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Debit for bad debt where parties connected and creditor insolvent | |
4 (1) Paragraph 6A of Schedule 9 to the Finance Act 1996 (c. 8) (bad debt etc: | |
parties having connection and creditor in insolvent liquidation etc) is | |
amended as follows. | |
(2) In sub-paragraph (1)— | 5 |
(a) in paragraph (a), for “has gone into” substitute “is in”, | |
(b) for paragraph (b) substitute— | |
“(b) that company is in insolvent administration;”, and | |
(c) in paragraph (d), for “an event has occurred, or circumstances exist,” | |
substitute “circumstances exist”. | 10 |
(3) In sub-paragraph (2)— | |
(a) in paragraph (a) for “after the commencement” substitute “in the | |
course”, and | |
(b) in paragraph (b) for “when the administration order is in force” | |
substitute “in the course of the administration”. | 15 |
(4) For sub-paragraph (3) substitute— | |
“(3) For the purposes of this paragraph a company is in insolvent | |
liquidation during the period which— | |
(a) begins when it goes into liquidation, as defined in section | |
247(2) of the Insolvency Act 1986 or Article 6(2) of the | 20 |
Insolvency (Northern Ireland) Order 1989, at a time when | |
its assets are insufficient for the payment of its debts and | |
other liabilities and the expenses of the winding up, and | |
(b) ends when the winding up is completed or otherwise | |
brought to an end (whether under paragraph 37 or 38 of | 25 |
Schedule B1 to the Insolvency Act 1986 or otherwise). | |
(4) For the purposes of this paragraph a company in administration is | |
in insolvent administration if— | |
(a) in the case of an administration under Schedule B1 to the | |
Insolvency Act 1986, it entered administration at a time | 30 |
when its assets were insufficient for the payment of its | |
debts and other liabilities and the expenses of the | |
administration, or | |
(b) in a case where an administration order has effect under | |
Part 3 of the Insolvency (Northern Ireland) Order 1989, the | 35 |
order was made at such a time.”. | |
Commencement | |
5 (1) Subject to sub-paragraph (2), this Schedule has effect in relation to | |
companies which enter administration (whether under the Insolvency Act | |
1986 (c. 45) or otherwise) on or after the commencement of section 248 of the | 40 |
Enterprise Act 2002 (c. 40) (which substitutes Part 2 of the Insolvency Act | |
1986 (administration)). | |
(2) Paragraph 4 has effect in relation to companies which— | |
(a) are in insolvent liquidation or insolvent administration immediately | |
before 9th April 2003, or | 45 |
(b) go into insolvent liquidation or insolvent administration on or after | |
that date. | |
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For this purpose “insolvent liquidation” and “insolvent administration” are | |
to be construed in accordance with paragraph 6A of Schedule 9 to the | |
Finance Act 1996 (c. 8) (as amended by paragraph 4 above). | |
Schedule 42 | |
Section 197 | |
Controlled foreign companies: exempt activities | 5 |
Introductory | |
1 Part 2 of Schedule 25 to the Taxes Act 1988 (controlled foreign companies: | |
exempt activities) is amended as follows. | |
Companies engaged in wholesale, distributive, financial or service business | |
2 (1) Paragraph 6 (meaning of “engaged in exempt activities”) is amended as | 10 |
follows. | |
(2) In sub-paragraph (1)(c) (requirement that any of sub-paragraphs (2) to (4A) | |
applies to the company) for “(2) to (4A)” substitute “(2), (3), (4) or (4A)”. | |
(3) In sub-paragraph (2A) (persons from whom less than 50% of the gross | |
trading receipts of a wholesale etc business of the controlled foreign | 15 |
company must be derived) omit the word “and” immediately preceding | |
paragraph (c) and at the end of that paragraph add “; | |
(d) persons not falling within paragraphs (a) to (c) above which | |
are companies resident in the United Kingdom; | |
(e) persons not falling within paragraphs (a) to (c) above which | 20 |
are companies not resident in the United Kingdom which | |
carry on business through a branch or agency in the United | |
Kingdom; | |
(f) persons not falling within paragraphs (a) to (c) above who are | |
individuals habitually resident in the United Kingdom; | 25 |
but where the company is a controlled foreign company falling | |
within sub-paragraph (2B) below, paragraphs (d) to (f) above shall be | |
disregarded.”. | |
(4) After sub-paragraph (2A) insert— | |
“(2B) A controlled foreign company falls within this sub-paragraph if | 30 |
either— | |
(a) its main business is the effecting or carrying out of | |
contracts of long-term insurance, other than protection | |
business; or | |
(b) it is a member of an insurance group and its main business | 35 |
is insuring or reinsuring large risks. | |
Paragraph 11A below has effect for the interpretation of this sub- | |
paragraph. | |
(2C) For the purposes of sub-paragraph (2)(b) above, a company’s | |
gross trading receipts from a business shall be regarded as directly | 40 |
or indirectly derived from a person falling within sub-paragraph | |
(2A)(e) above only to the extent that they are derived directly or | |
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indirectly from contracts or other arrangements relating to that | |
person’s branch or agency in the United Kingdom.”. | |
(5) In sub-paragraph (4C) (which defines for the purposes of sub-paragraph | |
(2)(b) a “25 per cent assessable interest”, an expression not used in sub- | |
paragraph (2)(b) but used in sub-paragraph (2A)(b)) for “(2)(b)” substitute | 5 |
“(2A)(b)”. | |
Companies engaged in business of banking etc | |
3 (1) Paragraph 11 (provisions relating to wholesale, distributive, financial or | |
service business) is amended as follows. | |
(2) In sub-paragraph (3) (controlled foreign company engaged in business of | 10 |
banking etc) for paragraph (a) (interest from UK company not to be regarded | |
as receipt derived from connected or associated persons) substitute— | |
“(a) no payment of interest received from a company resident in | |
the United Kingdom which is connected or associated with | |
the controlled foreign company shall be regarded for the | 15 |
purposes of paragraph 6(2)(b) above as a receipt derived | |
directly or indirectly from a person falling within paragraph | |
6(2A) above, but”. | |
(3) At the end of paragraph (b) of that sub-paragraph (the capitalisation test) | |
add “, and | 20 |
(c) it shall also be conclusively presumed that the condition in | |
paragraph 6(2)(b) is not fulfilled if 10% or more of the | |
company’s gross trading receipts from all businesses carried | |
on by it in the accounting period in question, taken together, | |
are receipts other than interest and are directly or indirectly | 25 |
derived from persons— | |
(i) which are companies resident in the United | |
Kingdom, | |
(ii) which are companies not resident in the United | |
Kingdom but which carry on business through a | 30 |
branch or agency in the United Kingdom, or | |
(iii) who are individuals habitually resident in the United | |
Kingdom, | |
but for this purpose a company’s gross trading receipts shall | |
be regarded as directly or indirectly derived from a person | 35 |
falling within sub-paragraph (ii) above only to the extent that | |
they are derived directly or indirectly from contracts or other | |
arrangements relating to that person’s branch or agency in | |
the United Kingdom.”. | |
Interpretation of paragraph 6(2B) | 40 |
4 After paragraph 11 insert— | |
“11A (1) This paragraph has effect for the interpretation of paragraph 6(2B) | |
above. | |
(2) “Contract of long-term insurance” means any contract falling | |
within Part II of Schedule 1 to the Financial Services and Markets | 45 |
Act 2000 (Regulated Activities) Order 2001. | |
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(3) “Protection business” means contracts of long-term insurance | |
where— | |
(a) either— | |
(i) the contract has no surrender value; or | |
(ii) the consideration consists of a single premium and | 5 |
the surrender value does not exceed the amount of | |
that premium; and | |
(b) the contract makes no provision for its conversion or | |
extension in a manner which would result in its ceasing to | |
fall within paragraph (a) above; | 10 |
and references to protection business include a reference to | |
reinsurance of protection business. | |
(4) “Insurance group” shall be construed in accordance with section | |
255A(5) of the Companies Act 1985 (meaning of “insurance group” | |
in Part 7) but reading Part 7 of that Act— | 15 |
(a) as if it extended to Northern Ireland, and | |
(b) as if any reference to a company (within the meaning of | |
that Act) included a reference to a company as defined in | |
Article 3 of the Companies (Northern Ireland) Order 1986, | |
but does not include such an insurance group if it falls within sub- | 20 |
paragraph (5) below. | |
(5) Such an insurance group falls within this sub-paragraph if (within | |
the meaning of that Part as so read) the parent company is a | |
subsidiary undertaking of a parent company which is neither— | |
(a) the parent company of an insurance group; nor | 25 |
(b) a subsidiary undertaking of the parent company of an | |
insurance group. | |
(6) A controlled foreign company is, in accordance with sub- | |
paragraphs (4) and (5) above, a “member of an insurance group” if | |
(within the meaning of that Part as so read) it is the parent | 30 |
company, or a subsidiary undertaking of the parent company, of | |
an insurance group which is by virtue of sub-paragraph (4) above | |
an insurance group for the purposes of paragraph 6(2B) above. | |
(7) A company’s main business is “insuring or reinsuring large risks” | |
if (and only if)— | 35 |
(a) the company’s main business is the effecting or carrying | |
out of contracts of insurance; and | |
(b) 50% or more of its gross trading receipts from that business | |
are derived from insuring or reinsuring large risks. | |
“Large risks” is defined in paragraph 11B below. | 40 |
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(8) In this paragraph— | |
“contract of insurance” has the meaning given by article 3(1) | |
of the Financial Services and Markets Act 2000 (Regulated | |
Activities) Order 2001; | |
“contract of long-term insurance” has the meaning given by | 5 |
sub-paragraph (2) above. | |
11B (1) In paragraph 11A above “large risks” means— | |
(a) risks falling within classes 4, 5, 6, 7, 11 and 12 of Part I of | |
Schedule 1 to the Financial Services and Markets Act 2000 | |
(Regulated Activities) Order 2001; | 10 |
(b) risks falling within classes 14 and 15 of that Part which | |
relate to a business carried on by the policy holder; | |
(c) risks falling within classes 3, 8, 9, 10, 13 and 16 of that Part | |
where the policy holder carries on a business in respect of | |
which the condition specified in sub-paragraph (2) below | 15 |
is satisfied. | |
(2) The condition referred to in sub-paragraph (1)(c) above is that, in | |
the case of that business of the policy holder, at least two of the | |
three following criteria were exceeded in the most recent financial | |
year beginning on or after 1st January 1999 for which the | 20 |
information is available— | |
(a) balance sheet total: 6.2 million euros; | |
(b) net turnover: 12.8 million euros; | |
(c) number of employees: 250. | |
(3) For the purposes of sub-paragraph (2) above as it applies where | 25 |
the policy holder is a company, within the meaning of section | |
735(1) of the Companies Act 1985 or Article 3 of the Companies | |
(Northern Ireland) Order 1986,— | |
(a) “balance sheet total” has the meaning given by section | |
247(5) of that Act or Article 255(5) of that Order; | 30 |
(b) “net turnover” has the meaning given to “turnover” by | |
section 262(1) of that Act or Article 270(1) of that Order; | |
and | |
(c) “number of employees” has the meaning given by section | |
247(6) of that Act or Article 255(6) of that Order; | 35 |
and for a financial year which is a company’s financial year but | |
not in fact a year, the net turnover of the company shall be | |
proportionately reduced. | |
(4) Where the policy holder is a member of a group for which | |
consolidated accounts (within the meaning of Directive 83/349/ | 40 |
EEC) are drawn up, the question whether the condition in sub- | |
paragraph (2) above is met shall be determined by reference to | |
those accounts. | |
(5) For the purposes of sub-paragraph (1)(c) above as it applies where | |
the policy holder is a professional association, joint venture or | 45 |
temporary grouping, the question whether the condition in sub- | |
paragraph (2) above is met shall be determined by reference to the | |
aggregate of the figures of the description in question for all the | |
members of the professional association, joint venture or | |
temporary grouping. | 50 |
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(6) In sub-paragraphs (1) to (5) above “business” includes a trade or | |
profession and, for the purposes of sub-paragraph (1)(c) above, | |
any activity of a professional association, joint venture or | |
temporary grouping. | |
(7) For the purposes of this paragraph, where an amount is | 5 |
denominated in any accounts in a currency other than the euro, it | |
shall be converted into its equivalent in euros using the London | |
closing exchange rate for that currency and the euro for the last | |
day of the period to which the accounts relate. | |
(8) In this paragraph— | 10 |
“euro” means the single currency adopted or proposed to be | |
adopted as its currency by a member State in accordance | |
with the Treaty establishing the European Community; | |
“financial year”, in relation to any person, means the period | |
(not exceeding 12 months) for which that person makes | 15 |
up accounts.”. | |
Schedule 43 | |
Section 213 | |
Repeals | |
Part 1 | |
Excise duties | 20 |
(1) General betting duty | |
| | Short title and chapter | Extent of repeal | | | | | Betting and Gaming Duties Act | Section 5A. | | | | | 1981 (c. 63) | In section 5C, subsections (2) and (3) and, in | | | | | | subsection (4), the words “In the case of a bet | | 25 | | | | which is excluded from subsection (2) by | | | | | | virtue of subsection (3),”. | | |
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1 The repeal of section 5A has effect in accordance with section 6(6) of this Act. | |
2 The repeals in section 5C have effect in accordance with section 7(5) and (6) | |
of this Act. | 30 |
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(2) Bingo duty | |
| | Short title and chapter | Extent of repeal | | | | | Betting and Gaming Duties Act | In Schedule 3— | | | | | 1981 (c. 63) | (a) paragraphs 11, 12 and 15; | | 35 | | | | (b) paragraph 16(2)(b) and the word “or” | | | | | | preceding it. | | |
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These repeals have effect in accordance with section 9 of this Act. | |
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(3) Amusement machine licence duty | |
| | Short title and chapter | Extent of repeal | | | | | Betting and Gaming Duties Act | In section 26—
| | 5 | | | 1981 (c. 63) | (a) the definition of “coin” in subsection (2);
| | | | | | (b) subsection (4). | | |
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These repeals have effect in accordance with section 11(3) of this Act. | |
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(4) Vehicle excise duty | 10 |
| | Short title and chapter | Extent of repeal | | | | | Vehicle Excise and Registration | Section 16. | | | | | Act 1994 (c. 22). | | | |
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This repeal has effect in accordance with section 16 of this Act. | |
| 15 |
Part 2 | |
Value added tax | |
Face-value vouchers | |
| | Short title and chapter | Extent of repeal | | | | | Value Added Tax Act 1994 | In Schedule 6, paragraph 5. | | 20 | | | (c. 23) | | | |
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This repeal has effect in accordance with paragraph 4 of Schedule 1 to this | |
Act. | |
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Part 3 | 25 |
Income tax, corporation tax and capital gains tax | |
(1) Provision of services through intermediary | |
| | Short title and chapter | Extent of repeal | | | | | Income Tax (Earnings and | Section 49(2). | | | | | Pensions) Act 2003 (c. 1) | In section 56(7), paragraph (c) and the word | | 30 | | | | “and” preceding it. | | |
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These repeals have effect in accordance with section 135(4) of this Act. | |
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