CHOLERA = CHOLÉRA
1. Cigarettes An amount equal to 22 per cent of the retail price plus £105.10 per thousand cigarettes. 2. Cigars £153.07 per kilogram. 3. Hand-rolling tobacco £110.02 per kilogram. 4. Other smoking tobacco and chewing tobacco £67.30 per kilogram.
This section shall be deemed to have come into force at 6 o'clock in the evening of 22nd March 2006.
After section 7 of the Tobacco Products Duty Act 1979 (c. 7) (regulations for management of duty) insert—
At the end of section 9 of the Tobacco Products Duty Act 1979 (c. 7) (regulations) (which becomes subsection (1)) add—
This section shall come into force in accordance with provision made by the Treasury by order.
An order under subsection (3)—
may include transitional, consequential or incidental provision, and
shall be made by statutory instrument.
In section 36(1AA)(a) of ALDA 1979 (rate of duty on beer) for “£12.92” substitute “ £13.26 ”.
This section shall be deemed to have come into force at midnight on 26th March 2006.
For Part 1 of the Table of rates of duty in Schedule 1 to ALDA 1979 (rates of duty on wine and made-wine) substitute—
This section shall be deemed to have come into force at midnight on 26th March 2006.
The following provisions of ALDA 1979 shall cease to have effect—
section 12(4) (power to refuse or revoke distiller's licence where premises near to premises of a rectifier, registered brewer or vinegar-maker);
section 14 (duty on spirits – attenuation charge);
section 15(4) (provision of accommodation in distiller's warehouse);
section 18(5) (power to refuse licence as a rectifier where premises near to premises of a distillery);
section 21 (restrictions relating to rectifiers);
section 24 (restriction on carrying on of other trades by distiller or rectifier);
section 26 (importation and exportation of spirits);
section 32 (restriction on transfer of British spirits in warehouses);
section 35 (returns as to importation, manufacture, sale or use of alcohols);
section 55A (wine and made-wine of a strength not exceeding 5.5%);
section 67 (power to regulate keeping of dutiable alcoholic liquors by wholesalers and retailers);
section 69 (miscellaneous provisions as to wholesalers and retailers of spirits);
section 71 (penalty for mis-describing liquor as spirits);
section 74 (liquor to be deemed wine or spirits); and
section 82 (power to make regulations with respect to stills).
In consequence of the repeal of section 55A of ALDA 1979, that Act is amended as follows.
In section 54 (wine: charge of excise duty), in subsection (4A), for “wine to which section 55A below applies” substitute “ wine of a strength not exceeding 5.5 per cent ”.
In section 55 (made-wine: charge of excise duty), in subsections (4A) and (5)(d), for “made-wine to which section 55A below applies” substitute “ made-wine of a strength not exceeding 5.5 per cent ”.
HODA 1979 is amended as follows.
In section 6(1A) (hydrocarbon oil: rates of duty)—
in paragraph (a) (ultra low sulphur petrol) for “£0.4832” substitute “ £0.4710 ”,
in paragraph (aa) (sulphur-free petrol) for “£0.4832” substitute “ £0.4710 ”,
in paragraph (b) (light oil other than ultra low sulphur petrol and sulphur-free petrol) for “£0.5766” substitute “ £0.5620 ”,
in paragraph (c) (ultra low sulphur diesel) for “£0.4832” substitute “ £0.4710 ”,
in paragraph (ca) (sulphur-free diesel) for “£0.4832” substitute “ £0.4710 ”, and
in paragraph (d) (heavy oil other than ultra low sulphur diesel and sulphur-free diesel) for “£0.5465” substitute “ £0.5327 ”.
In section 6AA(3) (biodiesel) for “£0.2832” substitute “ £0.2710 ”.
In section 6AD(3) (bioethanol) for “£0.2832” substitute “ £0.2710 ”.
In section 8(3) (road fuel gas)—
in paragraph (a) for “£0.1080” substitute “ £0.0900 ”, and
in paragraph (b) for “£0.1270” substitute “ £0.0900 ”.
In section 13A(1) (rebate on unleaded petrol) for “£0.0617” substitute “ £0.0601 ”.
The following statutory instruments shall cease to have effect—
the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2005 (S.I. 2005/1978),
the Excise Duties (Road Fuel Gases) (Reliefs) Regulations 2005 (S.I. 2005/1979), and
the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) (Amendment) Order 2005 (S.I. 2005/3330).
HODA 1979 is amended as follows.
In section 6(1A) (hydrocarbon oil: rates of duty)—
in paragraph (a) (ultra low sulphur petrol) for “£0.4710” substitute “ £0.4835 ”,
in paragraph (aa) (sulphur-free petrol) for “£0.4710” substitute “ £0.4835 ”,
in paragraph (b) (light oil other than ultra low sulphur petrol and sulphur-free petrol) for “£0.5620” substitute “ £0.5768 ”,
in paragraph (c) (ultra low sulphur diesel) for “£0.4710” substitute “ £0.4835 ”,
in paragraph (ca) (sulphur-free diesel) for “£0.4710” substitute “ £0.4835 ” and
in paragraph (d) (heavy oil other than ultra low sulphur diesel and sulphur-free diesel) for “£0.5327” substitute “ £0.5468 ”.
In section 6AA(3) (biodiesel) for “£0.2710” substitute “ £0.2835 ”.
In section 6AD(3) (bioethanol) for “£0.2710” substitute “ £0.2835 ”.
In section 8(3) (road fuel gas)—
in paragraph (a) for “£0.0900” substitute “ £0.1081 ”, and
in paragraph (b) for “£0.0900” substitute “ £0.1221 ”.
In section 11(1) (rebate on heavy oil)—
in paragraph (a) for “£0.0604” substitute “ £0.0729 ”,
in paragraph (b) for “£0.0644” substitute “ £0.0769 ”, and
in paragraph (ba) for “£0.0644” substitute “ £0.0769 ”.
In section 13A(1) (rebate on unleaded petrol) for “£0.0601”substitute “ £0.0617 ”.
In section 14(1) (rebate on light oil for use as furnace oil) for “£0.0604” substitute “ £0.0729 ”.
This section comes into force on 1st September 2006.
After section 27(1A) of HODA 1979 (interpretation) insert—
In section 2(2) of the Betting and Gaming Duties Act 1981 (c. 63) (general betting duty: exemptions) after paragraph (c) add—, or
This section shall have effect in respect of anything done on or after 6th December 2005 (with the reference to section 23 of the Value Added Tax Act 1994 being a reference to that definition as it is treated as having effect in relation to things done on or after that date by virtue of section 16(6) and (7) below).
Part of gross gaming yield Rate The first £546,500 2.5 per cent. The next £1,212,500 12.5 per cent. The next £1,212,500 20 per cent. The next £2,124,000 30 per cent. The remainder 40 per cent.
This section has effect in relation to accounting periods beginning on or after 1st April 2006.
For section 25(1) to (1B) of the Betting and Gaming Duties Act 1981 (c. 63) (amusement machine licence duty: definition of “amusement machine”) substitute—
In section 25(1C) of the Betting and Gaming Duties Act 1981 (“prize machine”) for “an amusement machine is a prize machine” substitute “ a machine is a prize machine ”.
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Subsections (1) and (2) shall have effect in relation to the provision of a machine on or after 1st August 2006.
Subsection (3) shall have effect in relation to accounting periods beginning on or after 1st August 2006.
For section 21(3AA) to (3E) of the Betting and Gaming Duties Act 1981 (c. 63) (special licences and excepted machines) substitute—
In section 22(2) of that Act (gaming machines) paragraph (b) shall cease to have effect.
For section 23(2) and (3) of that Act (rates) substitute—
For section 25(4) to (7) of the Betting and Gaming Duties Act 1981 (c. 63) substitute—
Section 25A of that Act (power to modify definitions) shall cease to have effect.
In section 26(2) of that Act (supplemental) the following shall cease to have effect—
the definition of “ video machine ”, and
in the definition of “two-penny machine”, the words from “and “five-penny machine”” to the end.
Paragraphs 2 and 3 of Schedule 4 to that Act (exemptions) shall cease to have effect.
Subsections (1) to (7) shall have effect in relation to the grant of an amusement machine licence on or after 1st August 2006.
An amusement machine licence granted before that time shall continue to have effect (for which purpose the Betting and Gaming Duties Act 1981 shall have effect without the amendments effected by this section).
But subsection (9) shall not apply in relation to machines which become gaming machines by virtue of section 11 of this Act.
For the purpose of the application of Schedule 4A to that Act (default licences) in respect of a period before 1st August 2006 no account shall be taken of an amendment effected by subsections (1) to (7) above or by section 11 above.
Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.
In paragraph 1(2) (general rate of duty), for “£170” substitute “ £175 ”.
For paragraph 1B (rates for light passenger vehicles) substitute—
In paragraph 1C (reduced rate for light passenger vehicles)—
for sub-paragraph (2) substitute—, and
after sub-paragraph (5) insert—
In paragraph 1J(a) (rates for light goods vehicles), for “£165” substitute “ £170 ”.
In paragraph 1K(a) (lower-emission vans), after “1st March 2003” insert “ and before 1st January 2007 ”.
In paragraph 2(1) (rates for motorcycles)—
in paragraph (b), for “£30” substitute “ £31 ”,
in paragraph (c), for “£45” substitute “ £46 ”, and
in paragraph (d), for “£60” substitute “ £62 ”.
In Schedule 2 to VERA 1994 (exempt vehicles), after paragraph 24 insert—
Subsection (8) comes into force on 23rd March 2006; but nothing in that subsection has the effect that a nil licence is required to be in force in respect of a vehicle while a vehicle licence is in force in respect of it.
The rest of this section has effect in relation to licences taken out on or after that date.
In section 61B of VERA 1994 (reduced pollution certificates), for subsection (2) substitute—
In VERA 1994, after section 7B insert—
Section 23 of VATA 1994 (gaming machines) shall be amended as follows.
In subsection (1)—
for “plays a game of chance” substitute “ gambles ”, and
omit “to play”.
In subsection (2) for “playing” substitute “ gambling ”.
In subsection (3)—
for “playing” substitute “ gambling ”, and
for “to play” substitute “ to use ”.
For subsection (4) substitute—
This section shall have effect in relation to anything done on or after 6th December 2005.
In the application of section 23(5)(c) of VATA 1994 as substituted by this section in relation to anything done before 1st November 2006, “game of chance” shall have the same meaning as in the Gaming Act 1968 (c. 65).
The Treasury may by order—
make provision for substituting Schedule 10 to VATA 1994 (buildings and land) for the purpose of rewriting that Schedule with amendments;
make provision amending sections 83 and 84 of that Act (appeals) in connection with any provision of that Schedule as so rewritten.
The Treasury may by order make provision repealing— The power conferred by this subsection is not to be regarded as affecting in any way the power to vary Schedule 9 to that Act conferred by section 31(2) of that Act.
paragraph (b) of item 1 in Group 1 of Schedule 9 to VATA 1994 (exempt supplies of land not to include supplies made pursuant to a developmental tenancy, developmental lease or developmental licence), and
Note (7) in that Group (meaning of developmental tenancy, developmental lease or developmental licence).
The Treasury may by order make provision repealing—
section 26 of FA 1995 (co-owners etc of buildings and land), and
the enactments inserted by that section (section 51A of VATA 1994 and paragraph 8(2) and (3) of Schedule 10 to that Act).
Any power to make an order under this section includes power—
to make any provision that might be made by an Act, and
to make incidental, consequential, supplemental, or transitional provision or savings.
The consequential provision that may be made under subsection (4)(b) includes provision amending any Act or any instrument made under any Act.
Any order under this section—
is to be made by statutory instrument,
must be laid before the House of Commons, and
unless approved by that House before the end of the period of 28 days beginning with the date on which it is made, ceases to have effect at the end of that period.
But, if an order so ceases to have effect, this does not affect—
anything previously done under the order, or
the making of a new order.
In reckoning the period of 28 days no account is to be taken of any time—
during which Parliament is dissolved or prorogued, or
during which the House of Commons is adjourned for more than 4 days.
Section 21 of VATA 1994 (value of imported goods) is amended as follows.
In subsection (2) (value of imported goods to include taxes and expenses), after “shall” insert “ (subject to subsection (2A) below) ”.
After subsection (2) insert—
Subsections (1) to (3) come into force on such day as the Treasury may by order made by statutory instrument appoint.
After section 55 of VATA 1994 (customers to account for tax on supplies of gold etc) insert—.
After section 26A of VATA 1994 (disallowance of input tax where consideration not paid) insert—.
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at the end insert—, and
in consequence of the amendment made by paragraph (a) the heading becomes “Inaccuracies in EC sales statements or in statements relating to section 55A”.
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at the end insert—, and
in consequence of the amendment made by paragraph (a) the heading becomes “Failure to submit EC sales statement or statement relating to section 55A”.
In section 69 of VATA 1994 (breaches of regulatory provisions), in subsection (1) (failure to comply with a requirement imposed under provisions mentioned in the paragraphs in that subsection), after paragraph (b) insert—.
In section 97 of VATA 1994 (orders, rules and regulations), in subsection (4) (orders which cease to have effect unless approved by House of Commons), after paragraph (e) insert—.
Regulations under this paragraph may require the submission to the Commissioners by taxable persons, at such times and intervals, in such cases and in such form and manner as may be— of statements containing such particulars of supplies to which section 55A(6) applies in which the taxable persons are concerned, and of the persons concerned in those supplies, as may be prescribed. Regulations under this paragraph may make provision, in relation to the first occasion on which a person makes a supply of goods to which section 55A(6) applies, for requiring the person to give to the Commissioners such notification of the supply at such time and in such form and manner as may be specified in the regulations.
The amendments made by this section have effect in relation to supplies made on or after such day as the Treasury may by order made by statutory instrument appoint. But no order may be made under this subsection on or after 22nd March 2009.
An order under subsection (8) may contain transitional provision and savings.
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In Schedule 11 to VATA 1994 (administration, collection and enforcement), paragraph 10 (entry and search of premises and persons) is amended as follows.
The power under sub-paragraph (2) above to inspect any goods includes, in particular,—
VATA 1994 is amended as follows.
After section 69A (breach of record-keeping requirements etc in relation to transactions in gold) insert—.
In section 76(1) (assessment of amounts due by way of penalty, interest or surcharge) for “69A”, in both places, substitute “ 69B ”.
In section 83 (appeals)—
in paragraph (n) (penalties or surcharges by virtue of any of sections 59 to 69A) for “69A” substitute “ 69B ” and
after paragraph (z) (conditions imposed by virtue of paragraph 2B(2)(c) or 3(1) of Schedule 11) insert—.
In section 84 (further provision relating to appeals) after subsection (7A) (appeals against directions mentioned in section 83(wa)) insert—.
In Schedule 11 (administration, collection and enforcement), after paragraph 6 (duty to keep records) insert—.
VATA 1994 is amended as follows.
In section 97 (orders, rules and regulations), in subsection (4) (orders which cease to have effect unless approved by House of Commons), after paragraph (f) insert—.
The Treasury may by order specify other circumstances in which sub-paragraph (2) above does not apply.
Income tax shall be charged for the year 2006-07, and for that year—
the starting rate shall be 10%;
the basic rate shall be 22%;
the higher rate shall be 40%.
Corporation tax shall be charged for the financial year 2007 at the rate of 30%.
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the small companies' rate shall be 19%, and
the fraction mentioned in section 13(2) of ICTA (marginal relief for small companies) shall be 11/400ths.
Section 13AA of ICTA (corporation tax starting rate) shall cease to have effect.
Section 13AB of ICTA (the non-corporate distribution rate), and Schedule A2 to that Act (supplementary provisions in relation to that rate), shall cease to have effect.
In section 13A of ICTA (close investment-holding companies), in subsection (1) (meaning of “close investment-holding company” for purposes of sections 13(1) and 13AA(8)), omit “or 13AA(8)”.
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In paragraph 1(a) of Schedule 12 to FA 1989 (provision of information for the purposes of close companies provisions), for “13 to 13A” substitute “ 13, 13ZA, 13A ”.
In paragraph 8(1) of Schedule 18 to FA 1998 (tax calculation in company tax return), in the second step, omit “or 13AA(2)”>.
The amendments made by this section have effect for the financial year 2006 and subsequent financial years (but see also subsections (9) to (11)).
In the case of an accounting period (a “straddling period”)— sections 13AA and 13AB of, and Schedule A2 to, ICTA (“the repealed provisions”) apply as if the different parts of the straddling period falling in the different financial years were separate accounting periods.
beginning before 1st April 2006, and
ending on or after that date,
Where the rate of corporation tax charged on a company's basic profits for any such separate accounting period ending with 31st March 2006 is determined in accordance with any of the repealed provisions, section 13 of ICTA (small companies' relief) also so applies.
For the purpose of treating different parts of the straddling period as separate accounting periods in accordance with subsections (9) and (10), the profits and basic profits of the straddling period are to be apportioned between those separate accounting periods.
Schedule 1 (which makes provision in relation to group relief where the surrendering company is not resident in the United Kingdom) has effect.
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Schedule 2 (which amends Schedule 20 to FA 2000 and Schedules 12 and 13 to FA 2002 so as to make provision relating to payments to subjects of clinical trials) has effect.
The amendments made by paragraph 2 of Schedule 2 to Schedule 12 to FA 2002 (large companies etc) have effect in relation to expenditure incurred on or after 1st April 2006.
Except as provided by subsection (4), the amendments made by Schedule 2 to— have effect in relation to expenditure incurred on or after the appointed day.
Schedule 20 to FA 2000 (small or medium-sized enterprises),
Schedule 13 to FA 2002 (vaccine research etc),
The amendment made by paragraph 1(3) of Schedule 2 (insertion of paragraph 6A of Schedule 20 to FA 2000), in its application for the purposes of Schedule 12 to FA 2002 by virtue of the amendments made to Schedule 12 by paragraph 2 of Schedule 2, has effect in relation to expenditure incurred on or after 1st April 2006.
“The appointed day” means such day as the Treasury may by order appoint; and different days may be so appointed for different provisions or different purposes.
The days that may be appointed by an order under this section include days earlier than the day on which this Act is passed, but not days earlier than 1st April 2006.
Schedule 3 (which amends Schedule 18 to FA 1998 in connection with claims for tax relief for expenditure on research and development) has effect.
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The amount of a first-year allowance under section 44 of CAA 2001 (expenditure incurred by small or medium-sized enterprises) shall be determined, in the case of expenditure to which this subsection applies, as if the percentage specified in the entry relating to that section in the Table in section 52(3) of that Act were 50%.
Subsection (1) applies to expenditure incurred by a small enterprise (within the meaning of section 44 of that Act) in the period of 12 months beginning with—
1st April 2006, if the small enterprise is within the charge to corporation tax, or
6th April 2006, if the small enterprise is within the charge to income tax.
In the case of expenditure qualifying under section 44, see also—
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In this Chapter “film” includes any record, however made, of a sequence of visual images that is capable of being used as a means of showing that sequence as a moving picture.
For the purposes of this Chapter each part of a series of films is treated as a separate film, unless— in which case the films are treated as a single film.
the films form a series with not more than 26 parts,
the combined playing time is not more than 26 hours, and
the series constitutes a self-contained work or is a series of documentaries with a common theme,
References in this Chapter to a film include the film soundtrack.
For the purposes of this Chapter a film is completed when it is first in a form in which it can reasonably be regarded as ready for copies of it to be made and distributed for presentation to the general public.
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The following provisions have effect for the purposes of this Chapter as regards the meaning of “film production company”.
There cannot be more than one film production company in relation to a film.
A company that (otherwise than in partnership)— is the film production company in relation to the film.
is responsible—
for pre-production, principal photography and post production of the film, and
for delivery of the completed film,
is actively engaged in production planning and decision-making during pre-production, principal photography and post production, and
directly negotiates, contracts and pays for rights, goods and services in relation to the film,
In relation to a qualifying co-production, a company that (otherwise than in partnership)— is the film production company in relation to the film.
is a co-producer, and
makes an effective creative, technical and artistic contribution to the film,
If there is more than one company meeting the description in subsection (3) or (4), the company that is most directly engaged in the activities referred to in that subsection is the film production company in relation to the film.
If there is no company meeting the description in subsection (3) or (4), there is no film production company in relation to the film.
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In this Chapter “film-making activities”, in relation to a film, means the activities involved in development, pre-production, principal photography and post production of the film.
If all or any of the images in a film are generated by computer, references in this Chapter to principal photography shall be read as references to, or as including, the generation of those images.
The Treasury may by regulations—
amend subsections (1) and (2);
provide that specified activities are or are not to be regarded for the purposes of this Chapter as film-making activities or as film-making activities of a particular description;
provide that, in relation to a specified description of film, references in this Chapter to film-making activities of a particular description are to be read as references to such activities as may be specified.
“TMA 1970” means the Taxes Management Act 1970 (c. 9);
Schedule 12 to FA 2002 (tax relief for expenditure on research and development: large companies etc) is amended as follows. In paragraph 4 (qualifying expenditure on direct research and development), in sub-paragraph (3)— In paragraph 9 (expenditure on research and development directly undertaken by the SME), in sub-paragraph (2)— In paragraph 17 (which applies certain definitions from Schedule 20 to FA 2000)—
Sections 43A to 43G of ICTA (rent factoring) shall cease to have effect. The amendment made by this paragraph has effect in relation to transactions entered into on or after 6th June 2006.
In section 736B of ICTA (deemed manufactured payments in the case of stock lending arrangements) at the end insert—. In section 736C of ICTA (deemed interest: cash collateral under stock lending arrangements), as inserted by paragraph 3 above, at the end insert—. After that section insert—. The amendments made by this paragraph have effect in relation to any arrangement made on or after 22nd March 2006.
Section 785A of ICTA (rent factoring of leases of plant or machinery) is amended as follows. After subsection (5) (provision about partnerships with legal personality) insert—.
Section 81 of FA 1996 (meaning of “loan relationship” etc) is amended as follows. In subsection (2) (meaning of “money debt”)— The amendments made by this paragraph have effect in relation to relationships to which a company is a party on or after 22nd March 2006. The following provisions of this paragraph apply for the purposes of TCGA 1992 if— The company is treated as if— Any chargeable gain or loss accruing to the company on the disposal is treated as accruing to the company when it ceases to be a party to the relationship. For the purposes of this paragraph an asset is a chargeable asset in relation to the company at any time if any gain accruing to it on the disposal of the asset at that time would be a chargeable gain for the purposes of TCGA 1992.
Section 91A of FA 1996 (shares subject to outstanding third party obligations) is amended as follows. In subsection (1) (conditions for section to apply), in the opening words, for “a company if at any time in an accounting period” substitute “the times in a company’s accounting period during which”. In subsection (2) (how Chapter has effect for the accounting period) after “as if” insert “during those times”. In subsection (5) (cases where a share is subject to outstanding third party obligations)— After that subsection insert—. The amendments made by sub-paragraphs (2) and (3) have effect in relation to accounting periods ending on or after 22nd March 2006. The other amendments made by this paragraph have effect in relation to shares held by a company on or after 22nd March 2006. But, in relation to an accounting period beginning before 22nd March 2006, amounts are to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 as a result of those other amendments only if the amounts relate to any time on or after that date.
After section 93B of FA 1996 insert—. The amendment made by this paragraph has effect in relation to loan relationships to which a company is a party on or after 22nd March 2006. But amounts are to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 as a result of that amendment only if the amounts relate to any time on or after that date.
In Schedule 9 to FA 1996 (loan relationships: special computational provisions) paragraph 12 (continuity of treatment: groups etc) is amended as follows. In sub-paragraph (2A) (paragraph 12 not to apply where transferor uses fair value accounting)— The transferor company shall be regarded for the purposes of sub-paragraph (2A) above as using fair value accounting as respects the loan relationship only if— In any case where a discount (within the meaning given by section 100(3A)) arises in respect of the transaction, the series of transactions or the transfer— The amendments made by this paragraph have effect in any case where the relevant transaction is on or after 22nd March 2006. For this purpose “the relevant transaction” means— as a result of which paragraph 12 of that Schedule applies or, but for sub-paragraph (2A) of that paragraph, would apply.
In Schedule 26 to FA 2002 (derivative contracts), paragraph 28 (transactions within groups) is amended as follows. In any case where a discount (within the meaning given by section 100(3A) of the Finance Act 1996) arises in respect of the transaction or the series of transactions, the consideration for the purposes of sub-paragraph (3)(a) is to be increased by the amount of the discount. The amendment made by this paragraph has effect in any case where the relevant transaction is on or after 22nd March 2006. For this purpose “the relevant transaction” means— as a result of which paragraph 28 of that Schedule applies or, but for paragraph 30 of that Schedule, would apply.
ICTA is amended as follows.
In Part 2 (trading income) after Chapter 10 insert the following Chapter—.
The Treasury may by regulations make provision enabling a person of a prescribed description who is, or is to be, the lessor under a plant or machinery lease of a prescribed description to make an election for the lease to be treated in his case as a long funding lease. The power to make regulations under this paragraph includes power to make provision for or in connection with any of the following— The power to make regulations under this paragraph includes— In this paragraph—
Condition B, C or D in paragraph 18 is not failed by reason only of breaches due to events that meet the conditions in sub-paragraph (2). The conditions are that— In this paragraph “the principal parties” are—
This paragraph has effect for determining, for the purposes of paragraph 21, when an amount of expenditure is to be treated as incurred by the person mentioned in sub-paragraph (1) of that paragraph. The general rule is that an amount of expenditure is to be treated as incurred as soon as there is an unconditional obligation to pay it. The general rule applies even if the whole or a part of the expenditure is not required to be paid until a later date. There are the following exceptions to the general rule. If, under an agreement,— the expenditure is to be treated as incurred on the day before the passing of this Act. If, under an agreement,— the amount is to be treated as incurred on the date on or before which it is required to be paid. If the terms of an agreement are varied on or after 22nd March 2006 with respect to the times for payment and— the amount is to be treated as incurred on the date on which it would have been treated as incurred apart from the variation. Sub-paragraph (7) does not apply if the long funding lease mentioned in paragraph 21 was finalised before 22nd March 2006.
A “combined asset” is an asset which meets the conditions in sub-paragraph (2). The conditions are that— Plant or machinery that can be used individually is not a constituent asset just because— This paragraph has effect for the purposes of this Part.
Section 494AA of ICTA is amended as follows. In subsection (2), at the end of paragraph (a) insert “or”. At the end of subsection (2) insert—. “long funding operating lease” means a long funding operating lease for the purposes of Part 2 of the Capital Allowances Act (see section 70YI(1) of that Act); The amendments made by this paragraph have effect in relation to expenditure incurred on or after 1st April 2006.
After section 25 of TCGA 1992 (non-residents: deemed disposals) insert— The amendment made by this paragraph has effect where the commencement of the term of the lease is on or after 1st April 2006.
Schedule 12 to FA 1997 (leasing arrangements: finance leases and loans) is amended as follows. This Part of this Schedule does not apply if or to the extent that, in the case of the current lessor, the lease falls to be regarded in accordance with Chapter 6A of Part 2 of the Capital Allowances Act 2001 as a long funding lease for the purposes of that Part. This Part of this Schedule does not apply if or to the extent that, in the case of the current lessor, the lease falls to be regarded in accordance with Chapter 6A of Part 2 of the Capital Allowances Act 2001 as a long funding lease for the purposes of that Part. Paragraph 15 of Schedule 8 (commencement) also has effect in relation to the amendments made by this paragraph.
This Schedule sets out the modifications of Part 4 in its application to groups.
In section 117(1) the reference to the company shall be treated as a reference to a member of the group. An appeal under section 117(6) may be made by the member of the group on which the assessment is made.
Schedule 8 to F(No.2)A 1987 (amendments of Schedule 10 to FA 1987) is amended as follows. Omit paragraph 5 (which contains amendments making provision for certain amounts to be multiplied by a fraction greater than unity, and has not been brought into force). The amendment made by this paragraph has effect for chargeable periods beginning on or after 1st July 2006.
In section 49 of IHTA 1984, after subsection (1) insert— Sub-paragraph (1) shall be deemed to have come into force on 22nd March 2006.
Section 3A of IHTA 1984 (potentially exempt transfers) is amended as follows. In subsection (1)(a) (transfer must be one made on or after 18th March 1986), after “1986” insert “but before 22nd March 2006”. After subsection (1) insert— In subsection (2) (extent to which transfer is a gift to another individual), after “subsection (1)(c)” insert “or (1A)(c)(i)”. After subsection (3) insert— In subsection (7) (application of section in relation to charge to tax under section 52), after “subsection (1)(a)” insert “or (1A)(a)”.
In section 51 of IHTA 1984 (disposal of interest in possession not a transfer of value, but treated as coming to end of interest), after subsection (1) insert—
In section 57A of IHTA 1984 (relief where property enters fund for maintenance of historic buildings etc), after subsection (1) insert—
Section 59 of IHTA 1984 (settlements without interests in possession: meaning of “qualifying interest in possession”) is amended as follows. For subsection (1) substitute— In subsection (2) (cases where interest in possession to which a company is entitled is a “qualifying” interest), after paragraph (b) insert, and Where a chargeable transfer to which section 54A of IHTA 1984 applies was made before 22nd March 2006, that section has effect in relation to that transfer as if in that section “qualifying interest in possession” has the meaning it would have apart from sub-paragraphs (1) to (3). In the heading to Chapter 3 of Part 3 of IHTA 1984, at the end add “, and certain settlements in which interests in possession subsist”.
In section 80 of IHTA 1984 (postponement of commencement date of settlement where settlor, or spouse or civil partner or surviving spouse or surviving civil partner, has interest in possession at outset), after subsection (3) insert—
In section 101 of IHTA 1984 (where close company has interest in possession in settled property, its participators are treated for purposes of IHTA 1984 as the persons entitled to the interest), after subsection (1) insert—
Paragraph 9 of Schedule 36 (uncrystallised rights under arrangement under pension scheme within paragraph 1(1)(a) to (d)) is amended as follows. In sub-paragraph (3), insert at the end “as increased, in a case where sub-paragraph (5A) applies, in accordance with sub-paragraph (5B).” This sub-paragraph applies where, in the case of an arrangement under a pension scheme which immediately before 6th April 2006 was within section 611A(1)(a) of ICTA— Where sub-paragraph (5A) applies, the amount arrived at under sub-paragraph (3) is the aggregate of what it otherwise would be and so much of the amount of the lump sum as could not be so exchanged.
Schedule 36 (transitional provisions) is amended as follows.
In this Schedule, in relation to a group—
“G (pre-entry)” means the group before Part 4 begins to apply to it,
“G (property rental business)” means the group in so far as it carries on property rental business which satisfies Conditions 1 to 3 of section 107 (as modified by paragraph 6 below) while Part 4 applies to it,
“G (residual)” means the group in so far as it carries on other business while Part 4 applies to it, and
“G (post-cessation)” means the group after Part 4 has ceased to apply to it.
Section 118 shall apply as if—
a reference to C (residual) were a reference to G (residual), and
a reference to C (tax-exempt) were a reference to G (property rental business).
Section 52 of IHTA 1984 (tax on termination of interest in possession) is amended as follows. After subsection (2) insert— After subsection (3) insert—
In paragraphs 9(4)(a) and 26(3)(a) (primary protection: maximum permitted pension and maximum permitted lump sum), for “611(1)(a)” substitute “611A(1)(a)”.
A reference in this Schedule to a UK resident company is a reference to a company which— A reference in this Schedule to UK profits of a group is a reference to— A reference to UK business of a group is a reference to—
Section 53 of IHTA 1984 (exceptions from tax charge under section 52) is amended as follows. After subsection (1) insert— After subsection (2) insert—
In paragraph 54(1)(b) (benefits taxable under Chapter 2 of Part 6 of ITEPA 2003 where contributions taxed pre-commencement: old schemes), for “1st September 1993” substitute “1st December 1993”.
No such regulations shall be made unless a draft of the regulations has been laid before and approved by a resolution of the House of Commons.
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In this Chapter, in relation to a film—
Schedule 20 to FA 2000 (tax relief for expenditure on research and development by small or medium-sized enterprises) is amended as follows. In paragraph 3 (qualifying R&D expenditure), in sub-paragraph (4), after paragraph (b) insert—. After paragraph 6 (expenditure on software or consumable items), insert— In paragraph 10 (treatment of expenditure where company and sub-contractor are connected persons), in sub-paragraph (2)(a)(iii), for “or on software or consumable items” substitute “, on software or consumable items or on relevant payments to the subjects of a clinical trial”.
For the purposes of this Chapter a “limited-budget film” means a film whose core expenditure is £20 million or less.
In determining whether a film is a limited-budget film, any core expenditure that— is treated as having been of an amount equal to the arm’s length amount.
is incurred by a person under or as a result of a transaction entered into directly or indirectly between that person and a connected person, and
might have been expected to have been of a greater amount (“the arm’s length amount”) if the transaction had been between independent persons dealing at arm’s length,
Section 839 of ICTA (connected persons) applies for the purposes of subsection (3).
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For the purposes of this Chapter “UK expenditure”, in relation to a film, means expenditure on goods or services that are used or consumed in the United Kingdom.
Any apportionment of expenditure for the purposes of this Chapter as between UK expenditure and non-UK expenditure shall be made on a fair and reasonable basis.
The Treasury may by regulations amend subsection (1).
No such regulations shall be made unless a draft of the regulations has been laid before and approved by a resolution of the House of Commons.
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“qualifying co-production” means a film that falls to be treated as a national film in the United Kingdom by virtue of an agreement between Her Majesty’s Government in the United Kingdom and any other government, international organisation or authority,
“co-producer” means a person who is a co-producer for the purposes of the agreement.
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section 39 (intended theatrical release),
section 40 (British film), and
section 41 (UK expenditure).
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The film must be intended for theatrical release.
For this purpose—
“theatrical release” means exhibition to the paying public at the commercial cinema;
a film is not regarded as intended for theatrical release unless it is intended that a significant proportion of the earnings from the film should be obtained by such exhibition.
Whether this condition is met is determined for each accounting period of the film production company during which film-making activities are carried on in relation to the film, in accordance with the following rules.
If at the end of an accounting period the film is intended for theatrical release, the condition is treated as having been met throughout that period (subject to subsection (5)(b)).
If at the end of an accounting period the film is not intended for theatrical release, the condition— This does not affect any entitlement of the company to relief in an earlier accounting period for which the condition was met.
is treated as having been not met throughout that period, and
cannot be met in any subsequent accounting period.
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Not less than 25% of the core expenditure on the film incurred— must be UK expenditure.
in the case of a British film other than a qualifying co-production, by the film production company,
in the case of a qualifying co-production, by the co-producers,
The Treasury may by regulations amend the percentage specified in subsection (1).
No such regulations shall be made unless a draft of the regulations has been laid before and approved by a resolution of the House of Commons.
Schedule 5 to this Act contains further provisions about film tax relief.
In that Schedule— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 2 provides for the certification of British films for the purposes of the relief; Part 3 makes provision for claims for the relief; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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This section applies to restrict the use that may be made of a film production company’s trading loss for an accounting period before—
that in which the film is completed, or
where the company does not complete the film, that in which it abandons film-making activities in relation to the film.
A trading loss for such a period is not available for loss relief except to the extent that it may be carried forward under section 393(1) of ICTA to be set against profits of the same trade in a later period.
In this section “loss relief” includes any means by which a loss might be used to reduce the amount in respect of which the film production company, or any other person, is chargeable to tax.
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This section applies—
to the accounting period—
in which the film is completed, or
if the film production company does not complete the film, in which it abandons film-making activities in relation to the film, and
to any subsequent accounting period during which the trade continues.
Where a trading loss is carried forward to any such period under section 393(1) of ICTA from an earlier period in relation to which section 43 applied (restriction on use of losses while film is in production), so much (if any) of the loss as is not attributable to film tax relief may be treated for the purposes of loss relief as if it were a loss incurred in the period to which it is carried forward.
The amount of the trading loss for an accounting period to which this section applies that may be— is restricted to the amount (if any) that is not attributable to film tax relief.
set against other profits of the same or an earlier period under section 393A of ICTA, or
surrendered as group relief under section 403 of that Act,
For the purposes of this section the amount of a trading loss in any period that is attributable to film tax relief is calculated by deducting from the total amount of the loss the amount there would have been if there had been no additional deduction under Schedule 5 in that or any earlier period.
In this section “loss relief” includes any means by which a loss might be used to reduce the amount in respect of which the film production company, or any other person, is chargeable to tax.
This section does not apply to a loss to the extent that it is carried forward or surrendered under section 45 (terminal losses).
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This section applies where—
a film production company (“company A”) ceases to carry on a trade in relation to a qualifying film, and
if the company had not ceased to carry on the trade, it could have carried forward an amount under section 393(1) of ICTA 1988 to be set against profits of the same trade in a later period (the “terminal loss”).
If on cessation of the trade company A is carrying on a trade in relation to another qualifying film, it may on making a claim elect that the terminal loss or a part of it shall be treated as if it were a loss brought forward under section 393(1) to be set against profits of that other trade in the accounting period following that at the end of which the cessation takes place.
If on cessation of the trade carried on by company A there is another film production company (“company B”) which— the whole or part of the terminal loss may be surrendered by company A to company B.
is carrying on a trade in relation to a qualifying film (its “qualifying trade”), and
is in the same group as company A for the purposes of Chapter 4 of Part 10 of ICTA (group relief),
On the making of a claim by company B the amount surrendered shall be treated as if it were a loss brought forward by that company under section 393(1) to be set against the profits of its qualifying trade for the accounting period of that company following that in which or at the end of which the cessation takes place of the qualifying trade carried on by company A.
The Treasury may, in relation to the surrender of a loss under subsection (3) and the resulting claim under subsection (4), make provision by regulations corresponding, subject to such adaptations or other modifications as appear to them to be appropriate, to that made by Part 8 of Schedule 18 to FA 1998 (company tax returns: claims for group relief).
In this section—
references to the trade carried on by a film production company in relation to a film are to the trade that it is treated as carrying on under Schedule 4, and
references to a qualifying film are to a film that meets the conditions for film tax relief (see section 38).
Sections 40A to 40D of F(No.2)A 1992 (treatment of expenditure on production or acquisition of film) do not apply—
to production expenditure on a film that commences principal photography on or after 1st January 2007;
to acquisition expenditure—
on a film that commences principal photography on or after 1st January 2007, or
that is incurred on or after 1st October 2007 on a film (whenever made).
Section 41 of that Act (preliminary expenditure) does not apply to expenditure incurred after the date on which this Act is passed.
Section 42 of that Act and section 48 of F(No.2)A 1997 (special reliefs for British films) do not apply—
to production expenditure on a film that commences principal photography on or after 1st January 2007;
to acquisition expenditure—
on a film that commences principal photography on or after 1st January 2007, or
that is incurred on or after 1st October 2007.
References in this section to expenditure on the acquisition of a film, or to sums received from the disposal of a film, are to expenditure on the acquisition of, or sums received from the disposal of, the original master version of the film.
For this purpose—
“original master version” means the original negative, tape or disc;
references to the original master version of a film include the original master version of the film soundtrack (if any);
references to the original master version include any rights in the original master version that are held or acquired with it.
The provisions of sections 1181 to 1187 of CTA 2009 apply for the purposes of this section as if this section were contained in Part 15 of that Act.
Sections 134 and 135 of ITTOIA 2005 (treatment of expenditure on production or acquisition of film) do not apply—
to production expenditure on a film that commences principal photography on or after 1st January 2007 ;
to acquisition expenditure—
on a film that commences principal photography on or after 1st January 2007, or
that is incurred on or after 1st October 2007 on a film (whenever made).
Section 137 of that Act (preliminary expenditure) does not apply to expenditure incurred after the date on which this Act is passed.
Sections 138 to 144 of that Act (special reliefs for British films) do not apply—
to production expenditure on a film that commences principal photography on or after 1st January 2007;
to acquisition expenditure—
on a film that commences principal photography on or after 1st January 2007, or
that is incurred on or after 1st October 2007.
References in this section to expenditure on the acquisition of a film, or to sums received from the disposal of a film, are to expenditure on the acquisition of, or sums received from the disposal of, the original master version of the film.
For this purpose—
“original master version” means the original negative, tape or disc;
references to the original master version of a film include the original master version of the film soundtrack (if any);
references to the original master version include any rights in the original master version that are held or acquired with it.
The provisions of sections 1181 to 1187 of CTA 2009 apply for the purposes of this section as if this section were contained in Part 15 of that Act.
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If a company carrying on a trade incurs expenditure on the production or acquisition of the original master version of a sound recording, the expenditure is treated for corporation tax purposes as expenditure of a revenue nature.
If expenditure is treated under this section as revenue in nature, sums received by the company from the disposal of the original master version of the sound recording—
are treated for corporation tax purposes as receipts of a revenue nature, and
are brought into account in calculating the profits of the relevant period in which they are received.
For this purpose sums received from the disposal of the original master version include—
sums received from the disposal of any interest or right in or over the original master version (including an interest or right created by the disposal), and
insurance, compensation or similar money derived from the original master version.
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This section applies in calculating for the purposes of corporation tax the profits or losses of a company from a trade where—
the trade consists of or includes the exploitation of original master versions of sound recordings, and
the original master versions do not constitute trading stock of the trade as defined by section 100(2) of ICTA.
Expenditure that is— must be allocated to relevant periods in accordance with this section.
incurred on the production or acquisition of the original master version of a sound recording, and
expenditure of a revenue nature (whether as a result of section 48 or otherwise),
The company must allocate to a relevant period so much of the expenditure as is just and reasonable having regard to—
the amount of the expenditure that remains unallocated at the beginning of the period,
the proportion that the estimated value of the original master version of the sound recording that is realised in that period (whether by way of income or otherwise) bears to the aggregate of the value so realised and the estimated remaining value of the original master version at the end of the period, and
the need to bring the whole of the expenditure into account over the time during which the value of the original master version is expected to be realised.
The company may also allocate to a relevant period a further amount, so long as the total amount allocated does not exceed the value of the original master version of the sound recording realised in that period (whether by way of income or otherwise).
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“sound recording” does not include a film soundtrack;
“original master version” means the master tape or master audio disc of the recording;
references to the original master version of a sound recording include any rights in the original master version that are held or acquired with it; and
“relevant period” means—
a period for which accounts of the trade are made up, or
if no accounts of the trade are made up for a period, an accounting period of the company.
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In Schedule 29 to FA 2002 (corporation tax: gains and losses from intangible fixed assets), for paragraph 80 (exclusion of films and sound recordings) substitute—.
In determining for the purposes of that Schedule whether an asset representing production expenditure on a film was created before or after 1st April 2002, the asset shall be treated as created when the film was completed.
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The Treasury may make provision by regulations for the application of the provisions of this Chapter, and of any enactment amended by this Chapter, in relation to films that commenced principal photography before 1st April 2006 but are not completed before 1st January 2007.
The regulations may provide for such adaptations and modifications of the provisions of this Chapter, of any enactment amended by this Chapter and of any other provision of the Corporation Tax Acts, as appear to the Treasury appropriate for that purpose.
The regulations may—
provide that the provisions of this Chapter (or any specified provisions of this Chapter) shall have effect as if they had been in force at all material times;
require or authorise the making or amendment of returns, or the making of assessments, in relation to past accounting periods or tax years (whether before or after the commencement of this Chapter);
authorise the making of any such return, amendment or assessment notwithstanding any limitation on the time within which a return, amendment or assessment may normally be made.
No regulations shall be made under this section unless a draft of them has been laid before and approved by a resolution of the House of Commons.
The provisions of this Chapter come into force on such day as the Treasury may appoint by order.
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After section 506 of ICTA insert—
This section shall have effect in relation to transactions occurring on or after 22nd March 2006; and for that purpose a person may satisfy the definition of “substantial donor” by reference to gifts made at any time.
But this section shall not have effect in relation to a transaction entered into in pursuance of a contract made before 22nd March 2006 (otherwise than in pursuance of a variation on or after that date).
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For section 505(3) to (8) of ICTA (charities: exemption: non-qualifying expenditure) substitute—
In section 506 of ICTA (section 505: supplemental)—
“charitable expenditure” means (subject to subsections (3) to (5) below) expenditure which is exclusively for charitable purposes.
in subsection (2) omit “and subsection (1) above,”
in subsection (3) for “qualifying expenditure” substitute “charitable expenditure”,
in subsection (4) for “non-qualifying expenditure” substitute “non-charitable expenditure”,
in subsection (5) for “non-qualifying expenditure” substitute “non-charitable expenditure”,
omit subsection (6), and
for the heading, substitute “Charitable and non-charitable expenditure”.
Part III of Schedule 20 to ICTA (apportionment of non-qualifying expenditure to earlier chargeable periods) shall cease to have effect.
In section 256(1) of TCGA 1992 (charities) for “section 505(3)” substitute “section 505(4)”.
This section shall have effect in relation to chargeable periods beginning on or after 22nd March 2006; and—
section 505(5) and (6) of ICTA as substituted by subsection (1) above may cause an amount to be treated as non-charitable expenditure of a chargeable period beginning before that date, but
the amount of relief or exemption to be disallowed in respect of a chargeable period beginning before that date shall not exceed the amount which would have been disallowed in respect of that period if sections 505 and 506 of ICTA (and Part III of Schedule 20) had not been amended by this section.
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In section 505 of ICTA (charities: exemptions) after subsection (1A) insert—
Subsection (1) shall have effect in respect of chargeable periods beginning on or after 22nd March 2006.
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Section 339 of ICTA (charges on income: donations to charity) is amended as follows.
In subsection (1)(a) (distributions, other than those within section 209(4), not qualifying donations) after “distribution” insert “(but see subsections (1A) and (1B) below)”.
After subsection (1) insert—.
The amendments made by this section have effect in relation to payments made on or after 1st April 2006.
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Section 339 of ICTA (charges on income: donations to charity) is amended as follows.
In subsection (3B) (payment made by a close company not qualifying donation if subject to repayment etc) for “close company” substitute “company”.
In subsection (3E) (payment made by a close company not qualifying donation if it involves acquisition of property by charity, otherwise than by way of gift, from the company or a connected person) for “close company” substitute “company”.
The amendments made by this section have effect in relation to payments made on or after 1st April 2006.
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Section 139 of ITEPA 2003 (car with a CO2 emissions figure: the appropriate percentage) is amended as follows.
In subsection (1) (appropriate percentage dependent on whether emissions figure exceeds lower threshold) for the words from “whether” to the end of the subsection substitutewhether—
After subsection (1) insert—.
For subsection (2) (emissions figure does not exceed lower threshold) substitute—.
After subsection (3) insert—.
In the Table in subsection (4) (the lower threshold)—
in the entry relating to 2005-06 and subsequent tax years, for “and subsequent tax years” substitute “, 2006-07 or 2007-08”, and
2008-09 and subsequent tax years 135
After subsection (5) (rounding down of emissions figures to nearest multiple of 5) insert—.
In section 170 of ITEPA 2003 (orders etc relating to the Chapter) before subsection (3) (order varying lower threshold) insert—.
If a qualifying low emissions car is a car which, within the meaning of regulations under section 170(4) of ITEPA 2003,— no reduction in the appropriate percentage is to be made by virtue of any such regulations made before 22nd March 2006.
is capable of being propelled by petrol and road fuel gas,
is capable of being propelled by electricity and petrol, or
is propelled solely by road fuel gas,
Subsections (2) to (5) and (7) to (9) have effect for the tax year 2008-09 and subsequent tax years.
In section 266(2) of ITEPA 2003 (exemption of non-cash vouchers for exempt benefits), insert at the endor
In section 267(2) of that Act (exemption of credit-tokens used for exempt benefits), after paragraph (f) insert—
For section 319 of that Act (employment income: exemption for mobile telephones) substitute—
This section has effect for the year 2006-07 and subsequent years of assessment.
But the amendment made by subsection (3) does not cause any liability to income tax to arise in respect of the provision of a mobile telephone for an employee, or a member of an employee's family or household, if the mobile telephone was first provided to him before 6th April 2006.
Omit section 320 of ITEPA 2003 (employment income: limited exemption for computer equipment).
This section has effect for the year 2006-07 and subsequent years of assessment.
But it does not cause any liability to income tax to arise in respect of the provision of computer equipment by making it available to an employee, or a member of an employee's family or household, if the computer equipment was first made available to him before 6th April 2006.
Part 4 of ITEPA 2003 (employment income: exemptions) is amended as follows.
In Chapter 11 (miscellaneous exemptions), before section 321 (and the cross-heading “Awards and gifts”) insert—
In section 266 (exemption of non-cash vouchers for exempt benefits), at the end of subsection (3) insert, or
In section 267 (exemption of credit-tokens used for exempt benefits), at the end of subsection (2) insert, and
This section has effect for the year 2006-07 and subsequent years of assessment.
In Chapter 4 of Part 3 of ITEPA 2003 (taxable benefits: vouchers and credit-tokens), after section 96 insert—
In section 369 of ITTOIA 2005 (charge to tax on interest), in subsection (3) (non-exhaustive list of exemptions), in paragraph (e) (exemptions under sections 749 to 756)—
for “756” substitute “ 756A ”, and
for “and interest on certain foreign currency securities)” substitute “ , certain foreign currency securities and interest on certain deposits of victims of National-Socialist persecution) ”.
After section 756 of ITTOIA 2005 (which securities and loans are foreign currency ones for section 755) insert—.
In section 783 of ITTOIA 2005 (general disregard of exempt income for income tax purposes)—
for subsection (2) (exception to general disregard) substitute—, and
in subsection (3) (subsection (2) without prejudice to other exceptions) for “This express exception to subsection (1) is” substitute “ These express exceptions to subsection (1) are ”.
After section 268 of TCGA 1992 (decorations for valour or gallant conduct) insert—.
If at any time before claims could have been made under any qualifying compensation scheme— that deposit is to be ignored for all purposes of IHTA 1984.
a person beneficially entitled to a qualifying deposit has died, and
no information in respect of that deposit was contained in any account relating to that deceased person under any provision of IHTA 1984,
For this purpose “qualifying compensation scheme” and “qualifying deposit” have the same meaning as in section 756A of ITTOIA 2005.
Subsection (2) has effect (and is deemed always to have had effect)—
for the year 1996-97, and
subsequent years of assessment.
Subsection (4) has effect (and is deemed always to have had effect) in relation to disposals made on or after 6th April 1996; but no loss accruing on a disposal made before 6th April 2006 is, as a result of that subsection, to cease to be an allowable loss.
In relation to any time before 6th April 2005 (the commencement of ITTOIA 2005)—
the section inserted by subsection (2) is to be treated as if it were inserted into ICTA (and as if, in subsection (5) of that section, “of ICTA” were omitted), and
any reference to that section in any enactment is to be read accordingly.
In relation to the year 2005-06 or any earlier year of assessment, all such adjustments are to be made as are required to give effect to the exemptions conferred as a result of this section.
But the adjustments are to be made only if the person entitled to the exemption makes a claim for the exemption on or before 31st January 2012.
The adjustments may be made by discharge or repayment of tax, the making of an assessment or otherwise.
In this section “LOCOG” means the private company limited by guarantee incorporated on 22nd October 2004 with the Company Number 05267819 and with the name The London Organising Committee of the Olympic Games Limited.
LOCOG shall be exempt from corporation tax.
The duties to deduct under Chapters 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source) shall not apply to payments to LOCOG.
A claim may be made for any repayment of income tax required as a result of an exemption conferred by this section.
The Treasury may by regulations provide for subsections (2) to (4) to apply to a wholly-owned subsidiary of LOCOG (within the meaning of section 736 of the Companies Act 1985 (c. 6)) as they apply to LOCOG.
Subsection (7) applies if it appears to the Treasury—
that LOCOG has been or may have been, or is or may be, directly or indirectly connected with another person, or
has been or may have been, or is or may be, acting in association or co-operation with another person (whether by virtue of part-ownership, partnership, membership of a group or consortium or in any other way).
The Treasury may make regulations— and provision made under any of paragraphs (b) to (h) may relate to LOCOG or to the other person mentioned in subsection (6).
restricting the application of a provision of this section to a specified extent;
removing or restricting an exemption or relief under an enactment relating to corporation tax, income tax or capital gains tax;
preventing a loss or expense of a specified kind from being used or treated in a specified way for purposes of corporation tax, income tax or capital gains tax;
wholly or to a specified extent preventing an allowance from being claimed for purposes of corporation tax, income tax or capital gains tax;
providing for a transfer of property to be disregarded, or treated in a specified way, for purposes of corporation tax, income tax or capital gains tax;
providing for specified action taken by LOCOG or the other person to have, or not to have, a specified effect for purposes of corporation tax, income tax or capital gains tax;
providing for an enactment relating to the treatment of groups of companies for purposes of corporation tax, income tax or capital gains tax to be wholly or partly disapplied or to be applied with modifications;
making any other provision which appears to the Treasury to be expedient for the purpose of preventing this section from being used or relied upon otherwise than in connection with the functions of LOCOG under the Host City Contract;
If it appears to the Treasury that LOCOG has undertaken, is undertaking or may undertake activities other than in pursuance of the Host City Contract, the Treasury may make regulations restricting the application of a provision of this section to a specified extent.
Regulations under subsection (5) may include provision of a kind similar to that which may be made under subsection (7) or (8).
Regulations under section 65(5) to (8)—
may make provision which applies generally or only in specified cases or circumstances,
may make different provision for different cases or circumstances,
may have retrospective effect, and
may include incidental, consequential or transitional provision.
Regulations under section 65 shall be made by statutory instrument.
Regulations under section 65(5)—
shall be subject to annulment in pursuance of a resolution of the House of Commons, or
if they include provision by virtue of section 65(9), may not be made unless a draft has been laid before and approved by resolution of the House of Commons.
Regulations under section 65(7) or (8) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.
In section 65 “the Host City Contract” has the meaning given by section 1 of the London Olympic Games and Paralympic Games Act 2006.
Section 65 shall be treated as having come into force on 22nd October 2004.
The Treasury may by order made by statutory instrument repeal section 65 and this section.
The Treasury may make regulations—
providing for the International Olympic Committee to be treated for the purposes of corporation tax as not having a permanent establishment in the United Kingdom;
providing for the International Olympic Committee not to be chargeable to income tax or capital gains tax;
disapplying the duties to deduct under Chapters 3, 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source) to payments to the International Olympic Committee.
The Treasury may make regulations—
providing for a specified person or class of person appearing to the Treasury to be owned or controlled by the International Olympic Committee to be treated for the purposes of corporation tax as not having a permanent establishment in the United Kingdom;
providing for a specified person or class of person appearing to the Treasury to be owned or controlled by the International Olympic Committee not to be chargeable to income tax or capital gains tax;
disapplying the duties to deduct under Chapters 3, 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source) to payments to a specified person or class of person appearing to the Treasury to be owned or controlled by the International Olympic Committee.
Regulations under this section—
may make provision which applies generally or only in specified cases or circumstances,
may make different provision for different cases or circumstances,
may have retrospective effect, and
may include incidental, consequential or transitional provision.
Regulations under this section—
shall be made by statutory instrument, and
shall be subject to annulment in pursuance of a resolution of the House of Commons.
A claim may be made for any repayment of income tax required as a result of an exemption conferred under this section.
The Treasury may make regulations—
exempting specified classes of person from income tax in respect of specified classes of income arising from participation in London Olympic events;
providing for specified classes of activity undertaken in connection with London Olympic events to be disregarded for purposes of corporation tax, income tax or capital gains tax;
providing for specified classes of activity in connection with London Olympic events to be disregarded in determining for fiscal purposes whether a person has a permanent establishment in the United Kingdom;
disapplying the duties to deduct under Chapters 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source) in consequence of provision made under paragraphs (a) to (c) above.
The regulations may specify classes of person wholly or partly by reference to—
residence outside the United Kingdom, determined in such manner as the regulations may provide;
documents issued or authority given by such persons exercising functions in connection with the London Olympics as the regulations may provide.
Regulations under this section—
may make provision which applies generally or only in specified cases or circumstances,
may make different provision for different cases or circumstances, and
may include incidental, consequential or transitional provision.
Regulations under this section—
shall be made by statutory instrument, and
shall be subject to annulment in pursuance of a resolution of the House of Commons.
In this section “London Olympic event” and “the London Olympics” have the meaning given by section 1 of the London Olympic Games and Paralympic Games Act 2006.
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Section 8 of TCGA 1992 (company’s total profits to include chargeable gains) is amended as follows.
In subsection (2) (exclusion of loss as allowable loss)—
for “does not include a loss” substitutedoes not include—, and
at the end insert, or.
After subsection (2) insert—.
In section 834(1) of ICTA (interpretation of the Corporation Tax Acts), in the definition of “allowable loss”, at the end insert “or a loss accruing to a company in disqualifying circumstances (within the meaning of section 8(2)(b) of the 1992 Act)”.
The amendments made by this section have effect in relation to any loss accruing on any disposal that is made on or after 5th December 2005.
TCGA 1992 is amended as follows.
After section 184 insert—.
In Schedule 7A (restriction on set-off of pre-entry losses), in paragraph 1(1) (application of Schedule), at the end insert “ , but this Schedule shall have no effect in any case where section 184A (restrictions on buying losses: tax avoidance schemes) has effect in relation to those losses ”.
Section 177B and Schedule 7AA (restrictions on setting losses against pre-entry gains) shall cease to have effect.
In section 213 (insurance companies: spreading of gains and losses under section 212)— The amendments made by this subsection have effect where the accounting period for which the net amount represents an excess of losses over gains is an accounting period ending on or after 5th December 2005.
in subsection (8H) for “that the net amount is” to the end substitute “ that the net amount would still arise even if losses accruing after the date on which the company or transferee joined the group of companies were disregarded ”, and
in subsection (8I) for “paragraph 1” to the end substitute “ section 184C as if those references were contained in that section; and in subsection (8A)(b) above “group” has the same meaning as in that section ”.
The amendments made by this section, other than subsection (5), have effect for calculating the amount to be included in respect of chargeable gains in a company's total profits for any accounting period ending on or after 5th December 2005.
But, in respect of any such accounting period, those amendments do not have effect in relation to the deduction of any loss from chargeable gains that accrue on any disposal made before 5th December 2005 unless that loss accrues on a disposal made on or after that date.
For the purposes of those amendments, it does not matter whether a qualifying change of ownership in relation to a company occurs—
before 5th December 2005, or
on or after that date.
Subsections (10) to (12) apply so long as each of the following conditions is met—
at any time (“the relevant time”) before 5th December 2005 there is a qualifying change of ownership in relation to a company (“the relevant company”) for the purposes of section 184A . . . of TCGA 1992,
the change of ownership occurs because the relevant company ceases to be a member of a group of companies at the relevant time (whether or not it also occurs for any other reason),
the principal company of that group has control of the relevant company at the relevant time and at immediately afterwards,
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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
a qualifying loss for the purposes of section 184A of TCGA 1992 . . . accrues to the relevant company or any other company on a disposal made before 5th December 2005.
Subsection (2) of that section has effect in relation to that qualifying loss subject to the following modifications.
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.
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—
which, immediately before that time, was a member of the same group of companies as the relevant company, and
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.
Expressions which are used in subsections (9) to (12) have the same meaning as in sections 184A and 184C of TCGA 1992.
After section 184F of TCGA 1992 (as inserted by section 70 above) insert—.
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The amendments made by this section have effect in relation to chargeable gains accruing on any disposal that is made on or after 5th December 2005.
Section 106 of TCGA 1992 (disposal of shares and securities by company within prescribed period of acquisition) shall cease to have effect.
In consequence of that repeal—
in section 104(2)(b) of TCGA 1992 (share pooling: general interpretative provisions) omit “, 106”,
in section 105 of that Act (disposal on or before day of acquisition of shares and other unidentified assets)—
in subsection (2)(b) for “any of the provisions of section 106 or” substitute “ section ”, and
in subsection (2)(c) omit “106,”,
in section 108(8) of that Act (identification of relevant securities) omit “shall have effect subject to section 106 but”,
in section 110(1)(b) of that Act (section 104 holdings: indexation allowance) for “sections 105 and 106” substitute “ section 105 ”, and
in Schedule 15 to FA 2000 (corporate venture scheme), in paragraph 93(6) (identification of shares on a disposal), for “Sections 104 to 106” substitute “ Sections 104, 105 ”.
The amendments made by this section have effect in relation to any disposal that is made on or after 5th December 2005.
TCGA 1992 is amended as follows.
For section 204 (policies of insurance) substitute—.
In section 237 (superannuation funds, annuities and annual payments)—
at the end of paragraph (a), insert “ or ”, and
omit paragraph (b) (exemption for disposals of non-deferred annuities etc).
The amendments made by this section have effect in relation to disposals made on or after 5th December 2005.
TCGA 1992 is amended as follows.
In section 106A (identification of securities: general rules for capital gains tax), after subsection (5) (acquisition of securities within 30 days after disposing of securities of same class) insert—.
In section 288 (interpretation), after subsection (7A) (meaning of “surrender” in application of Act to Scotland) insert—.
In consequence of the amendment made by subsection (3)—
in section 10A (temporary non-residents), omit subsection (9A) (meaning of “Treaty non-resident”), and
in section 83A (trustees both resident and non-resident in a year of assessment), omit subsection (5) (meaning of “Treaty non-resident”).
The amendment made by subsection (2) has effect in relation to any acquisition made at any time on or after 22nd March 2006.
The amendments made by subsections (3) and (4) have effect in relation to any time on or after 22nd March 2006.
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The amount of interest on a loan in respect of which an individual (“the borrower”) is eligible for relief for a year of assessment under sections 353 and 362 of ICTA (interest on loan to buy into partnership) shall, where this section applies, be restricted to 40% of the interest that would otherwise be eligible for relief.
This section applies where—
the partnership (“the film partnership”) carries on a trade,
the profits or losses of the trade are computed in accordance with Chapter 9 of Part 2 of ITTOIA 2005 (films, etc),
the loan is secured on an asset or activity of another partnership (“the investment partnership”),
the borrower is or has been a member of the investment partnership, and
at a time in the year of assessment the proportion of the profits of the investment partnership to which the borrower is entitled is less than the proportion of the partnership’s capital contributed by him at that time.
For the purposes of subsection (2)(c) a loan is secured on an asset or activity of a partnership if there is any arrangement—
under which an asset of the partnership may be used or relied upon wholly or partly to guarantee repayment of any part of the loan, or
by virtue of which any part of the loan is expected to be repaid (directly or indirectly) out of assets or income held by or accruing to the partnership.
For the purposes of subsection (2)(e) the reference to profits excludes any amount that would not be taken into account as, or for the purpose of calculating, income for the purposes of the Tax Acts.
In subsection (2)(e) the reference to the partnership’s capital is a reference to—
anything that is, or in accordance with generally accepted accounting practice would be, accounted for as partners' capital or partners' equity, and
amounts lent to the partnership by the partners.
For the purposes of subsection (2)(e) the reference to the proportion of the partnership’s capital contributed by the borrower includes, in particular, a reference to—
any amount paid by the borrower to acquire an interest in the investment partnership if or in so far as the borrower retains the interest at that time,
any amount made available by the borrower (directly or indirectly) to another person who acquires an interest in the investment partnership if or in so far as that other person retains the interest at that time,
any amount lent by the borrower to the investment partnership,
any amount made available by the borrower (directly or indirectly) to another person who lends it to the investment partnership, and
an amount made available in any other way prescribed by regulations made by the Commissioners for Her Majesty’s Revenue and Customs.
Regulations under subsection (6)(e)—
may make provision having retrospective effect,
may make provision generally or only in relation to specified cases or circumstances,
may make different provision for different cases or circumstances,
may make transitional, consequential or incidental provision,
shall be made by statutory instrument, and
shall not be made unless a draft has been laid before and approved by resolution of the House of Commons.
In subsections (2) to (6) a reference to the borrower or another partner includes a reference to a person connected with him within the meaning of section 839(2) of ICTA.
This section shall have effect in relation to the payment of interest accruing on or after 10th March 2006.
Schedule 6 (which makes provision in relation to tax avoidance involving financial arrangements) has effect.
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Schedule 29 to FA 2002 (gains and losses of a company from intangible fixed assets) is amended as follows.
In paragraph 13 (credits in respect of intangible fixed assets: introduction), in sub-paragraph (1) (credits brought into account under Part 3), after paragraph (a) (receipts recognised in determining profit or loss), insert—.
After paragraph 14 (receipts recognised as they accrue) insert—.
In paragraph 82 (assets excluded to extent specified: research and development), in sub-paragraph (2) (provisions of Schedule not applying to asset so far as representing expenditure on research and development)—
in paragraph (a) (Part 2 not to apply subject to exception relating to paragraph 14), at the end insert “or 14A (receipts in respect of royalties so far as not dealt with under paragraph 14)”, and
in paragraph (b) (Part 3 not to apply subject to exception for paragraph 14), for “paragraph 14” substitute “paragraphs 14 and 14A”.
In paragraph 83 (assets excluded to extent specified: election to exclude capital expenditure on computer software), in sub-paragraph (3) (effect of election)—
in paragraph (a) (Part 2 not to apply subject to exception relating to paragraph 14), at the end insert “or 14A (receipts in respect of royalties so far as not dealt with under paragraph 14)”, and
in paragraph (b) (Part 3 not to apply subject to exception for paragraph 14), for “paragraph 14” substitute “paragraphs 14 and 14A”.
In paragraph 118 (application of Schedule to assets created or acquired after commencement, that is to say, on or after 1st April 2002)—
in sub-paragraph (4) (application of sub-paragraph (1) subject to other paragraphs), at the end insertand, and
in sub-paragraph (6) (nothing in paragraph 118 restricts application of Schedule in accordance with paragraph 119), at the end insert “, but see sub-paragraph (5) of that paragraph.”.
Nothing in this paragraph shall be read as authorising or requiring an amount to be brought into account in connection with the realisation of an existing asset within the meaning of Part 4.
After paragraph 127 (certain assets acquired on transfer of business treated as existing assets) insert—.
In paragraph 143 (index of defined expressions), in the entry relating to existing asset, in the second column, for “paragraph 127” substitute “paragraphs 127 to 127B”.
The amendments made by this section have effect in relation to the debits or credits to be brought into account for any accounting period beginning on or after 5th December 2005 (and, in relation to the debits or credits to be brought into account for any such period, shall be deemed always to have had effect).
For this purpose an accounting period beginning before, and ending on or after, that date is treated as if— were separate accounting periods.
so much of that period as falls before that date, and
so much of that period as falls on or after that date,
Section 90 of FA 2002 (controlled foreign companies and treaty non-resident companies) is amended as follows.
In subsection (2) (application of subsection (1), which inserted section 747(1B) of ICTA (disregard of section 249 of FA 1994 for most purposes of Chapter 4 of Part 17 of ICTA (controlled foreign companies))), for paragraph (b) (exclusion for companies which were non-resident immediately before 1st April 2002) substitute—.
After that subsection insert—.
Schedule 7 (which makes amendments of, or relating to, Chapter 3 of Part 17 of ICTA (transfer of assets abroad)) has effect.
Schedule 15 to FA 2004 (charge to income tax on benefits received by former owner of property) is amended as follows.
In paragraph 11 (exemptions from charge)—
in sub-paragraph (9) (meaning of “the relevant property”) for “sub-paragraphs (1) to (8)” substitute “ this paragraph ”, and
at the end insert—.
In paragraph 21 (election for application of inheritance tax provisions where paragraph 3 (land) or 6 (chattels) would otherwise apply)—
in sub-paragraph (2)(b) (application of the gifts with reservation rules), in sub-paragraph (i) at the end insert “ , but only so far as the chargeable person is not beneficially entitled to an interest in possession in the property ”,
in sub-paragraph (2)(b) for sub-paragraph (ii) and the “and” before it substitute—, and
in sub-paragraph (3) (meaning of “the chargeable proportion”), after paragraph (a)(ii) insert—.
In paragraph 22 (election for application of inheritance tax provisions where paragraph 8 (intangible property) would otherwise apply), in sub-paragraph (2)(b) (application of the gifts with reservation rules)—
in sub-paragraph (i) at the end insert “ , but only so far as the chargeable person is not beneficially entitled to an interest in possession in the property concerned ”, and
for sub-paragraph (ii) and the “and” before it substitute—.
The amendments made by this section have effect—
for the part of the year 2005-06 beginning with 5th December 2005, and
for the year 2006-07 and subsequent years of assessment.
If— his personal representatives (within the meaning of IHTA 1984) may make any election under paragraph 21 or 22 of that Schedule that he might have made.
paragraph 11 of Schedule 15 to FA 2004 ceases, in consequence of the amendments made by this section, to apply to a person in relation to any property, and
that person dies before the day on which this Act is passed without making an election under paragraph 21 or 22 of that Schedule in relation to that property,
If— that amount is to be treated instead as falling due at the end of the period of 14 days beginning with that day.
in consequence of the amendments made by this section a person makes an election under paragraph 21 or 22 of Schedule 15 to FA 2004,
that person dies before the day on which this Act is passed, and
an amount of inheritance tax would (but for this subsection) fall due before that day,
This section is deemed to have come into force on 5th December 2005.
Schedule 8 (which makes provision in relation to leases of plant or machinery) has effect.
Schedule 9 (which makes miscellaneous amendments relating to such leases) has effect.
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After section 261 of CAA 2001 (special leasing: life assurance business) insert—.
The amendments made by this section have effect in relation to any business carried on by a company in partnership in any accounting period of the partnership ending on or after 5th December 2005.
But, in relation to any accounting period of the partnership beginning before 5th December 2005 and ending on or after that date, those amendments have effect only if—
the company starts to carry on the business in partnership on or after that date, or
a relevant change in the interest of the company in the business occurs on or after that date.
A relevant change in the interest of the company in the business occurs at any time if—
immediately before that time its interest in the business during any accounting period of the partnership is determined on an allowable basis (within the meaning given by section 887 of the Corporation Tax Act 2010), and
immediately after that time its interest in the business during that period is not so determined.
CAA 2001 is amended as follows.
sections 228K to 228M Disposal of plant or machinery subject to lease where income retained
After section 228J (plant or machinery subject to further operating lease) insert—.
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The amendments made by this section have effect in relation to any disposal made on or after 5th December 2005.
But any rentals that are receivable by the lessor before 22nd March 2006 are to be left out of account in calculating the income of the lessor's leasing business for corporation tax purposes.
CAA 2001 is amended as follows.
In section 266 (election where predecessor and successor are connected persons), in subsection (7) (sections 104, 108 and 265 not to apply if election is made), at the end insert “ (but see section 267A) ”.
In section 267 (effect of election), at the end insert—.
After that section insert—.
The amendments made by this section have effect in relation to any succession occurring on or after 5th December 2005.
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Schedule 15 to ICTA (provisions for determining whether an insurance policy is a “qualifying policy” for the purposes of the Tax Acts) is amended as follows.
In paragraph 18 (variations), in sub-paragraph (3) (paragraph does not apply by reason of certain variations), at the end insert, or .
In paragraph 22 (certificates from body issuing policy), in sub-paragraph (3) (sub-paragraph (2) does not apply by reason of certain variations), at the end insert; or .
In the case of a variation effected as part of, or in connection with, an insurance business transfer scheme, the amendments made by this section are deemed always to have had effect.
In any other case, the amendments made by this section have effect in relation to variations effected on or after 7th October 2005.
In this section an “insurance business transfer scheme” means— and for the purposes of this subsection any reference to an enactment is a reference to the enactment as it had effect from time to time.
a scheme falling within section 105 of the Financial Services and Markets Act 2000 (c. 8),
a scheme sanctioned by a court under Part 1 of Schedule 2C to the Insurance Companies Act 1982 (c. 50), or
a scheme sanctioned by a court under section 49 of that Act or under any earlier enactment corresponding to that section,
Schedule 12 (which amends TCGA 1992 in respect of settlors and trustees of settlements and makes other minor and consequential amendments) shall have effect.
Schedule 13 (which amends ICTA and ITTOIA 2005 in respect of settlors and trustees of settlements and makes other minor and consequential amendments) shall have effect.
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Section 686 of ICTA (accumulation and discretionary trusts: special rates of tax) is amended as follows.
In subsection (2), after paragraph (b) insert—.
After subsection (6) insert—
This section has effect for the year 2006-07 and subsequent years of assessment.
Schedule 14 contains amendments of the provisions relating to— . . . . . . the corporate venturing scheme.
Those amendments have effect as mentioned in that Schedule.
Section 420 of ITEPA 2003 (meaning of securities etc) is amended as follows.
In subsection (1)(f), insert at the beginning “ options and ”.
In subsection (5)(e), insert at the beginning “ securities ”.
In subsection (8), in the definition of “securities option”, after “acquire securities” insert “ other than a right to acquire securities which is acquired pursuant to a right or opportunity made available under arrangements the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions ”.
This section has effect in relation to options acquired on or after 2nd December 2004; but subsection (4) also has effect in relation to an option acquired before that date where something is done on or after that date as part of the arrangements under which it was made available.
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Schedule 23 to FA 2003 (corporation tax relief for employee share acquisition) is amended as follows.
But if the option is a qualifying option, the amount mentioned in sub-paragraph (4) is increased by (or, if that amount is nil, is taken to be) the amount equal to any difference between—
But if the option is a qualifying option, the amount mentioned in sub-paragraph (4) is increased by (or, if that amount is nil, is taken to be) the amount equal to any difference between—
“the EMI code” has the meaning given by section 527(3) of the Income Tax (Earnings and Pensions) Act 2003; “qualifying option” has the same meaning as in the EMI code (see section 527(4) of the Income Tax (Earnings and Pensions) Act 2003);
the EMI code paragraph 30 qualifying option paragraph 30
This section applies in relation to an acquisition of shares made on or after 1st September 2003 (and for this purpose shares are acquired when the recipient acquires a beneficial interest in the shares and not, if different, the time the shares are conveyed or transferred).
ITEPA 2003 is amended as follows.
In section 222 (payments by employer on account of tax where deduction not possible)—
in subsection (1)(c), for “date on which the employer is treated as making the notional payment” substitute “ relevant date ”,
in subsection (2), for “date mentioned in subsection (1)(c)” substitute “ relevant date ”, and
after subsection (3) insert—
In section 684(2) (PAYE regulations), in item 1—
for “time of the payment” substitute “ relevant time ”, and
“The relevant time” is—
In section 710 (notional payments: accounting for tax)—
in subsection (7), after “means” insert “ (subject to subsection (7A)) ”, and
after that subsection insert—
The provisions of ITEPA 2003 amended by this section have effect in relation to notional payments treated by virtue of this Act as made before the date on which this Act is passed as if for the references to the date on which the Act is passed in— there were substituted references to such date as the Commissioners for Her Majesty's Revenue and Customs may by order made by statutory instrument appoint.
section 222(4)(a),
paragraph (a) of the definition of “the relevant time” in section 684(2), and
section 710(7A)(a), (b) and (c),
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for subsection (2) substitute—, and
in the heading for “profit share return” substitute “deposit”.
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in subsection (1)(a) for “or section 49,” substitute “, 49 or 49A,”
in subsection (3) for “or section 49.” substitute “, 49 or 49A.”, and
in subsection (5) for “49,” substitute “49 or 49A,”.
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as if references to Chapter 5 of Part 2 of that Act were references to this section,
as if references to 6th April 2005 were references to—
1st April 2006 in relation to corporation tax, and
6th April 2006 in relation to income tax, and
as if references to section 49 were references to section 49A.
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In section 46(1) of FA 2005 (alternative finance arrangements: definition) after “47” insert “, 47A,”.
In section 47 of FA 2005 (alternative finance return)—
omit subsection (5),
in subsections (6) and (7) after “is to be taken” insert “for the purposes of this Chapter”, and
in the heading for “alternative finance return” substitute “purchase and re-sale”.
After section 47 of FA 2005 insert—
In section 50 of FA 2005 (treatment of alternative finance arrangements: companies)—
in subsection (1) after “section 47” insert “or 47A”,
at the beginning of subsection (1)(b) add “in the case of arrangements within section 47,”, and
after subsection (1)(b) insert—.
In section 52 of FA 2005 (provision not at arm’s length)—
in subsection (1)(a) after “47” insert “, 47A”,
in subsection (3) after “47” insert “, 47A”, and
in subsection (4) for “47,” substitute “47 or 47A,”.
In section 53 of FA 2005 (sale and purchase of asset)—
in subsection (1) after “47” insert “or 47A”,
after subsection (2) add—, and
in the heading after “47” insert “or 47A”.
In the definition of “alternative finance return” in section 57 of FA 2005 for “section 47(5)” substitute “sections 47(6) and (7) and 47A(5)”.
This section shall have effect in relation to alternative finance arrangements entered into on or after—
1st April 2006 in relation to corporation tax, and
6th April 2006 in relation to income tax.
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For the purposes of Chapter 7 of Part 3 of ITEPA 2003 (taxable benefits: loans) a reference to a loan includes a reference to an arrangement which—
is an alternative finance arrangement to which section 47 or 47A FA 2005 applies, or
would be an alternative finance arrangement to which one of those sections applied if one of the parties were a financial institution.
In the application of that Chapter by virtue of subsection (1)—
a reference to interest shall be treated as including a reference to alternative finance return, and
a reference to the amount outstanding shall be taken to be—
in the case of arrangements to which section 47 applies, a reference to the purchase price minus such part of the aggregate payments made as does not represent alternative finance return, and
in the case of arrangements to which section 47A applies, a reference to the amount of the financial institution’s original beneficial interest minus such part of the aggregate payments made as does not represent alternative finance return.
This section shall have effect in relation to arrangements entered into on or after 22nd March 2006.
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The Treasury may by order amend Chapter 5 of Part 2 to FA 2005 (alternative finance arrangements) so as to introduce provision relating to arrangements which in the Treasury’s opinion—
equate in substance to a loan, deposit or other transaction of a kind that generally involves the payment of interest, but
achieve a similar effect without including provision for the payment of interest.
An order under subsection (1) may, in particular—
include provision of a kind similar to provision already made by Chapter 5 of Part 2;
make other provision about the treatment for the purposes of the Tax Acts of arrangements to which the order applies;
make provision generally or only in relation to specified cases or circumstances;
make different provision for different cases or circumstances;
include consequential provision (which may include provision amending a provision of the Tax Acts);
include incidental or transitional provision.
An order under subsection (1)—
shall be made by statutory instrument, and
shall not be made unless a draft has been laid before and approved by resolution of the House of Commons.
Section 29 of the Energy Act 2004 (c. 20) (disregard for tax purposes of cancellation etc of decommissioning provisions) is amended as follows.
In subsection (1)—
in paragraph (a), for “relevant company” substitute “ BNFL company ”;
for paragraphs (b) and (c) substitute—
For subsections (3) and (4) substitute—
In subsection (5)—
“BNFL company” means—
after that definition insert—;
“relevant period”, in relation to a company, means an accounting period during the whole of which the company is publicly owned;
After that subsection insert—
The amendments made by this section have effect in relation to accounting periods of a BNFL company ending on or after 22nd March 2006. “BNFL company” has the same meaning as in section 29 of the Energy Act 2004 (c. 20) as amended by this section.
“BNFL company” has the same meaning as in section 29 of the Energy Act 2004 (c. 20) as amended by this section.
Section 30 of the Energy Act 2004 (disregard for tax purposes of decommissioning provisions recognised by Nuclear Decommissioning Authority) is amended as follows.
In subsection (1)—
for paragraph (b) substitute—;
in paragraph (c) omit “on the coming into force of the direction mentioned in paragraph (a),”;
at the end of that paragraph insert; and
For subsection (3) substitute—
In subsection (4), for the words after “in connection with” substitute “ an adjustment not falling within paragraph (b) of that subsection ”.
“capping agreement” has the same meaning as in section 29;
The amendments made by this section have effect in relation to accounting periods of the Nuclear Decommissioning Authority ending on or after 22nd March 2006.
Section 83 of FA 2005 (application of accounting standards to securitisation companies) is amended as follows.
In subsection (1)(b) (periods of account in relation to which old UK GAAP is to apply) for “1st January 2007” substitute “ 1st January 2008 ”.
In subsection (3) (meaning of “note-issuing company”)—
omit “and” at the end of paragraph (c);
after paragraph (d) insert—, and .
In subsection (5) (meaning of “intermediate borrowing company”)— insert “ (or another intermediate borrowing company) ”.
in paragraph (a) after “asset-holding company”, and
in paragraph (b) after “note-issuing company”,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in subsection (3)(d)—
at the end of sub-paragraph (i) insert “, and”, and
omit sub-paragraph (ii) and the word “and” following it;
in subsection (5), omit paragraph (a).
The amendments in this section shall be deemed always to have had effect, subject as follows.
A company that would have been a securitisation company for the purposes of section 83 of FA 2005 if the amendments in this section had not been made, being either— may elect to be taxed as if the amendments in subsection (3) had not been made.
a note-issuing company that—
had become party as debtor to the capital market investment before 22nd March 2006, or
had before that date entered into a binding arrangement to become a party as debtor to the capital market investment, or
another description of securitisation company by virtue of its connection with a company within paragraph (a),
Any such election must be made not later than 31st March 2007 and has effect for all relevant periods of account.
Schedule 15 to this Act (accountancy change: spreading of adjustment) has effect.
In that Schedule— Part 1 makes provision for income tax purposes, and Part 2 makes provision for corporation tax purposes.
In section 21B of ICTA (corporation tax: application to Schedule A business of other rules applicable to Case 1 of Schedule D) for “section 44 of and Schedule 6 to the Finance Act 1998” substitute “ section 64 of and Schedule 22 to the Finance Act 2002 ”.
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This Part enables a company which carries on property rental business (within the meaning of section 104) and which satisfies the requirements of sections 106 to 108 to opt to—
benefit from exemptions from corporation tax on profits and gains in accordance with sections 119 and 124, and
have liabilities to tax imposed on the company and the recipients of distributions made by the company in accordance with sections 112, 121 and 122.
This Part makes similar provision in relation to groups of companies (sections 134 to 136 and Schedule 17).
A company or group to which this Part applies may be referred to as a Real Estate Investment Trust.
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In this Part “property rental business” means business that is or forms part of—
a Schedule A business (within the meaning of section 832(1) of ICTA), or
an overseas property business (within the meaning of section 70A(4) of ICTA).
But—
business of a kind listed in Part 1 of Schedule 16 is not property rental business, and
business is not property rental business if or in so far as it gives rise to income or profits of a kind listed in Part 2 of that Schedule.
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In this Part “entry” means the time when this Part begins to apply to a company.
In this Part “cessation” means the time when this Part ceases to apply to a company.
In this Part, in relation to a company—
“C (pre-entry)” means the company before this Part begins to apply to it,
“C (tax-exempt)” means the company in so far as it carries on tax-exempt business (within the meaning of section 107(2)) while this Part applies to it,
“C (residual)” means the company in so far as it carries on non-tax-exempt business while this Part applies to it, and
“C (post-cessation)” means the company after this Part has ceased to apply to it.
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A company may give notice for this Part to apply to it in accordance with section 109 only if it satisfies Conditions 1 to 3 below.
In order for this Part to apply to a company in respect of an accounting period, Conditions 1 to 6 below must be satisfied in relation to the company throughout the accounting period.
Condition 1 is that the company—
is resident in the United Kingdom, and
is not resident in another place in accordance with the law of that place relating to taxation.
Condition 2 is that section 236 of the Financial Services and Markets Act 2000 Financial Services and Markets Act 2000 (c. 8) (open-ended investment companies) does not apply to the company.
Condition 3 is that the shares forming the company’s ordinary share capital are listed on a recognised stock exchange.
Condition 4 is that the company— and for the purposes of paragraph (a) a company shall be treated as a close company if it is prevented from being a close company only by section 414(5) or 415(4)(a) of ICTA.
is not a close company (within the meaning of section 414 of ICTA), or
is a close company only by virtue of having as a participator (within the meaning of section 417 of ICTA) a limited partnership which is a collective investment scheme within the meaning of section 235 of the Financial Services and Markets Act 2000;
Condition 5 is that—
each share issued by the company either—
forms part of the company’s ordinary share capital, or
is a non-voting fixed-rate preference share (within the meaning of paragraph 2 of Schedule 25 to ICTA (acceptable distribution policy)), and
there is no more than one class of ordinary share issued by the company.
Condition 6 is that in the case of any loan to which the company is party—
the loan creditor is not entitled to an amount by way of interest which depends to any extent on the results of all or part of the company’s business or on the value of any of the company’s assets,
the loan creditor is not entitled to an amount by way of interest which exceeds a reasonable commercial return on the consideration lent, and
the loan creditor is entitled on repayment to an amount which either does not exceed the consideration lent or is reasonably comparable with the amount generally repayable (in respect of an equal amount of consideration) under the terms of issue of securities listed on a recognised stock exchange.
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In order to be a company to which this Part applies in respect of an accounting period—
the company must throughout the accounting period have a property rental business in respect of which Conditions 1 to 3 below are satisfied (whether or not it also has other business), and
Condition 4 below must be satisfied in relation to that property rental business in respect of that accounting period.
Property rental business of a company is “tax-exempt business” for the purposes of this Part in respect of an accounting period if—
Conditions 1 to 3 are satisfied throughout the accounting period in relation to the business, and
Condition 4 is satisfied in respect of the accounting period in relation to the business.
Condition 1 is that the property rental business involves at least three properties.
Condition 2 is that no one property represents more than 40% of the total value of the properties involved in the property rental business.
Condition 3 is that the property rental business must not involve property that would fall in accordance with generally accepted accounting practice to be described as owner-occupied.
For the purposes of Conditions 1 to 3—
a reference to a property involved in a business is a reference to an estate, interest or right by the exploitation of which the business is conducted,
a property is a single property if it is designed, fitted or equipped for the purpose of being rented, and it is rented or available for rent, as a commercial or residential unit (separate from any other commercial or residential unit),
assets must be valued in accordance with international accounting standards (within the meaning of section 50(2) of FA 2004),
where international accounting standards offer a choice of valuation between cost basis and fair value, fair value must be used, and
no account shall be taken of liabilities secured against or otherwise relating to assets (whether generally or specifically).
For the purpose of Condition 3—
no account shall be taken of the fact that a property may fall to be described as owner-occupied by reason only of the provision by the company of services to an occupant who is in exclusive occupation of the property and is not connected with the company (within the meaning given by section 839 of ICTA),
if the shares of one company are stapled to the shares of another, the two shall be treated as a single company, and
for this purpose shares of one company are stapled to shares of another if in consequence of the nature of the rights attaching to the shares of the one company (including any terms or conditions attaching to the right to transfer the shares) it is necessary or advantageous for a person who has, disposes of or acquires shares of that company also to have, to dispose of or to acquire a holding of shares of the other company.
Condition 4 is that at least 90% of the profits of the property rental business arising in the accounting period are distributed—
by way of dividend, and
on or before the filing date for the company’s tax return for the accounting period (see paragraph 14 of Schedule 18 to FA 1998).
But—
Condition 4 shall be disregarded if and in so far as compliance with it would be unlawful by virtue of—
an enactment (including Northern Ireland legislation and an Act of the Scottish Parliament), or
an enactment of a jurisdiction outside the United Kingdom where the enactment is prescribed, or is of a kind prescribed, for the purposes of this paragraph in regulations made by the Commissioners for Her Majesty’s Revenue and Customs, and
a distribution that is withheld in order to prevent or reduce a charge to tax arising under regulations under section 114 shall be treated for the purposes of Condition 4 as having been made.
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In order to be a company to which this Part applies in respect of an accounting period Conditions 1 and 2 below must be satisfied in respect of the company.
Condition 1 is that in the accounting period the profits arising from tax-exempt business are at least 75% of the company’s total profits; and for that purpose—
“total profits” means profits arising from tax-exempt business plus profits arising from non-tax-exempt business, and
“profits” means profits before deduction of tax and excluding realised and unrealised gains and losses on the disposal of property, calculated in accordance with international accounting standards.
Condition 2 is that at the beginning of the accounting period the value of the assets involved in tax-exempt business is at least 75% of the total value of assets held by the company; and for that purpose—
an asset is involved in tax-exempt business if it is property involved in the relevant property rental business within the meaning given by section 107(6)(a),
assets must be valued in accordance with international accounting standards,
where international accounting standards offer a choice of valuation between cost basis and fair value, fair value must be used, and
no account shall be taken of liabilities secured against or otherwise relating to assets (whether generally or specifically).
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If a company (which satisfies the requirement in section 106(1)) gives a notice under this section specifying an accounting period from the beginning of which this Part is to apply to the company, this Part shall apply to the company from the beginning of that accounting period.
A notice—
must be given in writing to the Commissioners for Her Majesty’s Revenue and Customs,
must be given before the beginning of the specified accounting period,
must be accompanied by a statement by the company that Conditions 1 to 6 in section 106 are reasonably expected to be satisfied in respect of the company throughout the specified accounting period, and
must contain such other information, and be accompanied by such other documents, as may be prescribed by regulations made by the Commissioners for Her Majesty’s Revenue and Customs.
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Property rental business of C (pre-entry) shall be treated for the purposes of corporation tax as ceasing at entry.
Assets which immediately before entry are involved in property rental business of C (pre-entry) shall be treated for the purposes of corporation tax as being sold by C (pre-entry) immediately before entry and re-acquired by C (tax-exempt) immediately after entry.
The sale and re-acquisition deemed under subsection (2) shall be treated as being for a consideration equal to the market value of the assets.
For the purposes of CAA 2001—
the sale and re-acquisition deemed under subsection (2)—
shall not give rise to allowances or charges, and
shall not make it possible to make an election under section 198 or 199 of that Act (apportionment),
subsection (3) above shall not apply, and
anything done by or to C (pre-entry) before entry in relation to an asset which is deemed under subsection (2) to be sold and re-acquired shall be treated after entry as having been done by or to C (tax-exempt).
For the purposes of corporation tax, on entry one accounting period of the company shall end and another shall begin.
For the purposes of subsection (2) an asset is involved in property rental business if it is property involved in the business within the meaning given by section 107(6)(a).
A gain accruing by reason of this section shall not be a chargeable gain.
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A company to which this Part applies shall be chargeable to corporation tax under Case VI of Schedule D on an amount of notional income calculated in accordance with subsection (3).
The notional income shall be treated as arising to C (residual) on entry.
The notional income is— where— arket Value means the aggregate market value of assets treated as sold and re-acquired under section 111(2) (ignoring any asset of negative market value), and Tax Rate means the percentage rate at which C (residual) is chargeable to tax on profits.
No loss, deficit, expense or allowance may be set off against notional income or tax arising under this section.
The company may elect to have the notional income treated as arising in four instalments, the first on the date of entry and the other three on the first three anniversaries of that date; and for this purpose subsection (3) shall apply as if the percentage referred to were—
0.50% for the first instalment,
0.53% for the second instalment,
0.56% for the third instalment, and
0.60% for the fourth instalment.
If a company makes an election under subsection (5)—
notice of the election must be given to the Commissioners for Her Majesty’s Revenue and Customs with the notice under section 109,
the election is irrevocable, and
if this Part ceases to apply to a company before the third anniversary of entry, any remaining instalments shall become chargeable immediately.
The Treasury may by regulations amend a percentage specified in subsection (5) in order to reflect a change in interest rates; but regulations under this subsection shall not have effect in relation to elections made before the regulations come into force.
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For the purposes of corporation tax, the business of C (tax-exempt) shall be treated as a separate business (distinct from—
any business carried on by C (pre-entry),
any business carried on by C (residual), and
any business carried on by C (post-cessation)).
For the purposes of corporation tax C (tax-exempt) shall be treated as a separate company (distinct from—
C (pre-entry),
C (residual), and
C (post-cessation)).
In particular—
a loss incurred by C (tax-exempt) may not be set off against profits of C (residual),
a loss incurred in respect of C (residual) may not be set off against profits of C (tax-exempt),
a loss incurred in respect of C (pre-entry) may not be set off against profits of C (tax-exempt) (but this section does not prevent a loss of that kind from being set off against profits of C (residual)),
a loss incurred by C (tax-exempt) may not be set off against profits arising to C (post-cessation) (in respect of business of any kind), and
receipts accruing after entry but relating to business of C (pre-entry) shall not be treated as receipts of C (tax-exempt).
In subsection (3) a reference to a loss includes a reference to a deficit, expense, charge or allowance.
Section 392B of ICTA (ring-fencing of losses from overseas property business) shall not apply to business of C (tax-exempt).
Paragraphs 5B and 5C of Schedule 28AA to ICTA (transfer pricing: exemption for small and medium enterprises) shall not apply to a company to which this Part applies (whether to C (tax-exempt) or to C (residual)).
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The Treasury may make regulations that apply to a company to which this Part applies if it makes a distribution to or in respect of a person who—
is beneficially entitled (directly or indirectly) to 10% or more of the dividends paid by the company,
is beneficially entitled (directly or indirectly) to 10% or more of the company’s share capital, or
controls (directly or indirectly) 10% or more of the voting rights in the company.
The regulations may, in particular—
cause a sum to be charged to tax, in accordance with the regulations, (whether by reference to a person’s interest, to a rate of tax or otherwise);
provide that a charge does not arise, or is reduced, if the company takes or does not take action of a specified kind.
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The Treasury may make regulations that apply to a company to which this Part applies where the result of the sum specified in subsection (2) is less than 1.25 in respect of an accounting period.
That sum is— where— Profits means the amount of the profits of C (tax-exempt) arising in the accounting period (before the offset of capital allowances), and Financing Costs means the amount of the financing costs incurred in that period in respect of the business of C (tax-exempt).
The regulations may cause a sum to be charged to tax, in accordance with the regulations, by reference to that part of the financing costs as a result of which the result of the sum specified in subsection (2) is less than 1.25.
In subsections (2)(b) and (3) “financing costs” means the cost of debt finance; and in calculating the costs of debt finance in respect of an accounting period the matters to be taken into account include—
costs giving rise to debits in respect of debtor relationships of the company under Chapter 2 of Part 4 of FA 1996 (loan relationships), other than debits in respect of exchange losses from such relationships (within the meaning of section 103(1A) and (1B) of that Act),
any exchange gain or loss from a debtor relationship within the meaning of that Chapter in relation to debt finance,
any credit or debit falling to be brought into account under Schedule 26 to FA 2002 (derivative contracts) in relation to debt finance,
the financing cost implicit in a payment under a finance lease, and
any other costs arising from what would be considered, in accordance with generally accepted accounting practice, to be a financing transaction.
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The Treasury may make regulations about the application of this Part to a company if a requirement in section 106(5) or (6), 107 or 108 is not satisfied (whether generally or in respect of an accounting period).
A company which gave a notice under section 109 shall notify the Commissioners for Her Majesty’s Revenue and Customs as soon as reasonably practicable if a requirement in section 106(5) or (6), 107 or 108 ceases to be satisfied in relation to the company.
The regulations may, in particular—
provide for this Part to cease to apply to a company at a time specified by or determined in accordance with the regulations (which may be before the breach of a requirement);
provide for this Part to continue to apply to a company with specified modifications;
provide for sums to be charged to tax, or otherwise treated, in accordance with the regulations;
make provision by reference to the extent of a failure to satisfy a requirement;
make provision by reference to the number of requirements not satisfied;
limit the number of occasions on which a provision of the regulations may be relied upon by a company in respect of a specified period;
include other provision for preventing tax avoidance;
confer a discretion on the Commissioners.
This section is subject to section 129.
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This section applies if the Commissioners for Her Majesty’s Revenue and Customs think that a company to which this Part applies has tried to obtain a tax advantage for itself or another person.
The Commissioners may give a notice to the company specifying the tax advantage.
If the Commissioners give a notice to the company under subsection (2)—
a tax advantage obtained by the company shall be counteracted, in accordance with the notice, by an adjustment by way of—
an assessment;
the cancellation of a right of repayment;
a requirement to return a repayment already made;
the computation or recomputation of profits or gains, or liability to tax, on a basis specified by the Commissioners in the notice, and
the Commissioners may (in addition to the adjustment under paragraph (a)) assess the company to such additional amount of corporation tax under Case VI of Schedule D as they think is equivalent to the value of the tax advantage.
For the purposes of this section “tax advantage” has the meaning given by section 709 of ICTA (and includes, in particular, entering into arrangements the sole or main purpose of which is to avoid or reduce a charge to tax under section 112).
But a company does not obtain a tax advantage by reason only of this Part applying to it, unless it does anything (whether before or during the application of this Part) which in the Commissioners' opinion is wholly or principally designed—
to create or inflate or apply a loss, deduction or expense (whether or not suffered or incurred by the company), or
to have another effect of a kind specified for the purposes of this subsection by regulations made by the Treasury.
Where a notice is given to a company under subsection (2), the company may appeal to the Special Commissioners.
An appeal must be instituted by notice given in writing to the Commissioners for Her Majesty’s Revenue and Customs during the period of 30 days beginning with the date on which the notice under subsection (2) is given to the company.
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This section applies where a company to which this Part applies—
disposes of an asset used wholly and exclusively for the purposes of tax-exempt business, and
holds the proceeds in cash.
Profits or losses arising from a loan relationship entered into in connection with the proceeds—
shall be disregarded for the purposes of section 120, and
shall be treated for all tax purposes as arising from a loan relationship entered into in connection with business of C (residual).
For the purposes of section 108—
the proceeds shall, during the period of 24 months beginning with the date of the disposal, be treated for the purposes of Condition 2 as assets held in connection with the tax-exempt business, but
any income derived from the proceeds is income from non-tax-exempt business.
For the purposes of this section proceeds are held in cash if—
held on deposit (whether or not in sterling),
invested in stocks or bonds of any of the descriptions included in Part 1 of Schedule 11 to FA 1942 (gilts), or
held or invested in such other form as the Commissioners for Her Majesty’s Revenue and Customs may specify for the purposes of this section in regulations.
In the case of the disposal of an asset which for one or more periods of at least a year has been used partly for the purposes of the business of C (tax-exempt) and partly for the purposes of C (residual), this section shall apply to such part of the proceeds as may reasonably be attributed to the tax-exempt business (having regard to the extent to which, and the length of the periods during which, the asset was used for the different purposes).
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Profits arising from the business of C (tax-exempt) shall not be charged to corporation tax.
Profits arising from the business of C (residual) which are charged to corporation tax shall be charged at a rate determined without reference to section 13 of ICTA (small companies rate).
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This section provides for the calculation of profits for the purposes of sections 107(8), 115(2), 119(1) and 123(c).
Section 21A of ICTA (calculation of profits of Schedule A business) shall apply (to profits of any kind).
Paragraph 2(3) of section 15(1) ICTA (Schedule A: disregard of credits and debits from loan relationships and derivative contracts) shall not apply in respect of—
a loan relationship if or in so far as it relates to tax-exempt business,
a hedging derivative contract if or in so far as it relates to tax-exempt business, or
embedded derivatives if or in so far as the host contract is entered into for the purposes of tax-exempt business.
For the purposes of subsection (3)—
a derivative contract is hedging in relation to a company if or in so far as it is acquired as a hedge of risk in relation to an asset,
a designation of a contract as wholly or partly hedging for the purposes of a company’s accounts shall be conclusive, and
“embedded derivatives” and “host contract” have the meanings given by paragraph 2(3) of Schedule 26 to FA 2002 (derivative contracts).
Profits shall be computed without regard to items giving rise to credits or debits which would be within Schedule 26 to FA 2002 (derivative contracts) but for paragraph 4(2)(b) (exclusion of share-based and unit-trust-based contracts).
Income and expenditure relating partly to tax-exempt business and partly to non-tax-exempt business shall be apportioned reasonably.
Section 3(1) of CAA 2001 (claims for capital allowances) shall not apply; and any allowance which the company could claim under that section shall be made automatically and reflected in the calculation of profits.
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A distribution received by a shareholder of a company to which this Part applies in respect of profits of C (tax-exempt) shall be treated—
in the case of a shareholder within the charge to corporation tax, as profits of a Schedule A business, and
in the case of a shareholder within the charge to income tax, as the profits of a UK property business (within the meaning of section 264 of ITTOIA 2005).
A distribution received by a shareholder who is not resident in the United Kingdom—
if the shareholder is a company within the charge to corporation tax, shall be chargeable to tax as profits of a Schedule A business,
if the shareholder is a person other than a company within the charge to corporation tax, shall be chargeable to tax as profits of a UK property business (within the meaning of section 264 of ITTOIA 2005), and
in either case, shall not be chargeable to tax by virtue of section 42A of ICTA (non-resident landlords).
Subsection (1) shall not apply in relation to a shareholder if and in so far as he—
is a dealer in respect of distributions (within the meaning of section 95 of ICTA),
is a dealer in securities who is charged to tax under Part 2 of ITTOIA 2005 (trading income) in respect of distributions made by companies,
is an individual member of Lloyd’s (within the meaning given by section 184(1) of FA 1993) and the distribution is made in respect of assets forming part of—
a premium trust fund of his (within the meaning given by section 174 of FA 1993), or
an ancillary trust fund of his (within the meaning given by section 176 of FA 1993), or
is a corporate member of Lloyd’s (within the meaning given by section 230(1) of FA 1994) and the distribution is made in respect of assets forming part of—
a premiums trust fund belonging to it (within the meaning given by section 222 of FA 1994), or
an ancillary trust fund belonging to it (within the meaning given by section 223 of FA 1994).
Section 114(1)(a) of ICTA (partnerships with companies as members) does not disapply subsection (1) above.
Sections 231 of ICTA and 397 of ITTOIA 2005 (tax credits in respect of qualifying distributions) shall not apply to distributions made by a company to which this Part applies in respect of profits of C (tax-exempt).
Distributions from companies to which this Part applies and distributions from principal companies of groups to which this Part applies shall be treated, for the purposes of subsection (1), as the profits of a single business (irrespective of whether the shareholder receives different distributions in different capacities) which is separate from—
any other Schedule A business carried on by the shareholder,
any other UK property business (within the meaning of section 264 of ITTOIA 2005) carried on by the shareholder,
any overseas property business (within the meaning of section 70A(4) of ICTA) carried on by the shareholder, and
any overseas property business (within the meaning of section 265 of ITTOIA 2005) carried on by the shareholder.
In the case of a shareholder which is a partnership, subsection (6) applies to receipts by a partner of a share of any distribution as it applies to receipts by a shareholder.
In subsection (1)—
the reference to a company to which this Part applies includes a reference to C (post-cessation), and
“profits” includes gains.
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The Treasury may make regulations providing for the assessment, collection and recovery of tax where—
a company to which this Part applies makes a distribution of profits of C (tax-exempt), and
tax is or may become chargeable in respect of the distribution (whether by virtue of section 121(1) or otherwise).
Regulations under this section may, in particular—
require a company to deduct tax at the basic rate before payment of distributions;
specify classes of shareholder to whom distributions may be made without deduction of tax;
make provision about the calculation of payments of tax to be made by a company;
require a company to account for tax deducted;
apply an enactment (with or without modification) in respect of cases where tax is deducted or treated as deducted from income;
specify the time at which a distribution is to be treated as made by a company;
specify periods in respect of which payments of tax are to be made;
specify times at which payments of tax are to be made;
make provision about the making of claims and determinations in respect of over-payment or under-payment (which may include provision for appeals);
include provision requiring the payment of interest in respect of late payments of tax (which may—
provide for payment without deduction of tax;
allow interest paid as a deduction from profits of the company’s tax-exempt business);
require a company to provide a shareholder with a certificate containing specified information;
make provision about the repayment to a shareholder of sums deducted and paid to the Commissioners in respect of tax;
make provision for the payment of interest in respect of repayments under paragraph (l);
require notices to be given by or to a company;
require a company to make returns;
require a company to make records available to the Commissioners for inspection.
A reference in subsection (2) to a distribution in respect of profits of tax-exempt business includes a distribution made after this Part has ceased to apply to a company.
A distribution which is treated as having been made by virtue of section 107(9)(b) shall also be treated as having been made for the purposes of regulations under this section.
In this section “profits” includes gains.
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first, to payments in satisfaction of Condition 4 of section 107,
secondly, if or in so far as the company determines, to distribution of amounts which derive from activities of a kind in respect of which corporation tax is chargeable in relation to income,
thirdly, to distribution of profits of the property rental business,
fourthly, to distribution of gains accruing to C (tax-exempt) which by virtue of section 124 are not chargeable gains, and
fifthly, to other distributions.
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A gain accruing to a company to which this Part applies on the disposal of an asset shall not be a chargeable gain if—
the asset was used wholly and exclusively for the purposes of the business of C (tax-exempt), or
the asset was used partly for the purposes of the business of C (tax-exempt) and partly for the purposes of the business of C (residual) during one or more periods of (in aggregate) less than a year, but was otherwise used wholly and exclusively for the purposes of the business of C (tax-exempt).
Where a gain accrues to a company to which this Part applies on the disposal of an asset which for one or more periods of (in aggregate) at least a year has been used partly for the purposes of the business of C (tax-exempt) and partly for the purposes of the business of C (residual), such part of the gain as may reasonably be attributed to the business of C (tax-exempt) (having regard to the extent to which, and the length of the periods during which, the asset was used for the different purposes) shall not be a chargeable gain.
Corporation tax shall be charged in respect of gains accruing to C (residual) at a rate determined without reference to section 13 of ICTA (small companies rate).
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Subsection (2) applies when an asset which has been used wholly and exclusively for the purposes of the business of C (tax-exempt) begins to be used (otherwise than by being disposed of in the course of trade) wholly and exclusively for the purposes of the business of C (residual).
The asset shall be treated as having been at that time—
disposed of by C (tax-exempt), and
immediately re-acquired by C (residual).
The sale and re-acquisition deemed under subsection (2) shall be treated as being for a consideration equal to the market value of the asset.
For the purposes of CAA 2001—
the sale and re-acquisition deemed under subsection (2)—
shall not give rise to allowances or charges, and
shall not make it possible to make an election under section 198 or 199 of that Act (apportionment),
subsection (3) above shall not apply, and
anything done by or to C (tax-exempt) before the deemed sale and re-acquisition shall be treated after the deemed sale and re-acquisition as having been done by or to C (residual).
Subsection (6) applies when an asset which has been used wholly and exclusively for the purposes of the business of C (tax-exempt) is disposed of in the course of trade for the purposes of the business of C (residual).
Where this subsection applies—
the deemed sale and re-acquisition under section 111(2) shall be disregarded, and
the asset shall be treated as having been disposed of in the course of the business of C (residual).
Subsection (6) shall be taken to apply, in particular, where—
a property acquired by a company to which this Part applies has been developed since acquisition,
the cost of the development exceeds 30% of the fair value of the property (determined in accordance with international accounting standards) at entry or at acquisition, whichever is the later, and
the company disposes of the property within the period of three years beginning with the completion of the development.
Where subsection (6) applies in relation to an asset held at entry, the company may make a claim for repayment of a proportion of the tax paid under section 112 calculated as follows— where— Asset Market Value means market value of the asset at entry, Aggregate Market Value means the aggregate market value of assets treated as sold and re-acquired under section 111(2) (ignoring any asset of negative market value), and Tax Paid means tax paid under section 112.
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This section applies where an asset which has been used wholly and exclusively for the purposes of the business of C (residual) begins to be used wholly and exclusively for the purposes of the business of C (tax-exempt).
The asset shall be treated as having been—
disposed of by C (residual), and
immediately re-acquired by C (tax-exempt).
The sale and re-acquisition deemed under subsection (2) shall be treated as being for a consideration equal to the market value of the asset.
For the purposes of CAA 2001—
the sale and re-acquisition deemed under subsection (2)—
shall not give rise to allowances or charges, and
shall not make it possible to make an election under section 198 or 199 of that Act (apportionment),
subsection (3) above shall not apply, and
anything done by or to C (residual) before the deemed sale and re-acquisition shall be treated after the deemed sale and re-acquisition as having been done by or to C (tax-exempt).
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If a company to which this Part applies gives a notice under this section specifying a date at the end of which this Part is to cease to apply to the company, this Part shall cease to apply to the company at the end of that date.
A notice must be given in writing to the Commissioners for Her Majesty’s Revenue and Customs.
The date specified under subsection (1) must be after the date on which the Commissioners receive the notice.
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If the Commissioners for Her Majesty’s Revenue and Customs give a company to which this Part applies a notice in writing under this subsection, this Part shall cease to apply to the company.
The Commissioners may give a company a notice only if—
the company has relied on a provision of regulations under section 116 on a specified number of occasions in a specified period,
the company has been given a specified number of notices under section 117 in a specified period, or
the Commissioners think that a breach of a requirement in section 107 or 108, or an attempt by the company to obtain a tax advantage, is so serious that this Part should cease to apply to it.
In subsection (2) “specified” means specified in regulations made by the Treasury.
A notice under subsection (1) must state the reason for it.
Where a notice is given to a company, this Part shall be taken to have ceased to apply to the company at the end of the accounting period before the accounting period during which the event occurs (or the last event occurs) which caused the Commissioners to give the notice.
Where a notice is given to a company, the company may appeal to the Special Commissioners.
An appeal must be instituted by notice given in writing to the Commissioners for Her Majesty’s Revenue and Customs during the period of 30 days beginning with the date on which the notice is given to the company.
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Where Condition 1, 2, 5 or 6 of section 106 is not satisfied in respect of an accounting period of a company to which this Part applies, this Part shall be taken to have ceased to apply to the company at the end of the previous accounting period.
A company which gave a notice under section 109 shall notify the Commissioners for Her Majesty’s Revenue and Customs as soon as is reasonably practicable if Condition 1, 2, 5 or 6 of section 106 ceases to be satisfied in relation to the company.
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The business of C (tax-exempt) shall be treated for the purposes of corporation tax as ceasing immediately before cessation.
Assets which immediately before cessation are involved in the business of C (tax-exempt) shall be treated for the purposes of corporation tax as being sold by C (tax-exempt) immediately before cessation and re-acquired immediately after cessation by C (post-cessation).
The sale and re-acquisition deemed under subsection (2) shall be treated as being for a consideration equal to the market value of the asset.
For the purposes of CAA 2001—
the sale and re-acquisition deemed under subsection (2)—
shall not give rise to allowances or charges, and
shall not make it possible to make an election under section 198 or 199 of that Act (apportionment),
subsection (3) above shall not apply, and
anything done by or to C (tax-exempt) before cessation in relation to an asset which is deemed to be sold and re-acquired shall be treated after cessation as having been done by or to C (post-cessation).
For the purposes of corporation tax, on cessation an accounting period of C (residual) shall end and an accounting period of C (post-cessation) shall begin.
For the purposes of subsection (2) an asset is involved in the business of C (tax-exempt) if it is property involved in the business within the meaning given by section 107(6)(a).
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This section applies where this Part—
ceases to apply to a company by reason of section 128, and
had applied to the company for a continuous period immediately before cessation of less than ten years.
If the company disposes of a tax-exempt asset during the post-cessation period, liability to corporation tax shall be determined without regard to—
any deemed disposal under section 111(2) that resulted in a gain,
any deemed disposal under section 131(3), or
any deemed disposal under section 125(2).
In subsection (2)—
“tax-exempt asset” means an asset that was involved (within the meaning of section 107(6)(a)) in the business of C (tax-exempt), and
“the post-cessation period” means the period of two years beginning with the date of cessation.
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This section applies where this Part—
ceases to apply to a company by reason of section 129 or 130, and
had applied to the company for a continuous period immediately before cessation of less than ten years.
The Commissioners for Her Majesty’s Revenue and Customs may direct—
that a provision of this Part shall have effect in relation to the company with a specified modification, or
that a provision of an enactment relating to corporation tax shall apply, not apply or apply with modifications in relation to the company.
A direction under subsection (2)(a) may, in particular—
alter the time at which this Part is taken to cease to apply to the company in accordance with section 129 or 130;
disapply or alter the effect of section 119(1) or 124(1)).
A direction under subsection (2)(b) may, in particular, prevent all or a specified part of a loss, deficit or expense from being set off or otherwise used at all or in a specified manner.
A company in respect of which a direction is given under this section may appeal to the Special Commissioners.
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A group of companies may become a group to which this Part applies; and for that purpose the provisions of this Part apply to a group of companies in the same way as to a company, subject to the modifications set out in Schedule 17.
For the purposes of this Part a company (“the principal company”) and all its 75% subsidiaries form a group; and if any of those subsidiaries have 75% subsidiaries the group includes them and their 75% subsidiaries, and so on.
But a group does not include—
a company (other than the principal company) which is not an effective 51% subsidiary of the principal company,
an insurance company,
an insurance subsidiary, or
an open-ended investment company.
In this section—
“effective 51% subsidiary” has the meaning given by section 170 of TCGA 1992 (groups of companies),
“75% subsidiary” has the meaning given by section 838 of ICTA (subsidiaries),
“insurance company” has the meaning given by section 431(2) of ICTA, and
“insurance subsidiary” means a company in which 75% or more of the ordinary shares are held by one or more insurance companies.
A company cannot be a member of more than one group; and if a company would be a member of more than one group, section 170(6) of TCGA 1992 (capital gains tax: groups) shall apply to determine the group of which it is a member.
Subsection (5) is subject to section 138.
After section 171(2)(d) of TCGA 1992 (transfer within a group: exclusions) insert—; or .
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In the application of a provision specified in subsection (2) to a group to which this Part applies G (property rental business) shall be treated as a separate group (distinct from—
G (pre-entry),
G (residual), and
G (post-cessation)).
The provisions mentioned in subsection (1) are—
sections 171 and 171A of TCGA 1992 (actual or notional transfer of assets within group),
sections 179A and 179B of TCGA 1992 (reallocation or roll-over of gain within a group),
Chapter 4 of Part X of ICTA (corporation tax: group relief),
Schedule 9 to FA 1996 (loan relationships),
Schedule 26 to FA 2002 (derivative contracts), and
Schedule 29 to FA 2002 (intangible assets).
In section 212(1) of TCGA 1992 (annual deemed disposal of holdings of certain assets) after paragraph (b) insert—, or .
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The Treasury may by regulations provide for this Part to apply in relation to property rental business (“the joint venture”) carried on—
jointly by a company to which this Part applies and another person, or
by a person in which a company to which this Part applies has an interest.
The regulations may, in particular, modify or disapply a provision of this Part in its application—
by virtue of this section, or
in relation to a company to which this Part applies where the company also carries on business in relation to which this Part applies by virtue of this section.
The regulations may, in particular, make application of this Part conditional on—
a company to which this Part applies having a minimum percentage interest of a specified kind in the joint venture;
an election by a company to which this Part applies.
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This section applies to a manufactured dividend if and to the extent that it is representative of a dividend paid by a company to which this Part applies in respect of profits of C (tax-exempt).
Sub-paragraphs (2A) to (2C) apply if and to the extent that a manufactured dividend is representative of a dividend in respect of profits of the tax-exempt business of a company to which Part 4 of the Finance Act 2006 applies. The Tax Acts shall have effect in relation to the recipient, and persons claiming title through or under him, as if the manufactured dividend were a dividend to which section 121 of that Act applied. In relation to the dividend manufacturer— The Treasury may by regulations provide, in a case where sub-paragraph (2B)(d)(i) and (ii) above apply, for a United Kingdom recipient of the manufactured dividend (within the meaning of paragraph 4(3A) below) to be liable to account for tax which the dividend manufacturer would have been required to deduct in accordance with regulations under section 122 of the Finance Act 2006. Sub-paragraph (2E) shall apply for the purposes of— The gross amount of a manufactured dividend to which sub-paragraphs (2A) and (2B) apply shall be taken to be equal to the gross amount of the dividend of which it is representative and which is paid by the company to which Part 4 of the Finance Act 2006 applies.
For the purposes of sections 736B of ICTA (deemed manufactured payments: stock lending), regulations under section 122 shall be treated, in so far as they apply to a dividend manufacturer, as if they were regulations made under Schedule 23A.
For the purposes of section 737A of ICTA (deemed manufactured payments: sale and repurchase of securities) regulations under section 122 shall be treated, in so far as they apply to a dividend manufacturer, as dividend manufacturing regulations (within the meaning of section 737A(6)).
After section 737C(3) of ICTA (amount of deemed manufactured dividend) insert—
In section 737D(2) of ICTA (manufactured payments: relief) after “any” insert “manufactured dividend,”.
In this section “dividend manufacturer” and “manufactured dividend” have the meaning given by Schedule 23A to ICTA.
Section 106 of FA 2006 as modified by Schedule 17 to that Act. Section 116 of FA 2006. Regulations under section 116 of FA 2006. Regulations under section 122 of FA 2006. Section 130 of FA 2006.
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a reference to an asset includes a reference to—
part of an asset, and
an interest in, or right in relation to, an asset,
a reference to assets used in business of a company includes a reference to assets—
which were acquired for the purpose of that business and which are not being used in another business,
which are available for use in that business, or
which are in any other way held in respect of, or associated or connected with, that business,
“company” has the meaning given by section 170(9) of TCGA 1992,
“international accounting standards” has the meaning given by section 50(2) of FA 2004,
“market value” has the same meaning as in TCGA 1992 (see sections 272 and 273 and Schedule 11), and
“profits” means income (except where the context otherwise requires).
Section 160 of, and Schedule 30 to, FA 1996 (housing investment trusts) shall cease to have effect (and accordingly—
sections 508A and 508B of ICTA shall cease to have effect,
the amendments of section 842(1)(a) and (e) of ICTA effected by paragraph 2(2) of Schedule 30 shall cease to have effect, and
section 842(1AA) of ICTA shall cease to have effect).
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may make provision which applies generally or only in specified cases or circumstances,
may make different provision for different cases or circumstances, and
may include incidental, consequential or transitional provision.
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Section 143 shall have effect in relation to accounting periods beginning on or after the day on which this Act is passed.
In OTA 1975, in Schedule 3 (petroleum revenue tax: miscellaneous provisions) before paragraph 2 (definition of market value of oil) insert—.
Paragraph 2 of that Schedule (definition of market value of oil) is amended as follows.
In sub-paragraph (1) (market value of oil in any calendar month to be determined in accordance with the paragraph) for “any oil in any calendar month” substitute “ any particular quantity of oil of any kind on any day ”.
After sub-paragraph (1) insert—.
For sub-paragraph (2) substitute—.
For sub-paragraphs (2A) to (2D) substitute—.
Omit sub-paragraph (3) (which relates to the market value of disposals in a calendar month).
In sub-paragraph (3A) (oil that has been subjected to initial treatment)—
for “sub-paragraphs (1) and (2) above” substitute “ sub-paragraph (1) and sub-paragraph (2) or (2AA) above ”, and
for “sub-paragraph (2)(a) above” substitute “ sub-paragraph (2)(d) or (2AA)(d) above ”.
In sub-paragraph (4) (application of sub-paragraphs (2) and (3) in relation to paragraph 2(2) of Schedule 2) for “sub-paragraphs (2) and (3)” substitute “ sub-paragraphs (2) and (2AA) ”.
After paragraph (4) insert—.
Schedule 18 (which makes minor and consequential amendments) has effect.
The amendments made by section 146 and Schedule 18 have effect in relation to oil delivered or appropriated on or after 1st July 2006 (disregarding section 12A of that Act).
Those amendments also have effect for the purpose of determining for any chargeable period ending on or after 31st December 2006—
the value to be brought into account under section 2(4)(b) of OTA 1975 by reference to a previous chargeable period ending on or after 30th June 2006, and
the value to be brought into account under section 2(5)(d) of that Act.
Subsections (1) and (2) are subject to any express provision in Schedule 18 as to the commencement or application of any provision of that Schedule.
In the following provisions of this section—
“the last old period” means the chargeable period that ends on 30th June 2006, and
“the first new period” means the chargeable period that ends on 31st December 2006.
Subsection (6) applies in relation to oil which was won from an oil field before 1st July 2006 and which—
was loaded on to a ship before 1st July 2006 and transported from the place of extraction to a place in the United Kingdom or elsewhere, or
was transported by pipeline from the place of extraction to a place in the United Kingdom and there loaded on to a ship before that date.
If the oil is or was disposed of crude by a participator in sales otherwise than at arm's length, but the market value of the oil— the date on which the oil is to be taken for the purposes of section 2(5)(b) of that Act to have been delivered is instead to be the first business day of the first new period.
does not fall to be brought into account for the purposes of section 2(5)(b) of OTA 1975 for the last old period by reason only that the oil was not delivered in that period, and
would not (apart from this subsection) fall to be brought into account for the purposes of that provision in the first new period by reason only that the date on which the oil is to be regarded by virtue of section 12A of that Act as delivered falls in the last old period,
Any power to make regulations that is conferred under or by virtue of any of the amendments made by section 146 or Schedule 18 includes power to make regulations having effect for, or in relation to,— notwithstanding that the period in question has begun or ended before the making of the regulations.
the first new period, or
for the purpose mentioned in subsection (2), the last old period,
Any regulations made by virtue of subsection (7) must be made before 31st December 2006.
In section 2(5) of OTA 1975 (profits from oil field) for “subsection (5A)” substitute “ subsections (5A) and (5B) ”.
After section 2(5A) of that Act insert—
Regulations under section 2(5B) of OTA 1975 (inserted by subsection (2) above) may have effect for the purpose of calculating profits in relation to a chargeable period ending at any time on or after 1st July 2006.
Section 61 of FA 1987 (oil taxation: nominations) shall be amended as follows.
In subsection (1) omit “, supplies and appropriations”.
For subsections (3) and (4) substitute—
Subsections (6) and (7) shall cease to have effect.
In subsection (8) for “9th February 1987” substitute “ 1st July 2006 ”.
In subsection (9)—
omit “subsection (7) or”, and
after “shall” insert “ (unless otherwise expressly provided) ”.
This section shall have effect in relation to chargeable periods ending on or after 1st July 2006.
Schedule 10 to FA 1987 (oil taxation: nominations) shall be amended as follows.
In paragraph 1—
in sub-paragraph (1)—
omit “, “proposed supply” and “proposed appropriation””,
for “paragraph 3 below” substitute “ paragraph 12A below ”, and
for “paragraphs (a) to (c)” substitute “ paragraph (a) ”, and
omit sub-paragraph (2).
In paragraph 2 omit—
sub-paragraph (1)(b), (c) and (d), and
the words following sub-paragraph (1)(d).
Omit paragraph 3.
In paragraph 4—
for sub-paragraph (1) substitute—,
omit sub-paragraphs (2) and (2A),
in sub-paragraph (3)—
for “transaction base date” substitute “ transaction base time ”, and
for “date” in each place substitute “ time ”, and
omit sub-paragraph (4).
In paragraph 5—
in sub-paragraph (1) for “A nomination of a proposed transaction shall not be effective unless it specifies, in respect to that transaction” substitute “ The requirements of this paragraph for a nomination in respect of a proposed transaction are ”,
in sub-paragraph (1)(b) omit “in the case of a proposed sale”,
in sub-paragraph (1)(c) and (d) omit “or relevantly appropriated”,
in sub-paragraph (1)(d) for “supplied” substitute “ delivered ”,
for sub-paragraph (1)(g) substitute—,
in sub-paragraph (2) after “A nomination” insert “ made under this paragraph ”, and
in sub-paragraph (3) after “a nomination” insert “ made under this paragraph ”.
After paragraph 5 insert—
In paragraph 6—
in sub-paragraph (1) omit “Subject to sub-paragraph (3) below,”, and
omit sub-paragraphs (2) and (3).
Omit paragraph 7(2) and (5).
After paragraph 7(5) insert—
Omit paragraphs 8 to 11.
In paragraph 12(1) omit “, supply or appropriation”.
After paragraph 12 insert—
This section shall have effect in relation to a transaction whenever proposed, but shall not have effect in relation to a proposed transaction with a transaction base date (within the meaning given by regulations under paragraph 4 of Schedule 10 to FA 1987) on or before 30th June 2006.
Regulations under paragraph 4(1B) of Schedule 10 to FA 1987 (inserted by subsection (5) above) may have retrospective effect.
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After section 493(1) of ICTA (valuation of oil disposed of or appropriated) insert—
This section shall have effect in relation to deliveries of oil made on or after 1st July 2006.
In section 501A of ICTA (supplementary charge in respect of ring fence trades), in subsection (1) (charge of 10 per cent on adjusted ring fence profits), for “10 per cent” substitute “ 20 per cent ”.
The amendment made by subsection (1) has effect in relation to any accounting period beginning on or after 1st January 2006 (but see also subsection (3)).
For the purpose of calculating the amount of the supplementary charge on a company for an accounting period (a “straddling period”) beginning before 1st January 2006 and ending on or after that date—
so much of the straddling period as falls before 1st January 2006, and so much of the straddling period as falls on or after that date, are treated as separate accounting periods, and
the company's adjusted ring fence profits for the straddling period are apportioned to the two separate accounting periods in proportion to the number of days in those periods.
The amount of the supplementary charge on the company for the straddling period is the sum of the amounts of supplementary charge that would, in accordance with subsection (3), be chargeable on the company for those separate accounting periods.
In the case of a company's straddling period—
the Instalment Payments Regulations apply as if the amendment made by subsection (1) had not been made, but
those Regulations also apply separately, in accordance with the following subsection, in relation to the increase in the amount of any supplementary charge on the company for that period that arises as a result of that amendment.
In that separate application of those Regulations as mentioned in subsection (5)(b), those Regulations have effect as if, for the purposes of those Regulations,—
the straddling period were an accounting period beginning on 1st January 2006,
supplementary charge were chargeable on the company for that period, and
the amount of that charge were equal to the increase in the amount of the supplementary charge for the straddling period that arises as a result of the amendment made by subsection (1).
Any reference in the Instalment Payments Regulations to the total liability of a company is, accordingly, to be read—
in their application as a result of subsection (5)(a), as a reference to the amount that would be the company's total liability for the straddling period if the amendment made by subsection (1) had not been made, and
in their application as a result of subsection (5)(b), as a reference to the amount of the supplementary charge on the company for the deemed accounting period under subsection (6)(a).
For the purposes of the Instalment Payments Regulations—
a company is to be regarded as a large company as respects the deemed accounting period under subsection (6)(a) if (and only if) it is a large company for those purposes as respects the straddling period, and
any question whether a company is a large company as respects the straddling period is to be determined as it would have been determined if the amendment made by subsection (1) had not been made.
If the Instalment Payments Regulations— those Regulations have effect as if the payment were due and payable instead at the end of the period of 14 days beginning with that date.
apply in relation to a company's liability to supplementary charge for the deemed accounting period under subsection (6)(a), and
would (but for this subsection) treat any instalment payment in respect of that liability as being due and payable on a date falling on or before 22nd March 2006,
In this section—
“foreign tax” means any tax or duty imposed under the law of the territory, or any of the territories, in relation to which the arrangements have been made.
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Schedule 18 to ICTA (group relief: equity holders and profits or assets available for distribution) is amended as follows. but this paragraph does not have effect in relation to any determination in the case of amounts falling within section 402(1)(b). In paragraph 7 (supplemental matters), in sub-paragraph (1) (definition of “the relevant accounting period”), in the opening words, after “means” insert “(subject to sub-paragraphs (1A) to (1C) below)”. In this Schedule “the relevant accounting period” means, in the case of a non-resident company which is not within the charge to corporation tax, the accounting period which the company would have on the following assumption. The assumption is that the company became resident in the United Kingdom (and, accordingly, within the charge to corporation tax) at the time when it became a 75 per cent. subsidiary as mentioned in section 402(2A). For the purposes of sub-paragraph (1B) above the reference to the company’s being a 75 per cent. subsidiary is to its being such a subsidiary disregarding section 413(7).
Section 493 of ICTA (valuation of oil disposed of or appropriated in certain circumstances) is amended as follows. Before subsection (1) insert—. In subsection (1)— In subsection (2), omit “in a particular month”. In subsection (3), omit “in the calendar month in which the disposal was made”. In subsection (4), omit “in the calendar month in which it was appropriated”. For subsection (5) substitute—.
Schedule 17A (stamp duty land tax: further provisions relating to leases) is amended as follows.
Paragraph 5 does not apply so as to treat the notional lease and the lease itself as a single lease.
Paragraph 5 does not apply so as to treat the first lease and the second lease as a single lease. Paragraph 5 does not apply so as to treat the notional lease and the lease itself as a single lease.
Section 119 shall apply only in relation to each UK resident company which is a member of the group; for which purpose— Where a percentage of the profits of a member of G (property rental business) is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be treated for the purposes of corporation tax as profits of the member in so far as it is a member of G (residual).
In section 71(1)(a) of IHTA 1984 (section applies to settled property only if one or more persons will become beneficially entitled on or before reaching a specified age not exceeding 25)— Sub-paragraph (1) comes into force on 6th April 2008 but only for the purpose of determining whether, at a time on or after that day, section 71 of IHTA 1984 applies to settled property. There is no charge to tax under section 71 of IHTA 1984 in a case where—
In the application of section 121(1)— In section 121(5) the reference to a company to which Part 4 applies shall be treated as a reference to the principal company of a group to which Part 4 applies. In the application of section 121(8)—
In the application of section 122(1)(a)— In the application of section 122(2)(n), (o) and (p) a reference to a company shall be treated as a reference to the principal company. In the application of section 122 disregard subsection (5).
In the application of section 123—
the reference to a company to which Part 4 applies shall be treated as a reference to the principal company of a group to which Part 4 applies, and
the reference to C (tax-exempt) shall be treated as a reference to a member of G (property rental business).
A claim to which Part 9D of this Schedule applies (claims for film tax relief) can only be made by being included in a company tax return (see paragraph 83T).
The company is not entitled to relief for an interim accounting period unless— If those requirements are met, the company is provisionally treated in relation to that period as if that condition was met. If such a statement is made but it subsequently appears that condition will not be met on completion of the film, the company— When the film is completed or, as the case may be, the company abandons film-making activities in relation to it—
Section 220 of CAA 2001 is amended as follows. Before subsection (1) insert—. In subsection (1)— After subsection (2) insert—. In consequence of the amendments made by this paragraph, the italic cross-heading preceding section 219 becomes “Finance leases and certain operating leases”. The amendments made by this paragraph have effect in relation to expenditure incurred on or after 1st April 2006.
This paragraph applies for corporation tax purposes if— On the relevant day— The income— On the day following the relevant day— The expense— This paragraph is supplemented by paragraphs 4 and 5.
This paragraph determines for the purposes of this Part of this Schedule whether, on any day (“the relevant day”), a company (“the relevant company”) carries on a business of leasing plant or machinery. A business carried on by the relevant company is a business of leasing plant or machinery on the relevant day if condition A or B is met. Condition A is that at least half of the accounting value of the plant or machinery owned by the relevant company on the relevant day relates to qualifying leased plant or machinery. Condition B is that at least half of the relevant company’s income in the period of 12 months ending with the relevant day derives from qualifying leased plant or machinery. For the purposes of this Part of this Schedule, plant or machinery is “qualifying leased plant or machinery”, in relation to any company, if— “The relevant assumptions” are—
A company is an “associated company” of another company on any day if, at the start of that day,— and for this purpose “control” is to be read in accordance with section 416 of ICTA. If, at the start of any day, a company (“the consortium company”) is owned by a consortium or is a qualifying 90% subsidiary of a company owned by a consortium, references to an associated company of the consortium company on that day include— For this purpose a member of the consortium is a “relevant” member on any day if— This paragraph applies for the purposes of this Part of this Schedule.
A company (“company E”) is a principal company of company A if— and company E is not a qualifying 75% subsidiary of another company. There is a relevant change in the relationship between company A and company E (as a principal company) on any day if the relevant fraction at the end of the day is less than the relevant fraction at the start of the day. In this paragraph “the relevant fraction” is whichever is the lowest of the following percentages— In any case where company A is a qualifying 90% subsidiary of a company, sub-paragraph (3) is to be read as if for references to company A there were substituted references to that company. A company (“company F”) is a principal company of company A if— and company E is a qualifying 75% subsidiary of company F, but company F is not a qualifying 75% subsidiary of another company. There is a relevant change in the relationship between company A and company F (as a principal company) on any day if— If company F is a qualifying 75% subsidiary of another company (“company G”), company G is a principal company of company A unless company G is a qualifying 75% subsidiary of another company, and so on. Accordingly, there is a relevant change in the relationship between company A and a principal company of company A on any day if— (as well as if the relevant fraction at the end of the day is less than the relevant fraction at the start of the day). This paragraph is supplemented by—
In this Schedule a company (“the subsidiary company”) is a qualifying 75% subsidiary of another company (“the parent company”) if— and the parent company is beneficially entitled to the appropriate proportion of profits and assets. The parent company is beneficially entitled to the appropriate proportion of profits and assets if (and only if) it— In this Schedule references to a qualifying 90% subsidiary are to be read in the same way as references to a qualifying 75% subsidiary, but as if the references to 75% were to 90%. A company (“company A”) cannot be a qualifying 90% subsidiary of another company for the purposes of this Schedule if company A is a qualifying 75% subsidiary of a third company. Schedule 18 to ICTA (equity holders and profits or assets etc) applies for the purposes of any provision of this Part of this Schedule as it applies for the purposes of any corresponding provision of Chapter 4 of Part 10 of that Act (group relief). But, in a case where the subsidiary company does not have ordinary share capital, that Schedule applies for those purposes as if the members of that company were equity holders of that company for the purposes of that Schedule.
For the purposes of paragraph 16, “TWDV” means the amount found by adding together— For the purposes of “TWDV”— and the reference here to an associated company is to a company which is an associated company of the relevant company on the relevant day.
This paragraph applies if the qualifying change of ownership occurs on any day as a result of paragraph 12. In a case where that change arises only because the relevant fraction at the end of the day is less than the relevant fraction at the start of the day, the amount of the income is limited to the appropriate percentage of the basic amount. The appropriate percentage is found by subtracting the relevant fraction at the end of the day from the relevant fraction at the start of the day. In any other case, the amount of the income is limited to the relevant fraction at the start of that day of the basic amount. In this paragraph “the relevant fraction” has the same meaning as in paragraph 12.
The amount of the income is calculated in accordance with paragraphs 29 to 31. The amount of the expense of the other company is calculated in accordance with paragraph 32.
For the purposes of this Schedule there is a qualifying change in a company’s interest in a business on any day if its relevant percentage share at the end of the day is less than its relevant percentage share at the start of the day. In this paragraph “relevant percentage share”, in relation to a company’s interest in a business, means its percentage share in the profits or loss of the business (determined in accordance with paragraph 28). For the purposes of this paragraph any reference to a company’s share in the profits or loss of the business includes a nil share (whether as a result of the dissolution of the partnership or otherwise).
If the basic amount given by the formula is a negative amount, the amount is taken instead to be nil.
This paragraph applies for corporation tax purposes if— On the relevant day— The income— On the day following the relevant day— The expense— This paragraph is supplemented by paragraphs 34 and 35.
This paragraph determines the amount of the income under paragraph 33 when a qualifying change of ownership in relation to a company carrying on a business of leasing plant or machinery occurs on any day (“the relevant day”). The amount of the income is found by first— The amount is then limited to the appropriate percentage of the amount given as a result of sub-paragraph (2). If there is no qualifying change in the company’s interest in the business on the relevant day, the appropriate percentage is the percentage share of the company in the profits or loss of the business on the relevant day. If there is a qualifying change in the company’s interest in the business on the relevant day, the appropriate percentage is the percentage share of the company in the profits or loss of the business at the end of the relevant day.
This paragraph applies if— So much of the loss (or part of the loss) that would otherwise be so carried forward as derives from the expense under paragraph 3 or 33 is instead to be treated for corporation tax purposes as an expense. The expense under this paragraph is allowed as a deduction in calculating for corporation tax purposes the profits of the business for the subsequent accounting period. For the purpose of determining how much of a loss derives from an expense under paragraph 3 or 33, the loss is to be calculated on the basis that the expense under that paragraph is the final amount to be deducted.
The following table lists the places where expressions used in this Schedule are defined or otherwise explained in this Schedule for the purposes of this Schedule or a Part of this Schedule— Expression Provision associated company (in Part 2) paragraph 9 associated company (in Part 3) paragraph 26 business of leasing plant or machinery (in Part 2) paragraphs 6 to 8 business of leasing plant or machinery (in Part 3) paragraphs 6 to 8 and 25 company paragraph 41 company’s percentage share in any profits or loss of a business (in Part 3) paragraph 28 connected persons paragraph 41 consortium and related expressions paragraph 14 excluded lease of background plant or machinery for a building paragraph 41 profits or assets available for distribution to equity holders (in Part 2) paragraph 15 finance lease paragraph 41 fixture paragraph 41 loss (in Part 3) paragraph 37 market value (in relation to plant or machinery) paragraph 41 notional business (in Part 3) paragraph 23 plant or machinery paragraph 41 plant or machinery lease paragraph 41 profits (in Part 3) paragraph 37 qualifying change in a company’s interest in a business (in Part 3) paragraphs 27 and 28 qualifying change of ownership in relation to a company paragraphs 10 to 13 qualifying leased plant or machinery (in Part 2) paragraph 6 qualifying 75% subsidiary paragraph 15 qualifying 90% subsidiary paragraph 15 relevant change in the relationship between companies paragraph 10
Except where the context otherwise requires and subject to the provisions of this Schedule, a reference to a company shall be treated as a reference to a group.
In paragraph 5(1)(d) of Schedule 29 (requirement that lump sum under a pension scheme must extinguish member’s entitlement to benefits under the pension scheme in order to be short service refund lump sum), after “scheme” insert “(except to the extent that it is prohibited from being extinguished by the payment of a lump sum by reason of the operation of provision made by or under any enactment).”.
5A. The individual reaching the age of 75 having designated sums or assets held for the purposes of a money purchase arrangement under any of the relevant pension schemes as available for the payment of unsecured pension to the individual The aggregate of the amount of the sums and the market value of the assets representing the individual’s unsecured pension fund under the arrangement less the aggregate of amounts crystallised by benefit crystallisation event 1 in relation to the arrangement and the individual
In section 279(1) (definitions), in the definition of “abatement”—
after “scheme pension” insert “to which a person has become entitled”, and
for “re-employment” substitute “the person’s employment”.
Schedule 36 (transitional provisions) is amended as follows.
After paragraph 11 insert—
A contribution is not a relevant contribution for the purposes of paragraph 13(a) if— and any exercise of rights conferred by the policy is to be regarded for this purpose as a variation. A contribution is not a relevant contribution for the purposes of paragraph 13(a) if it is paid— A “relevant hybrid arrangement” is a hybrid arrangement under an occupational pension scheme—
Paragraph 15 (enhanced protection: “the relevant crystallised amount”) is amended as follows. In sub-paragraph (3), for “paragraph 16” substitute “paragraphs 15A and 16”. In sub-paragraph (4), for “is the greater” substitute “is (subject to paragraph 15A) the greater”. In sub-paragraph (5), after “(4)(a)” insert “and paragraph 15A(2)(a)”. In sub-paragraph (6), after “(4)(b)” insert “and paragraph 15A(2)(b)”.
After that paragraph insert—
In section 256(1) (enhanced lifetime allowance regulations)—
in paragraph (d), after “7(1)(b)” insert “or 11A(1)(c)”, and
in paragraph (e), after “12(1)” insert “or 15A(1)(b)”.
This section applies if—
a company carries on a ring fence trade in an accounting period beginning on or after 1st January 2006,
relevant expenditure is incurred for the purposes of or in relation to the ring fence trade (see subsections (4) to (7)), and
the relevant expenditure would (but for this section) be treated as incurred for the purposes of CAA 2001 in the period of 12 months ending with 31st December 2005.
The company may elect for the relevant expenditure to be treated instead as if it were incurred on the first day of the company's first accounting period beginning on or after 1st January 2006.
The election—
has effect for the purposes of CAA 2001 other than those of section 45G (expenditure not first-year qualifying expenditure under section 45F if plant or machinery used for less than 5 years in a ring fence trade), and
must be made by notice given to an officer of Revenue and Customs on or before 31st December 2007.
Expenditure is relevant expenditure if it falls within any of Cases A to C.
Expenditure falls within Case A if—
it is first-year qualifying expenditure on the provision of plant or machinery under section 45F of CAA 2001 (expenditure on plant and machinery for use wholly in a ring fence trade), and
no disposal event (see subsection (8)) in relation to the plant or machinery occurs in the relevant period.
Expenditure falls within Case B— The reference in paragraph (b) to any asset representing the expenditure is to be read in accordance with section 416B(4) of CAA 2001.
if it is first-year qualifying expenditure under section 416B of CAA 2001 (mineral extraction allowances: expenditure incurred by a company for purposes of a ring fence trade),
if no disposal event in relation to any asset representing the expenditure occurs in the relevant period,
if (or so far as) it is expenditure to which no part of any capital sum received by the company in the relevant period is reasonably attributable under section 425(2) of CAA 2001, and
if no entitlement to a balancing allowance for a chargeable period in respect of the expenditure arises under any of sections 426 to 431 of CAA 2001 as a result of an event that occurs in the relevant period (as well as in that chargeable period).
Expenditure falls within Case C if—
it is qualifying expenditure on research and development under Part 6 of CAA 2001 where the ring fence trade is the trade by reference to which the expenditure is qualifying expenditure, and
no disposal event in relation to any asset representing the expenditure occurs in the relevant period.
In this section— “disposal event”— in relation to first-year qualifying expenditure under section 45F of CAA 2001, means an event of a kind that requires a disposal value to be brought into account under Part 2 of that Act (whether under section 61(1) or otherwise), in relation to first-year qualifying expenditure under section 416B of CAA 2001, means an event of a kind that requires a disposal value to be brought into account under section 421 or 422 of that Act, in relation to qualifying expenditure on research and development under Part 6 of CAA 2001, means an event of a kind that requires a disposal value to be brought into account under section 443(1) of that Act, “the relevant period”, in relation to any expenditure for the purposes of or in relation to a company's ring fence trade, means the period— beginning with the day on which the expenditure would (but for this section) be treated as incurred for the purposes of CAA 2001, and ending with the first day of the company's first accounting period beginning on or after 1st January 2006, “ring fence trade” means a ring fence trade in respect of which tax is chargeable under section 501A of ICTA (supplementary charge in respect of ring fence trades).
“the Instalment Payments Regulations” means the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/ 3175),
The amendments made by paragraphs 2 to 9 have effect in relation to accounting periods ending on or after 31st March 2006.
After section 741 insert—. The amendment made by this paragraph shall be taken to have come into force on 5th December 2005.
Section 742 (interpretation of sections 739 to 741) is amended as follows. In subsection (1) (meaning of “associated operations”) for “sections 739 to 741” substitute “this Chapter”. It is immaterial whether the operation is effected before, after, or at the same time as the transfer. After subsection (1) insert—. The heading to the section accordingly becomes “Interpretation of this Chapter”. The amendments made by this paragraph shall be taken to have come into force on 5th December 2005.
Part 10 (the ring fence: capital allowances: ship leasing) is amended as follows. paragraphs 91A to 91F (long funding leases), After paragraph 91 (defeased leasing: excepted forms of security) insert—. In paragraph 93 (certificates required to support claim by lessor), in sub-paragraph (1)(b) after “in relation to the lease” insert “and, if the lease is one that would (apart from paragraph 91A) fall to be regarded as a long funding lease for the purposes of Part 2 of the Capital Allowances Act 2001, that paragraph 91A(2) has effect in relation to the lease.” Paragraph 15 of Schedule 8 (commencement) also has effect in relation to the amendments made by this paragraph.
Section 444AC is amended as follows. In subsection (2B) (excess of liabilities transferred over transferee’s line 31 figure)— In subsection (2C) (case in which subsection (2B) does not require excess to be taken into account as a receipt of the transferee) for “the excess”, in both places, substitute “the life assurance part of the excess”. In subsection (5) (reduction of amount of relevant debts), in paragraph (a) (fair value of assets becoming assets of transferee’s long-term insurance fund) at the beginning insert “the aggregate amount of any relevant reinsurance amounts and of”. After that subsection insert—. The amendments made by sub-paragraphs (2) and (3) have effect in relation to transfers taking place on or after 22nd March 2006. The amendments made by sub-paragraphs (4) and (5) have effect (and are deemed always to have had effect) in relation to transfers taking place on or after 2nd December 2004.
Section 83 of FA 1989 is amended as follows. In subsection (2B) (circumstances in which fair value of assets of long-term insurance fund which are transferred are to be brought into account)— After subsection (2D) (exclusion if assets transferred for fair value and consideration forms part of long-term insurance fund) insert—. In subsection (8) (definitions), in the definition of “fair value”, for “, in relation to assets,” to “its amount;” substitute—. The amendments made by this paragraph have effect in relation to transfers taking place on or after 22nd March 2006.
Paragraphs 8 to 45 amend TCGA 1992.
After section 73(1) of TCGA 1992 (death of life tenant: exclusion of chargeable gain) insert—
The adjustment income shall be spread in accordance with the following rules. In each of the first three tax years beginning with that in which the whole amount of the adjustment income would otherwise be chargeable to tax, an amount equal to whichever is the less of— is treated as arising and charged to tax. In the fourth and fifth tax years, if the whole of the adjustment income has not been charged to tax in previous tax years, an amount equal to whichever is the least of— is treated as arising and charged to tax. In the sixth tax year so much (if any) of the adjustment income as has not previously been charged to tax is treated as arising and is charged to tax. For the purposes of this paragraph “the profits of the business” means the profits of the business as calculated for income tax purposes leaving out of account— This paragraph has effect subject to—
This paragraph applies in the case of the death of a person who would otherwise have been liable to tax under this Part of this Schedule on adjustment income. The tax under this Part of this Schedule for which the person would otherwise have been liable— The personal representatives may make any election under this Part of this Schedule that the deceased might have made.
This Part of this Schedule does not apply to adjustment income to which section 238 of that Act applies (spreading on ending of special provision for barristers and advocates in early years of practice).
In section 106 a reference to a company shall be treated as a reference to the principal company. The requirement in section 106(2) shall be treated as including a requirement that the principal company prepare for the accounting period, and submit to the Commissioners for Her Majesty’s Revenue and Customs, financial statements in accordance with paragraph 31 (“the financial statements”).
Section 2 is amended as follows. In subsection (4)(b) (one-half of the market value in the last calendar month of the preceding period) for “in the last calendar month” substitute “on the last business day”. In subsection (5)(d) (one-half of the market value in the last calendar month of the period) for “in the last calendar month” substitute “on the last business day”. In subsection (5A), in the opening words, after “or another country” insert “, or from its place of extraction (where that is in the territorial sea of the United Kingdom or a designated area),”. In subsection (9)(a)(i) (5% provisional allowance: deliveries)— In subsection (9)(a)(ii) (5% provisional allowance: relevant appropriations)—
After section 12, insert—. The amendment made by this paragraph has effect in relation to oil which would (apart from this paragraph) fall to be regarded for the purposes of Part 1 of OTA 1975 as delivered or appropriated on a date after 30th June 2006.
In Schedule 3 (petroleum revenue tax: miscellaneous provisions) paragraph 2A (market value of oil that consists of or includes gas) is amended as follows. In sub-paragraph (1)— In sub-paragraph (2)— In sub-paragraph (3)—
Section 71 of IHTA 1984 (accumulation and maintenance trusts) is amended as follows. In subsection (1) (settled property to which section applies, subject to subsection (2)), for “subsection” substitute “subsections (1A) to”. After subsection (1) insert— Where a chargeable transfer to which section 54A of IHTA 1984 applies was made before 22nd March 2006, that section has effect in relation to that transfer as if references in that section to section 71 of IHTA 1984 were to section 71 of IHTA 1984 without the amendments made by sub-paragraphs (2) and (3). There is no charge to tax under section 71 of IHTA 1984 in a case where settled property ceases, by the operation of the subsection (1B) inserted into that section by this paragraph, to be property to which that section applies. Sub-paragraphs (1) to (5) shall be deemed to have come into force on 22nd March 2006.
In IHTA 1984, after section 49 insert— Sub-paragraph (1) shall be deemed to have come into force on 22nd March 2006.
Where the value of a person’s estate is diminished, and the value— is increased
After section 46 of IHTA 1984 insert— Sub-paragraph (1) shall be deemed to have come into force on 22nd March 2006.
Section 54A of IHTA 1984 (special rate of charge on coming to end of interest in possession in settled property affected by potentially exempt transfer) is amended as follows. After subsection (1) insert— In subsection (2) (circumstances in which section applies to a chargeable transfer)— Where a chargeable transfer to which section 54A of IHTA 1984 applies was made before 22nd March 2006, that section has effect in relation to that transfer without the amendments made by sub-paragraph (3).
Section 58 of IHTA 1984 (meaning of “relevant property” in Chapter 3 of Part 3) is amended as follows. In subsection (1)(b) (which provides that property to which section 86 applies is not relevant property), after “86 below applies” insert “(but see subsection (1A) below)”. After subsection (1) insert—
In section 76(1) of IHTA 1984 (which provides for tax not to be charged under certain provisions of Chapter 3 of Part 3 where property becomes held for charitable purposes etc), after “71,” insert “71A, 71D,”.
In section 100 of IHTA 1984 (alteration of close company’s capital etc where participator is trustee of settlement under which an individual is beneficially entitled to an interest in possession), after subsection (1) insert—
“disabled person’s interest” has the meaning given by section 89B above; “immediate post-death interest” means an immediate post-death interest for the purposes of Chapter 2 of Part 3 (see section 49A above); “transitional serial interest” means a transitional serial interest for the purposes of Chapter 2 of Part 3 (see section 49B above);
Part 4 of FA 2004 (pension schemes etc) is amended as follows.
“CAA 2001” means the Capital Allowances Act 2001 (c. 2);
This Schedule has effect in relation to—
any qualifying change of ownership in relation to a company which occurs on or after 5th December 2005, and
any qualifying change in a company’s interest in a business which occurs on or after that date.
Section 432E of ICTA is amended as follows. In subsection (2A) (increase in amount determined under subsection (2) where amount is taken into account under subsection (2) of section 83 of FA 1989 by virtue of subsection (2B) of that section etc) in the opening words, after “section 444ACA(2)” insert “, 444AF(2) or 444AK(2)”. In that subsection, in the definition of “RP”, after paragraph (b) insert—. The amendments made by this paragraph have effect in relation to periods of account ending on or after 29th September 2005.
After section 444AE of ICTA insert—. The amendment made by this paragraph has effect in relation to periods of account ending on or after 29th September 2005. In determining for the purposes of section 444AF of ICTA the undistributed demutualisation surplus of an insurance company for the first period of account of the company to end on or after 29th September 2005 and before 22nd March 2006 (“the transitional period”), the value of UDSP in subsection (7) of that section is to be taken to be— The amount given by this sub-paragraph is the total amount of any demutualisation transfer surpluses accruing to the company— The amount given by this sub-paragraph is the lowest amount of unappropriated surplus of the company at the end of any period of account ending— Sections 444AF(3), 444AG, 444AH and 444AL of ICTA apply for the purposes of sub-paragraphs (3) to (5), but section 444AG has effect subject to the following modifications— In determining the value of DTSI for the purposes of section 444AF(7) of ICTA where the relevant period ends on or after 29th September 2005 and before 22nd March 2006, section 444AG of ICTA has effect subject to the modifications specified in sub-paragraph (6). Where the relevant period ends on or after 29th September 2005 and before 22nd March 2006, section 444AI of ICTA has effect as if subsections (6) and (7) of that section were omitted. Sub-paragraphs (10) to (12) apply in relation to an insurance company if— In determining for the purposes of section 444AF of ICTA the undistributed demutualisation surplus of an insurance company for the first period of account of the company to end on or after 22nd March 2006 (“the initial period”), the value of UDSP in subsection (7) of that section is to be taken to be— The amount given by this sub-paragraph is the total amount of any demutualisation transfer surpluses accruing to the company— The amount given by this sub-paragraph is the lowest amount of unappropriated surplus of the company at the end of any period of account ending— Sections 444AF(3), 444AG, 444AH and 444AL of ICTA apply for the purposes of sub-paragraphs (10) to (12). In relation to any period of account ending before 31st December 2005, the references in section 444AJ(5) and (8) of ICTA to line 34 of Form 58 are to be taken to be references to line 35 of Form 58.
Section 83ZA of FA 1989 is amended as follows. In subsection (7) (meaning of appropriate amount for a period of account)— Omit subsection (10) (meaning of “deficiencies of assets over liabilities received on relevant transferred business”). In subsection (11) (meaning of “the relevant contingent loan”) for “subsections (8) and (10)” substitute “subsection (8)”. Omit subsection (12) (definition in relation to subsection (10)(b)). In subsection (15) (references in subsections (8), (12) and (13) to an amount being brought into account) omit “, (12)”. The amendments made by this paragraph have effect (and are deemed always to have had effect) in relation to transfers taking place on or after 2nd December 2004.
Schedule 15 to FA 2003 (stamp duty land tax: partnerships) is amended as follows.
Paragraph 2 has effect in relation to any lease granted or treated as granted on or after commencement day. Paragraph 3 has effect in relation to any case where— Paragraphs 4 and 5 have effect in relation to any agreement that is substantially performed on or after commencement day. Paragraph 6 has effect in relation to any variation of a lease made on or after commencement day. Paragraphs 7 and 8 have effect in relation to any increase of rent that takes effect on or after commencement day. In this paragraph “commencement day” means the day on which this Act is passed.
Section 403D of ICTA (relief for or in respect of non-resident companies) is amended as follows. In subsection (1) (provision for determining amounts available for surrender by a non-resident company), in the opening words,— At the end insert—. In consequence of the amendments made by this paragraph, the title to the section becomes “Relief for or in respect of UK losses of non-resident companies”.
After section 736B of ICTA (deemed manufactured payments in the case of stock lending arrangements) insert—. Section 736C of ICTA has effect in relation to any stock lending arrangement made on or after 5th December 2005. In relation to any stock lending arrangement made on or after that date but before 22nd March 2006, that section has effect as if subsection (6) were omitted. If— section 736C of ICTA has effect as if that arrangement were made on the date of the substitution (and the substituted securities were the relevant securities).
After section 774 of ICTA (transactions between dealing company and associated company) insert—. The amendment made by this paragraph has effect in relation to any arrangements whenever made (but see sub-paragraphs (3) and (4)). In relation to arrangements made before 6th June 2006, amounts are, as a result of the amendment made by this paragraph,— only if the amounts arise on or after that date. The amendment made by this paragraph has no effect in relation to any arrangement made before that date in so far as section 43B or 43D of ICTA (rent factoring) applies to it. In any case where, in relation to arrangements made before that date, a person is treated, as a result of the amendment made by this paragraph, as being a party to any loan relationship— For this purpose, the notional carrying value is the amount that would have been the carrying value of the liability in the accounts of the person if a period of account had ended immediately before that date. “Carrying value” has the same meaning here as it has for the purposes of paragraph 19A of Schedule 9 to FA 1996.
After section 263D of TCGA 1992 (gains accruing to persons paying manufactured dividends) insert—. The amendment made by this paragraph has effect in relation to disposals made on or after 6th June 2006. The amendment made by this paragraph also has 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.
After section 85B of FA 1996 (amounts recognised in determining company’s profit or loss) insert—. The amendment made by this paragraph has effect in relation to periods of account ending on or after 22nd March 2006. But, in relation to a period of account beginning before 22nd March 2006, amounts are to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 as a result of that amendment only if the amounts relate to any time on or after that date.
Section 91D of FA 1996 (condition 2 for section 91B(6)(b)) is amended as follows. For subsection (2) (cases in which share regarded as redeemable) substitute—. After that subsection insert—. In subsection (7) (shares mirroring a public issue: Case 1), in paragraph (b) (associated companies issuing mirroring shares to company within 24 hours of its issuing shares), for “24 hours” substitute “7 days”. In subsection (8) (shares mirroring a public issue: Case 2), in paragraph (a) (second-level mirroring shares issued within 24 hours of the public issue), for “24 hours” substitute “7 days”. The amendments made by sub-paragraphs (2) and (3) have effect in relation to any share held by a company on or after 12th May 2006 in any case where— But in that case, in relation to an accounting period beginning before 12th May 2006, amounts are to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 as a result of those amendments only if the amounts relate to any time on or after that date. In any other case, the amendments made by sub-paragraphs (2) and (3) have effect in relation to shares held by a company on or after 22nd March 2006. But, in relation to an accounting period beginning before 22nd March 2006, amounts are to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 as a result of those amendments only if the amounts relate to any time on or after that date. The amendments made by sub-paragraphs (4) and (5) have effect in relation to any case where the public issue (within the meaning of section 91D(7) and (8) of FA 1996) is on or after 22nd March 2006.
Section 103 of FA 1996 (interpretation of Chapter 2 of Part 4 of FA 1996) is amended as follows. In subsection (1), in the definition of “fair value”, in paragraphs (a) and (b), omit “in respect of amounts which at that time are not yet due and payable”. The amendment made by this paragraph has effect in relation to periods of account ending on or after 22nd March 2006. But, in relation to a period of account beginning before 22nd March 2006, the amendment made by this paragraph has effect only in relation to— which were made (or treated as made) on or after that date.
Paragraph 17A of Schedule 26 to FA 2002 (computation in accordance with generally accepted accounting practice) is amended as follows. In sub-paragraph (1) (amounts to be brought into account are those recognised in determining company’s profit or loss) after “Subject to the provisions of this Schedule” insert “(including, in particular, paragraph 15(1))”.
Paragraph 54 of Schedule 26 to FA 2002 (interpretation of Schedule) is amended as follows. In sub-paragraph (1), in the definition of “fair value”, in paragraphs (a) and (b), omit “in respect of amounts which at that time are not yet due and payable”. The amendment made by this paragraph has effect in relation to periods of account ending on or after 22nd March 2006. But, in relation to a period of account beginning before 22nd March 2006, the amendment made by this paragraph has effect only in relation to— which were made (or treated as made) on or after that date.
In section 68 of TCGA 1992 for the definition of “settled property” substitute ““settled property” means any property held in trust other than property to which section 60 applies (and references, however expressed, to property comprised in a settlement are references to settled property).” After section 68 of TCGA 1992 insert— The amendment of section 68 made by sub-paragraph (1) shall come into force on 6th April 2006 (in relation to settlements whenever created). Sections 68A and 68B (as inserted by sub-paragraph (2)) shall come into force on 6th April 2006 (in relation to settlements whenever created). Section 68C (as inserted by sub-paragraph (2)) shall have effect in respect of variations occurring on or after 6th April 2006 (irrespective of the date on which the deceased person died).
For section 69(1) and (2) of TCGA 1992 (residence of trustees, etc) substitute— This paragraph shall have effect—
This paragraph applies where a company is entitled to relief under Schedule 20 to FA 2000 or Schedule 12 or 13 to FA 2002 for any accounting period of the company falling within sub-paragraph (2). An accounting period of a company falls within this sub-paragraph if it ends on a day falling after 31st March 2002 but before 31st March 2006. Sub-paragraphs (4) and (5) apply to any claim by the company for such relief for an accounting period falling within sub-paragraph (2), other than a claim by the company for— A claim to which this sub-paragraph applies may be made, amended or withdrawn by the company at any time up to and including 31st March 2008. A claim to which this sub-paragraph applies may be made, amended or withdrawn by the company at a later date if an officer of Revenue and Customs allows it.
In section 286(3) of TCGA 1992 (connected persons: trustees)—
omit “and” at the end of paragraph (b), and
after paragraph (c) insert—
For the purposes of section 107(1) the property rental businesses of the members of the group shall be treated as a single business. In section 107(7)(a) a reference to the company shall be treated as a reference to a member of the group. For section 107(7)(b) substitute—. For section 107(8) substitute— In the application of section 107(9) compliance with Condition 4 shall be treated as unlawful in so far as—
The provisions of this Schedule apply in relation to films that commence principal photography on or after 1st April 2006.
Where a company incurs expenditure on development of a film and subsequently begins to carry on a trade as the film production company in relation to the film, the expenditure may be treated as expenditure of that trade and as if incurred immediately after the company began to carry it on. If expenditure so treated has previously been taken into account for other tax purposes, the company must amend any relevant company tax return accordingly. Any amendment or assessment necessary to give effect to sub-paragraph (2) may be made notwithstanding any limitation on the time within which an amendment or assessment may normally be made.
For the first period of account there shall be brought into account in determining profit or loss— For any period of account after the first there shall be brought into account in determining profit or loss— The proportion of estimated total income treated as earned at the end of any period of account is determined using the formula: where— C is the total to date of costs incurred (and reflected in work done), T is the estimated total cost of the film, and I is the estimated total income from the film.
Expenditure in respect of which relief has been given under— shall not be taken into account for the purposes of this Schedule.
section 40B, 41 or 42 of F(No.2)A 1992,
section 48 of F(No.2)A 1997, or
section 135, 136 to 138A or 139 to 142 of ITTOIA 2005,
Section 782 of ICTA is amended as follows. After subsection (1) (application of section to payments under certain leases) insert—. The amendment made by this paragraph has effect in relation to payments due on or after 1st April 2006.
This paragraph applies if the business carried on by the company is a trade the profits of which are chargeable to corporation tax under Case I of Schedule D. No relief is to be given by virtue of section 393A(1)(b) of ICTA (set off of trading losses against profits of earlier accounting periods) in respect of so much of any loss as derives from the expense. For the purpose of determining how much of a loss derives from the expense, the loss is to be calculated on the basis that the expense is the final amount to be deducted.
This paragraph applies for the purposes of condition B in paragraph 6. The reference to the relevant company’s income is to its income as calculated for corporation tax purposes. Any apportionment necessary to determine the amount of the relevant company’s income attributable to the period of 12 months ending with the relevant day is to be made on a time basis. But— The proportion of the income that derives from qualifying leased plant or machinery is to be determined on a just and reasonable basis.
A company (“company B”) is a principal company of company A if— There is a relevant change in the relationship between company A and company B (as a principal company) on any day if company A ceases to be a qualifying 75% subsidiary of company B on that day. A company (“company C”) is a principal company of company A if— There is a relevant change in the relationship between company A and company C (as a principal company) on any day if— If company C is a qualifying 75% subsidiary of another company (“company D”), company D is a principal company of company A unless company D is a qualifying 75% subsidiary of another company, and so on. Accordingly, there is a relevant change in the relationship between company A and a principal company of company A on any day if— This paragraph is supplemented by paragraph 15 (meaning of a qualifying 75% subsidiary).
A company is owned by a consortium if— Those other companies are the members of the consortium. This paragraph applies for the purposes of this Schedule.
For the purposes of this paragraph references to plant or machinery, in the case of any company, do not include any plant or machinery— but, apart from that, include all other plant or machinery, whether or not subject to a lease. For the purposes of paragraph 16, “PM” means the amount found by adding together— and the reference here to an associated company is to a company which is an associated company of the relevant company on the relevant day. For this purpose the amounts shown in the appropriate balance sheet of any company in respect of any plant or machinery are— If— the amount of the net book value (or carrying amount) in respect of the fixture is determined on a just and reasonable basis. If— the amount of the net investment in respect of the finance lease of that plant or machinery is determined on a just and reasonable basis. In this paragraph any reference to any amount shown in the appropriate balance sheet of a company is to the amount which, on the following assumptions, falls (or would fall) to be shown in a balance sheet of the company. The assumptions are— Sub-paragraph (7)(b) does not apply if the relevant day falls before 22nd March 2006.
This paragraph applies if— There is no adjustment to the basic amount unless, on that day, company A— In that case, the amount of the income is limited to the appropriate percentage of the basic amount. The appropriate percentage is found by subtracting the relevant fraction at the end of the day from 100%. For this purpose “the relevant fraction” is whichever is the lowest of the following percentages— In any case where company A becomes a qualifying 90% subsidiary of a company, sub-paragraph (5) is to be read as if for references to company A there were substituted references to that company.
For purposes of this Part of this Schedule whether, on any day (“the relevant day”), a company (“the partner company”) carries on a business of leasing plant or machinery in partnership with other persons is determined in accordance with paragraphs 6 to 8 (but modified as follows). Any reference in those paragraphs to the relevant company is to be read as a reference to the partnership. Any reference in those paragraphs to an associated company of the relevant company on the relevant day is to be read as a reference to each of the following— For this purpose “any other partner company” means a company—
For the purposes of this Part of this Schedule a company’s percentage share in the profits or loss of a business at any time is determined on a just and reasonable basis. In making that determination, regard must be had, in particular, to—
The amount of the company’s income under paragraph 23 is limited to the appropriate percentage of the basic amount. The appropriate percentage is found by subtracting the company’s relevant percentage share at the end of the day from its relevant percentage share at the start of the day. In this paragraph “relevant percentage share” has the same meaning as it has for the purposes of paragraph 27.
The amount of the income is calculated in accordance with paragraph 36. The amount of the expense is the same as the amount of the income.
In this Part of this Schedule “profits” does not include chargeable gains, and references to “loss” are to be read accordingly.
At the beginning of Schedule 1 to TCGA 1992 (trustees: exempt amount, etc) insert— After paragraph 2 of Schedule 1 to TCGA 1992 insert—
In the application of section 108—
the aggregate amount shown in the financial statement as profits of members of G (property rental business), calculated in accordance with international accounting standards, shall be treated as the amount of the income accruing from tax-exempt business,
the aggregate amount shown in the financial statements as the amount of the profits of members of G (residual) shall be treated as the amount of the income accruing from non-tax-exempt business,
the amount shown in the financial statements as the amount of the assets of G (property rental business) shall be treated as the amount of the assets involved in tax-exempt business, and
the amount shown in the financial statements as the amount of the assets of G (residual) shall be treated as the amount of the assets involved in non-tax-exempt business.
Paragraphs 42 to 44 shall have effect in relation to years of assessment beginning on or after 6th April 2006.
Chapter 5 of Part 12 of ICTA (petroleum extraction activities) is amended as follows.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule 19B (petroleum extraction activities: exploration expenditure supplement) is amended as follows.
In paragraph 1 (about the Schedule)—
in sub-paragraph (1) (entitlement of company to supplement), in the opening words, after “2004” insert “ but before 1st January 2006 ”,
in sub-paragraph (2) (condition that expenditure incurred on or after 1st January 2004), after “2004” insert “ but before 1st January 2006 ”.
In paragraph 3 (accounting periods)—
in sub-paragraph (1), in the definition of “post-commencement period”, after “2004” insert “ but before 1st January 2006 ”,
in sub-paragraph (1), in the definition of “pre-commencement period”, after “2004” insert “ but before 1st January 2006 ”,
at the end insert—.
In paragraph 6 (qualifying E&A expenditure), in sub-paragraph (2) (condition that expenditure incurred on or after 1st January 2004), after “2004” insert “ but before 1st January 2006 ”.
In paragraph 15 (supplement in respect of a post-commencement period), in sub-paragraph (2) (supplement to be treated as a loss for the purposes of Corporation Tax Acts), for “this Schedule)” substitute “ this Schedule or Part 4 of Schedule 19C) ”.
In paragraph 16 (amount of post-commencement supplement for a post-commencement period), after sub-paragraph (2) (proportionate reduction of supplement if post-commencement period less than 12 months) insert—.
After paragraph 18 (ring fence losses and non-qualifying losses) insert—.
In paragraph 22 (reductions in respect of utilised ring fence profits), at the end insert—.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the Table in Schedule 1 to IHTA 1984 (rates and rate bands), as it has effect in relation to chargeable transfers made on or after 6th April 2008, there shall be successively substituted—
the 2008-09 Table, which shall apply to any chargeable transfer made on or after 6th April 2008 (but before 6th April 2009), and
the 2009-10 Table, which shall apply to any chargeable transfer made on or after 6th April 2009.
Subsection (1)(b) is without prejudice to the application of section 8 of IHTA 1984 (indexation) by virtue of the difference between the retail prices index for the month of September in 2008 or any later year and that for the month of September in the following year.
Portion of value Rate of tax Lower limit (£) Upper limit (£) Per cent. 0 312,000 Nil 312,000 40
Portion of value Rate of tax Lower limit (£) Upper limit (£) Per cent. 0 325,000 Nil 325,000 40
Section 8(1) of IHTA 1984 (indexation of rate bands) shall not have effect as respects any difference between the retail prices index—
for the month of September 2006 and that for the month of September 2007, or
for the month of September 2007 and that for the month of September 2008.
Schedule 20 contains—
amendments of provisions of IHTA 1984 relating to settled property,
amendments of provisions relating to property that, for purposes of that Act, is property subject to a reservation, and
related amendments of provisions relating to chargeable gains.
Those amendments have effect as mentioned in that Schedule.
Section 48 of IHTA 1984 (settled property: excluded property) is amended as follows.
In subsection (3) (circumstances in which settled property situated outside the United Kingdom is excluded property), after paragraph (b) insert— “ ; but this subsection is subject to subsection (3B) below. ”.
In subsection (3A) (circumstances in which a holding in an authorised unit trust or a share in an open-ended investment company comprised in settled property is excluded property), after paragraph (b) insert— “ ; but this subsection is subject to subsection (3B) below. ”.
After subsection (3A) insert—.
If, in consequence of the amendments made by this section, an amount of inheritance tax would (but for this subsection) fall due before the day on which this Act is passed, that amount is to be treated instead as falling due at the end of the period of 14 days beginning with that day.
This section is deemed to have come into force on 5th December 2005.
Schedule 21 (taxable property held by investment-regulated pension schemes) has effect.
This section and that Schedule are deemed to have come into force on 6th April 2006.
In Schedule 29 to FA 2004 (authorised lump sums), after paragraph 3 insert—
This section is deemed to have come into force on 6th April 2006.
Schedule 22 (provisions about inheritance tax in relation to registered pension schemes) has effect.
This section and that Schedule are deemed to have come into force on 6th April 2006.
Schedule 23 (miscellaneous amendments relating to pension schemes etc) has effect.
This section and that Schedule are deemed to have come into force on 6th April 2006.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In Schedule 5 to FA 2003 (stamp duty land tax: amount of tax chargeable: rent), in paragraph 2(3) (calculation of tax chargeable in respect of rent), in Table A (bands and percentages for residential property), for “£120,000”, in both places, substitute “ £125,000 ”.
In Schedule 13 to FA 1999 (stamp duty: instruments chargeable and rates of duty), in paragraph 4 (bands and percentages for conveyance or transfer on sale of property other than stock or marketable securities), for “£120,000”, in both places, substitute “ £125,000 ”.
The amendments made by subsections (1) and (2) have effect in relation to any transaction of which the effective date (within the meaning of Part 4 of FA 2003) is after 22nd March 2006.
The amendment made by subsection (3) has effect in relation to instruments executed after 22nd March 2006.
Schedule 24 (amendments of Schedule 15 to FA 2003) has effect.
In section 77 of FA 2003 (notifiable transactions), for subsection (2A) substitute—
In Schedule 5 to FA 2003 (amount of tax chargeable: rent), in paragraph 3 (net present value of rent payable over term of lease), for “in year i” substitute “ in respect of year i ”.
Subsection (1) has effect in relation to any assignment of which the effective date (within the meaning of Part 4 of FA 2003) is on or after the day on which this Act is passed.
Subsection (2) has effect in relation to any lease granted or treated as granted on or after that day.
Schedule 25 (amendments of Schedule 17A to FA 2003) has effect.
In Schedule 16 to FA 2003 (trusts and powers), after paragraph 7 insert—
Subsection (1) has effect in relation to any acquisition of which the effective date (within the meaning of Part 4 of FA 2003) is on or after the day on which this Act is passed.
Part 4 of FA 2003 (stamp duty land tax) is amended as follows.
Omit section 64A (initial transfer of assets to trustees of unit trust scheme).
In section 101 (unit trust schemes)—
in subsection (1) (application of Part (except for provisions mentioned in subsection (7)) to unit trust schemes) for “provisions” substitute “ provision ”, and
in subsection (7) (provisions for the purposes of which unit trust schemes not to be treated as companies) omit from “section 53” to “companies), or”.
This section has effect in relation to any land transaction of which the effective date is, or is after, 22nd March 2006 (but see subsections (5) and (6)).
This section does not have effect in relation to—
any land transaction which is effected in pursuance of a contract entered into and substantially performed before 2 p.m. on 22nd March 2006 (“the relevant time”), or
any other land transaction which is effected in pursuance of a contract entered into before the relevant time and which is not an excluded transaction.
For this purpose, a land transaction effected in pursuance of a contract is an excluded transaction if—
any provision of the contract has effect by reference to a unit trust scheme and the scheme is not established before the relevant time,
at or after the relevant time the contract is varied in a way that significantly affects the land transaction (see subsection (7)),
the subject-matter of the land transaction is not identified in the contract in a way that would have enabled its acquisition before the relevant time,
rights under the contract are assigned at or after the relevant time,
the land transaction is effected in consequence of the exercise, at or after the relevant time, of any option, right of pre-emption or similar right, or
at or after the relevant time there is an assignment, subsale or other transaction (relating to the whole or part of the contract's subject-matter) as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance to him.
For the purposes of subsection (6)(b) the contract is varied in a way that significantly affects the land transaction if (and only if)—
it is varied so as to substitute a different purchaser in relation to the land transaction,
it is varied so as to alter the subject-matter of the land transaction, or
it is varied so as to alter the consideration for the land transaction.
Expressions which are used in Part 4 of FA 2003 and in this section have the same meaning in this section as in that Part.
Schedule 7 to FA 2003 (stamp duty land tax: group relief etc) is amended as follows.
In paragraph 2 (restrictions on availability of group relief) in sub-paragraph (1) (no relief if arrangements by virtue of which a person has or could have control of purchaser but not vendor) at the end insert— “ For another exception to this, see sub-paragraph (3A). ”.
In that paragraph after sub-paragraph (3) (arrangements which are within sub-paragraph (2)(a)) insert—.
In paragraph 4 (cases in which group relief not withdrawn under paragraph 3)—
after sub-paragraph (6) (the third case where the relief not withdrawn) insert—, and
in sub-paragraph (7) (re-imposition of the withdrawal of the relief), in the opening words, after “in a case within sub-paragraph (6)” insert “ or (6A) ”.
The amendments made by this section have effect in relation to any transfer which takes place, or is intended to take place, after 22nd March 2006.
In sections 71A to 73 of FA 2003 (alternative property finance) for “individual” substitute “ person ” (and for “an individual” substitute “ a person ”).
Sections 71A(6), 72(6), 72A(6) and 73(4) shall cease to have effect.
In section 73(3) after “chargeable” insert “ on a chargeable consideration that is not less than the market value of the interest and, in the case of the grant of a lease at a rent, the rent. ”
After section 73 insert—
This section shall have effect in relation to arrangements in which the effective date of the first transaction (within the meaning of sections 71A to 73 of FA 2003) is on or after the date on which this Act is passed; and section 119(1) of FA 2003 shall have effect for determining the effective date for the purposes of this subsection.
Part 3 of FA 1986 (stamp duty) is amended as follows.
In section 75 (relief for acquisition of target company's undertaking in pursuance of reconstruction scheme)—
in subsection (4) (condition as to registered office etc) omit “that the registered office of the acquiring company is in the United Kingdom and”, and
in subsection (5)(c) (condition that any shareholder holds the same proportion of shares in the companies) after “the same” insert “ , or as nearly as may be the same, ”.
In section 76 (other relief for acquisition of target company's undertaking), in subsection (3) (condition as to registered office etc) omit “that the registered office of the acquiring company is in the United Kingdom and”.
In section 77 (relief for acquisition of target company's share capital), in subsection (3) (conditions for relief),—
omit paragraph (a) (condition as to registered office),
in paragraph (g) (condition that the number of shares of any particular class bear to all the shares the same proportion) after “the same proportion” insert “ , or as nearly as may be the same proportion, ”, and
in paragraph (h) (condition that proportion of shares of any particular class held by any shareholder be the same) after “the same” insert “ , or as nearly as may be the same, ”.
The amendments made by this section have effect in relation to instruments executed after the day on which this Act is passed.
In section 42 of FA 1996 (amount of landfill tax) for the amount specified in subsection (1)(a), and the corresponding amount specified in subsection (2), substitute “ £21 ”.
The amendments made by this section have effect in relation to taxable disposals made, or treated as made, on or after 1st April 2006.
Taxable commodity supplied Rate at which levy payable if supply is neither a half-rate supply nor a reduced-rate supply Electricity £0.00441 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 £0.00154 per kilowatt hour Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state £0.00985 per kilogram Any other taxable commodity £0.01201 per kilogram
This section has effect in relation to supplies treated as taking place on or after 1st April 2007.
For the purposes of climate change levy, no supply made on or after 1st April 2006 is a half-rate supply.
Subsections (3) to (6) have effect for determining when a supply is to be regarded as made for the purposes of subsection (1).
A supply— is to be regarded as made at the time when the electricity or gas is actually supplied.
of electricity, or
of gas that is in a gaseous state and is of a kind supplied by a gas utility,
In the case of a supply of a taxable commodity not falling within subsection (3) by a person who is resident in the United Kingdom— This subsection does not apply if subsection (6) (deemed self-supply) applies in the case of the supply.
if the commodity is to be removed, the supply is to be regarded as made at the time of the removal,
if the commodity is not to be removed, the supply is to be regarded as made when the commodity is made available to the person to whom it is supplied.
In the case of a supply of a taxable commodity not falling within subsection (3) by a person who is not resident in the United Kingdom, the supply is to be regarded as made— This subsection does not apply if subsection (6) (deemed self-supply) applies in the case of the supply.
when the commodity is delivered to the person to whom it is supplied, or
if earlier, when it is made available in the United Kingdom to that person.
In any case where, by virtue of paragraph 23(3) of Schedule 6 to FA 2000, a person is, for the purposes of that Schedule, deemed to make a supply to himself of a quantity of a taxable commodity— the supply is to be regarded as made at the time when he produced that particular quantity of the taxable commodity.
which he has produced, and
which does not fall within subsection (3),
In paragraph 34 of Schedule 6 to FA 2000 (deemed supplies of commodities other than electricity and certain gas), in sub-paragraph (2) omit the words “(or, in the case of electricity, consumed)” (which are unnecessary, because the paragraph does not apply in the case of electricity).
In consequence of subsection (1), Schedule 6 to FA 2000 (climate change levy) is amended as follows.
In paragraph 37 (supplies of electricity or gas spanning change of rate etc) in sub-paragraph (1)(c) omit “half-rate supplies or”.
In paragraph 38 (other supplies spanning change of rate etc) in sub-paragraph (1)(c) omit “half-rate supplies or”.
In paragraph 42(1) (amount payable by way of levy)—
in paragraph (a), for “neither a half-rate supply nor” substitute “ not ”;
omit paragraph (b);
in paragraph (c), for “neither a half-rate supply nor” substitute “ not ”;
in the Table (and in the Table substituted for it by section 171 of this Act), in the heading to column (2), for “neither a half-rate supply nor” substitute “ not ”.
Paragraph 43 (half-rate for supplies to horticultural producers) shall cease to have effect.
In paragraph 62 (tax credits) in subsection (1)—
in paragraph (c)—
for “neither a half-rate supply nor” substitute “ not ”;
omit “half-rate or”;
omit paragraph (d).
In paragraph 101 (civil penalties: incorrect notifications) in sub-paragraph (2)(a)—
at the end of sub-paragraph (ii) insert “ or ”;
omit sub-paragraph (iii).
In paragraph 147 (interpretation: general) omit the definition of “half-rate supply”.
Subsections (8) to (15) come into force on such day as the Treasury may by order made by statutory instrument appoint.
The power to make an order under subsection (16)—
may be exercised so as to bring a provision into force only in such cases as may be described in the order,
may be exercised so as to make different provision for different cases or descriptions of case,
includes power to make incidental, consequential, supplemental or transitional provision or savings.
If Her Majesty by Order in Council declares that— those arrangements have effect (and do so in spite of anything in any enactment or instrument).
arrangements relating to international tax enforcement which are specified in the Order have been made in relation to any territory or territories outside the United Kingdom, and
it is expedient that those arrangements have effect,
For the purposes of subsection (1) arrangements relate to international tax enforcement if they relate to any or all of the following—
the exchange of information foreseeably relevant to the administration, enforcement or recovery of any UK tax or foreign tax;
the recovery of debts relating to any UK tax or foreign tax;
the service of documents relating to any UK tax or foreign tax.
In this section—
“UK tax” means any tax or duty imposed under the domestic law of the United Kingdom, and
For the first period of account during which the trade is carried on the amount of the additional deduction is given by— where— E is— so much of the qualifying expenditure as is UK expenditure, or if less, 80% of the total amount of qualifying expenditure; and R is the rate of enhancement (see paragraph 5). For any period of account after the first the amount of the additional deduction is given by— where— E is— so much of the qualifying expenditure incurred to date as is UK expenditure, or if less, 80% of the total amount of qualifying expenditure incurred to date, R is the rate of enhancement (see paragraph 5), and P is the amount of the additional deduction given in the previous period or, as the case may be, the aggregate amount of the additional deductions given in previous periods. The Treasury may by regulations amend the percentage stated in sub-paragraph (1) or (2). No such regulations shall be made unless a draft of the regulations has been laid before and approved by a resolution of the House of Commons.
The company may surrender the whole or part of its surrenderable loss in a period. The amount of the film tax credit to which a company is entitled for a period is given by the formula— where— L is the amount of the loss surrendered, and R is the payable credit rate (see paragraph 8).
A payment in respect of film tax credit is not income of the company for any tax purpose.
To the extent that a transaction is attributable to arrangements entered into wholly or mainly for a disqualifying purpose, it shall be disregarded in determining for any period— Arrangements are entered into wholly or mainly for a disqualifying purpose if their main object, or one of their main objects, is to enable a company to obtain— In this paragraph “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.
Section 219 of CAA 2001 (meaning of “finance lease” in Chapter 17 of Part 2) is amended as follows. and which are not a long funding lease in the case of the lessor. Paragraph 15 of Schedule 8 (commencement) also has effect in relation to the amendment made by this paragraph.
In section 77 of TCGA 1992 (charge on settlor with interest in settlement)— Sub-paragraph (1) shall have effect for the purpose of determining whether for the purposes of section 77 a settlor is regarded as having an interest in a settlement (whenever created) on or after 6th April 2006.
A notice under section 109 must be given by the principal company. For the purposes of the requirement under section 109(2)(c) a reference to the company shall be treated as a reference to the principal company.
In section 132—
the reference in subsection (2) to disposal by the company shall be treated as a reference to disposal by a member of the group, and
the reference in subsection (3)(a) to C (tax-exempt) shall be treated as a reference to G (property rental business).
This paragraph applies to a non-UK resident company which is a member of a group to which Part 4 applies if— Business carried on by a non-UK resident company is property rental business for the purposes of this Part if the business would be property rental business within the meaning given by section 104 if it were carried on by a UK resident company. The property rental business of the company in the United Kingdom shall be treated as if it were (subject to the application of this Part) chargeable to corporation tax. Section 119(1) shall apply to the company as if the reference to the business of C (tax-exempt) were a reference to the UK property rental business. Profits arising from the UK property rental business shall not be charged to income tax. Sections 124 to 126 shall apply to the company as if— If a UK resident member of a group to which Part 4 applies receives a dividend which represents (wholly or partly and directly or indirectly) profits of UK property rental business of a non-UK resident member of the group, such proportion of the dividend as represents those profits shall be treated for the purposes of the Corporation Tax Acts as a dividend from a UK resident company. Profits and gains of the UK property rental business shall be treated as profits and gains of a UK resident member of the group for the purposes of—
The following paragraphs of this Part of this Schedule shall be deemed to have come into force on 22nd March 2006.
Section 5 of IHTA 1984 (meaning of “estate”) is amended as follows. In subsection (1) (person’s estate is aggregate of all property to which person beneficially entitled, except that person’s estate immediately before death does not include excluded property), for “except that the” substituteexcept that—. After subsection (1) insert—
Paragraph 22 of Schedule 36 (right to take benefits before normal minimum pension age: schemes within paragraph 1(1)(a) to (e) of Schedule 36) is amended as follows. In sub-paragraph (7), for paragraph (b) substitute— Condition 1 is met if— Condition 2 is met if— The persons referred to in sub-paragraph (7B)(a) are— If the member has become entitled to the benefits payable under arrangements under the pension scheme by reason of service in the armed forces of the Crown, any employment on compulsory recall is to be disregarded for the purposes of sub-paragraph (7B)(a). Condition 3 is met if — The re-employment conditions are— The pension abatement condition is met if— The materially different employment condition is met— is materially different in nature from the employment in which the member was employed immediately before becoming entitled to the benefits mentioned in sub-paragraph (7)(a). For the purposes of sub-paragraph (7D) “employment on compulsory recall” means permanent service— Section 839 of ICTA (connected persons) applies for the purposes of this paragraph.
The chargeable consideration for the transaction shall (subject to paragraph 13) be taken to be equal to— where— MV is the market value of the interest transferred, and SLP is the sum of the lower proportions. In sub-paragraph (6) of that paragraph, omit “(instead of sub-paragraphs (2) to (5))”.
In paragraph 14 (transfer of partnership interest: consideration given and chargeable interest held), for the heading substitute—. In sub-paragraph (1)(a) of that paragraph, before “partnership” insert “property-investment”. After sub-paragraph (7) of that paragraph insert—
After paragraph 9 insert— In paragraph 7(3), for the words after “but disregard” substitute “paragraphs 9(2) and 9A(3) (deemed reduction of rent, where further lease granted, for period during which rents overlap)”.
In paragraph 14 (increase of rent treated as grant of new lease: abnormal increase after fifth year), in sub-paragraph (1)(a), for “in accordance with the provisions of the lease” substitute “, whether in accordance with the provisions of the lease or otherwise”. Where the provisions of this paragraph have not previously applied to an increase in the rent payable under the lease, the rent previously taxed is— Where the provisions of this paragraph have previously applied to an increase in the rent payable under the lease, the rent previously taxed is the rent payable as a result of the last increase in relation to which the provisions of this paragraph applied. In determining the rent previously taxed, disregard paragraphs 9(2) and 9A(3) (deemed reduction of rent, where further lease granted, for period during which rents overlap). The reference to a lease in sub-paragraph (1) is to—
In section 169F of TCGA 1992 (meaning of “interest in a settlement” for purposes of sections 169B to 169D)— Sub-paragraph (1) shall have effect for the purpose of determining whether for the purposes of sections 169B to 169D and 169F an individual is to be regarded as having an interest in a settlement (whenever created) on or after 6th April 2006. But sub-paragraph (1) shall not have effect in relation to section 169C if the relevant disposal (within the meaning of section 169C(1)) is made on or before 5th April 2006.
In section 111(1) a reference to C (pre-entry) shall be treated as a reference to a UK resident member of G (pre-entry). Section 111(2) shall have effect in relation to each UK resident company which is a member of the group; and for that purpose— In section 111(5) the reference to the company shall be treated as a reference to each UK resident member. Where a percentage of the assets of a member of G (property rental business) is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be disregarded for the purposes of section 111.
Section 132(2) and (3) shall apply where a UK resident company ceases to be a member of a group to which Part 4 applies if— In the application of section 132(2) and (3) by virtue of sub-paragraph (1)—
Schedule 5 (amount of tax chargeable: rent) has effect with the modifications set out in sub-paragraphs (2A) to (2C). In paragraph 2— In paragraph 9(2A)— Tax chargeable under this Schedule is in addition to any tax chargeable under section 55 as it has effect by virtue of paragraph 10 of Schedule 15. For the purposes of sub-paragraphs (2A) and (2B) the relevant chargeable proportion is— where SLP is the sum of the lower proportions.
Step One Find the start date. Where the provisions of paragraph 14 have not previously applied to an increase in the rent payable under the lease, the start date is— Where the provisions of paragraph 14 have previously applied to an increase in the rent payable under the lease, the start date is the date of the last increase in relation to which the provisions of that paragraph applied. Step Two Find the number of whole years in the period between the start date and the date on which the new rent first becomes payable. Step Three The rent increase is regarded as abnormal if the excess rent (see paragraph 14(3)) is greater than: where— R is the rent previously taxed (see paragraph 14(4) or (4A)), and Y is the number of whole years found under Step Two.
In paragraph 7(5) of Schedule 4A to TCGA 1992 (disposal of interest in settled property)— Sub-paragraph (1) shall have effect for the purpose of determining whether a settlor is regarded as having an interest in a settlement (whenever created) for the purposes of Schedule 4A to TCGA 1992 on or after 6th April 2006.
If a UK resident company becomes a member of a group to which Part 4 applies, section 111 shall apply to the company as if— Where a percentage of the assets of the company would be excluded from a financial statement in accordance with paragraph 31(5), the percentage which would be excluded shall be disregarded in applying section 111 to the company.
A direction under section 133(2)— In the application of section 133(5), an appeal may be brought by the principal company.
In paragraph 13 (transfer of chargeable interest to a partnership consisting wholly of bodies corporate), in sub-paragraph (3), for “sub-paragraphs (2) to (5)” substitute “sub-paragraphs (2) and (5)”. In paragraph 11(2), for “sub-paragraphs (2A) to (2C)” substitute “sub-paragraph (2C)”. In paragraph 11, omit sub-paragraphs (2A), (2B), (2D) and (8).
In the application of section 112— Where a company joins a group to which Part 4 applies, section 112 shall apply to the company as if joining the group amounted to becoming a company to which Part 4 applies (but with a reference to C (residual) being treated as a reference to the company as a member of G (residual)).
Section 113(1) to (4) shall apply in relation to G (property rental business), G (pre-entry), G (residual) and G (post-cessation) as they apply in relation to C (tax-exempt), C (pre-entry), C (residual) and C (post-cessation). Section 113(1) to (6) shall also apply in relation to each UK resident company which is a member of the group; for which purpose— Where a percentage of the profits of a member of G (property rental business) is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be treated for the purposes of section 113 as profits of G (residual).
Regulations under section 114 may make provision in relation to a group to which Part 4 applies as if references to the company were references to the principal company.
Section 115 shall apply as if for subsection (2) there were substituted—
Where any arrangements have effect by virtue of this section, no obligation of secrecy (whether imposed by statute or otherwise) prevents a public authority or anyone acting on its behalf from making a disclosure to the Commissioners for Her Majesty’s Revenue and Customs —
for the purpose of giving effect, or enabling effect to be given, to the arrangements, or
which is authorised in accordance with the arrangements.
But information may not be disclosed by virtue of subsection (4A) unless the person making the disclosure is satisfied that the recipient of the information—
will only use the information in a manner consistent with the purposes of the arrangements, and
is bound by, or has undertaken to observe, rules of confidentiality with respect to the information which are not less strict than those applying to it in the United Kingdom.
Where any arrangements have effect by virtue of this section, no obligation of secrecy (whether imposed by statute or otherwise) prevents the Commissioners for Her Majesty’s Revenue and Customs or any other authorised Revenue and Customs official from making a disclosure to a person outside the United Kingdom—
for the purpose of giving effect, or enabling effect to be given, to the arrangements, or
which is authorised in accordance with the arrangements.
An Order in Council made under this section revoking an earlier such Order may contain any transitional provisions that appear appropriate.
An Order under this section is not to be submitted to Her Majesty in Council unless a draft of the Order has been laid before and approved by a resolution of the House of Commons.
Any provisions which— have effect after that time as if included in an Order in Council under this section.
are included in an Order in Council made under any of the provisions specified in subsection (10),
are in force immediately before the passing of this Act, and
could have been included in an Order in Council under this section had the Order in Council been made after that time,
If any such provisions relate to arrangements covering UK taxes or foreign taxes (or both) other than those in relation to which the Order in Council had effect, the provisions also have effect after the passing of this Act (by virtue of subsection (8)) in relation to those other UK taxes or foreign taxes (or both).
The provisions referred to in subsection (8)(a) are—
sections 788 and 815C of ICTA (international arrangements relating to income tax, corporation tax and capital gains tax and analogous foreign taxes), and
sections 158 and 220A of IHTA 1984 (international arrangements relating to inheritance tax and analogous foreign taxes).
In this section “Revenue and Customs official” has the same meaning as in section 18 of the Commissioners for Revenue and Customs Act 2005 (c. 11) (confidentiality).
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Subsections (1) to (8) and (8C) to (9) of section 20 of TMA 1970 (powers to call for information relevant to liability to income tax, corporation tax or capital gains tax), and sections 20B, 20BB and 20D of that Act so far as relating to those subsections, have effect as if— (but subject to subsection (3)).
the references in those provisions to tax liability included liability to relevant foreign tax, and
the references to tax included relevant foreign tax,
“Relevant foreign tax” means any tax or duty—
imposed under the law of a territory in relation to which arrangements having effect by virtue of section 173 have been made, and
covered by the arrangements.
In their application by virtue of subsection (1) the provisions mentioned in that subsection have effect as if—
the reference in section 20(7A) to any provision of the Taxes Acts were to any provision of the law of the territory concerned,
the reference in subsection (2) of section 20B to an appeal were to an appeal, review or similar proceedings under the law of that territory, and
the reference in subsection (6) of that section to the Crown were to that territory.
The Treasury may by regulations make provision for the recovery in the United Kingdom of debts relating to any relevant foreign tax pursuant to arrangements having effect by virtue of section 173.
“Relevant foreign tax” means any tax or duty—
imposed under the law of a territory in relation to which such arrangements have been made, and
covered by the arrangements.
Regulations under this section may make provision for the taking of action to recover debts relating to any relevant foreign tax by way of legal proceedings, distress, diligence or otherwise.
Such provision may in particular be made by applying, with any appropriate modifications, any enactment or rule of law that applies in relation to the recovery of any tax or duty imposed under the domestic law of the United Kingdom (including any enactment relating to penalties or interest on unpaid amounts).
The power to make regulations under this section is exercisable by statutory instrument.
A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.
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After section 352 of the Gambling Act 2005 (c. 19) (disclosure of information: data protection) insert—
Section 352A of the Gambling Act 2005 (c. 19) as inserted by subsection (1) above shall come into force on the passing of this Act.
The enactments mentioned in Schedule 26 (which include provisions that are spent or of no practical utility) are repealed to the extent specified.
The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained or referred to in the notes set out in that Schedule.
In this Act—
“supplementary charge” means any sum chargeable under section 501A(1) of ICTA as if it were an amount of corporation tax.
After paragraph 83L insert—
In each of the provisions set out in sub-paragraph (2) for “not resident or ordinarily resident in the United Kingdom” substitute “neither resident nor ordinarily resident in the United Kingdom”. Those provisions are— In paragraph (2)(1)(d) of Schedule 5A for “resident or ordinarily resident” substitute “resident and ordinarily resident”. The amendments to sections 76(1B)(a) and 86(2)(a) shall come into force on 6th April 2007 (in relation to settlements whenever created). The amendments to paragraph 2(1)(c) and (d) of Schedule 5A shall have effect in relation to transfers of property made on or after 6th April 2007 (in relation to settlements whenever created). The amendments to paragraphs 3(1)(a) and 4(1)(a) of Schedule 5A shall have effect in relation to settlements created on or after 6th April 2007.
In section 77(7) (settlor with interest in settlement) for “the settlor is, and the trustees are, either resident in the United Kingdom during any part of the year or ordinarily resident in the United Kingdom during the year” substitute—
In section 83A(3) (trustee residence: split years)—
in paragraph (a)—
after “resident” insert “and ordinarily resident”, and
at the end omit “or”, and
omit paragraph (b).
Paragraphs 31 and 32 shall come into force on 6th April 2007 (in relation to settlements whenever created).
In each of the provisions set out in sub-paragraph (2) for “resident or ordinarily resident in the United Kingdom” substitute “resident and ordinarily resident in the United Kingdom”. Those provisions are— The amendments to sections 83A(4)(b), 85A(3), 86(3) and 87(2), paragraph 5(2) of Schedule 4A and paragraphs 4(2) and 10(1) and (3) of Schedule 4C shall come into force on 6th April 2007 (in relation to settlements whenever created). The amendments to paragraphs 3(1)(b) and 4(1)(b) of Schedule 5A shall have effect in relation to settlements created on or after 6th April 2007.
In each of the provisions set out in sub-paragraph (2)— Those provisions are— Sub-paragraph (2)(c) shall have effect in relation to a transfer of value made on or after 6th April 2007 (in relation to settlements whenever created).
In each of the provisions set out in sub-paragraph (2) for “at no time resident or ordinarily resident in the United Kingdom” substitute “at no time resident and ordinarily resident in the United Kingdom”. Those provisions are— Sub-paragraph (2)(b) shall have effect in relation to a transfer of value made on or after 6th April 2007 (in relation to settlements whenever created).
In section 169(3)(a) (availability of hold-over relief)— In section 169(3)(b)(ii) (notional disposal) for “arising” substitute “accruing”. This paragraph shall have effect in relation to relevant disposals (within the meaning given by section 169(2)) made on or after 6th April 2007 (in relation to settlements whenever created).
In paragraph 2(7)(a) of Schedule 1 (meaning of “excluded settlement”) omit “treated under section 69(1) as”.
In paragraph 5(1) of Schedule 4A (residence of trustees) for the words from “either” to the end of the sub-paragraph substitute “resident and ordinarily resident in the United Kingdom during any part of the year”.
In paragraph 10(2) of Schedule 4C (capital payments received by beneficiaries when trustees resident in United Kingdom) for paragraphs (a) and (b) substitute “during the whole of which the trustees are resident and ordinarily resident in the United Kingdom”.
Paragraphs 35 to 40 shall, unless otherwise expressly provided, come into force on 6th April 2007 (in relation to settlements whenever created).
“VERA 1994” means the Vehicle Excise and Registration Act 1994 (c. 22).
After paragraph 77 of Schedule 18 to FA 1998 (joint amended returns) insert—.
In paragraph 83M (Part 9C: introduction) for “claims for tax credits” substitute “claims for relief”.
Film tax relief is available in accordance with this Schedule in respect of expenditure on a film— References in this Part of this Schedule to the trade of a film production company are to the trade that it is treated as carrying on under Schedule 4.
Section 730 of ICTA (transfers of rights to receive distributions in respect of shares) is amended as follows. Omit subsection (3) (proceeds of subsequent sales etc of rights to receive distributions not to be regarded as income of the seller etc). The amendment made by this paragraph has effect in relation to sales or other realisations on or after 20th January 2006.
Section 737A of ICTA (sale and repurchase of securities: deemed manufactured payments) is amended as follows. In subsection (5) (application of Schedule 23A and dividend manufacturing regulations), after “apply” insert “, subject to subsection (5A) below,”. After that subsection insert—. In subsection (6) (interpretation), for— substitute “this section”. The amendments made by this paragraph have effect in relation to securities if—
Section 786 of ICTA (transactions associated with loans or credit) is amended as follows. After subsection (5) (transaction under which a person assigns, surrenders etc income arising from property) insert—.
Section 85A of FA 1996 (computation in accordance with generally accepted accounting practice) is amended as follows. In subsection (1) (amounts to be brought into account are those recognised in determining company’s profit or loss) after “Subject to the provisions of this Chapter” insert “(including, in particular, section 84(1))”.
Section 91B of FA 1996 (non-qualifying shares) is amended as follows. In subsection (1) (conditions for section to apply)— In subsection (2) (how Chapter has effect for the accounting period) after “as if” insert “during those times”. The amendments made by this paragraph have effect in relation to accounting periods ending on or after 22nd March 2006. But, in relation to an accounting period beginning before 22nd March 2006, amounts are to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 as a result of those amendments only if the amounts relate to any time on or after that date.
Section 100 of FA 1996 (money debts etc not arising from the lending of money) is amended as follows. In subsection (1A) (conditions mentioned in subsection (1)(c)(iv)) for paragraph (e) (property not an asset representing a loan relationship or derivative contract) substitute—. After that subsection insert—. The amendments made by this paragraph have effect in relation to disposals made on or after 22nd March 2006.
In Schedule 9 to FA 1996 (loan relationships: special computational provisions), paragraph 15 (disposal or acquisition made in pursuance of repo and stock-lending arrangements not to be related transaction) is amended as follows. In sub-paragraph (2)(b) (transfer to original transferor (“A”) giving effect to entitlement or requirement to rights on re-transfer etc.), after “to A” insert “by B”. The amendment made by this paragraph has effect in relation to any transfer to A (within the meaning of paragraph (a) of sub-paragraph (3) of paragraph 15) under arrangements—
In Schedule 26 to FA 2002 (derivative contracts), paragraph 30 (transactions within groups: fair value accounting) is amended as follows. In sub-paragraph (1) (paragraph 28 not to apply where transferor uses fair value accounting) for paragraph (b) (treatment of transferee in respect of the transaction) substitute—. In any case where a discount (within the meaning given by section 100(3A) of the Finance Act 1996) arises in respect of the transaction or the series of transactions, the amount to be brought into account by virtue of sub-paragraph (1)(a) is to be increased by the amount of the discount. The amendments made by this paragraph have effect in any case where the relevant transaction is on or after 22nd March 2006. For this purpose “the relevant transaction” has the meaning given by paragraph 22.
After section 13 (use for qualifying activity of plant or machinery provided for other purposes) insert—.
Section 61 (disposal events and disposal values) is amended as follows. In subsection (1) (disposal events) after paragraph (e) insert—. 5A. Commencement of the term of a long funding finance lease of the plant or machinery. An amount equal to that which would fall to be recognised as the lessor’s net investment in the lease if accounts were prepared in accordance with generally accepted accounting practice on the date on which the lessor’s net investment in the lease is first recognised in the books or other financial records of the lessor. 5B. Commencement of the term of a long funding operating lease of the plant or machinery. An amount equal to the market value of the plant or machinery at the commencement of the term of the lease. In item 6 in that Table (which refers to the occurrence of an event within items 1 to 5) for “5” substitute “5B”.
The Table in section 84 is amended as follows. In paragraph 1 after sub-paragraph (a) insert— (aa) section 13A (use for other purposes of plant or machinery provided for long funding leasing), or
In Part 12 (special classes of companies and businesses) after section 502 insert the following Chapter—.
In section 293(6A) of ICTA (enterprise investment scheme: limits on value of gross assets of share-issuing company or its group)— Sub-paragraph (1) has effect in relation to shares issued on or after 6th April 2006, subject to sub-paragraphs (3) and (4). Sub-paragraph (1) does not have effect in relation to shares issued on or after 6th April 2006 to a person who subscribed for them before 22nd March 2006. Sub-paragraph (1) does not have effect in relation to shares issued on or after 6th April 2006 to the managers of an investment fund approved for the purposes of section 311 of ICTA by the Commissioners for Her Majesty’s Revenue and Customs if—
This Part of this Schedule applies where— and has effect in relation to any adjustment income under Chapter 17 of Part 2 of ITTIOIA 2005 attributable to the change of basis from that mentioned in paragraph (c) to that mentioned in paragraph (b). In relation to a period for which accounts are drawn up in accordance with international accounting standards, the references in sub-paragraph (1) to requirements of UK GAAP shall be read as references to the corresponding requirements of international accounting standards. In sub-paragraph (1)— Any reference in this Part of this Schedule to the date on which the change of accounting approach was adopted is to the first day of the first period of account for which it was adopted. To determine the amount of adjustment income attributable to the change of basis mentioned in the closing words of sub-paragraph (1), assume that there was no other change of accounting approach.
A person who under paragraph 2 is liable to tax for a tax year on an amount of adjustment income may elect for an additional amount to be treated as arising in that tax year. The election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year. The election must specify the amount to be treated as income arising in the tax year (which may be any amount up to the whole of the adjustment income not previously charged to tax). If an election is made, paragraph 2 applies in relation to any subsequent tax year as if the original amount of adjustment income (as reduced by the previous application of this sub-paragraph) were reduced by the additional amount treated as arising in the tax year for which the election is made.
This paragraph applies where the business is carried on by the person in partnership. The amounts chargeable to tax under this Part of this Schedule for any tax year are calculated as if the partnership were an individual resident in the United Kingdom. The person’s share of the amount charged to tax is determined— An election under paragraph 4 (election to accelerate charge) in relation to a tax year must be made jointly by all the persons who have been members of the partnership in the relevant twelve month period and are chargeable to income tax. If paragraph 3 applies (effect of cessation of business), each partner’s share of any amount charged to tax on or after the cessation is determined as follows— An election under paragraph 4 after the cessation must be made by each former partner separately. For the purposes of this paragraph “profit-sharing arrangements” means the rights of the partners to share in the profits of the business for the period in question. In the case of a business carried on by a limited liability partnership the operation of this Part of this Schedule is not affected by the partnership’s ceasing to be one carrying on a trade, profession or other business with a view to profit.
The adjustment shall be spread in accordance with the following rules. In each of the first three accounting periods beginning with that in which the whole of the adjustment would otherwise be charged to tax, an amount equal to whichever is the less of— is treated as arising and charged to tax. In the fourth and fifth accounting periods, if the whole of the adjustment has not been charged to tax in the previous periods, an amount equal to whichever is the least of— is treated as arising and charged to tax. In the sixth accounting period so much (if any) of the adjustment as has not previously been charged to tax is treated as arising and is charged to tax. For the purposes of this paragraph “the profits of the business” means the profits of the business as calculated for corporation tax purposes leaving out of account— This paragraph has effect subject to—
A company that under paragraph 10 is liable to tax for an accounting period on any amount may elect for an additional amount to be treated as arising in that period. The election must be made on or before the first anniversary of the filing date for the company’s company tax return for the accounting period for which the election is made. The election must specify the amount to be treated as arising in the accounting period (which may be any amount up to the whole of the adjustment not previously charged to tax). If an election is made, paragraph 10 applies in relation to any subsequent accounting period as if the amount of the original adjustment (as reduced by any previous application of this sub-paragraph) were reduced by the additional amount treated as arising in the accounting period for which the election is made.
Section 200 (liability for tax: transfer on death) is amended as follows. In subsection (1), after “any person are” insert “(subject to subsection (1A) below)”. After that subsection insert—
In section 233(1)(c) (interest on unpaid tax), for “or 126” substitute “, 126 or 151B”.
The reference in section 12(2A) of IHTA 1984 (inserted by paragraph 2) to a member of a registered pension scheme having omitted to exercise pension rights under the pension scheme includes an omission before 6th April 2006 in relation to a pension scheme which on that date becomes a registered pension scheme.
In paragraph 83R (penalty), in sub-paragraph (1)(a) for “a claim to which this Part of this Schedule applies” substitute “a claim for a tax credit under Schedule 13 to the Finance Act 2002”.
In section 210 (liability: pension rights etc) re-number the existing provision as subsection (1) of that section and insert after it—
In the title of Part 9C, “tax credit” becomes “relief”.
This Act may be cited as the Finance Act 2006.
Section 27
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Section 413 of ICTA (interpretation) is amended as follows. “EEA territory”, in relation to any time, means a territory outside the United Kingdom which is within the European Economic Area at that time;
A person commits an offence if— In sub-paragraph (1) “information about a person” means revenue and customs information relating to a person within the meaning of section 19(1) of the Commissioners for Revenue and Customs Act 2005 (c. 11) (wrongful disclosure). It is a defence for a person charged with an offence under this paragraph to prove that he reasonably believed— A person guilty of an offence under this paragraph is liable— A prosecution for an offence under this paragraph may be brought in England and Wales only— A prosecution for an offence under this paragraph may be brought in Northern Ireland only— In the application of this paragraph— the reference in sub-paragraph (4)(b) to twelve months shall be read as a reference to six months.
In this Part of this Schedule— The company tax return of the company for the final accounting period must state that the film has been completed or, as the case may be, that the company has abandoned film-making activities in relation to it.
The company is not entitled to film tax relief for an interim accounting period on the basis that the film is a limited-budget film unless— In that case, the film is provisionally treated in relation to that period as if that condition was met. If it subsequently appears that the condition will not be met on completion of the film, the company— When the film is completed or, as the case may be, the company abandons film-making activities in relation to it—
ICTA is amended as follows.
After section 741A insert—. The amendment made by this paragraph shall be taken to have come into force on 5th December 2005.
In ITTOIA 2005, section 468 (gains from contracts of life insurance etc: non-UK resident trustees and foreign institutions) is amended as follows. In subsection (2) (section 740 of ICTA to apply with the modifications in subsection (3) or (4))— In subsection (3) (cases within subsection (1)(a)) for “section 740 applies” substitute “sections 739 and 740 apply”. In subsection (4) (cases within subsection (1)(b)) for “section 740 applies” substitute “sections 739 and 740 apply”. The amendments made by this paragraph apply in relation to gains treated as arising on or after 5th December 2005.
ITTOIA 2005 is amended as follows.
A lease is an excepted lease if the following conditions are met. Condition 1 is that before 21st July 2005 there was evidence in writing that there was agreement, or a common understanding, between the lessor’s side and the lessee’s side as to the principal terms of the lease (the “pre-existing heads of agreement”). The definitions of “the lessor’s side”, “the lessee’s side” and “the principal terms” are in paragraph 27. Condition 2 is that the leased plant or machinery was under construction (see paragraph 24) before 1st April 2006. Condition 3 is that the lease has been finalised before 1st April 2007 (but see sub-paragraph (8)). Condition 4 is that the commencement of the term of the lease is before 1st April 2007 (but see sub-paragraph (8)). Condition 5 is that the lessee is the particular person or persons identified as such in the pre-existing heads of agreement. Condition 6 is that the principal terms of the lease are not (or, apart from section 70M of CAA 2001, would not be) materially different from those in the pre-existing heads of agreement. Sub-paragraphs (4) and (5) have effect with the substitution of “2009” for “2007” if the additional conditions in paragraph 18 are met.
This paragraph has effect for the purposes of this Part in any case where the pre-existing heads of agreement relates to two or more assets. The treatment of any of the assets varies according to whether the asset— Where any of the assets is for use individually, this Part has effect in relation to that asset separately, as if it were the subject of— See sub-paragraph (5) for the method of determining the terms. Where any of the assets are constituent assets of a combined asset— and sub-paragraph (3) applies accordingly. For the purposes of sub-paragraph (3), the principles in sections 70L and 70M of CAA 2001 are to be applied, with any necessary modifications, for the purpose of determining the terms of—
For the purposes of this Part, a lease is “finalised” on the earliest day on which the following conditions are met. Condition 1 is that there is a contract in writing for the lease between the lessor and the lessee. Condition 2 is that either— Condition 3 is that no terms remain to be agreed.
This paragraph applies in any case where there is a mixed lease (see section 70L of CAA 2001). In any such case, determine whether the mixed lease is an excepted lease. If the mixed lease is an excepted lease, section 70L of CAA 2001 and the amendments made by this Schedule accordingly do not have effect in relation to it. If the mixed lease is not an excepted lease, then apply sections 70L and 70M of CAA 2001 and determine separately in the case of each derived lease whether that derived lease is an excepted lease.
Section 501A of ICTA is amended as follows. In subsection (5), for the word “and” at the end of paragraph (d) substitute the following paragraph—. At the end of the section insert—. The amendments made by this paragraph have effect in relation to payments due on or after 1st April 2006.
After section 41 of TCGA 1992 (restriction of losses by reference to capital allowances and renewals allowances) insert— The amendment made by this paragraph has effect in relation to disposals on or after 1st April 2006.
Schedule 22 to FA 2000 (tonnage tax) is amended as follows.
Section 46 of CAA 2001 (general exclusions applying to certain sections) is amended as follows. For subsection (5) (exception of sections 45A, 45D, 45E and 45H from general exclusion 6 (leasing)) substitute—. The amendment made by this paragraph has effect in relation to expenditure incurred on or after 1st April 2006.
paragraph 14 of Schedule 4ZA to the 1992 Act paragraph 12 of Schedule 4ZA to the 1992 Act This paragraph shall come into force on 6th April 2006.
OTA 1975 is amended as follows.
In section 12 (interpretation of Part 1 of the Act) subsection (1) (general definitions) is amended as follows. “business day” has the same meaning as in the Bills of Exchange Act 1882;”; “Category 1 oil” and “Category 2 oil” have the meaning given by paragraph 2(1B) of Schedule 3 to this Act; “calendar month” (where those words are used) means a month of the calendar year;
In Schedule 2 (management and collection) paragraph 2 is amended as follows. In sub-paragraph (2)(a)(iii) (market value of oil disposed of otherwise than by sale at arm’s length) for “in the calendar month in which the delivery was made” substitute “as determined in accordance with Schedule 3 to this Act in the case of the delivery”. In sub-paragraph (2)(b)(ii) (market value of oil relevantly appropriated) for “in the calendar month in which the delivery was made” substitute “as determined in accordance with Schedule 3 to this Act in the case of the appropriation”. In sub-paragraph (2)(d)(ii) (market value of oil not disposed of etc at end of period) for “in the last calendar month” substitute “on the last business day”.
At the end of Schedule 3 insert—.
In subsection (2) of section 151 (treatment of pension rights etc) insert at the beginning “Subject to sections 151A and 151C below,”.
In section 226(4) (payment), for “or 126” substitute “, 126 or 151B”.
In Schedule 2 (provisions applying on reduction of tax), after paragraph 6 insert—
In section 151(5) (pension credit members), insert at the end “; and, if a person dies having become entitled to pension credits but without having rights attributable to them, the person is to be treated as having acquired, immediately before death, the rights by virtue of which the liability in respect of the pension credits is subsequently discharged.”
For section 761(7)(b) of ICTA (offshore income gain: trustee residence condition) substitute—. This paragraph shall have effect in relation to disposals made on or after 6th April 2007 (in relation to settlements whenever created).
After that section insert—
In section 30 of FA 2005 (trusts for vulnerable persons: capital gains)— In section 34(3) of that Act (disabled persons) for the words from “the powers” to the end of the subsection substitute— In section 35(4) of that Act (relevant minors) for the words from “the powers” to the end of the subsection substitute— After section 37(6) of that Act (vulnerable person election) insert— This paragraph shall come into force on 6th April 2006 (in relation to vulnerable person elections whenever made).
After section 403E of ICTA (relief for overseas losses of UK resident companies) insert—. After section 403F of ICTA (as inserted by sub-paragraph (1)) insert—.
After Schedule 18 to ICTA (group relief: equity holders and profits or assets available for distribution) insert—.
The amendments made by this Schedule, other than those made by paragraphs 4(2) and 5, have effect— If an accounting period (a “straddling period”) of a claimant company begins before 1st April 2006 and ends on or after that date— are to be treated as separate accounting periods for the purposes of the amendments made by this Schedule other than those made by paragraphs 4(2) and 5. The amount of the claimant company’s profits for the straddling period is to be attributed, on an apportionment in accordance with this paragraph, to those separate accounting periods. If the loss period of the non-resident company begins before 1st April 2006 and ends on or after that date— are to be treated as separate periods for the purposes of the amendments made by this Schedule other than those made by paragraphs 4(2) and 5. The amount of the loss or other amount of the non-resident company for the loss period is to be attributed, on an apportionment in accordance with this paragraph, to those separate periods. Any apportionment under this paragraph is to be made on a just and reasonable basis.
Paragraph 10 (other claims and elections to be included in return) is amended as follows. In sub-paragraph (2) (claims to which Part 8, 9 or 9A of Schedule 18 applies) for “R&D tax credit” substitute “R&D tax relief”. A claim to which Part 9BA of this Schedule applies (claims for relief under Schedule 12 to the Finance Act 2002) can only be made by being included in a company tax return (see paragraph 83LB). In sub-paragraph (3) (claims to which Part 9C of Schedule 18 applies) for “tax credits under Schedule 13 to the Finance Act 2002” substitute “tax relief under Schedule 13 to the Finance Act 2002”.
The amendments made by this Schedule have effect in the case of a lease if— unless the lease was finalised (see paragraph 23) before 21st July 2005 and on 17th May 2006 the lessor was within the charge to tax. As respects any time before 18th May 2006, this sub-paragraph has effect with the omission of the words “and on 17th May 2006 the lessor was within the charge to tax”. This sub-paragraph is subject to sub-paragraphs (5) and (6). Condition A is that— and the lease is not an excepted lease (see paragraph 17). Condition B is that— The amendments made by this Schedule also have effect in relation to a lease, in the case of the lessor, if— In the application of section 70W(4)(b) or 70X(4)(b) of CAA 2001 for the purposes of sub-paragraph (5) or (6), the lease mentioned in the opening words of the sub-paragraph in question is to be regarded as a lease which is not a long funding lease.
The additional conditions mentioned in paragraph 17(8) are as follows. Condition A is that the commencement of the term of the lease is before 1st April 2009. Condition B is that, at the latest, the commencement of the term of the lease is as soon as is reasonably practicable after construction of the asset is substantially complete. Condition C is that construction of the asset proceeded continuously on and after 1st April 2006. Condition D is that construction of the asset proceeded at the normal pace for an asset of its type. For this purpose, “normal pace” is the pace required to construct the asset in a reasonable time without delays or interruptions and consistent with normal business practice. This paragraph is supplemented by paragraph 19.
This paragraph applies where the following conditions are met— In this paragraph— Treat the old expenditure— Treat the new expenditure as if it had been incurred on the provision of a separate asset for leasing under a separate long funding lease in relation to which the amendments made by this Schedule have effect. That is without prejudice to the application of any provisions of this Part which treat that deemed separate long funding lease as if it were two or more leases. The rentals under the actual long funding lease are to be apportioned between the two deemed leases in such manner as is just and reasonable. This paragraph has effect for the purpose of determining liability to income tax or corporation tax in the case of any person who is or has been the lessor or the lessee under the actual long funding lease. Paragraph 22 has effect for determining when an amount of expenditure is to be treated for the purposes of this paragraph as incurred by the person mentioned in sub-paragraph (1).
An asset is “under construction” at any time in the period which— An asset consisting of two or more component parts is to be taken to be under construction at any time after the start of construction of any of those component parts which meets the condition in subsection (3). The condition is that the component part has been identified as a component part of the particular asset before construction of the component part begins. Sub-paragraphs (1) and (2) are subject to sub-paragraph (5). The leased asset is not to be regarded as under construction at any time after the commencement of the term of the lease. This paragraph has effect for the purposes of this Part.
In this Part— Chapter 6A of Part 2 of CAA 2001 (interpretation of that Part so far as relating to long funding leases) also applies for the purposes of this Part.
In Part 7 (the ring fence: general provisions) paragraph 63 (meaning of finance costs) is amended as follows. In sub-paragraph (2), for the word “and” at the end of paragraph (d) substitute the following paragraph—. At the end of the paragraph insert—. The amendments made by this paragraph have effect in relation to payments due on or after 1st April 2006.
Section 67 of CAA 2001 is amended as follows. After “qualifying activity”, in each place where those words occur in the section, insert “or corresponding overseas activity”. This subsection has effect subject to, and in accordance with, subsections (2A) to (2C). After subsection (2) insert—. Renumber subsection (5) as subsection (7). Before that subsection, as so renumbered, insert—. At the end of the section insert—. The amendments made by this paragraph have effect in relation to contracts that are finalised (within the meaning of Part 4 of Schedule 8) on or after 1st April 2006.
This paragraph applies for corporation tax purposes if— On the relevant day— The income— The expense— In this Part of this Schedule a company’s “notional business” means the business— This paragraph is supplemented by paragraph 24.
A company is an “associated company” of another company on any day if, at the start of that day,— and for this purpose “control” is to be read in accordance with section 416 of ICTA. Sub-paragraphs (3) and (4) apply if, at the start of any day, a company (“the consortium company”)— If there is any qualifying change in the consortium company’s interest in a business on that day, references to an associated company of the consortium company on that day include— If there is any qualifying change of ownership in relation to the consortium company on that day but there is no qualifying change in its interest in a business on the relevant day, references to an associated company of the consortium company on that day include— For this purpose a member of the consortium is a “relevant” member on any day if— This paragraph applies for the purposes of this Part of this Schedule.
This paragraph determines the amount of the income under paragraph 23 when a qualifying change in the interest of a company (“the partner company”) in a business of leasing plant or machinery occurs on any day (“the relevant day”). The amount of the income is found by— The formula is— In this paragraph “PM” has the meaning given by paragraph 17, but — In this paragraph “TWDV” means the amount found by adding together— For the purposes of “TWDV”— In this paragraph “qualifying company” means each of the following— For this purpose “any other partner company” means a company—
This paragraph applies if, as a result of a qualifying change in a company’s interest in a business on any day,— The amount of the expense of the other company is limited to the appropriate percentage of the amount of the income. The appropriate percentage is the percentage of the other company’s percentage share in the profits or loss of the business immediately after the change that is wholly attributable to the change. For the purposes of this paragraph any reference to an increase in the other company’s percentage share in any profits or loss of the business includes an increase from a nil share (whether as a result of its becoming a partner or otherwise).
This paragraph applies if the notional business carried on by the company is a trade the profits of which are chargeable to corporation tax under Case I of Schedule D. No relief is to be given by virtue of section 393A(1)(b) of ICTA (set off of trading losses against profits of earlier accounting periods) in respect of so much of any loss as derives from the expense. For the purpose of determining how much of a loss derives from the expense, the loss is to be calculated on the basis that the expense is the final amount to be deducted.
This paragraph applies if— No person is to be treated as receiving an amount of income, or as incurring an expense, as a result of any provision of this Schedule in so far as the income or expense arises by reference to the relevant plant or machinery subject to a lease which is disposed of. If, as a result of sub-paragraph (2), no income is treated as received by a company, no accounting period of the company ends or begins as a result of any provision of this Schedule. In relation to any disposal made before 2nd June 2006— In this paragraph—
ICTA is amended as follows. In section 12 (basis of, and periods for, assessment), at the end insert—. paragraph 38 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc: anti-avoidance)
Section 28
Schedule 13 to FA 2002 (tax relief for expenditure on vaccine research etc) is amended as follows. In paragraph 3 (qualifying expenditure on direct research and development), in sub-paragraph (5)— In paragraph 5 (which applies certain definitions from Schedule 20 to FA 2000)— In paragraph 9 (relevant expenditure of the sub-contractor), in sub-paragraph (3)—
The film production company is treated as starting to carry on the trade—
when pre-production of the film begins, or
if earlier, when any income from the film is received by the company.
References in this Schedule to income from the film are to any receipts by the company in connection with the making or exploitation of the film. This includes— Receipts that (apart from this provision) would be regarded as of a capital nature are treated as being of a revenue nature.
For the purposes of this Schedule costs are incurred when they are represented in the state of completion of the work in progress. Accordingly— The costs incurred on a film shall be taken to include an amount that has not been paid only if it is the subject of an unconditional obligation to pay. Where an obligation is linked to income being earned from the film no amount is to be brought into account in respect of the costs of the obligation unless an appropriate amount of income is or has been brought into account.
Section 29
“VATA 1994” means the Value Added Tax Act 1994 (c. 23);
Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended as follows.
The activities of the film production company in relation to such a film are treated as a trade separate from any other activities of the company (and from any activities in relation to any other film).
References in this Schedule to the costs of the film are to expenditure incurred by the company on— This is subject to any provision of the Corporation Tax Acts prohibiting the making of a deduction, or restricting the extent to which a deduction is allowed, in calculating the profits of a trade. Expenditure that (apart from this provision) would be regarded as of a capital nature by reason only of being incurred on the creation of an asset (the film) is treated as being of a revenue nature.
Estimates for the purposes of this Schedule must be made as at the balance sheet date for each period of account, on a fair and reasonable basis taking into consideration all relevant circumstances.
Section 826 of ICTA (interest on tax overpaid etc) is amended as follows. In subsection (1) (payments that carry interest) after paragraph (e) insert—; or. After subsection (3B) insert—. In subsection (8A) (recovery of overpaid amounts)— In subsection (8B) after “life assurance company tax credit” (twice) insert “or film tax credit”.
After Part 9C of that Schedule insert—.
The amendments made by orders under section 431A(3) of ICTA (power to amend provisions in relation to periods of account ending before 1st October 2006) are to continue to have effect in relation to periods of account ending on or after 1st October 2006 as if those amendments were made by this Act. Accordingly—
Section 444AD is amended as follows. At the end insert—. The amendment made by this paragraph has effect in relation to schemes taking place on or after 22nd March 2006.
After section 83 of FA 1989 insert—. The amendment made by this paragraph has effect in relation to periods of account ending on or after 29th September 2005. There are the following modifications of sections 83YA and 83YB of FA 1989 in the case of any period of account of a company (“the straddling period of account”)— The modifications are that sections 83YA and 83YB of FA 1989 have effect in relation to the straddling period of account (as “the current period of account”) as follows. First modification Determine the company’s basic line 51 amount for the previous period of account by reference to the last period of account (if any) of the company ending before 1st January 2004. Second modification Increase the amount of any transfer-in amount of the company for the previous period of account by the aggregate amounts of any transfer-in amounts of the company for any period of account beginning on or after 1st January 2004 and ending before the previous period of account. Third modification Increase the amount of any unrecognised capital amount of the company for the straddling period of account by the aggregate amounts of unrecognised capital amounts of the company for any period of account beginning on or after 1st January 2004 and ending before the straddling period of account. Fourth modification Reduce (but not below nil) the company’s basic line 51 amount for the straddling period of account by the appropriate amount of any resilience capital for the straddling period of account. For this purpose “the appropriate amount of any resilience capital for the straddling period of account” means the amount by which— the amount shown in line 32 of Form 2 of the company’s periodical return in respect of the whole of its long-term business for the straddling period of account, exceeds the amount of any unrecognised capital amount of the company for that period as determined in accordance with the third modification. In any case where any of the above modifications apply— If, as a result of the fourth modification, the company’s basic line 51 amount for the straddling period of account is reduced by an amount (“the reduction”)— An amount equal to two-thirds of the reduction is to be deemed to be brought into account for the company’s first period of account beginning on or after 1st January 2007 by virtue of subsection (3) of section 83YA of FA 1989. An amount equal to one-third of the reduction is to be deemed to be brought into account for the company’s next period of account by virtue of subsection (3) of section 83YA of FA 1989. But if the company ceases to carry on long-term business at any time— the whole of the reduction is to be deemed to be brought into account for the company’s period of account ending immediately before that time by virtue of subsection (3) of section 83YA of FA 1989. Any amount brought into account by virtue of any of sub-paragraphs (7) to (9) is in addition to— Any expression which is used in this paragraph and in section 83YA or 83YB of FA 1989 has the same meaning in this paragraph as it has in that section.
In paragraph 22(1) and (2) of Schedule 15 to FA 2000 (corporate venturing scheme: limits on value of gross assets of share-issuing company or its group)— Sub-paragraph (1) has effect in relation to shares issued on or after 6th April 2006, subject to sub-paragraph (3). Sub-paragraph (1) does not have effect in relation to shares issued on or after 6th April 2006 to a person who subscribed for them before 22nd March 2006.
This Part of this Schedule applies where— and has effect in relation to any positive adjustment under section 64 of and Schedule 22 to FA 2002 attributable to the change of basis from that mentioned in paragraph (c) to that mentioned in paragraph (b). In relation to a period for which accounts are drawn up in accordance with international accounting standards, the references in sub-paragraph (1) to requirements of UK GAAP shall be read as references to the corresponding requirements of international accounting standards. In this paragraph— Any reference in this Part of this Schedule to the date on which the change of accounting approach was adopted is to the first day of the first period of account for which it was adopted. To determine the amount of positive adjustment attributable to the change of basis mentioned in the closing words of sub-paragraph (1), assume that there was no other change of accounting approach.
If before the whole of the adjustment has been charged to tax an accounting period of the company ends by reason of— the rule in paragraph 10(4) applies in relation to that accounting period. If the company permanently ceases to carry on the business in question (without there being any event within sub-paragraph (1) above), paragraph 10 continues to apply but with the omission of the alternative limit in sub-paragraph (2)(b) and (3)(c) referring to the profits of the business.
This paragraph applies where the business is carried on by the company in partnership. The amounts chargeable to tax under this Part of this Schedule are calculated as if the partnership were a company resident in the United Kingdom. The company’s share of any such amount is determined by reference to the profit-sharing arrangements for the previous accounting period. An election under paragraph 13 (election to accelerate charge) must be made jointly by all the persons who have been members of the partnership in the previous accounting period and are chargeable to corporation tax. If paragraph 12(2) applies (effect of cessation of business), each partner’s share of any amount charged to tax on or after the cessation is determined as follows— An election under paragraph 13 after the cessation must be made by each former partner separately. For the purposes of this paragraph “profit-sharing arrangements” means the rights of the partners to share in the profits of the business for the period in question. A change in the persons carrying on a business does not constitute the permanent cessation of the business for the purposes of this Part of this Schedule so long as a person carrying on the business immediately before the change continues to carry on the business immediately after the change. In the case of a business carried on by a limited liability partnership the operation of this Part of this Schedule is not affected by the partnership’s ceasing to be one carrying on a trade, profession or other business with a view to profit. Nothing in this paragraph shall be read as affecting the operation of— (under which certain debits and credits are not to be brought into account as if the partnership were a company).
IHTA 1984 is amended as follows.
“TCGA 1992” means the Taxation of Chargeable Gains Act 1992 (c. 12);
In paragraph 83A (Part 9A: introduction) for “claims for R&D tax credits” substitute “claims for R&D tax relief”.
Qualifying expenditure for this purpose means core expenditure on the film that falls to be taken into account under Schedule 4 in calculating the profit or loss of the trade for tax purposes. The Treasury may by regulations— No such regulations shall be made unless a draft of the regulations has been laid before and approved by a resolution of the House of Commons.
A film production company may claim a film tax credit for an accounting period in which it has a surrenderable loss. The amount of the company’s surrenderable loss in any period is equal to whichever is the less of— For the first period of account during which the trade is carried on, the available qualifying expenditure is the amount that is E for that period for the purposes of paragraph 4(1). For any period of account after the first, the available qualifying expenditure is given by— where— E is the amount that is E for that period for the purposes of paragraph 4(2), and S is the amount surrendered in the previous period, or (as the case may be) the aggregate amount of the amounts surrendered in previous periods, under paragraph 7.
Where— the Commissioners shall pay to the company the amount of the credit. An amount payable in respect of— may be applied in discharging any liability of the company to pay corporation tax. To the extent that it is so applied the Commissioners' liability under sub-paragraph (1) is discharged. Where the company’s company tax return for the accounting period is enquired into by the Commissioners, no payment in respect of a film tax credit for that period need be made before the Commissioners' enquiries are completed (see paragraph 32 of Schedule 18 to FA 1998). In those circumstances the Commissioners may make a payment on a provisional basis of such amount as they think fit. No payment need be made in respect of a film tax credit for an accounting period before the company has paid to the Commissioners any amount that it is required to pay for payment periods ending in that accounting period—
In determining for the purposes of this Part of this Schedule the amount of costs incurred on a film at the end of a period of account no account is to be taken of any amount that has not been paid four months after the end of that period. This is without prejudice to the operation of paragraph 9 of Schedule 4 (general rules as to when costs are taken to be incurred).
Section 18(1) of the Commissioners for Revenue and Customs Act 2005 (c. 11) (restriction on disclosure by Revenue and Customs officials) does not prevent disclosure to the Secretary of State for the purposes of his functions under Schedule 1 to the Films Act 1985 (c. 21) (certification of films as British films for the purposes of film tax relief). Information so disclosed may be disclosed to the UK Film Council. A person to whom information is disclosed under sub-paragraph (1) or (2) may not otherwise disclose it except— The references in this paragraph to the functions of the Secretary of State under Schedule 1 to the Films Act 1985 do not include those functions in so far as they are exercised in relation to a film that commenced principal photography before 1st April 2006.
Section 741 (exemption from sections 739 and 740) is amended as follows. At the beginning of the section insert “(1)”. At the end of the section insert—. In consequence of amendments made by this Schedule, the heading of the section becomes “Exemption from sections 739 and 740 (transactions before 5th December 2005)”. The amendments made by this paragraph shall be taken to have come into force on 5th December 2005.
After section 741C insert—. The amendment made by this paragraph shall be taken to have come into force on 5th December 2005.
After section 34 insert—.
In Chapter 6 of Part 2 (hire-purchase etc and plant or machinery provided by lessee) after section 70 insert—.
In section 172 (scope of Chapter 14 of Part 2 (fixtures)) after subsection (2) insert—. After section 172 insert—.
Section 272 of TCGA 1992 (valuation: general) is amended as follows. In subsection (6) (subjection to other provisions) after “subject to” insert “sections 25A and 41A and”.
This Schedule makes provision for corporation tax purposes in relation to any company which is within the charge to corporation tax in respect of a business of leasing plant or machinery (within the meaning of Part 2 or 3). Part 2 deals with the case of a qualifying change of ownership in relation to the company where it carries on the business otherwise than in partnership. Part 3 deals with— Part 4 contains an anti-avoidance provision and other supplementary provisions.
The amount of the income is calculated in accordance with paragraphs 16 to 21. The amount of the expense is the same as the amount of the income.
This paragraph applies for the purposes of condition A in paragraph 6. The accounting value of the plant or machinery owned by the relevant company on the relevant day is taken to be the amount found by adding together the following amounts. The amounts are— and the reference here to an associated company is to a company which is an associated company of the relevant company on the relevant day (as to which, see paragraph 9). For this purpose the amounts shown in the appropriate balance sheet of any company in respect of any plant or machinery are— If— the amount of the net book value (or carrying amount) in respect of the fixture is determined on a just and reasonable basis. If— the amount of the net investment in respect of the finance lease of that plant or machinery is determined on a just and reasonable basis. In this paragraph any reference to any amount shown in the appropriate balance sheet of a company is to the amount which, on the following assumptions, falls (or would fall) to be shown in a balance sheet of the company. The assumptions are— Sub-paragraph (8)(b) does not apply if the relevant day falls before 22nd March 2006.
For the purposes of this Schedule, there is a qualifying change of ownership in relation to a company (“company A”) on any day if there is a relevant change in the relationship on that day between— but see paragraph 13 for an exception (no qualifying change of ownership in the case of certain intra-group reorganisations). For the purposes of this Schedule, there is a relevant change in the relationship between company A and a principal company of company A on any day in any of the circumstances in paragraphs 11 and 12 (qualifying 75% subsidiaries and consortium relationships).
This paragraph applies if— For the purposes of this Schedule, there is no qualifying change of ownership in relation to company A on that day as a result of that change in the relationship.
This paragraph determines the amount of the income under paragraph 3 when a qualifying change of ownership in relation to a company (“the relevant company”) carrying on a business of leasing plant or machinery occurs on any day (“the relevant day”). The amount of the income is found by— The formula is— For this purpose—
If the basic amount given by the formula is a negative amount, the amount is taken instead to be nil.
This paragraph applies if— For the purposes of this Part of this Schedule, any plant or machinery owned by the company immediately before the relevant day is to be ignored in calculating the amount of the income treated as received on that day.
If before the whole of the adjustment income has been charged to tax the person permanently ceases to carry on the business in question, paragraph 2 continues to apply but with the omission of the alternative limit in sub-paragraph (2)(b) and (3)(c) referring to the profits of the business.
In this Part of this Schedule “business” means—
a trade, profession or vocation, or
a UK property business or overseas property business.
This paragraph applies where by reason of— an accounting period to which paragraph 10 applies is a period of less than twelve months (a “short period”). In relation to a short period the references in that paragraph to one-third of the amount of the original adjustment shall be read as references to the proportion of that amount that the period bears to twelve months. Where any of the accounting periods of the company falling within the period of six years following the change of accounting approach is a short period—
In this Part of this Schedule “business” means—
Section 54 of IHTA 1984 (exceptions from charge on death) is amended as follows. After subsection (2) insert— In subsection (3) (section 53(5) and (6) apply in relation to subsections (1) and (2))—
In section 58(1)(b) of IHTA 1984 (property to which certain sections apply is not relevant property for purposes of Chapter 3 of Part 3), after “71,” insert “71A, 71D,”.
Section 72 of IHTA 1984 (property leaving employee trusts and newspaper trusts) is amended as follows. In subsection (1) (section 72 applies to property to which section 86 applies if no qualifying interest in possession subsists in it), for “if no qualifying interest in possession subsists in it” substituteif— After subsection (1) insert—
In section 88 of IHTA 1984 (protective trusts), after subsection (2) insert—
Section 144 of IHTA 1984 (distribution etc from property settled by will) is amended as follows. In subsection (1)— After subsection (1) insert— In subsection (2), for “this section” (in both places) substitute “this subsection”. After subsection (2) insert—
In each of the following provisions for “claim for an R&D tax credit” substitute “claim to which this Part of this Schedule applies”—
paragraph 83B(1) (claim to be included in company tax return);
paragraph 83C (content of claim);
paragraph 83D (amendment or withdrawal of a claim);
paragraph 83E(1) (time limit for claims).
In the title of Part 9A, “R&D tax credit” becomes “R&D tax relief”.
Section 37
Section 42
“adjusted ring fence profits” has the meaning given by section 501A of ICTA,
The film production company may (on making a claim) make an additional deduction in calculating the profit or loss of its trade in respect of qualifying expenditure on the film.
The rate of enhancement is—
for a limited-budget film, 100%;
for a film other than a limited-budget film, 80%.
The payable credit rate is—
for a limited-budget film, 25%;
for a film other than a limited-budget film, 20%.
The amount of a film production company’s trading loss for an accounting period is reduced by any amount surrendered for a film tax credit.
In this Part of this Schedule—
In section 13(10) (participators in non-resident companies) for “trustees who are participators” substitute “the trustees of a settlement who are participators”. This paragraph shall have effect in relation to gains accruing on or after 6th April 2006.
In sections 128 to 130 a reference to the giving of a notice by or to a company shall be treated as a reference to the giving of a notice by or to the principal company.
This paragraph sets out the requirements referred to in paragraph 5(2) for financial statements in respect of a group to which Part 4 applies in relation to an accounting period of the principal company. The principal company shall prepare— A financial statement under sub-paragraph (2)(a) or (c) shall specify, in relation to each member— A financial statement under sub-paragraph (2)(b) shall specify, in relation to each member, profits calculated in accordance with section 120. Where a non-member of the group holds a percentage of the beneficial interest in a member (other than the principal company), the financial statements for G (property rental business) and G (residual) shall exclude that percentage of income, expenses, gains, losses, assets and liabilities of the member. Percentages of beneficial interest for the purpose of sub-paragraph (5) shall be determined by reference to beneficial entitlement to profits available for distribution to equity holders. The Commissioners for Her Majesty’s Revenue and Customs may by regulations—
In IHTA 1984, after section 71 insert— Sub-paragraph (1) shall be deemed to have come into force on 22nd March 2006.
After section 89 (trusts for disabled persons) insert— In section 89, after subsection (4) insert— Sub-paragraph (1) shall be deemed to have come into force on 22nd March 2006. Sub-paragraph (2) shall be deemed to have come into force on 22nd March 2006, but only in respect of property transferred into settlement on or after that day.
Section 216 (delivery of accounts) is amended as follows. In subsection (1), after paragraph (bc) insert—. In subsection (3)(a), after “death” insert “(or would do apart from section 151A(3)(b) or 151C(3)(b) above)”. In subsection (4), insert at the end “(or would be apart from section 151A(3)(b), 151C(3)(b) or 151B(4) above)”. In subsection (6), after paragraph (ab) insert—.
Section 272 (general interpretation) is amended as follows. “member”, in relation to a registered pension scheme, has the same meaning as in Part 4 of the Finance Act 2004 (see section 151 of that Act); “scheme administrator”, in relation to a registered pension scheme, has the same meaning as in Part 4 of the Finance Act 2004 (see sections 270 to 274 of that Act);
Section 160 (payments by registered pension schemes) is amended as follows. In subsection (1), before “member” insert “person who is or has been a”. In subsection (2)— In subsections (3) and (4)(a) and (b), before “sponsoring” insert “person who is or has been a”.
In paragraph 13 (increase in rent treated as grant of new lease: variation of lease), in the heading, after “variation of lease” insert “in first five years”. In sub-paragraph (1) of that paragraph, after “to increase the amount of the rent” insert “as from a date before the end of the fifth year of the term of the lease”.
For section 21(1)(b) (definition of “asset”) substitute—.
An appeal under section 129(6) may be made by the principal company.
Section 161 (meaning of “payment” etc) is amended as follows. In subsection (5)— In subsections (6) and (7)—
In section 60(1) (nominees and bare trustees) in each place for “assets” substitute “property”. In section 60(2) (interpretation: property held for person absolutely entitled) in each place for “asset” substitute “property”. This paragraph shall have effect from 6th April 2006.
Section 131 shall apply in relation to each UK resident company which is a member of the group; for which purpose— Where a percentage of the assets of a member of G (property rental business) is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be disregarded for the purposes of section 131.
In section 162(3) and (4) (meaning of “loan”)—
before “member”, in the first, second and last places, insert “person who is or has been a”, and
for “a member or sponsoring employer of the pension scheme” substitute “such a person”.
In section 63 (death: application of law in Scotland)— After section 63 insert— The provisions of this paragraph shall have effect in relation to a death occurring on or after 6th April 2006.
If a UK resident company ceases to be a member of a group to which Part 4 applies section 131 shall apply to the company as if— Where a percentage of the assets of the company is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be disregarded in applying section 131 to the company.
In section 164 (authorised member payments)—
before “member” insert “person who is or has been a”,
in paragraph (a), after “benefit rules” insert “to be paid to or in respect of a member”, and
in paragraph (b), after “benefit rule” insert “to be paid to or in respect of a member”.
In section 64(1) (expenses in administration)— This paragraph shall have effect in relation to disposals made on or after 6th April 2006.
In section 171(1) and (4) (scheme administration member payments), before “member” insert “person who is or has been a”.
In section 77(1) (charge on settlor with interest in settlement), in the words following paragraph (c), after “those” insert “gains”. For section 77(8) (meaning of “derived property”) substitute— This paragraph shall be deemed always to have had effect.
Section 173 (benefits) is amended as follows. In subsection (1)— In subsection (3)— In subsection (4)— In subsection (7)(b)— In subsection (9)(a), before “member” insert “person who is or has been a”.
In section 79B(1) (attribution to trustees of gains of non-resident company) before “trustees of a settlement” insert “the”. This paragraph shall have effect in relation to gains accruing on or after 6th April 2006.
Section 174 (value shifting) is amended as follows. In subsection (1)— In subsection (2)—
In section 97(7) (supplementary provisions for offshore settlements: interpretation)— After section 97(7) insert— This paragraph shall come into force on 6th April 2006 (in relation to settlements whenever created).
In section 175 (authorised employer payments), before “sponsoring” insert “person who is or has been a”.
In section 98(2) (information: application of section 745 of ICTA)— This paragraph shall come into force on 6th April 2006 (in relation to settlements whenever created).
In section 179(1), (5) and (6) (authorised employer loan), before “sponsoring” insert “person who is or has been a”.
In section 104(1) (share pooling) after “for the purposes of this Act” insert “(subject to express provision to the contrary)”. This paragraph shall come into force on 6th April 2006.
In section 180(1) and (4) (scheme administration employer payments), before “sponsoring” insert “person who is or has been a”.
In section 109(2)(a) (share pooling: pre-1982 holdings) after “for the purposes of this Act” insert “(subject to express provision to the contrary)”. This paragraph shall come into force on 6th April 2006.
In section 181(1) (value shifting)—
before “sponsoring employer”, in the first place, insert “person who is or has been a”, and
for “sponsoring employer”, in each other place, substitute “person”.
In section 169D(5) after “(3)” insert “and to an individual’s dependent child in section 169F(2A)”. This paragraph shall come into force on 6th April 2006.
In section 208(2) (unauthorised payments charge)—
in paragraph (a), for the words after “member payment” substitute “made to or in respect of a person before the person’s death, is the person,”,
in paragraph (b), for “after the member's” substitute “in respect of a person after the person's”, and
in paragraph (c), for “sponsoring employer” substitute “person”.
In section 217 (building societies: successor companies)— This paragraph shall have effect in relation to a transfer falling within section 216(1) which is effected on or after 6th April 2006.
In section 209(3) (unauthorised payments surcharge)—
in paragraph (a), for the words after “member payment” substitute “made to or in respect of a person before the person’s death, is the person,”,
in paragraph (b), for “after the member's” substitute “in respect of a person after the person's”, and
in paragraph (c), for “sponsoring employer” substitute “person”.
In section 227(2) (employee share ownership trusts: conditions for roll-over relief) for “the trustees of a trust” substitute “the trustees of a settlement”. This paragraph shall have effect in relation to disposals made on or after 6th April 2006.
Section 210 (surchargeable unauthorised member payments) is amended as follows. In subsection (1), for “in respect of an arrangement relating to a member under” substitute “to or in respect of a person who is or has been a member of”. In subsections (2), (4), (5) and (8), for “in respect of the arrangement” substitute “to or in respect of the person”. In subsection (9), in the definition of “VR”, for the words after “equal to the” substitute “aggregate of the value of the member’s rights under arrangements relating to the member under the pension scheme when the unauthorised payment is made (or, if the unauthorised member payment is made after the member has died or has otherwise ceased to be a member of the pension scheme, at the date when the member died or otherwise ceased to be a member).” In subsection (10), for “the arrangement on that” substitute “an arrangement on any”.
In section 228(5)(b) (employee share ownership trusts: unauthorised arrangement) for “a beneficiary under the trust” substitute “a beneficiary under the settlement”. In section 228(7) (qualifying employee share ownership trust) for “whether a trust is” substitute “whether a settlement is”. Sub-paragraph (1) shall have effect in relation to arrangements which allow an acquisition to be made on or after 6th April 2006 (irrespective of when the arrangements were made). Sub-paragraph (2) shall have effect for the purposes of determining what constitutes a qualifying share ownership trust for the purpose of section 227 on or after 6th April 2006.
In section 211(1) (valuation of crystallised rights), for “the arrangement”, in the first place, substitute “an arrangement”.
In section 251(5) (debts: trustee creditors)— This paragraph shall have effect in relation to debts created on or after 6th April 2006.
In section 212(3) (valuation of uncrystallised rights), for “the arrangement”, in the first place, substitute “an arrangement”.
In section 283(4) (repayment supplements)— Sub-paragraph (1)(a) shall have effect in relation to a repayment made on or after 6th April 2006. Sub-paragraph (1)(b) shall have effect in relation to a repayment made on or after 6th April 2006 (irrespective of the date on which the deceased person died).
Section 213 (surchargeable unauthorised employer payments) is amended as follows. In subsection (1), before “sponsoring” insert “person who is or has been a”. In subsections (2), (4), (5) and (8), for “employer” substitute “person”.
In section 286(3) (connected persons: trustees) omit the words following paragraph (c). After section 286(3) insert— This paragraph shall come into force (in relation to settlements whenever created) on 6th April 2006.
“Principal settlement”… … Sch.4ZA para. 1 “Settlor” … … … … … S.68A “Settlor of property”… … S.68A “Sub-fund”… … … … Sch.4ZA para. 1 “Sub-fund election”… … Sch.4ZA para. 2 “Sub-fund settlement” … Sch.4ZA para. 1 This paragraph shall come into force on 6th April 2006 (in relation to settlements whenever created).
In this paragraph “derived property”, in relation to any property, means— In paragraph 17(5) of Schedule A1 (property settled by company) for “section” substitute “paragraph”. Paragraph 17(6) of Schedule A1 (meaning of “settlor”) shall cease to have effect. In paragraph 20(2) of Schedule A1 (application of section 79 to paragraph 20(1)) for “Subsections (1) to (5)” substitute “Subsections (1) to (5A)”. Sub-paragraphs (1) and (3) shall have effect for the purpose of determining whether a company which is a settlor in relation to a settlement (whenever created) is to be regarded as having an interest in the settlement for the purposes of paragraph 17(1) of Schedule A1 on or after 6th April 2006. Sub-paragraph (4) shall have effect to determine any question arising on or after 6th April 2006 as to whether, for the purposes of Schedule A1, settled property in relation to a settlement (whenever created) originated from more than one settlor (irrespective of when the property was provided).
In paragraph 1(6) of Schedule 1 (exempt amount: interpretation) for the words ““settlor” and “excluded settlement” have the same meanings” substitute ““excluded settlement” has the same meaning”. In paragraph 2(7) of that Schedule (meaning of “settlor” and “excluded settlement”) omit the words from “settlor” to “intestate and”. This paragraph shall have effect for the purposes of determining, for the purposes of Schedule 1, whether a person is a settlor in relation to a settlement (whenever created) on or after 6th April 2006.
In paragraph 12 of Schedule 4A (meaning of “settlor”) for “(3) to (5)” substitute “(3) to (5A)”. This paragraph shall have effect to determine any question arising on or after 6th April 2006 as to whether, for the purposes of Schedule 4A, a person is a settlor in relation to a settlement (whenever created).
Sections 124 to 126 shall apply only in relation to each UK resident company which is a member of the group; for which purpose— Where a percentage of the gains of a member of G (property rental business) is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be treated for the purposes of corporation tax as gains of the member in so far as it is a member of G (residual).
Section 5A is amended as follows. In subsection (5B) (oil to be treated as disposed of at its market value in the calendar month) for “in the calendar month in which it was disposed of or appropriated as mentioned” substitute “determined in accordance with Schedule 3 to this Act for the disposal or appropriation mentioned”. Amend subsection (5C) (application of Schedule 3 with modifications for ascertaining market value for the purposes of subsection (5B)) as follows. Omit paragraph (a) (modification of paragraph 2(2)(f)). In paragraph (b) (omission of sub-paragraphs (3) and (4)) for “sub-paragraphs (3) and (4)” substitute “sub-paragraph (4)”. At the end of paragraph (c) insert; and.
In section 21 (citation, interpretation and construction of the Act) subsection (2) is amended as follows. “the Board” means the Commissioners for Her Majesty’s Revenue and Customs; The amendment made by this paragraph comes into force on the day on which this Act is passed.
In Schedule 3, for paragraph 3 substitute—.
Paragraph 2 of Schedule 28 (scheme pension) is amended as follows. In sub-paragraph (4), for paragraph (c) substitute—. For the purposes of sub-paragraph (4)(c) “the relevant state retirement pension rate” at any time— and regulations under paragraph (c) may prescribe different percentages for different cases. For the purposes of sub-paragraph (5)— In sub-paragraph (8), for “(4)(e) and (h)” substitute “(4)(e) or (h) or (5)”.
Paragraph 6 of Schedule 29 (refund of excess contributions lump sum) is amended as follows. In sub-paragraphs (4) and (5), after “year is” insert “(subject to sub-paragraph (7))”. If any relief given in accordance with section 192(1) in relation to any contribution included in RPC is in excess of the maximum amount of relief to which the member is entitled under section 190, RPC is to be taken to be reduced by the amount of that excess.
Section 219 (availability of individual’s lifetime allowance) is amended as follows. In subsection (4) (previously-used amount)— After that subsection insert— In subsection (5), for “amount crystallised by” substitute “relevant untaxed amount in relation to”.
Section 281 (minor and consequential amendments) is amended as follows. After subsection (2) insert— In subsection (3), after “(2)” insert “or (2A)”. After that subsection insert—
The chargeable consideration for the transaction shall (subject to paragraph 24) be taken to be equal to— where— MV is the market value of the interest transferred, and SLP is the sum of the lower proportions. In sub-paragraph (6) of that paragraph, omit “(instead of sub-paragraphs (2) to (5))”.
Where— the amount of the charge under this paragraph is reduced (but not below nil) by the amount of the charge under that paragraph.
For the purposes of this paragraph and paragraph 8, the cases where the amount of rent payable under a lease is uncertain or unascertained include cases where there is a possibility of that amount being varied under— In paragraph 13(2), for the words after “increase of rent” substitutein pursuance of—
In the application of section 125(7) a reference to the company shall be treated as a reference to a member of the group.
In paragraph 1(4)(a) of Schedule 29 (pension commencement lump sum: excluded lump sum), for “when the member becomes entitled to state retirement pension” substitute “at a time not earlier than when the member reaches the age of 60 and not later than when the member reaches the age of 65”.
Section 283 (transitionals and savings) is amended as follows. After subsection (3) insert— In subsections (4) and (5), after “(2)” insert “or (3A)”.
Schedule 5 (amount of tax chargeable: rent) has effect with the modifications set out in sub-paragraphs (2A) to (2C). In paragraph 2— In paragraph 9(2A)— Tax chargeable under this Schedule is in addition to any tax chargeable under section 55 as it has effect by virtue of paragraph 18 of Schedule 15. For the purposes of sub-paragraphs (2A) and (2B) the relevant chargeable proportion is— where SLP is the sum of the lower proportions.
In paragraph 24 (transfer of chargeable interest from a partnership consisting wholly of bodies corporate), in sub-paragraph (3), for “sub-paragraphs (2) to (5)” substitute “sub-paragraphs (2) and (5)”. In paragraph 19(2), for “sub-paragraphs (2A) to (2C)” substitute “sub-paragraph (2C)”. In paragraph 19, omit sub-paragraphs (2A), (2B), (2D) and (8).
In paragraph 52 of that Schedule (recovery of excessive repayments etc)—
in sub-paragraph (2) (excessive repayments etc to which paragraphs 41 to 48 apply), after paragraph (bc) insert—;
in sub-paragraph (5) (connection of assessment for excessive payment to an accounting period), after paragraph (ad) insert—;
in the closing words of that sub-paragraph, after “(ad)” insert “, (ae)”.
The company is not entitled to relief for an interim accounting period unless its company tax return for the period is accompanied by an interim certificate. If an interim certificate ceases to be in force (otherwise than on being superseded by a final certificate) or is revoked, the company— If the film is completed by the company— If the company abandons film-making activities in relation to the film— If a final certificate is revoked, the company—
Any amendment or assessment necessary to give effect to the provisions of this Part of this Schedule may be made notwithstanding any limitation on the time within which an amendment or assessment may normally be made.
CAA 2001 is amended as follows.
Section 46 is amended as follows. In subsection (2) (the general exclusions) in general exclusion 8—
In Part 2, after Chapter 6 insert—.
Section 272 is amended as follows. In the Table in subsection (2), insert at the appropriate place— In Chapter 10A (long funding leases)— Sections 148A to 148J Leases of plant or machinery: special rules for long funding leases
This paragraph applies if— The following restrictions apply in respect of so much of any loss incurred by the company as derives from the expense (“the restricted part of the loss”). Apart from by way of set off against any relevant leasing income, relief is not to be given to the company under any relevant loss relief provision in respect of the restricted part of the loss. If the business carried on by the company is a trade, relief is not to be given to the company under section 393A(1) of ICTA in respect of the restricted part of the loss. The restricted part of the loss is not available for set off by way of group relief in accordance with section 403 of ICTA. For the purpose of determining how much of a loss derives from the expense, the loss is to be calculated on the basis that the expense is the final amount to be deducted. In this paragraph “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions— In this paragraph “relevant leasing income” means any income deriving from any plant or machinery lease— In this paragraph “relevant loss relief provision” means any of the following provisions of ICTA—
This paragraph applies for the purposes of this Schedule. “Company” means a body corporate. “Excluded lease of background plant or machinery for a building” has the meaning given in Chapter 6A of Part 2 of CAA 2001. “Finance lease”, in the case of any person, means a lease which, under generally accepted accounting practice, falls or (would fall) to be treated as a finance lease or loan in the accounts of that person. “Fixture”— “Plant or machinery” has the same meaning as in Part 2 of CAA 2001. “Plant or machinery lease” has the meaning given in Chapter 6A of that Part. The market value of any plant or machinery at any time is to be determined on the assumption of a disposal by an absolute owner free from— Section 839 of ICTA (connected persons) applies.
In paragraph 8(1) of Schedule 28B to ICTA (venture capital trusts: limits on value of gross assets of company issuing relevant holding or its group)— Sub-paragraph (1) has effect in relation to relevant holdings issued on or after 6th April 2006, subject to sub-paragraph (3). Sub-paragraph (1) does not have effect for the purpose of determining whether any shares or securities acquired by a company (“the trust company”) by means of the investment of protected money are, for the purposes of section 842AA of ICTA, to be regarded as comprised in qualifying holdings of the company at any time. In sub-paragraph (3) “protected money” means—
Section 139 shall apply—
as if in subsection (1) the reference to a company to which Part 4 applies were a reference to the principal company of a group to which that Part applies, and
as if, in the amendment effected by subsection (2), in sub-paragraph (2E) the reference to “the company” were a reference to the principal company of the group.
This paragraph applies if a company to which Part 4 applies, or a member of a group to which Part 4 applies, becomes a member of a group (or of another group) to which Part 4 applies. Where this paragraph applies, the following provisions of Part 4 shall not have effect—
In section 12 (dispositions conferring retirement benefits), after subsection (2) insert—; and, in the sidenote, for “retirement benefits” substitute “benefits under pension scheme”.
Paragraphs 10(2) and 18(2) do not apply. The chargeable consideration for the transaction shall be taken to be what it would have been if paragraph 10(2) had applied or, if greater, what it would have been if paragraph 18(2) had applied. Where the whole or part of the chargeable consideration for the transaction is rent—
Paragraphs 2 to 8 have effect in relation to any transfer of which the effective date is on or after the day on which this Act is passed. Paragraph 9 has effect in relation to any transfer that has (or, but for the amendment made by that paragraph, would have) an effective date which is on or after that day. Paragraph 10 has effect in relation to any qualifying event of which the effective date is on or after that day. In this paragraph “effective date” has the same meaning as in Part 4 of FA 2003.
For section 6 of the Films Act 1985 (c. 21) (certification of master negatives, tapes and discs for purposes of section 72 of FA 1982) substitute)—.
For the heading to Schedule 1 to that Act substitute “Certification of British films for purposes of film tax relief”.
For paragraph 1 of that Schedule substitute—.
For paragraph 2 of that Schedule substitute—.
For paragraph 3 of that Schedule substitute—.
A film is a British film for the purposes of this Schedule if it passes the relevant cultural test (see paragraph 4A, 4B or 4C).
Paragraph 5 of that Schedule (excluded films) is amended as follows. A film must not be certified as a British film for the purposes of this Schedule if parts of the film whose playing time exceeds 10% of the total playing time of the film are derived from a previous film, unless— For the purposes of this paragraph—
In paragraph 9 of that Schedule (determination of disputes) for the words from “any decision of the Secretary of State” to “may” substitute “any decision of the Secretary of State under paragraph 3 may”.
In paragraph 10 of that Schedule (regulations and orders)—
in sub-paragraph (1)(c), for “2(4)” substitute “2(6);
in sub-paragraph (2), for “4 to 8” substitute “4 to 5”.
Section 76
Section 79
Section 81
Section 81
Section 105 of CAA 2001 (basic terms: “leasing”, “overseas leasing” etc) is amended as follows. After subsection (2) (“overseas leasing”) insert—.
Section 82
Section 86
Section 88
After section 69 of TCGA 1992 insert— After Schedule 4 to TCGA 1992 insert— This paragraph shall have effect in relation to years of assessment beginning on or after 6th April 2006 (but a sub-fund election may not be treated as having taken effect before 6th April 2006).
Section 89
Before section 686 of ICTA (rate of tax applicable to trusts) insert— Sections 685A to 685C, inserted by sub-paragraph (1), shall come into force on 6th April 2006 (in relation to settlements whenever created). Section 685D, inserted by sub-paragraph (1), shall have effect in respect of variations occurring on or after 6th April 2006 (irrespective of the date on which the deceased person died). Section 685E, inserted by sub-paragraph (1), shall have effect— Section 685F, inserted by sub-paragraph (1), shall come into force on 6th April 2006. Section 685G, inserted by sub-paragraph (1), shall have effect in relation to years of assessment beginning on or after 6th April 2006.
In section 686(2)(b) of ICTA— This paragraph shall come into force on 6th April 2006 (in relation to settlements whenever created).
For section 686A of ICTA substitute— This paragraph shall have effect in respect of payments made, or gains arising, to the trustees of a settlement on or after 6th April 2006.
In section 686D of ICTA— After section 686D of ICTA insert— This paragraph shall come into force on 6th April 2006 (in relation to settlements whenever created).
For section 619(2) to (4) of ITTOIA 2005 (charge to tax on settlor) substitute— This paragraph shall have effect—
After section 685 of ITTOIA 2005 insert— This paragraph shall have effect for payments in respect of income made on or after 6th April 2006.
Paragraphs 8 to 26 amend ICTA.
Section 220(2) shall cease to have effect.
In section 227—
in subsection (5) for “trustees (other than bare trustees)” substitute “the trustees of a settlement”, and
in subsection (9) for “the property held on the trusts” substitute “the settled property”.
In section 229(2)—
for “held on trusts (other than bare trusts)” substitute “settled property”, and
for “trustees” substitute “trustees of the settlement”.
In section 360A—
in subsection (2)(b) omit the words after “is or was, a settlor”, and
in subsections (2) and (8) in each place omit the words “trustee or”.
In section 417(3)—
in paragraph (b) omit the words after “is or was, a settlor”, and
in paragraphs (b) and (c)(i) omit the words “trustee or”.
In section 421(1) for “trust” in each place substitute “settlement”.
In section 481—
in subsections (4) and (4A) for “trust” in each place substitute “settlement”, and
in subsection (5)(k)(iii) for “of the trust” substitute “under the settlement”.
Section 686 shall be amended as follows. In subsection (1) for “trustees” substitute “the trustees of a settlement”. In subsection (2) for “arising to trustees” substitute “arising to the trustees of a settlement”. In subsection (2AA)— In subsection (2A)(a)— In subsection (2B) for “arising to trustees” substitute “arising to the trustees of a settlement”. In subsection (5A)— In subsection (6) in each place for “trustees” substitute “the trustees of a settlement”.
In section 686D(7)(b) for “FA 1989” substitute “the Finance Act 1989 (c. 26)”.
In section 687(1) for “trustees” substitute “the trustees of a settlement”.
In section 687A(1)(a) for “trustees” substitute “the trustees of a settlement”.
In section 689A(1)(a) for “to trustees” substitute “to the trustees of a settlement”.
In section 689B(1) for “any trustees” substitute “the trustees of a settlement”.
In section 720—
in subsection (6)(a) for “a trustee of a settlement is” substitute “the trustees of a settlement are”,
in subsection (6)(b) for “a trustee of a settlement who is” substitute “the trustees of a settlement who are”,
in the closing words of subsection (6) for “the trustee is” substitute “the trustees are”,
in subsection (7) for “a trustee of a settlement” substitute “the trustees of a settlement”, and
in subsection (8) omit paragraph (a).
After section 742(9) insert—
Section 764 shall cease to have effect.
In section 809—
in subsection (1)(a) for “trustees” substitute “the trustees of a settlement”, and
in subsections (1)(a) and (2) for “trust” substitute “settlement”.
In section 839—
at the end of subsection (3)(b) omit “and”,
for the words after subsection (3)(c) substitute—, and
after subsection (3A) insert—
In paragraph 4(12) of Schedule 28AA for the definitions of “settlement” and “settlor” substitute—
Paragraph 3 of Schedule 29 (pension commencement lump sum: applicable amount) is amended as follows. In sub-paragraph (6), after “pension” insert “under a defined benefits arrangement”. Where the member becomes entitled to a scheme pension under a money purchase arrangement, the applicable amount is one third of the scheme pension purchase price. “The scheme pension purchase price” is the aggregate of— as are applied in (or in connection with) the purchase or provision of the scheme pension and any related dependants' scheme pension, but subject to sub-paragraph (8). For the purposes of this Part a dependants' scheme pension is related to a scheme pension payable to a member of a registered pension scheme if— In sub-paragraph (8)— Sub-paragraph (10) applies if— The pension scheme under which the relevant defined benefits arrangement is an arrangement is to be treated as making an unauthorised payment to the member of any amount by which— For the purposes of sub-paragraph (9)— In sub-paragraphs (9) and (10) “relevant defined benefits arrangement” means—
In paragraph 16(3) of Schedule 29 (annuity protection lump sum death benefit: annuity protection limit), in the definition of AC, insert at the end “, but disregarding paragraphs 3 and 4 of Schedule 32,”.
Paragraph 4 of Schedule 33 (meaning of “relevant migrant member”) is amended as follows. The existing provision becomes sub-paragraph (1). The Commissioners for Her Majesty’s Revenue and Customs may by regulations provide that, in circumstances prescribed by the regulations, paragraphs (a), (b) and (c) of sub-paragraph (1) have effect as if the references in those paragraphs to the pension scheme were to either the pension scheme or such other pension scheme as is prescribed by the regulations. Regulations under sub-paragraph (2) may include provision having effect in relation to times before they are made.
Paragraph 2 of that Schedule (the permitted maximum) is amended as follows. In sub-paragraph (6), in the definition of AAC, for “amounts crystallised by” substitute “relevant amount in the case of”. Subject to sub-paragraph (6B), the relevant amount in the case of a benefit crystallisation event is the amount crystallised by it. If the benefit crystallisation event is becoming entitled to a scheme pension under a money purchase arrangement, the relevant amount in the case of the benefit crystallisation event is the aggregate of— as are applied in (or in connection with) the purchase or provision of the scheme pension and any related dependants' scheme pension. In sub-paragraph (7), for “an amount crystallised by” substitute “the relevant amount in the case of”.
Paragraph 29 of Schedule 36 (transitional provisions: applicable amount in cases of enhanced protection) is amended as follows. In sub-paragraph (3), for “(7)” substitute “(7A)”. In the sub-paragraph (6) of paragraph 3 of Schedule 29 substituted by sub-paragraph (3), after “pension” insert “under a defined benefits arrangement”. Where the member becomes entitled to a scheme pension under a money purchase arrangement, the applicable amount is (subject to sub-paragraph (8))— where— VULSR, VUR and LS have the same meaning as in sub-paragraph (1), and SPPP is the scheme pension purchase price.
Paragraph 34 of that Schedule (transitional provisions: entitlement to lump sums exceeding 25% of uncrystallised rights) is amended as follows. In the sub-paragraph (7A) of paragraph 2 of Schedule 29 substituted by sub-paragraph (2), in the definition of AC, for “sub-paragraph (7B)” substitute “sub-paragraphs (7AA) and (7B)”. Where the pension in connection with which the lump sum is paid is a scheme pension under a money purchase arrangement, AC is the scheme pension purchase price, as it would be defined by paragraph 3 if the words “but subject to sub-paragraph (8)” in sub-paragraph (7A) and sub-paragraph (8) were omitted. In the sub-paragraph (7B) so substituted, for “the lump sum and the amount crystallised” substitute “what would otherwise be LS or AC”. In sub-paragraph (3), insert at the end “(but without prejudice to its operation for the purposes of paragraph 2(7AA) of Schedule 29 as inserted by sub-paragraph (2)).”
related dependants' scheme pension paragraph 3(7C) of Schedule 29
Paragraph 7 and paragraphs 9 to 26 shall come into force on 6th April 2006 (in relation to settlements whenever created). Paragraph 8 shall come into force on 6th April 2007 (in relation to settlements whenever created).
FA 1989 shall be amended as follows. The following provisions shall cease to have effect— In section 68(2)— In section 71(4)— Sub-paragraph (2)(a) and (b) shall have effect in relation to payments made on or after 6th April 2006. Sub-paragraph (2)(c) shall have effect from 6th April 2007 (in relation to settlements whenever created). Sub-paragraphs (3) and (4) shall come into force on 6th April 2006.
In section 151(2)(a) of FA 1989 (assessment of trustees) for “the trustees to whom the income arises” substitute “the trustees of the settlement in the year of assessment in which the income arises”. This paragraph shall come into force on 6th April 2006.
In section 25(9)(b) of FA 1990— This paragraph shall have effect for payments in respect of income made on or after 6th April 2006.
In ITTOIA 2005— For section 623 of ITTOIA 2005 (calculation of income) substitute— This paragraph shall come into force on 6th April 2006 in respect of settlements whenever created, and in respect of loans or advances whenever made.
The following provisions of ITTOIA 2005 shall cease to have effect— In section 457(5) of ITTOIA 2005 for “(2) to (4)” substitute “(2) and (3)”. In section 467(7) of that Act for paragraph (b) substitute— This paragraph shall have effect in relation to payments made on or after 6th April 2006 to the trustees of a settlement (whenever created).
In sections 628 and 630 of ITTOIA 2005 for “UK trust” in each place substitute “UK settlement”. “UK settlement” means a settlement the trustees of which are resident and ordinarily resident in the United Kingdom. In section 630(1)(b) of that Act for “terms of the trust” substitute “terms of the settlement”. In section 631(5)(e)(ii) of that Act for “provisions of the trust” substitute “terms of the settlement”. This paragraph shall come into force on 6th April 2006.
After section 629(7) of ITTOIA 2005 insert— This paragraph shall have effect in relation to payments made on or after 6th April 2004.
FA 2005 shall be amended as follows. In the following provisions for “trustees” substitute “the trustees of a settlement”— In section 25(3)— In section 27(2)(b) (qualifying expenses) for “total income” substitute “income”. Section 42(5)(b) shall cease to have effect. In section 43(4) (penalties) for the first reference to “trustees” substitute “the trustees of a settlement”. This paragraph shall come into force on 6th April 2006.
After section 28 of FA 2005 insert— This paragraph shall have effect in relation to payments made on or after 6th April 2004.
For the purposes of regulations (whenever made) made under a provision of the Tax Acts — This paragraph shall come into force on 6th April 2006.
Section 91
In paragraph 1(5)(a) of Schedule 15B to ICTA (where relief available on shares issued by venture capital trust on or after 6th April 2006, income tax liability reduced by amount not exceeding the sum subscribed multiplied by the lower rate of 20%), for “tax at the lower rate for that year on” substitute “30 per cent of”. In paragraph 3(4) of that Schedule (where shares in venture capital trust disposed of by bargain at arm’s length within 3 years of their issue, relief given is reduced by reference to consideration for disposal if less than amount subscribed), for “tax at the lower rate for the year of assessment for which the relief was given on” substitute “30 per cent of”. Sub-paragraphs (1) and (2) have effect in relation to shares issued on or after 6th April 2006.
In section 289A(4) of ICTA (which limits the amount eligible to be relieved in the previous year), for “£25,000” substitute “£50,000”. Sub-paragraph (1) has effect in relation to shares issued on or after 6th April 2006.
In section 290(2) of ICTA (maximum amount eligible for relief in any year), for “£200,000” substitute “£400,000”. Sub-paragraph (1) has effect for the year 2006-07 and for subsequent years of assessment.
Schedule 15B to ICTA (venture capital trusts: relief from income tax) is amended as follows. In paragraph 2(3) (no relief for investments linked to loans made within period ending immediately before third anniversary of date on which shares issued), in the definition of “the relevant period”, for “third” substitute “fifth”. In paragraph 3(1)(b) (loss of investment relief for disposal of shares within three years of issue), for “three” substitute “five”. In paragraph 6(1) (meaning of “eligible shares”), for “three” substitute “five”. Sub-paragraphs (1) to (4) have effect in relation to shares issued on or after 6th April 2006.
In section 842AA of ICTA (venture capital trusts: conditions for approval), after subsection (11) insert— Sub-paragraph (1) has effect for the purposes of determining whether, at a time on or after 6th April 2007, the conditions specified in section 842AA(2) of ICTA are, will be or were fulfilled with respect to a company.
Section 102
Section 104
Incidental letting of property (whether in the United Kingdom or outside) which is held in connection with a trade in property.
Letting of property which is held for use for administrative purposes in carrying on property rental business but is temporarily surplus to requirements for those purposes, provided that—
the space let is comparatively small compared to the space occupied for administrative purposes, and
the letting is for a term of not more than three years.
Letting of property if the following two conditions are satisfied. Condition 1 is that the property is let— Condition 2 is that the property would fall in accordance with generally accepted accounting practice to be described as owner-occupied. For the purpose of sub-paragraph (2)(b), shares of one company are stapled to shares of another if in consequence of the nature of the rights attaching to the shares of the one company (including any terms or conditions attaching to the right to transfer the shares) it is necessary or advantageous for a person who has, disposes of or acquires shares of that company also to have, to dispose of or to acquire a holding of shares of the other company.
The provision of services in connection with property outside the United Kingdom where the services would not fall within Schedule A if provided in connection with property in the United Kingdom.
Entering into structured finance arrangements to which section 774B or 774D of ICTA applies (factoring of rent and other income receipts).
All income in connection with the operation of a caravan site, if section 20(1) of ITTOIA 2005 (caravan sites) would apply in respect of any receipts in connection with the operation of the site.
Rent in respect of an electric-line wayleave.
Rent in respect of the siting of a pipeline for gas.
Rent in respect of the siting of a pipeline for oil.
Rent in respect of the siting of a mast or similar structure designed for use in a mobile telephone network or other system of electronic communication.
Rent in respect of the siting of a wind turbine.
Dividends from shares in a company to which this Part of this Act applies.
Income arising out of an interest in a limited liability partnership where section 118ZA(4) of ICTA (winding-up) applies.
The Commissioners for Her Majesty’s Revenue and Customs may by regulations—
add a paragraph to Part 1 or 2 of this Schedule,
amend a paragraph of Part 1 or 2 of this Schedule, or
repeal a paragraph of Part 1 or 2 of this Schedule.
Section 134
Section 146
Section 154 The following is the Schedule to be inserted as Schedule 19C to ICTA— .
Section 156
TCGA 1992 is amended in accordance with the following paragraphs of this Part of this Schedule. The following paragraphs of this Part of this Schedule shall be deemed to have come into force on 22nd March 2006.
Section 72 (death of person entitled to an interest in possession) is amended as follows. After subsection (1) insert— After subsection (2) insert—
In section 73 (no chargeable gain on deemed disposal under section 71(1) where person becomes absolutely entitled on death of person entitled to interest in possession), after subsection (2) insert—
In section 260(2) (disposals where gain may be held over), after paragraph (d) insert—.
FA 1986 is amended as follows. After section 102 (gifts with reservation) insert— In Schedule 20 (supplementary rules about gifts with reservation), after paragraph 4 insert— Sub-paragraphs (1) to (3) shall be deemed to have come into force on 22nd March 2006, but only as respects cases where an interest in possession comes to an end on or after that day.
Section 79 of IHTA 1984 (subsection (3) of which provides for charges to tax where, in the case of settled property designated under section 31 on a claim under section 79, an event occurs that would be chargeable under section 32 or 32A if the claim had been under section 30) is amended as follows. After subsection (5) (amount on which tax charged under subsection (3)) insert— For subsection (7) (which provides that the “relevant period” mentioned in subsection (6) begins with the latest of certain listed days and ends with the day before the event giving rise to the charge under subsection (3)) substitute— After subsection (9) insert—
Section 158
In section 271 of TCGA 1992 (exemptions), after subsection (1A) insert—
Part 4 of FA 2004 (pension schemes) is amended as follows.
Section 160 (payments by registered pension schemes) is amended as follows. After subsection (7) insert— In subsection (8), after “borrowing” insert “and the receipt of income and gains from taxable property.”
In section 173 (benefits), after subsection (7) insert—
After section 174 insert—
After section 185 insert—
In section 186 (relief for income derived from scheme investments), after subsection (2) insert—
In section 239 (scheme sanction charge), after subsection (5) insert—
In section 241(1) (scheme chargeable payments) insert at the end, and
After section 273 insert—
In section 278 (market value), after subsection (3) insert—
acquiring an interest in property (for the purposes of the taxable property provisions) paragraphs 12 and 27 to 29 of Schedule 29A building (for the purposes of the taxable property provisions) paragraph 7(2) of Schedule 29A holding an interest in a person (for the purposes of the taxable property provisions) paragraph 16(2) to (4) of Schedule 29A holding an interest in property (for the purposes of the taxable property provisions) paragraph 13 of Schedule 29A holding directly an interest in a vehicle (for the purposes of the taxable property provisions) paragraph 20(3) of Schedule 29A holding directly an interest in property (for the purposes of the taxable property provisions) paragraphs 14 and 15 of Schedule 29A holding indirectly an interest in a vehicle (for the purposes of the taxable property provisions) paragraph 20(4) of Schedule 29A holding indirectly an interest in property (for the purposes of the taxable property provisions) paragraph 16(1) of Schedule 29A investment-regulated pension scheme (for the purposes of the taxable property provisions) paragraphs 1 to 3 of Schedule 29A residential property (for the purposes of the taxable property provisions) paragraphs 7(1), 8 and 9 of Schedule 29A scheme-held taxable property section 185B(3) sums and assets held for the purposes of an arrangement (for the purposes of the taxable property provisions) paragraph 5 of Schedule 29A taxable property (for the purposes of the taxable property provisions) paragraphs 6, 10 and 11 of Schedule 29A the taxable property provisions paragraph 1(3) of Schedule 29A vehicle (in the taxable property provisions) paragraph 20(2) of Schedule 29A
After Schedule 29 insert—
Schedule 34 (non-UK schemes: application of certain charges) is amended as follows. In paragraph 1 (member payment charges)— After paragraph 7 insert—
In Schedule 36 (transitional provisions and savings), after paragraph 37 insert—
Section 160
Section 161
Section 163
Section 164
Section 178
Short title and chapter Extent of repeal Alcoholic Liquor Duties Act 1979 (c. 4) Section 12(4). Section 14. Section 15(4). Section 18(5). Section 21. Section 24. Section 26. Section 32. Section 35. Section 55A. Section 67. Section 69. Section 71. Section 74. Section 82. Finance Act 1981 (c. 35) In Schedule 8, paragraphs 13, 17 and 21. Finance Act 1985 (c. 54) In Schedule 3, paragraph 2. Finance Act 1986 (c. 41) In Schedule 5, paragraph 3(2). Territorial Sea Act 1987 (c. 49) In Schedule 1, paragraph 5(2). Finance Act 1988 (c. 39) In Schedule 1, paragraphs 6 and 10. Finance Act 1994 (c. 9) In Schedule 4, in paragraph 18(1), the words from “(offence” to the end, and paragraphs 23, 25, 28, 36, 42 to 44 and 48. In Schedule 5, paragraph 3(1)(i) and (n). Finance Act 1995 (c. 4) In Schedule 2, paragraph 4. Licensing Act 2003 (c. 17) In Schedule 6, paragraph 73. Short title and chapter Extent of repeal Betting and Gaming Duties Act 1981 (c. 63). Section 22(2)(b). Section 25A. In section 26(2)— the definition of “video machine”, and in the definition of “two-penny machine”, the words from “and “five-penny machine”” to the end. In Schedule 3, paragraph 6. In Schedule 4, paragraphs 2, 3 and 15.
Short title and chapter Extent of repeal Betting and Gaming Duties Act 1981 (c. 63) The word “or” immediately after section 2(2)(b). Value Added Tax Act 1994 (c. 23) In section 23(1), the words “to play”.
Short title and chapter Extent of repeal Income and Corporation Taxes Act 1988 (c. 1) Sections 13AA and 13AB. In section 13A(1), the words “or 13AA(8)”. Schedule A2. Finance Act 1998 (c. 36) In Schedule 18, in paragraph 8(1), in the second step, the words “or 13AA(2)”. Finance Act 1999 (c. 16) Section 28. Finance Act 2004 (c. 36) Section 28. Schedule 3. These repeals have effect in accordance with section 26 of this Act. Short title and chapter Extent of repeal Finance Act 2000 (c. 17) In Schedule 27, paragraph 3(a). This repeal has effect in accordance with Schedule 1 to this Act. Short title and chapter Extent of repeal Finance Act 2002 (c. 23) In Schedule 12— in paragraph 4(3), the word “or” at the end of paragraph (b); in paragraph 9(2), the word “or” at the end of paragraph (b); in paragraph 17, the word “and” at the end of paragraph (c). In Schedule 13— in paragraph 3(5), the word “or” at the end of paragraph (b); in paragraph 9(3), the word “or” at the end of paragraph (b). These repeals have effect in accordance with section 28 of this Act. Short title and chapter Extent of repeal Finance (No.2) Act 1992 (c. 48) Sections 40A to 43. Finance (No.2) Act 1997 (c. 58) Section 48. Finance Act 2002 (c. 23) Sections 99 to 101. Income Tax (Trading and Other Income) Act 2005 (c. 5) In the heading to Chapter 9 of Part 2, the words “FILMS AND”. In section 130— in subsections (1)(a), (2), (3) and (4), the words “film or” wherever occurring; in subsection (1), paragraph (b) and the word “and” preceding it; subsection (6). Section 131. In section 132— in subsection (1), paragraph (a) and the word “and” following it; subsections (2) and (3). Section 134(4). In section 135— in subsection (1)(a), the words “films or”; subsection (1)(d); subsection (6)(b) to (d); subsection (7). Sections 136 to 144. Finance Act 2005 (c. 7) Sections 58 to 71. Schedule 3. These repeals come into force in accordance with the provisions of sections 46 and 47 of this Act. In consequence of the repeals in ITTOIA 2005— the heading before section 135 of that Act becomes “Rules for allocating expenditure”; and the heading to that section becomes “Allocation of production or acquisition expenditure to relevant periods”. Short title and chapter Extent of repeal Income and Corporation Taxes Act 1988 (c. 1) In section 506(2), the words “and subsection (1) above”. Section 506(6). Part III of Schedule 20. Short title and chapter Extent of repeal Income Tax (Earnings and Pensions) Act 2003 (c. 1) In section 266(2)(b), the word “or”. In section 267(2)(e), the word “and” at the end. Communications Act 2003 (c. 21) In Schedule 17, paragraph 175(2). These repeals have effect in accordance with section 60(4) and (5) of this Act. Short title and chapter Extent of repeal Income Tax (Earnings and Pensions) Act 2003 (c. 1) Section 320. Communications Act 2003 (c. 21) In Schedule 17, paragraph 175(3). Finance Act 2004 (c. 12) Section 79. These repeals have effect in accordance with section 61(2) and (3) of this Act. Short title and chapter Extent of repeal Income Tax (Earnings and Pensions) Act 2003 (c. 1) In section 266(3), the word “or” at the end of paragraph (d). This repeal has effect for the year 2006-07 and subsequent years of assessment. Short title and chapter Extent of repeal Taxation of Chargeable Gains Act 1992 (c. 12) In section 104(2)(b), the word “, 106”. In section 105(2)(c), the word “106,”. Section 106. In section 108(8), the words “shall have effect subject to section 106 but”. Section 177B and the italic cross-heading before it. Schedule 7AA. Finance Act 1998 (c. 36) Section 137(1), (2) and (5). Schedule 24. Finance Act 2000 (c. 17) In Schedule 29, paragraphs 8 and 18. Finance Act 2003 (c. 14) In Schedule 27, in paragraph 2(3), the words “106(10),”. The repeals of— section 177B of, and Schedule 7AA to, TCGA 1992, section 137(1), (2) and (5) of, and Schedule 24, to FA 1998, and paragraph 8 of Schedule 29 to FA 2000, have effect in accordance with section 70(6) to (11) of this Act. The other repeals have effect in accordance with section 72 of this Act. Short title and chapter Extent of repeal Taxation of Chargeable Gains Act 1992 (c. 12) Section 237(b). This repeal has effect in accordance with section 73 of this Act. Short title and chapter Extent of repeal Taxation of Chargeable Gains Act 1992 (c. 12) Section 10A(9A). Section 83A(5). These repeals have effect in accordance with section 74(6) of this Act. Short title and chapter Extent of repeal Income and Corporation Taxes Act 1988 (c. 1) Sections 43A to 43G. Section 730(3). Finance Act 1996 (c. 8) In section 81(2), the word “or” immediately before paragraph (b). In section 103(1), in the definition of “fair value”, in paragraphs (a) and (b), the words “in respect of amounts which at that time are not yet due and payable”. Finance Act 2000 (c. 17) Section 110. Capital Allowances Act 2001 (c. 2) In Schedule 2, paragraphs 11 and 12. Finance Act 2002 (c. 23) In section 103(4)(a), the words “43A(1),”. In Schedule 26, in paragraph 54(1), in the definition of “fair value”, in paragraphs (a) and (b), the words “in respect of amounts which at that time are not yet due and payable”. Income Tax (Trading and Other Income) Act 2005 (c. 5) In Schedule 1, paragraphs 26 to 30. Finance (No.2) Act 2005 (c. 22) In Schedule 7, paragraphs 1, 2(6), 17(3) and 23(2). These repeals have effect in accordance with Schedule 6 to this Act. Short title and chapter Extent of repeal Finance Act 2002 (c. 23) Section 62. Finance Act 2003 (c. 14) In Schedule 30, paragraph 4(2). These repeals have effect in relation to expenditure incurred on or after 1st April 2006. Short title and chapter Extent of repeal Income and Corporation Taxes Act 1988 (c. 1) Section 431A(5). In section 432B(4)(b), the words “and ending before 1st October 2006”. Finance Act 1989 (c. 26) In section 83ZA— in subsection (7), the words “the aggregate of”, paragraph (b) and the word “and” before that paragraph, subsections (10) and (12), and in subsection (15), the word “, (12)”. The repeals in section 83ZA of FA 1989 have effect in accordance with Schedule 11 to this Act. Short title and chapter Extent of repeal Income and Corporation Taxes Act 1988 (c. 1) Section 220(2). In section 360A(2)(b)— the words “trustee or”, and the words from “(“settlement”” to the end. In section 360A(2)(c), the words “trustee or”. In section 360A(8), the words “trustee or”. In section 417(3)(b)— the words “trustee or”, and the words from “(“settlement”” to the end. In section 417(3)(c)(i), the words “trustee or”. In section 686(2)(b), the word “either”. Section 720(8)(a). Section 764. At the end of section 839(3)(b), the word “and”. Finance Act 1989 (c. 26) At the end of section 68(2)(bb), the word “and”. Section 68(2)(c). At the end of section 71(4)(bb), the word “and”. Section 71(4)(c). Section 110. Finance Act 1990 (c. 29) At the end of section 25(9)(b)(iii), the word “or”. Taxation of Chargeable Gains Act 1992 (c. 12) In section 63(1), the words “an heir of entail in possession of any property in Scotland subject to an entail, whether sui juris or not, or of”. In section 63(2)— the words “For the purposes of this Act,” the words “heir or” before “liferenter”, and the words “the heir of entail next entitled to the entailed property under the entail or, as the case may be,”. In section 77(6), the word “or” at the end of paragraph (a). In section 83A(3), the word “or” at the end of paragraph (a). Section 83A(3)(b). In section 97(7), the words “the preceding provisions of”. In section 98(2), the word “and” at the end of paragraph (a). Section 98(2)(b). In section 169(3)(a), the words from “, although” to the end of the paragraph. In section 217(3), the word “and” at the end of paragraph (a). Section 217(3)(b). In section 283(4), the words “as such (within the meaning of section 701(4) of that Act)”. In section 286(3), the word “and” at the end of paragraph (b). In section 286(3), the words following paragraph (c). Paragraph 17(6) of Schedule A1. In paragraph 2(7) of Schedule 1, the words from “settlor” to “intestate and”. In paragraph 2(7)(a) of Schedule 1, the words “treated under section 69(1) as”. In paragraph 7(5) of Schedule 4A, the word “or” at the end of paragraph (a). Income Tax (Trading and Other Income) Act 2005 (c. 5) Section 457(4). Section 568(5). Finance Act 2005 (c. 7) Section 42(5)(b). These repeals shall come into force in accordance with the provisions of Schedules 12 and 13 to this Act. Short title and chapter Extent of repeal Finance Act 1998 (c. 36) Section 73(5). In section 73(6), the words from “; and subsection (5)” to the end. In Schedule 13, paragraph 2. Finance Act 2000 (c. 17) In Schedule 18, paragraph 1(4). Finance Act 2004 (c. 12) In Schedule 18, paragraph 4. The repeals in section 73 of FA 1998 have effect in accordance with paragraph 2(2) to (4) of Schedule 14 to this Act. The repeal of paragraph 2 of Schedule 13 to FA 1998 has effect in accordance with paragraph 5(2) of Schedule 14 to this Act. The repeal of paragraph 1(4) of Schedule 18 to FA 2000 has effect in accordance with paragraph 7(5) of Schedule 14 to this Act. The repeal of paragraph 4 of Schedule 18 to FA 2004 has effect in accordance with paragraph 6(2) of Schedule 14 to this Act. Short title and chapter Extent of repeal Finance Act 2005 (c. 7) Section 47(5). Short title and chapter Extent of repeal Energy Act 2004 (c. 20) In section 30(1)(c), the words “on the coming into force of the direction mentioned in paragraph (a),”. This repeal has effect in relation to accounting periods of the Nuclear Decommissioning Authority ending on or after 22nd March 2006. Short title and chapter Extent of repeal Finance Act 2005 (c. 7) In section 83(3), the word “and” at the end of paragraph (c). In section 84— subsection (3)(d)(ii) and the word “and” following it; subsection (5)(a). These repeals have effect in accordance with section 101(6) and (7) of this Act.
Short title and chapter Repeal Income and Corporation Taxes Act 1988 (c. 1). Sections 508A, 508B and 842(1AA). Finance Act 1996 (c. 8). Schedule 30.
Short title and chapter Extent of repeal Oil Taxation Act 1975 (c. 22) In section 5A(5C), paragraph (a) and the word “and” at the end of paragraph (b). In Schedule 3, paragraph 2(3) and, in paragraph 2A,— in sub-paragraph (1), the words “, or in accordance with those sub-paragraphs as modified by sub-paragraph (3) of that paragraph,”;(b) in sub-paragraph (3), the words “(with sub-paragraphs (2)(f) of paragraph 2 applying accordingly)”. Finance Act 1983 (c. 28) Section 38. Finance Act 1987 (c. 16) Section 62(2)(c). In Schedule 11— paragraph 1(3) to (7); paragraphs 3 to 5. Finance (No. 2) Act 1987 (c. 51) In section 101— in subsection (5) the words “, subject to subsection (6) below”; and subsection (6). In Schedule 8, paragraph 5. Finance (No. 2) Act 1992 (c. 48) In Schedule 15, paragraph 4(1). Finance Act 1994 (c. 9) Section 235(1)(d) and (2). The repeal in Schedule 8 to F(No.2)A 1987 has effect for chargeable periods beginning on or after 1st July 2006. The other repeals have effect in accordance with section 146 of this Act. Short title and chapter Extent of repeal Finance Act 1987 (c. 16) In section 61(1) the words “, supplies and appropriations”. Section 61(6) and (7). In section 61(9) the words “subsection (7) or”. In paragraph 1(1) of Schedule 10 the words “, “proposed supply” and “proposed appropriation””. Paragraph 1(2) of Schedule 10. Paragraph 2(1)(b), (c) and (d) of Schedule 10. The words following paragraph 2(1)(d) of Schedule 10. Paragraph 3 of Schedule 10. Paragraph 4(2), (2A) and (4) of Schedule 10. In paragraph 5(1)(b) of Schedule 10, the words “in the case of a proposed sale”. In paragraph 5(1)(c) and (d) of Schedule 10, the words “or relevantly appropriated”. In paragraph 6 of Schedule 10— in sub-paragraph (1), the words “Subject to sub-paragraph (3) below,” and sub-paragraphs (2) and (3). Paragraphs 8 to 11 of Schedule 10. In paragraph 12(1) of Schedule 10, the words “, supply or appropriation”. These repeals shall come into force in accordance with the provisions of sections 149 and 150 of this Act.
Short title and chapter Extent of repeal Inheritance Tax Act 1984 (c. 51) In section 3A(1), the words after paragraph (c). In section 54A(2), in paragraph (c), the words “, other than property to which section 71 below applies” and, in paragraph (d)(i), the words “or to which section 71 below applies”. In section 71(1)(a), the words “or to an interest in possession in it”. The repeals in sections 3A(1) and 54A(2) of IHTA 1984 shall be deemed to have come into force on 22nd March 2006, but the repeal in section 54A(2) of IHTA 1984 is to be read with paragraph 16(4) of Schedule 20 to this Act. The repeal in section 71(1)(a) of IHTA 1984 comes into force in accordance with paragraph 3(2) of Schedule 20 to this Act.
Short title and chapter Extent of repeal Finance Act 2005 (c. 7) Section 95. This repeal has effect in accordance with section 162 of this Act. Short title and chapter Extent of repeal Finance Act 2003 (c. 14) In Schedule 15— in paragraph 10(6), the words “(instead of sub-paragraphs (2) to (5))”; in paragraph 18(6), the words “(instead of sub-paragraphs (2) to (5))”. These repeals have effect in relation to any transfer of which the effective date (within the meaning of Part 4 of FA 2003) is on or after the day on which this Act is passed. Short title and chapter Extent of repeal Finance Act 2003 (c. 14) Section 64A. In section 101(7), the words from “section 53” to “companies), or”. Finance Act 2004 (c. 12) In Schedule 39, paragraph 18. These repeals have effect in accordance with section 166 of this Act. Short title and chapter Extent of repeal Finance Act 2003 (c. 14). Section 71A(6). Section 72(6). Short title and chapter Extent of repeal Finance Act 1986 (c. 41) In section 75(4), the words “that the registered office of the acquiring company is in the United Kingdom and”. In section 76(3), the words “that the registered office of the acquiring company is in the United Kingdom and”. Section 77(3)(a). These repeals have effect in accordance with section 169 of this Act.
Short title and chapter Extent of repeal Finance Act 2000 (c. 17) In Schedule 6— in paragraph 34(2), the words “(or, in the case of electricity, consumed)”; in paragraph 37(1)(c), the words “half-rate supplies or”; in paragraph 38(1)(c), the words “half-rate supplies or”; paragraph 42(1)(b); paragraph 43; in paragraph 62(1), in paragraph (c), the words “half-rate or” and paragraph (d); paragraph 101(2)(a)(iii); in paragraph 147, the definition of “half-rate supply”. These repeals have effect in accordance with section 172 of this Act. Short title and chapter Extent of repeal Inheritance Tax Act 1984 (c. 51) Section 158(1A). Section 220A. Finance Act 1987 (c. 16) Section 70(2). Income and Corporation Taxes Act 1988 (c. 1) Section 788(2). Section 815C. Section 816(2) and (2ZA). Finance Act 2000 (c. 17) Sections 146 and 147. Finance Act 2002 (c. 23) In section 88(2)— in paragraph (a), the words “and 815C(1)”, in paragraph (b), the words “and 815C”, and paragraphs (d) and (e). Finance Act 2003 (c. 14) Section 198. Commissioners for Revenue and Customs Act 2005 (c. 11) In Schedule 4, in paragraph 37(b), the words “(2), (2ZA) and”.