Special cases
Section 29: Groups of companies
91.This section provides for how groups of companies and members of groups are to be treated with regard to tax liabilities. This includes providing how groups of companies are liable through their representative member carrying out taxable activities (see section 18) and how corporate bodies can be considered a group.
92.Subsections (2) to (3) set out the conditions of the application for group treatment. An application for group treatment is made to Revenue Scotland under subsection (4) setting out which of the bodies corporate is to be the representative member. As per subsection (6) a successful application will take effect from the beginning of a particular accounting period. An application to vary or end the group treatment may be made under subsection (7) and, as per subsection (8), may be granted with effect from a time specified by Revenue Scotland in a written notice to the members of the group.
93.Subsection (9) provides that Revenue Scotland only has discretion to refuse an application under subsection (4) or subsection (7) if it appears necessary to do so for the protection of the revenue (i.e. to prevent the loss of tax revenue) – otherwise the application must be granted. However Revenue Scotland has no discretion at all to refuse an application under subsection (7)(b) to exclude a body corporate from group treatments.
94.Subsection (10) states that an application under this section must be made by the bodies or person controlling them and that the application should be made 90 days before the group status is to take effect.
95.Subsection (11) sets out the circumstances in which a corporate body or individuals will be deemed to control another corporate body, mainly if the corporate body is the latter body’s holding company within the meaning of section 1159 and Schedule 6 of the Companies Act 2006 or, in the case of individuals, would be were the individuals a company.
Section 30: Notification of cessation of eligibility for group treatment or of having place of business in UK
96.This section provides that where bodies corporate are treated as members of a group for the purposes of Scottish aggregates tax, and one of them becomes no longer eligible for group treatment under section 29, that body is under a duty to notify Revenue Scotland immediately of that fact. In addition, this section places a duty on representative members of groups to notify Revenue Scotland before ceasing to have an established place of business in the UK.
Section 31: Group treatment: change to application or notification
97.This section applies where bodies corporate are treated as members of a group for the purposes of Scottish aggregates tax. A body corporate which has made an application under section 29(4) or (7) relating to group treatment, or a notification under section 30(1) or (2) concerning the cessation of its eligibility for group treatment or of its having a place of business in the UK, has a duty to notify Revenue Scotland immediately if any information contained in or provided in connection with that application or notification subsequently becomes inaccurate.
Section 32: Group treatment: substitution and termination
98.This section deals with the scenario where the representative member of a group of bodies corporate ceases to be treated as a member of the group, and no application to change the representative member under section 29(7)(c) has been granted by Revenue Scotland. In such a situation Revenue Scotland is required to substitute a different member of the group as the new representative member by notice to that member.
99.Subsection (3) provides that where a body corporate which is a member of a group ceases to be controlled by any person (see section 29(11)) for the meaning of control in this context) then Revenue Scotland must terminate the group treatment of that body by notice.
100.In addition, subsection (4) provides that if it appears to Revenue Scotland necessary to do so for the protection of the revenue, it has a general power to terminate the group treatment of a body corporate by notice. The time termination comes into effect must not be before the day on which notice is given to the representative member, as per subsection (5).
Section 33: Partnerships and unincorporated bodies etc.
101.This section of the Act gives a regulation-making power to the Scottish Ministers to make provision applying Part 1 of the Act to cases where a business is carried on in partnership or by an unincorporated body. Regulations under this section will be subject to the negative procedure. Under subsection (2), registration for tax can be in the name of the firm or body concerned (as opposed to being in the name of its members). A body corporate may have several divisions which are themselves bodies corporate: under subsection (4), Revenue Scotland may determine what divisions of a particular corporate body are registrable for Scottish aggregates tax.
Section 34: Bankruptcy etc.
102.This section of the Act gives a regulation-making power to the Scottish Ministers to make provision requiring persons who are carrying on the business of someone who has died, become bankrupt or become incapacitated – or whose business is in liquidation, receivership or administration – to inform Revenue Scotland that they are doing so. The regulations may also make provision allowing such persons to be treated as the original taxpayer for the purposes of Scottish aggregates tax; and make provision applying Part 1 of the Act to such persons. These regulations will be subject to the negative procedure.
Section 35: Transfer of business as a going concern
103.This section of the Act gives a regulation-making power to the Scottish Ministers to make provision applying Part 1 of the Act to cases where a business is transferred to another person as a going concern (that is, it is assumed that the business is still able to meet its financial obligations when they become due). The regulations may include provision requiring notification to Revenue Scotland, and provision treating the transferee as the original taxpayer for the purposes of Scottish aggregates tax. These regulations will be subject to the negative procedure.
