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(a) the sum of the foster care receipts for the year from each foster care | |
arrangement from which those receipts arise, less | |
(b) the individual’s limit for the year. | |
Election for alternative method | |
14 (1) An individual may elect— | 5 |
(a) for the alternative method of calculating profits given in paragraph | |
12 or 13 to apply if the conditions specified in paragraph 11(a), (b) | |
and (c) are met, and | |
(b) for the alternative method of calculating profits given in sub- | |
paragraph (5) of paragraph 15 to apply if the conditions specified in | 10 |
paragraphs (a) and (b) of sub-paragraph (4) of that paragraph are | |
met. | |
(2) An election under this paragraph has effect for the year of assessment for | |
which it is made. | |
(3) Subject to sub-paragraphs (5) and (6), an election under this paragraph must | 15 |
be made on or before the election deadline for the year of assessment to | |
which it relates. | |
(4) The election deadline for a year of assessment is— | |
(a) the first anniversary of the 31st January next following that year of | |
assessment, or | 20 |
(b) such later date as the Board may in any particular case allow. | |
(5) If— | |
(a) an individual does not make an election under this paragraph for a | |
year of assessment on or before the election deadline for that year, | |
and | 25 |
(b) an adjustment is made after that deadline to the profits from his | |
provision of foster care on which he is chargeable to tax for that year, | |
the individual may make an election under this paragraph for the year on or | |
before the date specified in sub-paragraph (6). | |
(6) That date is— | 30 |
(a) the first anniversary of the 31st January next following the year of | |
assessment in which the adjustment is made, or | |
(b) such later date as the Board may in any particular case allow. | |
(7) Any election under this paragraph must be made in writing to an officer of | |
the Board. | 35 |
Periods of account ending otherwise than on 5th April | |
15 (1) This paragraph applies to an individual for a year of assessment for which— | |
(a) the individual qualifies for relief under this Schedule, | |
(b) his foster care receipts are the receipts of a trade, profession or | |
vocation, and | 40 |
(c) the period of account in which his foster care receipts accrue ends on | |
a day other than 5th April in that year of assessment. | |
(2) If the individual’s total foster care receipts for the period of account do not | |
exceed the relevant limit for that period (see sub-paragraph (6) or (8)) the | |
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profits or losses from his trade, profession or vocation for the year of | |
assessment are to be treated as nil. | |
(3) If, in a case falling within sub-paragraph (2), the individual would, apart | |
from that sub-paragraph, be entitled to a deduction for the year under | |
section 63A(1) or (3) of the Taxes Act 1988 (overlap profits and overlap | 5 |
losses), the individual is entitled to that deduction notwithstanding that sub- | |
paragraph. | |
(4) Sub-paragraph (5) applies where— | |
(a) the individual’s total foster care receipts for the period of account | |
exceed the relevant limit for that period, and | 10 |
(b) an election by him under paragraph 14 has effect. | |
(5) The profits of the year of assessment of the trade, profession or vocation | |
from which the individual’s foster care receipts arise are— | |
(a) the amount of the foster care receipts arising from the trade, | |
profession or vocation for the period of account, less | 15 |
(b) the relevant limit for that period. | |
(6) If the period of account in which the individual’s foster care receipts accrue | |
ends in the year 2003-04, “the relevant limit” for that period is found by | |
aggregating— | |
(a) the individual’s share of the fixed amount for the year 2003-04 | 20 |
(found in accordance with paragraph 7), and | |
(b) each amount per child for that individual for that period of account. | |
(7) For the purposes of sub-paragraph (6), an individual’s amount per child for | |
the period of account is each amount that would be his amount per child by | |
virtue of paragraph 8 for the year 2003-04 if that period of account were the | 25 |
income period for that year. | |
(8) If the period of account in which the individual’s foster care receipts accrue | |
ends in a year subsequent to the year 2003-04, “the relevant limit” for that | |
period is found by aggregating— | |
(a) the individual’s share of the fixed amount for the year in which the | 30 |
period of account ends (found in accordance with paragraph 7), and | |
(b) for each of the years of assessment in which the period of account | |
falls, each amount per child for that individual for each part of that | |
period of account which falls within that year of assessment. | |
(9) For the purposes of sub-paragraph (8), an individual’s amount per child for | 35 |
a part of a period of account is each amount that would be his amount per | |
child by virtue of paragraph 8 for the year of assessment in which the part of | |
that period falls if that part of the period of account were the income period | |
for that year. | |
Part 3 | 40 |
Capital allowances | |
Introductory | |
16 (1) Paragraphs 17 to 19 make provision for the application of the Capital | |
Allowances Act 2001 (c. 2) (“CAA 2001”) in relation to— | |
(a) a relevant individual, and | 45 |
(b) a relevant chargeable period of that individual. | |
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(2) For this purpose, a “relevant individual” is an individual who, in a year of | |
assessment, satisfies the conditions in sub-paragraphs (3) and (4). | |
(3) The first condition is that in the year of assessment the individual would, | |
apart from this Schedule, have foster care receipts chargeable— | |
(a) under Case I or II of Schedule D as the profits of a trade, profession | 5 |
or vocation, or | |
(b) under Case VI of Schedule D as the profits of one or more foster care | |
arrangements. | |
(4) The second condition is that— | |
(a) the exemption in paragraph 10 or (as the case may be) 15(2) applies | 10 |
to the individual for the year of assessment, or | |
(b) the individual has elected for the alternative method of calculating | |
profits in paragraph 12, 13 or (as the case may be) 15(5) to apply to | |
him for the year of assessment. | |
(5) A period is a “relevant chargeable period” of a relevant individual if— | 15 |
(a) it is a chargeable period of the individual, | |
(b) it corresponds to an income period for the individual’s foster care | |
receipts in a year of assessment, and | |
(c) that year of assessment is a year in which the individual satisfies the | |
conditions in sub-paragraphs (3) and (4). | 20 |
Provisions applying in relation to carried forward unrelieved qualifying expenditure | |
17 (1) This paragraph applies in any case where— | |
(a) there is any available qualifying expenditure in a relevant pool for a | |
relevant chargeable period of a relevant individual, | |
(b) that expenditure is unrelieved qualifying expenditure carried | 25 |
forward in the pool from the previous chargeable period under | |
section 59 of CAA 2001, and | |
(c) that previous chargeable period was not a relevant chargeable | |
period. | |
(2) In any such case, CAA 2001 has effect in relation to the relevant individual’s | 30 |
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, | |
(b) disposal receipts fall to be brought into account in the pool for that | 35 |
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. | |
(3) In any such case, section 13 of CAA 2001 (use for qualifying activity of plant | 40 |
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 | |
provision of foster care such of the plant or machinery on which the | 45 |
unrelieved qualifying expenditure was incurred as he still owns on | |
that day, and | |
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(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 | |
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 | 5 |
purposes of the provision of foster care by the relevant individual. | |
Expenditure incurred in a relevant chargeable period not qualifying expenditure | |
18 Capital expenditure (“excluded capital expenditure”) which is incurred— | |
(a) by a relevant individual, | |
(b) in a relevant chargeable period, and | 10 |
(c) on the provision of plant or machinery wholly or partly for the | |
purposes of the provision of foster care by the individual, | |
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 | 15 |
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 | |
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 | 20 |
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 | |
provision of foster care. | |
Interpretation of this Part | 25 |
20 Expressions which— | |
(a) are used in this Part, and | |
(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. | 30 |
Part 4 | |
Supplementary | |
Interpretation | |
21 In this Schedule— | |
“CAA 2001” means the Capital Allowances Act 2001 (c. 2); | 35 |
“excluded capital expenditure” is to be construed in accordance with | |
paragraph 18; | |
“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) | 40 |
and (3); | |
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“profits” includes gains; | |
“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 | 5 |
16(2); | |
“total foster care receipts” is to be construed in accordance with | |
paragraph 5. | |
Schedule 37 | |
Section 177 | |
Loan relationships: amendments | 10 |
Part 1 | |
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. | 15 |
Late interest | |
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 | 20 |
paragraph as also being a participator in that other company.”. | |
(3) In sub-paragraph (6), in the definition of “participator” (which is expressed | |
to have effect in relation to a close company) omit “close”. | |
(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, | 25 |
be treated as accruing on or after 9th April 2003. | |
Continuity of treatment: groups etc | |
3 (1) Paragraph 12 is amended as follows. | |
(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 | 30 |
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 | |
gains or losses and identifying the company which | |
is to bring them into account; or | 35 |
(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 | |
“those purposes”. | |
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(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 | |
company in respect of the transaction, the result of the series | 5 |
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 | |
(ii) where a liability is to be brought into account, the fair | 10 |
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 | |
company in respect of the transaction, the result of the series | 15 |
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”. | |
(5) In sub-paragraph (6) (novation: equivalent rights) after “rights” insert “, or | 20 |
(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 | |
obligations under another such relationship if they subject the | 25 |
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 | |
obligations, | 30 |
notwithstanding any difference in the total nominal amounts of | |
the assets representing the corresponding creditor relationships, | |
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 | 35 |
which the transferee company becomes party to the loan relationship falls | |
on or after 9th April 2003. | |
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) | 40 |
substitute— | |
“(8) Any reference in this paragraph to a company which stands in the | |
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 | 45 |
debts which would be loan relationships if a company directly | |
stood in the position of creditor or debtor.”. | |
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(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 | 5 |
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, | 10 |
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 | 15 |
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 | 20 |
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 | 25 |
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. | |
(5) If, in the case of an issuing company, 9th April 2003 falls in a relevant period | 30 |
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 | |
(b) that proportion is the proportion which the part of that period— | 35 |
(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 | |
Schedule 9 to the Finance Act 1996 have the same meaning in that sub- | 40 |
paragraph as in that paragraph. | |
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