Finance Bill (HC Bill 116)

(6) This subsection applies if—

(a) 30at the time when L’s arrangement is made, the landlord
under the superior lease (“S”) is connected with L or C, or

(b) the landlord who granted the superior lease (whether that is
S or another person) and the tenant to whom it was granted
(whether that was L or another person) were connected at the
35time when that lease was granted.

(7) The conditions mentioned in subsection (3)(c) are as follows.

Condition X is that—

  • it is reasonable to suppose that immediately before C’s
    arrangement was made there was a material risk that at some
    40time within the next 12 months C would be unable to pay its
    debts as they fell due, and

  • the sole or main purpose of C’s arrangement was to avert that
    risk (whether directly or indirectly).

Debts due to a person connected with C are to be regarded as not
45being debts for the purposes of paragraph (a).

Condition Y is that C is in insolvent administration.

Condition Z is that C’s arrangement is, or is part of, a statutory
insolvency arrangement.

(8) In this section “statutory insolvency arrangement” means—

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(a) a voluntary arrangement that has taken effect under, or as a
result of, the Insolvency Act 1986 or the Insolvency (Northern
Ireland) Order 1989 (S.I. 1989/ 2405 (N.I. 19)),

(b) a compromise or arrangement that has taken effect under
5Part 26 of the Companies Act 2006, or

(c) an arrangement or compromise of a kind corresponding to
any of those mentioned in paragraph (a) or (b) that has taken
effect under, or as a result of, the law of a country or territory
outside the United Kingdom,

10(and for the purposes of this section an arrangement which is, or is
part of, a statutory insolvency arrangement is taken to be “made”
when the statutory insolvency arrangement takes effect).

(9) For the purposes of this section a company in administration is in
insolvent administration if—

(a) 15it entered administration under Schedule B1 to the
Insolvency Act 1986, or Schedule B1 to the Insolvency
(Northern Ireland) Order 1989, at a time when its assets were
insufficient for the payment of its debts and other liabilities
and the expenses of the administration, or

(a) 20under the law of a country or territory outside the United
Kingdom circumstances corresponding to those mentioned
in paragraph (a) exist.

(10) In the application of subsection (5) to Scotland, the reference to the
lease having been granted out of the superior lease is to the lease
25being a sublease of land subject to the superior lease.

(11) Section 152 (groups of companies) applies for the purposes of this
section as it applies for the purposes of Part 5.

(12) For the purposes of this section any question whether a person is
connected with another is to be determined in accordance with
30section 1122.

269ZZ Company tax return to specify amount of deductions allowance

(1) A company’s tax return for an accounting period must specify—

(a) the amount of the company’s deductions allowance for the
period, and

(b) 35if section 269ZX (increase of deductions allowance where
provision for onerous lease reversed) applies, what that
amount would be without the increase provided for by
subsection (3) of that section.

(2) But subsection (1) applies only if the company makes for the
40accounting period a deduction to which section 269ZB(2), 269ZC(2)
or 269ZD(2) or section 124D(1) of FA 2012 applies.

269ZZA Excessive specifications of deductions allowance

(1) This section applies if a company’s tax return for an accounting
period specifies an excessive amount as—

(a) 45the company’s deductions allowance for the period,

(b) the company’s trading profits deductions allowance for the
period,

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(c) the company’s non-trading profits deductions allowance for
the period,

(d) the company’s contractor’s ring fence profits deductions
allowance for the period, or

(e) 5the company’s BLAGAB trade profits deductions allowance
for the period.

(2) The company must, so far as it may do so, amend the company tax
return so that the amount specified is not excessive.

(3) If an officer of Revenue and Customs considers that an undue
10amount of relief has been given as a consequence of the amount
specified being excessive, the officer may make an assessment to tax
in the amount which in the officer’s opinion ought to be charged.

(4) If—

(a) the amount specified became excessive in consequence of an
15alteration being made to the amount of group deductions
allowance allocated to the company for the accounting
period concerned, and

(b) the company has failed, or is unable, to amend its company
tax return in accordance with subsection (2),

20an assessment under subsection (3) is not out of time if it is made
within 12 months of the date on which the alteration took place.

(5) The power in subsection (3) is without prejudice to the power to
make a discovery assessment under paragraph 41(1) of Schedule 18
to FA 1998.

269ZZB 25 Meaning of “group”

(1) In this Part “group” means two or more companies which together
meet the following condition.

(2) The condition is that one of the companies is—

(a) the ultimate parent of each of the other companies, and

(b) 30is not the ultimate parent of any other company.

(3) A company (“A”) is the “ultimate parent” of another company (“B”)
if—

(a) A is the parent of B, and

(b) no company is the parent of both A and B.

(4) 35A company (“A”) is the “parent” of another company (“B”) if—

(a) B is a 75% subsidiary of A,

(b) A is beneficially entitled to at least 75% of any profits
available for distribution to equity holders of B, or

(c) A would be beneficially entitled to at least 75% of any assets
40of B available for distribution to its equity holders on a
winding up.

(5) The following apply for the purposes of subsection (4)

(a) Chapter 6 of Part 5 (equity holders and profits or assets
available for distribution) other than sections 169 to 182, and

(b) 45Chapter 3 of Part 24 (subsidiaries).

This is subject to subsections (6) and (7).