|
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| |
(3) After that sub-paragraph insert— | |
“(3A) Arrangements are not repo or stock-lending arrangements if they | |
are excluded from section 730A of the Taxes Act 1988 by | |
subsection (8) of that section.”. | |
Connected persons | 5 |
19 In paragraph 15(3)(b) of Schedule 9 to the Finance Act 1996 (repo | |
transactions not related transactions for purposes of loan relationship | |
provisions), omit “, or a person connected with him,”. | |
Correction of section 730A(6B) of the Taxes Act 1988 | |
20 In section 730A(6B) of the Taxes Act 1988 (trading loan relationship debits | 10 |
and credits falling to be brought into account under section 82(2))— | |
(a) for “section 82(2) above” substitute “section 82(2) of the Finance Act | |
1996”, and | |
(b) for “the Finance Act 1996” substitute “that Act”. | |
Commencement | 15 |
21 (1) Paragraph 1 has effect in relation to repurchase prices becoming due on or | |
after 9th April 2003. | |
(2) Paragraphs 2 to 19 have effect in relation to agreements to sell securities | |
made on or after 9th April 2003. | |
(3) Paragraph 20 has effect in relation to accounting periods beginning on or | 20 |
after 1st October 2002. | |
Schedule 39 | |
Section 181 | |
Relevant discounted securities: withdrawal of relief for costs and losses, etc | |
Withdrawal of relief for incidental costs | |
1 (1) In Schedule 13 to the Finance Act 1996 (c. 8) (discounted securities: income | 25 |
tax provisions), paragraph 1 (charge to tax on realised profit comprised in | |
discount) is amended as follows. | |
(2) In sub-paragraph (2) (meaning of “realising the profit” from the discount on | |
a relevant discounted security) at the end of paragraph (b) insert “(no | |
account being taken of any costs incurred in connection with the transfer or | 30 |
redemption of the security or its acquisition)”. | |
(3) In sub-paragraph (3)(a) (calculation of profit) omit “reduced by the amount | |
of any relevant costs”. | |
(4) Omit sub-paragraph (4) (meaning of “relevant costs”). | |
Withdrawal of relief for losses | 35 |
2 Omit paragraph 2 of that Schedule (income tax relief for losses on | |
discounted securities). | |
| |
| |
|
| |
| |
Withdrawal of loss relief: exception for strips of government securities | |
3 After paragraph 14 of that Schedule (gilt strips) insert— | |
“Strips of government securities: losses | |
14A (1) A person who sustains a loss in any year of assessment from the | |
discount on a strip shall be entitled to relief from income tax on an | 5 |
amount of his income for that year equal to the amount of the loss. | |
(2) The relief is due only if the person makes a claim before the end of | |
twelve months from the 31st January following that year. | |
(3) For the purposes of this paragraph a person sustains a loss from | |
the discount on a strip where— | 10 |
(a) he transfers the strip or becomes entitled, as the person | |
holding it, to any payment on its redemption, and | |
(b) the amount paid by him for the strip exceeds the amount | |
payable on the transfer or redemption (no account being | |
taken of any costs incurred in connection with the transfer | 15 |
or redemption of the strip or its acquisition). | |
The loss shall be taken to be equal to the amount of the excess, and | |
to be sustained in the year of assessment in which the transfer or | |
redemption takes place. | |
(4) In sub-paragraph (3) above the reference to a transfer in paragraph | 20 |
(a) includes a reference to a deemed transfer under paragraph | |
14(4) above (and paragraph (b) shall be read accordingly). | |
(5) This paragraph does not apply in the case of— | |
(a) any transfer of a strip for the time being held under a | |
settlement the trustees of which are not resident in the | 25 |
United Kingdom, or | |
(b) any redemption of a strip which is so held immediately | |
before its redemption.”. | |
Extension of provisions about strips to strips of foreign government securities | |
4 In the definition of “strip” in paragraph 15(1) of that Schedule, for “is a strip | 30 |
of a gilt-edged security” substitute “is a strip of a security, or would be if that | |
section had effect with the substitution in subsection (1B) of “issued by or on | |
behalf of the government of any territory” for “issued under the National | |
Loans Act 1968””. | |
Consequential amendments | 35 |
5 (1) In paragraph 6 of that Schedule (trustees and personal representatives)— | |
(a) in sub-paragraph (3) for “paragraphs 1(1) and 2(1) above do not | |
apply” substitute “paragraph 1(1) above does not apply”; | |
(b) omit sub-paragraphs (4) to (6). | |
(2) Omit the following provisions of that Schedule— | 40 |
(a) paragraph 7 (treatment of losses where income exempt); | |
(b) paragraph 9A (securities issued to connected person etc at price in | |
excess of market value: transfer to connected person); | |
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|
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| |
(c) paragraph 11 (accrued income scheme). | |
(3) In paragraph 14 of that Schedule (gilt strips)— | |
(a) for the heading substitute “Strips of government securities”; | |
(b) in sub-paragraphs (2) and (3), omit the words “gilt-edged”; | |
(c) in sub-paragraph (4), omit the words after paragraph (c). | 5 |
(4) In section 710(3) of the Taxes Act 1988 (categories of security not included in | |
accrued income scheme) after paragraph (e) insert— | |
“(f) any relevant discounted security within the meaning of | |
Schedule 13 to the Finance Act 1996 (see paragraphs 3 and | |
14(1) of that Schedule).”. | 10 |
Commencement and transitional provisions | |
6 (1) Subject to sub-paragraph (2)— | |
(a) the amendments made by paragraphs 1 and 5(3)(c) apply in relation | |
to costs incurred on or after 27th March 2003; | |
(b) the amendments made by paragraphs 2, 3 and 5(1), (2) and (4) apply | 15 |
in relation to any loss sustained from the discount on a relevant | |
discounted security transferred or redeemed on or after that date; | |
(c) the amendments made by paragraphs 4 and 5(3)(a) and (b) apply in | |
relation to any security acquired on or after that date. | |
(2) The amendments mentioned in sub-paragraph (1)(a) and (b) do not apply in | 20 |
relation to costs incurred, or losses sustained, on the transfer or redemption | |
of a relevant discounted security if— | |
(a) the person transferring or redeeming the security held it | |
continuously since a time before 27th March 2003, and | |
(b) the security was listed on a recognised stock exchange at any time | 25 |
before that date. | |
(3) No losses may be carried forward under paragraph 6(6) of Schedule 13 to the | |
Finance Act 1996 (c. 8) to any year of assessment after 2002-03. | |
Schedule 40 | |
Section 192 | |
Acquisition by company of its own shares | 30 |
Venture capital trusts | |
1 In Schedule 15B to the Taxes Act 1988 (venture capital trusts: relief from | |
income tax), in paragraph 1 (entitlement to claim relief on investment), after | |
sub-paragraph (9) insert— | |
“(10) An individual is not eligible for relief under this Part of this | 35 |
Schedule by reference to any shares which are treated as issued to | |
him by virtue of section 192(8) of the Finance Act 2003 (tax | |
treatment of disposal by company of its own shares). | |
(11) Where a company which is a venture capital trust issues to any | |
individual eligible shares to which sub-paragraph (10) above | 40 |
applies, it must— | |
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(a) at the time of the issue of those shares, give that individual | |
a notice stating that he is not eligible for relief under this | |
Part of this Schedule by reference to those shares, and | |
(b) no later than three months after the issue of those shares, | |
give a copy of that notice to an officer of the Board.”. | 5 |
Stamp duty and stamp duty reserve tax | |
2 In section 66 of the Finance Act 1986 (c. 41) (stamp duty: company’s | |
purchase of own shares)— | |
(a) in subsection (2)— | |
(i) for “The return which relates to the shares” substitute “Any | 10 |
return which relates to any of the shares”, | |
(ii) after “169” insert “(1) or (1B)”, and | |
(iii) after “transferring the shares” insert “to which it relates”, | |
(b) after that subsection insert— | |
“(2A) Any return which relates to the cancellation of any of the | 15 |
shares purchased and is delivered to the registrar of | |
companies under section 169A of the Companies Act 1985 | |
shall be chargeable under this subsection with stamp duty of | |
£5.”, and | |
(c) in subsection (3), after “169” insert “(1) or (1B)”. | 20 |
3 In section 90 of that Act (exemptions from stamp duty reserve tax), after | |
subsection (7) insert— | |
“(7A) Section 87 above does not apply as regards an agreement to transfer | |
any shares in a company which are held by the company (whether in | |
accordance with section 162A of the Companies Act 1985 (treasury | 25 |
shares) or otherwise).”. | |
4 (1) Section 92 of that Act (stamp duty reserve tax: repayment or cancellation of | |
tax) is amended as follows. | |
(2) After subsection (1B) insert— | |
“(1C) If, as regards an agreement to transfer shares in a company to that | 30 |
company (“the own-shares agreement”)— | |
(a) tax is charged under section 87 above, and | |
(b) it is proved to the Board’s satisfaction that at a time in the | |
period of six years beginning on the relevant day (as defined | |
in section 87(3)) the conditions mentioned in subsection (1D) | 35 |
have been fulfilled in respect of those shares, | |
subsections (2) to (4A) apply. | |
(1D) The conditions referred to in subsection (1C) are— | |
(a) that, in relation to the transfer made in pursuance of the own- | |
shares agreement, a return has been made in respect of each | 40 |
of those shares in accordance with section 169(1) or (1B) of the | |
Companies Act 1985 (c. 6) (disclosure by company of | |
purchase of own shares), and | |
(b) that any such return has been duly stamped in accordance | |
with section 66.”. | 45 |
(3) In subsection (2), after “subsection (1)” insert “or, as the case may be, (1C)”. | |
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| |
5 In Schedule 13 to the Finance Act 1999 (c. 16) (stamp duty: instruments | |
chargeable and rates of duty), in Part 1 (conveyance or transfer on sale), in | |
paragraph 1 (stamp duty charge), after sub-paragraph (2) insert— | |
“(3) Sub-paragraph (1) is subject to sub-paragraphs (4) to (6). | |
(4) Where a company acquires any shares in itself by virtue of section | 5 |
162 of the Companies Act 1985 (power of company to purchase | |
own shares) or otherwise, sub-paragraph (1) does not apply to any | |
instrument by which the shares are transferred to the company. | |
(5) Where a company holds any shares in itself by virtue of section | |
162A of that Act (treasury shares) or otherwise, any instrument to | 10 |
which sub-paragraph (6) applies is to be treated for the purposes | |
of this Schedule as a conveyance otherwise than on sale, and | |
paragraph 16 applies accordingly. | |
(6) This sub-paragraph applies to any instrument for the sale or | |
transfer of any of the shares by the company, other than an | 15 |
instrument which, in the absence of sub-paragraph (5), would be | |
an instrument in relation to which— | |
(a) section 67(2) of the Finance Act 1986 (transfer to person | |
whose business is issuing depositary receipts etc), or | |
(b) section 70(2) of that Act (transfer to person who provides | 20 |
clearance services etc), | |
applied.”. | |
| |
Schedule 41 | |
Section 193 | |
Companies in administration | 25 |
Accounting period for company in administration | |
1 (1) Section 12 of the Taxes Act 1988 (corporation tax: basis of, and periods for, | |
assessment) is amended as follows. | |
(2) In subsection (3), after paragraph (d) insert— | |
“(da) the company ceasing to be in administration;”. | 30 |
(3) After subsection (5A) insert— | |
“(5B) For the purposes of subsection (3)(da) a company ceases to be in | |
administration when it ceases to be in administration under | |
Schedule B1 to the Insolvency Act 1986 or any corresponding event | |
occurs otherwise than under that Act.”. | 35 |
(4) In subsection (7) (accounting periods where company is wound up), after | |
the words “subject to” insert “subsection (7ZA) below and”. | |
(5) After subsection (7) insert— | |
“(7ZA) Notwithstanding anything in subsections (1) to (6) above, where a | |
company enters administration— | 40 |
(a) an accounting period of the company shall end immediately | |
before the day the company enters administration, and | |
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|
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| |
(b) if immediately before the company enters administration it is | |
in the course of being wound up, subsection (7) ceases to | |
apply at the end of that accounting period. | |
For this purpose a company enters administration when it enters | |
administration under Schedule B1 to the Insolvency Act 1986 or is | 5 |
subject to any corresponding procedure otherwise than under that | |
Act.”. | |
(6) In subsection (7A) for “subsections (1) to (7)” substitute “subsections (1) to | |
(7ZA)”. | |
Responsibility of officers of company in administration | 10 |
2 (1) Section 108 of the Taxes Management Act 1970 (c. 9) (responsibility of | |
company officers) is amended as follows. | |
(2) In subsection (3)(a)— | |
(a) after first “liquidator” insert “or administrator”, and | |
(b) after second “liquidator” insert “or, as the case may be, | 15 |
administrator”. | |
(3) After subsection (3) insert— | |
“(4) For the purposes of subsection (3)(a), where two or more persons are | |
appointed to act jointly or concurrently as the administrator of a | |
company, the proper officer is— | 20 |
(a) such one of them as is specified in a notice given to the Board | |
by those persons for the purposes of this section, or | |
(b) where the Board is not so notified, such one or more of those | |
persons as the Board may designate as the proper officer for | |
those purposes.”. | 25 |
Tax on companies in administration | |
3 After section 342 of the Taxes Act 1988 (tax on company in liquidation) | |
insert— | |
“342A Tax on companies in administration | |
(1) In this section— | 30 |
(a) references to the relevant event, in relation to a company in | |
administration, are references— | |
(i) to the administrator sending a notice in respect of the | |
company under paragraph 84(1) of Schedule B1 to the | |
Insolvency Act 1986 (company moving from | 35 |
administration to dissolution), or | |
(ii) in the case of a company which enters administration | |
otherwise than under that Act, to the doing of any | |
other act for a like purpose, and | |
(b) references to a company’s final year are references to the | 40 |
financial year in which the relevant event occurs, and | |
references to the company’s penultimate year are references | |
to the last financial year preceding its final year. | |
(2) Subject to subsections (3) and (4)— | |
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| |
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| |
| |
(a) corporation tax shall be charged on the profits of the | |
company arising in the administration in its final year at the | |
rate of corporation tax fixed or proposed for the penultimate | |
year, but | |
(b) where the corporation tax charged on the company’s income | 5 |
included in those profits falls to be calculated or reduced in | |
accordance with section 13, it shall be so calculated or | |
reduced in accordance with such rate or fraction fixed or | |
proposed for the penultimate year as is applicable under that | |
section. | 10 |
(3) If, before the relevant event, any of the rates or fractions mentioned | |
in subsection (2) has been fixed or proposed for the final year, that | |
subsection shall have effect in relation to that rate or fraction as if for | |
the references to the penultimate year there were substituted | |
references to the final year. | 15 |
(4) If, in the case of the company’s final accounting period, the income | |
(if any) which consists of interest received or receivable by the | |
company under section 826 does not exceed £2,000, that income shall | |
not be subject to corporation tax. | |
(5) In subsection (4) “the company’s final accounting period” means the | 20 |
last accounting period of the company before the relevant event. | |
(6) An assessment on the company’s profits for an accounting period in | |
which the company is in administration shall not be invalid because | |
made before the end of the accounting period. | |
(7) In making an assessment after the company enters administration | 25 |
and before the date of the relevant event, the administrator may act | |
on an assumption as to when that date will fall so far as it governs | |
section 12(3). | |
(8) The assumption of the wrong date shall not alter the company’s final | |
and penultimate year and, if the right date is later— | 30 |
(a) an accounting period shall end on the date assumed and a | |
new accounting period shall begin, and | |
(b) thereafter, section 12(3) shall apply as if the company had | |
entered administration at the beginning of that new | |
accounting period. | 35 |
(9) Subsections (7) and (9) of section 342 apply in relation to this section | |
as they apply in relation to that section, except that in subsection (7) | |
of that section the reference to the completion of the winding up is to | |
be read as a reference to the relevant event. | |
(10) Where the company entered administration before its final year, | 40 |
paragraphs (a) and (b) of subsection (2) (but not subsection (3)) apply | |
in relation to the company’s profits arising at any time in its | |
penultimate year.”. | |
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