Session 2012 - 13
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Schedule 15 — Relief in respect of gift aid and other income

369

 

     (1B)  

This paragraph also does not apply to a claim by a company for

repayment of income tax deducted at source from income which

is exempt from tax by virtue of—

(a)   

section 486 of the Corporation Tax Act 2010 (investment

income and non-trading profits from loan relationships),

5

(b)   

section 487 of that Act (public revenue dividends),

(c)   

section 488 of that Act (certain miscellaneous income),

(d)   

section 489 of that Act (income from estates in

administration), or

(e)   

section 664 of that Act (interest and gift aid income:

10

community amateur sports clubs).

     (1C)  

This paragraph also does not apply to a claim by a company for an

amount to be exempt from tax by virtue of—

(a)   

section 472 of the Corporation Tax Act 2010 (gifts

qualifying for gift aid relief: charitable companies),

15

(b)   

section 475 of that Act (gifts qualifying for gift aid relief:

eligible bodies), or

(c)   

any of the provisions mentioned in sub-paragraph (1B).”

16         

In consequence of the amendments made by paragraphs 14 and 15, in

Schedule 8 to FA 2010 omit paragraph 6.

20

Application

17    (1)  

The amendments made by paragraphs 1 to 4 and 7 are treated as having

come into force on 8 April 2010.

      (2)  

The amendments made by paragraphs 6, 8 and 10 are treated as having

effect—

25

(a)   

for corporation tax purposes, for accounting periods ending on or

after 1 April 2010, and

(b)   

for income tax purposes, for the tax year 2010-11 and subsequent tax

years.

      (3)  

The amendment made by paragraph 9 has effect in relation to income tax

30

repaid on gifts made or income received on or after 6 April 2006.

           

Accordingly, any reference in that amendment to a provision of ITA 2007 is

to be read as including a reference to any corresponding earlier enactment

which was rewritten in that provision.

      (4)  

An amendment corresponding to that made by paragraph 10(2) is to be

35

treated as having been made in ICTA and having had effect in relation to—

(a)   

gifts made by individuals to charitable companies and eligible

bodies on or after 6 April 2000 which were not covenanted payments,

(b)   

covenanted payments falling to be made by individuals to charitable

companies and eligible bodies on or after that date, and

40

(c)   

payments made to community amateur sports clubs on or after 6

April 2002.

      (5)  

An amendment corresponding to that made by paragraph 10(3) is to be

treated as having been made in ICTA and having had effect in relation to

payments of income made on or after 1 April 2006.

45

 
 

Finance Bill
Schedule 16 — Part 2: minor and consequential amendments
Part 1 — Amendments of ICTA

370

 

      (6)  

The amendments made by paragraphs 11 to 16 have effect in relation to

claims whenever made.

Schedule 16

Section 146

 

Part 2: minor and consequential amendments

Part 1

5

Amendments of ICTA

1          

ICTA is amended as follows.

2          

Omit section 76 (expenses of insurance companies).

3          

Omit section 76ZA (payments for restrictive undertakings).

4          

Omit section 76ZB (seconded employees).

10

5          

Omit sections 76ZC to 76ZE (counselling and retraining expenses).

6          

Omit sections 76ZF to 76ZJ (redundancy payments etc).

7          

Omit section 76ZK (contributions to local enterprise organisations or urban

regeneration companies).

8          

Omit sections 76ZL and 76ZM (unpaid remuneration).

15

9          

Omit section 76ZN (car hire).

10         

In section 95ZA(3) (taxation of UK distributions received by insurance

companies), for “life assurance business” substitute “business in relation to

which section 111 of the Finance Act 2012 applies”.

11         

Omit section 431 (interpretative provisions relating to insurance

20

companies).

12         

Omit section 431ZA (election for assets not be foreign business assets).

13         

Omit section 431A (amendment of Chapter etc).

14         

Omit section 431B (meaning of “pension business”).

15         

Omit section 431BA (meaning of “child trust fund business”).

25

16         

Omit section 431BB (meaning of “individual savings account business”).

17         

Omit section 431C (meaning of “life reinsurance business”).

18         

Omit sections 431D and 431E (meaning of “overseas life assurance business”

etc).

19         

Omit section 431EA (meaning of “gross roll-up business”).

30

20         

Omit section 431F (meaning of “basic life assurance and general annuity

business”).

21         

Omit section 431G (company carrying on life assurance business).

 
 

Finance Bill
Schedule 16 — Part 2: minor and consequential amendments
Part 1 — Amendments of ICTA

371

 

22         

Omit section 431H (company carrying on life assurance business and other

insurance business).

23         

Omit section 432YA (PHI business — adjustment consequent of change in

Insurance Prudential Sourcebook).

24         

Omit section 432ZA (linked assets).

5

25         

Omit section 432A (apportionment of income and gains).

26         

Omit section 432AA (property businesses).

27         

Omit section 432AB (losses from property businesses).

28         

Omit sections 432B to 432G (apportionment of receipts brought into

account).

10

29         

Omit section 434 (franked investment income etc).

30         

Omit section 434A (computation of losses and limitation on relief).

31         

Omit sections 434AZA to 434AZC (reduced loss relief for additions to non-

profit funds).

32         

Omit section 436A (gross roll-up business: separate charge on profits).

15

33         

Omit section 436B (gains referable to gross-roll up business not to be

chargeable gains).

34         

Omit sections 437 and 437A (general annuity business).

35         

Omit section 438 (pension business: exemption from tax).

36         

Omit section 440 (transfers of assets etc).

20

37         

Omit section 440A (securities).

38         

Omit section 440B (modifications where tax charged under s.35 of CTA

2009).

39         

Omit section 440C (modifications for change of tax basis).

40         

Omit section 440D (modifications in relation to BLAGAB group reinsurers).

25

41         

Omit section 442 (overseas business of UK companies).

42         

Omit section 442A (taxation of investment return where risk reinsured).

43         

Omit sections 444A to 444AED (transfers of business).

44         

Omit sections 444AF to 444AL (surpluses of mutual and former mutual

businesses).

30

45         

In Schedule 15 (qualifying policies), in paragraph 24(3)(a), for “section

431(2)” substitute “section 56 of the Finance Act 2012”.

46         

Omit Schedule 19ABA (modifications in relation to BLAGAB group

reinsurers).

 
 

Finance Bill
Schedule 16 — Part 2: minor and consequential amendments
Part 3 — Amendments of other Acts

372

 

Part 2

Amendments of FA 1989

47         

FA 1989 is amended as follows.

48         

In section 67(2) (employee share ownership trusts), for paragraph (b) (and

the “or” before that paragraph) substitute—

5

“(b)   

if the company is an investment company, shall be treated as

expenses of management, or

(c)   

if the company is a company in relation to which the I - E

rules apply and the sum is referable, in accordance with

Chapter 4 of Part 2 of the Finance Act 2012, to the company’s

10

basic life assurance and general annuity business, shall be

treated for the purposes of section 76 of that Act as ordinary

BLAGAB management expenses of the company.”

49         

Omit section 82 (calculation of profits: bonuses etc).

50         

Omit section 82A (calculation of profits: policy holders’ tax).

15

51         

Omit section 82B (unappropriated surplus on valuation).

52         

Omit sections 82D to 82F (treatment of profits: life assurance — adjustment

consequent on change in Insurance Prudential Sourcebook).

53         

Omit section 83 (receipts to be taken into account).

54         

Omit section 83XA (structural assets).

20

55         

Omit sections 83YA and 83YB (changes in value of assets brought into

account: non-profit companies).

56         

Omit sections 83YC to 83YF (FAFTS).

57         

Omit section 83A (meaning of “brought into account”).

58         

Omit section 83B (changes in recognised accounts: attribution of amounts

25

carried forward under s.432F of ICTA).

59         

Omit section 85 (charge of certain receipts of basic life assurance business).

60         

Omit section 85A (excess adjusted life assurance trade profits).

61         

Omit section 86 (spreading of relief for acquisition expenses).

62         

Omit section 88 (corporation tax: policy holders’ share of profits).

30

63         

Omit section 89 (policy holders’ share of profits).

Part 3

Amendments of other Acts

Finance Act 1950

64         

FA 1950 is amended as follows.

35

65         

In section 39(3)(b)(ii) (treatment for taxation purposes of enemy debts etc

written off during the war), for “an expenses deduction for the purposes of

 
 

Finance Bill
Schedule 16 — Part 2: minor and consequential amendments
Part 3 — Amendments of other Acts

373

 

Step 1 of section 76(7) of the Income and Corporation Taxes Act 1988”

substitute “ordinary BLAGAB management expenses for the purposes of

section 76 of the Finance Act 2012”.

Taxes Management Act 1970

66         

TMA 1970 is amended as follows.

5

67    (1)  

Section 98 (special returns) is amended as follows.

      (2)  

In the first column of the Table—

(a)   

omit the entry relating to regulations under section 431E(1) of ICTA,

and

(b)   

at the end insert—

10

“regulations under section 61(5) of the Finance Act

2012”.

      (3)  

In the second column of the Table—

(a)   

omit the entry relating to section 76ZE(4) of ICTA,

(b)   

omit the entry relating to regulations under section 431E(1) of ICTA,

15

and

(c)   

at the end insert—

“regulations under section 61(5) of the Finance Act

2012”.

Inheritance Tax Act 1984

20

68         

IHTA 1984 is amended as follows.

69         

In section 59(3)(b) (qualifying interest in possession), for “Chapter I of Part

XII of the Taxes Act 1988” substitute “Part 2 of the Finance Act 2012”.

Finance Act 1991

70         

FA 1991 is amended as follows.

25

71         

In paragraph 16(1) of Schedule 7 (transitional relief for old general annuity

contracts), for the words from “computation” to “1988” substitute

“application of the I - E rules in relation to an accounting period of an

insurance company, an amount equal to the lesser of the following amounts

is to be treated (if it is not nil) for the purposes of section 76 of the Finance

30

Act 2012 as a deemed BLAGAB management expense for the accounting

period”.

Taxation of Chargeable Gains Act 1992

72         

TCGA 1992 is amended as follows.

73         

In section 10B (non-resident company with United Kingdom permanent

35

establishment), after subsection (3) insert—

“(3A)   

This section applies to an overseas life insurance company in the case

of its long-term business with the omission from subsection (1)(b) of

the words “situated in the United Kingdom and”.”

74         

In section 100(2B)(a) (exemption for authorised unit trusts etc), for “section

40

431 of the Taxes Act” substitute “section 65 of the Finance Act 2012”.

 
 

Finance Bill
Schedule 16 — Part 2: minor and consequential amendments
Part 3 — Amendments of other Acts

374

 

75         

In section 140C (transfer or division of non-UK business), omit subsection

(8).

76         

In section 151I(1) (meaning of “financial institution”)—

(a)   

in paragraph (g), for “section 431(2) of ICTA” substitute “section 65

of the Finance Act 2012”, and

5

(b)   

in paragraph (h), for “section 431(2) of ICTA” substitute “section

139(1) of the Finance Act 2012”.

77    (1)  

Section 171C (elections under s.171A: insurance companies) is amended as

follows.

      (2)  

In subsection (2), for “section 440(3) of the Taxes Act” substitute “section 118

10

of the Finance Act 2012”.

      (3)  

In subsection (3)(b), for “part of that company’s long-term insurance fund”

substitute “held for the purposes of the company’s long-term business”.

      (4)  

In subsection (4), for the words from “as arising” to the end substitute “for

the purposes of section 210A (ring-fencing of losses) as a non-BLAGAB

15

chargeable gain or (as the case may be) a non-BLAGAB allowable loss”.

      (5)  

Omit subsection (5).

78         

In section 185 (deemed disposal of assets on company ceasing to be UK

resident), after subsection (4) insert—

“(4A)   

Subsection (4) applies to an overseas life insurance company in the

20

case of its long-term business with—

(a)   

the omission from paragraph (a) of the words “are situated in

the United Kingdom and”; and

(b)   

the omission from paragraph (b) of the words “are so situated

and”.”

25

79         

In section 204(10)(a) (policies of insurance and non-deferred annuities), for

“Chapter 1 of Part 12 of the Taxes Act” substitute “section 56(3) of the

Finance Act 2012”.

80    (1)  

Section 210A (ring-fencing of losses) is amended as follows.

      (2)  

For subsection (2) substitute—

30

“(2)   

Non-BLAGAB allowable losses accruing to an insurance company

are allowable as a deduction from the shareholders’ share (if any) of

the BLAGAB chargeable gains accruing to the company (but are not

otherwise allowable as a deduction from the BLAGAB chargeable

gains accruing to the company).”

35

      (3)  

For subsections (10) and (10A) substitute—

“(10)   

For the purposes of this section the “shareholders’ share” of

BLAGAB chargeable gains or BLAGAB allowable losses accruing to

an insurance company in an accounting period is determined as

follows.

40

(10A)   

If the company has an I - E profit for the accounting period—

(a)   

find the percentage (including, if applicable, nil) of the I - E

profit that is not represented by the policyholders’ share of

 
 

Finance Bill
Schedule 16 — Part 2: minor and consequential amendments
Part 3 — Amendments of other Acts

375

 

that profit as determined in accordance with section 103 of

the Finance Act 2012, and

(b)   

then multiply that percentage by the amount of the BLAGAB

chargeable gains or BLAGAB allowable losses.

   

The result is the shareholder’s share of the BLAGAB chargeable

5

gains or BLAGAB allowable losses.

(10B)   

If the company does not have an I - E profit for the accounting period,

the shareholders’ share of the BLAGAB chargeable gains or

BLAGAB allowable losses is nil.

(10C)   

In determining for the purposes of subsections (10A) and (10B)

10

whether or not the company has an I - E profit for an accounting

period, assume that non-BLAGAB allowable losses cannot be

deducted to any extent from BLAGAB chargeable gains (and,

accordingly, assume that section 95 is not included in the Finance Act

2012).”

15

      (4)  

In subsection (11)—

(a)   

for “the policy holders’ share” substitute “the shareholders’ share”,

and

(b)   

for “subsection (10)” substitute “subsections (10) to (10C)”.

      (5)  

Omit subsection (12).

20

      (6)  

In subsection (13)—

(a)   

in the definitions of “BLAGAB allowable losses” and “BLAGAB

chargeable gains”, for “(in accordance with section 432A of the Taxes

Act)” substitute “, in accordance with Chapter 4 of Part 2 of the

Finance Act 2012,”, and

25

(b)   

omit the definitions of “the relevant profits” and “the policy holders’

share of the relevant profits” (together with the “and” before the

definition of “the relevant profits”).

81    (1)  

Section 210B (disposal and acquisition of section 440A securities) is

amended as follows.

30

      (2)  

In subsection (1)—

(a)   

in the opening words, for “section 440A securities” (in both places)

substitute “section 119 or 120 securities”, and

(b)   

in paragraphs (a) and (b), for “chargeable section 440A holding”

substitute “chargeable section 119 or 120 holding”.

35

      (3)  

In subsection (7)(a), for “linked assets” substitute “assets wholly matched to

BLAGAB liabilities and the assets are”.

      (4)  

For subsection (8) substitute—

“(8)   

In this section—

“BLAGAB internal linked fund” means an internal linked fund

40

all the assets appropriated to which are matched wholly to

BLAGAB liabilities,

“chargeable section 119 or 120 holding” means a holding which

is a separate holding as a result of section 119(1)(a), (c) or (d)

or section 120(1)(a), (c) or (d) of the Finance Act 2012 (and

45

section 121(1) and (2) of that Act),

 
 

 
previous section contents continue
 

© Parliamentary copyright
Revised 9 May 2012