Office of Public Sector Information
SCHEDULE 24 continued
15 (1) Subject to the following provisions of this paragraph, where as a result of a relevant transfer, the predecessor falls to be regarded for the purposes of section 343 of the Taxes Act 1988 (company reconstructions without change of ownership) as ceasing to carry on a trade and the transferee falls to be regarded for the purposes of that section as beginning to carry on that trade—
(a) the transferee shall not, by virtue of those matters, be entitled to any relief under section 393(1) (trading losses) of that Act to which it would, apart from this paragraph, have been entitled by virtue of section 343(3) of that Act; and
(b) after the coming into force of the relevant transfer, the loss in question shall continue to be regarded for the purposes of the Corporation Tax Acts as a loss incurred in the trade for the time being carried on by the predecessor to the same extent as it would have been so regarded apart from the relevant transfer (and shall be eligible for relief accordingly).
(2) The following provisions of this paragraph apply in any case where—
(a) a restructuring scheme makes express provision for the transfer from the predecessor to the transferee of the right to obtain tax relief in respect of such an amount of the predecessor’s unrelieved trading losses or unrelieved transferred losses as may be specified in, or determined in accordance with, the scheme; and
(b) after the relevant date the transferee carries on, or begins to carry on, any trade (whether or not the trade, or a part of the trade, carried on by the predecessor);
and any reference in this paragraph to a transferred loss is a reference to the amount mentioned in paragraph (a) above.
(3) The transferee shall be entitled to relief under section 393(1) of the Taxes Act 1988 for the transferred loss, as for a loss sustained by the transferee in carrying on its trade, but the transferred loss may only be set off against trading income of the transferee which arises in an accounting period throughout which the transferee is a public sector railway company.
(4) Where the transferee ceases to be a public sector railway company, it shall be assumed for the purposes of giving relief by virtue of sub-paragraph (3) above that—
(a) on the occasion of the cessation (unless a true accounting period of the transferee ends then) an accounting period of the transferee ends and a new one begins, the new accounting period to end with the end of the true accounting period; and
(b) the amount of the trading income for the true accounting period of the transferee against which the relief may be allowed is apportioned to the component accounting periods;
and any apportionment under this sub-paragraph shall be on a time basis according to the respective lengths of the component accounting periods except that, if it appears that that method would work unreasonably or unjustly, such other method shall be used as appears just and reasonable.
(5) Relief by virtue of sub-paragraph (3) above in respect of a transferred loss shall be given against the trading income of any accounting period of the transferee before relief is given against that income in respect of losses incurred by the transferee after the relevant date.
(6) As from the relevant date—
(a) the amount of the predecessor’s unrelieved transferred losses (if any) shall be regarded for the purposes of this paragraph as reduced by an amount equal to the transferred loss; and
(b) if the transferred loss exceeds the amount of the predecessor’s unrelieved transferred losses before the reduction under paragraph (a) above, or if there are no such losses, the predecessor’s unrelieved trading losses shall be regarded for the purposes of the Corporation Tax Acts as reduced by the amount of that excess or, as the case may be, by an amount equal to the transferred loss.
(7) Without prejudice to the generality of sub-paragraphs (1) and (3) above, if the conditions in subsection (1) of section 343 of the Taxes Act 1988 become satisfied at any time on or after the relevant date in relation to any trade (or, where subsection (8) of that section applies, any part of a trade which falls to be treated for the purposes of that section as a separate trade), the company which is the successor, within the meaning of that section, shall not become entitled to relief by virtue of subsection (3) of that section in respect of any amount for which the company which is the predecessor, within the meaning of that section, would have been entitled to relief by virtue of sub-paragraph (3) above had it continued to carry on the trade (or the part of the trade which falls to be treated as a separate trade).
(8) Subject to sub-paragraph (9) below, the provisions of a restructuring scheme providing for the determination of the amount which is to be that of any transferred loss may include provision—
(a) for such a determination to be made by the Secretary of State in such manner as may be described in the scheme;
(b) for any amount determined to be calculated by reference to such factors, or to the opinion of such person, as may be so described; and
(c) for a determination under those provisions to be capable of being modified, on one or more occasions, in such manner and in such circumstances as may be so described.
(9) The consent of the Treasury shall be required for the making or modification of a determination of any such amount as is mentioned in sub-paragraph (8) above; and the consent of the transferee shall also be required for any such modification after the coming into force of the relevant transfer.
(10) Where there is a determination, or a modification of a determination, for any purposes of this paragraph, all necessary adjustments shall be made by making assessments or by repayment or discharge of tax, and shall be so made notwithstanding any limitation on the time within which assessments may be made.
(11) For the purposes of this paragraph, a transferee is at any time a “public sector railway company” if, and only if, it is at that time—
(a) the Board;
(b) a wholly owned subsidiary of the Board;
(c) a publicly owned railway company; or
(d) a company wholly owned by the Crown.
(12) In this paragraph—
“the relevant date” means the date on which the transfer mentioned in sub-paragraph (2)(a) above takes effect;
“trading income” has the same meaning as it has in section 393 of the Taxes Act 1988;
“unrelieved trading losses” means any losses—
which were incurred by the predecessor in carrying on a trade in accounting periods ending before the relevant date, or
for which the predecessor has, by virtue of section 343(3) of the Taxes Act 1988, become entitled to relief under section 393(1) of that Act,
and which would, apart from the restructuring scheme mentioned in sub-paragraph (2)(a) above, have fallen to be set off under the said section 393(1) against trading income of the predecessor arising in the accounting period in which the relevant date falls;
“unrelieved transferred losses” means so much of a transferred loss as would, apart from the restructuring scheme mentioned in sub-paragraph (2)(a) above, have fallen to be set off under section 393(1) of the Taxes Act 1988, as it applies by virtue of sub-paragraph (3) above, against trading income of the predecessor arising in the accounting period in which the relevant date falls.
(13) It shall be assumed for the purposes of the definitions of “unrelieved trading losses” and “unrelieved transferred losses” in sub-paragraph (12) above (if it is not in fact the case) that the trading income mentioned in those definitions is at least equal to the aggregate amount of the losses in question of each of those descriptions.
16 Where any of the liabilities of a successor company are extinguished by virtue of section 106(1) of the [1993 c. 43.] Railways Act 1993, section 400 of the Taxes Act 1988 (reduction of allowable losses on write-off of government investment) shall not have effect in relation to any amount of government investment in a body corporate which, apart from this paragraph, would thereby fall to be regarded as written-off for the purposes of that section.
17 (1) The existence of the powers of the Secretary of State or the Franchising Director under Part II of the Railways Act 1993 shall not be regarded as constituting arrangements falling within subsection (1) or (2) of section 410 of the Taxes Act 1988 (arrangements for the transfer of a company to another group or consortium).
(2) Nothing in Part II of the Railways Act 1993, and no direction given by the Secretary of State under or by virtue of any provision of that Part, shall be regarded as constituting option arrangements for the purposes of paragraph 5B of Schedule 18 to the Taxes Act 1988.
(3) Arrangements relating to the transfer, pursuant to any provision of Part II of the Railways Act 1993, of shares of a subsidiary of the Board to—
(a) the Secretary of State,
(b) the Franchising Director,
(c) a publicly owned railway company,
(d) a company which is wholly owned by the Crown, or
(e) a person acting on behalf of a person falling within any of paragraphs (a) to (d) above,
shall not, so far as so relating, be regarded as constituting arrangements falling within subsection (1)(b)(i) or (ii) of section 410 of the Taxes Act 1988.
(4) Arrangements relating to the transfer, by virtue of a section 85 transfer scheme, of the whole or any part of a trade carried on by the Board or a wholly owned subsidiary of the Board to—
(a) a publicly owned railway company, or
(b) a company wholly owned by the Franchising Director,
shall not, so far as so relating, be regarded as constituting arrangements falling within section 410(1)(b)(iii) of the Taxes Act 1988.
(5) Arrangements relating to the transfer, pursuant to any provision of Part II of the Railways Act 1993, of shares of a subsidiary of the Board, or shares of a company owned by a consortium, to—
(a) the Secretary of State,
(b) the Franchising Director,
(c) a publicly owned railway company,
(d) a company which is wholly owned by the Crown, or
(e) a person acting on behalf of a person falling within any of paragraphs (a) to (d) above,
shall not, so far as so relating, be regarded as constituting arrangements falling within section 410(2)(b)(ii) of the Taxes Act 1988.
(6) None of sub-paragraphs (3) to (5) above shall have effect in relation to any arrangements if—
(a) notwithstanding the provisions of those sub-paragraphs, the arrangements to any extent fall within section 410(1) or (2) of the Taxes Act 1988; or
(b) the arrangements form part of a series of subsisting arrangements which to any extent—
(i) relate to the transfer of any shares or assets of, or the whole or any part of the trade carried on by, a company to which the first-mentioned arrangements relate, and
(ii) notwithstanding the provisions of sub-paragraphs (3) to (5) above, fall within section 410(1) or (2) of the Taxes Act 1988.
(7) Section 413(6)(a) of the Taxes Act 1988 (company owned by a consortium) shall have effect for the purposes of sub-paragraph (5) above as it has effect for the purposes of Chapter IV of Part X of that Act.
(8) In this paragraph—
“arrangements” has the same meaning as in section 410 of the Taxes Act 1988;
“shares” includes stock.
18 (1) Subject to sub-paragraph (2) below, any shares issued by a relevant company in pursuance of section 98 or 106 of the [1993 c. 43.] Railways Act 1993 (initial share holding in, and extinguishment of certain liabilities of, successor companies) shall be treated for the purposes of the Corporation Tax Acts as if they had been issued wholly in consideration of a subscription paid to that company (and attributable equally between those shares) of an amount equal—
(a) in the case of shares issued under section 98 of that Act, to the value, as at the transfer date, of the property, rights and liabilities vested in that company in accordance with the transfer scheme mentioned in subsection (1) of that section, or
(b) in the case of shares issued under section 106 of that Act, to the amount of the liabilities extinguished by the order under subsection (1) of that section,
reduced, in either case, by the principal sum payable under any debentures issued by the company in pursuance of the section in question.
(2) Where two or more classes of share are issued by a relevant company in pursuance of section 98 or, as the case may be, section 106 of the Railways Act 1993—
(a) the issued shares of each of those classes shall be valued, as at the day on which, in consequence of section 98(4) or, as the case may be, section 106(5) of that Act, no more shares can be directed to be issued by the company under the section in question;
(b) the amount of the consideration mentioned in sub-paragraph (1) above shall be apportioned between those classes of share in proportion to the aggregate value of the issued shares of each of those classes, as determined pursuant to paragraph (a) above; and
(c) the portion attributed to any class of share pursuant to paragraph (b) above shall be divided by the number of issued shares of that class, the resulting amount being referred to in the following provisions of this sub-paragraph as the “appropriate price” for a share of that class;
and each of the issued shares of any of those classes shall be treated for the purposes of the Corporation Tax Acts as if it had been issued wholly in consideration of a subscription paid to the relevant company of an amount equal to the appropriate price for a share of that class.
(3) Any debenture issued by a relevant company in pursuance of section 98 or 106 of the [1993 c. 43.] Railways Act 1993 shall be treated for the purposes of the Corporation Tax Acts as if it had been issued—
(a) wholly in consideration of a loan made to that company of an amount equal to the principal sum payable under the debenture; and
(b) wholly and exclusively for the purposes of the trade or business carried on by that company.
(4) If any debenture issued as mentioned in sub-paragraph (3) above includes provisions for the payment of a sum expressed as interest in respect of a period which falls wholly or partly before the issue of the debenture, any payment made in pursuance of that provision in respect of that period shall be treated for the purposes of the Corporation Tax Acts as if the debenture had been issued at the commencement of that period and, accordingly, as interest on the principal sum payable under the debenture.
(5) The value required to be determined for the purposes of sub-paragraph (1)(a) or (2)(a) above is market value, as defined in section 272 of the Gains Act.
(6) In this paragraph—
“company” means a body corporate;
“relevant company” means a company which is—
a successor company; or
in the application of this paragraph in relation to shares or debentures issued pursuant to section 106 of the [1993 c. 43.] Railways Act 1993, the company, or one of the companies, wholly owning (within the meaning of that section) the successor company whose liabilities are extinguished by the order under subsection (1) of that section.
19 (1) For the purposes of section 781 of the Taxes Act 1988 (assets leased to traders and others), where the interest of the lessor or the lessee under a lease, or any other interest in an asset, vests in any person by virtue of a relevant transfer—
(a) the transfer shall (notwithstanding anything in section 783(4) of that Act) be treated as made without any capital sum having been obtained in respect of that interest by the predecessor or the transferee; and
(b) in a case where the interest is an interest under a lease, payments made by the predecessor under the lease before the coming into force of the transfer shall be treated as if they had been made under that lease by the transferee.
(2) No charge shall arise under section 781(1) of the Taxes Act 1988 by virtue of section 783(2) of that Act in a case where the capital sum mentioned in section 781(1)(b)(i) or (ii) of that Act is the consideration obtained (or treated by section 783(4) of that Act as obtained) by the Board on a disposal pursuant to a direction under Part II of the [1993 c. 43.] Railways Act 1993 of securities of a subsidiary of the Board.
(3) The grant of a lease of an asset—
(a) by a person to an associate of his, pursuant to an obligation imposed by a restructuring scheme by virtue of section 91(1)(c) of the [1993 c. 43.] Railways Act 1993,
(b) by a person to an associate of his, pursuant to paragraph 2 of Schedule 8 to that Act in connection with a restructuring scheme, or
(c) by the Board, any of the Board’s wholly owned subsidiaries, a publicly owned railway company or a company wholly owned by the Franchising Director to an associate of the grantor, pursuant to a direction under that Act,
shall be treated for the purposes of section 781 of the Taxes Act 1988 (notwithstanding anything in section 783(4) of that Act) as made without any capital sum having been obtained by the grantor.
(4) No charge shall arise under section 781(1) of the Taxes Act 1988 in a case where the capital sum mentioned in section 781(1)(b)(i) or (ii) of that Act is the consideration obtained (or treated by section 783(4) of that Act as obtained) on a disposal of, or of an interest in, rolling stock by—
(a) the Board,
(b) a wholly owned subsidiary of the Board,
(c) a publicly owned railway company,
(d) a company wholly owned by the Franchising Director, or
(e) a body which, at the time when it acquired the rolling stock, fell within paragraph (b), (c) or (d) above,
in any case where before, at or after the time when the disposal is made the lessee’s interest in a lease of the rolling stock has belonged to an associate of the person making the disposal.
(5) Section 782 of the Taxes Act 1988 (leased assets: special cases) shall not apply to payments made by—
(a) the Board,
(b) a wholly owned subsidiary of the Board,
(c) a publicly owned railway company,
(d) a company wholly owned by the Franchising Director,
(e) a successor company, or
(f) a franchise company,
under a lease of an asset which at any time before the creation of the lease was used by a body falling within paragraphs (a) to (d) above for the purposes of a trade carried on by that body and which was, when so used, owned by that body.
(6) Section 781 of the Taxes Act 1988 shall not, by virtue of sub-paragraph (5) above, apply to any payments to which, by virtue of section 782 of that Act, it would not have applied apart from that sub-paragraph.
(7) In this paragraph—
“asset” has the meaning given by section 785 of the Taxes Act 1988;
“associate” shall be construed in accordance with section 783(10) of that Act;
“capital sum” has the meaning given by section 785 of that Act;
“lease” has the meaning given by section 785 of that Act;
“rolling stock” has the meaning given by section 83(1) of the [1993 c. 43.] Railways Act 1993;
“securities” has the meaning given by section 142 of the [1986 c. 60.] Financial Services Act 1986.
20 (1) Subject to the following provisions of this Schedule, where, apart from this paragraph—
(a) the predecessor would be treated for the purposes of the Corporation Tax Acts as having ceased, by virtue of the coming into force of a relevant transfer, to carry on any trade, and
(b) the transferee would be treated as having begun, on the coming into force of that transfer, to carry it on,
then the trade shall not be treated as permanently discontinued, nor a new trade as set up, for the purposes of the allowances and charges provided for by the Capital Allowances Acts, but sub-paragraphs (2) to (4) below shall apply.
(2) Subject to sub-paragraphs (3) and (4) below, in a case falling within sub-paragraph (1) above—
(a) there shall be made to or on the transferee in accordance with the Capital Allowances Acts all such allowances and charges as would, if the predecessor had continued to carry on the trade, have fallen to be made to or on the predecessor; and
(b) the amount of any such allowance or charge shall be computed as if—
(i) the transferee had been carrying on the trade since the predecessor began to do so; and
(ii) everything done to or by the predecessor had been done to or by the transferee (but so that the relevant transfer itself, so far as it relates to any assets in use for the purpose of the trade, shall not be treated as giving rise to any such allowance or charge).
(3) For the purposes of the Corporation Tax Acts, only such amounts (if any) as may be specified in or determined in accordance with the restructuring scheme providing for a relevant transfer shall be allocated to the transferee in respect of expenditure by reference to which capital allowances may be made by virtue of sub-paragraph (2) above in relation to anything to which the transfer relates.
(4) Sub-paragraph (2) above shall affect the amounts falling to be taken into account in relation to the predecessor as expenditure by reference to which capital allowances may be made only so far as necessary to give effect to a reduction of any such amount by a sum equal to so much of that amount as is allocated to the transferee as mentioned in sub-paragraph (3) above.
(5) Subject to sub-paragraph (6) below, the provisions of a restructuring scheme providing for the determination of any amount which for the purposes of sub-paragraph (3) above is to be allocated, in the case of any relevant transfer, to the transferee may include provision—
(a) for such a determination to be made by the Secretary of State in such manner as may be described in the scheme;
(b) for any amount determined to be calculated by reference to such factors or to the opinion of such person as may be so described; and
(c) for a determination under those provisions to be capable of being modified, on one or more occasions, in such manner and in such circumstances as may be so described.
(6) The consent of the Treasury shall be required for the making or modification of a determination of any such amount as is mentioned in sub-paragraph (5) above; and the consent of the transferee shall also be required for any such modification after the coming into force of the relevant transfer.
(7) This sub-paragraph applies in any case where assets which are the subject of a relevant transfer became vested in the predecessor by virtue of a transfer made by a company; and in any such case—
(a) if the predecessor held a direct or indirect interest in the company at the time of the transfer by the company, that interest shall be treated for the purposes of sub-paragraph (2)(b)(ii) above as if it had instead been held by the transferee;
(b) if the company held a direct or indirect interest in the predecessor at the time of the transfer by the company, the interest which the company held in the predecessor shall be treated for the purposes of sub-paragraph (2)(b)(ii) above as if it had instead been the corresponding interest in the transferee; and
(c) if there was a person who, at the time of the transfer by the company, held—
(i) a direct or indirect interest in the predecessor, and
(ii) a direct or indirect interest in the company,
the interest which that person held at that time in the predecessor shall be treated for the purposes of sub-paragraph (2)(b)(ii) above as if it had instead been the corresponding interest in the transferee.
(8) Neither section 343 of the Taxes Act 1988 (company reconstructions without change of ownership) nor section 77 of the Allowances Act (successions to trades: connected persons) shall have effect in a case falling within sub-paragraph (1) above.
(9) In determining whether sub-paragraph (1) above has effect in relation to a relevant transfer in a case where—
(a) the predecessor continues to carry on any trade or part of a trade after the coming into force of the transfer, or
(b) the transferee was carrying on any trade before the coming into force of the transfer,
the trade or part of a trade which is continued or, as the case may be, was being carried on shall for the purposes of that sub-paragraph be treated in relation to any trade or part of a trade which is transferred by virtue of the transfer as a separate trade and shall accordingly be disregarded.
(10) Where there is a determination, or a modification of a determination, for any purposes of this paragraph, all necessary adjustments shall be made by making assessments or by repayment or discharge of tax, and shall be so made notwithstanding any limitation on the time within which assessments may be made.
21 (1) The Capital Allowances Acts shall have effect in accordance with this paragraph in relation to any property if—
(a) it is property to which a relevant transfer relates; and
(b) paragraph 20 above does not apply in relation to its transfer to the transferee;
and in this paragraph “the relevant scheme”, in relation to property to which a relevant transfer relates, means the restructuring scheme that provides for that transfer.
(2) In any case where—
(a) subsection (6) of section 21 of the Allowances Act (transfer of industrial buildings or structures to be deemed to be sale at market price) applies on the relevant transfer in relation to the property, and
(b) the relevant scheme contains provision for the sale of that property which is deemed to occur by virtue of that subsection to be deemed for the purposes of the Capital Allowances Acts to be at a price specified in or determined in accordance with the scheme,
that deemed sale shall be treated as a sale at the price so specified or determined (instead of at the price determined by virtue of that subsection or any other provision of those Acts), sections 157 and 158 of the Allowances Act shall not apply and that provision of the scheme shall have an equivalent effect in relation to the expenditure which the transferee is to be treated as having incurred in making the corresponding purchase.
(3) Where the property is plant or machinery which would, for the purposes of the Capital Allowances Acts, be treated on the coming into force of the relevant transfer as disposed of by the predecessor to the transferee and the relevant scheme contains provision for the disposal value of that property to be deemed for the purposes of those Acts to be of such amount as may be specified in or determined in accordance with the scheme—
(a) that provision shall have effect, instead of section 26(1) or 59 of the Allowances Act, for determining an amount as the disposal value of the property or, as the case may be, as the price at which any fixture is to be treated as sold;
(b) the transferee shall be deemed to have incurred expenditure of that amount on the provision of that property; and
(c) in the case of a fixture, the expenditure which falls to be treated as incurred by the transferee shall be deemed for the purposes of section 54 of that Act to be incurred by the giving of a consideration consisting in a capital sum of that amount.
(4) Sub-paragraphs (5) and (6) of paragraph 20 above shall apply in relation to any determination of any amount in accordance with any provision made by a restructuring scheme for the purposes of this paragraph as they apply for the purposes of a determination such as is mentioned in those sub-paragraphs.
(5) Where there is a determination, or a modification of a determination, for any purposes of this paragraph, all necessary adjustments shall be made by making assessments or by repayment or discharge of tax, and shall be so made notwithstanding any limitation on the time within which assessments may be made.
22 (1) In this paragraph, “relevant disposal” means—
(a) a disposal by virtue of a section 85 transfer scheme, other than a restructuring scheme, to the extent that the scheme provides for the transfer of property, rights and liabilities of—
(i) the Board,
(ii) a wholly owned subsidiary of the Board,
(iii) a publicly owned railway company, or
(iv) a company which is wholly owned by the Franchising Director,
to a franchise company or to the Franchising Director;
(b) a disposal pursuant to a direction under section 89 of the [1993 c. 43.] Railways Act 1993;
(c) a disposal in accordance with directions under section 125 of that Act;
(d) a disposal by or pursuant to an agreement or instrument made or executed, transaction effected or direction given under or by virtue of paragraph 2, 3 or 14(2) of Schedule 8 to that Act, in a case where the transfer scheme in question is a section 85 transfer scheme, other than a restructuring scheme; or
(e) a disposal pursuant to a requirement imposed under paragraph 7(2)(b) of that Schedule, in a case where the transfer to which that Schedule applies is a transfer by virtue of a section 85 transfer scheme.
(2) A relevant disposal of the relevant interest in—
(a) an industrial building or structure, or
(b) a qualifying hotel or a commercial building or structure,
shall be treated for the purposes of Part I of the Allowances Act, and the other provisions of that Act which are relevant to that Part, as a sale of that relevant interest; and sections 157 and 158 of that Act (sales between connected persons or without change of control) shall not have effect in relation to that sale.
(3) Where there is a relevant disposal of machinery or plant, the amount which, in consequence of that disposal, is to be brought into account as the disposal value of that machinery or plant for the purposes of section 24 of the Allowances Act (balancing adjustments) shall, subject to section 26(2) and (3) of that Act (disposal value of machinery or plant not to exceed capital expenditure incurred on its provision) be taken—
(a) if consideration is given in respect of the relevant disposal, to be an amount equal to the amount or value of that consideration, or
(b) if no such consideration is given, to be nil,
notwithstanding any other provision of the Capital Allowances Acts.
(4) Where, in consequence of a relevant disposal, a fixture is treated by section 57(2) of the Allowances Act as ceasing to belong to a person at any time, the amount which, in consequence of that disposal, is to be brought into account as the disposal value of the fixture for the purposes of section 24 of that Act shall, subject to section 26(2) and (3) of that Act, be taken—
(a) if consideration is given in respect of the relevant disposal, to be an amount equal to that portion of the amount or value of that consideration which falls (or, if the person to whom the relevant disposal is made were entitled to an allowance, would fall) to be treated for the purposes of Part II of that Act as expenditure incurred by that person on the provision of the fixture, or
(b) if no such consideration is given, to be nil,
notwithstanding any other provision of the Capital Allowances Acts.
23 (1) Section 779 of the Taxes Act 1988 (sale and lease back) shall not apply by virtue of subsection (1) or (2) of that section in any case where the liability of the transferor, or of the person associated with the transferor, is—
(a) a liability under an access agreement, within the meaning of Part I of the [1993 c. 43.] Railways Act 1993;
(b) a liability under an agreement or instrument made or executed—
(i) pursuant to an obligation imposed by a restructuring scheme by virtue of section 91(1)(c) of that Act; or
(ii) pursuant to paragraph 2 of Schedule 8 to that Act;
(c) a liability under an exempt lease; or
(d) a liability to pay exempt rent or to make other exempt payments.
(2) A lease is “exempt” for the purposes of sub-paragraph (1)(c) above if—
(a) the transfer mentioned in subsection (1) of section 779 of the Taxes Act 1988 is—
(i) a transfer by virtue of a restructuring scheme;
(ii) a transfer pursuant to an obligation imposed by a restructuring scheme by virtue of section 91(1)(c) of the [1993 c. 43.] Railways Act 1993; or
(iii) a transfer pursuant to paragraph 2 of Schedule 8 to that Act; and
(b) the lease is granted after that transfer and otherwise than pursuant to—
(i) an obligation imposed by a restructuring scheme by virtue of section 91(1)(c) of the [1993 c. 43.] Railways Act 1993; or
(ii) paragraph 2 of Schedule 8 to that Act.
(3) Rent or other payments are “exempt” for the purposes of paragraph (d) of sub-paragraph (1) above if—
(a) the rent or other payments would, apart from that paragraph, be rent or other payments to which section 779 of the Taxes Act 1988 applies by virtue of subsection (1) or (2) of that section;
(b) the transfer mentioned in subsection (1) or, as the case may be, subsection (2)(a) of that section is—
(i) a transfer by virtue of a restructuring scheme;
(ii) a transfer pursuant to an obligation imposed by a restructuring scheme by virtue of section 91(1)(c) of the [1993 c. 43.] Railways Act 1993; or
(iii) a transfer pursuant to paragraph 2 of Schedule 8 to that Act; and
(c) the transaction or series of transactions mentioned in subsection (1)(b) or, as the case may be, subsection (2)(b) of the said section 779 is effected after that transfer.
(4) In this paragraph “transferor”, “lease” and “rent” have the same meaning as they have in section 779 of the Taxes Act 1988 and “associated” shall be construed in accordance with subsection (11) of that section.
Finance Act 1994