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Section 247 of the Taxes Act 1988 |
| | 18. - (1) Section 247 of the Taxes Act 1988 (dividends etc paid by one member of a group to another) shall be amended as follows.
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(2) Subsections (1), (2) and (3) (which enable dividends paid by one member of a group to another to be excluded from sections 14(1) and 231 of the Taxes Act 1988 etc) shall cease to have effect.
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(3) In subsection (4), for paragraph (a) there shall be substituted-
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"(a) the payer company is- |
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(i) a 51 per cent. subsidiary of the other or of a company so resident of which the other is a 51 per cent. subsidiary, or
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(ii) a trading or holding company which does not fall within subsection (1A) above and which is owned by a consortium the members of which include the recipient company, or".
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(4) In subsection (5)-
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(a) for "Subsections (1) to (4) above shall not apply to dividends or other payments" there shall be substituted "Subsection (4) above shall not apply to payments"; and |
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(b) the words "and shall not apply to a dividend" onwards shall cease to have effect. |
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(5) In subsection (6)-
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(b) the words "advance corporation tax ought to have been paid or", |
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(c) the words "as the case may be", |
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(d) the words "paying or", |
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(e) the words "receiving or", and |
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(f) the words "the advance corporation tax had been duly paid or", |
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shall cease to have effect.
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(6) In subsection (7) the words "paying or" and "receiving or" shall cease to have effect.
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(7) In subsection (10)-
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(a) the words "dividends or", and |
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(b) the words "and references to "group income" shall be construed accordingly", |
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shall cease to have effect.
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(8) This paragraph has effect in relation to distributions made on or after 6th April 1999.
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Section 248 of the Taxes Act 1988 |
| | 19. - (1) Section 248 of the Taxes Act 1988 (provisions supplemental to section 247) shall be amended as follows.
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(2) In subsections (2) and (3) the words "dividends or other" shall cease to have effect.
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(3) This paragraph has effect in relation to distributions made on or after 6th April 1999.
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Section 252 of the Taxes Act 1988 |
| | 20. - (1) Section 252 of the Taxes Act 1988 (rectification of excessive set-off of ACT or tax credit) shall be amended as follows.
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(2) In subsection (1), paragraph (a) (which concerns the set-off of ACT) shall cease to have effect.
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(3) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.
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Section 253 of the Taxes Act 1988 |
| | 21. - (1) Section 253 of the Taxes Act 1988 (power to modify or replace section 234(5) to (9) and Schedule 13) shall be amended as follows.
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(2) In subsection (1)-
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(b) the words "and to Schedule 13", |
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shall cease to have effect.
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(3) Subsection (2) (which concerns ACT) shall cease to have effect.
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(4) In subsection (3)(a) (which contains a reference to ACT) the words "advance corporation tax or" shall cease to have effect.
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(5) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.
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Section 255 of the Taxes Act 1988 |
| | 22. - (1) Section 255 of the Taxes Act 1988 ("gross rate" and "gross amount" of distributions to include ACT) shall cease to have effect.
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(2) This paragraph has effect in relation to distributions made on or after 6th April 1999.
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Section 419 of the Taxes Act 1988 |
| | 23. - (1) Section 419 of the Taxes Act 1988 (loans to participators etc) shall be amended as follows.
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(2) In subsection (1) (charge at rate of ACT) for the words from "such proportion" onwards there shall be substituted "25 per cent. of the amount of the loan or advance".
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(3) In subsection (4) (relief in case of repayment of loan or advance)-
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(a) after "subsection (1) above and" there shall be inserted "(a)"; and |
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(b) after "is repaid to the company," there shall be inserted "or |
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(b) the whole or part of the debt in respect of the loan or advance is released or written off,". |
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(4) In subsection (4A) (provision in relation to relief under subsection (4)) after "repayment", in each place where it occurs, there shall be inserted ", release or writing off".
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(5) Sub-paragraph (2) above has effect in relation to loans or advances made on or after 6th April 1999.
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(6) Sub-paragraphs (3) and (4) above have effect in relation to the release or writing off of the whole or part of a debt on or after 6th April 1999.
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Section 434 of the Taxes Act 1988 |
| | 24. - (1) Section 434 of the Taxes Act 1988 (franked investment income etc) shall be amended as follows.
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(2) Subsection (3) (certain franked investment income not to be used to frank distributions) shall cease to have effect.
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(3) Subsection (6) (which makes provision in relation to section 239) shall cease to have effect.
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(4) Subsection (8) (which applies where subsection (3) or (6) of section 434 applies) shall cease to have effect.
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(5) Sub-paragraph (2) above has effect in relation to franked investment income which is attributable to distributions made on or after 6th April 1999.
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(6) Sub-paragraphs (3) and (4) above have effect in relation to accounting periods beginning on or after 6th April 1999.
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Section 434C of the Taxes Act 1988 |
| | 25. - (1) Section 434C of the Taxes Act 1988 (interest on repayment of ACT) shall cease to have effect.
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(2) This paragraph has effect in relation to distributions made on or after 6th April 1999.
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Section 468Q of the Taxes Act 1988 |
| | 26. - (1) Section 468Q of the Taxes Act 1988 (dividend distribution to corporate unit holder) shall be amended as follows.
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(2) In subsection (3) (as amended by paragraph 8(6)(b) of Schedule 6 to the Finance (No. 2) Act 1997)-
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(a) for the definition of "C" there shall be substituted- |
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" C = such amount of the gross income as does not derive from franked investment income, as reduced by an amount equal to the trustees' net liability to corporation tax in respect of the gross income;"; and |
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(b) for the definition of "D" there shall be substituted- |
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" D = the amount of the gross income, as reduced by an amount equal to the trustees' net liability to corporation tax in respect of the gross income;". |
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(3) After that subsection there shall be inserted-
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"(3A) Any reference in this section to the trustees' net liability to corporation tax in respect of the gross income is a reference to the amount of the liability of the trustees of the authorised unit trust to corporation tax in respect of that gross income less the amount (if any) of any reduction of that liability which is given or falls to be given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1)."
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(4) After subsection (5) there shall be inserted-
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"(5A) Where, in relation to a dividend distribution, any tax is deemed to have been deducted by virtue of the application of subsection (2)(b) above, the amount to which the unit holder is entitled by way of repayment of that tax shall not exceed the amount of the unit holder's portion of the trustees' net liability to corporation tax in respect of the gross income.
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(5B) For the purposes of subsection (5A) above the unit holder's portion shall be determined by reference to the proportions in which unit holders have rights in the authorised unit trust in the distribution period in question.
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(5C) The trustees of the authorised unit trust shall in the appropriate statement sent to the unit holder under section 234A include a statement showing their net liability to corporation tax in respect of the gross income."
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(5) This paragraph has effect in relation to distribution periods beginning on or after 6th April 1999.
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Section 490 of the Taxes Act 1988 |
| | 27. - (1) Section 490 of the Taxes Act 1988 (companies carrying on a mutual business or not carrying on a business) shall be amended as follows.
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(2) In subsection (1) the words "(including group income)" shall cease to have effect.
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(3) This paragraph has effect in relation to distributions made on or after 6th April 1999.
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Section 497 of the Taxes Act 1988 |
| | 28. - (1) Section 497 of the Taxes Act 1988 (restriction on setting ACT against income from oil extraction activities etc) shall cease to have effect.
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(2) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.
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