|
| |
| |
(3) Capital payments received— | |
(a) before 21st March 2000, or | |
(b) before the year of assessment preceding the year of | |
assessment in which the original transfer of value was | |
made, | 5 |
shall be disregarded.”. | |
(2) After paragraph 12 insert— | |
“Attribution of gains to beneficiaries in section 10A cases | |
12A (1) This paragraph applies where by virtue of section 10A an amount | |
of gains would (apart from this Schedule) be treated under section | 10 |
87 as accruing to a person (“the beneficiary”) in the year of return | |
by virtue of a capital payment made to him in an intervening year. | |
(2) Where this paragraph applies, a capital payment equal to so much | |
of that capital payment as exceeds the amount otherwise charged | |
shall be deemed for the purposes of this Schedule to be made to | 15 |
the beneficiary in the year of return. | |
(3) The “amount otherwise charged” means the total of any | |
chargeable gains attributed to the beneficiary under section 87(4) | |
or 89(2) by virtue of the capital payment. | |
(4) For the purposes of paragraph 13(5)(b) a deemed capital payment | 20 |
under this paragraph shall be treated as made when the actual | |
capital payment mentioned in sub-paragraph (1) above was made. | |
(5) Expressions used in this paragraph and section 10A have the same | |
meanings in this paragraph as in that section”. | |
Gains attributed to settlor | 25 |
5 (1) Paragraph 6 is amended as follows. | |
(2) In sub-paragraph (1), in the opening words, for “the amount of any | |
chargeable gains” substitute “the tapered amount of any chargeable gains”. | |
(3) After that sub-paragraph insert— | |
“(1A) The reference in sub-paragraph (1) to the tapered amount of any | 30 |
chargeable gains is a reference— | |
(a) where section 86(4) applies, to the tapered section 86(4) | |
amount as defined in section 87(3A); | |
(b) where section 10A applies, to the tapered section 86(1)(e) | |
amount as defined in section 86A(7A).”. | 35 |
Minor and consequential amendments | |
6 (1) In paragraph 10(1) for “of the transferor settlement, or of any transferee | |
settlement,” substitute “of any relevant settlement”. | |
(2) In paragraph 12— | |
(a) in sub-paragraph (1)(a) for “arising under Schedule 4B” substitute | 40 |
“included in a settlement’s Schedule 4C pool”, | |
(b) in sub-paragraph (2) for “the Schedule 4B trust gains” substitute “the | |
settlement’s Schedule 4C gains”, and | |
| |
| |
|
| |
| |
(c) in sub-paragraph (3) for “the transferor or transferee settlements” | |
substitute “any relevant settlement”. | |
(3) In paragraph 13(5)(a) for “that in which the transfer of value was made” | |
substitute “the year of the gain (determined in accordance with paragraph | |
8B(3))”. | 5 |
(4) After paragraph 13 insert— | |
“Effect of settlement ceasing to exist after transfer of value | |
13A Where a settlement ceases to exist after the trustees have made a | |
transfer of value to which Schedule 4B applies, this Schedule has | |
effect as if a year of assessment had ended immediately before the | 10 |
settlement ceased to exist.”. | |
Schedule 30 | |
Section 166 | |
First-year allowances for expenditure on environmentally beneficial plant | |
or machinery | |
Introductory | 15 |
1 The Capital Allowances Act 2001 (c. 2) is amended as follows. | |
Types of expenditure for which first-year allowances available | |
2 In section 39— | |
(a) after “under” insert “any of the following provisions”; | |
(b) at the end of the entry relating to section 45E, omit “or”; | 20 |
(c) after the entry relating to section 45F add— | |
| | “section 45H | expenditure on environmentally beneficial | | | | | | plant or machinery.”. | | |
|
First-year qualifying expenditure on environmentally beneficial plant or machinery | |
3 After section 45G insert— | 25 |
“45H Expenditure on environmentally beneficial plant or machinery | |
(1) Expenditure is first-year qualifying expenditure if— | |
(a) it is expenditure on environmentally beneficial plant or | |
machinery that is unused and not second-hand, | |
(b) it is incurred on or after 1st April 2003, | 30 |
(c) it is not long-life asset expenditure, and | |
(d) it is not excluded by section 46 (general exclusions). | |
(2) Environmentally beneficial plant or machinery means plant or | |
machinery in relation to which the following conditions are met— | |
(a) when the expenditure is incurred, or | 35 |
| |
| |
|
| |
| |
(b) when the contract for the provision of the plant or machinery | |
is entered into. | |
(3) The conditions are that the plant or machinery— | |
(a) is of a description specified by Treasury order, and | |
(b) meets the environmental criteria specified by Treasury order | 5 |
for plant or machinery of that description. | |
(4) The Treasury may make such orders under subsection (3) as appear | |
to them appropriate to promote the use of technologies, or products, | |
designed to remedy or prevent damage to the physical environment | |
or natural resources. | 10 |
(5) Any such order may make provision by reference to any technology | |
list, or product list, issued by the Secretary of State (whether before | |
or after the coming into force of this section). | |
45I Certification of environmentally beneficial plant and machinery | |
(1) The Treasury may by order provide that, in such cases as may be | 15 |
specified in the order, no section 45H allowance may be made unless | |
a relevant certificate of environmental benefit is in force. | |
A “section 45H allowance” means a first-year allowance in respect of | |
expenditure that is first-year qualifying expenditure under section | |
45H. | 20 |
(2) A certificate of environmental benefit is one certifying that— | |
(a) particular plant or machinery, or | |
(b) plant or machinery constructed to a particular design, | |
meets the environmental criteria specified in relation to that | |
description of plant or machinery by order under section 45H. | 25 |
(3) A relevant certification of environmental benefit means one issued— | |
(a) by the Secretary of State or a person authorised by the | |
Secretary of State; | |
(b) in the case of plant or machinery used or for use in Scotland, | |
by the Scottish Ministers or a person authorised by them; | 30 |
(c) in the case of plant or machinery used or for use in Wales, by | |
the National Assembly for Wales or a person authorised by it; | |
(d) in the case of plant or machinery used or for use in Northern | |
Ireland, by the Department of Enterprise, Trade and | |
Investment in Northern Ireland or a person authorised by it. | 35 |
(4) If a certification of environmental benefit is revoked— | |
(a) the certificate is treated for the purposes of this section as if it | |
had never been issued, and | |
(b) all such assessments and adjustments shall be made as are | |
necessary as a result of the revocation. | 40 |
(5) If a person who has made a tax return becomes aware that, as a result | |
of the revocation of a certificate of environmental benefit after the | |
return was made, the return has become incorrect, he must give | |
notice to the Inland Revenue specifying how the return needs to be | |
amended. | 45 |
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| |
|
| |
| |
(6) The notice must be given within three months beginning with the | |
day on which the person first became aware that anything in the tax | |
return had become incorrect because of the revocation of the | |
certificate. | |
45J Environmentally beneficial components of plant or machinery | 5 |
(1) This section applies for the purpose of apportioning expenditure | |
incurred on plant or machinery where one or more of the | |
components of the plant or machinery (but not all of it) is of a | |
description specified by Treasury order under section 45H(3). | |
(2) If— | 10 |
(a) only one of the components is of such a description, and | |
(b) an amount is specified by the order in respect of that | |
component, | |
the part of the expenditure that is section 45H expenditure must not | |
exceed that amount. | 15 |
(3) If— | |
(a) more than one of the components is of such a description, and | |
(b) an amount is specified by the order in respect of each of those | |
components, | |
the part of the expenditure that is section 45H expenditure must not | 20 |
exceed the total of those amounts. | |
(4) If the expenditure is treated under this Act as incurred in | |
instalments, the proportion of each instalment that is section 45H | |
expenditure is the same as the proportion of the whole expenditure | |
that is section 45H expenditure. | 25 |
(5) Where this section applies, the expenditure is not apportioned under | |
section 562(3) (apportionment where property sold with other | |
property). | |
(6) In this section “section 45H expenditure” means expenditure that is | |
first-year qualifying expenditure under section 45H.”. | 30 |
General exclusions affecting first-year qualifying expenditure | |
4 In section 46(1)— | |
(a) after “under” insert “any of the following provisions”; | |
(b) at the end of the entry relating to section 45E, omit “or”; | |
(c) after the entry relating to section 45F add— | 35 |
| | “section 45H | expenditure on environmentally beneficial | | | | | | plant or machinery.”. | | |
|
Amount of first-year allowances | |
5 In section 52(3), in the Table, after the entries relating to expenditure | |
qualifying under section 45F add— | 40 |
| |
| |
|
| |
| |
| | “Expenditure qualifying under section 45H | 100%”. | | | | | (expenditure on environmentally beneficial | | | | | | plant or machinery) | | | |
|
Penalty for failure to provide information etc | |
6 In the second column of the Table in section 98 of the Taxes Management Act | 5 |
1970 (c. 9) (penalty for failure to provide information etc), in the entry | |
relating to requirements imposed by the Capital Allowances Act 2001 (c. 2), | |
after “45G(5) and (6)” insert “, 45I(5) and (6)”. | |
Transitory provision: expenditure incurred etc before first order made | |
7 (1) For the purposes of section 45H(2) of the Capital Allowances Act 2001, | 10 |
where— | |
(a) expenditure on plant or machinery is incurred, or a contract for the | |
provision of plant or machinery is entered into, before the first order | |
is made under section 45H(3) of that Act, and | |
(b) if that order had been made before the relevant time, the conditions | 15 |
in section 45H(3) of that Act would have been met, | |
those conditions shall be treated as if they were met at the relevant time. | |
(2) In sub-paragraph (1) “the relevant time” means the time when the | |
expenditure was incurred or (as the case may be) the contract was entered | |
into. | 20 |
Schedule 31 | |
Section 167 | |
Tax relief for expenditure on research and development | |
Part 1 | |
Small and medium-sized enterprises: Schedule 20 to Finance Act 2000 | |
Introductory | 25 |
1 Schedule 20 to the Finance Act 2000 (c. 17) (tax relief for expenditure on | |
research and development by small and medium-sized enterprises) is | |
amended in accordance with the following provisions of this Part of this | |
Schedule. | |
Required minimum aggregate expenditure: reduction from £25,000 to £10,000 | 30 |
2 (1) Paragraph 1 (entitlement to R&D tax relief) is amended as follows. | |
(2) In sub-paragraph (1)(b) (requirement for minimum aggregate expenditure | |
of £25,000 or time apportioned part of that amount) in sub-paragraphs (i) | |
and (ii) for “£25,000” substitute “£10,000”. | |
| |
| |
|
| |
| |
Required minimum aggregate expenditure: inclusion of new class of expenditure | |
3 (1) Paragraph 1 is also amended as follows. | |
(2) In sub-paragraph (1)(b) (requirement for minimum aggregate | |
expenditure)— | |
(a) for “paragraph 3) and” substitute “paragraph 3),”; and | 5 |
(b) after “Finance Act 2002)” insert “and its qualifying additional SME | |
expenditure (as defined in paragraph 10B of that Schedule)”. | |
(3) In sub-paragraph (3A) (meaning of “deductible” in relation to qualifying | |
sub-contracted R&D expenditure)— | |
(a) after “(1)(b)” insert “, each of the following— | 10 |
(a)”; | |
(b) after “Finance Act 2002)” insert “, and”; and | |
(c) after the paragraph (a) so formed, insert the following paragraph— | |
“(b) a company’s qualifying additional SME expenditure | |
(as defined in paragraph 10B of that Schedule),”. | 15 |
Qualifying R&D expenditure: expenditure on externally provided workers | |
4 In paragraph 3 (qualifying R&D expenditure) for sub-paragraph (4) (the | |
third condition, that the expenditure is incurred on staffing costs or | |
consumable stores or is qualifying expenditure on sub-contracted research | |
and development) substitute— | 20 |
“(4) The third condition is that the expenditure— | |
(a) is incurred on staffing costs (see paragraph 5), | |
(b) is incurred on consumable stores (see paragraph 6), | |
(c) is qualifying expenditure on externally provided workers | |
(see paragraphs 8A to 8E), or | 25 |
(d) is qualifying expenditure on sub-contracted research and | |
development (see paragraphs 9 to 12).”. | |
Staffing costs: persons partly engaged directly and actively in relevant R&D | |
5 (1) In paragraph 5 (staffing costs) sub-paragraph (3) (person partly engaged in | |
relevant research and development) is amended as follows. | 30 |
(2) In the opening words, omit “the following rules apply”. | |
(3) Omit paragraphs (a) and (b) (person spending less than 20% or more than | |
80%of total working time on relevant research and development). | |
(4) In paragraph (c), omit “in any other case,”. | |
Qualifying expenditure on externally provided workers | 35 |
6 After paragraph 8 (subsidised expenditure) insert— | |
“Qualifying expenditure on externally provided workers | |
8A (1) The provisions of paragraphs 8C to 8E have effect for determining | |
the amount of the qualifying expenditure of a company (“the | |
company”) on externally provided workers. | 40 |
| |
| |
|
| |
| |
(2) The provisions of sub-paragraphs (4) to (6) have effect for | |
determining how much of any such expenditure is attributable to | |
relevant research and development. | |
(3) For the purposes of this Schedule the company incurs expenditure | |
on externally provided workers if it makes a payment (a “staff | 5 |
provision payment”) to another person (the “staff provider”) in | |
respect of the supply to the company, by or through the staff | |
provider, of the services of any externally provided workers. | |
(4) Qualifying expenditure on externally provided workers is | |
attributable to relevant research and development if the externally | 10 |
provided workers are directly and actively engaged in such | |
research and development. | |
(5) In the case of any externally provided worker partly engaged | |
directly and actively in relevant research and development, an | |
appropriate proportion of the qualifying expenditure relating to | 15 |
him is treated as attributable to the relevant research and | |
development. | |
(6) For the purposes of sub-paragraphs (4) and (5) persons who | |
provide services, such as secretarial or administrative services, in | |
support of activities carried on by others, are not, by virtue of | 20 |
providing those services, to be treated as themselves directly and | |
actively engaged in those activities. | |
Meaning of “externally provided worker” | |
8B For the purposes of this Schedule a person is an “externally | |
provided worker” in relation to the company if the following | 25 |
conditions are satisfied— | |
(a) he is an individual, | |
(b) he is not a director or employee of the company, | |
(c) he personally provides, or is under an obligation | |
personally to provide, services to the company, | 30 |
(d) he is subject to (or to the right of) supervision, direction or | |
control by the company as to the manner in which those | |
services are provided, | |
(e) his services are supplied to the company by or through the | |
staff provider (whether or not he is a director or employee | 35 |
of the staff provider or of any other person), | |
(f) he provides, or is under an obligation to provide, those | |
services personally to the company under the terms of a | |
contract between him and the staff provider, | |
(g) the provision of those services does not constitute the | 40 |
carrying on of activities contracted out by the company. | |
Treatment of expenditure where company and staff provider are connected persons | |
8C (1) Where— | |
(a) the company and the staff provider are connected persons, | |
and | 45 |
(b) in accordance with generally accepted accounting | |
practice— | |
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