Schedule 9: Transitionals and savings etc
Overview
1439.This Schedule contains transitional and saving provisions.
Part 3: Double taxation relief
1440.Paragraph 9 of Schedule 14 to FA 2009 repealed sections 806A to 806K of ICTA with effect in relation to distributions paid on or after 1 July 2009. As explained in the commentary on the amendments made by Schedule 8 to those sections, they apply for corporation tax purposes to certain accounting periods for which this Act has effect. Accordingly, this Schedule makes transitional provision ensuring that:
those amendments do not override the repeal of those sections;
the interpretative rules of ICTA which are repealed by this Act are saved to the extent that they are needed for the purposes of those sections; and
outlying references to Part 18 of ICTA which are converted into references to Part 2 of this Act continue, if they are relevant to those sections, to refer to those sections.
Part 10: Alternative finance arrangements
1441.The legislation concerning alternative finance arrangements was introduced in FA 2005. The legislation introduced at that time covers purchase and resale arrangements and deposit arrangements. The legislation applies to arrangements entered into on or after 6 April 2005 (the date on which FA 2005 became law) and also to alternative finance return payable under existing deposit arrangements where the return is paid on or after 6 April 2005 (section 56 of FA 2005).
1442.Sections 95 and 96 of FA 2006 introduced legislation relating to profit share agency and diminishing shared ownership arrangements. The legislation for profit share agency applies for income tax to arrangements entered into on or after 6 April 2006 and to payments made under existing arrangements on or after 6 April 2006 (section 95(11) of FA 2006). The legislation for diminishing shared ownership applies for income tax only to arrangements entered into on or after 6 April 2006 (section 96(11) of FA 2006).
1443.Section 53 of FA 2007 introduced legislation relating to investment bond arrangements. The legislation applies for income tax to arrangements entered into on or after 6 April 2007 and to payments made under existing arrangements on or after 6 April 2007 (section 53(13) of FA 2007).
1444.Transitional provisions in this Schedule preserve the effect of those commencement provisions.
1445.The Alternative Finance Arrangements (Amendment) Order 2009 (SI 2009/2568) amended the definition of “financial institution” with effect for alternative finance arrangements (of all types) entered into on or after 15 October 2009. A transitional provision preserves the former definition for arrangements entered into before that date.
Part 12: Factoring of income etc
Application of section 809BZN of ITA 2007 (finance arrangements: exceptions)
1446.Section 809BZN of ITA is inserted by Schedule 5. It is based on section 774E of ICTA 1988.
1447.Sub-paragraph (1) of this paragraph is a saving for the second sentence of section 774E(1) of ICTA 1988, which was repealed by paragraph 9(3)(b) of Schedule 25 to FA 2009. This saving applies in relation to transfers before 22 April 2009 in accounting periods which begin before that date and end on or after 1 April 2010.
1448.Section 774E(4)(b) of ICTA originally read as follows:
“(4)Section 774B or 774D does not apply so far as the structured finance arrangement is an arrangement in relation to which –
(b)paragraph 15 of Schedule 9 to the Finance Act 1996 (repo transactions and stock-lending) applies, or …”
1449.Paragraph 9 of Schedule 14 to FA 2007 substituted a new section 774E(4)(b) reading as follows:
“(b)Schedule 13 to the Finance Act 2007 (sale and repurchase of securities) applies, …”
1450.In that substituted version, CTA 2009 inserted before “applies” the words “or Chapter 10 of Part 6 of CTA 2009 (repos).”
1451.The amendment made by paragraph 9 of Schedule 14 to FA 2007 applies with effect in relation to an arrangement that comes into force on or after 1 October 2007: see article 3 of the Finance Act 2007 (Schedules 13 and 14) Order 2007 (SI 2007/2483).
1452.Furthermore, because of article 5 of that instrument, the pre-FA 2007 version of paragraph 15 of Schedule 9 to FA 1996 is still in force in relation to arrangements which would have been within Schedule 13 to FA 2007 but for having come into force before 1 October 2007.
1453.Section 774E(4)(b) of ICTA, as amended by FA 2007 and CTA 2009, is rewritten to new section 809BZN(5)(b) of ITA and section 771(5)(b) of CTA 2010. Sub-paragraph (2) of this paragraph accordingly makes transitional provision for arrangements which came into force before 1 October 2007. See also paragraph 78 of Schedule 2 to CTA 2009 for modifications with which paragraph 15 of Schedule 9 to FA 1996 (as it stood before the substitution made by paragraph 18 of Schedule 14 to FA 2007) has effect.
Application of section 809CZC of ITA 2007 (income-transfer under loan or credit transaction)
1454.This paragraph is a saving for the words in section 786 of ICTA 1988 omitted by paragraph 9(1)(d) of Schedule 25 to FA 2009. This saving applies in relation to transfers before 22 April 2009 in accounting periods which begin before that date and end on or after 1 April 2010.