Finance Bill (HC Bill 10)

(6) For the purposes of subsection (2)(c) it does not matter if the
transferor and the transferee are not members of a partnership as
mentioned at the same time.

(7) For the purposes of subsection (2)(c) a partnership is “associated”
5with the relevant partnership if—

(a) it is a member of the relevant partnership, or

(b) it is a member of a partnership which is associated with the
relevant partnership (whether by virtue of paragraph (a) or
this paragraph).

(8) 10In subsections (2)(c) and (6) references to the transferor include a
person connected with the transferor and references to the transferee
include a person connected with the transferee.

(9) Condition B is that it is reasonable to assume that, had the
transferred asset instead been disposed of directly by the transferor
15to the transferee, the relevant amount (or any part of it)—

(a) would have been chargeable to income tax as income of the
transferor, or

(b) would have been brought into account as income in
calculating profits of the transferor for income tax purposes.

(10) 20In this Chapter “the relevant amount” means the amount of the
consideration received by the transferor for the disposal.

(11) If the transferor receives—

(a) no consideration for the disposal, or

(b) consideration which is substantially less than the market
25value of the transferred asset,

assume for the purposes of subsection (10) that the transferor
receives consideration of an amount equal to the market value of the
transferred asset.

(12) In subsection (11) references to the market value of the transferred
30asset are to that value at the time of the disposal.

(13) In this Chapter—

• “arrangements” includes any agreement, understanding,
  scheme, transaction or series of transactions (whether or not
  legally enforceable),

• 35“partnership” includes a limited liability partnership whether
  or not section 863(1) of ITTOIA 2005 applies in relation to it,
  and

• “tax advantage” means a tax advantage, as defined in section
  1139 of CTA 2010, in relation to income tax or the charge to
  40corporation tax on income.

809DZB Relevant amount to be treated as income

(1) The relevant amount is to be treated as income of the transferor
chargeable to income tax in the same way and to the same extent as
that in which it—

(a) 45would have been chargeable to income tax as income of the
transferor, or

(b) would have been brought into account as income in
calculating profits of the transferor for income tax purposes,

as mentioned in section 809DZA(9).

(2) Section 809AZB(3) to (6) applies for the purpose of determining
5when income under subsection (1) is treated as arising (reading
references to the transfer of the right as references to the disposal of
the transferred asset).

(3) If, apart from this subsection and section 809AAZB(4)—

(a) both this Chapter and Chapter 5AA would apply in relation
10to the disposal, and

(b) Chapter 5AA would give the same amount, or a greater
amount, of income of the transferor chargeable to income tax,

this Chapter is not to apply in relation to the disposal.”

(2) The amendment made by this paragraph has effect for cases where the
15arrangements mentioned in section 809DZA(2) of ITA 2007 are made on or
after 6 April 2014.

Corporation tax

26 Part 16 of CTA 2010 (factoring of income etc) is amended as follows.

27 (1) In Chapter 1 (transfers of income streams) section 756 (partnership shares) is
20amended as follows.

(2) In subsection (1) omit “if condition A or B is met”.

(3) Omit subsections (2) and (3).

(4) The amendments made by this paragraph have effect for cases where the
transfer of a right to relevant receipts occurs on or after 1 April 2014.

28 (1) 25After Chapter 1 insert—

“Chapter 1A

Disposals of income streams through partnerships

757A Application of Chapter

(1) This Chapter applies if directly or indirectly in consequence of, or
otherwise in connection with, arrangements involving a company
within the charge to corporation tax (“the transferor”) and another
30person (“the transferee”)—

(a) there is, or is in substance, a disposal of a right to relevant
receipts by the transferor to the transferee,

(b) the disposal is effected (wholly or partly) by or through a
partnership (“the relevant partnership”),

(c) 35at any time—

(i) the transferor is a member of the relevant partnership
or of a partnership associated with the relevant
partnership, and

(ii) the transferee is a member of the relevant partnership
40or of a partnership associated with the relevant
partnership, and

(d) the main purpose, or one of the main purposes, of one or
more steps taken in effecting the disposal is the obtaining of
a tax advantage for any person.

(2) In subsection (1)(a) the reference to a disposal of a right to relevant
5receipts includes anything constituting a disposal of such a right for
the purposes of TCGA 1992.

(3) For the purposes of subsection (1)(b) the disposal might, in
particular, be effected by an acquisition or disposal of, or an increase
or decrease in, an interest in the relevant partnership (including a
10share of the profits or assets of the relevant partnership or an interest
in such a share).

(4) For the purposes of subsection (1)(c) it does not matter if the
transferor and the transferee are not members of a partnership as
mentioned at the same time.

(5) 15For the purposes of subsection (1)(c) a partnership is “associated”
with the relevant partnership if—

(a) it is a member of the relevant partnership, or

(b) it is a member of a partnership which is associated with the
relevant partnership (whether by virtue of paragraph (a) or
20this paragraph).

(6) In subsections (1)(c) and (4) references to the transferor include a
person connected with the transferor and references to the transferee
include a person connected with the transferee.

(7) In this Chapter—

• 25“arrangements” includes any agreement, understanding,
  scheme, transaction or series of transactions (whether or not
  legally enforceable),

• “partnership” includes a limited liability partnership whether
  or not section 1273(1) of CTA 2009 applies in relation to it,

• 30“relevant receipts” means any income—

  (a)

  which (but for the disposal) would be charged to
  corporation tax as income of the transferor (whether
  directly or as a member of a partnership), or

  (b)

  which (but for the disposal) would be brought into
  35account as income in calculating profits of the
  transferor (whether directly or as a member of a
  partnership) for corporation tax purposes, and

• “tax advantage” means a tax advantage, as defined in section
  1139, in relation to income tax or the charge to corporation tax
  40on income.

757B Relevant amount to be treated as income

(1) The relevant amount is to be treated as income of the transferor
chargeable to corporation tax in the same way and to the same extent
as that in which the relevant receipts—

(a) 45would have been chargeable to corporation tax as income of
the transferor, or

(b) would have been brought into account as income in
calculating profits of the transferor for corporation tax
purposes,

but for the disposal.

(2) 5In subsection (1) “the relevant amount” is to be read in accordance
with section 753(2) and section 753(3) and (4) applies for the purpose
of determining when income under subsection (1) is treated as
arising.

(3) For this purpose, in section 753(2) to (4) references to the transfer of
10the right are to be read as references to the disposal of the right.

(4) If, apart from this subsection and section 779B(3)—

(a) both this Chapter and Chapter 4 would apply in relation to
the disposal, and

(b) Chapter 4 would give a greater amount of income of the
15transferor chargeable to corporation tax,

this Chapter is not to apply in relation to the disposal.”

(2) The amendment made by this paragraph has effect for cases where the
arrangements mentioned in section 757A(1) of CTA 2010 are made on or
after 1 April 2014.

29 (1) 20After Chapter 3 insert—

“Chapter 4

Disposals of assets through partnerships

779A Application of Chapter

(1) This Chapter applies if conditions A and B are met.

(2) Condition A is that directly or indirectly in consequence of, or
otherwise in connection with, arrangements involving a company
25within the charge to corporation tax (“the transferor”) and another
person (“the transferee”)—

(a) there is, or is in substance, a disposal of an asset (“the
transferred asset”) by the transferor to the transferee,

(b) the disposal is effected (wholly or partly) by or through a
30partnership (“the relevant partnership”),

(c) at any time—

(i) the transferor is a member of the relevant partnership
or of a partnership associated with the relevant
partnership, and

(ii) 35the transferee is a member of the relevant partnership
or of a partnership associated with the relevant
partnership, and

(d) the main purpose, or one of the main purposes, of one or
more steps taken in effecting the disposal is the obtaining of
40a tax advantage for any person.

(3) In subsection (2)(a) the reference to a disposal of an asset includes
anything constituting a disposal of an asset for the purposes of
TCGA 1992.

(4) For the purposes of subsection (2)(b) the disposal might, in
particular, be effected by an acquisition or disposal of, or an increase
or decrease in, an interest in the relevant partnership (including a
share of the profits or assets of the relevant partnership or an interest
5in such a share).

(5) For the purposes of subsection (2)(c) it does not matter if the
transferor and the transferee are not members of a partnership as
mentioned at the same time.

(6) For the purposes of subsection (2)(c) a partnership is “associated”
10with the relevant partnership if—

(a) it is a member of the relevant partnership, or

(b) it is a member of a partnership which is associated with the
relevant partnership (whether by virtue of paragraph (a) or
this paragraph).

(7) 15In subsections (2)(c) and (5) references to the transferor include a
person connected with the transferor and references to the transferee
include a person connected with the transferee.

(8) Condition B is that it is reasonable to assume that, had the
transferred asset instead been disposed of directly by the transferor
20to the transferee, the relevant amount (or any part of it)—

(a) would have been chargeable to corporation tax as income of
the transferor, or

(b) would have been brought into account as income in
calculating profits of the transferor for corporation tax
25purposes.

(9) In this Chapter “the relevant amount” means the amount of the
consideration received by the transferor for the disposal.

(10) If the transferor receives—

(a) no consideration for the disposal, or

(b) 30consideration which is substantially less than the market
value of the transferred asset,

assume for the purposes of subsection (9) that the transferor receives
consideration of an amount equal to the market value of the
transferred asset.

(11) 35In subsection (10) references to the market value of the transferred
asset are to that value at the time of the disposal.

(12) In this Chapter—

• “arrangements” includes any agreement, understanding,
  scheme, transaction or series of transactions (whether or not
  40legally enforceable),

• “partnership” includes a limited liability partnership whether
  or not section 1273(1) of CTA 2009 applies in relation to it,
  and

• “tax advantage” means a tax advantage, as defined in section
  451139, in relation to income tax or the charge to corporation tax
  on income.

779B Relevant amount to be treated as income

(1) The relevant amount is to be treated as income of the transferor
chargeable to corporation tax in the same way and to the same extent
as that in which it—

(a) 5would have been chargeable to corporation tax as income of
the transferor, or

(b) would have been brought into account as income in
calculating profits of the transferor for corporation tax
purposes,

10as mentioned in section 779A(8).

(2) Section 753(3) and (4) applies for the purpose of determining when
income under subsection (1) is treated as arising (reading references
to the transfer of the right as references to the disposal of the
transferred asset).

(3) 15If, apart from this subsection and section 757B(4)—

(a) both this Chapter and Chapter 1A would apply in relation to
the disposal, and

(b) Chapter 1A would give the same amount, or a greater
amount, of income of the transferor chargeable to corporation
20tax,

this Chapter is not to apply in relation to the disposal.”

(2) The amendment made by this paragraph has effect for cases where the
arrangements mentioned in section 779A(2) of CTA 2010 are made on or
after 1 April 2014.

Section 80

25SCHEDULE 14 Abolition of reduced rates for vehicles satisfying reduced pollution
requirements

Part 1 Amendments of the Vehicle Excise and Registration Act 1994

1 30VERA 1994 is amended as follows.

2 Omit section 61B (certificates as to reduced pollution).

3 In consequence of the amendment made by paragraph 2—

(a) in section 45 (false declarations etc), in subsections (3A) and (3B)
omit “or 61B”,

(b) 35in Schedule 1 (annual rates of duty)—

(i) in paragraph 3(6) omit paragraph (a) and the “and” following
it,

(ii) in paragraph 4(7) omit paragraph (a) and the “and” following
it,

(iii) 40in paragraph 5(6) omit paragraph (a) and the “and” following
it, and

(iv) in paragraph 7(3) omit paragraph (a) and the “and” following
it, and

(c) in paragraph 22 of Schedule 2 (exempt vehicles: vehicle testing etc)—

(i) in sub-paragraph (1)(a) for “, a vehicle weight test or a
5reduced pollution test” substitute “or a vehicle weight test”,

(ii) in sub-paragraph (2) omit “a reduced pollution test or”,

(iii) in sub-paragraph (2A), in both places it occurs, omit “or a
reduced pollution test”,

(iv) in sub-paragraph (3) omit “, or a reduced pollution test,”,

(v) 10omit sub-paragraph (6AA),

(vi) in sub-paragraph (6B) for “, a vehicle weight test or a reduced
pollution test” substitute “or a vehicle weight test”, and

(vii) in sub-paragraphs (8) and (9) omit paragraph (d) and the “or”
following paragraph (c).

4 15In paragraph 3 of Schedule 1 (annual rates of duty: buses)—

(a) in sub-paragraph (1) omit “with respect to which the reduced
pollution requirements are not satisfied”, and

(b) omit sub-paragraph (1A).

5 In paragraph 6 of Schedule 1 (annual rates of duty: vehicles used for
20exceptional loads), in sub-paragraph (2A)—

(a) in paragraph (a) omit “in the case of a vehicle with respect to which
the reduced pollution requirements are not satisfied,”,

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

(c) omit paragraph (b).

6 25In paragraph 7 of Schedule 1 (annual rates of duty: haulage vehicles), for
sub-paragraph (3A) substitute—

“(3A) The rate referred to in sub-paragraph (1)(b) is £350.”

7 Omit paragraphs 9A and 9B of Schedule 1.

8 Omit paragraphs 11A and 11B of Schedule 1.

9 30In paragraph 11C of Schedule 1 (annual rates of duty: tractive units), in sub-
paragraph (2)—

(a) in paragraph (a) omit “in the case of a vehicle with respect to which
the reduced pollution requirements are not satisfied,”, and

(b) omit paragraph (b).

10 35In consequence of the amendments made by paragraphs 4 to 9—

(a) in section 13 (trade licences: duration and amount of duty) omit
subsection (7)(a) and the “and” following it,

(b) in section 13 (trade licences: duration and amount of duty) as set out
in paragraph 8(1) of Schedule 4 to VERA 1994 which is to have effect
40on and after a day appointed by order, omit subsection (7)(a) and the
“and” following it,

(c) in section 15 (vehicles becoming chargeable to duty at a higher rate),
omit subsection (2A),

(d) in paragraph 9 of Schedule 1 (annual rates of duty: rigid goods
45vehicles)—

(i) in sub-paragraph (1), omit “is not a vehicle with respect to
which the reduced pollution requirements are satisfied and
which”,

(ii) omit sub-paragraph (3)(a), and

(iii) 5in sub-paragraph (4), omit paragraph (a) and the “and”
following it, and

(e) in paragraph 11 of Schedule 1 (annual rates of duty: tractive units)—

(i) in sub-paragraph (1), omit “is not a vehicle with respect to
which the reduced pollution requirements are satisfied and
10which”,

(ii) omit sub-paragraph (3)(a), and

(iii) in sub-paragraph (4), omit paragraph (a) and the “and”
following it.

Part 2 15Commencement

Introduction

11 This Part of this Schedule makes provision for the coming into force of the
amendments made by Part 1.

Licences taken out on or after 1 April 2014

12 20In the case of an exceptional load vehicle—

(a) which is charged to HGV road user levy, and

(b) which satisfies the reduced pollution requirements for the purposes
of VERA 1994,

the amendments made by paragraphs 5 and 10 have effect in relation to
25licences taken out on or after 1 April 2014.

13 In the case of a rigid goods vehicle or tractive unit—

(a) which has a revenue weight of not less than 12,000 kgs, and

(b) which satisfies the reduced pollution requirements for the purposes
of VERA 1994,

30the amendments made by paragraphs 7 to 10 have effect in relation to
licences taken out on or after 1 April 2014.

Licences taken out on or after 1 April 2016

14 In the case of the vehicles described in paragraph 15 the amendments made
by paragraphs 4 to 10 have effect in relation to licences taken out on or after
351 April 2016.

15 Those vehicles are—

(a) a bus, light exceptional load vehicle or haulage vehicle which
satisfies the reduced pollution requirements for the purposes of
VERA 1994 because paragraph 4 of Schedule 2 to the Regulations
40applies to the vehicle as result of it falling within item 1 or 2 of Table
1 or any of items 1 to 3 of Table 2 in that paragraph (or being taken to
be a vehicle falling within item 1 of Table 1 or Table 2 as a result of
paragraph 5 of that Schedule), and

(b) a rigid goods vehicle or tractive unit—

(i) which has a revenue weight below 12,000 kgs, and

(ii) which satisfies the reduced pollution requirements for the
purposes of VERA 1994 because paragraph 4 of Schedule 2 to
5the Regulations applies to the vehicle as result of it falling
within item 1 or 2 of Table 1 or any of items 1 to 3 of Table 2
in that paragraph (or being taken to be a vehicle falling
within item 1 of Table 1 or Table 2 as a result of paragraph 5
of that Schedule).

10Licences taken out on or after 1 January 2017

16 In the case of the vehicles described in paragraphs 17 and 18 the
amendments made by paragraphs 4 to 10 have effect in relation to licences
taken out on or after 1 January 2017.

17 A bus, light exceptional load vehicle or haulage vehicle which satisfies the
15reduced pollution requirements for the purposes of VERA 1994 because—

(a) paragraph 4 of Schedule 2 to the Regulations applies to the vehicle as
result of it falling within item 3 or 4 of Table 1 or item 4 of Table 2 in
that paragraph,

(b) paragraph 4A of Schedule 2 to the Regulations applies to the vehicle
20as result of it meeting the requirements of paragraph 4B of that
Schedule, or

(c) paragraph 4C of Schedule 2 to the Regulations applies to the vehicle
as result of it meeting the requirements of paragraph 4D of that
Schedule.

18 (1) 25A rigid goods vehicle or tractive unit—

(a) which has a revenue weight below 12,000 kgs, and

(b) which satisfies the reduced pollution requirements for the purposes
of VERA 1994 for any of the reasons in sub-paragraph (2).

(2) Those reasons are—

(a) 30paragraph 4 of Schedule 2 to the Regulations applies to the vehicle as
result of it falling within item 3 or 4 of Table 1 or item 4 of Table 2 in
that paragraph,

(b) paragraph 4A of Schedule 2 to the Regulations applies to the vehicle
as result of it meeting the requirements of paragraph 4B of that
35Schedule, or

(c) paragraph 4C of Schedule 2 to the Regulations applies to the vehicle
as result of it meeting the requirements of paragraph 4D of that
Schedule.

I January 2017

19 40The amendments made by paragraphs 2 and 3 come into force on 1 January
2017.

Interpretation

20 In this Schedule—

• “bus” has the same meaning as in paragraph 3(2) of Schedule 1 to VERA
  451994;

Finance BillPage 449

• “exceptional load vehicle” is a vehicle to which paragraph 6 of Schedule
  1 to VERA 1994 applies by reason of falling within sub-paragraph (1)
  of that paragraph;

• “haulage vehicle” has the same meaning as in paragraph 7(2) of
  5Schedule 1 to VERA 1994;

• “light exceptional load vehicle” means an exceptional load vehicle
  which is not charged to HGV road user levy;

• “the Regulations” means the Road Vehicles (Registration and
  Licensing) Regulations 2002 (S.I. 2002/2742S.I. 2002/2742);

• 10“rigid goods vehicle” and “tractive unit” have the same meaning as in
  VERA 1994.

Section 85

SCHEDULE 15 Other amendments about vehicle excise duty

Part 1 15Amendments of the Vehicle Excise and Registration Act 1994

1 VERA 1994 is amended as follows.

2 In section 7 (issue of vehicle licences), omit subsections (6) and (7).

3 (1) Section 7A (supplement payable on vehicle ceasing to be appropriately
covered) is amended as follows.

(2) 20In subsection (1B)—

(a) omit “or in respect of”, and

(b) omit the words from “unless” to the end.

(3)
Omit subsection (1C).

4 Omit section 10 (transfer of vehicle licences).

5 25In section 14 (trade licences: supplementary)—

(a) in subsection (2), for the words from “surrender” to the end
substitute “request that the Secretary of State cancel the licence”, and

(b) omit subsection (4).

6 (1) Section 19 (rebates) is amended as follows.

(2) 30In subsection (1), for the words from the beginning to “receive” substitute “If
any of the rebate conditions is satisfied in relation to a vehicle in respect of
which a vehicle licence is in force, the relevant person is entitled to receive
(by way of rebate of duty paid on the licence)”.

(3) For subsection (3) substitute—

“(3) 35The rebate conditions are as follows—

(a) the vehicle has been stolen and the Secretary of State has been
notified of that by the relevant person,

(b) the vehicle has been destroyed and the Secretary of State has
been notified of that by the relevant person,