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| Taper relief: assets qualifying as business assets. |
66. - (1) Schedule A1 to the Taxation of Chargeable Gains Act 1992 (application of taper relief) is amended as follows.
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(2) In paragraph 4 (conditions for shares to qualify as business assets)-
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(a) in sub-paragraph (4) (disposal by personal representatives), for the words following "if at that time" substitute "the relevant company was a qualifying company by reference to the personal representatives"; and |
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(b) in sub-paragraph (5) (disposal by legatee), for paragraph (b) substitute- |
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"(b) the relevant company was a qualifying company by reference to the personal representatives.". |
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(3) In paragraph 5 (conditions for other assets to qualify as business assets)-
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(a) in sub-paragraph (2) (disposal by individual), for paragraphs (d) and (e) substitute- |
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"(d) the purposes of any office or employment held by that individual with a person carrying on a trade."; |
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and
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(b) in sub-paragraph (3) (disposal by trustees of settlement), for paragraphs (e) and (f) substitute- |
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"(e) the purposes of any office or employment held by an eligible beneficiary with a person carrying on a trade.". |
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(4) For paragraph 6 (companies which are qualifying companies) substitute-
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| "6. - (1) A company shall be taken to have been a qualifying company by reference to an individual at any time when-
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(a) the company was a trading company or the holding company of a trading group, and |
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(b) one or more of the following conditions was met- |
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(i) the company was unlisted,
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(ii) the individual was an officer or employee of the company, or of a company having a relevant connection with it, or
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(iii) the voting rights in the company were exercisable, as to not less than 5%, by the individual.
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(2) A company shall be taken to have been a qualifying company by reference to the trustees of a settlement at any time when-
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(a) the company was a trading company or the holding company of a trading group, and |
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(b) one or more of the following conditions was met- |
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(i) the company was unlisted,
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(ii) an eligible beneficiary was an officer or employee of the company, or of a company having a relevant connection with it, or
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(iii) the voting rights in the company were exercisable, as to not less than 5%, by the trustees.
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(3) A company shall be taken to have been a qualifying company by reference to an individual's personal representatives at any time when-
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(a) the company was a trading company or the holding company of a trading group, and |
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(b) one or more of the following conditions was met- |
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(i) the company was unlisted, or
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(ii) the voting rights in the company were exercisable, as to not less than 5%, by the personal representatives.".
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(5) In paragraph 22(1) (interpretation), at the appropriate place insert-
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""unlisted company" means a company- |
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(a) none of whose shares is listed on a recognised stock exchange, and |
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(b) which is not a 51% subsidiary of a company whose shares, or any class of whose shares, is so listed;"; |
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and omit the definitions of "full-time working officer or employee" and "qualifying office or employment". |
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(6) This section has effect for determining whether an asset is a business asset at any time on or after 6th April 2000.
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It does not affect the determination on or after that date whether an asset was a business asset at a time before that date.
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Research and development |
| Meaning of "research and development". |
67. - (1) Schedule 19 to this Act (meaning of "research and development") has effect.
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In that Schedule-
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Part I contains a new definition of "research and development" for the purposes of the Tax Acts, and |
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Part II contains consequential amendments. |
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(2) The amendments in Part II of that Schedule have effect-
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(a) for the purposes of income tax and capital gains tax, in relation to the year 2000-01 and subsequent years of assessment, and |
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(b) for the purposes of corporation tax, for accounting periods ending on or after 1st April 2000. |
| Tax relief for expenditure on research and development. |
68. - (1) Schedule 20 to this Act (tax relief for expenditure on research and development) has effect for accounting periods ending on or after 1st April 2000.
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In that Schedule-
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Part I provides for entitlement to relief, |
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Part II provides for the manner of giving effect to the relief, and |
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Part III contains supplementary provisions. |
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(2) Schedule 21 to this Act (which contains consequential amendments) has effect accordingly.
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Capital allowances |
| First year allowances for small or medium-sized enterprises. |
69. - (1) In section 22(3D) of the Capital Allowances Act 1990 (expenditure qualifying for 40% first year allowances), for "in the period beginning with 2nd July 1998 and ending with 1st July 2000" substitute "on or after 2nd July 1998".
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(2) In that Act-
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(a) in section 22(3C)(a), (3CA)(a) and (3D)(a), for "a small company or a small business" substitute "a small or medium-sized enterprise"; |
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(i) in the sidenote, for "small company or small business",
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(ii) in subsection (1) for "a small company", and
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(iii) in subsection (2) for "a small business",
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substitute "small or medium-sized enterprise". |
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The amendments in this subsection are of nomenclature only.
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