Finance Act 2007 (c. 11)

Finance Act 2007

2007 CHAPTER 11

An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

[19th July 2007]

Most Gracious Sovereign

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and to grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Part 1 U.K. Charges, rates, thresholds etc

Income tax U.K.

1 Charge and rates for 2007-08 U.K.

Income tax is charged for the tax year 2007-08; and for that tax year—

(a) the starting rate is 10%,

(b) the basic rate is 22%, and

(c) the higher rate is 40%.

Corporation tax U.K.

2 Charge and main rates for financial year 2008 U.K.

(1) Corporation tax is charged for the financial year 2008; and for that year the rate of corporation tax is—

(a) 28% on profits of companies other than ring fence profits, and

(b) 30% on ring fence profits of companies.

(2) In this section “ring fence profits” has the same meaning as in Chapter 5 of Part 12 of ICTA (see section 502(1) and (1A)).

F1 3 Small companies' rates and fractions for financial year 2007 U.K.

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Textual Amendments

F1 S. 3 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 574, Sch. 3 Pt. 1 (with Sch. 2)

Inheritance tax U.K.

F2 4 Rates and rate bands for 2010-11 U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2 S. 4 omitted (8.4.2010) by virtue of Finance Act 2010 (c. 13), s. 8(2)(b)

Alcohol and tobacco U.K.

5 Rates of duty on alcoholic liquor U.K.

(1) The Alcoholic Liquor Duties Act 1979 (c. 4) is amended as follows.

(2) In section 36(1AA)(a) (standard rate of duty on beer), for “£13.26” substitute “ £13.71 ”.

(3) In section 62(1A) (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for “£166.70” substitute “ £172.33 ”,

(b) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£38.43” substitute “ £39.73 ”, and

(c) in paragraph (c) (rate of duty per hectolitre in any other case), for “£25.61” substitute “ £26.48 ”.

(4) For Part 1 of the Table in Schedule 1 substitute—

“Part 1 U.K. Wine and made-wine of a strength not exceeding 22 per cent

Description of wine or made-wine	Rates of duty per hectolitre
	£
Wine or made-wine of a strength not exceeding 4 per cent	54.85
Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent	75.42
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling	177.99
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent	172.33
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent	227.99
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent	237.31”.

(5) The amendments made by this section are deemed to have come into force on 26th March 2007.

6 Rates of tobacco products duty U.K.

(1) For the Table in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute—

“Table

1. Cigarettes	An amount equal to 22 per cent of the retail price plus £108.65 per thousand cigarettes.
2. Cigars	£158.24 per kilogram.
3. Hand-rolling tobacco	£113.74 per kilogram.
4. Other smoking tobacco and chewing tobacco	£69.57 per kilogram.”

(2) The amendment made by subsection (1) is deemed to have come into force at 6 p.m. on 21st March 2007.

Gambling U.K.

7 Rates of gaming duty U.K.

(1) For the Table in section 11(2) of FA 1997 substitute—

“Table

Part of gross gaming yield	Rate
The first £1,836,500	15 per cent.
The next £1,266,000	20 per cent.
The next £2,217,500	30 per cent.
The next £4,680,000	40 per cent.
The remainder	50 per cent.”

(2) In section 11(3) of that Act, for “40 per cent” substitute “ 50 per cent ”.

(3) The amendments made by this section have effect in relation to accounting periods beginning on or after 1st April 2007.

8 Remote gaming duty U.K.

(1) Schedule 1 contains amendments of and relating to Part 2 of BGDA 1981 (gaming duties) imposing a remote gaming duty.

(2) The amendments made by Schedule 1 have effect in respect of the provision of facilities on or after a date appointed by the Commissioners for Her Majesty's Revenue and Customs by order made by statutory instrument.

9 Amusement machine licence duty U.K.

(1) Section 23 of BGDA 1981 (amount of duty payable on amusement machine licence) is amended as follows.

F3 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) After subsection (6) insert—

“(7) The Commissioners may by order substitute for a sum for the time being specified in subsection (3) such higher sum as they consider appropriate.”

F4 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F3 S. 9(2) omitted (retrospective to 1.6.2009) by virtue of Finance Act 2009 (c. 10), s. 22(11)(b)(12)

F4 S. 9(4) omitted (retrospective to 1.6.2009) by virtue of Finance Act 2009 (c. 10), s. 22(11)(b)(12)

Commencement Information

I1 S. 9 wholly in force at Royal Assent; s. 9(2) deemed to have come into force on 22.3.2007 see s. 9(4); s. 9(1)(3)(4) in force at Royal Assent

Environment U.K.

10 Fuel duty rates and rebates U.K.

(1) The Hydrocarbon Oil Duties Act 1979 (c. 5) is amended as follows.

(2) In section 6(1A) (hydrocarbon oil: rates of duty)—

(a) in paragraph (a) (ultra low sulphur petrol), for “£0.4835” substitute “ £0.5035 ”,

(b) in paragraph (aa) (sulphur-free petrol), for “£0.4835” substitute “ £0.5035 ”,

(c) in paragraph (b) (light oil other than ultra low sulphur petrol and sulphur-free petrol), for “£0.5768” substitute “ £0.6007 ”,

(d) in paragraph (c) (ultra low sulphur diesel), for “£0.4835” substitute “ £0.5035 ”,

(e) in paragraph (ca) (sulphur-free diesel), for “£0.4835” substitute “ £0.5035 ”, and

(f) in paragraph (d) (heavy oil other than ultra low sulphur diesel and sulphur-free diesel), for “£0.5468” substitute “ £0.5694 ”.

(3) In section 6AA(3) (biodiesel), for “£0.2835” substitute “ £0.3035 ”.

(4) In section 6AD(3) (bioethanol), for “£0.2835” substitute “ £0.3035 ”.

(5) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.1081” substitute “ £0.1370 ”, and

(b) in paragraph (b) (other road fuel gas), for “£0.1221” substitute “ £0.1649 ”.

(6) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.0729” substitute “ £0.0929 ”,

(b) in paragraph (b) (gas oil which is not ultra low sulphur diesel), for “£0.0769” substitute “ £0.0969 ”, and

(c) in paragraph (ba) (ultra low sulphur diesel), for “£0.0769” substitute “ £0.0969 ”.

(7) In section 13A(1) (rebate on unleaded petrol), for “£0.0617” substitute “ £0.0642 ”.

(8) In section 14(1) (rebate on light oil for use as furnace oil), for “£0.0729” substitute “ £0.0929 ”.

(9) The amendments made by this section come into force on 1st October 2007.

11 Rates of vehicle excise duty U.K.

(1) Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2) In paragraph 1 (general)—

(a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder capacity not exceeding 1,549cc), for “£175” substitute “ £180 ”, and

(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£110” substitute “ £115 ”.

(3) Paragraph 1B (graduated rates for light passenger vehicles) is amended as follows.

(4) For the words from “Table A” to “date,” substitute “ the following table ”.

(5) For “, or is liable to the standard rate or the premium” substitute

“Table

CO2 emissions figure		Rate
(1)	(2)	(3)	(4)
Exceeding	Not exceeding	Reduced rate	Standard rate
g/km	g/km	£	£
100	120	15	35
120	150	95	115
150	165	120	140
165	185	145	165
185	225	190	205
225		285	300”

“The table has effect in relation to vehicles first registered before 23rd March 2006 as if—

(a) in column (3), in the last row, “190” were substituted for “ 285 ”, and

(b) in column (4), in the last row, “205” were substituted for “ 300 or is liable to the standard ”.”.

(6) For Tables A and B substitute—

(7) For paragraphs 1D and 1E substitute—

“1D “The standard rate

“1D A vehicle is liable to the standard rate of duty if it does not qualify for the reduced rate of duty.”

(8) In paragraph 1J (light goods vehicles)—

(a) in sub-paragraph (a) (vehicle which is not lower-emission van), for “£170” substitute “ £175 ”, and

(b) in sub-paragraph (b) (lower-emission van), for “£110” substitute “ £115 ”.

(9) In paragraph 2(1) (motorcycles)—

(a) in paragraph (b) (motorbicycle and engine's cylinder capacity more than 150cc but not more than 400cc), for “£31” substitute “ £32 ”,

(b) in paragraph (c) (motorbicycle and engine's cylinder capacity more than 400cc but not more than 600cc), for “£46” substitute “ £47 ”, and

(c) in paragraph (d) (any other case), for “£62” substitute “ £64 ”.

(10) The amendments made by this section have effect in relation to licences taken out on or after 22nd March 2007.

F5 12 Rates of air passenger duty U.K.

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Textual Amendments

F5 S. 12 omitted (with effect in accordance with Sch. 5 para. 7 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 5 para. 6(d)

13 Rates of climate change levy U.K.

(1) For the Table in paragraph 42(1) of Schedule 6 to FA 2000 substitute—

“Table

Taxable commodity supplied	Rate at which levy payable if supply is not a reduced-rate supply
Electricity	£0.00456 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility	£0.00159 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.01018 per kilogram
Any other taxable commodity	£0.01242 per kilogram”.

(2) The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1st April 2008.

14 Rate of aggregates levy U.K.

(1) In section 16(4) of FA 2001 (rate of aggregates levy), for “£1.60” substitute “ £1.95 ”.

(2) The amendment made by subsection (1) has effect in relation to aggregate subjected to commercial exploitation on or after 1st April 2008.

15 Rates of landfill tax U.K.

(1) Section 42 of FA 1996 (amount of landfill tax) is amended as follows.

(2) In—

(a) subsection (1)(a) (the standard rate), and

(b) subsection (2) (reference to the standard rate taken to be £2 in cases of disposals of qualifying material),

for “£21” substitute “ £24 ”.

(3) The amendments made by subsection (2) have effect in relation to disposals made (or treated as made) on or after 1st April 2007 (but before 1st April 2008).

(4) In subsection (1)(a), for “£24” substitute “ £32 ” and, in subsection (2), for “£24 were to £2” substitute “ £32 were to £2.50 ”.

(5) The amendments made by subsection (4) come into force on 1st April 2008 and have effect in relation to disposals made (or treated as made) on or after that date.

16 Emissions trading: charges for allocations U.K.

(1) The Treasury may impose charges by providing for Community tradeable emissions allowances to be allocated in return for payment.

(2) The Treasury must by regulations make provision for and in connection with allocations of allowances in return for payment.

F6 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The regulations may make any other provision about allocations which the Treasury consider appropriate, including (in particular)—

(a) provision as to the imposition of fees, and as to the making and forfeiting of deposits, in connection with participation in allocations,

(b) provision as to the persons by whom allocations are to be conducted,

(c) provision for the [F7 creation of criminal offences, or for the imposition and recovery of civil penalties,] for failure to comply with the terms of a scheme made under subsection (5),

(d) provision for and in connection with the recovery of payments due in respect of allowances allocated (including provision as to the imposition and recovery of interest and penalties), and

(e) provision conferring rights of appeal against decisions made in allocations, the forfeiting of deposits and the imposition of penalties (including provision specifying the person, court or tribunal to hear and determine appeals).

(5) The Treasury may make schemes about the conduct and terms of allocations (to have effect subject to any regulations under this section); and schemes may in particular include provision about—

(a) who may participate in allocations,

(b) the allowances to be allocated, and

(c) where and when allocations are to take place.

(6) “Community tradeable emissions allowances” are transferable allowances which—

(a) relate to the making of emissions of greenhouse gases, and

(b) are allocated as part of a system made for the purpose of implementing any [F8 EU] obligation of the United Kingdom relating to such emissions;

and “greenhouse gases” means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

[F9 (6A) Subsection (4)(c) does not permit the creation of a criminal offence with maximum penalties in excess of the maximum penalties which an instrument under section 2(2) of the European Communities Act 1972 may provide in respect of an offence created by such an instrument.]

(7) Regulations under this section are to be made by statutory instrument.

(8) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons unless a draft of the regulations has been laid before, and approved by a resolution of, that House.

Textual Amendments

F6 S. 16(3) repealed (14.11.2012) by The Community Emissions Trading Scheme (Allocation of Allowances for Payment) Regulations 2012 (S.I. 2012/2661), regs. 1, 6(1)(a) (with reg. 6(2))

F7 Words in s. 16(4)(c) substituted (21.7.2008) by Finance Act 2008 (c. 9), s. 164(2)

F8 Words in Act substituted (22.4.2011) by The Treaty of Lisbon (Changes in Terminology) Order 2011 (S.I. 2011/1043), arts. 2, 3, 6 (with art. 3(2)(3), 4(2), 6(4)(5))

F9 S. 16(6A) inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 164(3)

Part 2 U.K. Environment

Energy-saving: houses U.K.

F10 17 Corporation tax deduction for expenditure on energy-saving items U.K.

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Textual Amendments

F10 S. 17 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

18 Extension of income tax deduction for expenditure on energy-saving items U.K.

(1) Section 312 of ITTOIA 2005 (deduction for expenditure on energy-saving items) is amended as follows.

(2) In subsection (1)(b) (expenditure incurred in acquiring and installing energy-saving item in dwelling-house), for “in the dwelling-house an energy-saving item” substitute “ an energy-saving item in the dwelling-house or in a building containing the dwelling-house ”.

(3) In subsection (1)(c) (expenditure incurred before 6th April 2009), for “2009” substitute “ 2015 ”.

(4) In section 313 of that Act (restrictions on relief), insert at the end—

“(6) No deduction is allowed in respect of expenditure incurred in acquiring and installing the energy-saving item in a building containing the dwelling-house in so far as the expenditure is not for the benefit of the dwelling-house.”

(5) In section 314 of that Act (regulations), insert at the end—

“(3) Regulations under this section may—

(a) make different provision for different cases, and

(b) contain incidental, supplemental, consequential and transitional provision and savings (including provision as to appeals in relation to apportionments mentioned in subsection (1)(d)).”

(6) The amendments made by subsections (2) and (4) have effect in relation to expenditure incurred on or after 6th April 2007.

(7) The amendment made by subsection (5) is deemed always to have had effect.

(8) Regulations under section 314 of ITTOIA 2005 made on or after the day on which this Act is passed but before 31st December 2007 may include provision having effect in relation to expenditure incurred on or after 6th April 2007.

19 SDLT relief for new zero-carbon homes U.K.

(1) In FA 2003, after section 58A insert—

“58B Relief for new zero-carbon homes

(1) The Treasury may make regulations granting relief on the first acquisition of a dwelling which is a “zero-carbon home”.

(2) In subsection (1) “first acquisition of a dwelling” means the acquisition of a building which—

(a) has been constructed for use as a single dwelling, and

(b) has not previously been occupied.

(3) For the purpose of subsection (2) land occupied or enjoyed with a dwelling as a garden or grounds is part of the dwelling.

(4) The regulations shall define “zero-carbon home” by reference to specified aspects of the energy efficiency of a building; for which purpose “energy efficiency” includes—

(a) consumption of energy,

(b) conservation of energy, and

(c) generation of energy.

(5) The relief may take the form of—

(a) exemption from charge, or

(b) a reduction in the amount of tax chargeable.

(6) Regulations under this section shall not have effect in relation to acquisitions on or after 1st October 2012.

(7) The Treasury may by order—

(a) substitute a later date for the date in subsection (6);

(b) make transitional provision, or provide savings, in connection with the effect of subsection (6).

58C Relief for new zero-carbon homes: supplemental

(1) Regulations under section 58B—

(a) shall include provision about the method of claiming relief (including documents or information to be provided), and

(b) in particular, shall include provision about the evidence to be adduced to show that a building satisfies the definition of “zero-carbon home”.

(2) Regulations made by virtue of subsection (1)(b) may, in particular—

(a) refer to a scheme or process established by or for the purposes of an enactment about building;

(b) establish or provide for the establishment of a scheme or process of certification;

(c) specify, or provide for the approval of, one or more schemes or processes for certifying energy efficiency.

(3) In defining “zero-carbon home” regulations under section 58B may include requirements which may be satisfied in relation to a building either—

(a) by features of the building itself, or

(b) by other installations or utilities.

(4) Regulations under section 58B may modify the effect of section 108, or another provision of this Part about linked transactions, in relation to a set of transactions of which at least one is the first acquisition of a dwelling which is a zero-carbon home.

(5) In determining whether section 116(7) applies, and in the application of section 116(7), a transaction shall be disregarded if or in so far as it involves the first acquisition of a dwelling which is a zero-carbon home.

(6) Regulations under section 58B—

(a) may provide for relief to be wholly or partly withdrawn if a dwelling ceases to be a zero-carbon home, and

(b) may provide for the reduction or withholding of relief where a person acquires more than one zero-carbon home within a specified period.

(7) Regulations under section 58B may include provision for relief to be granted in respect of acquisitions occurring during a specified period before the regulations come into force.”

(2) In section 114 of FA 2003 (stamp duty land tax: orders and regulations), insert at the end—

“(5) The first set of regulations under section 58B (new zero-carbon homes) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.

(6) An order or regulations under this Part—

(a) may make provision having effect generally or only in specified cases or circumstances,

(b) may make different provision for different cases or circumstances, and

(c) may include incidental, consequential or transitional provision or savings.”

Domestic microgeneration U.K.

20 Income tax exemption for domestic microgeneration U.K.

(1) In ITTOIA 2005, after section 782 insert—

“782A Domestic microgeneration

(1) No liability to income tax arises in respect of income arising to an individual from the sale of electricity generated by a microgeneration system if—

(a) the system is installed at or near domestic premises occupied by the individual, and

(b) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.

(2) In subsection (1)—

• “domestic premises” means premises used wholly or mainly as a separate private dwelling, and

• “microgeneration system” has the same meaning as in section 4 of the Climate Change and Sustainable Energy Act 2006.”

(2) The amendment made by subsection (1) has effect for the tax year 2007-08 and subsequent tax years.

21 Renewables obligation certificates for domestic microgeneration U.K.

(1) In ITTOIA 2005, after section 782A (inserted by section 20) insert—

“782B Renewables obligation certificates for domestic microgeneration

(1) No liability to income tax arises in respect of the receipt by an individual of a renewables obligation certificate if—

(a) the individual receives the certificate in connection with the generation of electricity by a microgeneration system,

(b) the system is installed at or near domestic premises occupied by the individual, and

(c) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.

(2) In subsection (1)—

• “domestic premises” and “microgeneration system” have the same meaning as in section 782A, and

• “renewables obligation certificate” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.”

(2) In TCGA 1992, after section 263 insert—

“263AZA Renewables obligation certificates for domestic microgeneration

(1) A gain accruing to an individual on a disposal of a renewables obligation certificate is not a chargeable gain if—

(a) the individual acquired the certificate in connection with the generation of electricity by a microgeneration system,

(b) the system is installed at or near domestic premises occupied by the individual, and

(c) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.

(2) In subsection (1)—

• “domestic premises” means premises used wholly or mainly as a separate private dwelling,

• “microgeneration system” has the same meaning as in section 4 of the Climate Change and Sustainable Energy Act 2006, and

• “renewables obligation certificate” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.”

(3) The amendment made by subsection (1) has effect for the tax year 2007-08 and subsequent tax years.

(4) The amendment made by subsection (2) has effect in relation to disposals on or after 6th April 2007.

Other measures U.K.

22 Aggregates levy: exemption for aggregate removed from railways etc U.K.

(1) Section 17(3) of FA 2001 (exempt aggregate) is amended as follows.

(2) Omit “or” at the end of paragraph (d).

(3) After that paragraph insert—

“(da) it consists wholly of aggregate won by being removed from the ground along the line or proposed line of any railway, tramway or monorail or proposed railway, tramway or monorail and in the course of excavations carried out—

(i) for the purpose of improving or maintaining the railway, tramway or monorail or of constructing the proposed railway, tramway or monorail; and

(ii) not for the purpose of extracting that aggregate;”.

(4) Insert “ or ” at the end of paragraph (e).

(5) The amendment made by subsection (3) comes into force on such day as the Treasury may by order made by statutory instrument appoint.

Commencement Information

I2 S. 22(3) in force at 1.8.2007 for the purposes of the amendment made by that sub-section by S.I. 2007/2118, art. 2

23 Climate change levy: reduced-rate supplies etc U.K.

Schedule 2 contains amendments of Schedule 6 to FA 2000 in relation to reduced-rate supplies and other matters.

24 Landfill tax: bodies concerned with the environment U.K.

(1) In section 53(4) of FA 1996 (credit: bodies concerned with the environment), after paragraph (c) insert—

“(ca) provision for an environmental body to be and remain approved only if it complies with conditions imposed from time to time by the regulatory body or for the regulatory body to be and remain approved only if it complies with conditions imposed from time to time by the Commissioners (including provision for the variation or revocation of such conditions);”.

(2) The amendment made by subsection (1) is deemed to have come into force on 22nd March 2007.

Part 3 U.K. Income tax, corporation tax and capital gains tax

Anti-avoidance U.K.

25 Managed service companies U.K.

(1) Schedule 3 contains provision about managed service companies.

(2) That Schedule is deemed to have come into force on 6th April 2007.

26 Restrictions on trade loss relief for partners U.K.

Schedule 4 contains provision restricting reliefs for losses made by individuals carrying on trades in partnership.

27 Extension of restrictions on allowable capital losses U.K.

(1) TCGA 1992 is amended as follows.

(2) In section 8 (company's total profits to include chargeable gains)—

(a) in subsection (2), for the words from “does not include—” to the end substitute “ does not include a loss accruing to a company in such circumstances that if a gain accrued the company would be exempt from corporation tax in respect of it. ”, and

(b) omit subsections (2A) to (2C).

(3) After section 16 insert—

“16A Restrictions on allowable losses

(1) For the purposes of this Act, “allowable loss” does not include a loss accruing to a person if—

(a) it accrues to the person directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and

(b) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage.

(2) For the purposes of subsection (1)—

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and

• “tax advantage” means—

  (a)

  relief or increased relief from tax,

  (b)

  repayment or increased repayment of tax,

  (c)

  the avoidance or reduction of a charge to tax or an assessment to tax, or

  (d)

  the avoidance of a possible assessment to tax,

  and for the purposes of this definition “tax” means capital gains tax, corporation tax or income tax.

(3) For the purposes of subsection (1) it does not matter—

(a) whether the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or

(b) whether the tax advantage is secured for the person to whom the loss accrues or for any other person.”

(4) In section 288(1) (interpretation), in the definition of “allowable loss”, after “16” insert “ , 16A ”.

F11 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The amendments made by this section have effect in relation to losses accruing on disposals made on or after 6th December 2006.

Textual Amendments

F11 S. 27(5) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

F12 28 Restriction on expenses of management U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F12 S. 28 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

29 Life policies etc: effect of rebated or reinvested commission U.K.

F13 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In section 552 of that Act (information: duty of insurers), after subsection (12) insert—

“(13) For the purposes of this section, no account is to be taken of the effect of section 548A above or section 541A of ITTOIA 2005.”

(3) In ITTOIA 2005, after section 541 insert—

“Rebated or reinvested commission U.K.

541A Effect of rebated or reinvested commission in certain cases

(1) This section applies if—

(a) a chargeable event within section 484(1)(a)(i) to (iii), (c) or (e) occurs in respect of a policy or contract,

(b) commission in respect of the policy or contract has at any time been rebated or reinvested, and

(c) condition A or B is met.

(2) For the purposes of performing the calculation in section 494 (total allowable deductions) for the chargeable event, the total amount of premiums under the policy or contract paid in the period mentioned in section 494(1) or (2)(b) is to be reduced by the total amount of commission attributable to those premiums that has been rebated or reinvested.

(3) Condition A is that the total amount of premiums under the policy or contract paid in a relevant period exceeds £100,000.

(4) Condition B is that—

(a) at a time when the policy or contract was the taxable person's, the taxable person's policies and contracts exceeded the relevant threshold as respects a relevant period, and

(b) premiums under the policy or contract were paid in that relevant period.

(5) In subsection (4)(a) “taxable person” means the person whose policy or contract the policy or contract is, immediately before the chargeable event.

(6) For the purposes of subsection (4)(a) a person's policies and contracts “exceed the relevant threshold” as respects a relevant period if the total amount of premiums under them paid in that relevant period exceeds the sum specified in subsection (3).

(7) In this section “relevant period” means—

(a) the period beginning with the beginning of the tax year in which the chargeable event occurs and ending with the chargeable event, or

(b) any of the 3 preceding tax years.

(8) The Treasury may by order—

(a) substitute another sum for the sum for the time being specified in subsection (3);

(b) amend the definition of “relevant period”.

541B Section 541A: further definitions

(1) This section supplements section 541A.

(2) “Commission”, in relation to a policy or contract, includes any passing of value to or for the benefit of an intermediary, or a person connected with an intermediary, that can reasonably be taken to represent a reward in respect of the policy or contract.

(3) Commission in respect of a policy or contract is “reinvested” if, as a result of a waiver of an entitlement to it, there is an increase in the total value of a relevant person's policies and contracts.

(4) The amount of commission reinvested is the amount of the increase.

(5) Commission in respect of a policy or contract is “rebated” if—

(a) value passes (directly or indirectly) from an intermediary, or a person connected with an intermediary, to or for the benefit of a relevant person (and the passing of value does not amount to the reinvestment of the commission), and

(b) the passing of value can reasonably be taken to be in respect of the commission.

(6) The amount of commission rebated is the amount of value passed.

(7) A policy or contract is a person's policy or contract if a gain arising in connection with it would be—

(a) a gain for which the person, or (if the person is an individual) the person's spouse or civil partner, would be liable to tax under this Chapter, or

(b) treated by virtue of section 547(1) of ICTA as forming part of the person's income.

(8) Any necessary apportionment is to be made (on a just and reasonable basis) as regards—

(a) commission which is attributable to two or more premiums, and

(b) any part of such commission that has been rebated or reinvested.

(9) Commission which is in respect of one or more policies or contracts (but is not attributable to particular premiums) is to be attributed to such premiums as is just and reasonable.

(10) In subsections (3) and (5), “relevant person” means—

(a) any of the policyholders (including any of the persons who hold the contract),

(b) a person who beneficially owns the rights under the policy or contract,

(c) if those rights are held on trust, any of the trustees, or

(d) a person connected with a person within any of paragraphs (a) to (c).”

(4) The amendments made by this section have effect in relation to a policy or contract if—

(a) it is made on or after 21st March 2007, or

(b) on or after that date, any of its terms are varied, or a right under it is exercised, so as to increase the benefits under it.

Textual Amendments

F13 S. 29(1) omitted (with effect in accordance with Sch. 14 para. 18 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 14 para. 17(p)

30 Avoidance involving financial arrangements U.K.

Schedule 5 contains provision in relation to tax avoidance involving financial arrangements.

31 Companies carrying on business of leasing plant or machinery U.K.

Schedule 6 contains provision in relation to companies carrying on a business of leasing plant or machinery.

32 Restrictions on companies buying losses or gains: tax avoidance schemes U.K.

(1) TCGA 1992 is amended as follows.

(2) In section 184A(2) (losses accruing on disposals of pre-change assets not deductible from gains unless gains accrue on disposals of pre-change assets), omit “unless the gains accrue to the company on a disposal of a pre-change asset”.

(3) In section 184B(2) (losses not deductible from gains accruing on disposals of pre-change assets unless losses accrue on disposals of pre-change assets), omit “unless the loss accrues to the company on a disposal of a pre-change asset”.

(4) Section 70 of FA 2006 (which inserted sections 184A to 184F of TCGA 1992) is amended as follows.

(5) In subsection (9) (special provision for qualifying changes of ownership and disposals before 5th December 2005)—

(a) for “The following subsection applies” substitute “ Subsections (10) to (12) apply ”,

(b) in paragraph (a), omit “or 184B”,

(c) in paragraph (c), for “at all subsequent times,” substitute “ immediately afterwards, ”,

(d) after that paragraph insert—

“(ca) no qualifying change of ownership occurs at any time in relation to the principal company of that group for the purposes of section 184A of TCGA 1992 directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage falling within subsection (1)(d) of that section, and”,

(e) omit paragraph (d) (together with the “and” following it), and

(f) in paragraph (e), omit “, or a qualifying gain for the purposes of section 184B of that Act,”.

(6) For subsections (10) and (11) substitute—

“(10) Subsection (2) of that section has effect in relation to that qualifying loss subject to the following modifications.

(11) That subsection has effect as if there were inserted at the end of it “ unless the gains accrue to the company on a disposal of a pre-change asset ”.

(12) That subsection (modified as mentioned above) has effect as if the reference to a pre-change asset included an asset held before the relevant time by any company—

(a) which, immediately before that time, was a member of the same group of companies as the relevant company, and

(b) which, throughout the period beginning with that time and ending immediately after the making of the disposal referred to in that subsection, has remained under the control of the company which was the principal company of that group at the relevant time.

(13) Expressions which are used in subsections (9) to (12) have the same meaning as in sections 184A and 184C of TCGA 1992.”

(7) The amendment made by subsection (2) has effect in relation to gains accruing on disposals made on or after 21st March 2007.

(8) The amendment made by subsection (3) has effect in relation to losses accruing on disposals made on or after that date.

(9) The amendments made by subsections (5) and (6) have effect in relation to disposals made on or after that date; but the amendment made by subsection (5)(d) has no effect in relation to disposals made before 9th May 2007.

33 Lloyd's corporate members: restriction of group relief U.K.

(1) In FA 1994, after section 227 insert—

“227A Restriction of group relief

(1) Losses of the last active underwriting year of a corporate member are not eligible for surrender by the corporate member as group relief to another company unless the group-relief continuity condition is satisfied.

(2) In this section “last active underwriting year”, in relation to a corporate member, means—

(a) if the corporate member writes insurance business in only one underwriting year, that underwriting year, and

(b) otherwise, the last underwriting year in which the corporate member writes insurance business.

(3) Where in an underwriting year—

(a) the corporate member writes an amount of insurance business which is insignificant when compared with that written by it in the preceding underwriting year, or

(b) the only insurance business written by the corporate member consists of the acceptance of reinsurance to close premiums,

the underwriting year is not to be regarded for the purposes of subsection (2)(b) above as an underwriting year in which the corporate member writes insurance business.

(4) In subsection (3)(b) above “reinsurance to close premium” means a premium or other consideration under a contract in pursuance of which, in accordance with the rules or practice of Lloyd's, one underwriting member agrees with another to meet liabilities arising from the latter's underwriting business in an underwriting year so that the accounts of the business for that year may be closed.

(5) The group-relief continuity condition is satisfied if the corporate member (as the surrendering company) and the other company (as the claimant company) meet the conditions in section 402(2) or (3) of the Taxes Act 1988 throughout the period—

(a) beginning with the last day of the last active underwriting year of the corporate member, and

(b) ending with the first day of the first underwriting year in which losses of the last active underwriting year are declared.”

(2) The amendment made by subsection (1) has effect in relation to any case where the corporate member (as the surrendering company) and the other company (as the claimant company) first meet the conditions in section 402(2) or (3) of ICTA on or after 21st March 2007.

34 Employee benefit contributions U.K.

F14 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Part 2 of ITTOIA 2005 (trading income) is amended as follows.

(8) In section 38 (restriction of deductions for employee benefit contributions), for subsection (1) substitute—

“(1) This section applies if, in calculating for income tax purposes the profits of a trade of a person (“the employer”) for a period, a deduction would otherwise be allowable for the period in respect of employee benefit contributions made or to be made (but see subsection (4)).”

(9) In section 39 (making of “employee benefit contributions), for subsection (1) substitute—

“(1) For the purposes of section 38, an “employee benefit contribution” is made if, as a result of any act or omission—

(a) property is held, or may be used, under an employee benefit scheme, or

(b) there is an increase in the total value of property that is so held or may be so used (or a reduction in any liabilities under an employee benefit scheme).”

(10) In section 41 (timing and amount of certain benefits), for “the third party” (in both places) substitute “ a scheme manager ”.

(11) In section 42 (provision or payment out of employee benefit contributions)—

(a) in subsection (1), for “the third party”, in the first place, substitute “ a scheme manager ” and, in the second place, substitute “ the scheme manager ”,

(b) in subsection (3), for “the third party”, in the first place, substitute “ a scheme manager ” and, in the second place, substitute “ the scheme manager ”, and

(c) in subsection (5), for “third party” substitute “ scheme manager ”.

(12) In section 44(1) (interpretation), for the definition of “the third party” substitute—

““scheme manager” means a person who administers an employee benefit scheme (acting in that capacity).”

(13) The amendments made by this section have effect in relation to employee benefit contributions made on or after 21st March 2007.

Textual Amendments

F14 S. 34(1)-(6) repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F15 35 Schemes etc designed to increase double taxation relief U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F15 S. 35 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

Capital allowances U.K.

F16 36 Industrial and agricultural buildings allowances U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F16 S. 36 omitted (with effect in accordance with Sch. 27 para. 30(1) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 27 para. 28

F17 37 Temporary increase in first-year capital allowances for small enterprises U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F17 S. 37 omitted (21.7.2008) by virtue of Finance Act 2008 (c. 9), s. 75(4)(c)

Insurance and friendly societies U.K.

38 Insurance companies: gross roll-up business etc U.K.

(1) Part 1 of Schedule 7 contains provisions relating to gross roll-up business, capital redemption business and miscellaneous minor matters relating to insurance companies.

(2) The amendments made by that Part of that Schedule have effect—

(a) for the purposes of corporation tax, for periods of account of insurance companies beginning on or after 1st January 2007, and

(b) for the purposes of income tax, for the tax year 2007-08 and subsequent tax years.

(3) Subsection (2) is subject to the transitional provisions in Part 2 of that Schedule.

39 Insurance companies: basis of taxation etc U.K.

(1) Part 1 of Schedule 8 contains provision about the basis of taxation of insurance companies and related matters.

(2) The amendments made by that Part of that Schedule have effect for periods of account of insurance companies beginning on or after 1st January 2007.

(3) Subsection (2) is subject to the transitional provisions in Part 2 of that Schedule.

40 Insurance companies: transfers etc U.K.

Schedule 9 contains provision about transfers by insurance companies and related matters.

41 Insurance companies: miscellaneous U.K.

Schedule 10 contains miscellaneous provisions relating to insurance companies.

42 Technical provisions made by general insurers U.K.

Schedule 11 contains provision in relation to technical provisions made by general insurers.

43 Lloyd's: cessation of business by corporate members U.K.

(1) In FA 1994, after section 227A (inserted by section 33) insert—

“227B Transfer of underwriting business without change of ownership

(1) This section applies where, in accordance with the rules or practice of Lloyd's, a corporate member (“the successor”) has taken up the syndicate capacity of another corporate member (“the predecessor”).

(2) Section 343 of the Taxes Act 1988 (company reconstructions without a change of ownership) applies as if—

(a) the trade mentioned in that section were the underwriting business of the predecessor,

(b) the predecessor ceases to carry it on, and the successor begins to carry it on, at the end of the first underwriting year in which profits or losses of the predecessor's last active underwriting year are declared, and

(c) subsections (8) to (10) and (12) were omitted.

(3) For the purposes of subsection (1) above the successor has taken up the predecessor's syndicate capacity if it has taken up the rights to participate in syndicates which were (or otherwise would be) offered to the predecessor.

(4) In subsection (2)(b) above “last active underwriting year” has the same meaning as in section 227A above (see subsections (2) to (4) of that section).”

(2) The amendment made by subsection (1) has effect in any case where the first underwriting year in which profits or losses of the predecessor's final underwriting year are declared is 2007 or a later underwriting year.

F18 44 Transfers of business by friendly societies to insurance companies etc U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F18 S. 44 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 18 para. 23(e)(i)

45 Tax exempt business of friendly societies U.K.

(1) Section 462 of ICTA (conditions for tax exempt business) is amended as follows.

(2) For subsection (1) substitute—

“(1) Subject to subsections (2) to (4) below, section 460 does not afford any exemption from corporation tax in relation to so much of the profits arising to a friendly society or insurance company from any business as is attributable to a policy which—

(a) is not a qualifying policy (by virtue of sub-paragraph (2) of paragraph 6 of Schedule 15) and is not an excluded policy, and

(b) would not be a qualifying policy (by virtue of that sub-paragraph) if all excluded policies were left out of account.

(1A) For the purposes of subsection (1) above a policy is an excluded policy if—

(a) it is a policy held otherwise than with the friendly society or insurance company, or

(b) the person who has the contract effecting the policy acquired the rights under it on an assignment (or, in Scotland, assignation) otherwise than for money or money's worth.”

(3) In subsection (2), for “under section 460(1) for profits arising from any part of a life or endowment” substitute “ in relation to profits arising from any part of a ”.

F19 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The amendments made by this section are deemed to have come into force on 1st January 2007.

Textual Amendments

F19 S. 45(4) omitted (21.7.2008) by virtue of Finance Act 2008 (c. 9), Sch. 18 para. 5(3)(c)

F20 S. 45(5) omitted (21.7.2008) by virtue of Finance Act 2008 (c. 9), Sch. 18 para. 5(3)(c)

46 Purchased life annuities: self-assessment U.K.

(1) In section 437(1C) of ICTA (general annuity business), omit paragraphs (c)(i) and (d)(i).

(2) In section 656 of that Act (purchased life annuities other than retirement annuities), omit subsections (5) and (6).

(3) In section 658 of that Act (supplementary), omit subsections (1) and (4) to (6).

(4) In section 828(4) of that Act (parliamentary procedure for orders and regulations), omit “658(3)”.

(5) In section 717 of ITTOIA 2005 (exemption for part of purchased life annuity payment), omit subsection (3).

(6) Omit section 723 of that Act (officer of Revenue and Customs to determine certain questions).

(7) In section 724 of that Act (regulations)—

(a) in subsection (1)(a), for “723” substitute “ 722 ”, and

(b) omit subsection (2).

(8) In section 873(3) of that Act (parliamentary procedure for orders and regulations), omit paragraph (b).

(9) The amendments made by subsections (1) to (3) and (5) to (7) come into force on such day as the Treasury may by order appoint; and different days may be appointed for different purposes.

Commencement Information

I3 S. 46(1)-(3) (5)-(7) in force at 6.4.2008 for the purposes of the amendments made by those sub-sections by S.I. 2008/561, art. 2

Repos U.K.

47 Sale and repurchase of securities U.K.

(1) Schedule 13 contains provision for corporation tax purposes about the sale and repurchase of securities.

(2) Schedule 14 contains minor and consequential amendments in relation to the sale and repurchase of securities.

(3) The Treasury may by order make such other amendments (including repeals and revocations) of enactments or instruments as may appear appropriate in consequence of, or otherwise in connection with, those Schedules.

(4) Schedule 13, and the amendments made by Schedule 14, have effect in accordance with provision made by the Treasury by order.

(5) Any order under this section—

(a) may make different provision for different purposes, and

(b) may contain transitional provision and savings.

CFCs U.K.

48 Controlled foreign companies U.K.

Schedule 15 contains provision in relation to controlled foreign companies.

R&D U.K.

F21 49 Vaccine research relief: amount of deduction for SMEs U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F21 S. 49 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F22 50 Research and development tax relief: definition of SME etc U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F22 S. 50 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Venture capital schemes etc U.K.

51 Venture capital schemes etc U.K.

Schedule 16 contains provision about venture capital schemes (and provision consequential on such provision).

REITs U.K.

52 Real Estate Investment Trusts U.K.

(1) Schedule 17 contains provisions about Real Estate Investment Trusts.

(2) The amendments made by that Schedule have effect in respect of—

(a) an accounting period, of a company to which Part 4 of FA 2006 (REITs) applies, which begins on or after 1st January 2007,

(b) an accounting period, of the principal company of a group to which that Part applies, which begins on or after 1st January 2007, and

(c) a distribution to which section 121 of FA 2006 applies and which is received on or after 1st January 2007.

Alternative finance U.K.

53 Alternative finance investment bond U.K.

F23 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F24 (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F25 (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F26 (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F26 (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F23 S. 53(1)-(10) repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 7 (with Sch. 9 paras. 1-9, 22)

F24 S. 53(11) repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 11 (with Sch. 9 paras. 1-9, 22)

F25 S. 53(12) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

F26 S. 53(13)(14) repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 7 (with Sch. 9 paras. 1-9, 22)

F27 54 Profit share agency U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F27 S. 54 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 7 (with Sch. 9 paras. 1-9, 22)

Trusts U.K.

55 Trust income U.K.

(1) In section 686A(2)(a) of ICTA (receipts to be treated as income subject to special rate of tax: payment by company), after “made” insert “ by way of qualifying distribution ”.

(2) In Type 1(b) in section 482 of ITA 2007 (types of amount to be charged at special rates for trustees), after “made” insert “ by way of qualifying distribution ”.

(3) The amendments made by this section have effect in respect of payments made to the trustees of a settlement on or after 6th April 2006.

56 Trust gains on contracts for life insurance U.K.

(1) Section 498 of ITA 2007 (trustees' tax pool) is amended as follows.

(2) In subsection (1)—

(a) in Type 1, for “2 or 3” substitute “ 2, 3 or 3A ”, and

(b) after Type 3 insert— “Type 3A The amount of tax at the nominal rate on any amount in respect of which—

(a) the trustees are liable to income tax under section 467 of ITTOIA 2005 (gains from contracts for life insurance etc),

(b) the trustees are liable to income tax at the trust rate by virtue of section 482 above, and

(c) tax at the savings rate is treated as having been paid by virtue of section 530 of ITTOIA 2005 (life insurance).”

(3) After subsection (2) insert—

“(2A) In relation to Type 3A, the reference to the nominal rate is a reference to a rate equal to the difference between the trust rate and the savings rate.”

(4) The amendments made by this section have effect in relation to gains arising to the trustees of a settlement on or after 6th April 2007.

Other corporation tax measures U.K.

57 Offshore funds U.K.

F28 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In section 756A of ICTA (definition of “offshore fund”), for subsection (3) substitute—

“(3) In this section “collective investment scheme” means any arrangements which are a collective investment scheme for the purposes of Part 17 of the Financial Services and Markets Act 2000 (see section 235 of that Act and orders made under subsection (5) of that section) or would be if the words “, within a period appearing to him to be reasonable,” were omitted from section 236(3)(a) of that Act.

(4) But the reference to offshore funds in section 760(3)(a) does not include any arrangements which are not a collective investment scheme for the purposes of that Part of that Act.”

F29 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In Schedule 27 to ICTA (distributing funds), in sub-paragraph (1)(c) of paragraph 6 (investments of offshore fund in other offshore funds which could, apart from that paragraph, be certified as distributing funds not to count towards limit in section 760(3)(a)), omit “without regard to the provisions of this paragraph,”.

(5) In section 152 of ITA 2007 (losses from miscellaneous transactions), in subsection (8), insert at the end “ except that income on which income tax is charged under section 761(1)(b)(i) of ICTA is not “section 1016 income” for the purposes of subsection (2)(a) ”.

F30 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F30 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) The amendment made by subsection (4) has effect in relation to account periods (within the meaning of Chapter 5 of Part 17 of ICTA) beginning on or after 1st January 2007.

(9) The amendment made by subsection (5) has effect in relation to transactions on or after 6th April 2007.

Textual Amendments

F28 S. 57(1) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

F29 S. 57(3) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

F30 S. 57(6)(7) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

58 Election out of special film rules for film production companies U.K.

F31 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In paragraph 10 of Schedule 18 to FA 1998 (other claims and elections to be included in company tax return), insert at the end—

“(5) An election under section 32(7) of the Finance Act 2006 (election not to be a film production company) can only be made by being included in a company tax return (see section 32(8)(a) of that Act).”

Textual Amendments

F31 S. 58(1) repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

59 Securitisation companies U.K.

(1) Section 83 of FA 2005 (continued application of old UK GAAP to securitisation companies during transitional period) is amended as follows.

(2) In subsection (1)(b) (old UK GAAP to apply to periods of account ending before 1st January 2008), insert at the beginning “ (subject to subsection (7A)(a)) ”.

(3) After subsection (7) insert—

“(7A) The Treasury may by regulations—

(a) make provision for subsection (1) to apply in relation to periods of account ending on or after 1st January 2008 but before a date specified by the regulations, and

(b) make provision modifying any provision of, or made under, the Corporation Tax Acts in relation to the first period of account of securitisation companies in the case of which subsection (1) does not apply (whether by virtue of that subsection itself or regulations under paragraph (a)).

(7B) Regulations under subsection (7A)(a) may, in particular—

(a) specify a date only in relation to specified descriptions of company,

(b) specify different dates in relation to different descriptions of company, and

(c) include provision for a company to elect that the regulations are to apply to it or provision for a company to elect that they are not to apply to it.”

F32 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F32 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F32 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F32 S. 59(4)-(6) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

Other income tax measures U.K.

60 Gift aid: limits U.K.

(1) In section 418 of ITA 2007 (donations to charity by individuals: limits)—

(a) in subsection (2)(c), for “2.5%” substitute “ 5% ”, and

F33 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F34 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The amendment made by subsection (1) has effect in relation to gifts made on or after 6th April 2007.

(4) The amendment made by subsection (2) has effect in relation to gifts made in an accounting period ending on or after 6th April 2007.

Textual Amendments

F33 S. 60(1)(b) omitted (with effect in accordance with s. 41(4) of the amending Act) by virtue of Finance Act 2011 (c. 11), s. 41(3)

F34 S. 60(2) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

61 Enterprise management incentives: excluded activities U.K.

(1) In Part 3 of Schedule 5 to ITEPA 2003 (enterprise management incentives: qualifying companies), in paragraph 19 (excluded activities: receipt of royalties or licence fees)—

(a) in sub-paragraph (4), for paragraphs (a) and (b) substitute—

“(a) by the relevant company, or

(b) by a company which was a qualifying subsidiary of the relevant company throughout a period during which it created the whole or greater part (in terms of value) of the intangible asset.”, and

(b) after sub-paragraph (7) insert—

“(8) If—

(a) the relevant company acquired all the shares (“old shares”) in another company (“the old company”) at a time when the only shares issued in the relevant company were subscriber shares, and

(b) the consideration for the old shares consisted wholly of the issue of shares in the relevant company,

references in sub-paragraph (4) to the relevant company include the old company.”

(2) The amendments made by subsection (1) have effect in relation to options granted on or after 6th April 2007.

(3) They also have effect in relation to a qualifying option within subsection (4), for the purpose of determining at any time on or after that date whether an activity is an excluded activity.

(4) An option is within this subsection if it was granted before 6th April 2007 and, immediately before that date—

(a) it had not been exercised, and

(b) no disqualifying event had occurred in relation to it.

(5) Subsection (6) applies in respect of an option within subsection (4) if—

(a) immediately before 6th April 2007—

(i) the right to exploit an intangible asset (“the asset”) was vested in the relevant company or a subsidiary of it (in either case, alone or jointly with others), and

(ii) the asset was a relevant intangible asset,

(b) at any time on or after that date, an activity carried on by the relevant company or a subsidiary of it would be an excluded activity by reason only of the receipt of royalties or licence fees attributable to the exploitation of the asset, and

(c) the activity would not be an excluded activity if the amendments made by subsection (1) had not been made.

(6) The activity is to be treated, in relation to the option, as not being an excluded activity at that time.

62 Benefits code: whether employment is “lower-paid employment” U.K.

(1) In section 219 of ITEPA 2003 (exclusion of lower-paid employments from parts of benefits code: extra amounts to be added in connection with a car), omit subsections (5) and (6).

(2) The repeal made by subsection (1) has effect for the tax year 2007-08 and subsequent tax years.

63 Armed forces redundancy schemes U.K.

(1) In section 411 of ITEPA 2003 (exception for payments and benefits for forces), the existing provision becomes subsection (1) and after that subsection insert—

“(2) This Chapter does not apply to a payment or other benefit provided under a scheme established by an order under section 1(1) of the Armed Forces (Pensions and Compensation) Act 2004.”

(2) The amendments made by subsection (1) have effect for the tax year 2006-07 and subsequent tax years.

64 Armed forces: the Operational Allowance U.K.

(1) In ITEPA 2003, after section 297 insert—

“297A Armed forces: the Operational Allowance

(1) No liability to income tax arises in respect of payments to members of the armed forces of the Crown of the Operational Allowance.

(2) The Operational Allowance is an allowance designated as such by the Secretary of State.”

(2) The amendment made by subsection (1) has effect in relation to payments whenever made.

65 Service charge income U.K.

(1) Section 480 of ITA 2007 (meaning of “accumulated or discretionary income”) is amended as follows.

(2) In subsection (3)(c) (income from service charges held on trust by relevant housing body), for the words after “charges” substitute “ which are paid in respect of dwellings in the United Kingdom and are held on trust. ”

(3) For subsections (5) and (6) substitute—

“(5) In subsection (3)(c) “service charges” has the meaning given by section 18 of the Landlord and Tenant Act 1985 (but as if that section also applied in relation to dwellings in Scotland and Northern Ireland).”

(4) The amendments made by this section have effect for the tax year 2007-08 and subsequent tax years.

66 Charge on benefits received by former owner of property: late elections U.K.

(1) In paragraph 23 of Schedule 15 to FA 2004 (charge to income tax on benefits received by former owner of property), for sub-paragraphs (3) and (4) substitute—

“(3) The election must be made on or before—

(a) the relevant filing date, or

(b) such later date as an officer of Revenue and Customs may, in a particular case, allow.”

(2) The amendment made by subsection (1) is deemed to have come into force on 21st March 2007.

67 Unpaid remuneration and employee benefit contributions U.K.

(1) Section 31 of ITTOIA 2005 (relationship between rules prohibiting and allowing deductions: trading income) is amended as follows.

(2) In subsection (1) (priority of relevant permissive rules over relevant prohibitive rules), in paragraph (b) (sections to which that priority rule is subject), for “sections 48 (car or motor cycle hire) and” substitute “ section 36 (unpaid remuneration), section 38 (employee benefit contributions), section 48 (car or motor cycle hire) and section ”.

(3) In subsection (3) (meaning of “relevant prohibitive rule”), after “sections” insert “ 36, 38, ”.

(4) Section 274 of ITTOIA 2005 (provision corresponding to section 31 of that Act in case of property income) is amended as follows.

(5) In subsection (1)(b), for “sections 48 (car or motor cycle hire) and” substitute “ section 36 (unpaid remuneration), section 38 (employee benefit contributions), section 48 (car or motor cycle hire) and section ”.

(6) In subsection (3), after “sections” insert “ 36, 38, ”.

(7) The amendments made by this section have effect for the tax year 2007-08 and subsequent tax years.

Part 4 U.K. Pensions

68 Abolition of contributions relief for life assurance premium contributions U.K.

Schedule 18 contains provisions denying relief for contributions made by or on behalf of members in respect of life assurance premiums.

69 Alternatively secured pensions etc U.K.

Schedule 19 contains provisions about alternatively secured pensions and transfer lump sum death benefit etc.

70 Miscellaneous U.K.

Schedule 20 contains miscellaneous provisions about registered pension schemes and employer-financed retirement benefits schemes.

Part 5 U.K. SDLT, stamp duty and SDRT

SDLT: anti-avoidance provisions U.K.

71 Anti-avoidance U.K.

(1) In FA 2003, after section 75 insert (in place of the section inserted by the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (S.I. 2006/ 3237))—

“75A Anti-avoidance

(1) This section applies where—

(a) one person (V) disposes of a chargeable interest and another person (P) acquires either it or a chargeable interest deriving from it,

(b) a number of transactions (including the disposal and acquisition) are involved in connection with the disposal and acquisition (“the scheme transactions”), and

(c) the sum of the amounts of stamp duty land tax payable in respect of the scheme transactions is less than the amount that would be payable on a notional land transaction effecting the acquisition of V's chargeable interest by P on its disposal by V.

(2) In subsection (1) “transaction” includes, in particular—

(a) a non-land transaction,

(b) an agreement, offer or undertaking not to take specified action,

(c) any kind of arrangement whether or not it could otherwise be described as a transaction, and

(d) a transaction which takes place after the acquisition by P of the chargeable interest.

(3) The scheme transactions may include, for example—

(a) the acquisition by P of a lease deriving from a freehold owned or formerly owned by V;

(b) a sub-sale to a third person;

(c) the grant of a lease to a third person subject to a right to terminate;

(d) the exercise of a right to terminate a lease or to take some other action;

(e) an agreement not to exercise a right to terminate a lease or to take some other action;

(f) the variation of a right to terminate a lease or to take some other action.

(4) Where this section applies—

(a) any of the scheme transactions which is a land transaction shall be disregarded for the purposes of this Part, but

(b) there shall be a notional land transaction for the purposes of this Part effecting the acquisition of V's chargeable interest by P on its disposal by V.

(5) The chargeable consideration on the notional transaction mentioned in subsections (1)(c) and (4)(b) is the largest amount (or aggregate amount)—

(a) given by or on behalf of any one person by way of consideration for the scheme transactions, or

(b) received by or on behalf of V (or a person connected with V within the meaning of section 839 of the Taxes Act 1988) by way of consideration for the scheme transactions.

(6) The effective date of the notional transaction is—

(a) the last date of completion for the scheme transactions, or

(b) if earlier, the last date on which a contract in respect of the scheme transactions is substantially performed.

(7) This section does not apply where subsection (1)(c) is satisfied only by reason of—

(a) sections 71A to 73, or

(b) a provision of Schedule 9.

75B Anti-avoidance: incidental transactions

(1) In calculating the chargeable consideration on the notional transaction for the purposes of section 75A(5), consideration for a transaction shall be ignored if or in so far as the transaction is merely incidental to the transfer of the chargeable interest from V to P.

(2) A transaction is not incidental to the transfer of the chargeable interest from V to P—

(a) if or in so far as it forms part of a process, or series of transactions, by which the transfer is effected,

(b) if the transfer of the chargeable interest is conditional on the completion of the transaction, or

(c) if it is of a kind specified in section 75A(3).

(3) A transaction may, in particular, be incidental if or in so far as it is undertaken only for a purpose relating to—

(a) the construction of a building on property to which the chargeable interest relates,

(b) the sale or supply of anything other than land, or

(c) a loan to P secured by a mortgage, or any other provision of finance to enable P, or another person, to pay for part of a process, or series of transactions, by which the chargeable interest transfers from V to P.

(4) In subsection (3)—

(a) paragraph (a) is subject to subsection (2)(a) to (c),

(b) paragraph (b) is subject to subsection (2)(a) and (c), and

(c) paragraph (c) is subject to subsection (2)(a) to (c).

(5) The exclusion required by subsection (1) shall be effected by way of just and reasonable apportionment if necessary.

(6) In this section a reference to the transfer of a chargeable interest from V to P includes a reference to a disposal by V of an interest acquired by P.

75C Anti-avoidance: supplemental

(1) A transfer of shares or securities shall be ignored for the purposes of section 75A if but for this subsection it would be the first of a series of scheme transactions.

(2) The notional transaction under section 75A attracts any relief under this Part which it would attract if it were an actual transaction (subject to the terms and restrictions of the relief).

(3) The notional transaction under section 75A is a land transaction entered into for the purposes of or in connection with the transfer of an undertaking or part for the purposes of paragraphs 7 and 8 of Schedule 7, if any of the scheme transactions is entered into for the purposes of or in connection with the transfer of the undertaking or part.

(4) In the application of section 75A(5) no account shall be taken of any amount paid by way of consideration in respect of a transaction to which any of sections 60, 61, 63, 64, 65, 66, 67, 69, 71, 74 and 75, or a provision of Schedule 6A or 8, applies.

(5) In the application of section 75A(5) an amount given or received partly in respect of the chargeable interest acquired by P and partly in respect of another chargeable interest shall be subjected to just and reasonable apportionment.

(6) Section 53 applies to the notional transaction under section 75A.

(7) Paragraph 5 of Schedule 4 applies to the notional transaction under section 75A.

(8) For the purposes of section 75A—

(a) an interest in a property-investment partnership (within the meaning of paragraph 14 of Schedule 15) is a chargeable interest in so far as it concerns land owned by the partnership, and

(b) where V or P is a partnership, Part 3 of Schedule 15 applies to the notional transaction as to the transfer of a chargeable interest from or to a partnership.

(9) For the purposes of section 75A a reference to an amount of consideration includes a reference to the value of consideration given as money's worth.

(10) Stamp duty land tax paid in respect of a land transaction which is to be disregarded by virtue of section 75A(4)(a) is taken to have been paid in respect of the notional transaction by virtue of section 75A(4)(b).

(11) The Treasury may by order provide for section 75A not to apply in specified circumstances.

(12) An order under subsection (11) may include incidental, consequential or transitional provision and may make provision with retrospective effect.”

(2) The amendment made by subsection (1) has effect in respect of disposals and acquisitions if the disposal mentioned in new section 75A(1)(a) (inserted by that subsection) takes place on or after 6th December 2006.

(3) But—

(a) the transitional provisions of sub-paragraphs (2) to (5) of paragraph 1 of the Schedule to the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (S.I. 2006/3237) continue to have effect in relation to this section as in relation to that paragraph, and

(b) a provision of new section 75C (inserted by subsection (1) above) shall not have effect where the disposal mentioned in new section 75A(1)(a) took place before the day on which this Act is passed, if or in so far as the provision would make a person liable for a higher amount of tax than would have been charged in accordance with those regulations.

72 Partnerships U.K.

(1) Schedule 15 to FA 2003 (stamp duty land tax: partnerships) is amended as follows.

(2) A reference in this section to a provision of that Schedule is to the provision as it had effect before variation by the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006.

(3) In Step Two of paragraph 12(1) (transfer to partnership: how to calculate the “sum of the lower proportions”)—

(a) in paragraph (b), for “or is connected with the relevant owner” substitute “ or is an individual connected with the relevant owner ”, and

(b) insert at the end— “ (If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.) ”

(4) In paragraph 12, after sub-paragraph (2) insert—

“(3) For the purpose of paragraph (b) of Step 2 a company is to be treated as an individual connected with the relevant owner in so far as it—

(a) holds property as trustee, and

(b) is connected with the relevant owner only because of section 839(3) of the Taxes Act 1988.”

(5) Omit paragraph 13 (transfer to partnership where all partners are companies).

(6) In paragraph 14 (transfer of interest in property-investment partnership)—

(a) omit sub-paragraphs (1)(b) and (4), and

(b) insert at the end—

“(9) An interest in respect of the transfer of which this paragraph applies shall be treated as a chargeable interest for the purposes of paragraph 3(1) of Schedule 7 to the extent that the relevant partnership property consists of a chargeable interest.”,

and in the italic cross-heading before it, omit “for consideration”.

(7) In Step Two of paragraph 20(1) (transfer from partnership: how to calculate the “sum of the lower proportions”)—

(a) in paragraph (b), for “or was connected with the relevant owner” substitute “ or was an individual connected with the relevant owner ”, and

(b) insert at the end— “ (If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.) ”

(8) In paragraph 20, after sub-paragraph (2) insert—

“(3) For the purpose of paragraph (b) of Step 2 a company is to be treated as an individual connected with the relevant owner in so far as it—

(a) holds property as trustee, and

(b) is connected with the relevant owner only because of section 839(3) of the Taxes Act 1988.”

(9) After paragraph 27 insert—

“27A (1) This paragraph applies where in calculating the sum of the lower proportions in relation to a transaction (in accordance with paragraph 12)—

(a) a company (“the connected company”) would have been a corresponding partner of a relevant owner (“the original owner”) but for the fact that paragraph (b) of Step Two includes connected persons only if they are individuals, and

(b) the connected company and the original owner are members of the same group.

(2) The charge in respect of the transaction shall be reduced to the amount that would have been payable had the connected company been a corresponding partner of the original owner for the purposes of calculating the sum of the lower proportions.

(3) The provisions of Part 1 of Schedule 7 apply to group relief under sub-paragraph (2) above as to group relief under paragraph 1(1) of Schedule 7, but—

(a) with the omission of paragraph 2(2)(a),

(b) with the substitution for “the purchaser” in paragraph 3(1)(a) of “a partner who was, at the effective date of the transaction, a partner and a member of the same group as the transferor (“the relevant partner”)”, and

(c) with the other modifications specified in paragraph 27(3) to (6) above.”

(10) For paragraph 36 substitute—

“36 For the purposes of this Part of this Schedule, where a person acquires or increases a partnership share there is a transfer of an interest in the partnership (to that partner and from the other partners).”

(11) In paragraph 39 (“connected persons”), insert at the end—

“(3) As applied by sub-paragraph (1) for the purposes of paragraph 12 or 20, that section has effect with the omission of subsection (3)(c) (trustee connected with settlement).”

(12) In Schedule 16 to FA 2003 (trusts and powers)—

(a) in paragraph 3(1) (bare trust), after “a chargeable interest” insert “ or an interest in a partnership ”, and

(b) in paragraph 4 (trustees of settlement), after “a chargeable interest” insert “ or an interest in a partnership ”.

(13) The amendments made by subsections (1) to (11) have effect in respect of transfers occurring on or after the day on which this Act is passed.

F35 (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15) The amendment made by subsection (12) has effect in respect of acquisitions occurring on or after the day on which this Act is passed.

(16) An amendment made by this section replaces, to the extent provided for by subsections (13) to (15), any variation made by the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (S.I. 2006/3237).

(17) Despite subsections (13) to (16), the transitional provisions of sub-paragraphs (8) to (10) of paragraph 2 of the Schedule to the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (S.I. 2006/3237) continue to have effect in relation to the amendments made by this section as in relation to that paragraph.

Textual Amendments

F35 S. 72(14) omitted (21.7.2008) by virtue of Finance Act 2008 (c. 9), Sch. 31 para. 10

Reliefs in relation to shares etc U.K.

73 Exemptions: intermediaries, repurchases etc U.K.

Schedule 21 contains provision in relation to exemptions from stamp duty and stamp duty reserve tax in cases involving intermediaries, repurchases, stock lending or recognised investment exchanges.

74 Acquisition relief: disregard of company holding own shares U.K.

(1) In section 75 of FA 1986 (relief on acquisition of undertaking of company in pursuance of scheme for reconstruction of that company), after subsection (5) insert—

“(5A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsections (4) and (5) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).”

(2) In section 77 of that Act (relief on acquisition of target company's share capital), after subsection (3) insert—

“(3A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsection (3) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).”

(3) In Part 2 of Schedule 7 to FA 2003 (SDLT: reconstruction and acquisition reliefs), in paragraph 7 (reconstruction relief) after sub-paragraph (5) insert—

“(5A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of sub-paragraphs (2) and (4) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).”

(4) The amendments made by subsections (1) and (2) have effect in relation to any instrument executed on or after the day on which this Act is passed.

(5) The amendment made by subsection (3) has effect in relation to any land transaction of which the effective date is on or after that day.

Other reliefs etc U.K.

75 SDLT: alternative finance arrangements U.K.

(1) In FA 2003, after section 73A insert—

“73B Exempt interests

(1) An interest held by a financial institution as a result of the first transaction within the meaning of section 71A(1)(a), 72(1)(a) or 72A(1)(a) is an exempt interest for the purposes of stamp duty land tax.

(2) That interest ceases to be an exempt interest if—

(a) the lease or agreement mentioned in section 71A(1)(c), 72(1)(b) or 72A(1)(b) ceases to have effect, or

(b) the right under section 71A(1)(d), 72(1)(c) or 72A(1)(c) ceases to have effect or becomes subject to a restriction.

(3) Subsection (1) does not apply if the first transaction is exempt from charge by virtue of Schedule 7.

(4) Subsection (1) does not make an interest exempt in respect of—

(a) the first transaction itself, or

(b) a further transaction or third transaction within the meaning of section 71A(4), 72(4) or 72A(4).”

(2) In section 48 of that Act (stamp duty land tax: exempt interests), after subsection (3) insert—

“(3A) Section 73B makes additional provision about exempt interests in relation to alternative finance arrangements.”

(3) For the text of sections 71A(8), 72(7), 72A(8) and 73(5)(a) of that Act (alternative finance arrangements: meaning of “financial institution”), substitute “ In this section “financial institution” has the meaning given by section 46 of the Finance Act 2005 (alternative finance arrangements). ”

(4) The amendments made by this section—

(a) have effect in relation to anything that would, but for the exemption provided by new section 73B inserted by subsection (1) above, be a land transaction with an effective date on or after 22nd March 2007, and

(b) apply, in accordance with paragraph (a), to interests irrespective of the date of their creation.

76 SDLT: exchanges U.K.

(1) In section 47(1) of FA 2003 (exchanges), insert at the end “ (and they are not linked transactions within the meaning of section 108) ”.

(2) In section 108 of that Act (linked transactions), insert at the end—

“(4) This section is subject to section 47(1).”

(3) The amendments made by this section have effect in relation to a set of land transactions if the effective date of any of them is on or after the day on which this Act is passed.

77 SDLT: shared ownership trusts U.K.

(1) In Schedule 9 to FA 2003 (right to buy and shared ownership leases), insert at the end—

“Shared ownership trust: introduction

7 (1) In this Schedule “shared ownership trust” means a trust of land, within the meaning of section 1 of the Trusts of Land and Appointment of Trustees Act 1996, which satisfies the following conditions.

(2) Condition 1 is that the trust property is—

(a) a dwelling, and

(b) in England or Wales.

(3) Condition 2 is that one of the beneficiaries (“the social landlord”) is a qualifying body (within the meaning of paragraph 5(2)).

(4) Condition 3 is that the terms of the trust—

(a) provide for one or more of the individual beneficiaries (“the purchaser”) to have exclusive use of the trust property as the only or main residence of the purchaser,

(b) require the purchaser to make an initial payment to the social landlord (“the initial capital”),

(c) require the purchaser to make additional payments to the social landlord by way of compensation under section 13(6)(a) of the Trusts of Land and Appointment of Trustees Act 1996 (“rent-equivalent payments”),

(d) enable the purchaser to make other additional payments to the social landlord (“equity-acquisition payments”),

(e) determine the initial beneficial interests of the social landlord and of the purchaser by reference to the initial capital,

(f) specify a sum, equating or relating to the market value of the dwelling, by reference to which the initial capital was calculated, and

(g) provide for the purchaser's beneficial interest in the trust property to increase, and the social landlord's to diminish (or to be extinguished), as equity-acquisition payments are made.

(5) Section 118 (meaning of “market value”) does not apply to this paragraph.

(6) In Condition 1 “dwelling” includes—

(a) a building which is being constructed or adapted for use as a dwelling,

(b) land which is to be used for the purpose of the construction of a dwelling, and

(c) land which is, or is to become, the garden or grounds of a dwelling.

Shared ownership trust: “purchaser”

8 For the purposes of the application of stamp duty land tax in relation to a shared ownership trust, the person (or persons) identified as the purchaser in accordance with paragraph 7, and not the social landlord or any other beneficiary, is (or are) to be treated as the purchaser of the trust property.

Shared ownership trust: election for market value treatment

9 (1) This paragraph applies where—

(a) a shared ownership trust is declared, and

(b) the purchaser elects for tax to be charged in accordance with this paragraph.

(2) An election must be included in—

(a) the land transaction return for the declaration of the shared ownership trust, or

(b) an amendment of that return.

(3) An election may not be revoked.

(4) Where this paragraph applies—

(a) the chargeable consideration for the declaration of the shared ownership trust shall be taken to be the amount stated in accordance with paragraph 7(4)(f), and

(b) no account shall be taken for the purposes of stamp duty land tax of rent-equivalent payments.

(5) The transfer to the purchaser of an interest in the trust property upon the termination of the trust is exempt from charge if—

(a) an election was made under this paragraph, and

(b) any tax chargeable in respect of the declaration of the shared ownership trust has been paid.

Shared ownership trust: treatment of staircasing transaction

10 (1) An equity-acquisition additional payment under a shared ownership trust, and the consequent increase in the purchaser's beneficial interest, shall be exempt from charge if—

(a) an election was made under paragraph 9, and

(b) any tax chargeable in respect of the declaration of trust has been paid.

(2) An equity-acquisition additional payment under a shared ownership trust, and the consequent increase in the purchaser's beneficial interest, shall also be exempt from charge if following the increase the purchaser's beneficial interest does not exceed 80% of the total beneficial interest in the trust property.

Shared ownership trust: treatment of additional payments where no election made

11 Where no election has been made under paragraph 9 in respect of a shared ownership trust—

(a) the initial capital shall be treated for the purposes of stamp duty land tax as chargeable consideration other than rent, and

(b) any rent-equivalent additional payment by the purchaser shall be treated for the purposes of stamp duty land tax as a payment of rent.”

(2) The amendment made by subsection (1) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed.

78 SDLT: shared ownership lease U.K.

In paragraph 2 of Schedule 9 to FA 2003 (stamp duty land tax: shared ownership lease), after sub-paragraph (4) insert—

“(4A) Where this paragraph applies no account shall be taken for the purposes of stamp duty land tax of the rent mentioned in sub-paragraph (2)(d).”

79 Certain transfers of school land U.K.

(1) In Chapter 7 of Part 2 of the School Standards and Framework Act 1998 (c. 31) (“the 1998 Act”) (new framework for maintained schools), omit sections 79 and 79A (no stamp duty or SDLT payable in respect of certain transfers).

(2) The repeal of—

(a) section 79A of the 1998 Act, and

(b) section 79 of that Act as it applies for the purposes of section 79A,

has effect in relation to any land transaction of which the effective date is on or after the day on which this Act is passed.

(3) Subject to that, the repeal of section 79 of the 1998 Act has effect in relation to any instrument executed on or after that day.

SDLT: administration U.K.

80 Payment of tax U.K.

(1) FA 2003 is amended as follows.

(2) In section 76(3) (payment to accompany land transaction return), omit paragraph (b).

(3) In section 80(2) (adjustment for change of circumstance: payment to accompany return), for paragraph (d) substitute—

“(d) the tax or additional tax payable must be paid not later than the filing date for the return.”

(4) In section 81 (withdrawal of relief: further return)—

(a) in subsection (2), omit paragraph (b), and

(b) after that subsection insert—

“(2A) Tax payable must be paid not later than the filing date for the return.”

(5) In section 81A(1) (later linked transaction: return), for paragraph (d) substitute—

“(d) the tax or additional tax payable must be paid not later than the filing date for the return.”

(6) In section 86 (payment of tax)—

(a) in subsection (1), for “at the same time that a land transaction return is made in respect of the transaction.” substitute “ not later than the filing date for the land transaction return relating to the transaction. ”, and

(b) in subsection (2), for “at the same time that a return is made in respect of the withdrawal” substitute “ not later than the filing date for the return relating to the withdrawal ”.

(7) In paragraph 2 of Schedule 10 (payment to accompany land transaction return), omit sub-paragraph (2)(b).

(8) For each of paragraphs 3(3)(d), 4(3)(d) and 8(3)(d) of Schedule 17A (leases) substitute—

“(d) the tax or additional tax payable must be paid not later than the filing date for the return.”

(9) The amendments made by this section have effect as follows—

(a) the amendment made by subsection (2) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed,

(b) the amendment made by subsection (3) has effect in relation to returns where the event as a result of which the return is required occurs on or after the day on which this Act is passed,

(c) the amendment made by subsection (4) has effect in relation to returns where the disqualifying event occurs on or after the day on which this Act is passed,

(d) the amendment made by subsection (5) has effect in relation to returns where the effective date of the later transaction is on or after the day on which this Act is passed,

(e) the amendment made by subsection (6) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed,

(f) the amendment made by subsection (7) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed, and

(g) the amendment made by subsection (8) has effect in respect of requirements to deliver a return or further return which arise on or after the day on which this Act is passed.

F36 81 Self-certificate declarations U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F36 S. 81 omitted (with effect in accordance with s. 94(5) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 30 para. 15

Part 6 U.K. Investigation, administration etc

Investigation etc U.K.

82 Criminal investigations: powers of Revenue and Customs U.K.

(1) Section 114 of the Police and Criminal Evidence Act 1984 (c. 60) (application of Act to customs and excise) is amended as follows.

(2) In paragraph (a) of subsection (2)—

(a) for “investigations conducted by officers of Customs and Excise of offences which relate to assigned matters, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ investigations conducted by officers of Revenue and Customs ”, and

(b) for “persons detained by officers of Customs and Excise;” substitute “ persons detained by officers of Revenue and Customs; ”.

(3) In the opening words of paragraph (b) of that subsection, for “investigations of offences conducted by officers of Customs and Excise” substitute “ investigations of offences conducted by officers of Revenue and Customs ”.

(4) In sub-paragraph (i) of that paragraph, for “section” substitute “ sections ”.

(5) In the section 14A deemed to be inserted by that sub-paragraph—

(a) for “and which relates to an assigned matter, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ and which relates to a matter in relation to which Her Majesty's Revenue and Customs have functions, ” and

(b) in the heading, for “Customs and Excise” substitute “ Revenue and Customs ”.

(6) After that section insert—

“14B Revenue and Customs: restriction on other powers to apply for production of documents

(1) An officer of Revenue and Customs may make an application for the delivery of, or access to, documents under a provision specified in subsection (3) only if the condition in subsection (2) is satisfied.

(2) The condition is that the officer thinks that an application under Schedule 1 would not succeed because the material required does not consist of or include special procedure material.

(3) The provisions are—

(a) section 20BA of, and Schedule 1AA to, the Taxes Management Act 1970 (serious tax fraud);

(b) paragraph 11 of Schedule 11 to the Value Added Tax Act 1994 (VAT);

(c) paragraph 4A of Schedule 7 to the Finance Act 1994 (insurance premium tax);

(d) paragraph 7 of Schedule 5 to the Finance Act 1996 (landfill tax);

(e) paragraph 131 of Schedule 6 to the Finance Act 2000 (climate change levy);

(f) paragraph 8 of Schedule 7 to the Finance Act 2001 (aggregates levy);

(g) Part 6 of Schedule 13 to the Finance Act 2003 (stamp duty land tax).”

(7) In paragraph (c) of subsection (2)—

(a) for “customs detention” substitute “ Revenue and Customs detention ”, and

(b) for “an officer of Customs and Excise” substitute “ an officer of Revenue and Customs ”.

(8) After that paragraph insert—

“(d) that where an officer of Revenue and Customs searches premises in reliance on a warrant under section 8 of, or paragraph 12 of Schedule 1 to, this Act (as applied by an order under this subsection) the officer shall have the power to search persons found on the premises—

(i) in such cases and circumstances as are specified in the order, and

(ii) subject to any conditions specified in the order; and

(e) that powers and functions conferred by a provision of this Act (as applied by an order under this subsection) may be exercised only by officers of Revenue and Customs acting with the authority (which may be general or specific) of the Commissioners for Her Majesty's Revenue and Customs.”

(9) After that subsection insert—

“(2A) A certificate of the Commissioners that an officer of Revenue and Customs had authority under subsection (2)(e) to exercise a power or function conferred by a provision of this Act shall be conclusive evidence of that fact.”

(10) For subsection (3) substitute—

“(3) An order under subsection (2)—

(a) may make provision that applies generally or only in specified cases or circumstances,

(b) may make different provision for different cases or circumstances,

(c) may, in modifying a provision, in particular impose conditions on the exercise of a function, and

(d) shall not be taken to limit a power under section 164 of the Customs and Excise Management Act 1979.”

(11) The heading of section 114 accordingly becomes “ Application of Act to Revenue and Customs ”.

Commencement Information

I4 S. 82 in force at 8.11.2007 by S.I. 2007/3166, art. 2(a)

83 Northern Ireland criminal investigations U.K.

(1) Article 85 of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)) (application of Order to customs and excise) is amended as follows.

(2) In sub-paragraph (a) of paragraph (1)—

(a) for “investigations conducted by officers of Customs and Excise of offences which relate to assigned matters, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ investigations conducted by officers of Revenue and Customs ”, and

(b) for “persons detained by officers of Customs and Excise;” substitute “ persons detained by officers of Revenue and Customs; ”.

(3) In the opening words of sub-paragraph (b) of that paragraph, for “investigations of offences conducted by officers of Customs and Excise” substitute “ investigations of offences conducted by officers of Revenue and Customs ”.

(4) In paragraph (i) of that sub-paragraph, for “Article” substitute “ Articles ”.

(5) In the Article 16A deemed to be inserted by that paragraph—

(a) for “and which relates to an assigned matter, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ and which relates to a matter in relation to which Her Majesty's Revenue and Customs have functions, ” and

(b) in the heading, for “Customs and Excise” substitute “ Revenue and Customs ”.

(6) After that Article insert—

“16B Revenue and Customs: restriction on other powers to apply for production of documents

(1) An officer of Revenue and Customs may make an application for the delivery of, or access to, documents under a provision specified in paragraph (3) only if the condition in paragraph (2) is satisfied.

(2) The condition is that the officer thinks that an application under Schedule 1 would not succeed because the material required does not consist of or include special procedure material.

(3) The provisions are—

(a) section 20BA of, and Schedule 1AA to, the Taxes Management Act 1970 (serious tax fraud);

(b) paragraph 11 of Schedule 11 to the Value Added Tax Act 1994 (VAT);

(c) paragraph 4A of Schedule 7 to the Finance Act 1994 (insurance premium tax);

(d) paragraph 7 of Schedule 5 to the Finance Act 1996 (landfill tax);

(e) paragraph 131 of Schedule 6 to the Finance Act 2000 (climate change levy);

(f) paragraph 8 of Schedule 7 to the Finance Act 2001 (aggregates levy);

(g) Part 6 of Schedule 13 to the Finance Act 2003 (stamp duty land tax).”

(7) After sub-paragraph (b) of paragraph (1) insert—

“(c) that where an officer of Revenue and Customs searches premises in reliance on a warrant under Article 10 of, or paragraph 9 of Schedule 1 to, this Order (as applied by an order under this paragraph) the officer shall have the power to search persons found on the premises—

(i) in such cases and circumstances as are specified in the order, and

(ii) subject to any conditions specified in the order; and

(d) that powers and functions conferred by a provision of this Order (as applied by an order under this paragraph) may be exercised only by officers of Revenue and Customs acting with the authority (which may be general or specific) of the Commissioners for Her Majesty's Revenue and Customs.”

(8) After that paragraph insert—

“(1A) A certificate of the Commissioners that an officer of Revenue and Customs had authority under paragraph (1)(d) to exercise a power or function conferred by a provision of this Order shall be conclusive evidence of that fact.”

(9) For paragraph (2) substitute—

“(2) An order under paragraph (1)—

(a) may, in modifying a provision, in particular impose conditions on the exercise of a function, and

(b) shall not be taken to limit a power under section 164 of the Customs and Excise Management Act 1979.”

(10) The heading of Article 85 accordingly becomes “ Application of Order to Revenue and Customs ”.

Commencement Information

I5 S. 83 in force at 8.11.2007 by S.I. 2007/3166, art. 2(b)

84 Sections 82 and 83: supplementary U.K.

(1) In Schedule 2 to CRCA 2005 (restrictions on the exercise of functions), omit—

(a) paragraph 7 (Police and Criminal Evidence Act 1984 (c. 60)), and

(b) paragraph 9 (Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12))).

(2) Nothing in section 6 or 7 of CRCA 2005 (initial functions) restricts the functions in connection with which officers of Revenue and Customs may exercise a power under—

(a) the Police and Criminal Evidence Act 1984 by virtue of section 114 of that Act (as amended by section 82 above), or

(b) the Police and Criminal Evidence (Northern Ireland) Order 1989 by virtue of Article 85 of that Order (as amended by section 83 above).

F37 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Schedule 22 contains amendments and repeals consequential on extension of police powers to Revenue and Customs.

(5) Sections 82 and 83 and this section come into force in accordance with provision made by the Treasury by order.

(6) The power to make an order under subsection (5) is exercisable by statutory instrument.

Textual Amendments

F37 S. 84(3) omitted (27.4.2017 for specified purposes, 27.6.2017 in so far as not already in force) by virtue of Criminal Finances Act 2017 (c. 22), ss. 18(5), 58(4)(6)

Commencement Information

I6 S. 84(1)-(3) (5) (6) in force at 8.11.2007 by S.I. 2007/3166, art. 2(c)

I7 S. 84(4) in force at 1.12.2007 by S.I. 2007/3166, art. 3(a)

85 Criminal investigations: Scotland U.K.

Schedule 23 contains provision for Scotland about the investigation of offences by Her Majesty's Revenue and Customs.

86 Search warrants U.K.

In section 8 of the Police and Criminal Evidence Act 1984, after subsection (6) insert—

“(7) Section 4 of the Summary Jurisdiction (Process) Act 1881 (execution of process of English courts in Scotland) shall apply to a warrant issued on the application of an officer of Revenue and Customs under this section by virtue of section 114 below.”

87 Cross-border exercise of powers U.K.

(1) This section relates to the Criminal Justice and Public Order Act 1994 (c. 33).

(2) Sections 136 to 139 (execution of warrants and powers of arrest and search) shall apply to an officer of Revenue and Customs as they apply to a constable; and for that purpose—

(a) a reference to a constable (including a reference to a constable of a police force in England and Wales, a constable of a police force in Scotland or a constable of a police force in Northern Ireland) shall be treated as a reference to an officer of Revenue and Customs, and

(b) a reference to a police station, or a designated police station, includes a reference to an office of Revenue and Customs or (in England and Wales and Northern Ireland) a designated office of Revenue and Customs.

[F38 (2A) In the application of section 137C where a person is arrested under section 137A by an officer of Revenue and Customs in respect of a specified offence that is being investigated by an officer of Revenue and Customs—

(a) subsection (2)(b) is to be read as if (instead of requiring the detention to be authorised by both an officer of at least the rank of inspector in the arresting force and an officer of at least the rank of inspector in the investigating force) it required the detention to be authorised by an officer of Revenue and Customs of at least the grade equivalent to the rank of inspector;

(b) subsection (2)(c) is to be read as if (instead of requiring the detention to be authorised by both an officer of a rank above that of inspector in the arresting force and an officer of a rank above that of inspector in the investigating force) it required the detention to be authorised by an officer of Revenue and Customs of a grade above that equivalent to the rank of inspector;

(c) subsection (3) is omitted;

(d) in subsections (4) and (5), the reference to an officer of the investigating force is to be read as a reference to an officer of Revenue and Customs;

(e) in subsection (6), the reference to an appropriate officer in the investigating force is to be read as a reference to an appropriate officer of Revenue and Customs (as defined by subsection (7));

(f) subsection (6)(a) is omitted;

(g) in subsection (7)(b), the reference to an officer of at least the rank of inspector is to be read as a reference to an officer of Revenue and Customs of at least the equivalent grade;

(h) in subsection (7)(c), the reference to an officer of a rank above that of inspector is to be read as a reference to an officer of Revenue and Customs of above the equivalent grade;

(i) subsections (8) to (10) are omitted.

(2B) Where section 137C applies in accordance with subsection (2A), Schedule 7B applies with the following modifications—

(a) any reference to a constable in the arresting force is to be read as a reference to an officer of Revenue and Customs;

(b) any reference to an officer of at least, or above, a particular rank in the investigating force is to be read as a reference to an officer of Revenue and Customs of at least, or above, the equivalent grade;

(c) any reference to the arresting force or to the investigating force (otherwise than in relation to a description of officer in the force) is to be read as a reference to officers of Revenue and Customs;

(d) instead of the modification made by paragraph 9, section 42 of the Criminal Justice (Scotland) Act 2016 is to be read as if the references in subsections (1)(c)(ii) and (3)(b) to the police were references to officers of Revenue and Customs;

(e) the Schedule is to be read as if it also provided for references in the provisions applied by section 137D(2)(d), (3)(d) and (4)(d) to a police station to include references to an office of Revenue and Customs.

(2C) In the application of section 137C where a person is arrested under section 137A by an officer of Revenue and Customs in respect of a specified offence other than one that is being investigated by an officer of Revenue and Customs—

(a) any reference to an officer of at least, or above, the rank of inspector in the arresting force is to be read as a reference to an officer of Revenue and Customs of at least, or above, the equivalent grade;

(b) the reference in subsection (6)(a) to the arresting force is to be read as a reference to any officer of Revenue and Customs.

(2D) Where section 137C applies in accordance with subsection (2C), Schedule 7B applies with the following modifications—

(a) any reference to a constable in the arresting force is to be read as a reference to an officer of Revenue and Customs;

(b) any reference to the arresting force (otherwise than in relation to a description of officer in the force) is to be read as a reference to officers of Revenue and Customs;

(c) instead of the modification made by paragraph 9, section 42 of the Criminal Justice (Scotland) Act 2016 is to be read as if the references in subsections (1)(c)(ii) and (3)(b) to the police were references to officers of Revenue and Customs;

(d) the Schedule is to be read as if it also provided for references in the provisions applied by section 137D(2)(d), (3)(d) and (4)(d) to a police station to include references to an office of Revenue and Customs.]

[F39 (2E) In the application of those sections to an officer of Revenue and Customs—

(a) sections 136(4B) and 137(7B) apply with the omission of the words from “and, if the constable” to the end;

(b) section 137ZA applies with the omission of subsection (6).]

F40 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) An officer of Revenue and Customs may exercise a power under sections 136 to 139 [F41 in the exercise of any function of the Commissioners for Her Majesty's Revenue and Customs or of officers of Revenue and Customs, within the meaning of the Commissioners for Revenue and Customs Act 2005 (see section 51(2) to (2B) of that Act) ] .

(5) In subsection (2)—

• “office of Revenue and Customs” means premises wholly or partly occupied by Her Majesty's Revenue and Customs, and

• “designated office of Revenue and Customs” has the meaning given by an order under section 114 of the Police and Criminal Evidence Act 1984 (c. 60) (power to extend provisions to HMRC) or, in Northern Ireland, by an order under Article 85 of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)) (power to extend Order to HMRC).

(6) In section 136, after subsection (8) insert—

“(9) Powers under this section and sections 137 to 139 may be exercised by an officer of Revenue and Customs in accordance with section 87 of the Finance Act 2007.”

Textual Amendments

F38 S. 87(2A)-(2D) inserted (31.1.2017 for specified purposes, 1.3.2018 in so far as not already in force) by Policing and Crime Act 2017 (c. 3), s. 183(1)(5)(e), Sch. 17 para. 9(2); S.I. 2018/227, art. 2(g)

F39 S. 87(2E) inserted (25.1.2018) by The Criminal Justice (Scotland) Act 2016 (Consequential Provisions) Order 2018 (S.I. 2018/46), arts. 2(2)(d), 19(3)(a) (with art. 19(2))

F40 S. 87(3) repealed (25.1.2018) by The Criminal Justice (Scotland) Act 2016 (Consequential Provisions) Order 2018 (S.I. 2018/46), arts. 2(2)(d), 19(3)(b) (with art. 19(2))

F41 Words in s. 87(4) substituted (31.1.2017 for specified purposes, 1.3.2018 in so far as not already in force) by Policing and Crime Act 2017 (c. 3), ss. 118, 183(1)(5)(e); S.I. 2018/227, art. 2(f)

Filing dates U.K.

88 Personal tax returns U.K.

(1) Section 8 of TMA 1970 (personal tax return) is amended as follows.

(2) In subsection (1)(a), omit “, on or before the day mentioned in subsection (1A) below”.

(3) Omit subsection (1A).

(4) After subsection (1C) insert—

“(1D) A return under this section for a year of assessment (Year 1) must be delivered—

(a) in the case of a non-electronic return, on or before 31st October in Year 2, and

(b) in the case of an electronic return, on or before 31st January in Year 2.

(1E) But subsection (1D) is subject to the following two exceptions.

(1F) Exception 1 is that if a notice in respect of Year 1 is given after 31st July in Year 2 (but on or before 31st October), a return must be delivered—

(a) during the period of 3 months beginning with the date of the notice (for a non-electronic return), or

(b) on or before 31st January (for an electronic return).

(1G) Exception 2 is that if a notice in respect of Year 1 is given after 31st October in Year 2, a return (whether electronic or not) must be delivered during the period of 3 months beginning with the date of the notice.

(1H) The Commissioners—

(a) shall prescribe what constitutes an electronic return, and

(b) may make different provision for different cases or circumstances.”

89 Trustee's tax return U.K.

(1) Section 8A of TMA 1970 (trustee's tax return) is amended as follows.

(2) In subsection (1)(a), omit “, on or before the day mentioned in subsection (1A) below”.

(3) Omit subsection (1A).

(4) After subsection (1AA) insert—

“(1B) A return under this section for a year of assessment (Year 1) must be delivered—

(a) in the case of a non-electronic return, on or before 31st October in Year 2, and

(b) in the case of an electronic return, on or before 31st January in Year 2.

(1C) But subsection (1B) is subject to the following two exceptions.

(1D) Exception 1 is that if a notice in respect of Year 1 is given after 31st July in Year 2 (but on or before 31st October), a return must be delivered—

(a) during the period of 3 months beginning with the date of the notice (for a non-electronic return), or

(b) on or before 31st January (for an electronic return).

(1E) Exception 2 is that if a notice in respect of Year 1 is given after 31st October in Year 2, a return (whether electronic or not) must be delivered during the period of 3 months beginning with the date of the notice.

(1F) The Commissioners—

(a) shall prescribe what constitutes an electronic return, and

(b) may make different provision for different cases or circumstances.”

90 Partnership tax returns U.K.

(1) In section 12AA of TMA 1970, for subsection (4) (partnership return: filing date) substitute—

“(4) In the case of a partnership which includes one or more individuals, a notice under subsection (2) or (3) above may specify different days depending on whether a return in respect of a year of assessment (Year 1) is electronic or non-electronic.

(4A) The day specified for a non-electronic return must not be earlier than 31st October of Year 2.

(4B) The day specified for an electronic return must not be earlier than 31st January of Year 2.

(4C) But subsections (4A) and (4B) are subject to the following two exceptions.

(4D) Exception 1 is that if the notice is given after 31st July in Year 2 (but on or before 31st October)—

(a) the day specified for a non-electronic return must be after the end of the period of three months beginning with the date of the notice, and

(b) the day specified for an electronic return must not be earlier than 31st January.

(4E) Exception 2 is that if the notice is given after 31st October in Year 2, the day specified for a return (whether or not electronic) must be after the end of the period of three months beginning with the date of the notice.”

(2) For subsection (5) of that section (partnership return where a company is a partner: filing date) substitute—

“(5) In the case of a partnership which includes one or more companies, a notice may specify different dates depending on whether a notice in respect of a relevant period is electronic or non-electronic.

(5A) The day specified for a non-electronic return must not be earlier than the end of the period of nine months beginning at the end of the relevant period.

(5B) The day specified for an electronic return must not be earlier than the first anniversary of the end of the relevant period.

(5C) But where the notice is given more than nine months after the end of the relevant period, the day specified for a return (whether or not electronic) must be after the end of the period of three months beginning with the date of the notice.

(5D) For the purposes of this section “relevant period” means the period in respect of which the return is required.

(5E) The Commissioners—

(a) shall prescribe what constitutes an electronic return for the purposes of this section, and

(b) may make different provision for different cases or circumstances.”

91 Consequential amendments U.K.

(1) In section 9(2) of TMA 1970 (returns to include self-assessment)—

(a) in paragraph (a), for “30th September” substitute “ 31st October ”, and

(b) in paragraph (b), for “31st July” substitute “ 31st August ”.

(2) In section 9ZA of TMA 1970 (amendment of personal or trustee return), for subsection (3) substitute—

“(3) In this section “the filing date”, in respect of a return for a year of assessment (Year 1), means—

(a) 31st January of Year 2, or

(b) if the notice under section 8 or 8A is given after 31st October of Year 2, the last day of the period of three months beginning with the date of the notice.”

(3) In section 9A(6) of TMA 1970 (notice of enquiry: “the filing date”), for the words from “means” to the end substitute “ means, in relation to a return, the last day for delivering it in accordance with section 8 or 8A. ”

F42 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In section 28C of TMA 1970 (determination of tax where no return delivered), for subsection (6) substitute—

“(6) In this section “the filing date” in respect of a return for a year of assessment (Year 1) means either—

(a) 31st January of Year 2, or

(b) if the notice under section 8 or 8A was given after 31st October of Year 2, the last day of the period of three months beginning with the day on which the notice is given.”

(6) In section 33A of TMA 1970 (error in partnership return)—

(a) in subsection (1), insert at the end “ for a year of assessment (Year 1), or for a relevant period which ends in Year 1 ”,

F43 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) in subsection (9), omit the definition of “filing date”, and

(d) in that subsection, after the definition of “relevant partner” insert—

““relevant period” means a period in respect of which a return is required.”

(7) In section 93(10) of TMA 1970 (penalty for failure to make individual or trustee return), for the definition of “filing date” substitute—

““the filing date” in respect of a return for a year of assessment (Year 1) means—

(a) 31st January of Year 2, or

(b) if the notice under section 8 or 8A was given after 31st October of Year 2, the last day of the period of three months beginning with the day on which the notice is given.”

(8) In section 93A of TMA 1970 (failure to make partnership return), after subsection (7) insert—

“(7A) For the purposes of this section the filing date for a year of assessment (Year 1) in the case of a partnership which includes one or more individuals is—

(a) 31st January of Year 2, or

(b) if the notice under section 12AA was given after 31st October of Year 2, the last day of the period of three months beginning with the date of the notice.

(7B) For the purposes of this section the filing date for a year of assessment (Year 1) in the case of a partnership which includes one or more companies is—

(a) the first anniversary of the period for which the return is required, or

(b) where the notice is given more than nine months after the end of the period for which the return is required, the last day of the period of three months beginning with the date of the notice.”

(9) In subsection (8) of section 93A, omit the definition of “the filing date”.

(10) In paragraph 4 of Schedule 15 to FA 2006 (accountancy change: spreading of adjustment)—

(a) in sub-paragraph (1), after “a tax year” insert “ (Year 1) ”, and

(b) in sub-paragraph (2), for “normal self-assessment filing date for the tax year.” substitute “ 31st January of Year 2. ”

Textual Amendments

F42 S. 91(4) omitted (with effect in accordance with Sch. 22 para. 2(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 22 para. 2(2)(b)

F43 S. 91(6)(b) omitted (1.4.2010) by virtue of Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 65(e); S.I. 2009/403, art. 2(2) (with art. 10)

92 Commencement U.K.

(1) Sections 88 to 91 have effect—

(a) in relation to a return under section 8 or 8A of TMA 1970, or a return under section 12AA of that Act for a partnership which includes one or more individuals, in respect of a return for a year of assessment beginning on or after 6th April 2007, and

(b) in relation to a return under section 12AA of that Act for a partnership which includes one or more companies, in respect of a return for a relevant period beginning on or after 6th April 2007.

(2) In subsection (1)(b) “relevant period” means a period in respect of which a return is required.

Other administration U.K.

93 Mandatory electronic filing of returns U.K.

(1) Section 135 of FA 2002 (mandatory electronic filing) is amended as follows.

(2) In subsection (7), after paragraph (b) insert—

“(ba) to specify other consequences of contravention of, or failure to comply with, the regulations (which may include disregarding a return delivered otherwise than by the use of electronic communications);”.

(3) In subsection (10), for the definition of “taxation matter” substitute—

““taxation matter” means any matter relating to a tax (or duty) for which the Commissioners are responsible.”

(4) Section 76 of VATA 1994 (assessment) is amended as follows.

(5) In subsection (1), after paragraph (c) insert— “or

(d) a penalty under regulations made under section 135 of the Finance Act 2002 (mandatory electronic filing of returns) in connection with VAT,”.

(6) In that subsection, before “may have ceased” insert “ or the regulations ”.

(7) In subsection (3), insert at the end— “; and

(f) in the case of a penalty under regulations made under section 135 of the Finance Act 2002, the relevant period is the prescribed accounting period in respect of which the contravention of, or failure to comply with, the regulations occurred.”

(8) In section 83 of VATA 1994 (appeals), after paragraph (zb) insert—

“(zc) a decision of the Commissioners about the application of regulations under section 135 of the Finance Act 2002 (mandatory electronic filing of returns) in connection with VAT (including, in particular, a decision as to whether a requirement of the regulations applies and a decision to impose a penalty);”.

(9) In section 84 of VATA 1994 (appeals), after subsection (6A) insert—

“(6B) Nothing in section 83(zc) shall be taken to confer on a tribunal any power to vary an amount assessed by way of penalty except in so far as it is necessary to reduce it to the amount which is appropriate under regulations made under section 135 of the Finance Act 2002.”

94 Mandatory electronic payment U.K.

(1) Section 204 of FA 2003 (mandatory electronic payment by large employers) is amended as follows.

(2) For subsections (1) and (2) substitute—

“(1) The Commissioners for Her Majesty's Revenue and Customs may make regulations requiring a person to use electronic means in making specified payments under legislation relating to a tax (or duty) for which the Commissioners are responsible.

(2) The regulations may provide for exceptions.”

(3) In subsection (5)(b), for “the Inland Revenue” substitute “ Her Majesty's Revenue and Customs ”.

(4) In subsection (6)(a), for “the Inland Revenue” substitute “ Her Majesty's Revenue and Customs ”.

(5) In subsection (8)—

(a) in paragraph (a), for “a contravention of, or any failure to comply with,” substitute “ a contravention by a large employer of, or any failure by a large employer to comply with, ”, and

(b) in paragraph (b), for “taxation matter within the care and management of the Commissioners” substitute “ matter relating to a tax (or duty) for which the Commissioners are responsible ”.

(6) In subsection (12)—

(a) for the definition of “the Inland Revenue” substitute—

““Her Majesty's Revenue and Customs” includes a person acting under the authority of the Commissioners in relation to payment by electronic means;”, and

(b) after that definition insert—

• ““large employer” means a person paying PAYE income to 250 or more recipients (and regulations under this section may make provision as to the date or period by reference to which this is to be determined and the circumstances in which a person is to be treated as paying PAYE income to a recipient);”.

(7) The heading accordingly becomes “ Mandatory electronic payment ”.

(8) In section 205(1) of FA 2003 (application of section 204 for other purposes)—

(a) after “taxation” insert “ (or duty) ”, and

(b) for “the Commissioners of Inland Revenue” substitute “ the Commissioners for Her Majesty's Revenue and Customs ”.

95 Payment by cheque U.K.

(1) The Commissioners may make regulations providing for a payment to HMRC made by cheque to be treated as made when the cheque clears, as defined in the regulations.

(2) Section 70A of TMA 1970 (payment by cheque treated as made on receipt by HMRC) is subject to regulations under subsection (1).

(3) Regulations under subsection (1)—

(a) may make provision generally or only for specified purposes,

(b) may make different provision for different purposes, and

(c) may include incidental, consequential or transitional provision.

(4) Regulations under subsection (1)—

(a) shall be made by statutory instrument, and

(b) shall be subject to annulment in pursuance of a resolution of the House of Commons.

(5) In this section—

(a) “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs, and

(b) “HMRC” means Her Majesty's Revenue and Customs.

(6) In section 204 of FA 2003 (electronic payment), insert at the end—

“(13) Regulations under section 95(1) of the Finance Act 2007 (payment by cheque) may, in particular, provide for a payment which is made by cheque in contravention of regulations under this section to be treated as made when the cheque clears, as defined in the regulations under that section.”

(7) In section 70A of TMA 1970 (payments by cheque), insert at the end—

“(3) This section is subject to regulations under section 95(1) of the Finance Act 2007 (payment by cheque).”

(8) In VATA 1994, after section 58A insert—

“58B Payment by cheque

Regulations under section 95(1) of the Finance Act 2007 (payment by cheque) may, in particular, provide for a payment which is made by cheque in contravention of regulations under section 25(1) above to be treated as made when the cheque clears, as defined in the regulations under section 95(1) of that Act.”

96 Enquiry into returns U.K.

(1) In section 9A(2)(a) of TMA 1970 (period during which HMRC can open enquiry into return), for “after the filing date;” substitute “ after the day on which the return was delivered; ”.

(2) In section 12AC(2)(a) of TMA 1970 (period during which HMRC can open enquiry into partnership return), for “after the filing date;” substitute “ after the day on which the return was delivered; ”.

(3) In paragraph 24(2) of Schedule 18 to FA 1998 (period during which HMRC can open enquiry into company tax return), for “from the filing date.” substitute “ from the day on which the return was delivered (subject to sub-paragraph (6)). ”

(4) In paragraph 24 of that Schedule, insert at the end—

“(6) In the case of a company which is a member of a group other than a small group, the 12-month period in sub-paragraph (2) shall start not from the day on which the return was delivered but from the filing date.

(7) In sub-paragraph (6) “group” and “small group” have the same meaning as in sections 383(2) and 474(1) of the Companies Act 2006 (or, until their commencement, as in the provisions that they replicate).”

(5) The amendments made by subsections (1) and (2) apply to returns which relate to the tax year 2007-08 or a later tax year.

(6) The amendments made by subsections (3) and (4) apply to returns which relate to accounting periods ending after 31st March 2008.

97 Penalties for errors U.K.

(1) Schedule 24 contains provisions imposing penalties on taxpayers who—

(a) make errors in certain documents sent to HMRC, or

(b) unreasonably fail to report errors in assessments by HMRC.

(2) That Schedule comes into force in accordance with provision made by the Treasury by order.

(3) An order—

(a) may commence a provision generally or only for specified purposes,

(b) may make different provision for different purposes, and

(c) may include incidental, consequential or transitional provision.

(4) The power to make an order is exercisable by statutory instrument.

Part 7 U.K. Miscellaneous

Value added tax and insurance premium tax U.K.

98 VAT: joint and several liability of traders in supply chain where tax unpaid U.K.

(1) In section 77A of VATA 1994 (joint and several liability of traders in supply chain where tax unpaid), for subsection (9) substitute—

“(9) The Treasury may by order amend subsection (1) above.

(9A) The Treasury may by order amend this section in order to extend or otherwise alter the circumstances in which a person shall be presumed to have reasonable grounds for suspecting matters to be as mentioned in subsection (2)(b) above.

(9B) Any order under this section may make such incidental, supplemental, consequential or transitional provision as the Treasury think fit.”

(2) In section 97(4) of that Act (orders ceasing to have effect unless approved by House of Commons), after paragraph (ea) insert—

“(eb) an order under section 77A(9) or (9A);”.

99 VAT: non-business use etc of business goods U.K.

(1) Schedule 4 to VATA 1994 (matters to be treated as supply of goods or services) is amended as follows.

(2) In paragraph 5 (non-business use etc of business goods), omit sub-paragraph (4A) (exception to rule in case of interests in land and buildings etc that non-business use of business assets treated as supply of services).

(3) In paragraph 9 (application of paragraphs 5 to 8 where land forms part of assets of business), insert at the end—

“(4) In this paragraph “grant” includes surrender.”

(4) Paragraph 7 of Schedule 6 to VATA 1994 (valuation of supply of services otherwise than for consideration by virtue of paragraph 5(4) of Schedule 4 etc) is amended as follows.

(5) The existing provision becomes sub-paragraph (1) and after that sub-paragraph insert—

“(2) Regulations may, in relation to a supply of services by virtue of paragraph 5(4) of Schedule 4 (but otherwise than for a consideration), make provision for determining how the full cost to the taxable person of providing the services is to be calculated.

(3) The regulations may, in particular, make provision for the calculation to be made by reference to any prescribed period.

(4) The regulations may make—

(a) different provision for different circumstances;

(b) such incidental, supplementary, consequential or transitional provision as the Commissioners think fit.”

(6) The amendment made by subsection (2) comes into force on 1st September 2007.

(7) The amendment made by subsection (3) has effect in relation to surrenders on or after 21st March 2007.

100 VAT: transfers of going concerns U.K.

(1) Section 49 of VATA 1994 (transfers of going concern) is amended as follows.

(2) In subsection (1) (transferor's supplies treated as transferee's supplies for purposes of registration and transferor's records to be kept by transferee after transfer)—

(a) after “Where a business” insert “ , or part of a business, ”,

(b) after “on the business” insert “ or part of the business ”, and

(c) omit paragraph (b) (together with the “and” before it).

(3) In subsection (2) (regulations for securing continuity of Act in case of transfers of going concerns), after “a business” insert “ , or part of a business, ”.

(4) After that subsection insert—

“(2A) Regulations under subsection (2) above may, in particular, provide for the duties under this Act of the transferor to preserve records relating to the business or part of the business for any period after the transfer to become duties of the transferee unless the Commissioners, at the request of the transferor, otherwise direct.”

(5) In subsection (3) (provision which may be made by regulations), in paragraph (a), after “the transferor” insert “ (other than the duties mentioned in subsection (2A) above) ”.

(6) After that subsection insert—

“(4) Subsection (5) below applies where—

(a) a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, and

(b) the transferor continues to be required under this Act to preserve for any period after the transfer any records relating to the business or part of the business.

(5) So far as is necessary for the purpose of complying with the transferee's duties under this Act, the transferee (“E”) may require the transferor—

(a) to give to E, within such time and in such form as E may reasonably require, such information contained in the records as E may reasonably specify,

(b) to give to E, within such time and in such form as E may reasonably require, such copies of documents forming part of the records as E may reasonably specify, and

(c) to make the records available for E's inspection at such time and place as E may reasonably require (and permit E to take copies of, or make extracts from, them).

(6) Where a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, the Commissioners may disclose to the transferee any information relating to the business when it was carried on by the transferor for the purpose of enabling the transferee to comply with the transferee's duties under this Act.”

(7) In section 94(6) of VATA 1994 (meaning of “business” etc)—

(a) after “a business” insert “ , or part of a business, ”, and

(b) for “its assets or liabilities” substitute “ the assets or liabilities of the business or part of the business ”.

(8) In paragraph 1(2) of Schedule 1 to that Act (registration in respect of taxable supplies), after “Where a business” insert “ , or part of a business, ”.

(9) In paragraph 8(2)(b) of Schedule 4 to that Act (matters to be treated as supply of goods or services), after “a business” insert “ , or part of a business, ”.

(10) The amendments made by this section have effect in relation to transfers pursuant to contracts entered into on or after 1st September 2007.

101 IPT: meaning of “premium” U.K.

(1) In section 72 of FA 1994 (interpretation: “premium”), after subsection (1A) insert—

“(1B) Where—

(a) an amount is charged (to the insured or any other person) in respect of the acquisition of a right (whether of the insured or any other person) to require the insurer to provide, or offer to provide, any of the cover included in a taxable insurance contract, and

(b) any payment in respect of that amount is not regarded as a payment received under that contract by the insurer by virtue of subsection (1A) above,

the payment is to be regarded as a payment received under that contract by the insurer unless it is chargeable to tax at the higher rate by virtue of section 52A above.”

(2) The amendment made by subsection (1) has effect in relation to amounts charged on or after 22nd March 2007.

Petroleum revenue tax U.K.

102 Abolition of PRT for fields recommissioned after earlier decommissioning U.K.

(1) Section 185 of FA 1993 (abolition of PRT for oil fields with development consents on or after 16th March 1993) is amended as follows.

(2) In subsection (1) (meaning of “non-taxable field” and “taxable field”), after paragraph (b) insert “ or an oil field which does not meet the conditions in paragraphs (a) and (b) above but which does meet the conditions in subsection (1A) below ”.

(3) After that subsection insert—

“(1A) An oil field meets the conditions in this subsection if—

(a) the Secretary of State has at any time approved one or more abandonment programmes under Part 4 of the Petroleum Act 1998 (or Part 1 of the Petroleum Act 1987) in relation to all assets of the field which are relevant assets;

(b) those programmes have been carried out to the satisfaction of the Secretary of State;

(c) a development decision is made in relation to the field; and

(d) that decision is made on or after 16th March 1993 and after those programmes have been so carried out.

(1B) For the purposes of subsection (1A)(a) above, an asset is a relevant asset of an oil field if—

(a) it has at any time been a qualifying asset (within the meaning of the 1983 Act) in relation to any participator in the field; and

(b) it has at any time been used for the purpose of winning oil from the field.

(1C) For the purposes of subsection (1A)(c) and (d) above, a development decision is made in relation to an oil field when—

(a) consent for development is granted to a licensee by the Secretary of State in respect of the whole or part of the field; or

(b) a programme of development is served on a licensee or approved by the Secretary of State for the whole or part of the field.”

(4) In subsection (7) (meaning of “development” etc), for “subsections (1) and (2)” substitute “ this section ”.

(5) An oil field which meets the conditions in subsection (1A) of section 185 of FA 1993 (as inserted by subsection (3) above) becomes a non-taxable field for the purposes of any enactment relating to petroleum revenue tax—

(a) in any case where the development decision is made before 1st July 2007, on that date, and

(b) in any other case, on the date on which the development decision is made.

103 Tax-exempt tariffing receipts U.K.

(1) Section 6A of the Oil Taxation Act 1983 (c. 56) (tax-exempt tariffing receipts) is amended as follows.

(2) In subsection (4), insert at the end “or

(c) use in relation to a UK recommissioned field (see subsection (5) below) or oil won from such a field.”

(3) In subsection (5), insert at the end—

““UK recommissioned field” means any oil field which is not a new field or qualifying existing field but as respects which the conditions in section 185(1A) of the Finance Act 1993 are satisfied (fields recommissioned after earlier decommissioning).”

(4) The amendments made by this section are deemed to have come into force on 1st July 2007.

104 Allowance of unrelievable loss from abandoned field U.K.

(1) In section 6 of the Oil Taxation Act 1975 (c. 22) (allowance of unrelievable loss from abandoned field), after subsection (4) insert—

“(4A) For the purposes of this section and Schedule 8 to this Act, the winning of oil from an oil field shall not be regarded as having permanently ceased until all the oil wells in the field have been permanently abandoned.”

(2) The amendment made by subsection (1) is deemed to have come into force on 1st July 2007.

Other miscellaneous measures U.K.

105 Amendments connected with Gambling Act 2005 U.K.

Schedule 25 contains amendments that are consequential on, or otherwise connected with, the Gambling Act 2005 (c. 19).

106 VED: exempt vehicles U.K.

(1) In section 5 of VERA 1994 (exempt vehicles), after subsection (2) insert—

“(3) The Secretary of State may by order amend Schedule 2 in order to make provision about the descriptions of—

(a) tractors, and

(b) vehicles used for purposes relating to agriculture, horticulture or forestry,

that are to be exempt vehicles.

(4) An order under subsection (3) may in particular repeal any of paragraphs 20A to 20D of Schedule 2.”

(2) In section 60(3) of that Act (orders subject to affirmative procedure), after “under” insert “ section 5(3) or ”.

107 Limitation period in old actions for mistake of law relating to direct tax U.K.

(1) Section 32(1)(c) of the Limitation Act 1980 (c. 58) (extended period for bringing action in case of mistake) does not apply in relation to any action brought before 8th September 2003 for relief from the consequences of a mistake of law relating to a taxation matter under the care and management of the Commissioners of Inland Revenue.

(2) Subsection (1) has effect regardless of how the grounds on which the action was brought were expressed and of whether it was also brought otherwise than for such relief.

(3) But subsection (1) does not have effect in relation to an action, or so much of an action as relates to a cause of action, if—

(a) the action, or cause of action, has been the subject of a judgment of the House of Lords given before 6th December 2006 as to the application of section 32(1)(c) in relation to such relief, or

(b) the parties to the action are, in accordance with a group litigation order, bound in relation to the action, or cause of action, by a judgment of the House of Lords in another action given before that date as to the application of section 32(1)(c) in relation to such relief.

(4) If the judgment of any court was given on or after 6th December 2006 but before the day on which this Act is passed, the judgment is to be taken to have been what it would have been had subsections (1) to (3) been in force at all times since the action was brought (and any defence of limitation which would have been available had been raised).

(5) And any payment made to satisfy a liability under the judgment which (in consequence of subsection (4)) is to be taken not to have been imposed is repayable (with interest from the date of the payment).

[F44 (5A) Subsection (1) also does not have effect in relation to an action, or so much of an action as relates to a cause of action, if the consequences of a mistake of law to which the action, or cause of action, relates is the charging of tax contrary to EU law.]

(6) In this section—

• “group litigation order” means an order of a court providing for the case management of actions which give rise to common or related issues of fact or law, and

• “judgment” includes order (and “given” includes made).

Textual Amendments

F44 S. 107(5A) inserted (with effect in accordance with s. 299(2) of the amending Act) by Finance Act 2014 (c. 26), s. 299(1)

108 Disclosure of tax avoidance schemes U.K.

(1) Part 7 of FA 2004 (disclosure of tax avoidance schemes) is amended as follows.

(2) After section 306 insert—

“306A Doubt as to notifiability

(1) HMRC may apply to the Special Commissioners for an order that—

(a) a proposal is to be treated as notifiable, or

(b) arrangements are to be treated as notifiable.

(2) An application must specify—

(a) the proposal or arrangements in respect of which the order is sought, and

(b) the promoter.

(3) On an application the Special Commissioners may make the order only if satisfied that HMRC—

(a) have taken all reasonable steps to establish whether the proposal or arrangements are notifiable, and

(b) have reasonable grounds for suspecting that the proposal or arrangements may be notifiable.

(4) Reasonable steps under subsection (3)(a) may (but need not) include taking action under section 313A or 313B.

(5) Grounds for suspicion under subsection (3)(b) may include—

(a) the fact that the relevant arrangements fall within a description prescribed under section 306(1)(a);

(b) an attempt by the promoter to avoid or delay providing information or documents about the proposal or arrangements under or by virtue of section 313A or 313B;

(c) the promoter's failure to comply with a requirement under or by virtue of section 313A or 313B in relation to another proposal or other arrangements.

(6) Where an order is made under this section in respect of a proposal or arrangements, the prescribed period for the purposes of section 308(1) or (3) in so far as it applies by virtue of the order—

(a) shall begin after a date prescribed for the purpose, and

(b) may be of a different length than the prescribed period for the purpose of other applications of section 308(1) or (3).

(7) An order under this section in relation to a proposal or arrangements is without prejudice to the possible application of section 308, other than by virtue of this section, to the proposal or arrangements.”

(3) In section 307 (“promoter”), insert at the end—

“(6) In the application of this Part to a proposal or arrangements which are not notifiable, a reference to a promoter is a reference to a person who would be a promoter under subsections (1) to (5) if the proposal or arrangements were notifiable.”

(4) After section 308 insert—

“308A Supplemental information

(1) This section applies where—

(a) a promoter (P) has provided information in purported compliance with section 308(1) or (3), but

(b) HMRC believe that P has not provided all the prescribed information.

(2) HMRC may apply to the Special Commissioners for an order requiring P to provide specified information about, or documents relating to, the notifiable proposal or arrangements.

(3) The Special Commissioners may make an order under subsection (2) in respect of information or documents only if satisfied that HMRC have reasonable grounds for suspecting that the information or documents—

(a) form part of the prescribed information, or

(b) will support or explain the prescribed information.

(4) A requirement by virtue of subsection (2) shall be treated as part of P's duty under section 308(1) or (3).

(5) In so far as P's duty under section 308(1) or (3) arises out of a requirement by virtue of subsection (2) above, the prescribed period shall begin after a date prescribed for the purpose.

(6) In so far as P's duty under section 308(1) or (3) arises out of a requirement by virtue of subsection (2) above, the prescribed period—

(a) may be of a different length than the prescribed period for the purpose of other applications of section 308(1) or (3), and

(b) may be extended by HMRC by direction.”

(5) After section 313 insert—

“313A Pre-disclosure enquiry

(1) Where HMRC suspect that a person (P) is the promoter of a proposal or arrangements which may be notifiable, they may by written notice require P to state—

(a) whether in P's opinion the proposal or arrangements are notifiable by P, and

(b) if not, the reasons for P's opinion.

(2) A notice must specify the proposal or arrangements to which it relates.

(3) For the purpose of subsection (1)(b)—

(a) it is not sufficient to refer to the fact that a lawyer or other professional has given an opinion,

(b) the reasons must show, by reference to this Part and regulations under it, why P thinks the proposal or arrangements are not notifiable by P, and

(c) in particular, if P asserts that the arrangements do not fall within any description prescribed under section 306(1)(a), the reasons must provide sufficient information to enable HMRC to confirm the assertion.

(4) P must comply with a requirement under or by virtue of subsection (1) within—

(a) the prescribed period, or

(b) such longer period as HMRC may direct.

313B Reasons for non-disclosure: supporting information

(1) Where HMRC receive from a person (P) a statement of reasons why a proposal or arrangements are not notifiable by P, HMRC may apply to the Special Commissioners for an order requiring P to provide specified information or documents in support of the reasons.

(2) P must comply with a requirement under or by virtue of subsection (1) within—

(a) the prescribed period, or

(b) such longer period as HMRC may direct.

(3) The power under subsection (1)—

(a) may be exercised more than once, and

(b) applies whether or not the statement of reasons was received under section 313A(1)(b).”

(6) After section 314 insert—

“314A Order to disclose

(1) HMRC may apply to the Special Commissioners for an order that—

(a) a proposal is notifiable, or

(b) arrangements are notifiable.

(2) An application must specify—

(a) the proposal or arrangements in respect of which the order is sought, and

(b) the promoter.

(3) On an application the Special Commissioners may make the order only if satisfied that section 306(1)(a) to (c) applies to the relevant arrangements.”

(7) After section 317 insert—

“317A Special Commissioners: procedure

Sections 56B to 56D of the Taxes Management Act 1970 (procedure) shall apply (with any necessary modifications) to applications under this Part as to appeals.”

(8) In section 318(1) (interpretation)—

(a) after the definition of “corporation tax” insert—

““HMRC” means the Commissioners for Her Majesty's Revenue and Customs;” and

(b) after the definition of “reference number” insert—

““the Special Commissioners” has the meaning given by section 4 of the Taxes Management Act 1970;”.

(9) In section 98C of TMA 1970 (notifications under Part 7 of FA 2004)—

(a) in subsection (2), at the end insert— “, and

(e) sections 313A and 313B (duty of promoter to respond to inquiry).”, and

(b) after that subsection insert—

“(2A) Where a failure to comply with a provision mentioned in subsection (2) concerns a proposal or arrangements in respect of which an order has been made under section 306A of the Finance Act 2004 (doubt as to notifiability), the amount specified in subsection (1)(b) above shall be increased to the prescribed sum.

(2B) Where a failure to comply with a provision mentioned in subsection (2) concerns a proposal or arrangements in respect of which an order has been made under section 314A of the Finance Act 2004 (order to disclose), the amount specified in subsection (1)(b) above shall be increased to the prescribed sum in relation to days falling after the prescribed period.

(2C) In subsection (2A) and (2B)—

(a) “the prescribed sum” means a sum prescribed by the Treasury by regulations, and

(b) “the prescribed period” means a period beginning with the date of the order under section 314A and prescribed by the Commissioners by regulations.

(2D) The making of an order under section 314A of that Act does not of itself mean that, for the purposes of section 118(2) of this Act, a person either did or did not have a reasonable excuse for non-compliance before the order was made.

(2E) Where an order is made under section 314A of that Act then for the purposes of section 118(2) of this Act—

(a) the person identified in the order as the promoter of the proposal or arrangements cannot, in respect of any time after the end of the period mentioned in subsection (2B), rely on doubt as to notifiability as an excuse for failure to comply with section 308 of that Act, and

(b) any delay in compliance with that section after the end of that period is unreasonable unless attributable to something other than doubt as to notifiability.

(2F) Regulations under subsection (2C)—

(a) may include incidental or transitional provision,

(b) shall be made by statutory instrument,

(c) in the case of regulations under subsection (2C)(a), shall not be made unless a draft has been laid before and approved by resolution of the House of Commons, and

(d) in the case of regulations under subsection (2C)(b), shall be subject to annulment in pursuance of a resolution of the House of Commons.”

(10) The amendments made by this section come into force on the passing of this Act; and—

F45 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) a power under Part 7 of FA 2004 as amended by this section may be exercised in relation to, or by virtue of, matters arising wholly or partly before the passing of this Act.

Textual Amendments

F45 S. 108(10)(a) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 465

109 Meaning of “recognised stock exchange” etc U.K.

Schedule 26 contains—

(a) new definitions of “recognised stock exchange” for the purposes of the Tax Acts and TCGA 1992,

(b) provision for the valuation for the purposes of TCGA 1992 of certain shares or securities listed on recognised stock exchanges,

(c) provision for the valuation for the purposes of Chapter 8 of Part 4 of ITTOIA 2005 of strips and securities exchanged for strips, and

(d) minor and consequential amendments in relation to stock exchanges.

110 Mergers Directive: regulations U.K.

(1) The Treasury may by regulations make provision about—

(a) the tax consequences of a merger to form an SE or SCE,

(b) the tax consequences of a merger where—

(i) each party to the merger is resident in a member State, and

(ii) the parties are not all resident in the same member State,

(c) the tax consequences of a transfer between companies of a business or part of a business, where—

(i) each party to the transfer is resident in a member State, and

(ii) the parties are not all resident in the same member State,

(d) the tax consequences of a share exchange to which section 135 of TCGA 1992 (exchange of securities) applies where companies A and B are resident in different member States,

(e) the residence of an SE or SCE.

(2) Regulations may, in particular, make provision—

(a) about the taxation of chargeable gains (including conferring relief from taxation in relation to transfers or mergers which satisfy specified conditions),

(b) conferring relief from taxation on a distribution of a company which satisfies specified conditions,

(c) about the treatment of securities issued on a transfer or merger,

(d) about the treatment of loan relationships,

(e) about the treatment of derivative contracts,

(f) about the treatment of intangible fixed assets, and

(g) about capital allowances.

(3) Regulations may make provision only if the Treasury think it necessary or expedient for the purposes of complying with the United Kingdom's obligations under the Mergers Directive.

(4) In this section—

• “the Mergers Directive” means Council Directive [F46 2009/133/EC],

• “SCE” means an SCE formed in accordance with Council Regulation (EC) 1435/2003 on the Statute for a European Cooperative Society, and

• “SE” means an SE formed in accordance with Council Regulation (EC) 2157/2001 on the Statute for a European Company.

(5) Regulations under this section may—

(a) amend the Taxes Acts,

(b) make incidental or consequential amendments of enactments other than the Taxes Acts,

(c) make provision having retrospective effect,

(d) make provision generally or only for specified cases or circumstances,

(e) make different provision for different cases or circumstances,

(f) make incidental, consequential or transitional provision.

(6) In this section “the Taxes Acts” has the meaning given by section 118(1) of TMA 1970.

Textual Amendments

F46 Word in s. 110(4) substituted (1.7.2011) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2011 (S.I. 2011/1431), regs. 1(2), 3

111 Excise duties: small consignment relief U.K.

(1) The Excise Duties (Small Non-Commercial Consignments) Relief Regulations 1986 (S.I. 1986/938) are revoked.

(2) The revocation made by subsection (1) does not apply in relation to goods consigned before the day on which this Act is passed.

112 Updating references to Standing Committees U.K.

(1) In section 1(4)(b) of the Provisional Collection of Taxes Act 1968 (c. 2) (circumstances in which a resolution affecting income tax etc ceases to have effect), for “Standing Committee” substitute “ Public Bill Committee ”.

(2) In section 50(2)(a) of FA 1973 (corresponding provision for stamp duty), for “Standing Committee” substitute “ Public Bill Committee ”.

Part 8 U.K. Final provisions

113 Interpretation U.K.

(1) In this Act—

• “BGDA 1981” means the Betting and Gaming Duties Act 1981 (c. 63),

• “CAA 2001” means the Capital Allowances Act 2001 (c. 2),

• “CEMA 1979” means the Customs and Excise Management Act 1979 (c. 2),

• “CRCA 2005” means the Commissioners for Revenue and Customs Act 2005 (c. 11),

• [F47 “CTA 2009” means the Corporation Tax Act 2009;]

• “ICTA” means the Income and Corporation Taxes Act 1988 (c. 1),

• “IHTA 1984” means the Inheritance Tax Act 1984 (c. 51),

• “ITA 2007” means the Income Tax Act 2007 (c. 3),

• “ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003 (c. 1),

• “ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005 (c. 5),

• “TCGA 1992” means the Taxation of Chargeable Gains Act 1992 (c. 12),

• “TMA 1970” means the Taxes Management Act 1970 (c. 9),

• “VATA 1994” means the Value Added Tax Act 1994 (c. 23), and

• “VERA 1994” means the Vehicle Excise and Registration Act 1994 (c. 22).

(2) In this Act—

• “FA”, followed by a year, means the Finance Act of that year, and

• “F(No.2)A”, followed by a year, means the Finance (No.2) Act of that year.

Textual Amendments

F47 Words in s. 113 inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 723 (with Sch. 2 Pts. 1, 2)

114 Repeals U.K.

Schedule 27 contains repeals.

115 Short title U.K.

This Act may be cited as the Finance Act 2007.

SCHEDULES

Section 8

SCHEDULE 1 U.K. Remote gaming duty

Part 1 U.K. Imposition of duty

1 U.K. The sections set out below are to be inserted in Part 2 of BGDA 1981 (gaming duties) before section 26A (which is renumbered 26N).

2 U.K. Those sections are—

“Remote gaming duty U.K.

26A Interpretation

(1) For the purposes of remote gaming duty “remote gaming” means gaming in which persons participate by the use of—

(a) the internet,

(b) telephone,

(c) television,

(d) radio, or

(e) any other kind of electronic or other technology for facilitating communication.

(2) For the purposes of remote gaming duty the expressions listed below shall be construed (for the whole of the United Kingdom) in accordance with the Gambling Act 2005.

Expression	Defining provision of Gambling Act 2005
Provision of facilities	Section 5(1) to (3)
Remote gambling equipment	Section 36(4) and (5)
Remote operating licence	Section 67

(3) In relation to remote gaming duty “P” means a person who provides facilities for remote gaming.

(4) The Treasury may by order amend the definition of “remote gaming” in subsection (1) (and an order may include incidental, consequential or transitional provision).

26B The duty

A duty of excise to be known as remote gaming duty shall be charged on the provision of facilities for remote gaming if—

(a) the facilities are provided in reliance on a remote operating licence, or

(b) at least one piece of remote gambling equipment used in the provision of the facilities is situated in the United Kingdom (whether or not the facilities are provided for use wholly or partly in the United Kingdom).

26C The rate

(1) Remote gaming duty is chargeable at the rate of 15% of P's remote gaming profits for an accounting period.

(2) P's remote gaming profits for an accounting period are—

(a) the amount of P's remote gaming receipts for the period (calculated in accordance with section 26E), minus

(b) the amount of P's expenditure for the period on remote gaming winnings (calculated in accordance with section 26F).

26D Accounting periods

(1) The following are accounting periods for the purposes of remote gaming duty—

(a) the period of three months beginning with 1st January,

(b) the period of three months beginning with 1st April,

(c) the period of three months beginning with 1st July, and

(d) the period of three months beginning with 1st October.

(2) The Commissioners may agree with P for specified periods to be treated as accounting periods, instead of those described in subsection (1), for purposes of remote gaming duty relating to P.

(3) The Commissioners may by direction make transitional arrangements for the periods to be treated as accounting periods where—

(a) P becomes registered, or ceases to be registered, under section 26J, or

(b) an agreement under subsection (2) begins or ends.

26E Remote gaming receipts

(1) The amount of P's remote gaming receipts for an accounting period is the aggregate of—

(a) amounts falling due to P in that period in respect of entitlement to use facilities for remote gaming provided by P, and

(b) amounts staked, or falling due to be paid, in that period by a user of facilities for remote gaming provided by P, if or in so far as responsibility for paying any amount won by the user falls on P (or a person with whom P is connected or has made arrangements).

(2) Amounts in respect of VAT shall be ignored for the purposes of subsection (1).

(3) The Treasury may by order provide that where a person who uses facilities (U) relies on an offer which waives payment or permits payment of less than the amount which would have been required to be paid without the offer, U is to be treated for the purposes of this section as having paid that amount.

26F Remote gaming winnings

(1) The amount of P's expenditure on remote gaming winnings for an accounting period is the aggregate of the value of prizes provided by P in that period which have been won (at any time) by persons using facilities for remote gaming provided by P.

(2) Prizes provided by P to one user on behalf of another are not to be treated as prizes provided by P.

(3) A reference to providing a prize to a user (U) includes a reference to crediting money in respect of gaming winnings by U to an account if U is notified that—

(a) the money is being held in the account, and

(b) U is entitled to withdraw it on demand.

(4) The return of a stake is to be treated as the provision of a prize.

(5) Where P participates in arrangements under which a number of persons who provide facilities for remote gaming contribute towards a fund which is wholly used to provide prizes in connection with the use of those facilities (sometimes described as arrangements for “linked progressive jackpot games ”)—

(a) the making by P of a contribution which relates to the provision by P of facilities for remote gaming shall be treated as the provision of a prize, and

(b) the award of a prize from the fund shall not be treated as the provision of a prize by P.

(6) Where P credits the account of a user of facilities provided by P (otherwise than as described in subsection (3)), the credit shall be treated as the provision of a prize; but the Commissioners may direct that this subsection shall not apply in a specified case or class of cases.

(7) Subsections (2) to (6) of section 20 shall apply (with any necessary modifications) for the purpose of remote gaming duty as for the purpose of bingo duty.

26G Losses

Where the calculation of P's remote gaming profits for an accounting period produces a negative amount, it may be carried forward in reduction of the profits of one or more later accounting periods.

26H Exemptions

(1) Remote gaming duty shall not be charged in respect of the provision of facilities for remote gaming if and in so far as—

(a) the provision is charged with another gambling tax, or

(b) the use of the facilities is charged with another gambling tax.

(2) Remote gaming duty shall not be charged in respect of the provision of facilities for remote gaming if and in so far as—

(a) the provision would be charged with another gambling tax but for an express exception, or

(b) the use of the facilities would be charged with another gambling tax but for an express exception.

(3) In this section “gambling tax” means—

(a) amusement machine licence duty,

(b) bingo duty,

(c) gaming duty,

(d) general betting duty,

(e) lottery duty, and

(f) pool betting duty.

(4) The Treasury may by order—

(a) confer an exemption from remote gaming duty, or

(b) remove or vary (whether or not by textual amendment) an exemption under this section.

(5) In calculating P's remote gaming profits for an accounting period, no account shall be taken of amounts or prizes if, or in so far as, they relate to the provision of facilities to which an exemption applies under or by virtue of this section.

26I Liability to pay

(1) P is liable for any remote gaming duty charged on P's remote gaming profits for an accounting period.

(2) If P is a body corporate, P and P's directors are jointly and severally liable for any remote gaming duty charged on P's remote gaming profits for an accounting period.

(3) The Commissioners may make regulations about payment of remote gaming duty; and the regulations may, in particular, make provision about—

(a) timing;

(b) instalments;

(c) methods of payment;

(d) when payment is to be treated as made;

(e) the process and effect of assessments by the Commissioners of amounts due.

(4) Subject to regulations under subsection (3), section 12 of the Finance Act 1994 (assessment) shall apply in relation to liability to pay remote gaming duty.

26J Registration

(1) The Commissioners shall maintain a register of persons who provide facilities for remote gaming in respect of which remote gaming duty may be chargeable.

(2) A person may not provide facilities for remote gaming in respect of which remote gaming duty may be chargeable without being registered.

(3) The Commissioners may make regulations about registration; in particular, the regulations may include provision (which may include provision conferring a discretion on the Commissioners) about—

(a) the procedure for applying for registration;

(b) the timing of applications;

(c) the information to be provided;

(d) notification of changes;

(e) de-registration;

(f) re-registration after a person ceases to be registered.

(4) The regulations may require a registered person to give notice to the Commissioners before applying for a remote operating licence.

(5) The regulations may permit the Commissioners to make registration, or continued registration, of a foreign person conditional; and the regulations may, in particular, permit the Commissioners to require—

(a) the provision of security for payment of remote gaming duty;

(b) the appointment of a United Kingdom representative with responsibility for discharging liability to remote gaming duty.

(6) In subsection (5) “foreign person” means a person who—

(a) in the case of an individual, is not usually resident in the United Kingdom,

(b) in the case of a body corporate, does not have an established place of business in the United Kingdom, and

(c) in any other case, does not include an individual who is usually resident in the United Kingdom.

(7) The regulations may include provision for the registration of groups of persons; and may provide for the modification of the provisions of this Part about remote gaming duty in their application to groups.

(8) The regulations—

(a) may make provision which applies generally or only for specified purposes, and

(b) may make different provision for different purposes.

26K Returns

(1) The Commissioners may make regulations requiring persons who provide facilities for remote gaming in respect of which remote gaming duty may be chargeable to make returns to the Commissioners in respect of their activities.

(2) The regulations may, in particular, make provision about—

(a) liability to make a return;

(b) timing;

(c) form;

(d) content;

(e) method of making;

(f) declarations;

(g) authentication;

(h) when a return is to be treated as made.

(3) The regulations—

(a) may make provision which applies generally or only for specified purposes, and

(b) may make different provision for different purposes.

26L Enforcement

(1) Contravention of a provision made by or by virtue of sections 26I to 26K—

(a) is conduct to which section 9 of the Finance Act 1994 applies (penalties), and

(b) attracts daily penalties under that section.

(2) A person who is knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of remote gaming duty commits an offence.

(3) A person guilty of an offence under subsection (2) shall be liable on summary conviction to—

(a) a penalty of—

(i) the statutory maximum, or

(ii) if greater, three times the duty which is unpaid or the payment of which is sought to be avoided,

(b) imprisonment for a term not exceeding six months, or

(c) both.

(4) A person guilty of an offence under subsection (2) shall be liable on conviction on indictment to—

(a) a penalty of any amount,

(b) imprisonment for a term not exceeding seven years, or

(c) both.

26M Review and appeal

(1) Sections 14 to 16 of the Finance Act 1994 (review and appeal) shall apply in relation to liability to pay remote gaming duty.

(2) Sections 14 to 16 of that Act shall also apply to the decisions listed in subsection (3) below.

(3) Those decisions are—

(a) a decision to refuse a request for an agreement under section 26D(2),

(b) a decision to give a direction under section 26D(3),

(c) a decision not to give a direction under section 26D(3),

(d) a decision to direct that section 26F(6) shall not apply in a specified case,

(e) a decision under regulations by virtue of section 26J(3), and

(f) a decision about security by virtue of section 26J(5)(a).

(4) A decision of a kind specified in subsection (3) shall be treated as an ancillary matter for the purposes of sections 14 to 16 of the Finance Act 1994.”

Part 2 U.K. Consequential amendments

3 U.K. In BGDA 1981, before section 26N (non-sterling amounts) (as renumbered by paragraph 1 above) insert the italic cross-heading “ General ”.

4 U.K. In section 31 of that Act (protection of officers), after “bingo duty” insert “ , remote gaming duty ”.

5 U.K. In section 32 of that Act (subordinate legislation), after subsection (2) insert—

“(3) But in the case of an order under section 26H(4) which has the effect of adding to the class of activities in respect of which remote gaming duty is chargeable—

(a) subsection (2) above shall not apply, and

(b) the order may not be made unless a draft has been laid before and approved by resolution of the House of Commons.”

6 U.K. In section 33(2) of that Act (no legalising effect), after “bingo duty” insert “ , remote gaming duty ”.

Section 23

SCHEDULE 2 U.K. Climate change levy: reduced-rate supplies etc

Introductory U.K.

1 U.K. Schedule 6 to FA 2000 (climate change levy) is amended as follows.

Reduced-rate supplies U.K.

2 U.K. In paragraph 4(2)(b) (taxable supplies: introduction), after “paragraph 24” insert “ or 45A ”.

Commencement Information

I8 Sch. 2 para. 2 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1)

3 U.K. In paragraph 5(3) (supplies of electricity), for “or 24” substitute “ , 24 or 45A ”.

Commencement Information

I9 Sch. 2 para. 3 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1)

4 U.K. In paragraph 6(2A) (supplies of gas), after “24” insert “ or 45A ”.

Commencement Information

I10 Sch. 2 para. 4 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1)

5 (1) Paragraph 34 (other commodities: deemed supplies) is amended as follows. U.K.

(2) In sub-paragraph (1)(b), for “or 24” substitute “ , 24 or 45A ”.

(3) After sub-paragraph (3) insert—

“(4) A supply that is deemed to be made under paragraph 45A is treated as taking place upon the later determination.”

Commencement Information

I11 Sch. 2 para. 5 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1)

6 U.K. In paragraph 39(1)(c) (regulations as to time of supply), for “or 24” substitute “ , 24 or 45A ”.

Commencement Information

I12 Sch. 2 para. 6 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1)

7 U.K. For paragraph 44 substitute—

“44 (1) For the purposes of this Schedule, a taxable supply is a reduced-rate supply if—

(a) the taxable commodity is supplied to a facility specified in a certificate given by the Secretary of State to the Commissioners as a facility which is to be taken as being covered by a climate change agreement for a period specified in the certificate, and

(b) the supply is made at a time falling in that period.

(2) Sub-paragraph (1) has effect subject to paragraph 45.

(3) The Commissioners may by regulations make provision for giving effect to sub-paragraph (1).

(4) Regulations under this paragraph may, in particular, include provision for determining whether any taxable commodity is supplied to a facility.

(5) The provision that may be made by virtue of sub-paragraph (4) includes, in particular, provision for a taxable commodity of any description specified in the regulations to be taken as supplied to a facility only if the commodity is delivered to the facility.”

Commencement Information

I13 Sch. 2 para. 7 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1) (with art. 2(2)(4))

8 (1) Paragraph 45 (reduced-rate supplies: variation of notices under paragraph 44) is amended as follows. U.K.

(2) Omit sub-paragraphs (2) to (4).

(3) In sub-paragraph (5)—

(a) in paragraph (b), for “the variation notice is published” substitute “ the variation certificate is given ”, and

(b) for the words following that paragraph substitute “ the original certificate has effect as if the facility had never been specified in it ”.

(4) In sub-paragraph (6)—

(a) in paragraph (b), for “the variation notice is published” substitute “ the variation certificate is given ”, and

(b) for the words following that paragraph substitute “ the original certificate has effect as if the last day of the period specified for the facility in the original certificate were the day on which the variation certificate is given ”.

(5) In sub-paragraph (7), for the words from “the original notice” to the end substitute “the original certificate has effect as if the last day of the period specified for the facility in the original certificate were the later of—

(a) the day on which the variation certificate is given, and

(b) the day specified in the variation certificate.”

(6) The italic heading before that paragraph accordingly becomes “ Reduced-rate supplies: variation of certificates under paragraph 44 ”.

Commencement Information

I14 Sch. 2 para. 8 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1)

9 U.K. After that paragraph insert—

“Reduced-rate supplies: deemed supply U.K.

45A (1) This paragraph applies where—

(a) a taxable supply has been made to any person (“the recipient”),

(b) the supply was made on the basis that it was a reduced-rate supply, and

(c) it is later determined that the supply was not a reduced-rate supply.

(2) For the purposes of this Schedule—

(a) the recipient is deemed to make a taxable supply to itself of the taxable commodity, and

(b) the amount payable by way of levy on that deemed supply is 80 per cent. of the amount that would be payable if the supply were not a reduced-rate supply.”

Commencement Information

I15 Sch. 2 para. 9 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1) (with art. 2(3)(4))

10 U.K. In paragraph 147 (interpretation), in the definition of “reduced-rate supply”—

(a) for “44(3)” substitute “ 44(1) ”, and

(b) for “44(4)” substitute “ 44(2) ”.

Commencement Information

I16 Sch. 2 para. 10 in force at 1.11.2007 by S.I. 2007/2902, art. 2(1) (with art. 2(2)(4))

Notifications and certificates U.K.

11 (1) Paragraph 11 (exemption: supply not for burning in UK) is amended as follows. U.K.

(2) In sub-paragraph (1)—

(a) omit “has, before the supply is made, notified the supplier”, and

(b) omit “that he” (in both places).

(3) In sub-paragraph (3)—

(a) omit “has, before the supply is made, notified the supplier that”, and

(b) omit “he”.

12 (1) Paragraph 101 (civil penalties: incorrect notifications etc) is amended as follows. U.K.

(2) Omit sub-paragraph (1).

(3) In sub-paragraph (2)—

(a) after “paragraphs” insert “ 11, ” and

(b) after “the certificate is” insert “ (or becomes) ”.

(4) In sub-paragraph (3)—

(a) for “sub-paragraph (1) or (2)” substitute “ this paragraph ”, and

(b) omit “notification or”.

(5) In sub-paragraph (4)—

(a) for “notification or certificate” substitute “ certificate (or not revoking or varying it) ”,

(b) for “the person who gave it” substitute “ the person concerned ”, and

(c) for the words from “there is” to the end substitute “ the person has a reasonable excuse ”.

(6) In sub-paragraph (5)—

(a) for “notification or certificate” substitute “ certificate (or not revoking or varying it) ”, and

(b) for “the giving of the notification or certificate” substitute “ that ”.

(7) The italic heading before paragraph 101 accordingly becomes “ Civil penalties: incorrect certificates ”.

Commencement U.K.

13 (1) Paragraphs 2 to 10 come into force on such day as the Treasury may by order made by statutory instrument appoint. U.K.

(2) But any power to make regulations under any provision inserted or amended by any of those paragraphs may be exercised at any time after this Act is passed.

(3) The power to make an order under sub-paragraph (1)—

(a) may be exercised so as to bring a provision into force only in such cases as may be described in the order,

(b) may be exercised so as to make different provision for different cases or descriptions of case,

(c) includes power to make incidental, consequential, supplemental or transitional provision or savings.

Section 25

SCHEDULE 3 U.K. Managed service companies

Part 1 U.K. Amendments of ITEPA 2003

1 U.K. ITEPA 2003 is amended as follows.

2 U.K. In section 7(5) (meaning of “employment income” etc), for paragraph (a) substitute—

“(a) Chapters 7 to 9 of this Part (agency workers, workers under arrangements made by intermediaries, and workers providing services through managed service companies),”.

3 U.K. In section 48(2) (workers under arrangements made by intermediaries: scope of Chapter) for “or” at the end of paragraph (a) substitute—

“(aa) applies to services provided by a managed service company (within the meaning of Chapter 9 of this Part), or”.

4 U.K. After section 61 insert—

“Chapter 9 U.K. Managed service companies

Application of this Chapter U.K.

61A Scope of this Chapter

(1) This Chapter has effect with respect to the provision of services by a managed service company.

(2) Nothing in this Chapter—

(a) affects the operation of Chapter 7 of this Part (agency workers), or

(b) applies to payments or transfers to which section 966(3) or (4) of ITA 2007 applies (visiting performers: duty to deduct and account for sums representing income tax).

61B Meaning of “managed service company”

(1) A company is a “managed service company” if—

(a) its business consists wholly or mainly of providing (directly or indirectly) the services of an individual to other persons,

(b) payments are made (directly or indirectly) to the individual (or associates of the individual) of an amount equal to the greater part or all of the consideration for the provision of the services,

(c) the way in which those payments are made would result in the individual (or associates) receiving payments of an amount (net of tax and national insurance) exceeding that which would be received (net of tax and national insurance) if every payment in respect of the services were employment income of the individual, and

(d) a person who carries on a business of promoting or facilitating the use of companies to provide the services of individuals (“an MSC provider”) is involved with the company.

(2) An MSC provider is “involved with the company” if the MSC provider or an associate of the MSC provider—

(a) benefits financially on an ongoing basis from the provision of the services of the individual,

(b) influences or controls the provision of those services,

(c) influences or controls the way in which payments to the individual (or associates of the individual) are made,

(d) influences or controls the company's finances or any of its activities, or

(e) gives or promotes an undertaking to make good any tax loss.

(3) A person does not fall within subsection (1)(d) merely by virtue of providing legal or accountancy services in a professional capacity.

(4) A person does not fall within subsection (1)(d) merely by virtue of carrying on a business consisting only of placing individuals with persons who wish to obtain their services (including by contracting with companies which provide their services).

(5) Subsection (4) does not apply if the person or an associate of the person—

(a) does anything within subsection (2)(c) or (e), or

(b) does anything within subsection (2)(d) other than influencing the company's finances or activities by doing anything within subsection (2)(b).

61C Section 61B: supplementary

(1) The Treasury may by order provide that persons of a prescribed description do not fall within section 61B(1)(d).

(2) An order under subsection (1) may be made so as to have effect in relation to the whole of the tax year in which it is made.

(3) In section 61B and this section, “company” means a body corporate or partnership.

(4) References in section 61B to an associate of a person (“P”) include a person who, for the purpose of securing that the individual's services are provided by a company, acts in concert with P (or with P and other persons).

(5) In section 61B(2)(e), “undertaking to make good any tax loss” means an undertaking (in any terms) to make good (in whole or in part, and by any means) any cost to the individual or an associate of the individual resulting from a relevant provision, or a particular kind of relevant provision, applying in relation to payments made to the individual or associate.

(6) In subsection (5) “relevant provision” means—

(a) a provision of the Tax Acts,

(b) an enactment relating to national insurance, or

(c) a provision of subordinate legislation made under any such provision or enactment.

The deemed employment payment U.K.

61D Worker treated as receiving earnings from employment

(1) This section applies if—

(a) the services of an individual (“the worker”) are provided (directly or indirectly) by a managed service company (“the MSC”),

(b) the worker, or an associate of the worker, receives (from any person) a payment or benefit which can reasonably be taken to be in respect of the services, and

(c) the payment or benefit is not earnings (within Chapter 1 of Part 3) received by the worker directly from the MSC.

(2) The MSC is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment (“the deemed employment payment”).

(3) The deemed employment payment is treated as made at the time the payment or benefit mentioned in subsection (1)(b) is received.

(4) In this Chapter—

• “the worker” has the meaning given by subsection (1),

• “the relevant services” means the services mentioned in that subsection, and

• “the client” means the person to whom the relevant services are provided.

(5) Section 61F supplements this section.

61E Calculation of deemed employment payment

(1) The amount of the deemed employment payment is the amount resulting from the following steps—

Step 1

Find (applying section 61F) the amount of the payment or benefit mentioned in section 61D(1)(b).

Step 2

Deduct (applying Chapters 1 to 5 of Part 5) the amount of any expenses met by the worker that would have been deductible from the taxable earnings from the employment if—

(a) the worker had been employed by the client to provide the relevant services, and

(b) the expenses had been met by the worker out of those earnings.

If the result at this point is nil or a negative amount, there is no deemed employment payment.

Step 3

Assume that the result of step 2 represents an amount together with employer's national insurance contributions on it, and deduct what (on that assumption) would be the amount of those contributions.

The result is the deemed employment payment.

(2) In step 2 of subsection (1), the reference to expenses met by the worker includes, where the MSC is a partnership and the worker is a member of the partnership, expenses met by the worker for and on behalf of the partnership.

(3) In step 2 of subsection (1), the expenses deductible include the amount of any mileage allowance relief which the worker would have been entitled to in respect of the use of a vehicle falling within subsection (4) if—

(a) the worker had been employed by the client to provide the relevant services, and

(b) the vehicle had not been a company vehicle (within the meaning of Chapter 2 of Part 4).

(4) A vehicle falls within this subsection if—

(a) it is provided by the MSC for the worker, or

(b) where the MSC is a partnership and the worker is a member of the partnership, it is provided by the worker for the purposes of the business of the partnership.

(5) For the purposes of subsection (1) any necessary apportionment of payments or benefits that are referable partly to the provision of the relevant services and partly to other matters is to be made on a just and reasonable basis.

61F Sections 61D and 61E: application of rules relating to earnings from employment

(1) The following provisions apply for the purposes of sections 61D and 61E.

(2) A “payment or benefit” means anything that, if received by an employee for performing the duties of an employment, would be general earnings from the employment.

(3) The amount of a payment or benefit is taken to be—

(a) in the case of a payment or cash benefit, the amount received, and

(b) in the case of a non-cash benefit, the cash equivalent of the benefit.

(4) The cash equivalent of a non-cash benefit is taken to be—

(a) the amount that would be general earnings if the benefit were general earnings from an employment, or

(b) in the case of living accommodation, whichever is the greater of that amount and the cash equivalent determined in accordance with section 398(2).

(5) A payment or benefit is treated as received—

(a) in the case of a payment or cash benefit, when payment is made of or on account of the payment or benefit;

(b) in the case of a non-cash benefit, when it would have been treated as received for the purposes of Chapter 4 or 5 of this Part (see section 19 or 32) if—

(i) the worker had been an employee, and

(ii) the benefit had been provided by reason of the employment.

61G Application of Income Tax Acts in relation to deemed employment

(1) The Income Tax Acts (in particular, the PAYE provisions) apply in relation to the deemed employment payment as follows.

(2) They apply as if—

(a) the worker were employed by the MSC to provide the relevant services, and

(b) the deemed employment payment were a payment by the MSC of earnings from that employment;

but this is subject to subsection (3).

(3) No deduction under Part 5 (deductions allowed from employment income) or section 232 (mileage allowance relief) may be made from the deemed employment payment.

(4) The worker is not chargeable to tax in respect of the deemed employment payment if, or to the extent that, by reason of any combination of the factors mentioned in subsection (5), the worker would not be chargeable to tax if—

(a) the worker were employed by the client to perform the relevant services, and

(b) the deemed employment payment were a payment by the client of earnings from that employment.

(5) The factors are—

(a) the worker being resident, ordinarily resident or domiciled outside the United Kingdom,

(b) the client being resident or ordinarily resident outside the United Kingdom, and

(c) the relevant services being provided outside the United Kingdom.

(6) Where the MSC is a partnership and the worker is a member of the partnership, the deemed employment payment is treated as received by the worker in the worker's personal capacity and not as income of the partnership.

(7) Where—

(a) the worker is resident in the United Kingdom, and

(b) the relevant services are provided in the United Kingdom,

the MSC is treated as having a place of business in the United Kingdom, whether or not it in fact does so.

Supplementary provisions U.K.

61H Relief in case of distributions by managed service company

(1) A claim for relief may be made under this section where the MSC—

(a) is a body corporate,

(b) is treated as making a deemed employment payment in any tax year, and

(c) either in that tax year (whether before or after that payment is treated as made), or in a subsequent tax year, makes a distribution (a “relevant distribution”).

(2) A claim for relief under this section must be made—

(a) by the MSC by notice to an officer of Revenue and Customs, and

(b) within 5 years after 31st January following the tax year in which the distribution is made.

(3) If on a claim being made an officer of Revenue and Customs is satisfied that relief should be given in order to avoid a double charge to tax, the officer must direct the giving of such relief by way of amending any assessment, by discharge or repayment of tax, or otherwise, as appears to the officer appropriate.

(4) Relief under this section is given by setting the amount of the deemed employment payment against the relevant distribution so as to reduce the distribution.

(5) In the case of more than one relevant distribution, an officer of Revenue and Customs must exercise the power conferred by this section so as to secure that so far as practicable relief is given by setting the amount of a deemed employment payment—

(a) against relevant distributions of the same tax year before those of other years,

(b) against relevant distributions received by the worker before those received by another person, and

(c) against relevant distributions of earlier years before those of later years.

(6) Where the amount of a relevant distribution is reduced under this section, the amount of any associated tax credit is reduced accordingly.

61I Meaning of “associate”

(1) Subsections (2) to (4) apply for the purposes of this Chapter.

(2) “Associate”, in relation to an individual, means—

(a) a member of the individual's family or household,

(b) a relative of the individual,

(c) a partner of the individual, or

(d) the trustee of any settlement in relation to which the individual, or a relative of the individual or member of the individual's family (living or dead), is or was a settlor.

(3) “Associate”, in relation to a company, means a person connected with the company.

(4) “Associate”, in relation to a partnership, means any associate of a member of the partnership.

(5) If—

(a) a managed service company (“the MSC”) is a partnership, and

(b) a person is an associate of another person by virtue only of being a member of the partnership,

the person is to be treated, for the purposes of this Chapter as it applies in relation to the MSC, as if the person were not an associate of that other person.

(6) In subsection (2), “relative” means ancestor, lineal descendant, brother or sister.

(7) For the purposes of subsection (2)—

(a) a man and woman living together as husband and wife are treated as if they were married to each other, and

(b) two persons of the same sex living together as if they were civil partners of each other are treated as if they were civil partners of each other.

61J Interpretation of Chapter

(1) In this Chapter—

• “associate” has the meaning given by section 61I,

• “business” means any trade, profession or vocation,

• “the client” has the meaning given by section 61D(4),

• “employer's national insurance contributions” means secondary Class 1 or Class 1A national insurance contributions,

• “managed service company” has the meaning given by section 61B,

• “national insurance contributions” means contributions under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992,

• “PAYE provisions” means the provisions of Part 11 or PAYE regulations,

• “the relevant services” has the meaning given by section 61D(4), and

• “the worker” has the meaning given by section 61D(4).

(2) Nothing in section 995 of ITA 2007 (meaning of control) applies for the purposes of this Chapter.”

5 U.K. In section 218(1) (exclusion of lower-paid employments from parts of benefits code: calculation of earnings rate), in Step 1, at the end of paragraph (d) insert “and

(e) in the case of an employment within section 61G(2) (deemed employment payment by managed service company), the total amount of deemed employment payments for the year.”

6 U.K. After section 688 insert—

“688A Managed service companies: recovery from other persons

(1) PAYE regulations may make provision authorising the recovery from a person within subsection (2) of any amount that an officer of Revenue and Customs considers should have been deducted by a managed service company (“the MSC”) from a payment of, or on account of, PAYE income of an individual.

(2) The persons are—

(a) a director or other office-holder, or an associate, of the MSC,

(b) an MSC provider,

(c) a person who (directly or indirectly) has encouraged or been actively involved in the provision by the MSC of the services of the individual, and

(d) a director or other office-holder, or an associate, of a person (other than an individual) who is within paragraph (b) or (c).

(3) A person does not fall within subsection (2)(c) merely by virtue of—

(a) providing legal or accountancy advice in a professional capacity, or

(b) placing the individual with persons who wish to obtain the services of the individual (including by contracting with the MSC for the provision of those services).

(4) The supplementary provision that may be made by the regulations includes provision as to the liability of one person within subsection (2) to another such person.

(5) In this section—

• “associate” has the meaning given by section 61I,

• “director” has the meaning given by section 67,

• “managed service company” has the meaning given by section 61B, and

• “MSC provider” means an MSC provider who is involved with the MSC (within the meaning of section 61B).

(6) Section 61C(4) (extended meaning of “associate”) applies for the purposes of subsection (2)(d).

(7) The Treasury may by order amend this section (but not this subsection or subsection (8)).

(8) The Treasury must not make an order under subsection (7) unless a draft of it has been laid before and approved by a resolution of the House of Commons.”

7 U.K. In section 717(4) (orders and regulations not subject to negative procedure), insert at the end “ or section 688A(7) (PAYE regulations: managed service companies) ”.

8 U.K. In Part 2 of Schedule 1 (index of defined expressions), insert at the appropriate places—

“associate (in Chapter 9 of Part 2)

section 61I (but see section 61C(4))”

“business (in Chapter 9 of Part 2)

section 61J”

“the client (in Chapter 9 of Part 2)

section 61D(4)”

“employer's national insurance contributions (in Chapter 9 of Part 2)

section 61J”

“managed service company (in Chapter 9 of Part 2)

section 61B”

“national insurance contributions (in Chapter 9 of Part 2)

section 61J”

“PAYE provisions (in Chapter 9 of Part 2)

section 61J”

“the relevant services (in Chapter 9 of Part 2)

section 61D(4)”

“the worker (in Chapter 9 of Part 2)

section 61D(4)”.

Part 2 U.K. Calculation of profits of MSCs: deduction for deemed employment payments

Deduction for deemed employment payments for income tax purposes U.K.

9 U.K. In ITTOIA 2005, after section 164 insert—

“Managed service companies U.K.

164A Deduction for deemed employment payments

(1) This section applies for the purpose of calculating the profits of a trade, profession or vocation carried on by a managed service company (“the MSC”) which is treated as making a deemed employment payment in connection with the trade, profession or vocation.

(2) A deduction is allowed for—

(a) the amount of the deemed employment payment, and

(b) the amount of any employer's national insurance contributions paid by the MSC in respect of it.

(3) The deduction is allowed for the period of account in which the deemed employment payment is treated as made.

(4) The amount of the deduction allowed under subsection (2) is limited to the amount that reduces the profits of the firm for the tax year to nil.

(5) No deduction in respect of—

(a) the deemed employment payment, or

(b) any employer's national insurance contributions paid by the MSC in respect of it,

may be made except in accordance with this section.

(6) In this section “deemed employment payment”, “employer's national insurance contributions” and “managed service company” have the same meaning as in Chapter 9 of Part 2 of ITEPA 2003.”

Deduction for deemed employment payments for corporation tax purposes U.K.

F48 10 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F48 Sch. 3 para. 10 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 724, Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Section 26

SCHEDULE 4 U.K. Restrictions on trade loss relief for partners

Limit on amount of sideways relief and capital gains relief available in any tax year U.K.

1 (1) In ITA 2007, before section 104 (and the italic cross-heading before it) insert— U.K.

“Limit on amount of sideways relief and capital gains relief U.K.

103C Limit on reliefs in any tax year not to exceed cap for tax year

(1) This section applies if an individual carries on one or more trades—

(a) as a non-active partner in a firm during a tax year, or

(b) as a limited partner in a firm at a time in that tax year,

and the individual makes a loss in any of those trades (an “affected loss”) in that tax year.

(2) There is a restriction on the amount of sideways relief and capital gains relief which (after applying the restrictions under the other provisions of this Chapter) may be given to the individual for any affected loss (but see subsections (6) and (7)).

(3) The restriction is that the total amount of the sideways relief and capital gains relief given to the individual for all the affected losses must not exceed the cap for that tax year.

(4) The cap for any tax year is £25,000.

(5) The Treasury may by order amend the sum for the time being specified in subsection (4).

(6) The restriction under this section does not apply to so much of any affected loss as derives from qualifying film expenditure (see section 103D).

(7) The restriction under this section does not affect the giving of sideways relief for a loss made in a trade against the profits of that trade.

(8) In this section “trade” does not include a trade which consists of the underwriting business of a member of Lloyd's (within the meaning of section 184 of FA 1993).”

(2) The amendment made by sub-paragraph (1) has effect in relation to any loss made by an individual in a trade in the tax year 2007-08 or any subsequent tax year.

(3) But, in the case of a loss made by an individual in a trade in a tax year the basis period for which begins before 2nd March 2007 (a “straddling basis period”), the amount of that loss for the purposes of section 103C of ITA 2007 is—

(a) the amount of sideways relief and capital gains relief which (after applying the restrictions under the other provisions of Chapter 3 of Part 4 of that Act) may be given to the individual for that loss, less

(b) the amount (if any) of the pre-announcement loss.

(4) “The pre-announcement loss” is determined as follows.

(5) Calculate the profits or losses of the straddling basis period, but without regard to capital allowances and qualifying film expenditure (within the meaning of section 103D of ITA 2007).

(6) If that calculation produces a loss and the individual has made a contribution of an amount as capital to the firm or LLP in question—

(a) on or before the start of the straddling basis period, or

(b) after the start of that period but before 2nd March 2007,

apportion the loss produced by that calculation to the part of the straddling basis period which begins with the relevant date and falls before 2nd March 2007 in proportion to the number of days in that part.

(7) Calculate so much of the loss of the straddling basis period as derives from relevant pre-announcement capital expenditure.

(8) The pre-announcement loss is the sum of—

(a) the amount of the loss apportioned under sub-paragraph (6) (if any), and

(b) so much of the loss of the straddling basis period (if any) as derives from relevant pre-announcement capital expenditure.

(9) In sub-paragraph (6) “the relevant date” means—

(a) in any case where a contribution was made on or before the start of the straddling basis period, the start of that period, and

(b) in any other case, the date on which the contribution was made or, if more than one contribution was made, the date on which the first contribution was made.

(10) For the purposes of this paragraph the amount of the loss of the straddling basis period that derives from relevant pre-announcement capital expenditure is determined on a just and reasonable basis.

(11) In this paragraph “relevant pre-announcement capital expenditure” means—

(a) any capital allowance in respect of expenditure paid before 2nd March 2007, and

(b) any capital allowance in respect of expenditure paid on or after that date pursuant to an unconditional obligation in a contract made before that date,

and for this purpose “an unconditional obligation” means an obligation which may not be varied or extinguished by the exercise of any right conferred on the firm or LLP in question (whether or not under the contract).

(12) For the purposes of this paragraph—

(a) an amount of money is not to be taken as contributed as capital to a firm or LLP until the money is paid to the firm or LLP, and

(b) a right or other asset is not to be taken as contributed as capital to a firm or LLP until it is transferred to the firm or LLP.

(13) Section 62 of ITA 2007 (partners: losses of a tax year etc) applies for the purposes of this paragraph as it applies for the purposes of Chapter 3 of Part 4 of that Act.

Disregard of contributions made for purpose of accessing sideways relief and capital gains relief U.K.

2 (1) In ITA 2007, before section 114 insert— U.K.

“Exclusion of amounts in calculating contribution to the firm or LLP U.K.

113A Exclusion of amounts contributed to access relief

(1) An amount which an individual contributes to a firm as capital is to be excluded in calculating the individual's contribution to the firm for the purposes of section 104 or 110 if the contribution was made for a prohibited purpose (but see subsection (4)).

(2) If—

(a) an individual carries on a trade as a member of an LLP at a time in a tax year,

(b) the individual does not devote a significant amount of time to the trade in the relevant period for that year, and

(c) the individual contributes an amount to the LLP as capital at any time in that year,

that amount is to be excluded in calculating the individual's contribution to the LLP for the purposes of section 107 if the contribution was made for a prohibited purpose (but see subsection (4)).

(3) For the purposes of this section a contribution is made for a prohibited purpose if the main purpose, or one of the main purposes, of making the contribution is the obtaining of a reduction in tax liability by means of sideways relief or capital gains relief.

(4) This section has no effect in relation to the application of any restriction under section 104, 107 or 110 to any loss that derives wholly from qualifying film expenditure.”

(2) The amendment made by sub-paragraph (1) has effect in relation to any amount contributed to a firm or LLP as capital on or after 2nd March 2007 (but see sub-paragraph (4)).

(3) For this purpose—

(a) an amount of money is not to be taken as contributed as capital to a firm or LLP until the money is paid to the firm or LLP, and

(b) a right or other asset is not to be taken as contributed as capital to a firm or LLP until it is transferred to the firm or LLP.

(4) The amendment made by sub-paragraph (1) has no effect in relation to any amount contributed by an individual on or after 2nd March 2007 if—

(a) the amount is contributed pursuant to an obligation in a contract made before that date, and

(b) the obligation may not be varied or extinguished by the exercise of any right conferred on the individual (whether or not under the contract).

Provision corresponding to paragraphs 1 and 2 for tax year 2006-07 U.K.

3 (1) ICTA has effect, in relation to any loss made by an individual in a trade in the tax year 2006-07 the basis period for which ends on or after 2nd March 2007, as if provision corresponding to section 103C of ITA 2007 were included in Chapter 7 of Part 4 of ICTA. U.K.

(2) Sub-paragraphs (3) to (13) of paragraph 1 apply for the purposes of sub-paragraph (1) above.

(3) ICTA has effect for the tax year 2006-07 as if provision corresponding to section 113A of ITA 2007 were included in that Chapter.

(4) Sub-paragraphs (2) to (4) of paragraph 2 apply for the purposes of sub-paragraph (3) above.

(5) The provisions which are treated by this paragraph as included in Chapter 7 of Part 4 of ICTA have effect as if—

(a) any reference in section 103C of ITA 2007 to sideways relief were to relief under section 380 or 381 of ICTA,

(b) any reference in section 103C of ITA 2007 to capital gains relief in relation to a loss were to the treatment of the loss as an allowable loss by virtue of section 72 of FA 1991,

(c) any reference in section 103C or 113A of ITA 2007 to any provision of Chapter 3 of Part 4 of ITA 2007 were to the corresponding provision of Chapter 7 of Part 4 of ICTA, and

(d) any reference in section 113A of ITA 2007 to a contribution to a firm or an LLP were to a contribution to a trade carried on by the firm or LLP,

and references in paragraphs 1(3) to (13) and 2(2) to (4) to any of those expressions are to be read accordingly.

Consequential amendments U.K.

4 U.K. ITA 2007 is amended as follows.

5 U.K. In section 32 (liability not dealt with in the calculation), for “section 112(5)” substitute “ section 103B(5) ”.

6 U.K. In section 82(a) (exploitation of films), for “sections 115 and 116” substitute “ section 115 ”.

7 (1) Section 102 (overview of Chapter 3 of Part 4) is amended as follows. U.K.

(2) In subsection (1)—

(a) in paragraph (a), for “104 to 106 and section 114)” substitute “ 103A, 103C to 105, 113A and 114) ”,

(b) in paragraph (b), for “107 to 109 and section 114)” substitute “ 103C, 103D, 107 to 109, 113A and 114) ”, and

(c) in paragraph (c), for “in an early tax year (see sections 110 to 114)” substitute “ (see sections 103B to 103D and 110 to 114) ”.

(3) In subsection (2), for “sections 115 and 116” substitute “ section 115 ”.

8 U.K. After section 103 insert—

“103A Meaning of “limited partner”

(1) In this Chapter “limited partner” means an individual who carries on a trade—

(a) as a limited partner in a limited partnership registered under the Limited Partnerships Act 1907,

(b) as a partner in a firm who in substance acts as a limited partner in relation to the trade (see subsection (2)), or

(c) while the condition mentioned in subsection (3) is met in relation to the individual.

(2) An individual in substance acts as a limited partner in relation to a trade if the individual—

(a) is not entitled to take part in the management of the trade, and

(b) is entitled to have any liabilities (or those beyond a certain limit) for debts or obligations incurred for the purposes of the trade met or reimbursed by some other person.

(3) The condition referred to in subsection (1)(c) is that—

(a) the individual carries on the trade jointly with other persons,

(b) under the law of a territory outside the United Kingdom, the individual is not entitled to take part in the management of the trade, and

(c) under that law, the individual is not liable beyond a certain limit for debts or obligations incurred for the purposes of the trade.

(4) In the case of an individual who is a limited partner as a result of subsection (1)(c), references in this Chapter to the individual's firm are to be read as references to the relationship between the individual and the other persons mentioned in subsection (3)(a).

103B Meaning of “non-active partner” etc

(1) For the purposes of this Chapter an individual carries on a trade as a non-active partner during a tax year if the individual—

(a) carries on the trade as a partner in a firm at a time during the year,

(b) does not carry on the trade as a limited partner at any time during the year, and

(c) does not devote a significant amount of time to the trade in the relevant period for the year.

(2) For the purposes of this Chapter an individual devotes a significant amount of time to a trade in the relevant period for a tax year if, in that period, the individual spends an average of at least 10 hours a week personally engaged in activities carried on for the purposes of the trade.

(3) For this purpose “the relevant period” means the basis period for the tax year (unless the basis period is shorter than 6 months).

(4) If the basis period for the tax year is shorter than 6 months, “the relevant period” means—

(a) the period of 6 months beginning with the date on which the individual first started to carry on the trade (if the basis period begins with that date), or

(b) the period of 6 months ending with the date on which the individual permanently ceased to carry on the trade (if the basis period ends with that date).

(5) If—

(a) any relief is given on the assumption that the individual devoted or will devote a significant amount of time to the trade in the relevant period for a tax year, but

(b) the individual in fact failed or fails to do so,

the relief is withdrawn by the making of an assessment to income tax under this section.”

9 U.K. After section 103C (as inserted by paragraph 1(1) above) insert—

“103D Meaning of “qualifying film expenditure”

(1) For the purposes of this Chapter expenditure is qualifying film expenditure if—

(a) it is deducted under a relevant film provision for the purposes of the calculation required by section 849 of ITTOIA 2005 (calculation of firm's profits or losses), or

(b) it is incidental expenditure which (although not deducted under a relevant film provision) is incurred in connection with the production of a film, or the acquisition of the original master version of a film, in relation to which expenditure is so deducted.

(2) Expenditure is incidental if it is on management, administration or obtaining finance.

(3) The extent to which expenditure is within subsection (1)(b) is determined on a just and reasonable basis.

(4) For the purposes of this Chapter the amount of any loss that derives from qualifying film expenditure is determined on a just and reasonable basis.

(5) In this section—

• “the acquisition of the original master version of a film” has the same meaning as in Chapter 9 of Part 2 of ITTOIA 2005 (see sections 130 and 132 of that Act),

• “film” is to be read in accordance with paragraph 1 of Schedule 1 to the Films Act 1985, and

• “a relevant film provision” means any one of sections 137 to 140 of ITTOIA 2005 (relief for certified master versions of films).”

10 U.K. In—

(a) section 104(5) (restriction on reliefs for limited partners),

(b) section 107(2) (restriction on reliefs for members of LLPs),

(c) section 110(1)(a) (restriction on reliefs for non-active partners in early tax years), and

(d) section 115(1)(d) (restrictions on relief for firms exploiting films),

omit “(see section 112)”.

11 U.K. In—

(a) section 105(11) (meaning of “contribution to the firm” for purposes of section 104),

(b) section 108(9) (meaning of “contribution to the LLP” for purposes of section 107), and

(c) section 111(12) (meaning of “contribution to the firm” for purposes of section 110),

for the words from “any regulations” to “excluded” substitute “ section 113A and any regulations made under section 114 (exclusion of amounts ”.

12 U.K. Omit section 106 (meaning of “limited partner”).

13 U.K. In section 112 (meaning of “non-active partner” and “early tax year” etc)—

(a) omit subsections (1) to (5), and

(b) the heading accordingly becomes “ Meaning of “early tax year” ”.

14 U.K. Omit the italic-cross heading before section 114 (regulations: exclusion of amounts in calculating contribution to the firm or LLP) and for the heading of that section substitute “ Power to exclude other amounts ”.

15 U.K. In section 115 (restrictions on reliefs for firms exploiting films), for subsection (4) substitute—

“(4) The restrictions under this section do not apply to so much of the loss (if any) as derives from qualifying film expenditure.”

16 U.K. Omit section 116 (exclusion from restrictions under section 115: certain film expenditure).

17 U.K. In section 792 (partners claiming excess sideways or capital gains relief)—

(a) in subsection (7), for “106” substitute “ 103A ”, and

(b) in subsection (8), for “106(3)(a)” substitute “ 103A(3)(a) ”.

18 U.K. In section 809 (individuals in partnership claiming relief for licence-related trading losses: other definitions)—

(a) in subsection (1), for “112” substitute “ 103B ”, and

(b) in subsection (2), for “112(1)(b)” substitute “ 103B(1)(b) ”.

19 U.K. In paragraph 148(3)(b) of Schedule 2 (transitionals and savings: tax avoidance)—

(a) for “106” substitute “ 103A ”, and

(b) for “112” substitute “ 103B ”.

20 U.K. In Schedule 4 (index of defined expressions)—

(a) in the definition of “limited partner”, for “106” substitute “ 103A ”,

(b) in the definition of “non-active partner”, for “112” substitute “ 103B ”, and

(c) after the definition of “qualifying donation (in Chapter 2 of Part 8)” insert—

“qualifying film expenditure (in Chapter 3 of Part 4)

section 103D”.

21 U.K. The amendments made by paragraphs 5 to 20 are deemed always to have had effect.

Section 30

SCHEDULE 5 U.K. Avoidance involving financial arrangements

Amounts not forming part of a company's income U.K.

1 (1) ICTA is amended as follows. U.K.

(2) In section 347A(1) (annual payments: general rule), as it had effect before ITA 2007, omit paragraph (b) together with the “and” before it (payment to which section applies not income of any company for corporation tax purposes).

(3) The amendment made by sub-paragraph (2) has effect in relation to payments made on or after 6th December 2006 but before 6th April 2007.

(4) Omit section 347A (as amended by ITA 2007).

(5) The amendment made by sub-paragraph (4) has effect in relation to payments made on or after 6th April 2007.

2 (1) In section 660C of ICTA, omit subsection (4) (income which is income of settlor alone for income tax purposes by virtue of section 624 or 629 of ITTOIA 2005 not income of any company for corporation tax purposes). U.K.

(2) The amendment made by sub-paragraph (1) has effect in relation to accounting periods ending on or after 6th March 2007.

(3) But income which arises in an accounting period beginning before that date is to be chargeable to corporation tax as a result of that amendment only if it arises on or after that date.

Structured finance arrangements U.K.

F49 F50 3 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F49 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 10 (with Sch. 9 paras. 1-9, 22)

F50 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

F49 F50 4 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F49 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 10 (with Sch. 9 paras. 1-9, 22)

F50 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

F49 F50 5 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F49 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 10 (with Sch. 9 paras. 1-9, 22)

F50 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

F49 F50 6 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F49 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 10 (with Sch. 9 paras. 1-9, 22)

F50 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

F49 F50 7 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F49 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 10 (with Sch. 9 paras. 1-9, 22)

F50 Sch. 5 paras. 3-7 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

8 (1) Section 263E of TCGA 1992 (structured finance arrangements) is amended as follows. U.K.

(2) In subsection (2) (condition A: person making disposal of asset subsequently acquires it), for the words from “subsequently” to the end substitute “ (and no-one else) has the right or obligation under the arrangement to acquire the asset disposed of by that disposal at any subsequent time (whether or not the right or obligation is subject to any conditions). ”

(3) In subsection (3) (condition B: asset ceases to exist)—

(a) in paragraph (a), for “subsequently ceases” substitute “ will subsequently cease ”, and

(b) in paragraph (b), for “that asset was held” substitute “ it is intended that that asset will be held ”.

(4) After subsection (4) insert—

“(4A) If, at any time after that disposal, it becomes apparent that—

(a) the person making the disposal will not subsequently acquire under the arrangement the asset disposed of by that disposal, or

(b) that asset will not be held as mentioned in subsection (3)(b),

that person is to be treated for the purposes of this Act as disposing of that asset at that time for a consideration equal to its market value at that time.”

(5) In subsection (5) (disregard of subsequent acquisitions), for “Any” substitute “ Except in a case falling within subsection (4A), any ”.

(6) The amendments made by this paragraph have effect in relation to disposals made on or after 6th March 2007.

(7) The amendments made by this paragraph also have effect in relation to any disposal made by a person before that date if the person makes a claim to that effect under this sub-paragraph.

Manufactured payments under arrangements having an unallowable purpose U.K.

F51 9 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F51 Sch. 5 para. 9 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

Options and groups of companies U.K.

10 (1) In section 171(2) of TCGA 1992 (exceptions to rule that disposals within the same group of companies produce neither a gain nor a loss), after paragraph (da) insert “or U.K.

(db) a disposal by company A in fulfilment of its obligations under an option granted to company B at a time when those companies were not members of the same group;”.

(2) The amendment made by sub-paragraph (1) has effect in relation to cases where the option is exercised on or after 6th March 2007 (whenever the option was granted).

Loan relationships: amounts not fully recognised for accounting purposes U.K.

F52 11 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 Sch. 5 paras. 11-16 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Shares treated as loan relationships U.K.

F52 12 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 Sch. 5 paras. 11-16 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F52 13 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 Sch. 5 paras. 11-16 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F52 14 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 Sch. 5 paras. 11-16 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Exchange gains and losses where loan not on arm's length terms U.K.

F52 15 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 Sch. 5 paras. 11-16 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Loan relationships and collective investment schemes U.K.

F52 16 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 Sch. 5 paras. 11-16 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Plant or machinery subject to a lease and finance leaseback U.K.

17 (1) Chapter 17 of Part 2 of CAA 2001 (plant and machinery allowances: anti-avoidance) is amended as follows. U.K.

(2) In section 228A(2) (application of sections 228B to 228D in case of a lease and finance leaseback), for “Sections 228B to 228D” substitute “ Sections 228B and 228C ”.

(3) In section 228F (lease and finance leaseback)—

(a) in subsection (1), for “Sections 228B, 228C and 228D” substitute “ Sections 228B and 228C ”,

(b) omit subsection (4), and

(c) in subsection (8), for “sections 228B to 228D” substitute “ sections 228B and 228C ” and omit paragraph (b) (together with the “and” before it).

F53 F54 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The amendments made by this paragraph have effect in relation to post-commencement rentals that fall to be taken into account in calculating for tax purposes the income or profits for any post-commencement period of account.

(6) In this paragraph—

• “post-commencement period of account” means any period of account ending on or after 6th December 2006, and

• “post-commencement rental” means—

  (a)

  any amount receivable on or after 6th December 2006 in respect of any period beginning on or after that date, or

  (b)

  the appropriate fraction of any amount receivable on or after that date in respect of any period beginning before, and ending on or after, that date,

  but does not include any amount received before that date.

(7) For this purpose the “appropriate fraction”, in relation to any amount received in respect of any period, means the fraction—

where—

“PCP” means the number of days in the part of the period falling on or after 6th December 2006, and

“WP” means the number of days in the whole of the period.

(8) Sub-paragraph (9) applies if the amounts that, in accordance with section 228D of CAA 2001 as applied by section 228F of that Act, fall to be taken into account in calculating for tax purposes the income or profits for any post-commencement period of account comprise both post-commencement rentals and other amounts.

(9) For the purposes of section 228D of CAA 2001 as applied by section 228F of that Act, the amount of the gross earnings is taken to be so much of the gross earnings as, on a just and reasonable basis, relates to those other amounts.

“Gross earnings” has the meaning given by section 228D(5) of CAA 2001.

Textual Amendments

F53 Sch. 5 para. 17(4) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

F54 Sch. 5 para. 17(4) repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 10 (with Sch. 9 paras. 1-9, 22)

Derivative contracts: contracts treated for accounting purposes as financial asset or liability U.K.

F55 18 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F55 Sch. 5 para. 18 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Derivative contracts: transfers of value to connected companies U.K.

F56 19 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F56 Sch. 5 para. 19 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Section 31

SCHEDULE 6 U.K. Companies carrying on business of leasing plant or machinery

Company reconstructions without change of ownership U.K.

F57 1 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F57 Sch. 6 paras. 1, 2 repealed (1.4.2010) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

Sale etc of lessor companies etc U.K.

F57 2 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F57 Sch. 6 paras. 1, 2 repealed (1.4.2010) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

Section 38

SCHEDULE 7 U.K. Insurance business: gross roll-up business etc

Part 1 U.K. Amendments

Taxes Management Act 1970 (c. 9) U.K.

1 U.K. In section 98 of TMA 1970 (special returns etc), in the Table, omit the entries relating to section 333B of ICTA.

Income and Corporation Taxes Act 1988 (c. 1) U.K.

2 U.K. ICTA is amended as follows.

F58 3 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F58 Sch. 7 para. 3 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

4 U.K. Omit section 333B (involvement of insurance companies with plans and accounts).

5 U.K. In section 403E (relief for overseas losses of UK resident companies), omit subsection (3).

F59 6 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F59 Sch. 7 para. 6 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

7 U.K. In section 431A(3)(a) (power to amend), omit “and Schedule 19AA”.

F60 8 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F60 Sch. 7 paras. 8-14 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F60 9 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F60 Sch. 7 paras. 8-14 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F60 10 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F60 Sch. 7 paras. 8-14 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F60 11 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F60 Sch. 7 paras. 8-14 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F60 12 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F60 Sch. 7 paras. 8-14 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F60 13 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F60 Sch. 7 paras. 8-14 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F60 14 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F60 Sch. 7 paras. 8-14 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

15 U.K. In section 432AB (losses from Schedule A business or overseas property business), omit subsection (6).

F61 16 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F61 Sch. 7 para. 16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F62 17 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F62 Sch. 7 para. 17 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

18 U.K. Omit section 432D (section 432B apportionment: value of non-participating funds).

F63 19 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F63 Sch. 7 para. 19 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

20 U.K. In section 432F(2) (section 432B apportionment: supplementary provisions)—

(a) omit “For each category of business in relation to which section 432E falls to be applied”, and

(b) omit “, after making any reduction required by section 432E(5),”.

F64 21 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F64 Sch. 7 paras. 21-23 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F64 22 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F64 Sch. 7 paras. 21-23 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F64 23 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F64 Sch. 7 paras. 21-23 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

24 U.K. Omit section 436 (pension business: separate charge on profits).

F65 25 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F65 Sch. 7 para. 25 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F66 26 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F66 Sch. 7 para. 26 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

27 U.K. Omit section 438B (income or gains arising from property investment LLP).

28 U.K. Omit section 438C (determination of policy holders' share for purposes of s.438B).

29 U.K. Omit section 439 (restricted government securities).

30 U.K. Omit section 439B (life reinsurance business: separate charge on profits).

F67 31 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F67 Sch. 7 paras. 31-33 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F67 32 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F67 Sch. 7 paras. 31-33 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F67 33 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F67 Sch. 7 paras. 31-33 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

34 U.K. Omit section 441 (overseas life assurance business).

F68 35 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F68 Sch. 7 paras. 35-38 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F68 36 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F68 Sch. 7 paras. 35-38 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F68 37 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F68 Sch. 7 paras. 35-38 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F68 38 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F68 Sch. 7 paras. 35-38 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

39 U.K. Omit sections 458 and 458A (capital redemption business).

F69 40 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F69 Sch. 7 para. 40 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 18 para. 23(e)(ii)

41 U.K. In section 461 (registered friendly societies: other business), omit subsection (3A).

42 U.K. In section 461B (incorporated friendly societies), omit subsection (2A).

F70 43 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F70 Sch. 7 para. 43 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 18 para. 23(e)(ii)

F71 44 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F71 Sch. 7 para. 44 omitted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 17(11)(g)

F72 45 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F72 Sch. 7 para. 45 omitted (with effect in accordance with Sch. 14 para. 18 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 14 para. 17(p)

F73 46 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F73 Sch. 7 para. 46 omitted (with effect in accordance with Sch. 14 para. 18 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 14 para. 17(p)

47 (1) Section 755A (treatment of chargeable profits and creditable tax apportioned to company carrying on life assurance business) is amended as follows. U.K.

(2) In subsection (4), for the words after “referable to” substitute “ gross roll-up business carried on by the UK company. ”

(3) In subsection (6)(c), for “a category of business specified in paragraphs (a) to (c) of subsection (4) above” substitute “ gross roll-up business ”.

(4) In subsection (13), for paragraphs (a) to (d) substitute—

“(a) basic life assurance and general annuity business, or

(ba) gross roll-up business,”.

F74 48 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 7 paras. 48-53 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

F74 49 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 7 paras. 48-53 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

F74 50 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 7 paras. 48-53 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

F74 51 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 7 paras. 48-53 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

F74 52 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 7 paras. 48-53 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

F74 53 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 7 paras. 48-53 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

F75 54 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F75 Sch. 7 para. 54 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

55 U.K. Omit Schedule 19AA (overseas life assurance fund).

F76 F77 56 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F76 Sch. 7 para. 56 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F77 Sch. 7 para. 56 omitted (with effect in accordance with Sch. 16 para. 6 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 16 para. 5(i) (with Sch. 16 paras. 78)

Finance Act 1989 (c. 26) U.K.

F78 57 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F78 Sch. 7 paras. 57-59 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F78 58 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F78 Sch. 7 paras. 57-59 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F78 59 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F78 Sch. 7 paras. 57-59 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

Taxation of Chargeable Gains Act 1992 (c. 12) U.K.

60 U.K. TCGA 1992 is amended as follows.

61 U.K. In section 204(10) (policies of insurance and non-deferred annuities)—

(a) for “as defined in section 458(3)” substitute “ within the meaning of Chapter 1 of Part 12 ”, and

(b) omit “other”.

62 U.K. In section 210B—

(a) omit paragraph (b) of subsection (6) and the word “or” before it, and

(b) in subsection (8) (disposal and acquisition of section 440A securities), in the definition of “chargeable section 440A holding”, for “(2)(a)(iii)” substitute “ (2)(a)(i) ”.

63 U.K. In section 212(2) (annual deemed disposal of holdings of certain assets), for the words from “pension business” to the end substitute “ gross roll-up business ”.

64 U.K. In section 213(1A) (spreading of gains and losses under section 212), omit the words following “general annuity business”.

Finance Act 1996 (c. 8) U.K.

F79 65 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F79 Sch. 7 paras. 65-67 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F79 66 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F79 Sch. 7 paras. 65-67 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F79 67 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F79 Sch. 7 paras. 65-67 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Capital Allowances Act 2001 (c. 2) U.K.

68 U.K. CAA 2001 is amended as follows.

69 (1) Section 255 (apportionment of allowances and charges) is amended as follows. U.K.

(2) For subsections (1) and (1A) substitute—

“(1) Except where subsection (3) applies, any allowance to which the company is entitled, and any charge to which it is liable, for a chargeable period in respect of a management asset must be apportioned between basic life assurance and general annuity business, gross roll-up business and PHI business in accordance with subsections (1A) and (1B).

(1A) The allowance or charge is to be apportioned to a category of business using the formula—

where—

A is the amount of the allowance or charge,

B is the mean of the opening and closing liabilities of that category of business, and

C is the mean of the opening and closing liabilities of all the categories of business mentioned in subsection (1) which are carried on by the company.

(1B) If C is nil or below nil, the allowance or charge to be apportioned to a category of business is such as is just and reasonable.”

(3) Omit subsection (2).

(4) In subsection (3)—

(a) in paragraph (a), for “section 441 of ICTA in respect of its overseas life assurance business” substitute “ section 436A of ICTA (gross roll-up business) ”, and

(b) in paragraph (b), for “provided outside the United Kingdom for use for the management of that business” substitute “ held for the purposes of a permanent establishment outside the United Kingdom at or through which the company carries on gross roll-up business ”.

70 (1) Section 256 (different giving effect rules for different categories of business) is amended as follows. U.K.

(2) In subsection (3), for paragraphs (a) to (c) substitute “ section 436A of ICTA (gross roll-up business) ”.

(3) In subsection (4)—

(a) for “profit” substitute “ profits ”,

(b) in paragraph (a), for “any particular category of business” substitute “ gross roll-up business ” and for “that category of business” substitute “ its gross roll-up business ”, and

(c) in paragraph (b), for “any particular category of business” substitute “ gross roll-up business ” and for “that category of business” substitute “ its gross roll-up business ”.

71 (1) Section 545 (investment assets) is amended as follows. U.K.

(2) In subsection (3), in the second sentence, for “sections 432ZA to 432E, or section 438B,” substitute “ section 432A ”.

(3) In subsection (5)—

(a) for the words from “under—” to “no allowance” substitute “ under section 436A of ICTA (gross roll-up business), no allowance ”, and

(b) for “the category of life assurance business in question” substitute “ gross roll-up business ”.

Finance Act 2001 (c. 9) U.K.

F80 72 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F80 Sch. 7 para. 72 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Finance Act 2002 (c. 23) U.K.

73 U.K. FA 2002 is amended as follows.

F81 74 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F81 Sch. 7 para. 74 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F82 75 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F82 Sch. 7 para. 75 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Income Tax (Trading and Other Income) Act 2005 (c. 5) U.K.

76 U.K. ITTOIA 2005 is amended as follows.

77 U.K. In section 473(2) (policies and contracts to which Chapter 9 applies), in the definition of “capital redemption policy”, for “as defined in section 458(3)” substitute “ within the meaning of Chapter 1 of Part 12 ”.

F83 78 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F83 Sch. 7 para. 78 omitted (with effect in accordance with Sch. 17 para. 27(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 27(2)

79 U.K. In Schedule 2 (transitionals and savings etc), in paragraph 118(2), for “from “other than” onwards in the definition of “annuity business”” substitute “ following paragraph (b) in the definition of “life assurance business” ”.

Part 2 U.K. Transitional provisions

Introduction U.K.

F84 80 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F84 Sch. 7 paras. 80-84 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

Carry forward of unused pension business losses U.K.

F84 81 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F84 Sch. 7 paras. 80-84 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

Carry forward of unused non-pension business losses U.K.

F84 82 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F84 Sch. 7 paras. 80-84 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

F84 83 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F84 Sch. 7 paras. 80-84 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

“Section 432F(2) excesses” U.K.

F84 84 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F84 Sch. 7 paras. 80-84 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(i)

[F85 [F86 Losses transferred under section 444AZA] U.K.

Textual Amendments

F85 Sch. 7 paras 85, 86 and cross-headings added (with effect in accordance with art. 1(5) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 30

F86 Sch. 7 para. 85 cross-heading substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 725(3) (with Sch. 2 Pts. 1, 2)

85. (1) This paragraph applies where a loss F87 ... is treated by virtue of section 444AZA of ICTA as a loss of the transferee F87 .... U.K.

(2) Where any [F88 losses so treated] would (assuming the transferor had continued to carry on the business transferred after the transfer) have been losses to which paragraph 81(1) would have applied, the amount of such losses to be treated as [F89 losses of the transferee] in any period of account must not exceed—

where—

• “GRBP” has the same meaning as in section 444AZA(2) of ICTA,

• “PBTL” is the mean of the opening and closing liabilities of the transferred pension business for the period of account, and

• “GRBTL” is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account.

Textual Amendments

F87 Words in Sch. 7 para. 85(1) repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 725(2)(a), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F88 Words in Sch. 7 para. 85(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 725(2)(b)(i) (with Sch. 2 Pts. 1, 2)

F89 Words in Sch. 7 para. 85(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 725(2)(b)(ii) (with Sch. 2 Pts. 1, 2)

[F90 Losses transferred under section 444AZB] U.K.

Textual Amendments

F90 Sch. 7 para. 86 cross-heading substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 725(5) (with Sch. 2 Pts. 1, 2)

86 (1) This paragraph applies where section 444AZB of ICTA has effect in relation to a transferee and the circumstances specified in sub-paragraph (2) or (3) below apply. U.K.

(2) The circumstances are that—

(a) the profits of the life assurance business of the transferee for the period of account immediately preceding the first period of account beginning on or after 1st January 2007 were chargeable to tax in accordance with Case I of Schedule D by virtue of section 439A of ICTA, and

(b) in that period, the transferee carried on pension business.

(3) The circumstances are that—

(a) paragraph 29 of Schedule 8 applies in relation to the transferee, and

(b) the transferee has an unused pension business loss within the meaning given by paragraph 81(4).

(4) The appropriate fraction of any amount treated by virtue of section 444AZB(2) of ICTA as a loss of the transferee (a “[F91 gross roll-up business] loss”) available to be set off against profits chargeable under section 436A of ICTA is to be treated for the purposes of paragraph 81 as an unused pension business loss.

(5) The relevant fraction of any [F92 gross roll-up business] loss is to be treated for the purposes of paragraph 82 as an unused non-pension business loss.

(6) In this paragraph “the appropriate fraction”, in relation to a period of account, is—

where—

• “PBTL” is the mean of the opening and closing liabilities of the transferred pension business for the period of account, and

• “TL” is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.

(7) In this paragraph the “the relevant fraction”, in relation to a period of account, is—

where—

• “NPBTL” is the mean of the opening and closing liabilities of the transferred gross roll-up business which is not pension business for the period of account, and

• “TL” is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.]

Textual Amendments

F91 Words in Sch. 7 para. 86(4) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 725(4) (with Sch. 2 Pts. 1, 2)

F92 Words in Sch. 7 para. 86(5) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 725(4) (with Sch. 2 Pts. 1, 2)

Section 39

SCHEDULE 8 U.K. Insurance companies: basis of taxation etc

Part 1 U.K. Amendments

Income and Corporation Taxes Act 1988 (c. 1) U.K.

1 U.K. ICTA is amended as follows.

F93 2 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F93 Sch. 8 paras. 2-6 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F93 3 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F93 Sch. 8 paras. 2-6 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F93 4 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F93 Sch. 8 paras. 2-6 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F93 5 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F93 Sch. 8 paras. 2-6 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F93 6 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F93 Sch. 8 paras. 2-6 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

7 U.K. Omit section 439A (taxation of pure reinsurance business).

F94 8 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F94 Sch. 8 para. 8 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F95 9 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F95 Sch. 8 para. 9 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

10 U.K. In section 755A(2) and (6)(a) (controlled foreign companies: apportionments to companies carrying on life assurance business), for “not charged to tax under Case I of Schedule D in respect of its profits from” substitute “ charged to tax under the I minus E basis in respect of ”.

Finance Act 1989 (c. 26) U.K.

F96 11 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F96 Sch. 8 paras. 11-16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F96 12 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F96 Sch. 8 paras. 11-16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F96 13 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F96 Sch. 8 paras. 11-16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F96 14 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F96 Sch. 8 paras. 11-16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F96 15 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F96 Sch. 8 paras. 11-16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

F96 16 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F96 Sch. 8 paras. 11-16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

Finance Act 1991 (c. 31) U.K.

17 U.K. In paragraph 16(1) of Schedule 7 to FA 1991 (transitional relief for old general annuity contracts), for “, otherwise than in accordance with the provisions applicable to Case I of Schedule D,” substitute “ under the I minus E basis ”.

Taxation of Chargeable Gains Act 1992 (c. 12) U.K.

18 U.K. In section 212 of TCGA 1992 (annual deemed disposal of holdings of unit trusts etc), omit subsection (7A) (which applies section 440B(5) of ICTA).

Finance (No. 2) Act 1992 (c. 48) U.K.

19 U.K. In F(No.2)A 1992, omit section 65 (life assurance business: I minus E basis).

Finance Act 1996 (c. 8) U.K.

F97 20 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F97 Sch. 8 para. 20 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Finance Act 1998 (c. 36) U.K.

21 U.K. In paragraph 84 of Schedule 18 to FA 1998 (company tax returns, assessments and related matters), for sub-paragraphs (1) to (3) substitute—

“(1) This paragraph applies where amounts may be brought into charge to tax either—

(a) in computing profits chargeable to tax under Case I of Schedule D, or

(b) as amounts within Case III or V of that Schedule.”; and the italic heading before that paragraph accordingly becomes “ Choice between Case I and Case III or V of Schedule D ”.

Capital Allowances Act 2001 (c. 2) U.K.

22 U.K. CAA 2001 is amended as follows.

23 U.K. In section 256(1) (different giving effect rules for different categories of business), for paragraph (b) substitute—

“(b) is charged to tax under the I minus E basis in respect of its life assurance business.”

24 U.K. In section 257(2) (life assurance: supplementary), for paragraphs (a) and (b) substitute—

“(a) section 85A(3) of the Finance Act 1989 (excess adjusted Case I profits), or

(b) section 89 of that Act (policy holders' share of profits).”

Finance Act 2002 (c. 23) U.K.

F98 25 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F98 Sch. 8 paras. 25-27 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F98 26 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F98 Sch. 8 paras. 25-27 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F98 27 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F98 Sch. 8 paras. 25-27 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Part 2 U.K. Transitional provisions

Unused pre-commencement section 76(12) etc excesses U.K.

F99 28 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F99 Sch. 8 para. 28 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

Shifts in basis of taxation at first post-commencement accounting period U.K.

F100 29 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F100 Sch. 8 para. 29 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(ii)

Section 40

SCHEDULE 9 U.K. Insurance companies: transfers etc

Definition of “insurance business transfer scheme” U.K.

1 F101 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

(2) In consequence of sub-paragraph (1), omit—

(a) the definition of “insurance business transfer scheme” in section 12(7B) of ICTA,

(b) section 444AB(11) of that Act (as originally enacted),

(c) in section 444AC(11) of that Act (as originally enacted), the definition of “insurance business transfer scheme”,

(d) section 460(10B) of that Act,

(e) the definition of “insurance business transfer scheme” in paragraph 12(9) of Schedule 9 to FA 1996,

(f) section 560(5)(b) of CAA 2001,

F102 (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F102 (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F103 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In section 66 of FA 2002 (election to continue postponement of mark to market)—

(a) in subsection (4)(a), for “a transfer” substitute “ an insurance business transfer ”,

(b) in subsection (5), omit the definition of “transfer scheme”, and

(c) omit subsections (6) and (7).

F104 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F101 Sch. 9 para. 1(1) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

F102 Sch. 9 para. 1(2)(g)(h) repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F103 Sch. 9 para. 1(3) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

F104 Sch. 9 para. 1(5) repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Transfer schemes: expenses, losses etc U.K.

2 (1) Section 444A of ICTA (transfers of business: expenses, losses and section 432F(2) excesses) is amended as follows. U.K.

(2) In subsection (1), omit “Subject to subsection (7) below,”.

(3) Omit—

(a) subsection (7) (section not to apply if transfer is not for bona fide commercial reasons or forms part of avoidance scheme), and

(b) subsection (8) (clearance procedure as to non-application of subsection (7)).

Transfer schemes: deemed periodical returns U.K.

3 F105 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

F106 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F107 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In section 213(10) of TCGA 1992, for “before the transfer” substitute “ before the relevant transfer date (within the meaning of that section) ”.

Textual Amendments

F105 Sch. 9 para. 3(1) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

F106 Sch. 9 para. 3(2) repealed (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), art. 1(1), Sch. Pt. 1

F107 Sch. 9 para. 3(3) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Transfer schemes: taxing the transferor U.K.

F108 4 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F108 Sch. 9 paras. 4-8 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Transferor's period of account including transfer U.K.

F108 5 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F108 Sch. 9 paras. 4-8 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Transfer schemes: taxing the transferee U.K.

F108 6 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F108 Sch. 9 paras. 4-8 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Repeal of section 444AD U.K.

F108 7 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F108 Sch. 9 paras. 4-8 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Transfer schemes: anti-avoidance U.K.

F108 8 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F108 Sch. 9 paras. 4-8 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Repeal of FA s.82C U.K.

9 U.K. In FA 1989, omit section 82C (relevant financial reinsurance contracts).

Commencement Information

I17 Sch. 9 para. 9 has effect as specified by Finance Act 2007 (Schedule 9) Order 2008 (S.I. 2008/379), art. 2

Transfers: receipts to be taken into account U.K.

F109 10 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F109 Sch. 9 para. 10 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Transfers and demutualisations: losses where assets added to long-term insurance fund U.K.

11 (1) FA 1989 is amended as follows. U.K.

(2) Omit—

(a) in section 83, subsections (3) to (7) and, in subsection (8), the definitions of “add”, “demutualisation” and “total reinsurance” (which relate to losses where assets added to long-term insurance fund),

(b) section 83AA (amounts added to long-term insurance fund in excess of loss), and

(c) section 83AB (treatment of surplus where there is subsequent transfer from company etc).

F110 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F110 Sch. 9 para. 11(3) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Commencement Information

I18 Sch. 9 para. 11 has effect as specified by Finance Act 2007 (Schedule 9) Order 2008 (S.I. 2008/379), art. 2

F111 12 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F111 Sch. 9 para. 12 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Transfer schemes: old annuity contracts U.K.

13 (1) Paragraph 16 of Schedule 7 to FA 1991 (transitional relief for old general annuity contracts) is amended as follows. U.K.

(2) In sub-paragraph (7), in the definition of “old annuity contract”, insert at the end “ (including one forming part of the business transferred to another insurance company by an insurance business transfer scheme) ”.

(3) After that sub-paragraph insert—

“(8) Where—

(a) business is transferred to an insurance company by an insurance business transfer scheme during an accounting period of the company, and

(b) the business transferred consists of or includes old annuity contracts (“the transferred contracts”),

the reference in the definition of R1 in sub-paragraph (2) above to the company's opening liabilities for the accounting period is, in relation to the transferred contracts, a reference to the company's liabilities in respect of the transferred contracts immediately after the transfer.”

Transfer schemes: no gain/no loss U.K.

14 (1) TCGA 1992 is amended as follows. U.K.

(2) In section 211 (application of section 139), for subsections (2) and (2A) substitute—

“(2) Where this section applies the transferor and the transferee are treated for the purposes of corporation tax on chargeable gains as if any assets included in the transfer which—

(a) immediately before they are acquired by the transferee, were assets of the transferor's long-term insurance fund, and

(b) immediately after they are so acquired are assets of the transferee's long-term insurance fund,

were acquired for a consideration of such amount as would secure that neither a gain nor a loss would accrue to the transferor on the disposal.

(3) Subsection (2) above is subject to section 212.”

F112 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F112 Sch. 9 para. 14(3) omitted (with effect in accordance with Sch. 2 para. 71 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 70(i)

Transfer schemes: old reinsurance business U.K.

F113 15 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F113 Sch. 9 para. 15 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Power to amend transfer provisions U.K.

F114 16 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F114 Sch. 9 para. 16 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iii)

Commencement U.K.

17 (1) The amendments made by paragraphs 1 to 3 and 13 to 15 have effect in relation to periods of account beginning on or after 1st January 2007. U.K.

(2) The amendments made by paragraphs 4, 6 to [F115 10(5),] 11 and 12 have effect in accordance with provision made by an order made by the Treasury.

(3) But the amendments made by paragraphs 11 and 12 also have effect

[F116 (a)] in relation to periods of account beginning on or after 1st January 2007 where the transfer of business or demutualisation concerned took place before 21st March 2007 [F117 and

(b) in relation to periods of account ending after 30 June 2008 where the transfer of business or demutualisation concerned took place on or after 21 March 2007 and before 1 July 2008.]

(4) The amendment made by paragraph 5 has effect in relation to transfers of business with a transfer date after 21st March 2007.

[F118 (4A) The amendment made by paragraph 9 has effect in relation to contracts entered into in a period of account beginning on or after 1 January 2008.]

(5) The amendment made by paragraph 10(2) has effect in relation to transfers taking place on or after 6th December 2006.

[F119 (6) The amendments made by paragraph 10(3) and (4) have effect in relation to assets transferred on or after 1 January 2008.]

Textual Amendments

F115 Word in Sch. 9 para. 17(2) substituted (21.7.2008) by Finance Act 2008 (c. 9), Sch. 17 para. 38(2)

F116 Word in Sch. 9 para. 17(3) inserted (21.7.2008) by Finance Act 2008 (c. 9), Sch. 17 para. 38(3)(a)

F117 Sch. 9 para. 17(3)(b) and word inserted (21.7.2008) by Finance Act 2008 (c. 9), Sch. 17 para. 38(3)(b)

F118 Sch. 9 para. 17(4A) inserted (21.7.2008) by Finance Act 2008 (c. 9), Sch. 17 para. 38(4)

F119 Sch. 9 para. 17(6) inserted (21.7.2008) by Finance Act 2008 (c. 9), Sch. 17 para. 38(5)

Section 41

SCHEDULE 10 U.K. Insurance companies: miscellaneous

Contingent loans U.K.

F120 1 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F120 Sch. 10 para. 1 omitted (with effect in accordance with Sch. 17 para. 4(1) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 3(d)

“Structural” assets U.K.

2 F121 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

(2) In ICTA, omit section 444ACA (transfers of business).

(3) In section 432E(2A) of that Act, omit “444ACA(2),” and paragraph (b).

(4) In section 211 of TCGA 1992 (transfers of business: application of section 139 of that Act), as amended by paragraph 14 of Schedule 9 to this Act, after subsection (2) insert—

“(2A) The reference in subsection (2) above to assets included in the transfer does not include structural assets within the meaning of section 83XA of the Finance Act 1989.”

(5) In paragraph 17 of Schedule 7AC to TCGA 1992 (substantial shareholdings exemption: special rules for assets of insurance company's long-term insurance fund), after sub-paragraph (4) insert—

“(4A) The reference in sub-paragraph (2) to an asset of the investing company's long-term insurance fund, and the references in sub-paragraphs (3) and (4) to shares or an interest in shares held as assets of its long-term insurance fund, do not include a structural asset, or structural assets, within the meaning of section 83XA of the Finance Act 1989.”

Textual Amendments

F121 Sch. 10 para. 2(1) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iv)

Losses on disposal of authorised investment fund assets to connected manager U.K.

3 U.K. In TCGA 1992, after section 210B insert—

“210C Losses on disposal of authorised investment fund assets to connected manager

(1) Section 18(3) does not apply in relation to a loss accruing on the disposal by an insurance company of authorised investment fund assets to the manager of the authorised investment fund.

(2) In this section—

• “authorised investment fund assets” means assets of the company's long-term insurance fund consisting of rights under an authorised unit trust or shares in an open-ended investment company,

• “the manager of the authorised investment fund” means—

  (a)

  in the case of an authorised unit trust, the person who is the manager of the unit trust scheme for the purposes of Chapter 3 of Part 17 of the Financial Services and Markets Act 2000, and

  (b)

  in the case of an open-ended investment company, a director or other person having responsibility for the management of its scheme property, and

• “open-ended investment company” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.”

Priority of section 83(2) of FA 1989 etc U.K.

F122 4 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F122 Sch. 10 para. 4 omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 247(p)(iv)

Tidying up of TCGA 1992 U.K.

5 (1) TCGA 1992 is amended as follows. U.K.

(2) In section 210B(6)(a) (disposal and acquisition of section 440A securities), for the words after “are” substitute “ assets within section 212(1). ”

(3) Omit—

(a) section 212(2A) (disapplication of section 212(1) to assets treated as representing rights under a creditor relationship),

(b) section 214 (rights under authorised unit trusts etc: transitional provisions), and

(c) section 214A (further transitional provisions).

Tidying up of Chapter 2 of Part 4 of FA 1996 U.K.

F123 6 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F123 Sch. 10 para. 6 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Correction of erroneous repeal U.K.

7 U.K. The repeals made by Schedule 3 to ITA 2007 in paragraph 11 of Schedule 6 to FA 1990 are deemed never to have had effect; but Schedule 3 to ITA 2007 is deemed to have included the repeal of the words before the paragraphs in sub-paragraph (1) of that paragraph.

Non-profit companies, non-profit funds and with-profits funds U.K.

8 (1) In section 431(2) of ICTA (interpretative provisions relating to insurance companies) insert at the appropriate place— U.K.

““non-profit company”, in relation to a period of account, means a company carrying on long-term business where, at the end of the period—

(a) none of the liabilities of that business, or

(b) none but an insignificant proportion of those liabilities,

are with-profits liabilities;”,

““non-profit fund” means a fund that is not a with-profits fund;”, and

““with-profits fund” has the meaning given by the Prudential Sourcebook (Insurers);”.

(2) Omit—

(a) in section 432YA(5) of ICTA, the definitions of “non-profit company” and “non-profit fund”,

(b) section 82D(5) of FA 1989,

(c) in section 83YA of that Act, subsection (8) and, in subsection (11), the definition of “with-profits fund”, and

(d) in section 83A of that Act, in subsections (2)(b) and (3D)(b) “(see subsection (