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Session 2010 - 12
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Other Bills before Parliament

Finance (No. 4) Bill

Finance (No. 4) Bill
The Bill is divided into three volumes. Volume I contains the Clauses to the Bill.
Volume II contains Schedules 1 to 19 to the Bill. Volume III contains Schedules 20
to 38 to the Bill.
EUROPEAN CONVENTION ON HUMAN RIGHTS
Mr Chancellor of the Exchequer has made the following statement under section
19(1)(a) of the Human Rights Act 1998:
In my view the provisions of the Finance (No. 4) Bill are compatible with the
Convention rights.
Bill 325                                                                                                 55/1
Finance (No. 4) Bill
The Bill is divided into three volumes. Volume I contains the Clauses to the Bill.
Volume II contains Schedules 1 to 19 to the Bill. Volume III contains Schedules 20
to 38 to the Bill.
Contents
Part 1
Income tax, corporation tax and capital gains tax
Chapter 1
Income tax and corporation tax charges and rate bands
Income tax
1    Charge for 2012-13 and rates for 2012-13 and subsequent tax years
2    Basic rate limit for 2012-13
3    Personal allowance for 2012-13 for those aged under 65
4    Personal allowances from 2013
Corporation tax
5    Main rate of corporation tax for financial year 2012
6    Charge and main rate for financial year 2013
7    Small profits rate and fractions for financial year 2012
Chapter 2
Income tax: general
Child benefit
8    High income child benefit charge
Anti-avoidance
9    Post-cessation trade or property relief: tax-generated payments or events
10    Property loss relief against general income: tax-generated agricultural
expenses
11    Gains from contracts for life insurance etc
12    Settlements: income originating from settlors other than individuals
Bill 325                                                                                                 55/1
Finance (No. 4) Bill ii
Reliefs
13    Champions League final 2013
14    Cars: security features not to be regarded as accessories
15    Termination payments to MPs ceasing to hold office
16    Employment income exemptions: armed forces
Other provisions
17    Taxable benefits: “the appropriate percentage” for cars for 2014-15
18    Qualifying time deposits
Chapter 3
Corporation tax: general
Support for business
19    Profits arising from the exploitation of patents etc
20    Relief for expenditure on R&D
21    Real estate investment trusts
Anti-avoidance
22    Treatment of the receipt of manufactured overseas dividends
23    Loan relationships: debts becoming held by connected company
24    Companies carrying on businesses of leasing plant or machinery
Insurance
25    Corporate members of Lloyd’s: stop-loss insurance and quota share contracts
26    Abolition of relief for equalisation reserves: general insurers
27    Election to accelerate receipts under s.26(4)
28    Deemed receipts under s.26(4): double taxation relief
29    Transfer of whole or part of the business
30    Abolition of relief for equalisation reserves: Lloyd’s corporate members etc
Miscellaneous
31    Tax treatment of financing costs and income
32    Group relief: meaning of “normal commercial loan”
33    Company distributions
Chapter 4
Capital gains
34    Annual exempt amount
35    Foreign currency bank accounts
36    Collective investment schemes: chargeable gains
37    Roll-over relief
Finance (No. 4) Bill iii
Chapter 5
Miscellaneous
Enterprise incentives
38    Seed enterprise investment scheme
39    Enterprise investment scheme
40    Venture capital trusts
Capital allowances
41    Plant and machinery: restricting exception for manufacturers and suppliers
42    Plant and machinery allowances: anti-avoidance
43    Plant and machinery allowances: fixtures
44    Expenditure on plant and machinery for use in designated assisted areas
45    Allowances for energy-saving plant and machinery
46    Plant and machinery: long funding leases
Foreign income and gains
47    Foreign income and gains
Pensions
48    Employer asset-backed pension contributions etc
Charitable giving etc
49    Gifts to the nation
50    Gift aid: giving through self-assessment return
51    Relief for gift aid and other income of charities etc
52    Meaning of “community amateur sports club”
Other provisions
53    Site restoration payments
54    Changes of accounting policy
Part 2
Insurance companies carrying on long-term business
Chapter 1
Introductory
Outline of provisions of Part
55    Overview
Meaning of “life assurance business”
56    Meaning of “life assurance business”
Finance (No. 4) Bill iv
Meaning of “basic life assurance and general annuity business”
57    Meaning of “basic life assurance and general annuity business”
58    Section 57: meaning of “pension business”
59    Section 57: meaning of “child trust fund business”
60    Section 57: meaning of “individual savings account business”
61    Section 57: meaning of “overseas life assurance business”
62    Section 57: meaning of “protection business”
Meaning of “long-term business” and “PHI business”
63    Meaning of “long-term business” and “PHI business”
Meaning of contract of “insurance” or “long-term insurance” and “insurance company”
64    Meaning of “contract of insurance” and “contract of long-term insurance”
65    Meaning of “insurance company”
Chapter 2
Charge to tax on I - E basis etc
Separate businesses etc
66    Separate businesses for BLAGAB and other long-term business
67    Exception where BLAGAB small part of long-term business
BLAGAB taxed on I - E basis
68    Charge to tax on I - E profit
69    Exclusion of charge under s.35 of CTA 2009 etc
70    Rules for calculating I - E profit or excess BLAGAB expenses
Non-BLAGAB long-term business
71    Charge to tax on profits of non-BLAGAB long-term business
PHI only business
72    Companies carrying on only PHI business
Chapter 3
The I - E basis
Introduction
73    The I - E basis
Definitions of expressions comprising “I”
74    Meaning of “income”
75    Meaning of “BLAGAB chargeable gains” etc
Finance (No. 4) Bill v
Definitions of expressions comprising “E”
76    Meaning of “adjusted BLAGAB management expenses”
77    Section 76: meaning of “ordinary BLAGAB management expenses” etc
78    Section 76: meaning of other expressions
79    Spreading of acquisition expenses
80    Section 79: meaning of “acquisition expenses”
81    Amounts treated as ordinary BLAGAB management expenses
82    Restrictions in relation to ordinary BLAGAB management expenses
83    General annuity business
84    General annuity business: meaning of “steep-reduction annuity” etc
85    General annuity business: payments made in pre-1992 accounting periods
Special rules applying to I - E basis
86    Separate property businesses for BLAGAB etc
87    Losses from property businesses where land held for long-term business
88    Loan relationships, derivative contracts and intangible fixed assets
89    Miscellaneous income and losses
90    Investment return where risk in respect of policy or contract re-insured
91    Regulations under section 90(4): supplementary provision
Deemed I - E receipts
92    Certain BLAGAB trading receipts to count as deemed I - E receipts
Minimum profits charge
93    Minimum profits test
94    Adjustment of I - E profit or excess BLAGAB expenses
Non-BLAGAB allowable losses
95    Use of non-BLAGAB allowable losses to reduce I - E profit
Overseas life insurance companies
96    Expenses referable to exempt FOTRA profits
Chapter 4
Apportionment rules for I - E charge
Introduction
97    Application of Chapter
Allocation of income, losses and expenses
98    Commercial allocation
Allocation of chargeable gains and allowable losses on disposals of assets
99    Application of sections 100 and 101
100    Assets wholly or partly matched to BLAGAB liabilities

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