Amendments of Schedule 9 to FA 1996U.K.
2(1)In Schedule 9 to FA 1996 (loan relationships: computational provisions), paragraph 2 (late interest) is amended as follows.U.K.
(2)In sub-paragraph (1B)—
(a)omit “, but not a CIS-based close company,” and the words after paragraph (c);
(b)in paragraph (a), at the end insert “ or a person who controls a company which is such a participator ”;
(c)in paragraph (b), after “who is” insert “ , or who controls a company which is, ”;
(d)for paragraph (c) substitute—
“(c)a company controlled by such a participator or by a person who controls a company which is such a participator, or
(d)a company in which such a participator has a major interest.”;
(e)at the end insert— “ This is subject to sub-paragraph (1E). ”.
(3)After sub-paragraph (1D) insert—
“(1E)A case does not fall within sub-paragraph (1B) above if either of the following exceptions applies.
(1F)The first exception applies where—
(a)the debtor company is a CIS-based close company at all such times as are mentioned in sub-paragraph (1B) above;
(b)the person standing in the position of a creditor as respects the loan relationship is not resident in a non-qualifying territory at any such time; and
(c)the debtor company is a small or medium-sized enterprise for the relevant accounting period.
(1G)The second exception applies where—
(a)the debt is one that is owed to, or to persons acting for, a CIS limited partnership;
(b)no member of that partnership is resident in a non-qualifying territory at any time in the relevant accounting period;
(c)the debtor company has received written notice from the partnership containing information from which it appears that the condition in paragraph (b) above is satisfied; and
(d)the debtor company is a small or medium-sized enterprise for the relevant accounting period.”.
(4)In sub-paragraph (6), at the appropriate places insert—
““non-qualifying territory” has the meaning given by paragraph 5E of Schedule 28AA to the Taxes Act 1988;”;
““resident” has the meaning given by paragraph 5B(6) of Schedule 28AA to the Taxes Act 1988;”;
““small or medium-sized enterprise” has the meaning given by paragraph 5D of that Schedule.”.
3(1)Paragraph 18 of that Schedule (discounted securities of close companies) is amended as follows.U.K.
(2)In sub-paragraph (1), omit paragraphs (aa) and (c).
(3)In sub-paragraph (1)(b)—
(a)in sub-paragraph (i), at the end insert “ or a person who controls a company which is such a participator ”;
(b)in sub-paragraph (ii), after “an associate of” insert “ a person who is, or who controls a company which is, ”;
(c)for sub-paragraph (iii) substitute—
“(iii)a company controlled by such a participator or by a person who controls a company which is such a participator.”.
(4)After sub-paragraph (1) insert—
“(1ZA)But for any such accounting period this paragraph shall not apply in relation to that debtor relationship if any of the following exceptions applies.”.
(5)In sub-paragraph (1A), for the words before paragraph (a) substitute “ The first exception applies where— ”.
(6)After that sub-paragraph insert—
“(1B)The second exception applies where—
(a)the issuing company is a CIS-based close company;
(b)at all times in the period when there is such a person as is described in sub-paragraph (1)(b) above, that person is not resident in a non-qualifying territory; and
(c)the issuing company is a small or medium-sized enterprise for the period.
(1C)The third exception applies where—
(a)the debt is one that is owed to, or to persons acting for, a CIS limited partnership;
(b)no member of that partnership is resident in a non-qualifying territory at any time in the period when there is such a person as is described in sub-paragraph (1)(b) above;
(c)the debtor company has received written notice from the partnership containing information from which it appears that the condition in paragraph (b) above is satisfied; and
(d)the issuing company is a small or medium-sized enterprise for the period.”.
(7)In sub-paragraph (4), at the appropriate places insert—
““CIS-based close company” and “CIS limited partnership” have the meaning given by paragraph 2(6) above;”;
““non-qualifying territory” has the meaning given by paragraph 5E of Schedule 28AA to the Taxes Act 1988;”;
““resident” has the meaning given by paragraph 5B(6) of Schedule 28AA to that Act;”;
““small or medium-sized enterprise” has the meaning given by paragraph 5D of that Schedule.”.