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(2) In any such case, CAA 2001 has effect in relation to the relevant individual’s | |
available qualifying expenditure in the pool for the relevant chargeable | |
period as if— | |
(a) a disposal event occurred immediately after the beginning of the | |
period, | 5 |
(b) disposal receipts fall to be brought into account in the pool for that | |
period by reason of that event, and | |
(c) the total of those disposal receipts equals the amount of the | |
unrelieved qualifying expenditure carried forward in the pool from | |
the previous chargeable period under section 59 of CAA 2001. | 10 |
(3) In any such case, section 13 of CAA 2001 (use for qualifying activity of plant | |
and machinery provided for other purposes) shall apply as if, on the first | |
day of the first subsequent chargeable period which is not a relevant | |
chargeable period,— | |
(a) the relevant individual brings into use for the purposes of his | 15 |
provision of foster care such of the plant or machinery on which the | |
unrelieved qualifying expenditure was incurred as he still owns on | |
that day, and | |
(b) he owns that plant or machinery as a result of having incurred capital | |
expenditure on its provision for purposes other than those of the | 20 |
provision of foster care. | |
(4) In this paragraph “relevant pool” means a pool containing expenditure | |
incurred on the provision of plant or machinery wholly or partly for the | |
purposes of the provision of foster care by the relevant individual. | |
Expenditure incurred in a relevant chargeable period not qualifying expenditure | 25 |
18 Capital expenditure (“excluded capital expenditure”) which is incurred— | |
(a) by a relevant individual, | |
(b) in a relevant chargeable period, and | |
(c) on the provision of plant or machinery wholly or partly for the | |
purposes of the provision of foster care by the individual, | 30 |
does not constitute qualifying expenditure for the purposes of CAA 2001. | |
Excluded capital expenditure: subsequent treatment of asset | |
19 Where a relevant individual incurs excluded capital expenditure in a | |
relevant chargeable period, section 13 of CAA 2001 shall apply as if, on the | |
first day of the first subsequent chargeable period which is not a relevant | 35 |
chargeable period,— | |
(a) he brings into use for the purposes of his provision of foster care such | |
of the plant or machinery on which the expenditure was incurred as | |
he still owns on that day, and | |
(b) he owns that plant or machinery as a result of having incurred capital | 40 |
expenditure on its provision for purposes other than those of the | |
provision of foster care. | |
Interpretation of this Part | |
20 Expressions which— | |
(a) are used in this Part, and | 45 |
| |
| |
|
| |
| |
(b) are used in CAA 2001, but | |
(c) apart from this paragraph, are not defined in this Schedule, | |
have the same meaning in this Part as in that Act. | |
Part 4 | |
Supplementary | 5 |
Interpretation | |
21 In this Schedule— | |
“CAA 2001” means the Capital Allowances Act 2001 (c. 2); | |
“excluded capital expenditure” is to be construed in accordance with | |
paragraph 18; | 10 |
“foster care arrangement” has the meaning given in paragraph 2(5); | |
“foster care receipts” is to be construed in accordance with paragraph 3; | |
“income period” is to be construed in accordance with paragraph 3(2) | |
and (3); | |
“profits” includes gains; | 15 |
“provision of foster care” has the meaning given in paragraph 4; | |
“relevant chargeable period” is to be construed in accordance with | |
paragraph 16(5); | |
“relevant individual” is to be construed in accordance with paragraph | |
16(2); | 20 |
“total foster care receipts” is to be construed in accordance with | |
paragraph 5. | |
Schedule 37 | |
Section 177 | |
Loan relationships: amendments | |
Part 1 | 25 |
Amendments to Schedule 9 to the Finance Act 1996 | |
Introductory | |
1 Schedule 9 to the Finance Act 1996 (c. 8) (loan relationships: special | |
computational provisions) is amended as follows. | |
Late interest | 30 |
2 (1) Paragraph 2 is amended as follows. | |
(2) After sub-paragraph (5) insert— | |
“(5A) A person who is a participator in a company which controls | |
another company shall be treated for the purposes of this | |
paragraph as also being a participator in that other company.”. | 35 |
(3) In sub-paragraph (6), in the definition of “participator” (which is expressed | |
to have effect in relation to a close company) omit “close”. | |
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| |
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| |
(4) The amendments made by this paragraph have effect in relation to interest | |
which would, apart from paragraph 2 of Schedule 9 to the Finance Act 1996, | |
be treated as accruing on or after 9th April 2003. | |
Continuity of treatment: groups etc | |
3 (1) Paragraph 12 is amended as follows. | 5 |
(2) In sub-paragraph (2) (determination of credits and debits to be brought into | |
account) in paragraph (a) (disregard of the transaction or series of | |
transactions except for certain purposes) after “except” insert— | |
“(i) for the purpose of determining the debits or credits | |
to be brought into account in respect of exchange | 10 |
gains or losses and identifying the company which | |
is to bring them into account; or | |
(ii)”. | |
(3) In paragraph (b) of that sub-paragraph (transferor and transferee deemed to | |
be the same person, except for that purpose) for “that purpose” substitute | 15 |
“those purposes”. | |
(4) In sub-paragraph (2A) (amount to be brought into account where transferor | |
company uses authorised mark to market basis of accounting) for paragraph | |
(a) substitute— | |
“(a) the amount to be brought into account by the transferor | 20 |
company in respect of the transaction, the result of the series | |
of transactions, or the transfer must be— | |
(i) where an asset is to be brought into account, the fair | |
value of the asset, or of the rights under or interest in | |
the asset, and | 25 |
(ii) where a liability is to be brought into account, the fair | |
value of the liability, | |
as at the date on which the transferee company becomes | |
party to the loan relationship; | |
(aa) the amount to be brought into account by the transferee | 30 |
company in respect of the transaction, the result of the series | |
of transactions, or the transfer must be the same as the | |
amount brought into account by the transferor company in | |
respect of the transaction, or, as the case may be, the result of | |
the series of transactions, or the transfer; and”. | 35 |
(5) In sub-paragraph (6) (novation: equivalent rights) after “rights” insert “, or | |
(as the case may be) its obligations,”. | |
(6) After sub-paragraph (7) (cases where rights are “equivalent”) insert— | |
“(7A) For the purposes of sub-paragraph (6) above a person’s | |
obligations under a debtor relationship are equivalent to | 40 |
obligations under another such relationship if they subject the | |
holder of the liability representing the relationship— | |
(a) to the same obligations to the same persons as to capital, | |
interest and dividends, and | |
(b) to the same remedies for the enforcement of those | 45 |
obligations, | |
notwithstanding any difference in the total nominal amounts of | |
the assets representing the corresponding creditor relationships, | |
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| |
| |
in the form in which those assets are held or in the manner in | |
which they can be transferred.”. | |
(7) The amendments made by this paragraph have effect where the date on | |
which the transferee company becomes party to the loan relationship falls | |
on or after 9th April 2003. | 5 |
Discounted securities where companies have a connection | |
4 (1) In paragraph 17, for sub-paragraph (8) (reference to person standing in the | |
position of creditor to include person indirectly standing in that position) | |
substitute— | |
“(8) Any reference in this paragraph to a company which stands in the | 10 |
position of a creditor as respects a relevant discounted security | |
includes a reference to a company which indirectly stands in that | |
position by reference to a series of loan relationships or money | |
debts which would be loan relationships if a company directly | |
stood in the position of creditor or debtor.”. | 15 |
(2) The amendment made by this paragraph has effect in relation to relevant | |
periods beginning on or after 9th April 2003. | |
(3) If, in the case of an issuing company, 9th April 2003 falls in a relevant period | |
beginning before that day— | |
(a) the amendment made by this paragraph also has effect in relation to | 20 |
a proportionate part of the debits of that company relating to the | |
amount of the discount that is referable to that period, and | |
(b) that proportion is the proportion which the part of that period— | |
(i) beginning with 9th April 2003, and | |
(ii) ending with the end of that period, | 25 |
bears to the whole of that period. | |
(4) Expressions used in sub-paragraph (2) or (3) and in paragraph 17 of | |
Schedule 9 to the Finance Act 1996 (c. 8) have the same meaning in that sub- | |
paragraph as in that paragraph. | |
Discounted securities of close companies | 30 |
5 (1) Paragraph 18 is amended as follows. | |
(2) In sub-paragraph (2C) (reference to person standing in the position of | |
creditor to include person indirectly standing in that position) for the words | |
from “includes a reference” to the end of that sub-paragraph substitute | |
“includes a reference to a person who indirectly stands in that position by | 35 |
reference to a series of loan relationships or money debts which would be | |
loan relationships if a company directly stood in the position of creditor or | |
debtor”. | |
(3) After sub-paragraph (3B) (meaning of “control”) insert— | |
“(3C) A person who is a participator in a company which controls | 40 |
another company shall be treated for the purposes of this | |
paragraph as also being a participator in that other company.”. | |
(4) The amendments made by this paragraph have effect in relation to relevant | |
periods beginning on or after 9th April 2003. | |
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| |
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| |
(5) If, in the case of an issuing company, 9th April 2003 falls in a relevant period | |
beginning before that day— | |
(a) the amendments made by this paragraph also have effect in relation | |
to a proportionate part of the debits of that company relating to the | |
amount of the discount that is referable to that period, and | 5 |
(b) that proportion is the proportion which the part of that period— | |
(i) beginning with 9th April 2003, and | |
(ii) ending with the end of that period, | |
bears to the whole of that period. | |
(6) Expressions used in sub-paragraph (4) or (5) and in paragraph 18 of | 10 |
Schedule 9 to the Finance Act 1996 have the same meaning in that sub- | |
paragraph as in that paragraph. | |
Part 2 | |
Transitional provisions | |
Transitional provisions | 15 |
6 (1) In Schedule 25 to the Finance Act 2002 (c. 23) (loan relationships) in Part 3 | |
(transitional provisions) after paragraph 61 insert— | |
“Non-trading deficit carried forward from last old accounting period | |
61A Any amount carried forward to a new accounting period under | |
subsection (3) of section 83 of the Finance Act 1996 (carry forward | 20 |
of so much of the non-trading deficit on a company’s loan | |
relationships as is not the subject of a claim under subsection (2) of | |
that section)— | |
(a) shall be disregarded for the purposes of any claim under | |
subsection (2) of that section; and | 25 |
(b) shall not be surrendered as group relief by virtue of section | |
403 of the Taxes Act 1988.”. | |
(2) The Finance Act 2002 shall be taken to have been originally enacted with the | |
amendment made by this paragraph. | |
Schedule 38 | 30 |
Section 180 | |
Sale and repurchase of securities etc | |
Increase of repurchase price of UK securities by amount of deemed manufactured dividend | |
1 In section 737C of the Taxes Act 1988 (deemed manufactured payments)— | |
(a) in subsection (3)(b) (repurchase price of UK equities to be treated as | |
increased by gross amount of deemed manufactured dividend), omit | 35 |
“gross”, and | |
(b) omit subsection (4) (definition of gross amount). | |
| |
| |
|
| |
| |
Deemed manufactured payment where transferor or connected person makes payment | |
representative of dividend | |
2 (1) Section 737A of the Taxes Act 1988 (deemed manufactured payments) is | |
amended as follows. | |
(2) In subsection (1), for “the conditions set out in subsection (2) below” | 5 |
substitute “either the conditions set out in subsection (2) below or the | |
conditions set out in subsection (2A) below”. | |
(3) In subsection (2), for “conditions” substitute “first set of conditions referred | |
to in subsection (1) above”. | |
(4) After that subsection insert— | 10 |
“(2A) The second set of conditions referred to in subsection (1) above are | |
that— | |
(a) a dividend which becomes payable in respect of the securities | |
is receivable otherwise than by the transferor, | |
(b) the transferor or a person connected with him is required | 15 |
under any agreement mentioned in subsection (1) above to | |
make a payment representative of the dividend, | |
(c) there is no requirement under any such agreement for a | |
person to pay to the transferor on or before the relevant date | |
an amount representative of the dividend, and | 20 |
(d) it is reasonable to assume that, in arriving at the repurchase | |
price of the securities, account is taken of the circumstances | |
referred to in paragraphs (a) to (c).”. | |
(5) In subsection (3), for “subsection (2)” substitute “subsections (2) and (2A)”. | |
(6) In subsection (5)(a), after “(2)(a)” insert “or (2A)(a)”. | 25 |
3 In section 737C of the Taxes Act 1988 (deemed manufactured payments: | |
further provisions), after “737A(2)(a)” (in each place) insert “or (2A)(a)”. | |
Provisions to cover both “put” and “call” options | |
4 In section 727A(1) of the Taxes Act 1988 (accrued income scheme not to | |
apply to transfers of securities under repo agreements), for the words from | 30 |
“and under” to the end of paragraph (b) substitute “and the transferor or a | |
person connected with him— | |
(a) is required to buy them back in pursuance of an obligation | |
imposed by, or in consequence of the exercise of an option | |
acquired under, that agreement or any related agreement, or | 35 |
(b) acquires an option to buy them back under that agreement or | |
any related agreement which he subsequently exercises,”. | |
5 In section 730A(1) of the Taxes Act 1988 (treatment of price differential on | |
sale and repurchase of securities), for paragraph (b) substitute— | |
“(b) the original owner or a person connected with him— | 40 |
(i) is required to buy them back in pursuance of an | |
obligation imposed by, or in consequence of the | |
exercise of an option acquired under, that agreement | |
or any related agreement, or | |
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| |
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| |
| |
(ii) acquires an option to buy them back under that | |
agreement or any related agreement which he | |
subsequently exercises; and”. | |
6 In section 731(2D) of the Taxes Act 1988 (provisions about purchase and sale | |
of securities not to apply to repo agreements etc) for the words from “and, | 5 |
in” to “is entitled” in paragraph (c) substitute “and the original owner— | |
(a) is required to buy them back in pursuance of an obligation | |
imposed by, or in consequence of the exercise of an option | |
acquired under, that agreement or any related agreement, | |
(b) acquires an option to buy them back under that agreement or | 10 |
any related agreement which he subsequently exercises, or | |
(c) under that agreement or any related agreement, is entitled”. | |
7 In section 737A(1) of the Taxes Act 1988 (deemed manufactured payments), | |
for the words from “and under” to the end of paragraph (b) substitute “and | |
the transferor or a person connected with him— | 15 |
(a) is required to buy them back in pursuance of an obligation | |
imposed by, or in consequence of the exercise of an option | |
acquired under, that agreement or any related agreement, or | |
(b) acquires an option to buy them back under that agreement or | |
any related agreement which he subsequently exercises;”. | 20 |
8 In section 737E(8) of the Taxes Act 1988 (power to modify provisions about | |
repo arrangements), for paragraph (b) substitute— | |
“(b) that person or a person connected with him— | |
(i) is required to buy them back in pursuance of an | |
obligation imposed by, or in consequence of the | 25 |
exercise of an option acquired under, that agreement | |
or any related agreement, or | |
(ii) acquires an option to buy them back under that | |
agreement or any related agreement which he | |
subsequently exercises.”. | 30 |
9 In paragraph 12(4) of Schedule 7AC to the Taxation of Chargeable Gains Act | |
1992 (c. 12) (exemptions for disposals by companies with substantial | |
shareholding: effect of repurchase agreement), for paragraph (b) | |
substitute— | |
“(b) the original owner or a person connected with him— | 35 |
(i) is required to buy them back in pursuance of an | |
obligation imposed by, or in consequence of the | |
exercise of an option acquired under, that agreement | |
or any related agreement, or | |
(ii) acquires an option to buy them back under that | 40 |
agreement or any related agreement which he | |
subsequently exercises.”. | |
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