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An “existing approved scheme” means a personal pension scheme approved | |
under Chapter 4 of Part 14 of that Act before 9th April 2003. | |
(3) In section 641A(1) of that Act (election for contributions to be treated as paid in | |
previous year), for “A person who pays a contribution under approved | |
personal pension arrangements” substitute “An individual who under | 5 |
approved personal pension arrangements made by him pays a contribution”. | |
(4) This section has effect in relation to contributions paid on or after 9th April | |
2003. | |
Miscellaneous | |
174 Payments to adopters | 10 |
(1) After section 327 of the Taxes Act 1988 insert— | |
“327A Payments to adopters | |
(1) The following payments shall not be treated as income for any purpose | |
of the Income Tax Acts— | |
(a) any payment or reward falling within section 57(3) of the | 15 |
Adoption Act 1976 (payments authorised by the court) which is | |
made to a person who has adopted, or intends to adopt, a child; | |
(b) payments under section 57(3A)(a) of that Act (payments by | |
adoption agencies of legal or medical expenses of persons | |
seeking to adopt); | 20 |
(c) payments of allowances under regulations under section 57A of | |
that Act (permitted allowances to persons who have adopted, | |
or intend to adopt, children) (as at 9th April 2003, see the | |
Adoption Allowance Regulations 1991); | |
(d) any payment or reward falling within section 51(3) of the | 25 |
Adoption (Scotland) Act 1978 (payments authorised by the | |
court) which is made to a person who has adopted, or intends | |
to adopt, a child; | |
(e) payments under section 51(4)(a) of that Act (payments by | |
adoption agencies of legal or medical expenses of persons | 30 |
seeking to adopt); | |
(f) payments of allowances by virtue of section 51B of that Act | |
(transitional provisions) in accordance with a scheme approved | |
by the Secretary of State under section 51(5) of that Act (schemes | |
for payment of allowances to persons who have adopted, or | 35 |
intend to adopt, a child); | |
(g) payments of allowances in accordance with an adoption | |
allowances scheme under section 51A of that Act; | |
(h) any payment or reward falling within Article 59(2)(b) of the | |
Adoption (Northern Ireland) Order 1987 (payments authorised | 40 |
by the court) which is made to a person who has adopted, or | |
intends to adopt, a child; | |
(i) any payment under Article 59(2)(c) of that Order (payments by | |
registered adoption societies) which is made to a person who | |
has adopted, or intends to adopt, a child; | 45 |
(j) payments of allowances under regulations under Article 59A of | |
that Order (permitted allowances to persons who have adopted, | |
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or intend to adopt, children) (as at 9th April 2003, see the | |
Adoption Allowance Regulations (Northern Ireland) 1996); | |
(k) payments of financial support made in the course of providing | |
adoption support services within the meaning of the Adoption | |
and Children Act 2002 (see sections 2(6) and (7) and 4 of that | 5 |
Act); | |
(l) payments made under regulations under paragraph 3(1) of | |
Schedule 4 to that Act (transitional and transitory provisions: | |
adoption support services). | |
(2) The Treasury may by order amend this section for the purposes of— | 10 |
(a) adding a description of payment, or | |
(b) removing a description of payment if the power to make a | |
payment of that description has been repealed or revoked or | |
has otherwise ceased to be exercisable.”. | |
(2) The amendment made by this section has effect for the year 2003-04 and | 15 |
subsequent years of assessment. | |
175 Foster carers | |
(1) Schedule 36 to this Act (foster carers) has effect. | |
(2) This section has effect in relation to the year 2003-04 and subsequent years of | |
assessment. | 20 |
176 Currency contracts and currency options | |
(1) This section applies in any case where at any time on or after 30th September | |
2002— | |
(a) a qualifying company becomes party to a qualifying contract which is | |
a currency contract or currency option, or | 25 |
(b) the terms of such a qualifying contract held by such a company are | |
varied, | |
and the conditions in subsection (2) are, or subsequently become, satisfied. | |
(2) The conditions are that— | |
(a) in accordance with generally accepted accounting practice, the | 30 |
company in preparing its statutory accounts uses the exchange rate | |
implied by the qualifying contract (“the accounting rate”); | |
(b) there is a difference between the accounting rate and the final payment | |
rate; and | |
(c) the difference between those exchange rates is more than 1 per cent of | 35 |
the final payment rate. | |
(3) In subsection (2) “the final payment rate” means the exchange rate found by | |
reference only to the amounts which fall or would, apart from this section and | |
the provisions specified in subsection (4), fall to be regarded for the purposes | |
of subsection (2) or, as the case may be, (7) of section 150 of the Finance Act 1994 | 40 |
(c. 9) as the amounts of the currency to be received, and the currency to be paid | |
in exchange, under the qualifying contract as mentioned in that subsection. | |
(4) Where this section first applies in relation to the qualifying contract in an | |
accounting period of the company which begins before 1st October 2002 (“the | |
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relevant contract period”), the following provisions of the Finance Act 2002 | |
(c. 23), namely— | |
(a) section 79(1)(b) (repeal of forex), | |
(b) section 80 and Schedule 24 (corporation tax: currency), and | |
(c) section 83 and Schedules 26 and 27 (derivative contracts), | 5 |
shall be taken to have effect in the case of the company, so far as relating to that | |
contract, in relation to that accounting period and any subsequent accounting | |
periods. | |
(5) Where— | |
(a) the qualifying contract is a currency contract which arises from the | 10 |
exercise of a currency option which is or was itself a qualifying contract | |
(or a series of such currency options), and | |
(b) that currency option was entered into or varied on or after 30th | |
September 2002 (or, in the case of a series of currency options, any of | |
them was entered into or varied on or after that date), | 15 |
the provisions specified in subsection (4) shall be taken to have effect in the case | |
of the company, so far as relating to the currency option (or, in the case of a | |
series of currency options, each of the options entered into or varied on or after | |
30th September 2002) in relation to the earliest accounting period (“the relevant | |
options period”) in which the option (or any of the options) was so entered into | 20 |
or varied and any subsequent accounting periods. | |
(6) Where the provisions specified in subsection (4) have effect by virtue of this | |
section in relation to a currency contract or currency option the following | |
provisions of the Finance Act 2002, namely— | |
(a) section 81 (transitional provision), so far as relating to section 80 and | 25 |
Schedule 24, and | |
(b) Schedule 28 (derivative contracts: transitional provisions etc), | |
shall have effect accordingly. | |
(7) In the application of Schedule 28 to the Finance Act 2002 by virtue of this | |
section, any reference to the company’s commencement day is to be taken— | 30 |
(a) in the case of a currency contract, as a reference to the first day of the | |
relevant contract period; or | |
(b) in the case of a currency option, as a reference to the first day of the | |
relevant options period. | |
(8) This section does not apply in relation to any contract entered into or varied in | 35 |
an accounting period beginning on or after 1st October 2002 unless the contract | |
arises from the exercise of a currency option which was entered into or varied | |
on or after 30th September 2002 and in an accounting period beginning on or | |
before that date. | |
(9) In this section the following expressions, namely— | 40 |
(a) qualifying company, | |
(b) qualifying contract, | |
(c) currency contract, | |
(d) currency option, | |
have the same meaning as in Chapter 2 of Part 4 of the Finance Act 1994 (c. 9), | 45 |
(disregarding for this purpose the provisions specified in subsection (4)) and | |
references to the exercise of an option shall be construed accordingly. | |
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(10) In this section “statutory accounts” has the meaning given by paragraph 52 of | |
Schedule 26 to the Finance Act 2002 (c. 23). | |
(11) This section shall be deemed to have come into force on 30th September 2002. | |
177 Loan relationships: amendments | |
Schedule 37 to this Act (which makes amendments in relation to loan | 5 |
relationships) has effect. | |
178 Derivative contracts: transactions within groups | |
(1) In paragraph 28 of Schedule 26 to the Finance Act 2002, in sub-paragraph (3)(a) | |
(credits and debits to be brought into account: disregard of the transaction or | |
series of transactions except for certain purposes) after “except” insert— | 10 |
“(i) for the purpose of determining the credits and debits | |
to be brought into account in respect of exchange | |
gains or losses and identifying the company which is | |
to bring them into account, or | |
(ii)”. | 15 |
(2) In sub-paragraph (3)(b) of that paragraph (transferor and transferee deemed to | |
be the same person, except for that purpose) for “that purpose” substitute | |
“those purposes”. | |
(3) For sub-paragraph (4) of that paragraph substitute— | |
“(4) References in this paragraph to one company replacing another as | 20 |
party to a derivative contract shall include references to a company | |
becoming party to any derivative contract which— | |
(a) confers rights or imposes liabilities, or | |
(b) both confers rights and imposes liabilities, | |
where those rights or liabilities, or rights and liabilities, are | 25 |
equivalent to those of the other company under a derivative contract | |
to which that other company has previously ceased to be party.”. | |
(4) For paragraph 30 of that Schedule (amount to be brought into account on | |
transaction within a group where transferor uses mark to market basis of | |
accounting) substitute— | 30 |
“30 (1) Paragraph 28 does not apply where the transferor company uses an | |
authorised mark to market basis of accounting as respects the | |
derivative contract in question, but in any such case— | |
(a) the amount to be brought into account by the transferor | |
company in respect of the transaction referred to in that | 35 |
paragraph, or in respect of the series of transactions there | |
referred to, taken together, must be the fair value of the | |
derivative contract as at the date of transfer to the transferee | |
company; and | |
(b) the amount to be brought into account by the transferee | 40 |
company in respect of the transaction referred to in that | |
paragraph, or in respect of the series of transactions there | |
referred to, taken together, must be the same as the amount | |
brought into account by the transferor company in respect of | |
that transaction or, as the case may be, that series of | 45 |
transactions, taken together. | |
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(2) In this paragraph “transferor company” and “transferee company” | |
have the same meaning as in paragraph 28.”. | |
(5) The amendments made by this section have effect where the date of transfer to | |
the transferee company falls on or after 9th April 2003. | |
179 Contributions to urban regeneration companies | 5 |
(1) After section 79A of the Taxes Act 1988 (contributions to training and | |
enterprise councils and local enterprise companies) insert— | |
“79B Contributions to urban regeneration companies | |
(1) Notwithstanding anything in section 74, but subject to the provisions of | |
this section, where a person carrying on a trade, profession or vocation | 10 |
makes any contribution (whether in cash or in kind) to a designated | |
urban regeneration company, any expenditure incurred by him in | |
making the contribution may be deducted as an expense in computing | |
the profits of the trade, profession or vocation if it would not otherwise | |
be so deductible. | 15 |
(2) Where any such contribution is made by an investment company, any | |
expenditure allowable as a deduction under subsection (1) above shall | |
for the purposes of section 75 be treated as expenses of management. | |
(3) Subsection (1) above does not apply in relation to a contribution made | |
by any person if either he or any person connected with him receives or | 20 |
is entitled to receive a benefit of any kind whatsoever for or in | |
connection with the making of that contribution, whether from the | |
urban regeneration company concerned or from any other person. | |
(4) In any case where— | |
(a) relief has been given under subsection (1) above in respect of a | 25 |
contribution, and | |
(b) any benefit received in any chargeable period by the contributor | |
or any person connected with him is in any way attributable to | |
that contribution, | |
the contributor shall in respect of that chargeable period be charged to | 30 |
tax under Case I or Case II of Schedule D or, if he is not chargeable to | |
tax under either of those Cases for that period, under Case VI of | |
Schedule D on an amount equal to the value of that benefit. | |
(5) In this section “urban regeneration company” means any body of | |
persons (whether corporate or unincorporate) which the Treasury by | 35 |
order designates as an urban regeneration company for the purposes of | |
this section. | |
(6) The Treasury may only make an order under subsection (5) above | |
designating a body as an urban regeneration company for the purposes | |
of this section if they consider that each of the criteria in subsection (7) | 40 |
below is satisfied in the case of the body. | |
(7) The criteria are that— | |
(a) the sole or main function of the body is to co-ordinate the | |
regeneration of a specific urban area in the United Kingdom; | |
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(b) the body is expected to seek to perform that function by creating | |
a plan for the development of that area and endeavouring to | |
secure that the plan is carried into effect; | |
(c) in co-ordinating the regeneration of that area, the body is | |
expected to work together with some or all of the public or local | 5 |
authorities which exercise functions in relation to the whole or | |
part of that area. | |
(8) An order under subsection (5) above may be framed so as to take effect | |
on a date earlier than the making of the order, but not earlier than— | |
(a) 1st April 2003, in the case of the first order under that | 10 |
subsection, or | |
(b) three months before the date on which the order is made, in the | |
case of any subsequent order. | |
(9) Section 839 (connected persons) applies for the purposes of this section. | |
(10) This section applies to contributions made on or after 1st April 2003.”. | 15 |
(2) In section 828(4) of the Taxes Act 1988 (orders or regulations under specified | |
provisions not to be subject to Commons negative resolution parliamentary | |
procedure) after “section 1(6),” insert “79B(5),”. | |
180 Repos etc | |
Schedule 38 to this Act (which contains amendments relating to arrangements | 20 |
for the sale and repurchase of securities etc) has effect. | |
181 Relevant discounted securities: withdrawal of relief for costs and losses, etc | |
Schedule 39 to this Act (relevant discounted securities: withdrawal of relief for | |
costs and losses, and extension of definition of “strip”) has effect. | |
182 Court common investment funds | 25 |
(1) Section 469A of the Taxes Act 1988 (court common investment funds) is | |
amended as follows. | |
(2) In paragraph (c) of subsection (1) (persons entitled as against the Accountant | |
General to share in fund’s investments treated as unit holders in authorised | |
unit trust) for “the persons whose interests entitle them, as against the | 30 |
Accountant General, to share in the fund’s investments” substitute “the | |
persons with qualifying interests”. | |
(3) After that subsection insert— | |
“(1A) For the purposes of subsection (1)(c) above, the persons with qualifying | |
interests are— | 35 |
(a) in relation to shares in the fund held by the Accountant General, | |
the persons whose interests entitle them, as against him, to | |
share in the fund’s investments; | |
(b) in relation to shares in the fund held by any other person | |
authorised by the Lord Chancellor to hold such shares on behalf | 40 |
of others (an “authorised person”)— | |
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(i) if there are persons whose interests entitle them, as | |
against the authorised person, to share in the fund’s | |
investments, those persons; | |
(ii) if not, the authorised person; | |
(c) in relation to shares in the fund held by persons authorised by | 5 |
the Lord Chancellor to hold such shares on their own behalf, | |
those persons.”. | |
(4) This section has effect in relation to income arising to a common investment | |
fund on or after 6th April 2003. | |
(5) In this section “common investment fund” means a common investment fund | 10 |
established under section 42 of the Administration of Justice Act 1982 (c. 53). | |
Part 8 | |
Other taxes | |
Inheritance tax | |
183 Authorised unit trusts, OEICs and common investment funds | 15 |
(1) The Inheritance Tax Act 1984 (c. 51) is amended as follows. | |
(2) In section 6 (excluded property), after subsection (1) insert— | |
“(1A) A holding in an authorised unit trust and a share in an open-ended | |
investment company is excluded property if the person beneficially | |
entitled to it is an individual domiciled outside the United Kingdom.”. | 20 |
(3) In section 48 (settlements: excluded property), after subsection (3) insert— | |
“(3A) Where property comprised in a settlement is a holding in an authorised | |
unit trust or a share in an open-ended investment company— | |
(a) the property (but not a reversionary interest in the property) is | |
excluded property unless the settlor was domiciled in the | 25 |
United Kingdom at the time the settlement was made, and | |
(b) section 6(1A) above applies to a reversionary interest in the | |
property but does not otherwise apply in relation to the | |
property.”. | |
(4) In section 178(1) (sale of shares etc from deceased’s estate: preliminary)— | 30 |
(a) in the definition of “qualifying investments”, after “authorised unit | |
trust” insert “, shares in an open-ended investment company”, and | |
(b) for “section 1 of the Administration of Justice Act 1965” substitute | |
“section 42 of the Administration of Justice Act 1982”. | |
(5) Section 272 (general interpretation) is amended as follows. | 35 |
(6) After the definition of “amount” insert— | |
““authorised unit trust” means a scheme which is a unit trust scheme for | |
the purposes of section 469 of the Taxes Act 1988 (see subsection (7) | |
of that section) and in the case of which an order under section 243 of | |
the Financial Services and Markets Act 2000 is in force;”. | 40 |
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