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Finance Bill
Schedule 28 — Close companies
Part 1 — Amendments of Part 10 of CTA 2010

379

 

6     (1)  

After Chapter 3A insert—

“Chapter 3B

Repayments and return payments

464C    

Treatment of certain repayments and return payments

(1)   

Where—

5

(a)   

within any period of 30 days—

(i)   

the qualifying amount of repayments made to a close

company in respect of one or more chargeable

payments made by the company to a person totals

£5,000 or more, and

10

(ii)   

the available amount of the relevant chargeable

payments made by the company to the person or an

associate of the person totals £5,000 or more, and

(b)   

the relevant chargeable payments are made in an accounting

period subsequent to that in which the chargeable payments

15

mentioned in paragraph (a)(i) were made,

   

the qualifying amount of the repayments, so far as not exceeding the

available amount of the relevant chargeable payments, is to be

treated for the purposes of this Chapter as a repayment of the

relevant chargeable payments.

20

(2)   

A chargeable payment is a relevant chargeable payment for the

purposes of subsection (1) if (or to the extent that) it is not repaid

within the period of 30 days mentioned in that subsection.

(3)   

Where—

(a)   

immediately before a repayment is made in respect of one or

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more chargeable payments made by a close company to a

person, the total amount owed to the company by the person

in respect of chargeable payments is £15,000 or more,

(b)   

at the time the repayment is made, arrangements had been

made for one or more chargeable payments to be made to

30

replace some or all of the amount repaid, and

(c)   

the available amount of the chargeable payments made by

the company to the person or an associate of the person

under the arrangements totals £5,000 or more,

   

the qualifying amount of the repayment, so far as not exceeding the

35

available amount of the chargeable payments mentioned in

paragraph (c), is to be treated for the purposes of this Chapter as a

repayment of those chargeable payments.

(4)   

An amount contained in a charg eable payment is an available

amount—

40

(a)   

for the purposes of subsection (1), to the extent that no

repayment has been treated as made in respect of it by the

previous operation of that subsection, and

(b)   

for the purposes of subsection (3), to the extent that no

repayment has been treated as made in respect of it—

45

(i)   

by the operation of subsection (1), or

(ii)   

by the previous operation of subsection (3).

 
 

Finance Bill
Schedule 28 — Close companies
Part 2 — Other amendments

380

 

(5)   

An amount contained in a repayment is a qualifying amount to the

extent that it has not been treated by the previous operation of this

section as a repayment of a chargeable payment.

(6)   

This section does not apply in relation to a repayment which gives

rise to a charge to income tax on the participator or associate by

5

reference to whom the loan, advance or benefit was a chargeable

payment.

(7)   

The Treasury may by order vary a sum specified in subsection (1) or

(3).

(8)   

An order under subsection (7) may contain incidental, supplemental,

10

consequential and transitional provision and savings.

464D    

Section 464C: supplementary

(1)   

All such assessments and adjustments of assessments are to be made

as are necessary to give effect to section 464C(1) and (3).

(2)   

If a person who has made a tax return becomes aware that, after

15

making it, anything in it has become incorrect because of the

operation of section 464C(1) or (3), the person must give notice to an

officer of Revenue and Customs specifying how the return needs to

be amended.

(3)   

The notice must be given within 3 months beginning with the day on

20

which the person became aware that anything in the return had

become incorrect because of the operation of section 464C(1) or (3).

(4)   

In section 464C, “chargeable payment” means—

(a)   

a loan or advance made by a close company which gives rise

to a charge to tax under section 455, or

25

(b)   

the conferral of a benefit on an individual in circumstances

which give rise to a charge to tax under section 464A.

(5)   

In a case within subsection (4)(b)—

(a)   

the conferral of the benefit is to be treated for the purposes of

section 464C as a loan made by the close company to the

30

individual to the value of the benefit conferred, and

(b)   

any payment in respect of which (apart from section 464C)

relief is due to the close company under section 464B is to be

treated for the purposes of section 464C as a repayment of the

loan.”

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      (2)  

The amendment made by this paragraph has effect in relation to repayments

and return payments made on or after 20 March 2013.

7          

In section 465 (power to obtain information), after “Chapter 3” (in both

places) insert “or 3A”.

Part 2

40

Other amendments

Taxes Management Act 1970

8          

TMA 1970 is amended as follows.

 
 

Finance Bill
Schedule 28 — Close companies
Part 2 — Other amendments

381

 

9          

In section 59E(11)(a) (provision as to when tax is due and payable)—

(a)   

after “455” insert “or 464A”, and

(b)   

after “loan” insert “or benefit”.

10         

In section 59F(6)(a) (arrangements for paying tax on behalf of group

members)—

5

(a)   

after “455” insert “or 464A”, and

(b)   

after “loan” insert “or benefit”.

11    (1)  

Section 109 (corporation tax on close company in connection with loans to

participators etc) is amended as follows.

      (2)  

In subsection (1)—

10

(a)   

after “459” insert “and 464A and 464B”, and

(b)   

for “by close companies” insert “or benefits”.

      (3)  

For subsection (3) substitute—

“(3)   

For the purposes of section 87A of this Act as applied by subsection

(1) above—

15

(a)   

the date when tax under section 455 of CTA 2010 became due

and payable is that determined in accordance with

subsection (3) of that section, and

(b)   

the date when tax under section 464A of CTA 2010 became

due and payable is that determined in accordance with

20

subsection (4) of that section.”

      (4)  

After subsection (3A) insert—

“(3B)   

If there is a payment which for the purposes of section 464B of CTA

2010 is a return payment in respect of a benefit conferred, interest

under section 87A of this Act on so much of the tax under section

25

464A of CTA 2010 as is referable to the return payment is not payable

in respect of any period after the date on which the return payment

was made.”

      (5)  

In subsection (4), after “458” insert “or 464B”.

      (6)  

In subsection (5), after “459” insert “or 464A and 464B”.

30

      (7)  

In the heading, after “loans” insert “or benefits”.

12         

The amendments made by paragraphs 9 to 11 are treated as having come

into force on 20 March 2013.

Finance Act 1998

13    (1)  

Schedule 18 to FA 1998 (company tax returns, assessments and related

35

matters) is amended as follows.

      (2)  

In paragraph 1 (meaning of “tax”), after the entry relating to section 455 of

CTA 2010 insert—

“section 464A of that Act (tax on other benefit conferred on

participator),”.

40

      (3)  

In paragraph 8(1) (calculation of tax payable), in paragraph 1 of the third

step—

(a)   

after “455” insert “or 464A”, and

 
 

Finance Bill
Schedule 28 — Close companies
Part 2 — Other amendments

382

 

(b)   

for “or advance made by close company” substitute “, advance or

benefit”.

      (4)  

In paragraph 18 (failure to deliver return: tax-related penalty), for sub-

paragraph (4) substitute—

    “(4)  

In determining that amount no account is to be taken of—

5

(a)   

any relief under section 458 of the Corporation Tax Act

2010 (relief in respect of repayment, etc of loan) which is

deferred under subsection (5) of that section, or

(b)   

any relief under section 464B of that Act (relief in respect of

return payment) which is deferred under subsection (5) of

10

that section.”

      (5)  

The amendments made by this paragraph are treated as having come into

force on 20 March 2013.

Income Tax (Trading and Other Income) Act 2005

14    (1)  

In section 417 of ITTOIA 2005 (person liable for charge on release of loan or

15

advance), for subsection (1) substitute—

“(1)   

The person liable for any tax charged under this Chapter is—

(a)   

in the case of a loan or advance made to a partnership, any

partner who is an individual, and

(b)   

in any other case, the person to whom the loan or advance

20

was made.

(1A)   

If more than one person is liable in a case within subsection (1)(a), the

liability is to be apportioned between them in a just and reasonable

manner.”

      (2)  

The amendment made by this paragraph has effect in relation to loans or

25

advances made on or after 20 March 2013.

 
 

 
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