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14 Apr 2003 : Column 766—continued
"(b) Condition A or B is met.".
(3) For subsections (2) and (3) there shall be substituted—
"(2) Condition A is that the option is exercised—
(a) on or after the third anniversary of the date on which it was granted, but
(b) not later than the tenth anniversary of that date.
(2A) Condition B is that the option—
(a) is exercised before the third anniversary of the date on which it was granted, and
(b) is so exercised by virtue of a provision included in the scheme under paragraph 24 of Schedule 4 (exercise of options after ceasing to be director or employee) in circumstances in which subsection (2B) applies.
(2B) This subsection applies if the individual exercising the option—
(a) has ceased to be a full-time director or qualifying employee of the scheme organiser (or, in the case of a group scheme, a constituent company) because of injury, disability, redundancy or retirement, and
(b) exercises the option within 6 months of the day on which he ceases to be such a director or employee.
(2C) In subsection (2B)—
"redundancy" means redundancy within the meaning of ERA 1996 or ER(NI)O 1996, and
"retirement" means retirement on or after reaching the retirement age specified in the scheme.".
(4) For section 525(1)(b) there shall be substituted—
"(b) Condition A or B (as set out in section 524(2) or (2A)) is met.".
(5) Section 701(2)(c) of the Income Tax (Earnings and Pensions) Act 2003 shall be amended as follows.
(6) In sub-paragraph (i), "or 4 (approved CSOP schemes)" shall be omitted.
(7) After that sub-paragraph there shall be inserted—
"(ia) any shares acquired by the employee (whether or not as a result of the exercise of a right to acquire shares) under a scheme approved under Schedule 4 (approved CSOP schemes), other than shares acquired as a result of the exercise of the right before the third anniversary of the date on which it was granted or later than the tenth anniversary of that date;".
(8) In sub-paragraph (ii), for "such a scheme" there shall be substituted "a scheme such as is mentioned in sub-paragraph (i) or (ia)".
(9) The amendments made by paragraphs (1) to (4) of this Resolution shall have effect in relation to the exercise of an option on or after 9th April 2003 and the other amendments made by this Resolution shall have effect in relation to shares acquired on or after that date.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
30. Employee Securities And Options
- That provision may be made about securities, and options to acquire securities, acquired pursuant to a right or opportunity available by reason of employment.
31. Payments To Third Parties For The Benefit Of Employees
- That provision (including provision having retrospective effect) may be made about the allowability of deductions for payments made by employers to third parties for the benefit of employees.
32. PAYE (Regulations And Notional Deductions)
- That provision may be made—
(a) as to the matters that may be provided for by regulations under section 684 of the Income Tax (Earnings and Pensions) Act 2003;
(b) amending section 710 of that Act.
33. Interest On Late Payment Of Amounts Required To Be Deducted From Pay
- That provision may be made about the tax treatment of interest on amounts payable under regulations made under—
(a) section 566 of the Income and Corporation Taxes Act 1988,
(b) paragraph 6 of Schedule 1 to the Social Security Contributions and Benefits Act 1992 or the Social Security Contributions and Benefits (Northern Ireland) Act 1992, or
(c) section 22 of the Teaching and Higher Education Act 1998 or Article 3 of the Education (Student Support) (Northern Ireland) Order 1998.
34. Corporation Tax (Permanent Establishments Of Non-Resident Companies)
- That provision (including provision having retrospective effect) may be made—
(a) about the taxation of companies that are not resident in the United Kingdom;
(b) about the taxation of profits of UK-resident companies attributable to permanent establishments elsewhere;
(c) replacing references to a branch, or branch or agency, of a company with references to a permanent establishment.
35. Life Insurance Policies And Deferred Annuity Contracts
- That provision may be made about chargeable gains on a disposal of, or of an interest in, the rights conferred by a policy of insurance or contract for a deferred annuity on the life of any person.
36. Exercise Of Options And The Market Value Rule
- That provision may be made about the application of section 17(1) of the Taxation of Chargeable Gains Act 1992 in relation to the exercise of options.
37. Chargeable Gains (Earn-Out Rights)
- That provision may be made amending section 138A of the Taxation of Chargeable Gains Act 1992.
38. Chargeable Gains (Attribution Of Gains To Beneficiaries And Settlors)
- That provision may be made amending the Taxation of Chargeable Gains Act 1992 with respect to the attribution of chargeable gains to beneficiaries and settlors.
39. Capital Allowances (Avoidance Affecting Proceeds Of Balancing Event)
- That—
(1) The following section shall be inserted after section 570 of the Capital Allowances Act 2001—
"570A Avoidance affecting proceeds of balancing event
(1) This section applies where an event occurs in relation to an asset (a "balancing event") as a result of which a balancing allowance would (but for this section) fall to be made to a person ("the taxpayer") under Part 3, 4, 4A, 5 or 10.
(2) The taxpayer is not entitled to any balancing allowance if, as a result of a tax avoidance scheme, the amount to be brought into account as the proceeds from the event is less than it would otherwise have been.
(3) In subsection (2) a "tax avoidance scheme" means a scheme or arrangement the main purpose, or one of the main purposes, of which is the obtaining of a tax advantage by the taxpayer.
(4) Where this section applies to deny a balancing allowance, the residue of qualifying expenditure immediately after the balancing event is nevertheless calculated as if the balancing allowance had been made.
(5) In this section as it applies for the purposes of Part 5 (mineral extraction allowances)—
(a) the references to the proceeds from the balancing event that are to be brought into account shall be read as references to the disposal value to be brought into account, and
(b) the reference to the residue of qualifying expenditure shall be read as a reference to the unrelieved qualifying expenditure.".
(2) This Resolution shall apply in relation to any balancing event (within the meaning of section 570A, inserted by paragraph (1) above) occurring on or after 27th November 2002, except where the event—
(a) occurs in pursuance of a contract entered into before that date, and
(b) does not occur in consequence of the exercise on or after that date of an option, right of pre-emption or similar right.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
40. Capital Allowances (Expenditure On Software For Sub-Licensing)
- That—
(1) In subsection (1) of section 45 of the Capital Allowances Act 2001, at the end of paragraph (d) there shall be inserted "or subsection (4) below".
(2) After subsection (3) of that section there shall be inserted—
"(4) Expenditure on an item within Class C is not first-year qualifying expenditure under this section if the person incurring it does so with a view to granting to another person a right to use or otherwise deal with any of the software in question.".
(3) This Resolution shall apply in relation to expenditure incurred on or after 26th March 2003.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
41. Research And Development (Staffing Costs)
- That provision may be made amending paragraph 5 of Schedule 20 to the Finance Act 2000.
42. Tonnage Tax (Extension Of Capital Allowances Restriction On Lessors Of Ships)
- That provision (including provision having retrospective effect) may be made about the entitlement to capital allowances of a person leasing a ship to a company within tonnage tax.
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