Finance (No. 2) Bill (HC Bill 193)

(a) a refund of the contribution, if the contribution is a sum of
15money;

(b) compensation for the contribution, if the contribution is the
provision of services;

(c) a structure that—

(i) is or is to be used for the purposes of flood or coastal
20erosion risk management, and

(ii) is put in place in carrying out the project;

(d) an addition to a structure where—

(i) the structure is or is to be used for the purposes of
flood or coastal erosion risk management, and

(ii) 25the addition is made in carrying out the project;

(e) land, plant or machinery that is or is to be used, in the
realization of the project, for the purposes of flood or coastal
erosion risk management;

(f) a right over land that is or is to be used, in the realization of
30the project, for the purposes of flood or coastal erosion risk
management.

(6) In subsection (5) “structure” includes road, path, pipe, earthwork,
plant and machinery.

(7) Section 86B applies for the purposes of this section as it applies for
35the purposes of section 86A.”

7 In Chapter 5 of Part 16 of CTA 2009 (investment business: receipts), after
section 1253 insert—

“1253A Contributions to flood and coastal erosion risk management
projects: refunds etc

(1) 40This section applies if—

(a) a deduction has been made under section 1219 by virtue of
section 1244A (contributions to flood and coastal erosion risk
management projects: expenses of management), and

(b) the contributor or a connected person receives—

(i) 45a refund of any part of the contribution, if the
contribution is a sum of money, or

(ii) compensation for any part of the contribution, if the
contribution is the provision of services,

in money or money’s worth.

(2) The contributor is to be treated as receiving, when the refund or
5compensation is received, an amount—

(a) which is equal to so much of the refund or compensation, or
so much of the value of the refund or compensation, as is not
otherwise taken into account for corporation tax purposes,
and

(b) 10to which the charge to corporation tax on income applies.”

8 In section 253 of CAA 2001 (companies with investment business), in
subsection (6), after “1233” insert “or 1244A”.

Commencement

9 The amendments made by this Schedule have effect in relation to
15contributions paid or provided on or after 1 January 2015.

Section 36

SCHEDULE 6 Investment reliefs: excluded activities

Part 1 Part 5B of ITA 2007: amendment coming into force on passing of Act

20Tax relief for social investments: power to amend excluded activities

1 In Part 5B of ITA 2007 (tax relief for social investments), after section 257MV
insert—

“257MW Excluded activities: power to amend

(1) The Treasury may by regulations add to, repeal or otherwise amend
25any provision of sections 257MQ to 257MT (excluded activities).

(2) Regulations under this section may—

(a) make different provision for different cases or purposes;

(b) contain incidental, supplemental, consequential and
transitional provision and savings.

(3) 30So far as they cause an activity to cease to be an excluded activity,
amendments made by regulations under this section may have effect
in relation to times before they come into force, but not times before
6 April 2015.

(4) This section is without prejudice to any other power to amend any
35provision of this Part.”

Part 2 Part 5 of ITA 2007: excluded activities from 6 April 2015

Introductory

2 The following provisions of Part 5 of ITA 2007 (enterprise investment
5scheme) are amended as set out in paragraphs 3 and 4—

(a) section 198A (excluded activities for purposes of Part 5 (and, by
virtue of section 257DA(9), Part 5A): subsidised generation or export
of electricity), and

(b) section 198B (excluded activities for those purposes: subsidised
10generation of heat and subsidised production of gas or fuel).

Generation of electricity involving contracts for difference

3 In section 198A—

(a) in subsection (3), omit “or” at the end of paragraph (b) and for
paragraph (c) substitute—

“(ba) 15a contract for difference has been entered into in
connection with the generation of the electricity, or

(c) a scheme established in a territory outside the United
Kingdom that—

(i) corresponds to one set out in a renewables
20obligation order under section 32 of the
Electricity Act 1989, or

(ii) is similar to one established by virtue of
regulations under Chapter 2 of Part 2 of the
Energy Act 2013 (contracts for difference),

25operates to incentivise the generation of the
electricity.”, and

(b) in subsection (9), at the appropriate place insert—

• ““contract for difference” means a contract for difference
  within the meaning of Chapter 2 of Part 2 of the
  30Energy Act 2013 (see section 6(2) of that Act);”.

Subsidised energy-related activities: anaerobic digestion and hydroelectric power

4 (1) In section 198A—

(a) in subsection (5), omit “, B or C” (exceptions for generation involving
anaerobic digestion and hydroelectric power),

(b) 35omit subsections (7) and (8), and

(c) in subsection (9), omit the definition of “anaerobic digestion”.

(2) In section 198B—

(a) in subsection (3), omit “or B” (exception for generation or production
involving anaerobic digestion), and

(b) 40omit subsection (5).

Application

5 The amendments made by this Part of this Schedule have effect in relation
to shares issued on or after 6 April 2015.