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(3) In paragraph 20B (exemption under paragraph 20A: averaging periods) for | |
sub-paragraphs (6) to (8) substitute— | |
“(6) If the total mentioned in sub-paragraph (3)(b) exceeds that | |
mentioned in sub-paragraph (3)(a), then— | |
(a) in a case where, at the time when the balancing period ends, | 5 |
an averaging period also ends because of sub-paragraph | |
(2)(f) or (g), the supplier is for the purposes of this Schedule | |
deemed to make at that time a taxable supply of a quantity of | |
electricity equal to the excess; | |
(b) in any other case, a balancing debit equal to the excess is | 10 |
carried forward to the next balancing period.”. | |
(4) The amendment made by subsection (2) has effect where the end of the | |
balancing period referred to in paragraph (a) of the sub-paragraph (6) | |
substituted by that subsection falls on or after 31st March 2003. | |
(5) The amendment made by subsection (3) has effect where the end of the | 15 |
balancing period referred to in paragraph (a) of the sub-paragraph (6) | |
substituted by that subsection falls on or after 1st April 2003. | |
Insurance premium tax | |
191 Higher rate of tax: divided companies | |
(1) In Schedule 6A to the Finance Act 1994 (c. 9) (insurance premium tax: | 20 |
premiums liable to tax at higher rate), insert after paragraph 3— | |
“Insurance provided by divided company | |
3A (1) A premium under a taxable insurance contract relating to a motor car | |
or motor cycle also falls within paragraph 2 above if— | |
(a) the insurance to be provided under the contract is provided | 25 |
by a divided company, and | |
(b) any division of that company would, if it were a separate | |
company, be a person connected with a supplier of motor | |
cars or motor cycles. | |
(2) A premium under a taxable insurance contract relating to relevant | 30 |
goods also falls within paragraph 3 above if— | |
(a) the insurance to be provided under the contract is provided | |
by a divided company, and | |
(b) any division of that company would, if it were a separate | |
company, be a person connected with a supplier of relevant | 35 |
goods. | |
(3) Sub-paragraph (1) or (2) above does not apply if the insurance is | |
provided to the insured free of charge. | |
(4) A premium falls within paragraph 2 above by virtue of this | |
paragraph only to the extent that it is attributable to cover for a risk | 40 |
which relates to a motor car or motor cycle supplied by a supplier of | |
motor cars or motor cycles with whom the division in question | |
would, if it were a separate company, be connected. | |
(5) A premium falls within paragraph 3 above by virtue of this | |
paragraph only to the extent that it is attributable to cover for a risk | 45 |
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which relates to relevant goods supplied by a supplier of relevant | |
goods with whom the division would, if it were a separate company, | |
be connected. | |
(6) For the purposes of this paragraph— | |
(a) a company is a “divided company” if under the law under | 5 |
which the company is formed, under the company’s | |
constitution or under arrangements entered into by or in | |
relation to the company— | |
(i) some or all of the assets of the company are available | |
primarily, or only, to meet particular liabilities of the | 10 |
company, and | |
(ii) some or all of the members of the company, and some | |
or all of its creditors, have rights primarily, or only, in | |
relation to particular assets of the company; | |
(b) a “division” of such a company means an identifiable part of | 15 |
it (by whatever name known) that carries on distinct business | |
activities and to which particular assets and liabilities of the | |
company are primarily or wholly attributable. | |
(7) In this paragraph “provided to the insured free of charge” has the | |
meaning given by sub-paragraph (5) of paragraph 2 or 3 above. | 20 |
In determining for this purpose whether a divided company by | |
whom insurance is provided is a person falling within sub- | |
paragraph (2) of paragraph 2 or 3 above, the company shall be | |
treated as connected with any person with whom a division of that | |
company would be connected if it were a separate company. | 25 |
(8) Other expressions defined for the purposes of paragraph 2 or 3 above | |
have the same meaning in this paragraph.”. | |
(2) Subsection (1) applies in relation to a premium that falls to be regarded for the | |
purposes of Part 3 of the Finance Act 1994 (c. 9) (insurance premium tax) as | |
received under a taxable insurance contract by an insurer on or after the day on | 30 |
which this Act is passed. | |
Part 9 | |
Miscellaneous and supplementary provisions | |
Provisions consequential on changes to company law | |
192 Companies acquiring their own shares | 35 |
(1) This section applies for the purposes of the Taxes Acts and the Inheritance Tax | |
Act 1984 (c. 51) where a company acquires any of its own shares (whether by | |
purchase, the issuing of bonus shares or otherwise). | |
(2) The acquisition of any of those shares by the company is not to be treated as the | |
acquisition of an asset. | 40 |
(3) The company is not, by virtue of the acquisition or holding of any of those | |
shares or its being entered in the company’s register of members in respect of | |
any of them, to be treated as a member of itself. | |
(4) Subject to subsection (5)— | |
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(a) the company’s issued share capital is to be treated as if it had been | |
reduced by the nominal value of the shares acquired, | |
(b) such of those shares as are not cancelled on acquisition are to be treated | |
as if they had been so cancelled, and | |
(c) any subsequent cancellation by the company of any of those shares is | 5 |
to be disregarded (and, accordingly, is not the disposal of an asset and | |
does not give rise to an allowable loss within the meaning of the | |
Taxation of Chargeable Gains Act 1992 (c. 12)). | |
(5) Where the shares are issued to the company as bonus shares, subsection (4)(a) | |
and (b) does not apply and the shares are to be treated as if they had not been | 10 |
issued. | |
(6) Where, disregarding subsections (2) to (5)— | |
(a) a company holds any of its own shares, and | |
(b) the company issues bonus shares in respect of those shares or any class | |
of those shares (“the existing shares”), | 15 |
nothing in this section prevents the existing shares being the company’s | |
holding of shares for the purposes of the application of section 126 of the | |
Taxation of Chargeable Gains Act 1992 (c. 12) (application of sections 127 to 131 | |
of that Act (company reorganisations etc)). | |
(7) In subsection (6) the reference to the application of section 126 of the Taxation | 20 |
of Chargeable Gains Act 1992 does not include a reference to the application of | |
that section in a modified form by virtue of any enactment relating to | |
chargeable gains. | |
(8) Where a company disposes of any of its own shares to a person in | |
circumstances where, but for subsections (2) to (5), it would be regarded as | 25 |
holding the shares immediately before the disposal— | |
(a) subsections (4)(b) and (c) and (5) cease to apply in relation to the shares | |
disposed of (“the relevant shares”), | |
(b) the relevant shares are to be treated as having been issued as new | |
shares to that person by the company at the time of the disposal (and | 30 |
not as having been disposed of by the company at that time), | |
(c) that person is to be treated as having subscribed for the relevant shares, | |
(d) an amount equal to the amount or value of the consideration (if any) | |
payable for the disposal of the relevant shares is to be treated as the | |
amount subscribed for those shares, | 35 |
(e) if the amount or value of that consideration does not exceed the | |
nominal value of those shares, the share capital of those shares is to be | |
treated for the purposes of Part 6 of the Taxes Act 1988 as if it were an | |
amount equal to the amount or value of that consideration, and | |
(f) if the amount or value of that consideration exceeds their nominal | 40 |
value, the relevant shares are to be treated as if they had been issued at | |
a premium representing that excess. | |
(9) Where— | |
(a) a company purchases its own shares, and | |
(b) the price payable by a company for the shares is taken into account in | 45 |
computing the profits of the company which are chargeable to tax in | |
accordance with the provisions of the Taxes Act 1988 applicable to Case | |
I or II of Schedule D, | |
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subsections (2) to (7) do not apply and subsection (8) does not apply in relation | |
to any disposal by the company of any of the shares. | |
(10) Schedule 40 to this Act (which makes amendments relating to the acquisition | |
and disposal by a company of its own shares) has effect. | |
(11) For the purposes of this section— | 5 |
(a) a company issues “bonus shares” if it issues share capital as paid up | |
otherwise than by the receipt of new consideration (within the meaning | |
of section 254 of the Taxes Act 1988), and | |
(b) “the Taxes Acts” has the same meaning as in the Taxes Management | |
Act 1970 (c. 9), | 10 |
and in this section references to a “company” are to a company with a share | |
capital. | |
(12) The preceding provisions of this section and the provisions of Schedule 40 to | |
this Act have effect in relation to any acquisition of shares by a company on or | |
after such day as the Treasury may by order made by statutory instrument | 15 |
appoint. | |
193 Companies in administration | |
Schedule 41 to this Act (provisions relating to the treatment, for tax purposes, | |
of companies in administration) has effect. | |
International matters | 20 |
194 Exchange of information between tax authorities of member States | |
(1) No obligation as to secrecy imposed by statute or otherwise precludes the | |
Commissioners or an authorised officer of the Commissioners from disclosing | |
to the competent authorities of another member State any information required | |
to be so disclosed by virtue of the Mutual Assistance Directive. | 25 |
(2) Neither the Commissioners nor an authorised officer shall disclose any | |
information in pursuance of the Mutual Assistance Directive unless satisfied | |
that the competent authorities of the other State are bound by, or have | |
undertaken to observe, rules of confidentiality with respect to the information | |
that are not less strict than those applying to it in the United Kingdom. | 30 |
(3) Nothing in this section permits the Commissioners or an authorised officer of | |
the Commissioners to authorise the use of information disclosed by virtue of | |
the Mutual Assistance Directive otherwise than for the purposes of taxation or | |
to facilitate legal proceedings for failure to observe the tax laws of the receiving | |
State. | 35 |
(4) In this section— | |
“the Commissioners” means the Commissioners of Inland Revenue or the | |
Commissioners of Customs and Excise; | |
the “Mutual Assistance Directive” means Council Directive 77/799/EEC, | |
as amended by Council Directives 79/1070/EEC and 92/12/EEC. | 40 |
(5) The Treasury may by order make such provision amending the definition of | |
the “Mutual Assistance Directive” in subsection (4) as appears to them | |
appropriate for the purpose of giving effect to any Council Directive adopted | |
after 16th April 2003 amending or replacing the Mutual Assistance Directive. | |
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(6) An order under subsection (5) shall be made by statutory instrument which | |
shall be subject to annulment in pursuance of a resolution of the House of | |
Commons. | |
(7) In section 48 of the Value Added Tax Act 1994 (c. 23) (VAT representatives)— | |
(a) in subsection (1B) (meaning of “the mutual assistance provisions”) for | 5 |
paragraphs (a) and (b) substitute— | |
“(a) section 134 of the Finance Act 2002 and Schedule 39 to | |
that Act (recovery of taxes etc due in other member | |
States); | |
(b) section 194 of the Finance Act 2003 (exchange of | 10 |
information between tax authorities of member | |
States);”; | |
(b) after subsection (8) insert— | |
“(9) The Treasury may by order amend the definition of “the mutual | |
assistance provisions” in subsection (1B) above.”. | 15 |
195 Arrangements for mutual exchange of tax information | |
(1) In the following provisions (which confer power to make arrangements for the | |
exchange of information necessary for carrying out the tax laws of the UK and | |
the territory to which the arrangements relate) for “necessary for carrying out” | |
substitute “foreseeably relevant to the administration or enforcement of”. | 20 |
(2) The provisions are— | |
sections 788(2) and 815C(1) of the Taxes Act 1988 (income tax, capital | |
gains tax and corporation tax), and | |
sections 158(1A) and 220A(1) of the Inheritance Tax Act 1984 (c. 51) | |
(inheritance tax). | 25 |
(3) Any reference in arrangements made before the passing of this Act, or in any | |
Order in Council under which such arrangements have effect, to information | |
necessary for the carrying out of the tax laws of the United Kingdom or the | |
territory to which the arrangements relate shall be read as including any | |
information foreseeably relevant to the administration or enforcement of the | 30 |
tax laws of the United Kingdom or, as the case may be, of that territory. | |
196 Savings income: Community obligations and international arrangements | |
(1) The Treasury may make regulations for implementing and for dealing with | |
matters arising out of or related to— | |
(a) any Community obligation created with a view to ensuring the | 35 |
effective taxation of savings income under the law of the United | |
Kingdom and the laws of the other member States, or | |
(b) any arrangements made with a territory other than a member State | |
with a view to ensuring the effective taxation of savings income under | |
the law of the United Kingdom and the law of the other territory. | 40 |
(2) Regulations under this section may, in particular, require paying agents— | |
(a) to obtain and verify prescribed descriptions of information about the | |
identity and residence of relevant payees to whom they make savings | |
income payments, and | |
(b) to provide to the Inland Revenue (or an officer of the Inland Revenue) | 45 |
prescribed descriptions of information about relevant payees to whom | |
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they make savings income payments and about the savings income | |
payments which they make to them. | |
(3) Regulations under this section may include provision for the inspection on | |
behalf of the Inland Revenue of books, documents and other records of persons | |
who are, or appear to an officer of the Inland Revenue to be, paying agents. | 5 |
(4) Regulations under this section may include provision for notices under such | |
regulations to be combined with notices under sections 17 and 18 of the Taxes | |
Management Act 1970 (c. 9) (interest paid or credited by banks and others). | |
(5) Regulations under this section may include provision about the time at or | |
within which, and the manner in which, any requirement imposed by such | 10 |
regulations is to be complied with. | |
(6) Regulations under this section may include provision for penalties for failure | |
to comply with requirements imposed by such regulations (including | |
provision applying any provision of the Taxes Management Act 1970 about the | |
determination of penalties or any other matter relating to penalties); and in the | 15 |
first column of the Table in section 98 of that Act (penalties for failure to furnish | |
information etc), insert at the appropriate place “Regulations under section 196 | |
of the Finance Act 2003.”. | |
(7) In this section “paying agents” means persons of a prescribed description who | |
make savings income payments to other persons; and the descriptions of | 20 |
persons who may be prescribed as paying agents include, in particular, public | |
officers and government departments. | |
(8) For the purposes of this section a person makes savings income payments to | |
another person if the person— | |
(a) makes payments of savings income to the other person, or | 25 |
(b) secures the payment of savings income for the other person. | |
(9) In this section “savings income” means interest (apart from interest of a | |
prescribed description) or other sums of a prescribed description. | |
(10) In this section “relevant payees” means persons of a prescribed description | |
who are resident (within the meaning of the regulations) in a prescribed | 30 |
territory and persons of any such other description as may be prescribed; and | |
the only territories which may be prescribed are the other member States and | |
territories with which arrangements such as are mentioned in subsection (1)(b) | |
have been made. | |
(11) Regulations under this section— | 35 |
(a) may make different provision for different cases or descriptions of case, | |
and | |
(b) may include supplementary, incidental, consequential or transitional | |
provision. | |
(12) The power to make regulations under this section is exercisable by statutory | 40 |
instrument. | |
(13) A statutory instrument containing regulations under this section is subject to | |
annulment in pursuance of a resolution of the House of Commons. | |
(14) In this section— | |
“the Inland Revenue” means the Commissioners of Inland Revenue, and | 45 |
“prescribed” means prescribed by regulations under this section. | |
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