Session 2013 - 14
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Finance Bill, continued

 
 

730C  

Disallowance of deductible amounts: relevant claims

 

(1)    

This section applies where a relevant claim is made for an accounting

 

period ending on or after the relevant day.

 

(2)    

“Relevant claim” means a claim by C, or a company connected with

 

C, under—

 

(a)    

section 37 (relief for trade losses against total profits), or

 

(b)    

Chapter 4 of Part 5 (group relief).

 

(3)    

A deductible amount that meets conditions A and B may not be the

 

subject of, or brought into account as a deduction in, the claim.

 

(4)    

But subsection (3) does not exclude any amount which could have

 

been the subject of, or brought into account as a deduction in, the claim

 

in the absence of the qualifying change.

 

(5)    

Condition A is that, on the relevant day, it is highly likely that the

 

amount, or any part of it, would (disregarding this Part) be the subject

 

of, or brought into account as a deduction in, a relevant claim for an

 

accounting period ending on or after the relevant day.

 

(6)    

Any question as to what is “highly likely” on the relevant day for the

 

purposes of subsection (5) is to be determined having regard to—

 

(a)    

any arrangements made on or before that day, and

 

(b)    

any events that take place on or before that day.

 

(7)    

Condition B is that the main purpose, or one of the main purposes, of

 

change arrangements is for the amount (whether or not together with

 

other deductible amounts) to be the subject of, or brought into account

 

as a deduction in, a relevant claim for an accounting period ending on

 

or after the relevant day.

 

(8)    

“Change arrangements” means any arrangements made to bring about,

 

or otherwise connected with, the qualifying change.

 

(9)    

This section does not apply to a deductible amount if, and to the extent

 

that—

 

(a)    

section 730D(2) applies to it, or

 

(b)    

for the purposes of section 432, a loss, or any part of a loss, to

 

which section 433(2) applies derives from it.

 

730D  

Disallowance of deductible amounts: profit transfers

 

(1)    

This section applies where arrangements (“the profit transfer

 

arrangements”) are made which result in—

 

(a)    

an increase in the total profits of C, or of a company connected

 

with C, or

 

(b)    

a reduction of any loss or other amount for which relief from

 

corporation tax could (disregarding this section) have been

 

given to C or a company connected with C,

 

    

in any accounting period ending on or after the relevant day.

 

(2)    

A deductible amount that meets conditions D and E may not be

 

brought into account by C, nor any company connected with C, as a

 

deduction in any accounting period ending on or after the relevant day.

 

(3)    

Condition D is that, on the relevant day, it is highly likely that the

 

amount, or any part of it, would (disregarding this Part) be brought into


 
 

Consideration of Bill: 1 July 2013                     

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Finance Bill, continued

 
 

account by C, or any company connected with C, as a deduction in any

 

accounting period ending on or after the relevant day.

 

(4)    

Any question as to what is “highly likely” on the relevant day for the

 

purposes of subsection (3) is to be determined having regard to—

 

(a)    

any arrangements made on or before that day, and

 

(b)    

any events that take place on or before that day.

 

(5)    

Condition E is that the main purpose, or one of the main purposes, of

 

the profit transfer arrangements is to bring the amount (whether or not

 

together with other deductible amounts) into account as a deduction in

 

any accounting period ending on or after the relevant day.

 

(6)    

Subsection (7) applies if—

 

(a)    

(disregarding subsection (7)) subsection (2) would prevent a

 

deductible amount being brought into account by a company

 

as a deduction in any accounting period ending on or after the

 

relevant day, and

 

(b)    

in the absence of the profit transfer arrangements and

 

disregarding any deductible amounts, the company would

 

have an amount of total profits for that accounting period.

 

(7)    

Subsection (2) applies only in relation to such proportion of the

 

deductible amount mentioned in subsection (6)(a) as is just and

 

reasonable.”

 

Consequential amendments

 

2    (1)  

In section 1(4) of CTA 2010 (overview of Act), after paragraph (a) insert—

 

“(aa)    

transfer of deductions (see Part 14A),”.

 

      (2)  

In section 432 of that Act (sale of lessors: restriction on relief for certain

 

expenses), after subsection (1) insert—

 

“(1A)    

For the purposes of subsection (1), an expense is to be disregarded if,

 

and to the extent that, section 730D(2) (disallowance of deductible

 

amounts: profit transfers) applies to it.”

 

      (3)  

In Schedule 4 to that Act (index of defined expressions), insert at the

 

appropriate places—

 

“arrangements (in Part 14A)

section 730B”

 
 

“as a deduction (in Part 14A)

section 730B”

 
 

“C (in Part 14A)

section 730B

 
 

“deductible amount (in Part 14A)

section 730B”

 
 

“qualifying change (in Part 14A)

section 730B”

 
 

“the relevant day (in Part 14A)

section 730B”.

 
 

Commencement and transitional provision

 

3    (1)  

The amendments made by this Schedule have effect in relation to a qualifying

 

change if the relevant day is on or after 20 March 2013.

 

      (2)  

But those amendments do not have effect if before that date—


 
 

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(a)    

the arrangements made to bring about the qualifying change were

 

entered into, or

 

(b)    

there was an agreement, or common understanding, between the

 

parties to those arrangements as to the principal terms on which the

 

qualifying change would be brought about.

 

      (3)  

If—

 

(a)    

the relevant day in relation to a qualifying change is before 26 June

 

2013, or

 

(b)    

paragraph (a) or (b) of sub-paragraph (2) was satisfied before that date,

 

            

those amendments have effect in relation to the qualifying change as if section

 

730C(9)(b) were omitted.’.

 


 

Mr Chancellor of the Exchequer

 

ns2

 

To move the following Schedule:—

 

‘Restrictions on buying capital allowances

 

Introductory

 

1          

Chapter 16A of Part 2 of CAA 2001 (avoidance involving allowance buying)

 

is amended as follows.

 

Restrictions where certain conditions met

 

2    (1)  

Section 212B (circumstances where Chapter 16A applies) is amended as

 

follows.

 

      (2)  

For subsection (1)(d) substitute—

 

“(d)    

the qualifying change meets one of the limiting conditions.”

 

      (3)  

For subsection (4) substitute—

 

“(4)    

Sections 212LA and 212M set out the limiting conditions and specify

 

when those conditions are met.”

 

3          

After section 212L insert—

 

“Limiting conditions

 

212LA

Limiting conditions

 

(1)    

The qualifying change meets one of the limiting conditions if

 

condition A, B, C or D is met.

 

(2)    

Condition A is that the amount of the relevant excess of allowances is

 

£50 million or more.

 

(3)    

Condition B is that the amount of the relevant excess of allowances—

 

(a)    

is £2 million or more but less than £50 million, and

 

(b)    

is not insignificant as a proportion of the total amount or value

 

of the benefits derived by any relevant person by virtue of the

 

qualifying change or change arrangements.


 
 

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(4)    

“Relevant person” means a person who, at the end of the relevant day,

 

is—

 

(a)    

a principal company of C,

 

(b)    

a person carrying on the relevant activity in partnership, or

 

(c)    

a person who is connected to a person within paragraph (a) or

 

(b) (within the meaning of section 1122 of CTA 2010).

 

(5)    

Condition C is that—

 

(a)    

the amount of the relevant excess of allowances is less than £2

 

million, and

 

(b)    

the qualifying change has an unallowable purpose.

 

    

See section 212M for the meaning of “unallowable purpose”.

 

(6)    

Condition D is that the main purpose, or one of the main purposes, of

 

any arrangements is to procure that condition A or B or paragraph (a)

 

of condition C is not met.

 

(7)    

In this section—

 

the amount of the relevant excess of allowances is the difference between

 

RTWDV and BSV (see sections 212K and 212L);

 

“change arrangements” and “arrangements” have the same meaning as in

 

section 212M.”

 

4          

In consequence of the amendments made by paragraphs 2 and 3, the heading

 

to Chapter 16A becomes “Restrictions on allowance buying”.

 

Extension of restrictions to other qualifying activities

 

5    (1)  

Section 212B (circumstances where Chapter 16A applies) is amended as

 

follows.

 

      (2)  

In subsection (1)—

 

(a)    

in paragraph (a), for “a trade (“the relevant trade”)” substitute “a

 

qualifying activity (“the relevant activity”)”, and

 

(b)    

in paragraph (c), for “trade” (in both places) substitute “activity”.

 

      (3)  

In subsection (3) for “trade” substitute “activity”.

 

6    (1)  

Section 212C (when there is a a qualifying change in relation to C) is amended

 

as follows.

 

      (2)  

In subsection (4)—

 

(a)    

after “Condition C is that” insert “the relevant activity is a trade

 

(within the meaning of this Part) and”, and

 

(b)    

for “trade”, where it appears after “the relevant” (in both places),

 

substitute “activity”.

 

      (3)  

In subsection (5) for “trade” (in both places) substitute “activity”.

 

7    (1)  

Section 212I (relevant percentage share) is amended as follows.

 

      (2)  

In subsections (1) and (3) for “trade” substitute “activity”.

 

      (3)  

In subsection (2) for “a trade” substitute “an activity”.

 

8          

In section 212J(1) (relevant excess of allowances) for “trade” substitute

 

“activity”.

 

9          

In section 212K(2), (3), (4) and (5) (relevant tax written-down value) for

 

“trade” substitute “activity”.

 

10         

In section 212N(2), (3) and (4) (old and new accounting periods) for “trade”

 

substitute “activity”.

 

11  (1)  

Section 212P (effect of excess on pools) is amended as follows.


 
 

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      (2)  

In subsection (3)—

 

(a)    

for “a trade (or part of a trade)” substitute “a qualifying activity (or

 

part of a qualifying activity)”,

 

(b)    

for “the activities of that trade (or part of a trade)” substitute “that

 

activity (or that part of an activity)”,

 

(c)    

after “its trade” insert “or business”,

 

(d)    

for “those activities” substitute “that activity (or that part)”, and

 

(e)    

after “separate trade” insert “or business”.

 

      (3)  

In subsection (4)—

 

(a)    

after “section 37” insert “, 62 or 66”,

 

(b)    

omit “trade”,

 

(c)    

for “earlier” substitute “other”, and

 

(d)    

after “period)” insert “or section 259 or 260(3) of this Act (special

 

leasing)”.

 

12  (1)  

Section 212Q (when there are postponed capital allowances) is amended as

 

follows.

 

      (2)  

In subsection (3)—

 

(a)    

for “a trade (or part of a trade)” substitute “a qualifying activity (or

 

part of a qualifying activity)”,

 

(b)    

for “the activities of that trade (or part of a trade)” substitute “that

 

activity (or that part of an activity)”,

 

(c)    

after “its trade” insert “or business”,

 

(d)    

for “those activities” substitute “that activity (or that part)”, and

 

(e)    

after “separate trade” insert “or business”.

 

      (3)  

In subsection (4)—

 

(a)    

after “section 37” insert “, 62 or 66”, and

 

(b)    

after “CTA 2010” insert “or section 259 or 260(3) of this Act”.

 

Commencement

 

13  (1)  

The amendments made by this Schedule have effect in relation to a qualifying

 

change if the relevant day (within the meaning of Chapter 16A of Part 2 of

 

CAA 2001) is on or after 20 March 2013.

 

      (2)  

But those amendments do not have effect if before that date—

 

(a)    

the arrangements made to bring about the qualifying change were

 

entered into, or

 

(b)    

there was an agreement, or common understanding, between the

 

parties to those arrangements as to the principal terms on which the

 

qualifying change would be brought about.’.

 



 
 

Consideration of Bill: 1 July 2013                     

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Finance Bill, continued

 
 

REMAINING NEW CLAUSES STANDING IN THE NAME OF A MINISTER OF THE CROWN;

 

AMENDMENTS STANDING IN THE NAME OF A MINISTER OF THE CROWN OTHER THAN

 

AMENDMENTS TO SCHEDULE 18; NEW CLAUSES AND NEW SCHEDULES RELATING TO

 

THE IMPACT, ON REVENUE FROM RATES AND MEASURES IN THE FINANCE BILL,

 

RESULTING FROM THE SPENDING REVIEW

 

Restrictions on interim payments in proceedings relating to taxation matters

 

Mr Chancellor of the Exchequer

 

NC7

 

To move the following Clause:—

 

‘(1)    

This section applies to an application for an interim remedy (however described),

 

made in any court proceedings relating to a taxation matter, if the application is

 

founded (wholly or in part) on a point of law which has yet to be finally

 

determined in the proceedings.

 

(2)    

Any power of a court to grant an interim remedy (however described) requiring

 

the Commissioners for Her Majesty’s Revenue and Customs, or an officer of

 

Revenue and Customs, to pay any sum to any claimant (however described) in the

 

proceedings is restricted as follows.

 

(3)    

The court may grant the interim remedy only if it is shown to the satisfaction of

 

the court—

 

(a)    

that, taking account of all sources of funding (including borrowing)

 

reasonably likely to be available to fund the proceedings, the payment of

 

the sum is necessary to enable the proceedings to continue, or

 

(b)    

that the circumstances of the claimant are exceptional and such that the

 

granting of the remedy is necessary in the interests of justice.

 

(4)    

The powers restricted by this section include (for example)—

 

(a)    

powers under rule 25 of the Civil Procedure Rules 1998 (S.I. 1998/3132);

 

(b)    

powers under Part II of Rule 29 of the Rules of the Court of Judicature

 

(Northern Ireland) (Revision) 1980 (S.R. 1980 No.346).

 

(5)    

This section applies in relation to proceedings whenever commenced, but only in

 

relation to applications made in those proceedings on or after 26 June 2013.

 

(6)    

This section applies on and after 26 June 2013.

 

(7)    

Subsection (8) applies where, on or after 26 June 2013 but before the passing of

 

this Act, an interim remedy was granted by a court using a power which, because

 

of subsection (6), is to be taken to have been restricted by this section.

 

(8)    

Unless it is shown to the satisfaction of the court that paragraph (a) or (b) of

 

subsection (3) applied at the time the interim remedy was granted, the court must,

 

on an application made to it under this subsection—

 

(a)    

revoke or modify the interim remedy so as to secure compliance with this

 

section, and

 

(b)    

if the Commissioners have, or an officer of Revenue and Customs has,

 

paid any sum as originally required by the interim remedy, order the

 

repayment of the sum or any part of the sum as appropriate (with interest

 

from the date of payment).

 

(9)    

For the purposes of this section, proceedings on appeal are to be treated as part of

 

the original proceedings from which the appeal lies.

 

(10)    

In this section “taxation matter” means anything, other than national insurance

 

contributions, the collection and management of which is the responsibility of the

 

Commissioners for Her Majesty’s Revenue and Customs (or was the


 
 

Consideration of Bill: 1 July 2013                     

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Finance Bill, continued

 
 

responsibility of the Commissioners of Inland Revenue or Commissioners of

 

Customs and Excise).’.

 


 

Mr Chancellor of the Exchequer

 

1

 

Clause  175,  page  105,  leave out lines 4 to 13 and insert—

 

‘(3)    

Condition A is that, at any time on or after 6 April 2013 and during the period of

 

7 years ending with the date on which the election is made, the person had a

 

spouse or civil partner who was domiciled in the United Kingdom.

 

(4)    

Condition B is that a person (“the deceased”) dies and, at any time on or after 6

 

April 2013 and within the period of 7 years ending with the date of death, the

 

deceased was—

 

(a)    

domiciled in the United Kingdom, and

 

(b)    

the spouse or civil partner of the person who would, by virtue of the

 

election, be treated as domiciled in the United Kingdom.’.

 

Mr Chancellor of the Exchequer

 

2

 

Clause  175,  page  105,  leave out lines 39 to 43.

 

Mr Chancellor of the Exchequer

 

3

 

Clause  175,  page  106,  line  4,  leave out ‘spouse or civil partner’s’ and insert

 

‘deceased’s’.

 

Mr Chancellor of the Exchequer

 

4

 

Clause  175,  page  106,  line  7,  leave out from first ‘date’ to end of line 19 and insert

 

‘if, on the date—

 

(a)    

in the case of a lifetime election—

 

(i)    

the person making the election was married to, or in a civil

 

partnership with, the spouse or civil partner, and

 

(ii)    

the spouse or civil partner was domiciled in the United Kingdom,

 

or

 

(b)    

in the case of a death election—

 

(i)    

the person who is, by virtue of the election, to be treated as

 

domiciled in the United Kingdom was married to, or in a civil

 

partnership with, the deceased, and

 

(ii)    

the deceased was domiciled in the United Kingdom.’.

 

Mr Chancellor of the Exchequer

 

5

 

Clause  175,  page  106,  line  21,  leave out ‘spouse or civil partner’ and insert

 

‘deceased’.

 

Mr Chancellor of the Exchequer

 

6

 

Clause  175,  page  106,  line  27,  leave out ‘or (4)(b)’.


 
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