Finance (No. 4) Bill

Session 2010 - 12
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Other Bills before Parliament

Finance (No. 4) Bill

Finance (No. 4) Bill
Part 1 — Income tax, corporation tax and capital gains tax
Chapter 5 — Miscellaneous
26

Chargeable Gains Act 1992 as appear to the Treasury to be
appropriate.”
(3)
Accordingly, section 43(3) of FA 2002 is repealed.
(4)
The amendment made by subsection (1) has effect where the disposal of the old
assets (or an interest in them) or the acquisition of the new assets (or an interest
5
in them) is on or after 1 January 2009.
Chapter 5
Miscellaneous
Enterprise incentives
38
Seed enterprise investment scheme
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Schedule 6 contains provision for and in connection with the seed enterprise
investment scheme (including provision for re-investment relief under TCGA
1992).
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Enterprise investment scheme
Schedule 7 contains provision about the enterprise investment scheme
15
(including provision about deferral relief under Schedule 5B to TCGA 1992).
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Venture capital trusts
Schedule 8 contains provision about venture capital trusts.
Capital allowances
41
Plant and machinery: restricting exception for manufacturers and suppliers
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(1)
In section 230 of CAA 2001 (exception for manufacturers and suppliers), in
subsection (1), for “restrictions in sections 217 and 218 do” substitute
“restriction in section 218 does”.
(2)
The amendment made by subsection (1) has effect in relation to expenditure of
B’s that is incurred on or after 12 August 2011 (regardless of when the relevant
25
transaction was entered into).
(3)
But, in relation to any such expenditure that is incurred before the next
amendment date, the restriction in section 217 of CAA 2001 does not apply
(despite subsection (1)) if B can show that the condition in subsection (4) is met.
(4)
The condition is that, had the amendments made by paragraphs 1 to 7 of
30
Schedule 9 had effect in relation to the expenditure, the restriction in section
217 would not have applied.
(5)
“The next amendment date” means the date defined in paragraph 9 of
Schedule 9 as the start date.

Finance (No. 4) Bill
Part 1 — Income tax, corporation tax and capital gains tax
Chapter 5 — Miscellaneous
27

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Plant and machinery allowances: anti-avoidance
Schedule 9 contains provision to counter abuse of Part 2 of CAA 2001.
43
Plant and machinery allowances: fixtures
Schedule 10 contains provision about plant and machinery allowances in
respect of fixtures.
5
44
Expenditure on plant and machinery for use in designated assisted areas
Schedule 11 contains provision about first-year allowances in respect of
expenditure on plant and machinery for use in designated assisted areas.
45
Allowances for energy-saving plant and machinery
(1)
Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.
10
(2)
In section 45A (expenditure on energy-saving plant or machinery), after
subsection (1) insert—
“(1A)
This section is subject to section 45AA (payments under Energy Act
2008 schemes).”
(3)
After that section insert—
15
“45AA
Section 45A exclusion: payments under Energy Act 2008 schemes
(1)
Expenditure incurred on or after the relevant date on plant or
machinery is to be treated as never having been first-year qualifying
expenditure under section 45A if—
(a)
a payment is made, or another incentive is given, under a
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scheme established by virtue of section 41 of the Energy Act
2008 (feed-in tariffs) in respect of electricity generated by the
plant or machinery, or
(b)
a payment is made, or another incentive is given, under a
scheme established by regulations under section 100 of that Act
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(renewable heat incentives) in respect of heat generated, or gas
or fuel produced, by the plant or machinery.
(2)
All such assessments and adjustments of assessments are to be made as
are necessary to give effect to subsection (1).
(3)
If a person who has made a tax return becomes aware that, after making
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it, anything in it has become incorrect because of the operation of this
section, the person must give notice to an officer of Revenue and
Customs specifying how the return needs to be amended.
(4)
The notice must be given within 3 months beginning with the day on
which the person first became aware that anything in the return had
35
become incorrect because of the operation of this section.
(5)
Except as provided by subsection (6), the relevant date is—
(a)
for corporation tax purposes, 1 April 2012, and
(b)
for income tax purposes, 6 April 2012.
(6)
In the case of expenditure incurred on a combined heat and power
40
system, the relevant date in relation to subsection (1)(b) is—

Finance (No. 4) Bill
Part 1 — Income tax, corporation tax and capital gains tax
Chapter 5 — Miscellaneous
28

(a)
for corporation tax purposes, 1 April 2014, and
(b)
for income tax purposes, 6 April 2014.”
(4)
In section 104A (special rate expenditure)—
(a)
in subsection (1), omit the “and” after paragraph (e), and after
paragraph (f) insert “, and
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(g)
expenditure incurred on or after the third relevant date
on the provision of solar panels.”, and
(b)
after subsection (3) insert—
“(3A)
The third relevant date is—
(a)
for corporation tax purposes, 1 April 2012, and
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(b)
for income tax purposes, 6 April 2012.”
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Plant and machinery: long funding leases
(1)
Section 70E of CAA 2001 (disposal events and disposal values) is amended as
follows.
(2)
In subsection (2A), for the definition of “R” substitute—
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“R is the sum of—
(a)
any relevant rebate (see subsections (2F) and (2G)), and
(b)
any other relevant lease-related payment (see
subsections (2FA) and (2G)).”
(3)
After subsection (2F) insert—
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“(2FA)
“Relevant lease-related payment” means any payment which—
(a)
is payable at any time for the benefit (directly or indirectly) of
the lessee or a person connected with the lessee,
(b)
is connected with the long funding lease, or with any
arrangement connected with that lease, and
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(c)
is not—
(i)
an initial payment or any other payment made to the
lessor by the lessee under the lease, or
(ii)
a payment made to the lessor by the lessee under a
guarantee of any residual amount (as defined in section
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70YE),

if, and to the extent that, the payment is not otherwise brought into
account for tax purposes as income or a disposal receipt by the person
for whom the benefit is payable (or would not be if that person were
within the charge to tax).
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(2FB)
For the purposes of subsection (2FA) “payment” includes the provision
of any benefit, the assumption of any liability and any other transfer of
money’s worth; and “payable” is to be construed accordingly.”
(4)
For subsection (2G) substitute—
“(2G)
In the case of a lease that is not a transaction at arm’s length, “relevant
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rebate” and “relevant lease-related payment” include any amount that
would reasonably be expected to have fallen within subsection (2F) or,
as the case may be, (2FA) if the lease had been such a transaction.”

Finance (No. 4) Bill
Part 1 — Income tax, corporation tax and capital gains tax
Chapter 5 — Miscellaneous
29

(5)
The amendments made by this section have effect in relation to cases where the
relevant event occurs on or after 21 March 2012.
Foreign income and gains
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Foreign income and gains
Schedule 12 contains provision about the taxation of foreign income and gains.
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Pensions
48
Employer asset-backed pension contributions etc
Schedule 13 contains—
(a)
provision relating to employers who pay contributions under
registered pension schemes and arrangements for which their
10
contributions are used (directly or indirectly), and
(b)
provision amending Chapter 5B of Part 13 of ITA 2007 and Chapter 2 of
Part 16 of CTA 2010 (finance arrangements).
Charitable giving etc
49
Gifts to the nation
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Schedule 14 contains provision for a person’s tax liability to be reduced in
return for giving pre-eminent property to the nation.
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Gift aid: giving through self-assessment return
(1)
Section 429 of ITA 2007 (gift aid: giving through self-assessment return) is
repealed.
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(2)
The following repeals are made in consequence of subsection (1)—
(a)
in section 426 of ITA 2007 (election by donor: gift treated as made in
previous tax year), omit subsection (8),
(b)
in section 538 of that Act (requirement to make claim), omit subsection
(3),
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(c)
in section 133 of FA 2008 (set-off etc where right to be paid a sum has
been transferred), in subsection (8)(a), omit the words from “except” to
the end,
(d)
in section 472 of CTA 2010 (gifts qualifying for gift aid relief:
corporation tax liability and exemption), omit subsection (5), and
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(e)
in section 475 of that Act (gifts qualifying for gift aid relief: income tax
treated as paid and exemption), omit subsection (7).
(3)
Accordingly, the following provisions are also repealed—
(a)
section 130(9) of FA 2008, and
(b)
paragraph 3(4) of Schedule 8 to FA 2010.
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(4)
The repeals made by this section are treated as having come into force on 6
April 2012.