Finance Act 1995

Supplementary provisions as to apportionment E+W+S+N.I.

17 (1) In section 432B of the Taxes Act 1988 (apportionment of receipts brought into account)— E+W+S+N.I.

(a) in subsections (1) and (2) for “sections 432C to 432E” substitute “ sections 432C to 432F ”, and

(b) in subsection (3) for “section 432E applies” substitute “ sections 432E and 432F apply ”.

(2) In section 432E of the Taxes Act 1988 (section 432B apportionment: participating funds)—

(a) in subsection (1), for the words from “shall be” to the end substitute “ shall be the amount determined in accordance with subsection (2) below or, if greater, the amount determined in accordance with subsection (3) below. ”; and

(b) in subsection (5) at the end insert—

“References in this subsection to the amount determined in accordance with subsection (3) above are to that amount after making any deduction required by section 432F.”.

(3) After section 432E of the Taxes Act 1988 insert—

“432F Section 432B apportionment: supplementary provisions.

(1) The provisions of this section provide for the reduction of the amount determined in accordance with section 432E(3) (“the subsection (3) figure”) for an accounting period in which that amount exceeds, or would otherwise exceed, the amount determined in accordance with section 432E(2) (“the subsection (2) figure”).

(2) For each category of business in relation to which section 432E falls to be applied there shall be determined for each accounting period the amount (if any) by which the subsection (2) figure, after making any reduction required by section 432E(5), exceeds the subsection (3) figure (“the subsection (2) excess”).

(3) Where there is a subsection (2) excess, the amount shall be carried forward and if in any subsequent accounting period the subsection (3) figure exceeds, or would otherwise exceed, the subsection (2) figure, it shall be reduced by the amount or cumulative amount of subsection (2) excesses so far as not previously used under this subsection.

(4) Where in an accounting period that amount is greater than is required to bring the subsection (3) figure down to the subsection (2) figure, the balance shall be carried forward and aggregated with any subsequent subsection (2) excess for use in subsequent accounting periods.”.

(4) In section 444A of the Taxes Act 1988 (transfers of business) after subsection (3) insert—

“(3A) Any subsection (2) excess (within the meaning of section 432F(2)) which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available under section 432F(3) or (4) to reduce a subsection (3) figure (within the meaning of section 432F(1)) of the transferor in an accounting period following that which ends with the day on which transfer takes place—

(a) shall, instead, be treated as a subsection (2) excess of the transferee, and

(b) shall be taken into account in the first accounting period of the transferee ending after the date of the transfer (to reduce the subsection (3) figure or, as the case may be, to produce or increase a subsection (2) excess for that period),

in relation to the revenue account of the transferee dealing with or including the business transferred.”.

(5) In section 444A(5) of the Taxes Act 1988 for “subsection (2) or (3)” substitute “ subsection (2), (3) or (3A) ”.