|
| |
|
“Net Consideration” means— |
| |
(a) | the consideration payable to S for entering into the |
| |
relevant transaction, minus |
| |
(b) | the restricted disposal value, |
| |
“Current Book Value” means the net book value of the leased plant |
| 5 |
or machinery immediately before the termination, and |
| |
“Original Book Value” means the net book value of the leased |
| |
plant or machinery at the beginning of the leaseback. |
| |
(4) | In this section “relevant qualifying activity” means the qualifying |
| |
activity for the purposes of which the leased plant or machinery was |
| 10 |
used immediately before the termination. |
| |
(5) | Section 228B has no effect on the treatment for the purposes of income |
| |
tax or corporation tax of amounts received by way of refund on the |
| |
termination of a leaseback of amounts payable under it. |
| |
(6) | In subsection (5), “amounts received by way of refund” includes any |
| 15 |
amount that would be so received in respect of the lessee’s interest |
| |
under the leaseback if any amounts due to the lessor under the |
| |
leaseback were disregarded. |
| |
| 228D Lessor’s income or profits |
| |
(1) | For the purpose of income tax or corporation tax, in calculating the |
| 20 |
lessor’s income or profits for a period of account amounts receivable |
| |
under the leaseback in that period may be disregarded to the extent that |
| |
they exceed the permitted threshold. |
| |
(2) | The permitted threshold is the total of— |
| |
| 25 |
(b) | the allowable proportion of the capital repayment. |
| |
(3) | In subsection (2)(a) “gross earnings” means the amount shown in the |
| |
lessor’s accounts in respect of the lessor’s gross earnings under the |
| |
| |
(4) | In subsection (2)(b) “allowable proportion of the capital repayment” |
| 30 |
means the amount obtained by this calculation—![equation: cross[times[char[R],char[e],char[s],char[t],char[r],char[i],char[c],char[t],char[
e],char[d],string[" "],char[D],char[i],char[s],char[p],char[o],char[s],char[a],char[
l],string[" "],char[V],char[a],char[l],char[u],char[e]],over[times[char[I],char[
n],char[v],char[e],char[s],char[t],char[m],char[e],char[n],char[t],string[" "],char[
R],char[e],char[d],char[u],char[c],char[t],char[i],char[o],char[n],string[" "],char[
F],char[o],char[r],string[" "],char[P],char[e],char[r],char[i],char[o],char[d]],
times[char[N],char[e],char[t],string[" "],char[I],char[n],char[v],char[e],char[s],
char[t],char[m],char[e],char[n],char[t]]]]](missing.gif) |
| |
| |
| “Investment Reduction For Period” means the amount shown in |
| |
the lessor’s accounts in respect of the reduction in net |
| |
investment in the leaseback, and |
| 35 |
| “Net Investment” means the amount shown in the lessor’s |
| |
accounts as the lessor’s net investment in the leaseback at the |
| |
| |
(5) | In relation to a period of account during which the leaseback |
| |
terminates, “amounts receivable under the leaseback” includes any |
| 40 |
amount that would be so receivable in respect of the lessor’s interest |
| |
under the leaseback if any reduction in respect of amounts due to the |
| |
lessee under the leaseback were disregarded. |
| |
|
| |
|
| |
|
(6) | This section does not apply to a leaseback if the lessee is a lessee by way |
| |
of an assignment made before 17 March 2004. |
| |
| 228E Lessor’s income or profits: termination of leaseback |
| |
(1) | Subsection (2) applies where— |
| |
(a) | the leaseback terminates, |
| 5 |
(b) | the lessor disposes of the plant or machinery, and |
| |
(c) | the amount of the disposal value required to be brought into |
| |
account because of that disposal is limited by section 62. |
| |
(2) | For the purpose of income tax or corporation tax, in calculating the |
| |
lessor’s income or profits for the period in which the termination occurs |
| 10 |
the amount deducted in respect of any amount refunded to the lessee |
| |
may not exceed the amount to which the disposal value is limited by |
| |
| |
| 228F Lease and finance leaseback |
| |
(1) | Sections 228B, 228C and 228D apply, with the following modifications, |
| 15 |
where plant or machinery is the subject of a lease and finance leaseback. |
| |
(2) | In determining the permitted maximum for the purposes of section |
| |
228B, depreciation shall be disregarded. |
| |
(3) | In the calculation under section 228C(3), the amount of the |
| |
consideration referred to in subsection (6)(b) of this section shall be |
| 20 |
substituted for the Net Consideration. |
| |
(4) | In determining the permitted threshold for the purposes of section |
| |
228D, the allowable proportion of the capital repayment shall be |
| |
| |
(5) | Plant or machinery is the subject of a lease and finance leaseback if— |
| 25 |
(a) | a person (“S”) leases the plant or machinery to another (“B”), |
| |
(b) | after the date of that transaction, the use of the plant or |
| |
machinery falls within sub-paragraph (i), (ii) or (iii) of section |
| |
| |
(c) | it is directly as a consequence of having been leased under a |
| 30 |
finance lease that the plant or machinery is available to be so |
| |
| |
(6) | For the purposes of subsection (5), S leases the plant or machinery to B |
| |
| |
(a) | S grants B rights over the plant or machinery (other than rights |
| 35 |
under a mortgage or other charge), |
| |
(b) | consideration is given for that grant, and |
| |
(c) | S is not required to bring all of that consideration into account |
| |
| |
(7) | In the application of sections 228B to 228D in relation to a lease and |
| 40 |
| |
(a) | references to the lessee are references to the person referred to |
| |
as S in this section, and |
| |
(b) | references to the lessor are references to the person so referred |
| |
to as B in this section or, where appropriate, to an assignee of |
| 45 |
| |
|
| |
|
| |
|
| 228G Sections 228A to 228F: supplementary |
| |
(1) | In sections 228A to 228F— |
| |
| the “current book value” of leased plant or machinery means the |
| |
book value of the plant or machinery having regard to any |
| |
relevant entry in the lessee’s accounts, but— |
| 5 |
(a) | also having regard to depreciation up to the time in |
| |
| |
(b) | disregarding any revaluation gains or losses and any |
| |
| |
| “lessee” does not include a person who is lessee by way of an |
| 10 |
| |
| “restricted disposal value” means the disposal value under section |
| |
| |
| “termination” in relation to a leaseback includes (except in section |
| |
| 15 |
(a) | the assignment of the lessee’s interest, |
| |
(b) | the making of any arrangements (apart from an |
| |
assignment of the lessee’s interest) under which a |
| |
person other than the lessee becomes liable to make |
| |
some or all payments under the leaseback, and |
| 20 |
(c) | a variation as a result of which the leaseback ceases to be |
| |
| |
(2) | In a case where accounts drawn up are not correct accounts, or no |
| |
| |
(a) | the provisions of sections 228A to 228F apply as if correct |
| 25 |
accounts had been drawn up, and |
| |
(b) | amounts referred to in any of those sections as shown in |
| |
accounts are those that would have been shown in correct |
| |
| |
(3) | In a case where accounts are drawn up in reliance upon amounts |
| 30 |
derived from an earlier period of account for which correct accounts |
| |
were not drawn up, or no accounts were drawn up, amounts referred |
| |
to in sections 228A to 228F as shown in the accounts for the later period |
| |
are those that would have been shown if correct accounts had been |
| |
drawn up for the earlier period. |
| 35 |
(4) | In subsections (2) and (3) “correct accounts” means accounts drawn up |
| |
in accordance with generally accepted accounting practice.” |
| |
(2) | In sections 228A to 228G of the Capital Allowances Act 2001 (c. 2) (as inserted |
| |
by subsection (1) above), a reference to a provision of that Act includes a |
| |
reference to an equivalent provision of the Capital Allowances Act 1990 (c. 1) |
| 40 |
(with any necessary modification). |
| |
(3) | This section applies to income tax and corporation tax chargeable in relation to |
| |
periods that end on or after 17 March 2004. |
| |
(4) | Schedule 23 contains transitional provision. |
| |
|
| |
|
| |
|
128 | Manufactured dividends |
| |
Schedule 24 to this Act (which makes provision in relation to cases where |
| |
payments are or have been made, or treated as made, which are representative |
| |
of dividends on shares of companies resident in the United Kingdom) has |
| |
| 5 |
| |
(1) | Schedule 13 to the Finance Act 1996 (c. 8) (discounted securities: income tax |
| |
provisions) is amended as follows. |
| |
(2) | In paragraph 8 (transfers between connected persons deemed to be at market |
| |
value) after sub-paragraph (3) insert— |
| 10 |
“(4) | Where the relevant discounted security is a strip, its market value at |
| |
any time shall be determined for the purposes of this paragraph in |
| |
accordance with paragraph 14E below.”. |
| |
(3) | In paragraph 9 (other transactions deemed to be at market value) after sub- |
| |
| 15 |
“(3) | Where the relevant discounted security is a strip, its market value at |
| |
any time shall be determined for the purposes of this paragraph in |
| |
accordance with paragraph 14E below.”. |
| |
(4) | In paragraph 14 (strips of government securities) for sub-paragraph (6) |
| |
(regulations as to manner of determining market value) substitute— |
| 20 |
“(6) | Paragraph 14E below makes provision as to the manner of determining |
| |
for the purposes of this paragraph the market value at any time of— |
| |
| |
(b) | any security exchanged for strips of that security.”. |
| |
(5) | After paragraph 14A (strips of government securities: losses) insert— |
| 25 |
“Strips of government securities: manipulation of acquisition, sale or redemption price |
| |
14B (1) | This paragraph applies in any case where, as a result of any scheme |
| |
| |
(a) | the amount paid by a person in respect of his acquisition of a |
| |
strip is or was more than the market value of the strip at the |
| 30 |
time of that acquisition, |
| |
(b) | the amount payable to a person on a transfer of a strip by him |
| |
is less than the market value of the strip at the time of the |
| |
| |
(c) | on redemption of a strip, the amount payable to a person, as |
| 35 |
the person holding the strip, is less than the market value of |
| |
the strip on the day before redemption, |
| |
| and the obtaining of a tax advantage by any person is the main |
| |
benefit, or one of the main benefits, that might have been expected to |
| |
accrue from, or from any provision of, the scheme or arrangement. |
| 40 |
(2) | In a case falling within sub-paragraph (1)(a) above, the person shall |
| |
be treated for the purposes of paragraphs 1(2)(b) and 14A(3)(b) |
| |
above on a transfer of the strip by him as if he had paid in respect of |
| |
|
| |
|
| |
|
his acquisition of the strip an amount equal to the market value of the |
| |
strip at the time of that acquisition. |
| |
(3) | In a case falling within sub-paragraph (1)(b) above, the person shall |
| |
be treated for the purposes of paragraphs 1(2)(b) and 14A(3)(b) |
| |
above as if the amount payable to him on the transfer were an |
| 5 |
amount equal to the market value of the strip at the time of the |
| |
| |
(4) | In a case falling within sub-paragraph (1)(c) above, the person shall |
| |
be treated for the purposes of paragraphs 1(2)(b) and 14A(3)(b) |
| |
above as if the amount payable to him on redemption were an |
| 10 |
amount equal to the market value of the strip on the day before |
| |
| |
(5) | For the purposes of this paragraph, no account shall be taken of any |
| |
costs incurred in connection with any transfer or redemption of a |
| |
strip or its acquisition. |
| 15 |
(6) | Paragraph 14E below makes provision as to the manner of |
| |
determining for the purposes of this paragraph the market value at |
| |
| |
(7) | In this paragraph “tax advantage” has the meaning given by section |
| |
709(1) of the Taxes Act 1988.”. |
| 20 |
(6) | After paragraph 14B insert— |
| |
“Strips: manipulation of price: associated payment giving rise to capital gains tax loss |
| |
| |
(a) | as a result of any scheme or arrangement which has an |
| |
unallowable purpose, the circumstances are, or might have |
| 25 |
been, as mentioned in paragraph (a), (b) or (c) of paragraph |
| |
| |
(b) | under the scheme or arrangement, a payment falls to be made |
| |
otherwise than in respect of the acquisition or disposal of a |
| |
| 30 |
(c) | as a result of that payment or the circumstances in which it is |
| |
made, a loss accrues to any person for the purposes of capital |
| |
| |
| the loss shall not be an allowable loss for the purposes of capital |
| |
| 35 |
(2) | For the purposes of this paragraph a scheme or arrangement has an |
| |
unallowable purpose if the main benefit, or one of the main benefits, |
| |
that might have been expected to result from, or from any provision |
| |
of, the scheme or arrangement (apart from paragraph 14B above and |
| |
| 40 |
(a) | the obtaining of a tax advantage by any person, or |
| |
(b) | the accrual to any person of an allowable loss for the |
| |
purposes of capital gains tax. |
| |
(3) | In this paragraph “tax advantage” has the meaning given by section |
| |
709(1) of the Taxes Act 1988.”. |
| 45 |
|
| |
|
| |
|
(7) | After paragraph 14C insert— |
| |
“Restriction of profits and losses on strips by reference to original acquisition cost |
| |
14D (1) | This paragraph has effect for the purpose of excluding from charge |
| |
or, as the case may be, relief under this Schedule so much of— |
| |
(a) | any profit realised by a person from the discount on a strip, or |
| 5 |
(b) | any loss sustained by a person from the discount on a strip, |
| |
| as is referable to a relevant amount being less than the person’s |
| |
original acquisition cost for the strip. |
| |
| For this purpose a relevant amount is any amount that falls to be |
| |
brought into account as paid in respect of the acquisition of the strip |
| 10 |
or as payable on the transfer or redemption of the strip. |
| |
(2) | Where, on the transfer or redemption of a strip,— |
| |
(a) | a person realises a profit (apart from this paragraph) from the |
| |
discount on the strip and amount C exceeds amount A, or |
| |
(b) | a person sustains a loss (apart from this paragraph) from the |
| 15 |
discount on the strip and amount C exceeds amount P, |
| |
| then, for the purposes of the other provisions of this Schedule, the |
| |
profit or loss shall be restricted or eliminated in accordance with the |
| |
following provisions of this paragraph. |
| |
(3) | For the purposes of this paragraph— |
| 20 |
| “amount A” is the amount that falls to be brought into account |
| |
as the amount paid by the person in respect of his |
| |
acquisition of the strip in determining the amount of the |
| |
profit or loss apart from this paragraph, |
| |
| “amount C” is the person’s original acquisition cost for the |
| 25 |
strip (see sub-paragraph (6) below); |
| |
| “amount L” is the amount (apart from this paragraph) of the |
| |
loss mentioned in sub-paragraph (2)(b) above; |
| |
| “amount P” is the amount that falls to be brought into account |
| |
as the amount payable on the transfer or redemption of the |
| 30 |
strip in determining the amount of the profit or loss apart |
| |
| |
(4) | In a case falling within sub-paragraph (2)(a) above (person realising |
| |
| |
(a) | if amount P exceeds amount C, the amount of the profit is |
| 35 |
restricted to the amount of that excess; |
| |
(b) | if amount P does not exceed amount C, the person shall be |
| |
treated as not realising a profit from the discount on the strip. |
| |
(5) | In a case falling within sub-paragraph (2)(b) above (person |
| |
| 40 |
(a) | if amount A exceeds amount C, the amount of the loss is |
| |
restricted to so much of amount L as remains after deducting |
| |
from it the amount by which amount C exceeds amount P; |
| |
(b) | if amount A does not exceed amount C, the person shall be |
| |
treated for the purposes of this Schedule as not sustaining a |
| 45 |
loss from the discount on the strip. |
| |
(6) | For the purposes of this paragraph a person’s “original acquisition |
| |
cost” in the case of a strip is the amount which— |
| |
|
| |
|
| |
|
(a) | disregarding any deemed transfers or re-acquisitions under |
| |
paragraph 14(4) above (other than the transfer mentioned in |
| |
sub-paragraph (2) above, if it is such a transfer), but |
| |
(b) | otherwise giving effect, so far as applicable, to paragraph 8, |
| |
9, 14 or 14B above (each of which treats a person acquiring a |
| 5 |
security as having paid an amount equal to its market value |
| |
determined in accordance with paragraph 14E below), |
| |
| would fall to be taken into account as the amount paid by the person |
| |
in respect of his acquisition of the strip in determining whether a |
| |
profit is realised, or a loss is sustained, from the discount on the strip. |
| 10 |
(7) | In this paragraph any reference to a transfer includes a reference to a |
| |
deemed transfer under paragraph 14(4) above. |
| |
(8) | In this paragraph any reference to sustaining a loss from the discount |
| |
on a strip shall be construed in accordance with paragraph 14A |
| |
| 15 |
(8) | After paragraph 14D insert— |
| |
“Market value of strips etc for the purposes of paragraphs 8, 9, 14 and 14B |
| |
14E (1) | This paragraph makes provision as to the manner of determining— |
| |
(a) | for the purposes of paragraph 8, 9, 14 or 14B above, the |
| |
market value at any time of a strip, and |
| 20 |
(b) | for the purposes of paragraph 14(2) above, the market value |
| |
at any time of a security exchanged for strips of that security. |
| |
(2) | The market value on any day of a strip or security quoted in the Daily |
| |
| |
(a) | the lower of the two figures shown in the Daily List for the |
| 25 |
strip or security for that day,
|
| |
| |
(b) | one-quarter of the difference between those two figures, |
| |
| unless the Stock Exchange is closed on that day. |
| |
(3) | If the Stock Exchange is closed on any day, the market value on that |
| 30 |
day of any such strip or security shall be taken to be its market value |
| |
on the latest previous day or earliest subsequent day on which the |
| |
Stock Exchange is open, whichever affords the lower value. |
| |
(4) | In the case of a strip or security which— |
| |
(a) | is a security, or a strip of a security, issued by or on behalf of |
| 35 |
the government of a territory outside the United Kingdom, |
| |
| |
(b) | is not quoted in the Daily List, but |
| |
(c) | is quoted in a foreign stock exchange list, |
| |
| the market value shall be determined in accordance with sub- |
| 40 |
| |
(5) | In any such case, subsections (2) and (3) above shall have effect for |
| |
determining the market value of the strip or security, but for this |
| |
purpose those provisions shall have effect— |
| |
(a) | with the substitution for references to the Daily List of |
| 45 |
references to the foreign stock exchange list, |
| |
|
| |
|