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| Corporate venturing scheme. |
63. - (1) Schedule 15 to this Act (which makes provision for the corporate venturing scheme) has effect.
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(2) Schedule 16 to this Act (which makes consequential amendments) has effect.
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(3) Paragraph 3(2)(a)(i) to (iii) and (3) of Schedule 16 (and paragraph 3(1) so far as it relates to those provisions) have effect-
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(a) in relation to claims made under section 573 of the Taxes Act 1988, in respect of disposals on or after 1st April 2000, and |
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(b) in relation to claims made under section 574 of that Act, in respect of disposals on or after 6th April 2000. |
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(4) Subject to that, Schedules 15 and 16 apply in relation to shares issued on or after 1st April 2000 but before 1st April 2010.
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| Enterprise investment scheme: amendments. |
64. The provisions relating to the enterprise investment scheme are amended in accordance with Schedule 17 to this Act.
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In that Schedule-
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Part I makes amendments reducing various periods which apply in relation to the provisions which determine the reliefs under the scheme; |
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Part II makes amendments about qualifying companies; |
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Part III makes other minor amendments. |
| Venture capital trusts: amendments. |
65. The provisions relating to venture capital trusts are amended in accordance with Schedule 18 to this Act.
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In that Schedule-
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Part I makes amendments reducing various periods which apply in relation to the provisions which determine the reliefs; and |
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Part II makes amendments about qualifying holdings. |
| Taper relief: taper for business assets. |
66. - (1) Section 2A of the Taxation of Chargeable Gains Act 1992 (taper relief) is amended as follows.
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(2) In subsection (5), for the first two columns of the table (which relate to gains on disposals of business assets) substitute-
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"Gains on disposals of business assets |
Number of whole years in qualifying holding period |
Percentage of gain chargeable |
1 |
87.5 |
2 |
75 |
3 |
50 |
4 or more |
25" |
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(3) For subsections (8) and (9) substitute-
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"(8) The qualifying holding period of an asset for the purposes of this section is-
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(a) in the case of a business asset, the period after 5th April 1998 for which the asset had been held at the time of its disposal; |
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(b) in the case of a non-business asset where- |
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(i) the time which, for the purposes of paragraph 2 of Schedule A1, is the time when the asset is taken to have been acquired by the person making the disposal is a time before 17th March 1998, and
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(ii) there is no period which by virtue of paragraph 11 or 12 of that Schedule does not count for the purposes of taper relief,
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the period mentioned in paragraph (a) plus one year; |
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(c) in the case of any other non-business asset, the period mentioned in paragraph (a). |
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This subsection is subject to paragraph 2(4) of Schedule A1 and paragraph 3 of Schedule 5BA.".
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(4) This section applies to disposals on or after 6th April 2000.
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| Taper relief: assets qualifying as business assets. |
67. - (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 per cent 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". |
68. - (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. |
