Chapter 6: Supplementary and general
Overview
901.This Chapter contains provisions relating to alternative finance arrangements, other miscellaneous provisions and definitions applicable to this Part.
902.Sections 256 to 259 modify this Part to enable the range of permitted investments in, and by, CDFIs to include various Sharia’a-compliant financial products that in substance, but not in form, are equivalent to interest-bearing loans. Such products are to be treated as loans for the purposes of this Part.
Section 256: Meaning of “loan” and “interest”
903.This section extends the meaning of the term “loan” to include purchase and resale arrangements, deposit arrangements and profit share agency arrangements and the meaning of the term “interest” to include profit share return under those alternative finance arrangements. It is based on section 54A(1) and (2) of FA 2005.
Section 257: Purchase and resale arrangements
904.This section sets out how this Part has effect in relation to purchase and resale arrangements. It is based on section 54A(3) and (4) of FA 2005.
Section 258: Deposit arrangements
905.This section sets out how this Part has effect in relation to deposit arrangements. It is based on section 54A(5) of FA 2005.
Section 259: Profit share agency arrangements
906.This section sets out how this Part has effect in relation to profit share agency arrangements. It is based on section 54A(6) of FA 2005.
Section 260: Information to be provided by the investor
907.This section imposes obligations on the investor to notify an officer of Revenue and Customs of events giving rise to the withdrawal or reduction of any CITR attributable to a loan or any securities or shares. It is based on paragraph 42 of Schedule 16 to FA 2002.
908.There is inconsistency of language between paragraph 42(1)(b) of Schedule 16 to FA 2002 which refers to CITR being attributable forany accounting period and paragraph 26(1)(b) of that Schedule (rewritten in section 240(1)) which defines references in that Schedule to “CITR attributable ... in respect of an accounting period”. This section removes this inconsistency by substituting “in respect of” in subsection (1)(b).
Section 261: Disclosure
909.This section authorises disclosure of information between HMRC and the Secretary of State for the purpose of discharging their respective functions under this Part. It is based on paragraph 43 of Schedule 16 to FA 2002.
Section 262: Nominees
910.This section allows for loans, securities or shares to be acquired, held and disposed of by nominees or bare trustees. It is based on paragraph 44 of Schedule 16 to FA 2002.
Section 263: Application for postponement of tax pending appeal
911.This section ensures that the investor cannot claim to postpone any payment of tax under section 55 of TMA on the grounds that the investor is eligible for CITR unless a claim has actually been made. It is based on paragraph 45 of Schedule 16 to FA 2002.
Section 264: Identification of securities or shares on a disposal
912.This section provides rules for the identification of the securities or shares disposed of for the purposes of this Part. It is based on paragraph 47 of Schedule 16 to FA 2002.
Section 265: Meaning of “issue of securities or shares”
913.This section provides definitions, in relation to a body, of an issue of securities or shares by that body and, in relation to a company, of an issue of securities or shares to that company. It is based on paragraph 46 of Schedule 16 to FA 2002.
Section 266: Meaning of “disposal”
914.This section defines “disposal”. It is based on paragraph 48 of Schedule 16 to FA 2002.
Section 267: Construction of references to being “held continuously”
915.This section explains what is meant by “held continuously”, for the purposes of those sections of this Part which require the investment to have been “held continuously” by the investor during a specified period (see for example sections 247 and 252). It is based on paragraph 49 of Schedule 16 to FA 2002.
Section 268: Meaning of “associate”
916.This section provides a definition of “associate”, which is relevant to sections 249 and 250. It is based on paragraph 50 of Schedule 16 to FA 2002.
Section 269: Minor definitions etc
917.This section explains various terms used in this Part. It is based on paragraph 51 of Schedule 16 to FA 2002.
918.With the exception of “body”, the terms defined in paragraph 51(1) of Schedule 16 to FA 2002 have been omitted, as they are either no longer required or are defined generally for the purposes of this Act.
919.A definition of “bonus shares” has been added in subsection (1).
920.In subsection (2), which determines when shares are to be treated as being of the same class, for the words “if dealt with on the Stock Exchange” in paragraph 51(2) of Schedule 16 to FA 2002 there are substituted the words:
if they were—
(a)included in the official UK list and
(b)admitted to trading on the London Stock Exchange.
See section 1005 of ITA as applied for corporation tax purposes by section 841 of ICTA for the meaning of “included in the official UK list”.
921.The words used in paragraph 51(2) of Schedule 16 to FA 2002 have been in wide use in tax legislation from a time when the London Stock Exchange only operated a single market. The reference to the Stock Exchange is accordingly to be taken as a reference to the requirements of the London Stock Exchange in relation to shares traded on the main market, rather than on AIM or any other platform. The substituted words are intended to preserve and clarify the meaning of the source legislation and do not change the law.
922.Paragraph 51(3) of Schedule 16 to FA 2002, which applies section 839 of ICTA (connected persons) for the purposes of that Schedule, has not been rewritten. Section 839 of ICTA is rewritten in section 1122 for the purposes of the Corporation Tax Acts and section 1176(1) applies that definition generally for the purposes of this Act.
