Session 2014 - 15
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Notices of Amendments: 27 June 2014                     

345

 

Finance Bill, continued

 
 

(4)    

Subsection (1) does not apply, in the case of debits in respect of a loan

 

relationship to which Chapter 2 of Part 6 of CTA 2009 (relevant non-

 

lending relationships) applies, so far as—

 

(a)    

the payment of interest under the relationship is expenditure

 

incurred as mentioned in subsection (2)(a), or

 

(b)    

the exchange loss arising from the relationship is in respect of

 

a money debt on which the interest payable (if any) is, or

 

would be, such expenditure.

 

(5)    

If a debit—

 

(a)    

falls to be brought into account for the purposes of Part 5 of

 

CTA 2009 in respect of a loan relationship of the contractor,

 

but

 

(b)    

as a result of this section cannot be brought into account in a

 

way that results in any reduction of what would otherwise be

 

the contractor’s ring fence profits,

 

    

the debit is to be brought into account for those purposes as a non-

 

trading debit despite anything in section 297 of that Act.

 

(6)    

References in this section to a loan relationship, in relation to the

 

borrowing of money, do not include a relationship to which Chapter 2

 

of Part 6 of CTA 2009 (relevant non-lending relationships) applies.

 

356NC

Restriction on credits to be brought into account

 

(1)    

Credits in respect of exchange gains from the contractor’s loan

 

relationships may not be brought into account for the purposes of Part

 

5 of CTA 2009 (loan relationships) in any way that results in an

 

increase of what would otherwise be the contractor’s ring fence

 

profits, but this is subject to subsections (2) to (4).

 

(2)    

Subsection (1) does not apply so far as a loan relationship is in respect

 

of money borrowed by the contractor which has been—

 

(a)    

used to meet expenditure incurred by the contractor in

 

carrying on oil contractor activities, or

 

(b)    

appropriated to meeting expenditure to be so incurred by the

 

contractor.

 

(3)    

Subsection (1) does not apply, in the case of credits falling to be

 

brought into account as a result of section 329 of CTA 2009 (pre-loan

 

relationship and abortive expenses) in respect of a loan relationship

 

that has not been entered into, so far as the relationship would have

 

been one entered into for the purpose of borrowing money to be used

 

or appropriated as mentioned in subsection (2).

 

(4)    

Subsection (1) does not apply, in the case of credits in respect of a loan

 

relationship to which Chapter 2 of Part 6 of CTA 2009 (relevant non-

 

lending relationships) applies, so far as—

 

(a)    

the payment of interest under the relationship is expenditure

 

incurred as mentioned in subsection (2)(a), or

 

(b)    

the exchange gain arising from the relationship is in respect of

 

a money debt on which the interest payable (if any) is, or

 

would be, such expenditure.


 
 

Notices of Amendments: 27 June 2014                     

346

 

Finance Bill, continued

 
 

(5)    

If a credit—

 

(a)    

falls to be brought into account for the purposes of Part 5 of

 

CTA 2009 in respect of a loan relationship of the contractor,

 

but

 

(b)    

as a result of this section cannot be brought into account in a

 

way that results in any increase of what would otherwise be

 

the contractor’s ring fence profits,

 

    

the credit is to be brought into account for those purposes as a non-

 

trading credit despite anything in section 297 of that Act.

 

(6)    

Section 356NB(6) applies for the purposes of this section.

 

Relief

 

356ND

Management expenses

 

No deduction under section 1219 of CTA 2009 (expenses of

 

management of a company’s investment business) is to be allowed

 

from the contractor’s ring fence profits.

 

356NE

Losses

 

Relief in respect of a loss incurred by the contractor may not be given

 

under section 37 (relief for trade losses against total profits) against the

 

contractor’s ring fence profits except so far as the loss arises from oil

 

contractor activities.

 

356NF

Group relief

 

(1)    

On a claim for group relief made by a claimant company in relation to

 

a surrendering company, group relief may not be allowed against the

 

claimant company’s contractor’s ring fence profits except so far as the

 

claim relates to losses incurred by the surrendering company that arose

 

from oil contractor activities.

 

(2)    

In section 105 (restriction on surrender of losses etc within section

 

99(1)(d) to (g)) the references to the surrendering company’s gross

 

profits of the surrender period do not include the company’s relevant

 

contractor’s ring fence profits for that period.

 

(3)    

The company’s “relevant contractor’s ring fence profits” for that

 

period are—

 

(a)    

if for that period there are no qualifying charitable donations

 

made by the company that are allowable under Part 6

 

(charitable donations relief), the company’s contractor’s ring

 

fence profits for that period, or

 

(b)    

otherwise, so much of the contractor’s ring fence profits of the

 

company for that period as exceeds the amount of the

 

qualifying charitable donations made by the company that are

 

allowable under section 189 for that period.

 

(4)    

In this section “claimant company” and “surrendering company” are

 

to be read in accordance with Part 5 (group relief) (see section 188).

 

356NG

Capital allowances

 

A capital allowance may not to any extent be given effect under

 

section 259 or 260 of CAA 2001 (special leasing) by deduction from

 

the contractor’s ring fence profits.”


 
 

Notices of Amendments: 27 June 2014                     

347

 

Finance Bill, continued

 
 

5          

In Schedule 4 (index of defined expressions), insert the following entries at the

 

appropriate places—

 

“associated

section 356LB”

 
 

person (in Part

  
 

8ZA)

  
 

“contractor (in

section

 
 

Part 8ZA)

356L(2)”

 
 

“contractor’s

section 356LD”

 
 

ring fence

  
 

profits (in Part

  
 

8ZA)

  
 

“exploration or

section

 
 

exploitation

356L(4)”

 
 

activities (in

  
 

Part 8ZA)

  
 

“lease (in Part

section 356LC”

 
 

8ZA)

  
 

“oil contractor

section

 
 

activities (in

356L(2)”

 
 

Part 8ZA)

  
 

“relevant asset

section 356LA”

 
 

(in Part 8ZA)

  
 

“relevant

section

 
 

offshore area

356L(5)”

 
 

(in Part 8ZA)

  
 

“relevant

section

 
 

offshore service

356L(3)”

 
 

(in Part 8ZA)

  

 
 

Notices of Amendments: 27 June 2014                     

348

 

Finance Bill, continued

 
 

Commencement etc

 

6          

This Schedule is to be treated as having come into force on 1 April 2014 (“the

 

commencement date”).

 

7          

Section 356L of CTA 2010 has effect in relation to activities carried out on or

 

after the commencement date.

 

8    (1)  

If, on the commencement date, a company was carrying on a trade that

 

consisted of, or included, carrying out oil contractor activities, an accounting

 

period ends (if it would not otherwise do so) with 31 March 2014.

 

      (2)  

Sub-paragraph (3) applies if—

 

(a)    

but for sub-paragraph (1), a company would have had an accounting

 

period that began before the commencement date and ended on or after

 

that date (“the split accounting period”), and

 

(b)    

the company’s accounting period beginning with 1 April 2014 ends

 

when the split accounting period would have ended but for that sub-

 

paragraph.

 

      (3)  

For the purposes of Chapter 4 of Part 22 of CTA 2010 (surrender of tax refund

 

within group)—

 

(a)    

the company is to be treated as having the split accounting period,

 

(b)    

any tax refund due to the company for—

 

(i)    

the accounting period ending with 31 March 2014, or

 

(ii)    

the accounting period beginning with 1 April 2014,

 

    

is to be treated as if it were a tax refund due to the company for the

 

split accounting period, and

 

(c)    

if the company surrenders a tax refund that is so treated (or part of such

 

a refund), the references in section 964(6) of CTA 2010 to the date on

 

which corporation tax became due and payable are to be treated as

 

references to the date on which corporation tax would have become

 

due and payable had the company had the split accounting period.

 

9    (1)  

A company may be given relief under section 45 of CTA 2010 (carry forward

 

of trade loss against subsequent trade profits) for a loss made in an accounting

 

period ending before the commencement date against profits of a ring fence

 

trade so far as (and only so far as) the loss would have been a loss of the ring

 

fence trade had section 356L of that Act had effect in relation to activities

 

carried out before the commencement date and Part 8ZA therefore applied.

 

      (2)  

In sub-paragraph (1) “ring fence trade” means oil contractor activities that

 

constitute a separate trade (whether by virtue of section 356M of that Act or

 

otherwise).”

 


 

Mr Chancellor of the Exchequer

 

NS2

 

To move the following Schedule—

 

“General Block Exemption Regulation

 

1          

CAA 2001 is amended as follows.

 

2    (1)  

Section 45DB (exclusions from allowances under section 45DA) is amended

 

as follows.

 

      (2)  

In subsection (3)(a), for “a firm in difficulty for the purposes of the Community

 

Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty


 
 

Notices of Amendments: 27 June 2014                     

349

 

Finance Bill, continued

 
 

(2004/C 244/02)” substitute “an undertaking in difficulty for the purposes of

 

the General Block Exemption Regulation”.

 

      (3)  

In subsection (4)(a), for “Council Regulation (EC) No 104/2000” substitute

 

“Regulation (EU) No 1379/2013 of the European Parliament and of the

 

Council”.

 

      (4)  

In subsection (11), in the definition of “General Block Exemption Regulation”,

 

for “(EC) No 800/2008” substitute “(EU) No 651/2014”.

 

      (5)  

In subsection (12), for paragraph (c) substitute—

 

“(c)    

Regulation (EU) No 1379/2013 of the European Parliament

 

and of the Council,”.

 

3          

In section 45K (expenditure on plant and machinery for use in designated

 

assisted areas), after subsection (8) insert—

 

“(8A)    

Condition C is met by virtue of subsection (8)(c) only if the amount of

 

the expenditure exceeds the amount by which the relevant plant or

 

machinery is depreciated in the period of 3 years ending immediately

 

before the beginning of the chargeable period in which the expenditure

 

is incurred.

 

(8B)    

“Relevant plant or machinery” means the plant or machinery being

 

used at the end of the period of 3 years mentioned in subsection (8A)

 

for the purposes of the product, process or service mentioned in

 

subsection (8)(c).”

 

4    (1)  

Section 45M (exemptions from allowances under section 45K) is amended as

 

follows.

 

      (2)  

In subsection (1), for “(6) or (7)” substitute “(7) or (7A)”.

 

      (3)  

In subsection (3)(a), for “a firm in difficulty for the purposes of the Community

 

Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty

 

(2004/C 244/02)” substitute “an undertaking in difficulty for the purposes of

 

the General Block Exemption Regulation”.

 

      (4)  

In subsection (4)—

 

(a)    

in paragraph (a), for “Council Regulation (EC) No 104/2000”

 

substitute “Regulation (EU) No 1379/2013 of the European

 

Parliament and of the Council”, and

 

(b)    

after paragraph (b) insert—

 

“(ba)    

in the transport sector or related infrastructure,

 

(bb)    

relating to energy generation, distribution or

 

infrastructure,

 

(bc)    

relating to the development of broadband networks,”.

 

      (5)  

After that subsection insert—

 

“(4A)    

Expressions used in subsection (4)(b), (ba), (bb) or (bc) and in the

 

General Block Exemption Regulation have the same meaning as in

 

that Regulation.”

 

      (6)  

Omit subsection (6).

 

      (7)  

After subsection (7) insert—

 

“(7A)    

Expenditure is within this subsection if—

 

(a)    

the area by reference to which the condition in section

 

45K(1)(a) is met is not an area which falls within Article

 

107(3)(a) of the Treaty on the Functioning of the European

 

Union,

 

(b)    

the condition in section 45K(8)(a) is not met in relation to the

 

expenditure, and


 
 

Notices of Amendments: 27 June 2014                     

350

 

Finance Bill, continued

 
 

(c)    

at the time the expenditure is incurred the company is not an

 

SME for the purposes of the General Block Exemption

 

Regulation.”

 

      (8)  

In subsection (12)—

 

(a)    

in the first definition, for the words from ““coal” to “have” substitute

 

“has”, and

 

(b)    

in the definition of “General Block Exemption Regulation”, for “(EC)

 

No 800/2008” substitute “(EU) No 651/2014”.

 

      (9)  

In subsection (15), for paragraph (c) substitute—

 

“(c)    

Regulation (EU) No 1379/2013 of the European Parliament

 

and of the Council,”.

 

5    (1)  

Section 45N (effect of plant or machinery subsequently being primarily for use

 

outside designated assisted areas) is amended as follows.

 

      (2)  

In subsection (1)—

 

(a)    

for “designated assisted area within the meaning of section 45K”

 

substitute “relevant area”, and

 

(b)    

for “such a designated assisted” substitute “a relevant”.

 

      (3)  

After subsection (3) insert—

 

“(3A)    

“Relevant area” means—

 

(a)    

in relation to expenditure which would be within subsection

 

(7A) of section 45M if paragraph (a) of that subsection were

 

omitted, a designated assisted area within the meaning of

 

section 45K which falls within Article 107(3)(a) of the Treaty

 

on the Functioning of the European Union, and

 

(b)    

in relation to any other expenditure, a designated assisted area

 

within the meaning of section 45K.”

 

6          

In section 212T(6) (cap on first-year allowances: zero-emission goods

 

vehicles), in the definition of “undertaking”, for “(EC) No 800/2008”

 

substitute “(EU) No 651/2014”.

 

7          

In section 212U(5) (cap on first-year allowances: expenditure on plant and

 

machinery for use in designated assisted areas), in the definition of “single

 

investment project”, for “(EC) No 800/2008” substitute “(EU) No 651/2014”.”

 

8          

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

 

incurred on or after the day on which this Act is passed.”

 


 

Mr Chancellor of the Exchequer

 

NS3

 

To move the following Schedule—

 

“Taxation of co-operative societies etc

 

Taxation of Chargeable Gains Act 1992 (c. 12)

 

1          

In section 217D of TCGA 1992 (disposal of assets on union, amalgamation or

 

transfer of engagements), in subsection (3), after paragraph (a) insert—

 

“(aa)    

a society registered as a credit union under the Credit Unions

 

(Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)),”.


 
 

Notices of Amendments: 27 June 2014                     

351

 

Finance Bill, continued

 
 

Co-operative and Community Benefit Societies Act 2014 (c. 14)

 

2          

Schedule 4 to the Co-operative and Community Benefit Societies Act 2014

 

(consequential amendments) is amended as follows.

 

3          

In paragraph 47 (which amends section 140E of TCGA 1992)—

 

(a)    

in sub-paragraph (2), after “Co-operative and Community Benefit

 

Societies Act 2014” insert “or a society registered or treated as

 

registered under the Industrial and Provident Societies Act (Northern

 

Ireland) 1969”, and

 

(b)    

in sub-paragraph (3), after “Co-operative and Community Benefit

 

Societies Act 2014” insert “, a society registered or treated as

 

registered under the Industrial and Provident Societies Act (Northern

 

Ireland) 1969”.

 

4          

In paragraph 48 (which amends section 140F of TCGA 1992) after “Co-

 

operative and Community Benefit Societies Act 2014” insert “or a society

 

registered or treated as registered under the Industrial and Provident Societies

 

Act (Northern Ireland) 1969”.

 

5          

In paragraph 49 (which amends section 140G of TCGA 1992) after “Co-

 

operative and Community Benefit Societies Act 2014” insert “or a society

 

registered or treated as registered under the Industrial and Provident Societies

 

Act (Northern Ireland) 1969”.

 

6          

In paragraph 50 (which amends section 170 of TCGA 1992)—

 

(a)    

in sub-paragraph (2), for “within the meaning of the Co-operative and

 

Community Benefits Societies Act 2014” substitute “(see section

 

1119 of that Act)”, and

 

(b)    

in sub-paragraph (3), for “within the meaning of the Co-operative and

 

Community Benefits Societies Act 2014” substitute “(see section

 

1119 of CTA 2010)”.

 

7          

In paragraph 53 (which amends Schedule 7AC of TCGA 1992) for “within the

 

meaning of the Co-operative and Community Benefits Societies Act 2014”

 

substitute “(see section 1119 of that Act)”.

 

8          

In paragraph 82 (which amends paragraph 28 of Schedule 2 to ITEPA 2003),

 

in the sub-paragraph (5) substituted by sub-paragraph (3)—

 

(a)    

omit the “or” following paragraph (b), and

 

(b)    

at the end of paragraph (c) insert “, or

 

(d)    

an SCE formed in accordance with Council

 

Regulation (EC) No 1435/2003 on the Statute for a

 

European Cooperative Society.”.

 

9          

In paragraph 94 (which amends section 379 of ITTOIA 2005), in the definition

 

of “registered society” inserted by sub-paragraph (4)—

 

(a)    

omit the “or” following paragraph (a), and

 

(b)    

after paragraph (b) insert—

 

“(c)    

a society registered as a credit union under the Credit

 

Unions (Northern Ireland) Order 1985 (S.I. 1985/

 

1205 (N.I. 12)), or

 

(d)    

an SCE formed in accordance with Council

 

Regulation (EC) No 1435/2003 on the Statute for a

 

European Cooperative Society,”.

 

10         

In paragraph 105 (which amends section 151 of ITA 2007), in the definition of

 

“registered society” inserted by sub-paragraph (3)—

 

(a)    

omit the “or” following paragraph (a), and

 

(b)    

at the end of paragraph (b) insert “or


 
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