Finance Bill (HC Bill 10)

that the affairs of the company are conducted in accordance with the
10wishes of the member (or, as the case may be, members).

(5) A partnership is “member-controlled” if a member of the club has (or
two or more members acting together have) the right to a share of more
than half the assets, or of more than half the income, of the partnership.

(6) In this section any reference to a member of the club includes a
15reference to a person connected with a member of the club.

(7) For the purposes of subsection (2)(a), the Treasury may by regulations
specify—

(a) descriptions of expenditure which is to be treated as
employment expenditure incurred in respect of the
20employment of a member of a club;

(b) descriptions of expenditure which is not to be so treated.

(8) Section 1171(4) (orders and regulations subject to negative resolution
procedure) does not apply to any regulations made under subsection
(7) if a draft of the statutory instrument containing them has been laid
25before, and approved by a resolution of, the House of Commons.”

(8) Chapter 9 of Part 13 of that Act (other special types of company: community
amateur sports clubs) is amended in accordance with subsections (9) to (12).

(9) After section 661D (but before the italic heading) insert—

“661E Tax treatment of gifts of money from companies

30If a registered club receives a gift of a sum of money from a company
which is not a charity, the gift is treated as an amount in respect of
which the registered club is chargeable to corporation tax, under the
charge to corporation tax on income.

But this is subject to section 664 (exemption for interest, gift aid and
35company gift income).”

(10) In section 664 (exemption for interest and gift aid income)—

(a) in subsection (1), omit the “and” after paragraph (a) and after
paragraph (b) insert “, and

(c) its company gift income for that period,”,

(b) 40in that subsection, for “and gift aid income” substitute “, gift aid income
and company gift income”, and

(c) in subsection (3), after “this section—” insert—

• ““company gift income”, in relation to a club, means gifts
  of money made to the club by companies which are not
  45charities,”.

(11) In section 665A (claims in relation to interest and gift aid income), in subsection
(1)(b) for “and gift aid” substitute “, gift aid and company gift”.

(12) Accordingly—

(a) in the italic heading before section 661D, omit “qualifying for gift aid
5relief”,

(b) in the heading for section 664, for “and gift aid” substitute “, gift aid
and company gift”

(c) in the heading for section 665A, for “and gift aid” substitute “, gift aid
and company gift”.

(13) 10The amendments made by this section have effect in relation to payments
made on or after 1 April 2014.

(14) But the amendments made by subsections (1) to (7) are to be ignored for the
purposes of section 199 of CTA 2010 (payment attributed to earlier accounting
period) if the claim mentioned in subsection (1)(c) of that section is in respect
15of an accounting period ending before 1 April 2014.

(15) The earlier accounting periods mentioned in section 202B(3) of CTA 2010 (see
subsection (7) of this section) do not include any accounting period ending
before 1 April 2014.

36 Changes in company ownership

(1) 20Part 14 of CTA 2010 (change in company ownership) is amended as follows.

(2) In section 688 (meaning of “significant increase in the amount of a company’s
capital”), in subsection (2), for paragraph (b) and the “or” before it substitute “,
and

“(b) is at least 125% of amount A.”

(3) 25In section 723 (changes in indirect ownership), in subsection (1), after “section
724” insert “or 724A”.

(4) After section 724 insert—

“724A Disregard of change in parent company

(1) Where a new company (“N”) acquires all the issued share capital of
30another company (“C”), the resulting ownership change is disregarded
for the purposes of Chapters 2 to 6 if, immediately after that acquisition
(“the acquisition”), N—

(a) possesses all of the voting power in C,

(b) is beneficially entitled to 100% of any profits available for
35distribution to equity holders of C,

(c) would be beneficially entitled to 100% of any assets of C
available for distribution to its equity holders in the event of a
winding up of C or in any other circumstances, and

(d) meets the continuity requirements.

(2) 40“The resulting ownership change” means the change in the ownership
of C by reason of Condition A in section 719 being met in relation to the
acquisition.

(3) A company is “new” if, before the acquisition, it has neither—

(a) issued any shares other than subscriber shares, nor

(b) begun to carry on any trade or business.

(4) N meets the continuity requirements if, and only if—

(a) the consideration for the acquisition consists only of the issue of
shares in N to the shareholders of C,

(b) 5immediately after the acquisition, each person who
immediately before the acquisition was a shareholder of C is a
shareholder of N,

(c) immediately after the acquisition, the shares in N are of the
same classes as were the shares in C immediately before the
10acquisition,

(d) immediately after the acquisition, the number of shares of any
particular class in N bears to all the shares in N the same
proportion, or as nearly as may be the same proportion, as the
number of shares of that class in C bore to all the shares in C
15immediately before the acquisition, and

(e) immediately after the acquisition, the proportion of shares of
any particular class in N held by any particular shareholder is
the same, or as nearly as may be the same, as the proportion of
shares of that class in C held by that shareholder immediately
20before the acquisition.

(5) For the purposes of this section, N is treated as acquiring all the issued
share capital of C for consideration consisting only of the issue of shares
in N to the shareholders of C if, as a result of a scheme of reconstruction
involving the cancellation of all shares in C and the issue of shares in
25N—

(a) N holds all the issued share capital of C by reason of that share
capital being issued to N by C, and

(b) only shares in N are issued to the persons who were
shareholders of C immediately before the shares in C were
30cancelled.

(6) In a case within subsection (5), subsection (4) applies as if any reference
to immediately before the acquisition were a reference to immediately
before the shares in C were cancelled.

(7) “Scheme of reconstruction” means a scheme carried out in pursuance of
35a compromise or arrangement—

(a) to which Part 26 of the Companies Act 2006 (arrangements and
reconstructions) applies, or

(b) under any corresponding provision of the law of a country or
territory outside the United Kingdom.

(8) 40Chapter 6 of Part 5 (equity holders and profits or assets available for
distribution) applies for the purposes of subsection (1)(b) and (c) as it
applies for the purposes of section 151(4).”

(5) In section 726 (interpretation of Chapter), after “acquisition” insert “and
shareholder”.

(6) 45The amendments made by this section have effect in relation to any change of
ownership which occurs on or after 1 April 2014.

37 Transfer of deductions: research and development allowances

(1) In section 730B(1) of CTA 2010 (interpretation of transfer of deductions
provisions), in paragraph (a) of the definition of “deductible amount” after
“trade,” insert “other than an amount treated as such an expense by section
5450(a) of CAA 2001 (research and development allowances treated as expenses
in calculating profits of a trade),”.

(2) The amendment made by this section has effect in relation to a qualifying
change if the relevant day is on or after 1 April 2014.

38 Tax treatment of financing costs and income

(1) 10Chapter 10 of Part 7 of TIOPA 2010 (tax treatment of financing costs and
income: interpretation) is amended as follows.

(2) In section 345 (meaning of “UK group company” and “relevant group
company”), for subsection (7) substitute—

“(7) Chapter 6 of Part 5 of CTA 2010 (equity holders and profits or assets
15available for distribution) and Chapter 3 of Part 24 of that Act
(subsidiaries) apply for the purposes of subsection (6), subject to
subsections (8) and (9).

(8) Sections 169 to 182 of CTA 2010 do not apply.

(9) In applying the remaining provisions of those Chapters for the
20purposes of subsection (6), they are to be read with all modifications
necessary to ensure that—

(a) they apply to a company or other body corporate which does
not have share capital, and to holders of corresponding
ordinary holdings in such a company or body, in a way which
25corresponds to the way they apply to companies with ordinary
share capital and holders of ordinary shares in such companies,

(b) they apply in relation to ownership through an entity (other
than a body corporate), or any trust or other arrangement, in a
way which corresponds to the way they apply to ownership
30through a company or other body corporate, and

(c) for the purposes of achieving paragraphs (a) and (b), profits or
assets are attributed to holders of corresponding ordinary
holdings in entities, trusts or other arrangements in a manner
which corresponds to the way profits or assets are attributed to
35holders of ordinary shares in a company.

(10) In this section “corresponding ordinary holding” in an entity, trust or
other arrangement means a holding or interest which provides the
holder with economic rights corresponding to those provided by a
holding of ordinary shares in a company.”

(3) 40In section 353A (effect of Part 7 on parties to capital market arrangements), in
subsection (4), before paragraph (a) insert—

“(za) the conditions that must be met for an election to be made;”.

(4) The amendment made by subsection (2) has effect in relation to periods of
account of the worldwide group starting on or after 5 December 2013.

CHAPTER 4 Other provisions

Pensions

39 Pension flexibility: drawdown

(1) In section 165(1) of FA 2004 (rules about payment of pension by registered
5scheme to member) in pension rule 5 (payments of drawdown pension in a
year not to exceed 120% of basis amount for year) for “120%” substitute
“150%”.

(2) In section 167(1) of FA 2004 (rules about payment of pension death benefits by
registered scheme in respect of member) in pension death benefit rule 4
10(payments of dependants’ drawdown pension not to exceed 120% of basis
amount for year) for “120%” substitute “150%”.

(3) In paragraph 14A(2) of Schedule 28 to FA 2004 (amount of minimum income
requirement for flexible drawdown by member) for “£20,000” substitute
“£12,000”.

(4) 15In paragraph 24C(2) of Schedule 28 to FA 2004 (amount of minimum income
requirement for flexible drawdown by dependant) for “£20,000” substitute
“£12,000”.

(5) In consequence of subsections (1) and (2), in FA 2013 omit section 50(1) and (2).

(6) The amendments made by subsections (1), (2) and (5) have effect in relation to
20pension drawdown years beginning on or after 27 March 2014.

(7) The amendment made by subsection (3) has effect in relation to declarations
made under section 165(3A) of FA 2004 on or after 27 March 2014.

(8) The amendment made by subsection (4) has effect in relation to declarations
made under section 167(2A) of FA 2004 on or after 27 March 2014.

40 25Pension flexibility: taking low-value pension rights as lump sum

(1) In paragraph 7(4) of Schedule 29 to FA 2004 (amount of commutation limit for
purposes of trivial commutation lump sum) for “£18,000” substitute “£30,000”.

(2) In paragraph 8 of Schedule 29 to FA 2004 (value of crystallised pension rights
for trivial commutation purposes)—

(a) 30in sub-paragraph (1)(a) omit “, as adjusted under sub-paragraph (2)”,

(b) in sub-paragraph (1)(b) omit “, as adjusted under sub-paragraph (3)”,
and

(c) omit sub-paragraphs (2) and (3), as originally enacted and as
substituted by FA 2013.

(3) 35In consequence of subsection (1), in FA 2011 omit paragraph 4(2) of Schedule
18.

(4) In consequence of subsection (2)(c), in FA 2013 omit paragraph 8(4) of Schedule
22.