Session 2012 - 13
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Finance (No. 2) Bill


Finance (No. 2) Bill
Schedule 19 — Tax mismatch schemes

314

 

938V    

  Priority

   

For the purposes of this Part the following provisions are to be

treated as of no effect—

(a)   

section 441 of CTA 2009 (loan relationships for unallowable

purposes);

5

(b)   

section 690 of that Act (derivative contracts for unallowable

purposes);

(c)   

Part 6 of TIOPA 2010 (tax arbitrage);

(d)   

Part 7 of that Act (tax treatment of financing costs and

income).”

10

4          

In Schedule 4 (index of defined expressions), at the appropriate places

insert—

 

“economic loss (in Part 21BA)

section 938S”

 
 

“economic profit (in Part 21BA)

section 938S”

 
 

“relevant tax advantage (in Part 21BA)

section 938R”

 

15

 

“relevant tax disadvantage (in Part 21BA)

section 938R”

 
 

“scheme (in Part 21BA)

section 938U”

 
 

“scheme loss (in Part 21BA)

section 938Q”

 
 

“the scheme period (in Part 21BA)

section 938R”

 
 

“scheme profit (in Part 21BA)

section 938Q”.

 

20

 

“a tax mismatch scheme (in Part 21BA)

section 938P”.

 

5          

In section 231(8) of TIOPA 2010 (tax arbitrage: overview), for the words from

“section” to the end substitute “sections 938N and 938V of CTA 2010 (this

Part treated as of no effect for the purposes of Parts 21B and 21BA of CTA

2010 (group mismatch and tax mismatch schemes)).”

25

6     (1)  

The amendments made by this Schedule have effect in relation to schemes

entered into at any time (including any time before the commencement

date).

      (2)  

But section 938O in Part 21BA of CTA 2010 (as inserted by paragraph 3 of

this Schedule) does not apply to—

30

(a)   

scheme losses or profits that relate to a time before the

commencement date, or

(b)   

scheme profits that relate to a time on or after that date but are made

in relation to a scheme entered into before that date.

      (3)  

In this paragraph “the commencement date” means 5 December 2012.

35

 
 

Finance (No. 2) Bill
Schedule 20 — Community amateur sports clubs

315

 

Schedule 20

Section 45

 

Community amateur sports clubs

Introductory

1          

Chapter 9 of Part 13 of CTA 2010 (community amateur sports clubs) is

amended as follows.

5

Meaning of “open to the whole community”

2     (1)  

Section 659 (meaning of “open to the whole community”) is amended as

follows.

      (2)  

In subsection (1), for paragraph (c) substitute—

“(c)   

the costs associated with membership of the club for any year

10

do not represent a significant obstacle to membership of the

club, use of its facilities or full participation in its activities

(see subsection (2A)).”

      (3)  

After subsection (2) insert—

“(2A)   

For the purposes of subsection (1)(c) the costs associated with

15

membership of a club for any year represent a significant obstacle to

membership of the club, use of its facilities or full participation in its

activities if—

(a)   

those costs exceed the amount specified for the year for the

purposes of this subsection in regulations made by the

20

Treasury, and

(b)   

the club has not made such arrangements as are necessary to

secure that those costs do not represent such an obstacle.

(2B)   

The Treasury may by regulations make provision supplementing

subsection (2A), including—

25

(a)   

provision as to what constitutes full participation in a club’s

activities;

(b)   

provision as to costs that are, or are not, to be regarded as the

costs associated with membership of a club;

(c)   

provision about calculating the amount of the costs

30

associated with membership of a club for any year.

(2C)   

The provision that may be made by regulations under this section

includes—

(a)   

different provision for different purposes, and

(b)   

provision having effect in relation to times before the

35

regulations are made.

(2D)   

Section 1171(4) (orders and regulations subject to negative resolution

procedure) does not apply to any regulations made under this

section if a draft of the statutory instrument containing them has

been laid before, and approved by a resolution of, the House of

40

Commons.”

 
 

Finance (No. 2) Bill
Schedule 20 — Community amateur sports clubs

316

 

      (4)  

For subsection (3) substitute—

“(3)   

A club is not prevented from being “open to the whole community”

for the purposes of section 658 merely because it charges different

fees for different descriptions of person.”

Meaning of “organised on an amateur basis”

5

3     (1)  

Section 660 (meaning of “organised on an amateur basis”) is amended as

follows.

      (2)  

In subsection (1), omit the “and” after paragraph (b) and after that paragraph

insert—

“(ba)   

it does not exceed the limit on paid players (see subsection

10

(5A)), and”.

      (3)  

In subsection (4)(g)—

(a)   

after “travel” insert “or subsistence”, and

(b)   

for “travelling to away matches” substitute “in connection with away

matches”.

15

      (4)  

After subsection (4) insert—

“(4A)   

In subsection (4)(g) “subsistence expenses” means expenses on food,

drink and temporary living accommodation.”

      (5)  

After subsection (5) insert—

“(5A)   

A club does not exceed the limit on paid players for the purposes of

20

subsection (1) if—

(a)   

the number of persons paid to play for the club does not at

any time exceed the specified maximum,

(b)   

the number of such persons in any year does not exceed the

specified maximum for that year,

25

(c)   

the amount paid to any such person in any year in respect of

activities undertaken for the club does not exceed the

specified maximum for that year, and

(d)   

the total amount paid to such persons in any year in respect

of activities undertaken for the club does not exceed the

30

specified maximum for that year.

   

“Specified” means specified in regulations made by the Treasury.

(5B)   

The Treasury may by regulations make provision supplementing

subsection (5A), including—

(a)   

provision as when a person is, or is not, to be regarded as a

35

person paid to play for a club, and

(b)   

provision about calculating for the purposes of subsection

(5A) the amount paid to such a person.”

      (6)  

After subsection (7) insert—

“(8)   

The Treasury may by regulations make further provision as to when

40

a club is “organised on an amateur basis” for the purposes of section

658.

(9)   

The provision that may be made by regulations under subsection (8)

includes—

 
 

Finance (No. 2) Bill
Schedule 20 — Community amateur sports clubs

317

 

(a)   

provision as to the conditions which a club must meet in

order to be “organised on an amateur basis” for the purposes

of section 658;

(b)   

provision as to what are, or are not, to be regarded as

“ordinary benefits of an amateur sports club” for the

5

purposes of subsection (1);

(c)   

provision about persons who are, or are not, to be regarded

as guests of a member of a club for the purposes of subsection

(1).

(10)   

Regulations made under subsection (8) may amend this section or

10

make other amendments to this Chapter.

(11)   

A statutory instrument that contains (whether alone or with other

provisions) regulations under subsection (8) that amend this section

or make other amendments to this Chapter may not be made unless

a draft of the instrument has been laid before, and approved by a

15

resolution of, the House of Commons.”

      (7)  

After subsection (11) insert—

“(12)   

The provision that may be made by regulations under this section

includes—

(a)   

different provision for different purposes, and

20

(b)   

provision having effect in relation to times before the

regulations are made.

(13)   

Section 1171(4) (orders and regulations subject to negative resolution

procedure) does not apply to any regulations made under this

section if a draft of the statutory instrument containing them has

25

been laid before, and approved by a resolution of, the House of

Commons.”

Clubs consisting mainly of social members

4          

In section 658 (meaning of “community amateur sports club”), in subsection

(1A)(c), for “section 661” substitute “sections 660A and 661”.

30

5          

After section 660 insert—

“660A   

Clubs consisting mainly of social members

(1)   

A club is not to be regarded as a club that has as its main purpose the

provision of facilities for, and the promotion of participation in, one

or more eligible sports if the percentage of its members who are

35

social members exceeds the percentage specified for the purposes of

this section in regulations made by the Treasury.

(2)   

A member is a “social member” for the purposes of this section if the

member does not participate, or participates only occasionally, in the

sporting activities of the club.

40

(3)   

The Treasury may by regulations make provision—

(a)   

as to activities that are, or are not, to be regarded as “sporting

activities” of a club;

 
 

Finance (No. 2) Bill
Schedule 20 — Community amateur sports clubs

318

 

(b)   

as to the circumstances in which a member of a club is, or is

not, to be regarded as participating in the sporting activities

of the club;

(c)   

as to the circumstances in which a member of a club is, or is

not, to be regarded as participating only occasionally in those

5

activities.

(4)   

The provision that may be made by regulations under this section

includes—

(a)   

different provision for different purposes, and

(b)   

provision having effect in relation to times before the

10

regulations are made.

(5)   

Section 1171(4) (orders and regulations subject to negative resolution

procedure) does not apply to any regulations made under this

section if a draft of the statutory instrument containing them has

been laid before, and approved by a resolution of, the House of

15

Commons.”

Exemptions

6          

In section 662 (exemption from corporation tax for UK trading income), after

subsection (5) insert—

“(5A)   

The Treasury may by order amend the figure for the time being

20

specified as the relevant threshold in subsection (5)(a).

(5B)   

A statutory instrument containing an order under subsection (5A)

that amends that figure so as to substitute a lower figure may not be

made unless a draft of the instrument has been laid before, and

approved by a resolution of, the House of Commons.”

25

7          

In section 663 (exemption from corporation tax for UK property income),

after subsection (5) insert—

“(5A)   

The Treasury may by order amend the figure for the time being

specified as the relevant threshold in subsection (5)(a).

(5B)   

A statutory instrument containing an order under subsection (5A)

30

that amends that figure so as to substitute a lower figure may not be

made unless a draft of the instrument has been laid before, and

approved by a resolution of, the House of Commons.”

Power to specify income condition

8     (1)  

The Treasury may by regulations provide that a club is not entitled to be

35

registered as a community amateur sports club under section 658 of CTA

2010 unless it meets one or more conditions relating to income received by

the club.

      (2)  

The provision that may be made by regulations under this paragraph

includes, in particular—

40

(a)   

provision restricting the amount of income, or income of a specified

description, that a community amateur sports club may receive for a

period, and

(b)   

provision prohibiting such a club from receiving income of a

specified description.

45

 
 

Finance (No. 2) Bill
Schedule 21 — Transitional provision relating to reduction in standard lifetime allowance etc
Part 1 — “Fixed protection 2014”

319

 

           

“Specified” means specified in the regulations.

      (3)  

Regulations made under this paragraph may—

(a)   

amend Chapter 9 of Part 13 of CTA 2010,

(b)   

make different provision for different purposes, and

(c)   

contain provision having effect in relation to times before the

5

regulations are made or this Act is passed.

      (4)  

A statutory instrument that contains (whether alone or with other

provisions) regulations under this paragraph may not be made unless a

draft of the instrument has been laid before, and approved by a resolution

of, the House of Commons.

10

Commencement

9     (1)  

Any power conferred on the Treasury under or by virtue of this Schedule to

make regulations or an order comes into force on the day on which this Act

is passed (and may be exercised to make provision having effect in relation

to times before this Act is passed).

15

      (2)  

So far as not already brought into force by virtue of sub-paragraph (1), the

amendments made by this Schedule come into force in accordance with

provision contained in an order made by the Treasury.

      (3)  

An order made under sub-paragraph (2) may—

(a)   

provide for such amendments to be treated as having come into force

20

on a date not earlier than 1 April 2010;

(b)   

make transitional provision or savings.

10    (1)  

In a case where a club that was registered as a community amateur sports

club before the day on which this Act is passed ceases to be entitled to be

registered as such by virtue of this Schedule, an officer of Revenue and

25

Customs may not cancel the club’s registration with effect from a date earlier

than that day.

      (2)  

But sub-paragraph (1) does not prevent the cancellation of the club’s

registration if the officer is satisfied that—

(a)   

any information provided by a person (“P”) at the time of

30

registration was inaccurate, and

(b)   

the inaccuracy was careless (within the meaning of paragraph 3 of

Schedule 24 to FA 2007) or deliberate on P’s part.

Schedule 21

Section 47

 

Transitional provision relating to reduction in standard lifetime allowance

35

etc

Part 1

“Fixed protection 2014”

1     (1)  

This paragraph applies on or after 6 April 2014 in the case of an individual—

(a)   

who, on that date, has one or more arrangements under—

40

(i)   

a registered pension scheme, or

 
 

Finance (No. 2) Bill
Schedule 21 — Transitional provision relating to reduction in standard lifetime allowance etc
Part 1 — “Fixed protection 2014”

320

 

(ii)   

a relieved non-UK pension scheme of which the individual is

a relieved member,

(b)   

in relation to whom paragraph 7 of Schedule 36 to FA 2004 (primary

protection) does not make provision for a lifetime allowance

enhancement factor,

5

(c)   

in relation to whom paragraph 12 of that Schedule (enhanced

protection) does not apply on that date, and

(d)   

in whose case paragraph 14 of Schedule 18 to FA 2011 (transitional

provision relating to new standard lifetime allowance for the tax year

2012-13) does not apply on that date,

10

           

if notice of intention to rely on it is given to an officer of Revenue and

Customs.

      (2)  

Part 4 of FA 2004 has effect in relation to the individual as if the standard

lifetime allowance were the greater of the standard lifetime allowance and

£1,500,000.

15

      (3)  

But this paragraph ceases to apply if on or after 6 April 2014—

(a)   

there is benefit accrual in relation to the individual under an

arrangement under a registered pension scheme,

(b)   

there is an impermissible transfer into any arrangement under a

registered pension scheme relating to the individual,

20

(c)   

a transfer of sums or assets held for the purposes of, or representing

accrued rights under, any such arrangement is made that is not a

permitted transfer, or

(d)   

an arrangement relating to the individual is made under a registered

pension scheme otherwise than in permitted circumstances.

25

      (4)  

For the purposes of sub-paragraph (3)(a) there is benefit accrual in relation

to the individual under an arrangement—

(a)   

in the case of a money purchase arrangement that is not a cash

balance arrangement, if a relevant contribution is paid under the

arrangement on or after 6 April 2014,

30

(b)   

in the case of a cash balance arrangement or a defined benefits

arrangement, if there is an increase in the value of the individual’s

rights under the arrangement at any time on or after that date (but

subject to sub-paragraph (11)), and

(c)   

in the case of a hybrid arrangement—

35

(i)   

where the benefits that may be provided to or in respect of

the individual under the arrangement include money

purchase benefits other than cash balance benefits, if a

relevant contribution is paid under the arrangement on or

after 6 April 2014, and

40

(ii)   

in any case, if there is an increase in the value of the

individual’s rights under the arrangement at any time on or

after that date (but subject to sub-paragraph (11)).

      (5)  

For the purposes of sub-paragraphs (4)(b) and (c)(ii) and (11) whether there

is an increase in the value of the individual’s rights under the arrangement

45

(and its amount if there is) is to be determined—

(a)   

in the case of a cash balance arrangement (or a hybrid arrangement

under which cash balance benefits may be provided to or in respect

of the individual under the arrangement), by reference to whether

there is an increase in the amount that would, on the valuation

50

 
 

 
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Revised 28 March 2013