Session 2013 - 14
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Finance Bill
Schedule 1 — Annual investment allowance: periods straddling 1 January 2013 or 1 January 2015

137

 

Schedules

Schedule 1

Section 7

 

Annual investment allowance: periods straddling 1 January 2013 or 1 January

2015

Chargeable periods which straddle 1 January 2013

5

1     (1)  

This paragraph applies in relation to a chargeable period which begins

before 1 January 2013 and ends on or after that date (“the first straddling

period”).

      (2)  

The maximum allowance under section 51A of CAA 2001 for the first

straddling period is the sum of each maximum allowance that would be

10

found if—

(a)   

so much (if any) of the first straddling period as falls before the

relevant date,

(b)   

so much of the first straddling period as falls on or after the relevant

date but before 1 January 2013, and

15

(c)   

so much of the first straddling period as falls on or after 1 January

2013,

           

were each treated as separate chargeable periods.

      (3)  

But this is subject to paragraphs 2 and 3.

      (4)  

In this Schedule “the relevant date” means—

20

(a)   

for the purposes of corporation tax, 1 April 2012;

(b)   

for the purposes of income tax, 6 April 2012.

Straddling period beginning before the relevant date

2     (1)  

This paragraph applies where the first straddling period begins before the

relevant date.

25

      (2)  

So far as concerns expenditure incurred before the relevant date, the

maximum allowance under section 51A of CAA 2001 for the first straddling

period is what would have been the maximum allowance for that period if

the amendment made by section 7(1) had not been made.

      (3)  

So far as concerns expenditure incurred on or after the relevant date but

30

before 1 January 2013, the maximum allowance under section 51A of CAA

2001 for the first straddling period is—equation: plus[char[A],minus[char[B]]]

      (4)  

In sub-paragraph (3)—

 

 

Finance Bill
Schedule 1 — Annual investment allowance: periods straddling 1 January 2013 or 1 January 2015

138

 

(a)   

“A” means the amount that would have been the maximum

allowance for the period beginning on the relevant date and ending

at the end of the first straddling period if—

(i)   

that period had been a separate chargeable period, and

(ii)   

the amendment made by section 7(1) had not been made;

5

(b)   

 “B” means the amount (if any) by which—

(i)   

the AIA expenditure incurred in the period mentioned in

paragraph 1(2)(a) in respect of which a claim for an annual

investment allowance is made, exceeds

(ii)   

the maximum allowance under section 51A of CAA 2001 for

10

that period if it were treated as a separate chargeable period.

      (5)  

So far as concerns expenditure incurred on or after 1 January 2013, the

maximum allowance under section 51A of CAA 2001 for the first straddling

period is the sum of each maximum allowance that would be found if the

period mentioned in paragraph 1(2)(b) and the period mentioned in

15

paragraph 1(2)(c) were each treated as separate chargeable periods.

First straddling period beginning on or after the relevant date

3     (1)  

This paragraph applies where no part of the first straddling period falls

within paragraph 1(2)(a).

      (2)  

So far as concerns expenditure incurred before 1 January 2013, the maximum

20

allowance under section 51A of CAA 2001 for the first straddling period is

to be calculated as if the amendment made by section 7(1) had not been

made.

Chargeable periods which straddle 1 January 2015

4     (1)  

This paragraph applies in relation to a chargeable period (“the second

25

straddling period”) which begins before 1 January 2015 and ends on or after

that date.

      (2)  

The maximum allowance under section 51A of CAA 2001 for the second

straddling period is the sum of each maximum allowance that would be

found if—

30

(a)   

the period beginning with the first day of the chargeable period and

ending with the day before 1 January 2015, and

(b)   

the period beginning with 1 January 2015 and ending with the last

day of the chargeable period,

           

were treated as separate chargeable periods.

35

      (3)  

But, so far as concerns expenditure incurred on or after 1 January 2015, the

maximum allowance under section 51A of CAA 2001 for the second

straddling period is the maximum allowance, calculated in accordance with

sub-paragraph (2), for the period mentioned in paragraph (b) of that sub-

paragraph.

40

Operation of annual investment allowance where restrictions apply

5     (1)  

Paragraphs 1 to 4 also apply for the purpose of determining the maximum

allowance under section 51K of CAA 2001 (operation of annual investment

allowance where restrictions apply) in a case where one or more chargeable

 
 

Finance Bill
Schedule 2 — Tax advantaged employee share schemes
Part 1 — Retirement of participants

139

 

periods in which the relevant AIA qualifying expenditure is incurred are

chargeable periods within paragraph 1(1) or 4(1).

           

This is subject to sub-paragraphs (2) and (3).

      (2)  

There is to be taken into account for those purposes only chargeable periods

of one year or less (whether or not they are chargeable periods within

5

paragraph 1(1) or 4(1)), and, if there is more than one such period, only that

period which gives rise to the greatest maximum allowance.

      (3)  

For the purposes of sub-paragraph (2) any chargeable period which—

(a)   

is longer than a year, and

(b)   

ends in the tax year 2012-13, 2013-14, 2014-15, 2015-16 or 2016-17,

10

           

is to be treated as being a chargeable period of one year ending at the same

time as it actually ends.

      (4)  

Section 11(11) of FA 2011 is repealed.

      (5)  

That repeal has effect in relation to cases where one or more chargeable

periods in which the relevant AIA qualifying expenditure is incurred are

15

chargeable periods within paragraph 1(1).

      (6)  

Nothing in this paragraph affects the operation of sections 51M and 51N of

CAA 2001.

Schedule 2

Section 14

 

Tax advantaged employee share schemes

20

Part 1

Retirement of participants

Introduction

1          

Part 7 of ITEPA 2003 (employment income: income and exemptions relating

to securities) is amended as follows.

25

Share incentive plans

2          

In section 498 (no charge on shares ceasing to be subject to plan in certain

circumstances) in subsection (2)(e) omit the words from “on” to “2)”.

3          

In Part 4 of Schedule 2 (types of shares that may be awarded) in paragraph

32 (provision for forfeiture) in sub-paragraph (2)(e) omit the words from

30

“on” to “98)”.

4          

Part 11 of Schedule 2 (supplementary provisions) is amended as follows.

5          

Omit paragraph 98 (meaning of “specified retirement age”).

6          

In paragraph 100 (index of defined expressions) omit the entry for “the

specified retirement age”.

35

 
 

Finance Bill
Schedule 2 — Tax advantaged employee share schemes
Part 1 — Retirement of participants

140

 

SAYE option schemes

7          

Part 6 of Schedule 3 (requirements etc relating to share options) is amended

as follows.

8          

In paragraph 27 (introduction) in sub-paragraph (1)—

(a)   

omit the entry for paragraph 31,

5

(b)   

after the entry for paragraph 32 insert “and”, and

(c)   

omit the entry for paragraph 33 and the “and” after it.

9          

In paragraph 30 (time for exercising options) in sub-paragraph (2)(a)—

(a)   

for “32 to” substitute “32,”, and

(b)   

omit “reaching the specified age without retiring,”.

10

10         

Omit paragraph 31 (requirement to have a “specified age”).

11         

Omit paragraph 33 (exercise of options: reaching specified age without

retiring).

12         

In paragraph 34 (exercise of options: scheme-related employment ends) in

sub-paragraph (2)(b) omit the words from “on” to “employment”.

15

13         

In Part 9 of Schedule 3 (supplementary provisions) in paragraph 49 (index

of defined expressions) omit the entry for “specified age”.

CSOP schemes

14         

In section 524 (no charge in respect of exercise of option) in subsection (2C)

omit the definition of “retirement” and the “and” before it.

20

15         

In Part 8 of Schedule 4 (supplementary provisions) omit paragraph 35A

(retirement age).

Transitional provision

16         

The amendment made by paragraph 11 above has no effect in relation to

options granted before the day on which this Act is passed; and the effect of

25

the amendments made by paragraphs 8 to 10 and 13 above is limited

accordingly.

17    (1)  

A SIP, SAYE option scheme or CSOP scheme approved before the day on

which this Act is passed has effect with any modifications needed to reflect

the amendments made by this Part of this Schedule.

30

      (2)  

In relation to any shares awarded under a SIP before that day which are

subject to provision for forfeiture, that provision has effect with any

modifications needed to reflect the amendment made by paragraph 3 above.

      (3)  

Because of paragraphs 47 and 57 below, that amendment is not relevant to

shares awarded under a SIP on or after that day.

35

 
 

Finance Bill
Schedule 2 — Tax advantaged employee share schemes
Part 2 — “Good leavers” (other than retirees)

141

 

Part 2

“Good leavers” (other than retirees)

Introduction

18         

Part 7 of ITEPA 2003 (employment income: income and exemptions relating

to securities) is amended as follows.

5

Share incentive plans

19         

In section 498 (no charge on shares ceasing to be subject to plan in certain

circumstances) after subsection (2) insert—

“(3)   

A participant is not liable to income tax on shares (“the relevant

shares”) in a company (“the relevant company”) being withdrawn

10

from the plan if—

(a)   

the withdrawal of the relevant shares from the plan relates

to—

(i)   

a transaction resulting from a compromise,

arrangement or scheme falling within subsection (9),

15

(ii)   

an offer forming part of a general offer falling within

subsection (10), or

(iii)   

the application of sections 979 to 982 or 983 to 985 of

the Companies Act 2006 in the case of a takeover offer

(as defined in section 974 of that Act) falling within

20

subsection (12), and

(b)   

as a result of, as the case may be—

(i)   

the transaction,

(ii)   

the offer, or

(iii)   

the application of sections 979 to 982 or 983 to 985 of

25

the Companies Act 2006,

   

the participant receives cash (and no other assets) in

exchange for the relevant shares.

(4)   

For the purposes of subsection (3)(b) it does not matter if the

participant receives other assets in exchange for shares other than the

30

relevant shares.

(5)   

Subsection (3) does not apply to the relevant shares (or to a

proportion of them) if in connection with, as the case may be—

(a)   

the compromise, arrangement or scheme,

(b)   

the general offer, or

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(c)   

the takeover offer,

   

a course of action was open to the participant which, had it been

followed, would have resulted in other assets being received in

exchange for the relevant shares (or the proportion of them) instead

of cash.

40

(6)   

Subsection (3) does not apply to the relevant shares (or to a

proportion of them) if it is reasonable to suppose that the relevant

shares (or the proportion of them) would not have been awarded to

the participant—

(a)   

had, as the case may be—

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Finance Bill
Schedule 2 — Tax advantaged employee share schemes
Part 2 — “Good leavers” (other than retirees)

142

 

(i)   

the compromise, arrangement or scheme,

(ii)   

the general offer, or

(iii)   

the takeover offer,

   

not been made, or

(b)   

had any arrangements for the making of—

5

(i)   

a compromise, arrangement or scheme which would

fall within subsection (9),

(ii)   

a general offer which would fall within subsection

(10), or

(iii)   

a takeover offer (as defined in section 974 of the

10

Companies Act 2006) which would fall within

subsection (12),

   

which were in place or under consideration at any time not

been in place or under consideration.

(7)   

In subsection (6) the reference to shares being awarded to the

15

participant is to be read, in the case of dividend shares, as a reference

to the shares being acquired by the trustees on the participant’s

behalf.

(8)   

In subsection (6)(b) “arrangements” includes any plan, scheme,

agreement or understanding, whether or not legally enforceable.

20

(9)   

A compromise, arrangement or scheme falls within this subsection if

it is applicable to or affects—

(a)   

all the ordinary share capital of the relevant company or all

the shares of the same class as the relevant shares, or

(b)   

all the shares, or all the shares of that same class, which are

25

held by a class of shareholders identified otherwise than by

reference to their employment or their participation in an

approved SIP.

(10)   

A general offer falls within this subsection if—

(a)   

it is made to holders of shares of the same class as the relevant

30

shares or to holders of shares in the relevant company, and

(b)   

it is made in the first instance on a condition such that if it is

satisfied the person making the offer will have control of the

relevant company.

(11)   

In subsection (10)(b) “control” has the meaning given by sections 450

35

and 451 of CTA 2010.

(12)   

A takeover offer falls within this subsection if—

(a)   

it relates to the relevant company, and

(b)   

where there is more than one class of share in the relevant

company, the class or classes to which it relates is or include

40

the class of the relevant shares.”

20    (1)  

In Part 5 of Schedule 2 (free shares) in paragraph 37 (holding period: power

of participant to direct trustees to accept general offers etc) after sub-

paragraph (6) insert—

    “(7)  

If in the case of a takeover offer (as defined in section 974 of the

45

Companies Act 2006) there arises a right under section 983 of that

Act to require the offeror to acquire the participant’s free shares,

 
 

Finance Bill
Schedule 2 — Tax advantaged employee share schemes
Part 2 — “Good leavers” (other than retirees)

143

 

or such of them as are of a particular class, the participant may

direct the trustees to exercise that right.”

      (2)  

A SIP approved before the day on which this Act is passed has effect with

any modifications needed to reflect the amendment made by this paragraph.

SAYE option schemes

5

21         

In section 519 (no charge in respect of exercise of option) after subsection (3)

insert—

“(3A)   

In relation to any shares acquired by the exercise of the share option,

no liability to income tax arises in respect of its exercise if—

(a)   

the individual exercises the option before the third

10

anniversary of the date on which the option was granted at a

time when the SAYE option scheme is approved,

(b)   

the option is exercised by virtue of a provision included in the

scheme—

(i)   

under paragraph 37(1) of Schedule 3 where the

15

relevant date is the relevant date for the purposes of

paragraph 37(2) or (4), or

(ii)   

under paragraph 37(6) of Schedule 3,

(c)   

as a result of, as the case may be—

(i)   

the general offer,

20

(ii)   

the compromise or arrangement, or

(iii)   

the takeover offer,

   

the individual receives cash (and no other assets) in exchange

for the shares,

(d)   

when the decision to grant the option was taken—

25

(i)   

the general offer,

(ii)   

the compromise or arrangement, or

(iii)   

the takeover offer,

   

as the case may be, had not been made,

(e)   

when that decision was taken, no arrangements were in place

30

or under consideration for—

(i)   

the making of a general offer which would fall within

subsection (3D),

(ii)   

the making of any compromise or arrangement which

would fall within subsection (3F), or

35

(iii)   

the making of a takeover offer (as defined in section

974 of the Companies Act 2006) which would fall

within subsection (3G),

(f)   

if the scheme includes a provision under paragraph 38 of

Schedule 3 (“the paragraph 38 provision”), in connection

40

with—

(i)   

the general offer,

(ii)   

the compromise or arrangement, or

(iii)   

the takeover offer,

   

as the case may be, no course of action was open to the

45

individual which, had it been followed, would have resulted

in the individual making an agreement under the paragraph

 
 

 
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Revised 8 May 2013