Finance Bill

Session 2013 - 14
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Other Bills before Parliament

Finance Bill

Finance Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 4 — Pensions
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“relevant requirement” means—
(a)
a requirement imposed by regulations under subsection
(4), or
(b)
a requirement imposed by virtue of Part 1 of Schedule 36
to FA 2008 (powers to obtain information and
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documents).”
(8)
In section 280(1) of that Act (abbreviations), insert at the appropriate place—
““FA 2008” means the Finance Act 2008,”.
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Overseas pension schemes: information and inspection powers
(1)
Part 6 of Schedule 36 to FA 2008 (information and inspection powers: special
10
cases) is amended as follows.
(2)
In paragraph 34B (registered pension schemes etc)—
(a)
in sub-paragraph (2), omit the “or” at the end of paragraph (b) and, at
the end of paragraph (c) insert—
“(d)
a QROPS or former QROPS, or
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(e)
an annuity purchased with sums or assets held for the
purposes of a QROPS or former QROPS.”;
(b)
after sub-paragraph (4) insert—
   “(4A)
In relation to a notice to which this paragraph applies that
refers only to information or documents relating to a matter
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within sub-paragraph (2)(d) or (e), paragraph 20 (old
documents) has effect as if the reference to 6 years were to 10
years.”;
(c)
after sub-paragraph (7) insert—
   “(7A)
Where the notice relates to a matter within sub-paragraph
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(2)(d) or (e), the officer of Revenue and Customs who gives
the notice must give a copy of the notice to the scheme
manager in relation to the pension scheme.”;
(d)
in sub-paragraph (8), for “and (7)” substitute “to (7A)”.
(3)
In paragraph 34C (registered pension schemes etc: interpretation), insert at the
30
appropriate places—
““QROPS” and “former QROPS” have the meanings given by
section 169(8) of FA 2004;”;
““scheme manager”, in relation to a pension scheme, has the
meaning given by section 169(3) of FA 2004.”
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(4)
In paragraphs 34B and 34C of Schedule 36 to FA 2008, references to a former
QROPS include a scheme that ceased to be a QROPS before this Act was
passed.

Finance Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 5 — Other provisions
27

Chapter 5
Other provisions
Employee shareholder shares
54
Employee shareholder shares
Schedule 22 contains provision about employee shareholder shares.
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Seed enterprise investment scheme
55
SEIS: income tax relief
(1)
ITA 2007 is amended as follows.
(2)
In section 29 (tax reductions: supplementary), in subsection (4B), after the entry
for Chapter 1 of Part 5 insert—
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“Chapter 1 of Part 5A (SEIS relief),”.
(3)
In section 32 (liability not dealt with in the calculation), after the entry for
section 235 insert—
“under section 257G (withdrawal or reduction of SEIS relief),”.
(4)
In section 257DG (the control and independence requirement), for subsection
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(2) substitute—
“(2)
The independence element of the requirement is that—
(a)
the issuing company must not at any time in period A (ignoring
any on-the-shelf period) be within subsection (2A), and
(b)
no arrangements must be in existence at any time in period A by
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virtue of which the issuing company could be within that
subsection (whether during period A or otherwise).
(2A)
The issuing company is within this subsection at any time if it is under
the control of any other company (or of another company and any other
person connected with that other company).
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(2B)
In subsection (2)(a) “on-the-shelf period” means a period during which
the issuing company—
(a)
has not issued any shares other than subscriber shares, and
(b)
has not begun to carry on, or make preparations for carrying on,
any trade or business.”
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(5)
The amendments made by subsections (2) and (3) have effect for the tax year
2013-14 and subsequent tax years.
(6)
The amendment made by subsection (4) has effect in relation to shares issued
on or after 6 April 2013.
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SEIS: re-investment relief
35
(1)
Schedule 5BB to TCGA 1992 (seed enterprise investment scheme: re-
investment) is amended as follows.
(2)
In paragraph 1 (SEIS re-investment relief)—

Finance Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 5 — Other provisions
28

(a)
in sub-paragraph (2)—
(i)
in paragraph (a), after “the tax year 2012-13” insert “or the tax
year 2013-14 (the year in question being referred to in this
Schedule as “the relevant year”)”, and
(ii)
in paragraph (b), for “that year” substitute “the relevant year”,
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(b)
in sub-paragraph (3)(a), for “tax year 2012-13” substitute “relevant
year”, and
(c)
for sub-paragraph (5) substitute—
“(5)
The relevant percentage of the available SEIS expenditure is to
be set against a corresponding amount of the original gain.
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(5A)
In sub-paragraph (5)—
“the available SEIS expenditure” means so much of the
SEIS expenditure as—
(a)
is specified in the claim,
(b)
is unused, and
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(c)
does not exceed so much of the original gain as
is unmatched;
“the relevant percentage” means—
(a)
if the relevant year is the tax year 2012-13, 100%,
and
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(b)
if the relevant year is the tax year 2013-14, 50%.”
(3)
In paragraph 2 (restrictions on relief under paragraph 1)—
(a)
in sub-paragraph (1), for “tax year 2012-13” substitute “relevant year”,
and
(b)
in sub-paragraph (2)—
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(i)
for “tax year 2012-13” substitute “relevant year”, and
(ii)
for “that tax year” substitute “that year”.
(4)
In paragraph 5 (removal or reduction of relief) in sub-paragraph (2) for “2012-
13” substitute “in which the shares were issued”.
(5)
Accordingly, in section 150G of TCGA (which introduces Schedule 5BB), for
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“tax year 2012-13” substitute “tax years 2012-13 and 2013-14”.
Disincorporation
57
Disincorporation relief
(1)
A claim for relief under this section (“disincorporation relief”) may be made
where—
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(a)
a company transfers its business to some or all of the shareholders of
the company,
(b)
the transfer of the business is a qualifying business transfer (see section
58), and
(c)
the business transfer date falls within the period of 5 years beginning
40
with 1 April 2013.
(2)
As to the consequences of a claim for disincorporation relief being made, see—
sections 162B and 162C of TCGA 1992;
section 849A of CTA 2009.

Finance Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 5 — Other provisions
29

(3)
In this section and sections 58 to 60 “the business transfer date”, in relation to
the transfer of a business, is the date on which the business is transferred.

For this purpose, where the business is transferred under a contract—
(a)
the date on which the business is transferred is to be determined in
accordance with section 28 of TCGA 1992, and
5
(b)
if the business in question is transferred by more than one contract,
then for the purposes of that section the contract under which the
business is transferred is to be taken to be the contract under which the
goodwill of the business is transferred.
(4)
This section and sections 58 and 59 apply to a transfer of a business with a
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business transfer date of 1 April 2013 or a later date.
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Qualifying business transfer
(1)
The transfer of a business from a company to some or all of the shareholders of
the company is a qualifying business transfer for the purposes of section 57 if
conditions A to E are met.
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(2)
Condition A is that the business is transferred as a going concern.
(3)
Condition B is that the business is transferred together with all of the assets of
the business, or together with all of those assets other than cash.
(4)
Condition C is that the total market value of the qualifying assets of the
business included in the transfer does not exceed £100,000.
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(5)
Condition D is that all of the shareholders to whom the business is transferred
are individuals.
(6)
Condition E is that each of those shareholders held shares in the company
throughout the period of 12 months ending with the business transfer date.
(7)
For the purposes of condition D, the reference to individuals includes an
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individual acting as a member of a partnership, but does not include an
individual acting as a member of a limited liability partnership.
(8)
Section 60 of TCGA 1992 (nominees and bare trustees) applies for the purposes
of this section as it applies for the purposes of that Act.
(9)
In this section “market value”, in relation to an asset, means the price which the
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asset might reasonably be expected to fetch on a sale in the open market.
(10)
In this section a “qualifying asset” means—
(a)
goodwill, or
(b)
an interest in land which is not held as trading stock.
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Making a claim
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(1)
A claim for disincorporation relief under section 57—
(a)
is to be made jointly by the company and all of the shareholders to
whom the business is transferred, and
(b)
is irrevocable.
(2)
Any claim for disincorporation relief must be made within the period of 2 years
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beginning with the business transfer date.