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Finance (No. 3) BillPage 30

(i) conditions specified in the regulations are met (or
appear to the Commissioners to be met) in relation to the
company, or

(ii) the company has failed to comply with requirements
5imposed by the regulations,

(e) include provision prohibiting a company from which approval
has been withdrawn from reapplying, or

(f) include provision under which approval may or must be
withdrawn in relation to an accounting period that ends before
10the notice withdrawing approval is given.

(3) Regulations under this section—

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

(b) may make incidental, consequential, supplementary or
15transitional provision.

(4) A statutory instrument containing the first regulations under this
section may not be made unless a draft of the instrument has been laid
before and approved by a resolution of the House of Commons.

(5) Any other statutory instrument containing regulations under this
20section is subject to annulment in pursuance of a resolution of the
House of Commons.

(6) In this section “the Commissioners” means the Commissioners for Her
Majesty’s Revenue and Customs.

(4) Omit sections 1160 to 1165 (which relate to the interpretation of the provisions
25replaced by this section).

(5) In Schedule 4 (index of defined expressions), omit the following entries—

(6) 30The amendments made by this section have effect in relation to accounting
periods beginning on or after such day as the Treasury may by order appoint.

50 Power to make provision about treatment of transactions

In Part 13 of CTA 2010 (special types of company etc), after Chapter 3 insert—

CHAPTER 3A Investment trusts
622A 35Power to make provision about treatment of transactions

(1) The Treasury may by regulations provide that a transaction of a
specified kind entered into by an investment trust is to be treated for the
purposes of the Corporation Tax Acts as entered into by it otherwise
than in the course of a trade.

(2) 40Regulations under this section—

Finance (No. 3) BillPage 31

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

(b) may make incidental, consequential, supplementary or
transitional provision.

(3) 5A statutory instrument containing the first regulations under this
section may not be made unless a draft of the instrument has been laid
before and approved by a resolution of the House of Commons.

(4) Any other statutory instrument containing regulations under this
section is subject to annulment in pursuance of a resolution of the
10House of Commons.

(5) In this section “specified” means specified in regulations under this
section.

Miscellaneous

51 Taxable benefits: calculating the appropriate percentage for cars

(1) 15In section 139 of ITEPA 2003 (cars with a CO2 emissions figure: the appropriate
percentage), as substituted by section 59 of FA 2010 with effect for the tax year
2012-13 and subsequent tax years, in subsection (5) for “100 grams” substitute
“95 grams”.

(2) The amendment made by this section has effect for the tax year 2013-14 and
20subsequent tax years.

52 Furnished holiday lettings

Schedule 14 contains provisions about furnished holiday lettings.

53 Leases and changes to accounting standards

(1) This section applies where there is a change in a leasing accounting standard
25which—

(a) occurs on or after 1 January 2011, and

(b) is not within subsection (3),

(in this section referred to as a “leasing change”).

(2) “Leasing accounting standard” means—

(a) 30International Accounting Standard 17 (leases) issued by the
International Accounting Standards Board,

(b) Statement of Standard Accounting Practice 21 (accounting for leases
and hire purchase contracts) recognised by the Accounting Standards
Board,

(c) 35the part of the International Financial Reporting Standard for Small and
Medium-sized Entities issued by the International Accounting
Standards Board which relates specifically to leases,

(d) the part of the Financial Reporting Standard for Smaller Entities issued
by the Accounting Standards Board which relates specifically to leases,
40or

Finance (No. 3) BillPage 32

(e) any accounting standard, or part of an accounting standard, which
replaces (wholly or in part) a standard or part mentioned in paragraphs
(a) to (d).

(3) A change is within this subsection if, and to the extent that, it is one which
5permits or requires persons, when preparing accounts in accordance with UK
GAAP, to account for a lease, or a transaction accounted for as a lease, in a
manner equivalent to that provided for by the International Financial
Reporting Standard for Small and Medium-sized Entities issued by the
International Accounting Standards Board (disregarding any leasing change
10which may be made to that Standard).

(4) Changes within subsection (1) include those which may or must be adopted for
periods of account which fall wholly or partly before the time the change
occurs or before the day on which this Act is passed.

(5) For the purposes of the Taxes Acts any reference in those Acts (other than this
15section)—

(a) to a thing being determined or done in accordance with or by reference
to generally accepted accounting practice, or

(b) to accounts prepared (or not prepared) in accordance with
international accounting standards or UK GAAP,

20is to be construed as if any leasing change had not occurred.

(6) Section 997 of ITA 2007 and section 1127 of CTA 2010 (meaning of “generally
accepted accounting practice” and related expressions in the Tax Acts) have
effect subject to subsection (5).

(7) Where a person prepares or is required to prepare accounts in accordance with
25new standards for a period of account, the Taxes Acts (other than this section)
have effect as if the person prepared or was required to prepare accounts, for
that period, in accordance with the corresponding old standards.

(8) For the purposes of subsection (7)

(a) if the new standards are international accounting standards, the
30corresponding old standards are international accounting standards
disregarding any leasing change, and

(b) if the new standards are UK GAAP, the corresponding old standards
are UK GAAP disregarding any leasing change.

(9) In this section—

(10) 5This section has effect in relation to any period (including any period falling
wholly or partly before the day on which this Act is passed) in respect of which
a change to a leasing accounting standard which occurs on or after 1 January
2011 may or must be adopted by any person for accounting purposes.

54 Leasing companies: withdrawal of election

(1) 10In section 398A(1)(a) of CTA 2010 (election out of qualifying change of
ownership), after “day”)” insert “before 23 March 2011”.

(2) The amendment made by this section is to be treated as having come into force
on 23 March 2011.

55 Companies with small profits: associated companies

(1) 15For section 27 of CTA 2010 (meaning of “associated company”: attribution to
persons of rights and powers of their partners) substitute—

27 Attribution to persons of rights and powers of their associates

(1) This section applies if—

(a) it is necessary to determine in accordance with section 25(4) and
20(5) whether a company is an associated company of another
company, and

(b) the relationship between the two companies is not one of
substantial commercial interdependence.

(2) In the application of section 451 (meaning of “control”: rights to be
25attributed) for the purposes of the determination, any person to whom
rights and duties fall to be attributed under subsections (4) and (5) of
that section is to be treated, for the purposes of those subsections, as
having no associates.

(3) The Treasury may by order prescribe factors that are to be taken into
30account in determining whether a relationship between two companies
amounts to substantial commercial interdependence for the purposes
of this section.

(2) The amendment made by this section has effect in relation to accounting
periods ending on or after 1 April 2011.

(3) 35But a company may elect that the amendment made by this section is of no
effect in relation to an accounting period that begins before that date.

(4) An election under subsection (3) must be made within one year from the end
of the accounting period to which it relates.

(5) The first order under section 27(3) of CTA 2010 (as substituted by subsection
40(1) of this section) may be made so as to have effect in relation to accounting
periods ending on or after 1 April 2011.

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56 Insurance companies: apportionment of amounts brought into account

(1) In section 432C of ICTA (section 432B apportionment: non-participating
funds), in subsection (9), for the words from “D is” to the end substitute—

(2) The amendment made by this section has effect in relation to periods of
account beginning on or after 1 January 2011.

(3) 20For the purposes of section 432CA of ICTA, where the current period of
account begins on or after 1 January 2011, the reference in subsection (4) to
section 432C is a reference to that section as amended by this section even if the
applicable appropriate period of account began before that date.

(4) In subsection (3), “current period of account”, “appropriate period of account”
25and “applicable” have the meaning given by section 432CA of ICTA.

57 Tonnage tax: capital allowances in respect of ship leasing

(1) Part 10 of Schedule 22 to FA 2000 (companies within tonnage tax: capital
allowances in respect of ship leasing) is amended as follows.

(2) In paragraph 94 (quantitative restrictions on allowances)—

(a) 30in sub-paragraph (3)(a), for “a rate of 20% per annum” substitute “the
rate determined under sub-paragraph (3A)”,

(b) in sub-paragraph (3)(b), for “a rate of 10% per annum” substitute “the
rate specified in section 104D(1) of the Capital Allowances Act 2001”,

(c) after sub-paragraph (3) insert—

(3A) 35The rate mentioned in sub-paragraph (3)(a) is—

(a) if the rate of the writing down allowance to which the
lessor would be entitled in respect of the expenditure
apart from this paragraph is that specified in section
56(1) of the Capital Allowances Act 2001, that rate,
40and

(b) otherwise, the rate specified in section 104D(1) of that
Act.,

(d) in sub-paragraph (4)—

(i) omit the words “within each of those bands”,

(ii) 45after “separate pools” insert “in accordance with sub-paragraph
(4A)”, and

(iii) omit the second sentence, and

Finance (No. 3) BillPage 35

(e) after that sub-paragraph insert—

(4A) The expenditure is to be allocated to the following pools—

(a) to the extent that it is expenditure in respect of which
the lessor is entitled to writing down allowance at the
5rate specified in section 56(1) of the Capital
Allowances Act 2001, a pool to be known as “the
tonnage tax (main rate) pool”, and

(b) to the extent that it is expenditure in respect of which
the lessor is entitled to writing down allowance at the
10rate specified in section 104D(1) of that Act, a pool to
be known as “the tonnage tax (special rate) pool”.

(3) In paragraph 95(4)—

(a) for “(4)” substitute “(4A)”, and

(b) for “20%” substitute “tonnage tax (main rate)” and for “10%” substitute
15“tonnage tax (special rate)”.

(4) In paragraph 97—

(a) in sub-paragraphs (2) and (3), for “20%” substitute “tonnage tax (main
rate)” and for “10%” substitute “tonnage tax (special rate)”, and

(b) in sub-paragraph (4), for “10%” substitute “tonnage tax (special rate)”.

(5) 20In paragraph 98(8), for “20%” substitute “tonnage tax (main rate)” and for
“10%” substitute “tonnage tax (special rate)”.

(6) In paragraph 99 (quantitative restrictions: change of circumstances taking case
out of restrictions)—

(a) in sub-paragraph (2), for “20%” substitute “tonnage tax (main rate)”
25and for “10%” substitute “tonnage tax (special rate)”,

(b) in sub-paragraph (4), for the words from “the whole of” to the end
substitute “the amount that the tax written down value of the ship
would have been, at the time the change of circumstances occurs, had
paragraph 94 never applied.”, and

(c) 30omit sub-paragraph (5).

(7) In consequence of the amendments made by this section, omit section 80(5) to
(7) of FA 2008.

(8) The amendments made by this section have effect in relation to chargeable
periods ending on or after 1 January 2011.

(9) 35But the amendments made by this section are of no effect in relation to
expenditure incurred before that date.

58 Transfer pricing: application of OECD principles

(1) In section 164 of TIOPA 2010 (Part to be interpreted in accordance with OECD
principles), for subsection (4) substitute—

(4) 40In this section “the transfer pricing guidelines” means—

(a) the version of the Transfer Pricing Guidelines for Multinational
Enterprises and Tax Administrations approved by the
Organisation for Economic Co-operation and Development
(OECD) on 22 July 2010, or

Finance (No. 3) BillPage 36

(b) such other document approved and published by the OECD in
place of that (or a later) version or in place of those Guidelines
as is designated for the time being by order made by the
Treasury,

5including, in either case, such material published by the OECD as part
of (or by way of update or supplement to) the version or other
document concerned as may be so designated.

(2) The amendment made by this section has effect (in relation to provision made
or imposed at any time)—

(a) 10for corporation tax purposes, for accounting periods beginning on or
after 1 April 2011, and

(b) for income tax purposes, for the tax year 2011-12 and subsequent tax
years.

59 Offshore funds

15In Part 8 of TIOPA 2010 (offshore funds), after section 363 insert—

363A Residence of offshore funds which are undertakings for collective
investment in transferable securities

(1) This section applies to an offshore fund (within the meaning of section
355) which—

(a) 20is, for the purposes of the UCITS Directive, an undertaking for
collective investment in transferable securities, and

(b) is authorised pursuant to Article 5 of the UCITS Directive in a
Member State other than the United Kingdom.

(2) If—

(a) 25the offshore fund is a body corporate which, under the law of
the Member State in which it is authorised pursuant to Article 5
of the UCITS Directive, is treated as resident in that State for the
purposes of any tax imposed under that law on income, and

(b) (apart from this section) the body corporate would be treated as
30resident in the United Kingdom for the purposes of any
enactment (within the meaning of section 354) relating to
income tax, corporation tax or capital gains tax,

the body corporate is instead to be treated as if it were not resident in
the United Kingdom.

(3) 35If, by virtue of section 99 or 103A of TCGA 1992, that Act applies in
relation to the offshore fund as if it were a company, that Act applies as
if the company were neither resident nor ordinarily resident in the
United Kingdom (if it would not otherwise do so).

(4) In this section “the UCITS Directive” means Directive 2009/65/EC of
40the European Parliament and of the Council.

60 Index-linked gilt-edged securities

(1) In section 399 of CTA 2009 (index-linked gilt-edged securities: basic rules), for
subsection (4) substitute—

(4) In this section and sections 400 to 400C—

(2) In the following provisions of that Act, for “retail” substitute “relevant”—

(a) 10section 400(1)(b), (2), (3) and (6);

(b) section 400A(3) and (7)(b).

(3) Accordingly, in Schedule 14 to FA 2010, omit paragraph 4(4).

(4) The amendments made by this section have effect in relation to securities
issued on or after the day on which this Act is passed.

15Part 3 Oil

61 PRT: areas treated as continuing to be oil fields

(1) In Schedule 1 to OTA 1975 (determination of oil fields), in paragraph 7(4), for
“the relevant area” substitute “those qualifying assets”.

(2) 20The amendment made by this section has effect in relation to chargeable
periods that begin after 30 June 2009.

62 Intangible fixed assets: oil licences

(1) Section 809 of CTA 2009 (oil licences) is amended as follows.

(2) After subsection (1) insert—

(1A) 25The reference in subsection (1) to an oil licence or an interest in an oil
licence includes all goodwill, and any intangible asset, which relates to,
derives from or is connected with an oil licence or an interest in an oil
licence.

(3) In subsection (2), for “subsection (1)” substitute “this section”.

(4) 30In subsection (4), for “subsection (1)” substitute “this section”.

(5) The amendments made by this section have effect in relation to accounting
periods beginning on or after 23 March 2011 (and, in relation to those
accounting periods, are to be treated as always having had effect).

(6) For the purposes of subsection (5), an accounting period beginning before, and
35ending on or after, 23 March 2011 is to be treated as if so much of the period as
falls before that date, and so much of the period as falls on or after that date,
were separate accounting periods.

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63 Reduction of supplementary charge for certain new oil fields

(1) In section 337 of CTA 2010 (initial licensee to hold a field allowance), in
subsection (1), for “authorisation day” substitute “accounting period in which
the authorisation day falls”.

(2) 5For section 350 of that Act (meaning of “new oil field”) substitute—

350 New oil field”

(1) In this Chapter “new oil field” means an oil field—

(a) which is a qualifying oil field, and

(b) whose development (in whole or in part) is authorised for the
10first time on or after 22 April 2009.

(2) If all assets of an oil field which are relevant assets have been
decommissioned, there is to be ignored for the purposes of subsection
(1)(b) any authorisation in respect of that oil field which occurs before
that decommissioning.

(3) 15Sub-paragraphs (2) to (9) of paragraph 7 of Schedule 1 to OTA 1975
apply for the purpose of determining whether relevant assets of an oil
field are decommissioned as they apply for the purpose of determining
whether qualifying assets of a relevant area are decommissioned.

(4) For the purposes of this section, an asset is a relevant asset of an oil field
20if—

(a) it has at any time been a qualifying asset (within the meaning of
the Oil Taxation Act 1983) in relation to any participator in the
field, and

(b) it has at any time been used for the purpose of winning oil from
25the field.

(3) In section 357 of that Act (other definitions), in the definition of “authorisation
day”, after “authorised” insert “as mentioned in section 350(1)(b)”.

(4) The amendments made by this section have effect in relation to accounting
periods ending on or after 1 April 2010.

(5) 30Corresponding amendments, having effect in relation to accounting periods
ending on or after 22 April 2009, are to be treated as having been made in
Schedule 44 to FA 2009.

64 Chargeable gains: oil activities

Schedule 15 contains provisions about chargeable gains in relation to oil
35activities.

Part 4 Pensions

65 Benefits under pension schemes

Schedule 16 contains provision about the benefits available under pension
40schemes and related matters.

Finance (No. 3) BillPage 39

66 Annual allowance charge

Schedule 17 contains provision about the annual allowance charge.

67 Lifetime allowance charge

Schedule 18 contains provision about the lifetime allowance charge.

68 5Borrowing by section 67 pension scheme

(1) Section 182 of FA 2004 (unauthorised borrowing) does not cause a section 67
pension scheme to be not authorised to borrow an amount for the purposes of
meeting costs of establishing, administering or managing the pension scheme.

(2) Accordingly, in the case of a section 67 pension scheme, references in sections
10182 and 183 of FA 2004 to amounts previously borrowed do not include any
amount previously borrowed for those purposes.

(3) For the purposes of this section neither—

(a) borrowing an amount for making investments for the purposes of a
pension scheme, nor

(b) 15borrowing an amount for making deposits with a view to deriving
income for the purposes of a pension scheme (otherwise than prior to
applying the amount for meeting costs of establishing, administering or
managing the pension scheme),

is to be taken to be borrowing the amount for the purposes of meeting costs of
20establishing, administering or managing the pension scheme.

(4) In this section “section 67 pension scheme” means a pension scheme which is
established under section 67 of the Pensions Act 2008.

(5) Section 163(2) of FA 2004 (meaning of “borrowing”) applies for the
interpretation of this section.

(6) 25This section is treated as having come into force on 6 April 2011.

69 Exemption from tax on interest on unpaid relevant contributions

(1) ITTOIA 2005 is amended as follows.

(2) In section 369(3)(e) (exemptions from income tax charge on income), after
“loans,” insert “unpaid relevant contributions,”.

(3) 30After section 753 insert—

753A Interest on unpaid relevant contributions

(1) No liability to income tax arises in respect of interest paid in compliance
with a requirement in a compliance notice or an unpaid contributions
notice to pay interest in respect of unpaid relevant contributions.

(2) 35In this section—

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