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| |
| |
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| | |
| | A is the expenditure incurred by the company for or in |
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| | connection with the acquisition of the qualifying IP assets |
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| | mentioned in subsection (1)(b), |
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| | B is the expenditure incurred by the company for or in |
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| | connection with the acquisition of the asset concerned and any |
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| | other relevant assets acquired with the business, and |
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| | |
| | (4) | The Treasury may by regulations amend the meaning of N. |
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| | |
| | “expenditure” means expenditure that is— |
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| | (a) | capitalised for accounting purposes, or |
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| | (b) | recognised in determining the profit or loss of the |
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| | company concerned without being capitalised for |
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| | |
| | subject to any adjustments under this Part or Part 4 of TIOPA |
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| | |
| | “qualifying IP asset” has the same meaning as in section 879I |
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| | |
| | 879N | When the partial restrictions apply: acquisition from individual or |
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| | |
| | (1) | Section 879O (the partial restrictions on debits) also applies in respect |
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| | of a relevant asset of a company if— |
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| | (a) | the company acquires the asset on or after 1 April 2019 |
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| | directly or indirectly from an individual or firm (“the |
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| | |
| | (b) | the related party condition is met, |
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| | (c) | the third party acquisition condition is met, and |
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| | (d) | the amount in subsection (6) is less than 1. |
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| | (2) | But section 879O does not apply in respect of the relevant asset if |
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| | either of the following sections applies in respect of it— |
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| | (a) | section 879C (restrictions on debits: pre-FA 2019 relevant |
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| | |
| | (b) | section 879I (restrictions on debits: no business or no |
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| | qualifying IP assets acquired). |
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| | (3) | The related party condition is met if— |
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| | (a) | in a case where the transferor is an individual, the transferor is |
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| | a related party in relation to the company at the time of the |
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| | |
| | (b) | in a case where the transferor is a firm, any individual who is |
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| | a member of the transferor is a related party in relation to the |
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| | |
| | (4) | The third party acquisition condition is met if— |
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| | (a) | in a case where the relevant asset is goodwill— |
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| | (i) | the transferor acquired all or part of the relevant |
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| | business in one or more third party acquisitions as |
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| | part of which the transferor acquired goodwill, and |
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|
|
| |
| |
|
| | (ii) | the relevant asset is acquired by the company as part |
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| | of an acquisition of all the relevant business; |
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| | (b) | in a case where the relevant asset is not goodwill— |
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| | (i) | the transferor acquired the relevant asset in a third |
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| | |
| | (ii) | the relevant asset is acquired by the company as part |
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| | of an acquisition of all the relevant business. |
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| | (5) | Section 879L (meaning of relevant business and third party |
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| | acquisition) applies for the purposes of this section. |
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| | (6) | The amount is—
![equation: over[char[A],char[B]]](images\finance3_rm_rep_1220-2.gif) |
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| | |
| | A is the relevant accounting value of third party acquisitions (see |
|
| | subsections (7) to (9)), and |
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| | B is the expenditure incurred by the company for or in |
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| | connection with the acquisition of the relevant asset that is— |
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| | (a) | capitalised by the company for accounting purposes, |
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| | |
| | (b) | recognised in determining the company’s profit or |
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| | loss without being capitalised for accounting |
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| | |
| | subject to any adjustments under this Part or Part 4 of TIOPA |
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| | |
| | (7) | In a case in which the relevant asset is goodwill, the relevant |
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| | accounting value of third party acquisitions is the notional accounting |
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| | value of the goodwill mentioned in subsection (4)(a)(i) (“the |
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| | previously acquired goodwill”). |
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| | (8) | In a case in which the relevant asset is not goodwill, the relevant |
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| | accounting value of third party acquisitions is the notional accounting |
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| | value of the relevant asset. |
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| | (9) | The “notional accounting value” of the previously acquired goodwill, |
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| | or the relevant asset, is what its accounting value would have been in |
|
| | GAAP-compliant accounts drawn up by the transferor— |
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| | (a) | immediately before the relevant asset was acquired by the |
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| | |
| | (b) | on the basis that the relevant business was a going concern. |
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| | 879O | The partial restrictions on debits |
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| | (1) | Where this section applies in respect of a relevant asset of a company, |
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| | the following restrictions have effect. |
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| | (2) | If a debit in respect of the relevant asset is to be brought into account |
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| | by the company for tax purposes under a provision of Chapter 3 (debits |
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|
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| |
| |
|
| | in respect of intangible fixed assets) or Chapter 15 (adjustments on |
|
| | change of accounting policy), the amount of that debit is—
![equation: cross[char[D],times[char[R],char[A]]]](images\finance3_rm_rep_1220-3.gif) |
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| | |
| | D is the amount of the debit that would be brought into account |
|
| | disregarding this section (and, accordingly, for the purposes |
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| | of any calculation of the tax written-down value of the |
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| | relevant asset needed to determine D, this section’s effect in |
|
| | relation to any debits previously brought into account is to be |
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| | |
| | RA is the relevant amount (see subsection (6)). |
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| | (3) | If, but for this section, a debit in respect of any of the relevant assets |
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| | would be brought into account by the company for tax purposes under |
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| | a provision of Chapter 4 (realisation of intangible fixed assets), the |
|
| | following two debits are to be brought into account under that |
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| | |
| | (a) | a debit determined in accordance with subsection (4), and |
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| | (b) | a debit determined in accordance with subsection (5), which |
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| | is to be treated for the purposes of Chapter 6 as a non-trading |
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| | debit (“the non-trading debit”). |
|
| | (4) | The amount of the debit determined in accordance with this subsection |
|
| | is—
![equation: cross[char[D],times[char[R],char[A]]]](images\finance3_rm_rep_1220-4.gif) |
|
| | |
| | D is the amount of the debit that would be brought into account |
|
| | under Chapter 4 disregarding this section (and, accordingly, |
|
| | for the purposes of any calculation of the tax written down |
|
| | value of the relevant asset needed to determine D, this |
|
| | section’s effect in relation to any debits previously brought |
|
| | into account is to be disregarded), and |
|
| | RA is the relevant amount (see subsection (6)). |
|
| | (5) | The amount of the non-trading debit is—
![equation: plus[char[D],minus[times[char[T],char[D]]]]](images\finance3_rm_rep_1220-5.gif) |
|
| | |
| | D is the amount of the debit that would be brought into account |
|
| | under Chapter 4 disregarding this section (but, for the |
|
| | purposes of any calculation of the tax written-down value of |
|
|
|
| |
| |
|
| | the relevant asset needed to determine D, this section’s effect |
|
| | in relation to any debits previously brought into account is not |
|
| | |
| | TD is the amount of the debit determined in accordance with |
|
| | |
| | (6) | In this section the “relevant amount” means— |
|
| | (a) | in a case where this section applies in respect of the relevant |
|
| | asset by reason only of section 879M, the amount in |
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| | subsection (3) of that section; |
|
| | (b) | in a case where this section applies in respect of the relevant |
|
| | asset by reason only of section 879N, the amount in |
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| | subsection (6) of that section; |
|
| | (c) | in a case where this section applies in respect of the relevant |
|
| | asset by reason of both section 879M and 879N, the amount |
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| | found by multiplying the amount in subsection (3) of section |
|
| | 879M by the amount in subsection (6) of section 879N. |
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| | |
| | 879P | Date of acquisition of relevant asset |
|
| | (11) | A company that acquires a relevant asset in pursuance of an |
|
| | unconditional obligation under a contract is to be treated for the |
|
| | purposes of this Chapter as having acquired the asset on the date on |
|
| | which the company became subject to that obligation or (if later) the |
|
| | date on which that obligation became unconditional. |
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| | (2) | An obligation is unconditional if it may not be varied or extinguished |
|
| | by the exercise of a right (whether under contract or otherwise).” |
|
| | 7 (1) | The amendments made by this Schedule have effect in relation to accounting |
|
| | periods beginning on or after 1 April 2019. |
|
| | (2) | For the purposes of sub-paragraph (1), an accounting period beginning before, |
|
| | and ending on or after, 1 April 2019 is to be treated as if so much of the |
|
| | accounting period as falls before that date, and so much of the accounting |
|
| | period as falls on or after that date, were separate accounting periods.” |
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| |
| |
| |
| |
| | |
|
| Schedule 1, page 148, line 34, at end insert— |
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| | “21A | The Chancellor of the Exchequer must review the expected revenue effects of |
|
| | the changes made to TCGA 1992 in this Schedule, along with an estimate of |
|
| | the difference between the amount of tax required to be paid to the |
|
| | Commissioners under those provisions and the amount paid, and lay a report |
|
| | of that review before the House of Commons within six months of the passing |
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| | |
| |
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|
| |
| |
|
| |
| |
| | |
|
| Schedule 2, page 177, line 21, at end insert— |
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| | |
| | Review of effects on public finances 17a |
|
| | | The Chancellor of the Exchequer must review the expected revenue effects of |
|
| | the changes made to capital gains tax returns and payments on account in this |
|
| | in this Schedule, along with an estimate of the difference between the amount |
|
| | of tax required to be paid to the Commissioners under those provisions and the |
|
| | amount paid, and lay a report of that review before the House of Commons |
|
| | within six months of the passing of this Act.” |
|
| |
| |
| |
| | |
|
| Schedule 5, page 211, line 45, at end insert— |
|
| | |
| | Review of effects on public finances 34a |
|
| | (1) | The Chancellor of the Exchequer must review the revenue effects of this |
|
| | Schedule and lay a report of that review before the House of Commons within |
|
| | six months of the passing of this Act. |
|
| | (2) | The review under sub-paragraph (1) must consider— |
|
| | (a) | the expected change in corporation tax paid attributable to the |
|
| | provisions in this Schedule, and |
|
| | (b) | an estimate of any change, attributable to the provisions in this |
|
| | Schedule, in the difference between the amount of tax required to be |
|
| | paid to the Commissioners and the amount paid.” |
|
| |
| |
| | |
|
| Schedule 5, page 211, line 45, at end insert— |
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| | |
| | Review of effects on tax paid by eu and non-eu resident firms |
|
| | (1) | The Chancellor of the Exchequer must review the revenue effects of this |
|
| | Schedule and lay a report of that review before the House of Commons within |
|
| | six months of the passing of this Act. |
|
| | (2) | The review under sub-paragraph (1) must consider the expected change, |
|
| | attributable to the provisions in this Schedule, in the difference between the |
|
| | amount of tax required to be paid to the Commissioners and the amount paid |
|
| | by non-UK resident companies that are— |
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|
|
| |
| |
|
| | (a) | resident in the European Union, or |
|
| | (b) | not resident in the European Union.” |
|
| |
| |
| |
| | |
|
| Schedule 6, page 221, line 26, at end insert— |
|
| | “13 | The Chancellor of the Exchequer must review the expected change to |
|
| | payments of Diverted Profits Tax and any associated changes to overall |
|
| | payments made to the Commissioners arising from the provisions of this |
|
| | Schedule, and lay a report of that review before the House of Commons within |
|
| | 6 months of the passing of this Act.” |
|
| |
| The Chancellor of the Exchequer |
|
| | |
|
| Schedule 15, page 291, line 31, leave out paragraph 2 and insert— |
|
| | “2 (1) | Chapter 3 of Part 5 of TCGA 1992 (transfer of business assets: entrepreneurs’ |
|
| | relief) is amended as follows. |
|
| | (2) | In section 169K(1B) (disposals associated with relevant material disposal), for |
|
| | paragraph (a) (together with the “and” at the end of it) substitute— |
|
| | “(a) | the ordinary shares disposed of constitute at least 5% of the |
|
| | company’s ordinary share capital and are shares in the |
|
| | individual’s personal company (and section 169S(3A)(a) to |
|
| | (c) apply here but as if the reference to the final day of the |
|
| | period mentioned in section 169S(3A)(a) were to the date of |
|
| | |
| | (3) | In section 169LA (relevant business assets: goodwill transferred to a close |
|
| | |
| | (a) | for subsection (1) substitute— |
|
| | “(1) | Subject to subsection (1A), subsection (4) applies if— |
|
| | (a) | as part of a qualifying business disposal, a person |
|
| | (“P”) disposes of goodwill directly or indirectly to a |
|
| | |
| | (b) | immediately after the disposal, P meets any of the |
|
| | personal company conditions in the case of C or any |
|
| | company which is a member of a group of companies |
|
| | |
| | (1ZA) | For the purposes of subsection (1)(b)— |
|
| | (a) | the reference to the personal company conditions is a |
|
| | reference to any of the conditions in 169S(3)(a), (b), |
|
| | |
| | (b) | P is taken to have all the rights and interests of any |
|
| | relevant connected person. |
|
| | (1ZB) | For the purposes of subsection (1ZA)— |
|
|
|
| |
| |
|
| | (a) | section 169S(3) is treated as having effect with the |
|
| | omission of the references to “by virtue of that |
|
| | |
| | (b) | section 169S(3A)(a) and (b) are to apply for the |
|
| | purposes of section 169S(3)(c)(ii) but as if the |
|
| | reference to the final day of the period mentioned in |
|
| | section 169S(3A)(a) were to the time immediately |
|
| | |
| | (c) | the condition in section 169S(3)(c)(i) is to be read as |
|
| | containing two separate conditions (one relating to |
|
| | profits and the other relating to assets).”, and |
|
| | (b) | in subsection (1A)(a), for “subsection (1)(aa)” substitute “subsection |
|
| | |
| | (4) | In section 169S (interpretation of Chapter), for subsections (3) and (4) |
|
| | |
| | “(3) | For the purposes of this Chapter a company is a “personal company” |
|
| | in relation to an individual if— |
|
| | (a) | the individual holds at least 5% of the ordinary share capital |
|
| | |
| | (b) | by virtue of that holding, at least 5% of the voting rights in the |
|
| | company are exercisable by the individual, and |
|
| | (c) | either or both of the following conditions are met— |
|
| | (i) | by virtue of that holding, the individual is beneficially |
|
| | entitled to at least 5% of the profits available for |
|
| | distribution to equity holders and, on a winding up, |
|
| | would be beneficially entitled to at least 5% of assets |
|
| | |
| | (ii) | in the event of a disposal of the whole of the ordinary |
|
| | share capital of the company, the individual would be |
|
| | beneficially entitled to at least 5% of the proceeds. |
|
| | (3A) | In determining whether subsection (3)(c)(ii) applies for the purposes |
|
| | of any provision of this Chapter under which a question arises as to |
|
| | whether or not a company is the individual’s personal company at any |
|
| | time in a particular period — |
|
| | (a) | it is to be assumed that (so far as this is not otherwise the case) |
|
| | the whole of the ordinary share capital is disposed of at that |
|
| | time for a consideration equal to its market value on the final |
|
| | |
| | (b) | it is to be assumed that the amount of the proceeds to which |
|
| | the individual would be beneficially entitled at that time is the |
|
| | amount of the proceeds to which, having regard to all the |
|
| | circumstances as they existed at that time, it would be |
|
| | reasonable to expect the person to be beneficially entitled, and |
|
| | (c) | the effect of any avoidance arrangements is to be ignored. |
|
| | (3B) | For the purposes of subsection (3A)(c)— |
|
| | (a) | arrangements are “avoidance arrangements” if the main |
|
| | purpose of, or one of the main purposes of, the arrangements |
|
| | is to secure that any provision of this Chapter applies or does |
|
| | |
| | (b) | “arrangements” includes any agreement, understanding, |
|
| | scheme, transaction or series of transactions (whether or not |
|
| | |
|