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(1) Section 339 of the Income and Corporation Taxes Act 1988 shall be amended in accordance with paragraphs (2) to (8) below.
(2) In subsection (1), for paragraph (a) there shall be substituted--
"(a) a payment which, by reason of any provision of the Taxes Acts except section 209(4), is to be regarded as a distribution; and".
(3) Subsections (2), (3), (3A), (3F), (6), (7) and (8) shall cease to have effect.
(4) In subsection (3B)(b), for "two and a half per cent. of the amount given after deducting tax under section 339(3)" there shall be substituted "the limit imposed by subsection (3DB) below".
(5) After subsection (3D) there shall be inserted--
"(3DA) The limit imposed by this subsection is--
(a) where the amount of the payment does not exceed £100, 25 per cent of the amount of the payment;
(b) where the amount of the payment exceeds £100 but does not exceed £1,000, £25;
(c) where the amount of the payment exceeds £1,000, 2.5 per cent of the amount of the payment.
(3DB) Where a benefit received in consequence of making a payment--
(a) consists of the right to receive benefits at intervals over a period of less than twelve months;
(b) relates to a period of less than twelve months; or
(c) is one of a series of benefits received at intervals in consequence of making a series of payments at intervals of less than twelve months,
the value of the benefit shall be adjusted for the purposes of subsection (3C) above and the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
(3DC) Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a payment which is one of a series of payments made at intervals of less than twelve months, the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
(3DD) Where the value of a benefit, or the amount of a payment, falls to be adjusted under subsection (3DB) or (3DC) above, the value or amount shall be multiplied by 365 and the result shall be divided by--
(a) in a case falling within subsection (3DB)(a) or (b) above, the number of days in the period of less than twelve months;
(b) in a case falling within subsection (3DB)(c) or (3DC) above, the average number of days in the intervals of less than twelve months;
and the reference in subsection (3DB) to subsection (3C) above is a reference to that subsection as it applies for the purposes of subsection (3B) above."
(6) For subsection (4) there shall be substituted--
"(4) Where a company gives a sum of money to a charity, the gift shall in the hands of the charity be treated for the purposes of this Act as if it were an annual payment."
(7) For subsection (7AA) there shall be substituted--
"(7AA) Where--
(a) a qualifying donation to a charity is made by a company which is wholly owned by a charity, and
the donation or part shall be deemed for those purposes to be a charge on income paid in that accounting period, and not in any later period.
A claim under this subsection must be made within the period of two years immediately following the accounting period in which the donation is made, or such longer period as the Board may allow."
(8) In subsection (9), the words "in subsections (1) to (4) above includes" shall cease to have effect.
(9) In subsection (1) of section 209 of the Income and Corporation Taxes Act 1988, for "section 339(6) and any other express exceptions" there shall be substituted "any express exceptions".
(10) In subsection (2)(a) of section 338 of that Act, after "company" there shall be inserted "or payments falling within paragraph (b) below".
(11) This Resolution has effect in relation to payments made on or after 1st April 2000; and--
(a) so much of an accounting period as falls before that date; and
(b) so much of it as falls after 31st March 2000,
shall be treated as separate accounting periods for the purposes of the amendment made by paragraph (5) above.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
27. Covenanted Payments to Charities
- That--
(1) In subsection (5)(b) of section 338 of the Income and Corporation Taxes Act 1988, for "a covenanted donation to charity" there shall be substituted "a qualifying donation".
(2) In section 347A of that Act, subsections (2)(b), (7) and (8) shall cease to have effect.
(3) In subsection (3) of section 348 of that Act, at the end there shall be inserted "or to any payment which is a qualifying donation for the purposes of section 25 of the Finance Act 1990".
(4) In subsection (1) of section 349 of that Act, at the end there shall be inserted "or to any payment which is a qualifying donation (within the meaning of section 339) or a qualifying donation for the purposes of section 25 of the Finance Act 1990".
(5) In subsection (6) of section 505 of that Act, the words "and, for this purpose, all covenanted payments to charity (within the meaning of section 347A(7)) shall be treated as a single item" shall cease to have effect.
(6) In subsection (9) of section 660A of that Act, for paragraph (b) there shall be substituted--
"(b) qualifying donations for the purposes of section 25 of the Finance Act 1990."
(7) Section 59 of the Finance Act 1989 shall cease to have effect.
(8) Where a deed of covenant executed by an individual before 6th April 2000 provides for the payment of specified amounts, any amount payable under the deed on or after that date shall be determined as if the individual were entitled to deduct tax from that amount at the basic rate.
(9) This Resolution has effect in relation to covenanted payments--
(a) falling to be made by individuals on or after 6th April 2000; or
(b) made by companies on or after 1st April 2000.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
28. Disposals of Investments to Charities etc.
- That provision may be made about the disposal of shares, securities or other investments to charities or other bodies.
29. Employee Share Ownership Plans
- That provision may be made for the purposes of income tax about employee share ownership plans.
30. Profit Sharing Schemes (Corporation Tax Relief)
- That provision may be made about corporation tax relief for payments to trustees of profit sharing schemes approved under Schedule 9 to the Income and Corporation Taxes Act 1988.
31. Profit Sharing Schemes (Arrangements for Loans)
- That--
(1) In paragraph 2 of Schedule 9 to the Income and Corporation Taxes Act 1988, after sub-paragraph (2) there shall be inserted--
"(2A) The Board shall not approve a profit sharing scheme unless they are satisfied--
(a) that the arrangements for the scheme do not make any provision, and are not in any way associated with any provision made, for loans to some or all of the employees of--
(i) the company that established the scheme, or
(ii) in the case of a group scheme, any participating company, and
(b) that the operation of the scheme is not in any way associated with such loans.
(2B) For the purposes of sub-paragraph (2A) above 'arrangements' includes any scheme, agreement or understanding, whether or not legally enforceable."
(2) In paragraph 3(2) of that Schedule, before paragraph (d) there shall be inserted--
"(ca) the Board--
(i) cease to be satisfied of the matters mentioned in paragraph 2(2A) above, or
(ii) in the case of a scheme approved before 21st March 2000, are not satisfied of those matters; or".
(3) This Resolution shall be deemed to have come into force on 21st March 2000.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
32. Profit Sharing Schemes (Restrictions on Types of Shares)
- That--
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