Finance Bill (HC Bill 47)

(5) The amendments made by this section have effect in relation to accounting
periods beginning on or after 25 November 2015.

(6) For the purposes of subsection (5), an accounting period beginning before and
ending on or after 25 November 2015 is to be treated as if so much of the
5accounting period as falls before that date, and so much of the accounting
period as falls on or after that date, were separate accounting periods.

(7) An apportionment for the purposes of subsection (6) must be made—

(a) in accordance with section 1172 of CTA 2010 (time basis), or

(b) if that method produces a result that is unjust or unreasonable, on a just
10and reasonable basis.

52 Intangible fixed assets: transfers treated as at market value

(1) In section 845 of CTA 2009 (transfer between company and related party
treated as at market value), after subsection (4) insert—

“(4A) References in subsection (1) to a related party in relation to a company
15are to be read as including references to a person in circumstances
where the participation condition is met as between that person and the
company.

(4B) References in subsection (4A) to a company include a firm in a case
where, for section 1259 purposes, references in subsection (1) to a
20company are read as references to the firm.

(4C) Section 148 of TIOPA 2010 (when the participation condition is met)
applies for the purposes of subsection (4A) as it applies for the purposes
of section 147(1)(b) of TIOPA 2010.

(4D) Subsection (4E) applies where—

(a) 25a gain on the disposal of an intangible asset by a firm is a gain
to be taken into account for section 1259 purposes, and

(b) for those purposes, references in subsection (1) to a company
are read as references to the firm.

(4E) Where this subsection applies, the gain referred to in subsection (4D)(a)
30is to be treated for the purposes of this section as if it were a chargeable
realisation gain for the purposes of section 741(1) (meaning of
“chargeable intangible asset”).

(4F) In this section, “section 1259 purposes” means the purposes of
determining under section 1259 the amount of profits or losses to be
35allocated to a partner in a firm.””

(2) The amendment made by this section applies in relation to a transfer which
takes place on or after 25 November 2015, unless it takes place pursuant to an
obligation, under a contract, that was unconditional before that date.

(3) For the purposes of subsection (2), an obligation is “unconditional” if it may not
40be varied or extinguished by the exercise of a right (whether under the contract
or otherwise).

Creative industry reliefs

53 Tax relief for production of orchestral concerts

Schedule 8 contains provision about relief in respect of the production of
orchestral concerts.

54 5Television and video games tax relief: consequential amendments

In the following provisions, for “section 1218” substitute “section 1218B”—

(a) paragraph 8(2)(c) of Schedule 7A to TCGA 1992,

(b) section 63(1) of CTA 2010, and

(c) section 729 of CTA 2010.

10Banking companies

55 Banking companies: excluded entities

(1) Section 133F of CTA 2009 (“excluded company”) has effect, and is to be deemed
always to have had effect, with the amendments set out in subsections (2) to (4).

(2) After subsection (2) insert—

“(2A) 15A company is also an “excluded company” at any time (in an
accounting period) if—

(a) the company would fall within a relevant relieving provision
but for one (and only one) line of business which it carries on,

(b) that line of business does not involve the relevant regulated
20activity described in the provision mentioned in section
133G(1)(a), and

(c) the company’s activities in that line of business would not, on
their own, result in it being both a 730k firm and a full scope
investment firm.

(2B) 25For the purposes of subsection (2A) the “relevant relieving provisions”
are paragraphs (b), (c), (e), (g) and (h) of subsection (2).””

(3) In subsection (7), before the definition of “authorised corporate director”
insert—

• “““730k firm”—

  (a)

  30in relation to any time on or after 1 January 2014, means
  an IFPRU 730k firm,

  (b)

  in relation to any time before that date, means a BIPRU
  730k firm;”.”

(4) In subsection (7), at the appropriate places insert—

• 35“““BIPRU 730k firm” and “full scope BIPRU investment firm” have
  the same meaning as in subsections (2) to (4) of section 133H;”

• ““IFPRU 730k firm” and full scope IFPRU investment firm” have
  the meaning given by the FCA Handbook at the time in
  question;”

• 40““full scope investment firm”—

  (a)

  in relation to any time on or after 1 January 2014, means
  a full scope IFPRU investment firm,

  Finance BillPage 92

  (b)

  in relation to any time before that date, means a full
  scope BIPRU investment firm;”.”

(5) Section 133M of CTA 2009 has effect, and is to be deemed always to have had
effect, with the amendment set out in subsection (6).

(6) 5For subsection (5)(b)(ii) substitute—

“(“ii) the firm would not (if references in section 133F(2) and
(3) to companies included firms) be an excluded
company for the purposes of section 133E.””

(7) Part 7A of CTA 2010 has effect, and is to be deemed always to have had effect,
10with the amendments set out in subsections (8) and (9).

(8) In section 269BA (excluded entities), after subsection (1) insert—

“(1A) For the purposes of section 269B an entity is also an “excluded entity”
if—

(a) the entity would fall within a relevant relieving provision but
15for one (and only one) line of business which it carries on,

(b) that line of business does not involve the relevant regulated
activity described in the provision mentioned in section
269BB(a), and

(c) the entity’s activities in that line of business would not, on their
20own, result in it being both an IFPRU 730k firm and a full scope
IFPRU investment firm.

(1B) For the purposes of subsection (1A) the “relevant relieving provisions”
are paragraphs (b), (c), (e), (g) and (h) of subsection (1).””

(9) In section 269DO (interpretation)—

(a) 25after subsection (5) insert—

“(5A) For the purposes of section 269BA(1A) (extension of certain
exclusions under subsection (1) of that section) a line of business
carried on by a company is not regarded as involving the
relevant regulated activity described in the provision
30mentioned in section 269BB(a) if—

(a) the carrying on of that activity is ancillary to asset
management activities the company carries on, and

(b) the company would not carry that activity on but for the
fact that it carries on asset management activities.”;”

(b) 35in subsection (6) for “subsection (5)” substitute “subsections (5) and
(5A)”.

(10) In Schedule 19 to FA 2011 (the bank levy), paragraph 73 is amended in
accordance with subsections (11) and (12).

(11) In sub-paragraph (1), omit “or” at the end of paragraph (j) and after paragraph
40(k) insert “, or

(l) an entity falling within sub-paragraph (1A).””

(12) After sub-paragraph (1) insert—

“(1A) An entity falls within this sub-paragraph if—

(a) it would fall within a relevant relieving provision but for one
45(and only one) line of business which it carries on,

(b) that line of business does not involve the relevant regulated
activity described in the provision mentioned in paragraph
79(a), and

(c) the entity’s activities in that line of business would not, on
5their own, result in it being both an IFPRU 730k firm and a
full scope IFPRU investment firm.

(1B) For the purposes of sub-paragraph (1A) the “relevant relieving
provisions” are paragraphs (b), (c), (e), (g) and (h) of sub-paragraph
(1).””

(13) 10Subsections (10) to (12) have effect in relation to chargeable periods beginning
on or after the day on which this Act is passed.

(14) But for the purposes of determining what groups and entities must be listed
under subsection (4) of section 285 of FA 2014 (Code of Practice on Taxation for
Banks: HMRC reports) in any relevant report under that section—

(a) 15subsection (13) is to be disregarded, and

(b) Schedule 19 to FA 2011 is to be deemed to have effect, and always to
have had effect, with the amendments set out in subsections (10) to (12).

(15) In subsection (14) “relevant report” means a report for the reporting period
beginning with 1 April 2015 or any subsequent reporting period.

56 20Banking companies: restrictions on loss relief etc

(1) Chapter 3 of Part 7A of CTA 2010 (restrictions on banking companies obtaining
certain deductions) is amended as follows.

(2) In section 269CA (restriction on deductions for trading losses), in subsection
(2), for “50%” substitute “25%”.

(3) 25In section 269CB (restriction on deductions for non-trading deficits from loan
relationships), in subsection (2), for “50%” substitute “25%”.

(4) In section 269CC (restriction on deductions for management expenses etc), in
step 1 in subsection (7), for “50%” substitute “25%”.

(5) The amendments made by this section have effect for the purposes of
30determining the taxable total profits of companies for accounting periods
beginning on or after 1 April 2016.

(6) For the purposes of subsection (5), where a company has an accounting period
beginning before 1 April 2016 and ending on or after that date (“the straddling
period”)—

(a) 35so much of the straddling period as falls before 1 April 2016, and so
much of that period as falls on or after that date, are treated as separate
accounting periods, and

(b) profits or losses of the company for the straddling period are
apportioned to the two separate accounting periods—

(i) 40in accordance with section 1172 of CTA 2010 (time basis), or

(ii) if that method would produce a result that is unjust or
unreasonable, on a just and reasonable basis.

Oil and gas

57 Reduction in rate of supplementary charge

(1) In section 330 of CTA 2010 (supplementary charge in respect of ring fence
trades), in subsection (1), for “20%” substitute “10%”.

(2) 5The amendment made by subsection (1) has effect in relation to accounting
periods beginning on or after 1 January 2016 (but see also subsection (3)).

(3) Subsections (4) and (5) apply where a company has an accounting period
beginning before 1 January 2016 and ending on or after that date (“the
straddling period”).

(4) 10For the purpose of calculating the amount of the supplementary charge on the
company for the straddling period—

(a) so much of that period as falls before 1 January 2016, and so much of
that period as falls on or after that date, are treated as separate
accounting periods, and

(b) 15the company’s adjusted ring fence profits for the straddling period are
apportioned to the two separate accounting periods in proportion to
the number of days in those periods.

(5) The amount of the supplementary charge on the company for the straddling
period is the sum of the amounts of supplementary charge that would, in
20accordance with subsection (4), be chargeable on the company for those
separate accounting periods.

(6) In this section—

• “adjusted ring fence profits” has the same meaning as in section 330 of
  CTA 2010;

• 25“supplementary charge” means any sum chargeable under section 330(1)
  of CTA 2010 as if it were an amount of corporation tax.

58 Investment allowance: disqualifying conditions

(1) Section 332D of CTA 2010 (expenditure on acquisition of asset: disqualifying
conditions) is amended as follows.

(2) 30In subsection (1) after “an asset” insert “(“the acquisition concerned”)”.

(3) In subsection (2)—

(a) for “acquisition,” substitute “acquisition concerned,” and

(b) after “acquiring,” insert “leasing,”.

(4) In subsection (3)(b)—

(a) 35for “acquisition,” substitute “acquisition concerned,”, and

(b) after “acquiring,” insert “leasing,”.

(5) After subsection (4) insert—

“(5) In subsection (3)(c) “this Chapter” means the provisions of this Chapter,
and of any regulations made under this Chapter, as those provisions
40have effect at the time when the investment expenditure mentioned in
subsection (1) is incurred.

(6) Subsections (7) and (8) apply where investment expenditure mentioned
in subsection (1) would, in the absence of this section, be relievable
under section 332C by reason of section 332CA (treatment of
expenditure incurred before field is determined).

(7) 5Where this subsection applies—

(a) subsection (2) is to be read as if after “was” there were inserted
“, or has become,”, and

(b) in determining for the purposes of subsection (2) or (3)(b)
whether particular expenditure was incurred “before” the
10acquisition concerned—

(i) paragraph (b) of section 332CA(3) is to be ignored, and

(ii) accordingly, that expenditure is to be taken (for the
purposes of determining whether it was incurred before
the acquisition concerned) to have been incurred when
15it was actually incurred.

(8) Where this subsection applies, in determining whether the second
disqualifying condition applies to the asset—

(a) the reference in subsection (3)(a)(i) to a qualifying oil field is to
be read as including an area which, at the time of the acquisition
20concerned, had not been determined to be an oil field but which
has subsequently become a qualifying oil field,

(b) the reference in subsection (3)(a)(ii) to a qualifying oil field is to
be read as including an area which, at the time of the transfer,
had not been determined to be an oil field but which has
25subsequently become a qualifying oil field,

(c) the reference in subsection (3)(c)(i) to “the qualifying oil field” is
to be read accordingly, and

(d) the following sub-paragraph is to be treated as substituted for
subsection (3)(c)(ii)—

“(“ii) 30would have been relievable under section 332C
if this Chapter had been fully in force and had
applied to expenditure incurred at the time
when that expenditure was actually incurred
and the area in question had been a qualifying
35oil field at that time.””

(9) In subsection (8)(a) and (b) “determined” means determined under
Schedule 1 to OTA 1975.

(10) In this section any reference to expenditure which was incurred by a
company in “leasing” an asset is to expenditure incurred by the
40company under an agreement under which the asset was leased to the
company.””

(6) The amendments made by this section have effect for the purposes of
determining whether any expenditure—

(a) incurred by a company on or after 16 March 2016 on the acquisition of
45an asset, or

(b) treated under section 332CA of CTA 2010 as so incurred,

is relievable expenditure for the purposes of section 332C of CTA 2010.

59 Investment allowance: power to expand meaning of “relevant income”

(1) Section 332F of CTA 2010 (activation of investment allowance) is amended as
follows.

(2) In subsection (2)(b) before “the company’s relevant income” insert “the total
5amount of”.

(3) For subsection (3) substitute—

“(3) For the purposes of this Chapter, income is relevant income of a
company from a qualifying oil field for an accounting period if it is—

(a) production income of the company from any oil extraction
10activities carried on in that oil field that is taken into account in
calculating the company’s adjusted ring fence profits for the
accounting period, or

(b) income that—

(i) is income of such description (whether or not relating to
15the oil field) as may be prescribed by the Treasury by
regulations, and

(ii) is taken into account as mentioned in paragraph (a).

(4) The Treasury may by regulations make such amendments of this
Chapter as the Treasury consider appropriate in consequence of, or in
20connection with, any provision contained in regulations under
subsection (3)(b).

(5) Regulations under subsection (3)(b) or (4) may provide for any of the
provisions of the regulations to have effect in relation to accounting
periods ending before (or current when) the regulations are made.

(6) 25But subsection (5) does not apply to—

(a) any provision of amending or revoking regulations under
subsection (3)(b) which has the effect that income of any
description is to cease to be treated as relevant income of a
company from a qualifying oil field for an accounting period, or

(b) 30provision made under subsection (4) in consequence of or in
connection with provision within paragraph (a).

(7) Regulations under this section may make transitional provision or
savings.

(8) Regulations under this section may not be made unless a draft of the
35instrument containing them has been laid before, and approved by a
resolution of, the House of Commons.””

60 Onshore allowance: disqualifying conditions

(1) CTA 2010 is amended as follows.

(2) In section 356C after subsection (4) insert—

“(4A) 40Subsections (1) to (4) are subject to section 356CAA (which prevents
expenditure on the acquisition of an asset from being relievable in
certain circumstances).””

(3) After section 356CA insert—

“356CAA Expenditure on acquisition of asset: further disqualifying
conditions

(1) Capital expenditure incurred by a company (“the acquiring company“)
5on the acquisition of an asset (“the acquisition concerned”) is not
relievable capital expenditure for the purposes of section 356C if
subsection (2), (3) or (8) applies to the asset.

(2) This subsection applies to the asset if capital expenditure incurred
before the acquisition concerned, by the acquiring company or another
10company, in acquiring, bringing into existence or enhancing the value
of the asset was relievable under section 356C.

(3) This subsection applies to the asset if—

(a) the asset—

(i) is the whole or part of the equity in a qualifying site, or

(ii) 15is acquired in connection with a transfer to the acquiring
company of the whole or part of the equity in a
qualifying site,

(b) capital expenditure was incurred before the acquisition
concerned, by the acquiring company or another company, in
20acquiring, bringing into existence or enhancing the value of the
asset, and

(c) any of that expenditure—

(i)(i) related to the qualifying site, and

(ii) would have been relievable under section 356C if this
25Chapter had been fully in force and had applied to
expenditure incurred at that time.

(4)
For the purposes of subsection (3)(a)(ii) it does not matter whether the
asset is acquired at the time of the transfer.

(5) In subsection (3)(c) “this Chapter” means the provisions of this Chapter
30as those provisions have effect at the time when the capital expenditure
mentioned in subsection (1) is incurred.

(6) The reference in subsection (3)(c)(i) to the qualifying site includes an
area that, although not a qualifying site when the expenditure
mentioned in subsection (3)(b) was incurred, subsequently became the
35qualifying site.

(7) Where expenditure mentioned in subsection (3)(b) related to an area
which subsequently became the qualifying site, the following sub-
paragraph is to be treated as substituted for subsection (3)(c)(ii)—

“(“ii) would have been relievable under section 356C if the
40area in question had been a qualifying site when the
expenditure was incurred, or if the area in question had
been such a site at that time and this Chapter had been
fully in force and had applied to expenditure incurred at
that time.””

(8) 45This subsection applies to the asset if—

(a) capital expenditure mentioned in subsection (1) would, in the
absence of this section, be relievable under section 356C by

reason of an election under section 356CB (treatment of
expenditure not related to an established site), and

(b) capital expenditure which was incurred before the acquisition
concerned, by the acquiring company or another company, in
acquiring, bringing into existence or enhancing the value of the
asset, either—

(i) 5has become relievable under section 356C by reason of
an election under section 356CB, or

(ii) would be so relievable if such an election were made in
10respect of that expenditure.

(9) In determining for the purposes of subsection (8)(b) whether particular
expenditure was incurred “before” the acquisition concerned—

(a) paragraph (b) of section 356CB(6) is to be ignored, and

(b) accordingly, that expenditure is to be taken (for the purposes of
15determining whether it was incurred before the acquistion
concerned) to have been incurred when it was actually
incurred.

(10) For the purposes of subsection (8)(b)(ii) it does not matter if an election
is not in fact capable of being made.””

(4) 20The amendments made by this section have effect for the purposes of
determining whether any expenditure—

(a) incurred by a company on or after 16 March 2016 on the acquisition of
an asset, or

(b) treated by reason of an election under section 356CB as so incurred,

25is relievable expenditure for the purposes of section 356C of CTA 2010.

61 Cluster area allowance: disqualifying conditions

(1) Section 356JFA of CTA 2010 (expenditure on acquisition of asset: disqualifying
conditions) is amended as follows.

(2) In subsection (2) after “acquiring,” insert “leasing,”.

(3) 30In subsection (3)(b) after “acquiring,” insert “leasing,”.

(4) After subsection (4) insert—

“(5) In this section any reference to expenditure which was incurred by a
company in “leasing” an asset is to expenditure incurred by the
company under an agreement under which the asset was leased to the
35company.””

(5) The amendments made by this section have effect for the purposes of
determining whether any expenditure incurred by a company on or after 16
March 2016 on the acquisition of an asset is relievable expenditure for the
purposes of section 356JF of CTA 2010.

62 40Cluster area allowance: power to expand meaning of “relevant income”

(1) Section 356JH of CTA 2010 (activation of cluster area allowance) is amended as
follows.

(2) In subsection (2)(b) before “the company’s relevant income” insert “the total
amount of”.

(3) For subsection (3) substitute—

“(3) For the purposes of this Chapter, income is relevant income of a
5company from a cluster area for an accounting period if it is—

(a) production income of the company from any oil extraction
activities carried on in that area that is taken into account in
calculating the company’s adjusted ring fence profits for the
accounting period, or

(b) 10income that—

(i) is income of such description (whether or not relating to
the cluster area) as may be prescribed by the Treasury by
regulations, and

(ii) is taken into account as mentioned in paragraph (a).

(4) 15The Treasury may by regulations make such amendments of this
Chapter as the Treasury consider appropriate in consequence of, or in
connection with, any provision contained in regulations under
subsection (3)(b).

(5) Regulations under subsection (3)(b) or (4) may provide for any of the
20provisions of the regulations to have effect in relation to accounting
periods ending before (or current when) the regulations are made.

(6) But subsection (5) does not apply to—

(a) any provision of amending or revoking regulations under
subsection (3)(b) which has the effect that income of any
25description is to cease to be treated as relevant income of a
company from a cluster area for an accounting period, or

(b) provision made under subsection (4) in consequence of or in
connection with provision within paragraph (a).

(7) Regulations under this section may make transitional provision or
30savings.

(8) Regulations under this section may not be made unless a draft of the
instrument containing them has been laid before, and approved by a
resolution of, the House of Commons.””

Exploitation of patents etc

63 35Profits from the exploitation of patents etc

(1) Part 8A of CTA 2010 (profits arising from the exploitation of patents etc) is
amended as follows.

(2) In section 357A (election for special treatment of profits from patents etc)—

(a) for subsections (6) and (7) substitute—

“(6) 40Chapter 2A makes provision for determining the relevant IP
profits or relevant IP losses of a trade of a company for an
accounting period in a case where—

(a) the accounting period begins on or after 1 July 2021, or

(b) the company is a new entrant (see subsection (11)).