|
| |
|
(5) | Section 196H of FA 2004 also has effect in relation to contributions paid by |
| |
employers before 29 November 2011 (and, for the purpose of applying |
| |
section 196H in relation to such contributions, assume that sections 196B to |
| |
196D also have effect in relation to such contributions). |
| |
(6) | Section 196I of FA 2004 also has effect in relation to contributions paid by |
| 5 |
employers before 29 November 2011 (and, for the purpose of applying |
| |
section 196I in relation to such contributions, assume that sections 196B to |
| |
196D also have effect in relation to such contributions). |
| |
| |
Transitional provision relating to Part 1 |
| 10 |
Application and interpretation |
| |
4 (1) | This Part of this Schedule applies if— |
| |
(a) | before 29 November 2011, an employer (“E”) pays a contribution |
| |
(“E’s contribution”) under a registered pension scheme (“the |
| |
| 15 |
(b) | at any time, relief is given in respect of E’s contribution, |
| |
(c) | if the reference in paragraph 3(2) above to 29 November 2011 were |
| |
instead a reference to the date on which E’s contribution is paid, E |
| |
would have no entitlement to relief in respect of E’s contribution by |
| |
virtue of section 196B, 196C or 196D of FA 2004, and |
| 20 |
(d) | the asset-backed arrangement is not completed before 29 November |
| |
| |
(2) | For the purposes of sub-paragraph (1)(c) section 196F of FA 2004 is to be |
| |
| |
5 | For the purposes of this Part of this Schedule— |
| 25 |
(a) | terms used in section 196B, 196C or 196D of FA 2004 (as the case may |
| |
be) have the same meaning as in that section, and |
| |
(b) | as necessary, assume that section 196B, 196C or 196D of FA 2004 (as |
| |
the case may be) has effect in relation to E’s contribution. |
| |
6 (1) | This paragraph applies for the purposes of this Part of this Schedule. |
| 30 |
(2) | Sub-paragraph (3) applies if the section which would have applied as |
| |
mentioned in paragraph 4(1)(c) above is section 196B of FA 2004. |
| |
(3) | The asset-backed arrangement is “completed” when neither the lender nor |
| |
any person connected with the lender is any longer entitled under the asset- |
| |
backed arrangement (conditionally or unconditionally) to payments in |
| 35 |
| |
(4) | Sub-paragraph (5) applies if the section which would have applied as |
| |
mentioned in paragraph 4(1)(c) above is section 196C or 196D of FA 2004. |
| |
(5) | The asset-backed arrangement is “completed” when the share in the |
| |
partnership’s profits of the person involved in the relevant change is no |
| 40 |
longer to be determined under the asset-backed arrangement (conditionally |
| |
or unconditionally) by reference (wholly or partly) to payments in respect of |
| |
| |
|
| |
|
| |
|
7 (1) | In this Part of this Schedule “the completion day” means the earliest of the |
| |
| |
(a) | the day on which the asset-backed arrangement is to be completed |
| |
determined as at the beginning of 29 November 2011; |
| |
(b) | the day on which the asset-backed arrangement is actually |
| 5 |
| |
(c) | the day on which a completion event occurs (see sub-paragraphs (2) |
| |
| |
(d) | if an event falling within paragraph 8 occurs, the day on which falls |
| |
the time immediately before the occurrence of the event. |
| 10 |
(2) | Sub-paragraphs (3) and (4) apply if the section which would have applied as |
| |
mentioned in paragraph 4(1)(c) above is section 196B of FA 2004. |
| |
(3) | To determine if a completion event occurs for the purposes of sub-paragraph |
| |
(1)(c) first determine, as at the beginning of 22 February 2012, the |
| |
| 15 |
(a) | the number of payments to be made after the beginning of 22 |
| |
February 2012 to which the lender or a person connected with the |
| |
lender is entitled under the asset-backed arrangement, |
| |
(b) | what the amounts of those payments are to be, and |
| |
(c) | the times at which those payments are to be made. |
| 20 |
(4) | A completion event occurs for the purposes of sub-paragraph (1)(c) if, after |
| |
the beginning of 22 February 2012— |
| |
(a) | whether as a result of a term of the asset-backed arrangement or |
| |
another arrangement or otherwise— |
| |
(i) | there is a change in the number of payments to be made from |
| 25 |
that determined under sub-paragraph (3), |
| |
(ii) | there is a significant change in the amount of a payment to be |
| |
made from that so determined, or |
| |
(iii) | there is a significant change in the time at which a payment is |
| |
to be made from that so determined, |
| 30 |
(b) | a payment determined under sub-paragraph (3) is not made, |
| |
(c) | a payment determined under sub-paragraph (3) is made but its |
| |
amount is significantly different from the amount so determined for |
| |
| |
(d) | a payment determined under sub-paragraph (3) is made but is made |
| 35 |
at a time significantly different from the time so determined for the |
| |
| |
(5) | Sub-paragraphs (6) and (7) apply if the section which would have applied as |
| |
mentioned in paragraph 4(1)(c) above is section 196C or 196D of FA 2004. |
| |
(6) | To determine if a completion event occurs for the purposes of sub-paragraph |
| 40 |
(1)(c) first determine, as at the beginning of 22 February 2012, the |
| |
| |
(a) | what the amount of the share in the partnership’s profits of the |
| |
person involved in the relevant change is to be so far as the share is |
| |
to be determined under the asset-backed arrangement by reference |
| 45 |
to payments made after the beginning of 22 February 2012, |
| |
(b) | the number of drawings to be made from the partnership on account |
| |
of the amount determined under paragraph (a) and the number of |
| |
any other payments to be made after the beginning of 22 February |
| |
|
| |
|
| |
|
2012 to which the person involved in the relevant change, the lender |
| |
or any other person connected with the lender is entitled under the |
| |
asset-backed arrangement, |
| |
(c) | what the amounts of those drawings or other payments are to be, and |
| |
(d) | the times at which those drawings or other payments are to be made. |
| 5 |
(7) | A completion event occurs for the purposes of sub-paragraph (1)(c) if, after |
| |
the beginning of 22 February 2012— |
| |
(a) | whether as a result of a term of the asset-backed arrangement or |
| |
another arrangement or otherwise— |
| |
(i) | there is a change in the number of drawings or other |
| 10 |
payments to be made from that determined under sub- |
| |
| |
(ii) | there is a significant change in the amount of a drawing or |
| |
other payment to be made from that so determined, or |
| |
(iii) | there is a significant change in the time at which a drawing or |
| 15 |
other payment is to be made from that so determined, |
| |
(b) | a drawing or other payment determined under sub-paragraph (6) is |
| |
| |
(c) | a drawing or other payment determined under sub-paragraph (6) is |
| |
made but its amount is significantly different from the amount so |
| 20 |
determined for the drawing or other payment, or |
| |
(d) | a drawing or other payment determined under sub-paragraph (6) is |
| |
made but is made at a time significantly different from the time so |
| |
determined for the drawing or other payment. |
| |
(8) | In sub-paragraphs (3) and (4) and (6) and (7) references to payments are to |
| 25 |
payments of any type including payments in respect of the security or any |
| |
| |
(9) | In sub-paragraphs (6) and (7) references to the making of drawings from the |
| |
partnership include references to the receiving of distributions from the |
| |
| 30 |
(10) | For the purposes of sub-paragraphs (4)(b) to (d) and (7)(b) to (d) it does not |
| |
matter if the event in question is authorised by a term of the asset-backed |
| |
arrangement or results from the occurrence or non-occurrence of another |
| |
event which is so authorised. |
| |
8 (1) | The events falling within this paragraph are those listed in sub-paragraph |
| 35 |
| |
| But an event falls within this paragraph only if it occurs after the beginning |
| |
| |
| |
(a) | if E is a company within the charge to corporation tax when E’s |
| 40 |
contribution is paid, E ceases to be within that charge; |
| |
(b) | if E is a limited liability partnership in relation to which section |
| |
863(1) of ITTOIA 2005 or section 1273(1) of CTA 2009 applies when |
| |
E’s contribution is paid, that provision ceases to apply in relation to |
| |
| 45 |
(c) | if E is a firm for the purposes of ITTOIA 2005 (see section 847) or CTA |
| |
2009 (see section 1257) (other than a limited liability partnership) |
| |
when E’s contribution is paid, the partnership ceases to carry on the |
| |
trade, profession or business in question; |
| |
|
| |
|
| |
|
| |
(i) | if E is a company, E enters administration or the winding up |
| |
| |
(ii) | if E is a partnership, the partnership is dissolved; |
| |
(iii) | if E is an individual, E dies. |
| 5 |
(3) | Sections 10(3) and 12(7) of CTA 2009 apply for the purposes of sub- |
| |
| |
Certain tax consequences not to have effect |
| |
9 (1) | This paragraph applies if— |
| |
(a) | the section which would have applied as mentioned in paragraph |
| 10 |
4(1)(c) above is section 196B of FA 2004, and |
| |
(b) | the asset-backed arrangement would have the relevant effect |
| |
(ignoring this paragraph). |
| |
(2) | The asset-backed arrangement is not to have the relevant effect. |
| |
(3) | The relevant effect is that— |
| 15 |
(a) | an amount of income on which the borrower or a person connected |
| |
with the borrower would otherwise have been charged to tax is not |
| |
| |
(b) | an amount which would otherwise have been brought into account |
| |
in calculating for tax purposes any income of the borrower or of a |
| 20 |
person connected with the borrower is not so brought into account, |
| |
| |
(c) | the borrower or a person connected with the borrower becomes |
| |
entitled to deduct an amount— |
| |
(i) | in calculating income for tax purposes, or |
| 25 |
(ii) | from total income or total profits (as the case may be). |
| |
(4) | But if the borrower is a partnership the relevant effect is that— |
| |
(a) | an amount of income on which a member of the partnership would |
| |
otherwise have been charged to tax is not so charged, |
| |
(b) | an amount which would otherwise have been brought into account |
| 30 |
in calculating for tax purposes any income of a member of the |
| |
partnership is not so brought into account, or |
| |
(c) | a member of the partnership becomes entitled to deduct an |
| |
| |
(i) | in calculating income for tax purposes, or |
| 35 |
(ii) | from total income or total profits (as the case may be). |
| |
(5) | In sub-paragraphs (3) and (4) “amount” means an amount which arises on |
| |
or after 29 November 2011 but on or before the completion day. |
| |
10 (1) | This paragraph applies if— |
| |
(a) | the section which would have applied as mentioned in paragraph |
| 40 |
4(1)(c) above is section 196C of FA 2004, and |
| |
(b) | any relevant change in relation to the partnership would have the |
| |
relevant effect (ignoring this paragraph). |
| |
| |
|
| |
|
| |
|
(a) | Part 9 of ITTOIA 2005 or sections 1259 to 1265 of CTA 2009 (as the |
| |
case may be) is or are to have effect in relation to the transferor, or |
| |
any person connected with the transferor, as if the relevant change in |
| |
relation to the partnership had not occurred, and |
| |
(b) | accordingly, the asset-backed arrangement is not to have the relevant |
| 5 |
| |
(3) | The relevant effect is that— |
| |
(a) | an amount of income on which the transferor, or the person |
| |
connected with the transferor, would otherwise have been charged |
| |
to tax is not so charged, |
| 10 |
(b) | an amount which would otherwise have been brought into account |
| |
in calculating for tax purposes any income of the transferor, or the |
| |
person connected with the transferor, is not so brought into account, |
| |
| |
(c) | the transferor, or the person connected with the transferor, becomes |
| 15 |
entitled to deduct an amount— |
| |
(i) | in calculating income for tax purposes, or |
| |
(ii) | from total income or total profits (as the case may be). |
| |
(4) | In sub-paragraph (3) “amount” means an amount which arises on or after 29 |
| |
November 2011 but on or before the completion day. |
| 20 |
(5) | In deciding whether sub-paragraph (1)(b) is met assume that amounts of |
| |
income equal to the payments mentioned in section 196C(2)(g) of FA 2004 |
| |
were payable to the partnership before the relevant change in relation to it |
| |
| |
11 (1) | This paragraph applies if— |
| 25 |
(a) | the section which would have applied as mentioned in paragraph |
| |
4(1)(c) above is section 196D of FA 2004, and |
| |
(b) | any relevant change in relation to the partnership would have the |
| |
relevant effect (ignoring this paragraph). |
| |
(2) | The relevant effect is that— |
| 30 |
(a) | an amount of income on which a relevant member would otherwise |
| |
have been charged to tax is not so charged, |
| |
(b) | an amount which would otherwise have been brought into account |
| |
in calculating for tax purposes any income of a relevant member is |
| |
not so brought into account, or |
| 35 |
(c) | a relevant member becomes entitled to deduct an amount— |
| |
(i) | in calculating income for tax purposes, or |
| |
(ii) | from total income or total profits (as the case may be). |
| |
(3) | A relevant member is a person who— |
| |
(a) | was a member of the partnership immediately before the relevant |
| 40 |
change in relation to it occurred, and |
| |
| |
(4) | In sub-paragraph (2) “amount” means an amount which arises on or after 29 |
| |
November 2011 but on or before the completion day. |
| |
(5) | If this paragraph applies— |
| 45 |
(a) | Part 9 of ITTOIA 2005 or sections 1259 to 1265 of CTA 2009 (as the |
| |
case may be) is or are to have effect in relation to any relevant |
| |
|
| |
|
| |
|
member as if the relevant change in relation to the partnership had |
| |
| |
(b) | accordingly, the asset-backed arrangement is not to have the relevant |
| |
| |
(6) | In deciding whether sub-paragraph (1)(b) is met assume that amounts of |
| 5 |
income equal to the payments mentioned in section 196D(2)(e) of FA 2004 |
| |
were payable to the partnership before the relevant change in relation to it |
| |
| |
| |
12 (1) | For the purposes of paragraphs 13 and 14— |
| 10 |
(a) | amount A is the total amount of relief given in respect of E’s |
| |
| |
(b) | amount B is the total of the following amounts— |
| |
(i) | any amounts of income which are charged to tax by virtue of |
| |
paragraph 9, 10 or 11 above (as the case may be), |
| 15 |
(ii) | any amounts brought into account in calculating income for |
| |
tax purposes by virtue of paragraph 9, 10 or 11 above (as the |
| |
case may be) (so far as not reflected in sub-paragraph (i)), and |
| |
(iii) | any amounts stopped from being the subject of an income |
| |
deduction by virtue of paragraph 9, 10 or 11 above (as the |
| 20 |
case may be) (so far as not reflected in sub-paragraph (i) or |
| |
| |
(c) | subject to sub-paragraph (7), amount C is the amount of the payment |
| |
mentioned in sub-paragraph (4) or (6) (as the case may be) so far as |
| |
| 25 |
(i) | is made under the asset-backed arrangement on the |
| |
| |
(ii) | is not reflected in amount B, |
| |
(iii) | is not the subject of an income deduction, and |
| |
(iv) | is not a contribution paid by E under the relevant scheme but |
| 30 |
nevertheless becomes (directly or indirectly) part of the sums |
| |
held for the purposes of the relevant scheme. |
| |
(2) | In sub-paragraph (1) “income deduction” means a deduction to which any |
| |
| |
(a) | in calculating income for tax purposes, or |
| 35 |
(b) | from total income or total profits. |
| |
(3) | Sub-paragraph (4) applies if the section which would have applied as |
| |
mentioned in paragraph 4(1)(c) above is section 196B of FA 2004. |
| |
(4) | The payment referred to in sub-paragraph (1)(c) is the payment (if any) |
| |
which the borrower, or a person connected with the borrower, makes to the |
| 40 |
lender, or a person connected with the lender, in order to acquire— |
| |
| |
(b) | any asset substituted for the security under the asset-backed |
| |
| |
(5) | Sub-paragraph (6) applies if the section which would have applied as |
| 45 |
mentioned in paragraph 4(1)(c) above is section 196C or 196D of FA 2004. |
| |
|
| |
|
| |
|
(6) | The payment referred to in sub-paragraph (1)(c) is the payment (if any) |
| |
which E, or a person connected with E, makes to the lender, or a person |
| |
connected with the lender, in order to reverse the relevant change in relation |
| |
| |
(7) | Amount C is to be taken to be nil if— |
| 5 |
(a) | the completion day is on or after 22 February 2012, |
| |
(b) | on or before the completion day, a commitment (whether or not |
| |
legally enforceable and whether or not subject to any conditions) is |
| |
given (directly or indirectly) to a relevant person, and |
| |
| 10 |
(i) | is a commitment to secure that a person receives money or |
| |
| |
(ii) | is linked (directly or indirectly) to the making of the payment |
| |
| |
(8) | In sub-paragraph (7)(b) “relevant person” means— |
| 15 |
| |
(b) | a person connected with E; |
| |
(c) | a person acting (directly or indirectly) at the direction or request, or |
| |
with the agreement, of E or a person connected with E; |
| |
(d) | a person chosen (directly or indirectly) by E or a person connected |
| 20 |
| |
(e) | a person within a class of person chosen (directly or indirectly) by E |
| |
or a person connected with E; |
| |
| |
(9) | But “relevant person” does not include— |
| 25 |
(a) | the persons who from time to time are the trustees of the relevant |
| |
| |
(b) | the persons who from time to time are the persons controlling the |
| |
management of the relevant scheme, |
| |
| in their capacity as such. |
| 30 |
13 (1) | This paragraph applies if amount A exceeds the sum of amounts B and C. |
| |
(2) | The amount of the excess is treated as follows as relevant— |
| |
(a) | for corporation tax purposes, the amount is treated as if it were a |
| |
profit which E has in respect of E’s loan relationships chargeable to |
| |
corporation tax under section 299 of CTA 2009 for E’s accounting |
| 35 |
period in which the beginning of the completion day falls, or |
| |
(b) | for income tax purposes, the amount is treated as if it were an |
| |
amount of income of E chargeable to income tax under Chapter 8 of |
| |
Part 5 of ITTOIA 2005 for the tax year in which the beginning of the |
| |
| 40 |
14 | If the sum of amounts B and C exceeds amount A— |
| |
(a) | E is to be treated as having paid a contribution under the relevant |
| |
scheme in respect of any individual of an amount equal to the excess, |
| |
(b) | the contribution is to be treated as having been paid at the beginning |
| |
of the completion day, and |
| 45 |
(c) | E is to be given relief as provided for by section 196 of FA 2004 |
| |
| |
|
| |
|