn Statement 2023, the Government announced its intention to permit certain fractional shares contracts to be eligible ISA investments. This requires a change to the ISA Regulations and ISA manager’s guidance to define those eligible investments for ISA purposes.
Government has considered the Financial Conduct Authority’s initial position towards fractional shares, the position of the small number of firms offering them, and the view of the wider market.
Further information will be available in due course.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government whether they intend to clarify before April 2024 whether fractional shares may be included in individuals savings accounts.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
At Autumn Statement 2023, the Government announced its intention to permit certain fractional shares contracts to be eligible ISA investments. This requires a change to the ISA Regulations and ISA manager’s guidance to define those eligible investments for ISA purposes.
Government has considered the Financial Conduct Authority’s initial position towards fractional shares, the position of the small number of firms offering them, and the view of the wider market.
Further information will be available in due course.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government whether any amendment to individual savings account (ISA) regulations is necessary in respect of fractional shares; and if this is the case, what is the timeline to amend ISA regulations in order to enable fractional shares to be included in ISAs.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
At Autumn Statement 2023, the Government announced its intention to permit certain fractional shares contracts as eligible ISA investments and committed to engage with stakeholders on implementation. HMT and HMRC officials have met with industry stakeholders and the FCA to understand how to define qualifying ‘fractional shares contracts’ for the purposes of ISA regulations. This work continues to progress at pace, with an expectation to legislate at the earliest opportunity.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the extent to which changes to the definition of "high net worth individual” investors is likely to impact minority group and female angel investors in business start-ups and early-stage businesses, and what assessment they have made of the consequential impact for diversity and access to funding.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The changes to the financial promotion exemptions that came into force on 31 January 2024 were subject to a public consultation which closed in March 2022. Impacts of the proposals were considered, and a consultation response and de minimis impact assessment were published alongside the final reforms. The changes made aimed to both reduce the risk of consumer detriment and preserve the ability of SMEs to raise finance under the exemptions.
However, the Government recognises the significant concerns that have been raised recently about these changes. The Economic Secretary met last week with the angel investing sector and listened carefully to the representations made, and the Government is working closely with the sector to address the concerns raised.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government at what point Ukrainian refugees who have been in the UK for over 180 days are liable to pay tax.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
Under UK tax rules, all income earned through employment is taxable. The Government has made guidance available on GOV.UK for Ukrainians arriving in the UK, which includes a section on employment and tax.
The Government is committed to a fair tax system in which those with the most contribute the most. The income tax system is highly progressive, with different rates of tax sitting above an internationally high tax-free Personal Allowance. Ukrainians arriving in the UK will have to claim the Personal Allowance at the end of each tax year in which they receive UK income.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask Her Majesty's Government whether they intend to update current Stamp Duty Reserve Tax legislation to ensure that the growth market exemption can apply to regulated recognised growth markets that are not part of a recognised stock exchange.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
There are currently no plans to extend the recognised growth market exemption from Stamp Duty Reserve Tax to markets that are not part of a recognised stock exchange.
However, as with all aspects of the tax system, the Government will continue to keep this legislation under review.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask Her Majesty's Government whether regulated securities such as equity and debt are classified as digital assets; and what consideration they have given to the possible future use of such securities as a mechanism of fundraising.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The regulatory treatment of a particular asset or instrument depends on its structure, the rights attached to it and how it is used in practice.
The FCA set out in its 2019 perimeter guidance that certain digital assets have characteristics which mean they are the same as or akin to traditional instruments like shares, debentures or units in a collective investment scheme.
Such assets are therefore within the scope of FCA regulation, and it is the responsibility of firms that use them to ensure they are meeting relevant regulatory requirements.
The Government is taking forward various initiatives in this space. The Government’s response to the Call for Evidence on the Investment and Wholesale uses of Cryptoassets published earlier this year made clear that legislation should be technology-neutral and able to accommodate innovation – such as distributed ledger technology – that could more easily enable the transfer of assets. The Government also set out its plans for a Financial Market Infrastructure Sandbox, which could enable firms to test the use of digital technologies in financial markets.
As announced by the Economic Secretary on 4 April, the Government will also be undertaking a programme of work to explore the possibilities for applying distributed ledger technology to the debt issuance process.
Separately, the Law Commission has been tasked by Government to make recommendations for private law reform to ensure that private law is capable of accommodating certain digital assets, including cryptoassets, and to clarify their legal status as objects of property rights.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask Her Majesty's Government what progress they have made with evaluating the benefits of a UK Central Bank Digital Currency.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The UK, like many countries globally, is actively exploring the potential role of central bank digital currencies (CBDC): an electronic form of central bank money that could be used by households and businesses to make payments.
The government has taken several actions to signal its commitment to leading the global conversation on the opportunities and risks of a potential CBDC.
This includes creating a new Taskforce led by HM Treasury and the Bank of England to lead exploration of a CBDC, with separate forums to engage civil society and technology experts. The government has also made a public commitment to issue a joint consultation with the Bank of England on the use cases for a UK CBDC in 2022, followed by the publication of a technical specification.
At the international level, we have used our 2021 G7 Presidency to develop and agree a set of public policy principles for CBDC, which are intended to support and inform exploration of CBDCs in the G7 and beyond.
The government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the benefits of stablecoins, including as an efficient means of payment.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
On April 4, the government confirmed its intention to legislate, when Parliamentary time allows, to bring certain stablecoins within the regulatory perimeter for payments. It will achieve this primarily by amending the existing e-money and payments regulatory frameworks.
The government’s proposed approach focusses on stablecoins in the near term, given their potential use as a widespread means of payment. The proposed legislative changes will create the conditions for stablecoin issuers and service providers to operate and grow in the UK. For consumers, bringing stablecoins used for payments into the regulatory framework means they will be able to use stablecoin services with confidence.
Asked by: Lord Cromwell (Crossbench - Excepted Hereditary)
Question to the HM Treasury:
To ask Her Majesty's Government when they intend to publish their response to their consultation on the UK regulatory approach to cryptoassets and stablecoins, which closed on 21 March 2021.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
On April 4, the government confirmed its intention to legislate, when Parliamentary time allows, to bring certain stablecoins within the regulatory perimeter for payments. It will achieve this primarily by amending the existing e-money and payments regulatory frameworks.
The government’s proposed approach focusses on stablecoins in the near term, given their potential use as a widespread means of payment. The proposed legislative changes will create the conditions for stablecoin issuers and service providers to operate and grow in the UK. For consumers, bringing stablecoins used for payments into the regulatory framework means they will be able to use stablecoin services with confidence.