|
| |
|
(a) | by the partners in a partnership of which the |
| |
relevant company, or a relevant qualifying |
| |
subsidiary of that company, is a member, or |
| |
(b) | by the parties to a joint venture to which the |
| |
relevant company, or a relevant qualifying |
| 5 |
subsidiary of that company, is a party. |
| |
(2AF) | The requirements of this paragraph are not to be regarded, |
| |
by virtue of sub-paragraph (2AB) above, as failing to be |
| |
| |
(a) | by reason only of anything done as a consequence |
| 10 |
of the relevant company or any other company |
| |
being in administration or receivership, or |
| |
(b) | by reason only of the relevant company or any |
| |
other company being wound up or dissolved |
| |
| 15 |
| the trade mentioned in sub-paragraph (2AB)(a) above |
| |
ceases to be carried on by the relevant company or a |
| |
relevant qualifying subsidiary of that company and is |
| |
subsequently carried on by a person who has not been |
| |
connected, at any time after the date which is one year |
| 20 |
before the issue of the relevant holding, with the relevant |
| |
| |
(2AG) | Sub-paragraph (2AF) above applies only if (as the case |
| |
| |
(a) | the entry into administration or receivership and |
| 25 |
everything done as a consequence of the company |
| |
concerned being in administration or receivership, |
| |
| |
(b) | the winding up or dissolution, |
| |
| is for bona fide commercial reasons and is not part of a |
| 30 |
scheme or arrangement the main purpose of which or one |
| |
of the main purposes of which is the avoidance of tax. |
| |
(2AH) | Sub-paragraph (2) of paragraph 11A below applies for the |
| |
purposes of sub-paragraphs (2AF) and (2AG) above as it |
| |
applies for the purpose of that paragraph.”, |
| 35 |
(d) | omit sub-paragraph (5). |
| |
12 | In paragraph 10 (meaning of “qualifying subsidiary”)— |
| |
(a) | omit sub-paragraph (3)(a) to (c), |
| |
(b) | before sub-paragraph (3)(d) insert— |
| |
“(ca) | the subsidiary is a 51 per cent. subsidiary of the |
| 40 |
| |
(c) | in sub-paragraph (3)(e), for “the relevant company could cease to fall |
| |
within this sub-paragraph” substitute “either of the conditions in |
| |
paragraphs (ca) and (d) above would cease to be met”, |
| |
(d) | in sub-paragraph (4)— |
| 45 |
(i) | after “time when it” insert “or any other company”, |
| |
| |
(iii) | omit the first “that” in paragraph (a), |
| |
(iv) | omit “that” in paragraph (b), |
| |
(v) | for “and not” substitute “and is not”, |
| 50 |
|
| |
|
| |
|
(e) | after sub-paragraph (4) insert— |
| |
“(4A) | Sub-paragraph (4B) below applies at a time when the |
| |
subsidiary or any other company is in administration or |
| |
| |
(4B) | The subsidiary shall not be regarded, by reason only of |
| 5 |
anything done as a consequence of the company |
| |
concerned being in administration or receivership, as |
| |
having ceased to be a company falling within sub- |
| |
| |
(a) | the entry into administration or receivership, and |
| 10 |
(b) | everything done as a consequence of the company |
| |
concerned being in administration or receivership, |
| |
| is for bona fide commercial reasons and is not part of a |
| |
scheme or arrangement the main purpose of which or one |
| |
of the main purposes of which is the avoidance of tax. |
| 15 |
(4C) | Sub-paragraph (2) of paragraph 11A below applies for the |
| |
purposes of sub-paragraphs (4A) and (4B) above as it |
| |
applies for the purpose of that paragraph.”, |
| |
(f) | in sub-paragraph (5)— |
| |
(i) | omit the words “it is shown that”, |
| 20 |
(ii) | for “and not” substitute “and is not to be”, |
| |
(g) | omit sub-paragraph (6). |
| |
13 | After paragraph 10 insert— |
| |
“Requirement as to property managing subsidiaries |
| |
10ZA (1) | The requirement of this paragraph is that the relevant company |
| 25 |
must not have a property managing subsidiary which is not a |
| |
relevant qualifying subsidiary of the relevant company. |
| |
(2) | “Property managing subsidiary” means a qualifying subsidiary of |
| |
the relevant company whose business consists wholly or mainly in |
| |
the holding or managing of land or any property deriving its value |
| 30 |
| |
(3) | In sub-paragraph (2) above, “land” and “property deriving its |
| |
value from land” have the same meaning as in section 776.”. |
| |
14 | In paragraph 11 (winding up of the relevant company)— |
| |
| 35 |
(b) | omit the first “that” in paragraph (a), |
| |
(c) | omit “that” in paragraph (b), |
| |
(d) | in paragraph (b), for “and not” substitute “and is not”. |
| |
15 | In paragraph 11A (company in administration or receivership) in sub- |
| |
paragraph (1), after “by reason” insert “only”. |
| 40 |
16 | The amendments made by this Part have effect for the purpose of |
| |
determining whether shares or securities issued on or after 17th March 2004 |
| |
are, for the purposes of section 842AA of the Taxes Act 1988, to be regarded |
| |
as comprised in a company’s qualifying holdings. |
| |
|
| |
|
| |
|
| |
| |
Corporate venturing scheme |
| |
1 | Schedule 15 to the Finance Act 2000 (c. 17) (the corporate venturing scheme) |
| |
| |
2 | In paragraph 3 (meaning of “the qualification period”)— |
| 5 |
(a) | in sub-paragraph (1)(b)(ii), and |
| |
(b) | in sub-paragraph (2)(a) and (b), |
| |
| for “qualifying subsidiaries” substitute “qualifying 90% subsidiaries”. |
| |
3 | In paragraph 15 (introduction) after paragraph (e) insert— |
| |
“(ea) | property managing subsidiaries (see paragraph 21A);”. |
| 10 |
4 | In paragraph 20 (the qualifying subsidiaries requirement) for sub-paragraph |
| |
| |
“(2) | In this paragraph “subsidiary” means any company which the |
| |
company controls, either on its own or together with any person |
| |
| 15 |
(3) | For the purpose of sub-paragraph (2), the question whether a |
| |
person controls a company shall be determined in accordance |
| |
with section 416(2) to (6) of the Taxes Act 1988.”. |
| |
5 (1) | Paragraph 21 (meaning of “qualifying subsidiary”) is amended as follows. |
| |
(2) | In sub-paragraph (2)— |
| 20 |
(a) | omit paragraphs (a) to (c), |
| |
(b) | before paragraph (d) insert— |
| |
“(ca) | the subsidiary is a 51% subsidiary of the relevant |
| |
| |
(c) | in paragraph (e) for “the conditions in paragraphs (a) to” substitute |
| 25 |
“either of the conditions in paragraphs (ca) and”. |
| |
(3) | In sub-paragraph (4)(a)(ii), after “company” insert “concerned”. |
| |
(4) | In sub-paragraph (5)— |
| |
(a) | after “qualifying subsidiary” insert “of the relevant company”, |
| |
(b) | for “and not part” substitute “and is not to be part”. |
| 30 |
6 | After paragraph 21 insert— |
| |
“The property managing subsidiaries requirement |
| |
21A (1) | The issuing company is not a qualifying issuing company in |
| |
relation to the relevant shares if, at any time during the |
| |
qualification period relating to those shares, it has a property |
| 35 |
managing subsidiary which is not a qualifying 90% subsidiary of |
| |
the issuing company (see paragraph 23(10) and (11)). |
| |
(2) | “Property managing subsidiary” means a qualifying subsidiary of |
| |
the issuing company whose business consists wholly or mainly in |
| |
the holding or managing of land or any property deriving its value |
| 40 |
| |
|
| |
|
| |
|
(3) | In sub-paragraph (2), “land” and “property deriving its value from |
| |
land” have the same meaning as in section 776 of the Taxes Act |
| |
| |
7 | In paragraph 23 (the trading activities requirement)— |
| |
(a) | in sub-paragraph (3)(b), for “at least one group company” substitute |
| 5 |
“the issuing company or a qualifying 90% subsidiary of the issuing |
| |
| |
(b) | in sub-paragraph (5)— |
| |
(i) | for “a subsidiary” substitute “a qualifying 90% subsidiary of |
| |
| 10 |
(ii) | for “or subsidiary” substitute “or a qualifying 90% subsidiary |
| |
| |
(c) | in sub-paragraph (6), for “the company”, in the first place, substitute |
| |
| |
(d) | after sub-paragraph (9) insert— |
| 15 |
“(10) | For the purposes of this Schedule, a company (“the |
| |
subsidiary”) is a qualifying 90% subsidiary of the issuing |
| |
company if the following conditions are met— |
| |
(a) | the issuing company possesses not less than 90% of |
| |
the issued share capital of, and not less than 90% of |
| 20 |
the voting power in, the subsidiary; |
| |
(b) | the issuing company would— |
| |
(i) | in the event of a winding up of the |
| |
| |
(ii) | in any other circumstances, |
| 25 |
| be beneficially entitled to receive not less than 90% |
| |
of the assets of the subsidiary which would then be |
| |
available for distribution to the shareholders of the |
| |
| |
(c) | the issuing company is beneficially entitled to not |
| 30 |
less than 90% of any profits of the subsidiary which |
| |
are available for distribution to the shareholders of |
| |
| |
(d) | no person other than the issuing company has |
| |
control of the subsidiary within the meaning of |
| 35 |
section 840 of the Taxes Act 1988; and |
| |
(e) | no arrangements are in existence by virtue of which |
| |
any of the conditions in paragraphs (a) to (d) would |
| |
| |
(11) | For the purposes of sub-paragraph (10)— |
| 40 |
(a) | sub-paragraphs (3) and (4) of paragraph 21 apply |
| |
in relation to the conditions in sub-paragraph (10) |
| |
as they apply in relation to the conditions in |
| |
| |
(b) | the subsidiary shall not be regarded, at any time |
| 45 |
when arrangements are in existence for the |
| |
disposal by the issuing company of all its interest in |
| |
the subsidiary, as having ceased on that account to |
| |
be a qualifying 90% subsidiary of the issuing |
| |
company if the disposal is to be for commercial |
| 50 |
reasons and is not to be part of a scheme or |
| |
|
| |
|
| |
|
arrangement the main purpose of which, or one of |
| |
the main purposes of which, is the avoidance of |
| |
| |
8 | In paragraph 24 (ceasing to meet trading requirements by reason of |
| |
administration, receivership etc)— |
| 5 |
(a) | in sub-paragraph (1)— |
| |
(i) | omit “which is in administration or receivership”, |
| |
(ii) | after “by reason” insert “only”, |
| |
(b) | in sub-paragraph (2)(b), after “company” insert “concerned”, |
| |
(c) | in sub-paragraph (4)— |
| 10 |
(i) | in paragraph (a), for “of the company or any of its |
| |
subsidiaries” substitute “only of the company or any of its |
| |
qualifying subsidiaries”, |
| |
(ii) | in paragraph (b), for “and not” substitute “and is not”. |
| |
9 | In paragraph 25 (meaning of “qualifying trade”) in sub-paragraph (3)(b), for |
| 15 |
“any other group company” substitute “the issuing company or any of its |
| |
qualifying 90% subsidiaries”. |
| |
10 | In paragraph 35 (requirement as to the shares) in sub-paragraph (2), for “the |
| |
issuing company at a future date” substitute “any person at a future date in |
| |
respect of the acquisition of the shares”. |
| 20 |
11 | In paragraph 36 (requirement as to money raised)— |
| |
(a) | in sub-paragraph (1B)(b)— |
| |
(i) | for “relevant trade was not being carried on” substitute |
| |
“issuing company or a qualifying 90% subsidiary of that |
| |
company had not begun to carry on the relevant trade”, |
| 25 |
(ii) | for “subsidiary” substitute “qualifying 90% subsidiary of that |
| |
| |
(b) | in sub-paragraphs (4)(b)(ii) and (5)(b), for “qualifying subsidiary” |
| |
substitute “qualifying 90% subsidiary”. |
| |
12 | In paragraph 40 (entitlement to claim)— |
| 30 |
(a) | in sub-paragraph (2), for paragraph (a) substitute— |
| |
“(a) | the funded trade has been carried on for four |
| |
months by no person other than the issuing |
| |
company or a qualifying 90% subsidiary of that |
| |
| 35 |
(i) | any time spent preparing to carry on that |
| |
| |
(ii) | any person required to be disregarded in |
| |
accordance with sub-paragraph (2A) or |
| |
| 40 |
(b) | after sub-paragraph (2) insert— |
| |
“(2A) | At any time when the funded trade is carried on by the |
| |
partners in a partnership of which the issuing company, or |
| |
a qualifying 90% subsidiary of that company, is a member, |
| |
there shall be disregarded for the purposes of sub- |
| 45 |
paragraph (2)(a) any other members of the partnership at |
| |
| |
|
| |
|
| |
|
(2B) | At any time when the funded trade is carried on by the |
| |
parties to a joint venture to which the issuing company, or |
| |
a qualifying 90% subsidiary of that company, is a party, |
| |
there shall be disregarded for the purposes of sub- |
| |
paragraph (2)(a) any other parties to the joint venture at |
| 5 |
| |
(c) | for sub-paragraph (5)(a) substitute— |
| |
“(a) | by reason only of the issuing company or any other |
| |
company being wound up or dissolved without |
| |
winding up, the funded trade is carried on as |
| 10 |
mentioned in sub-paragraph (2)(a) for a period |
| |
shorter than four months, and”, |
| |
(d) | in sub-paragraph (5)(b), for “was”, in each place, substitute “is”, |
| |
(e) | for sub-paragraph (6)(a) substitute— |
| |
“(a) | by reason only of anything done as a consequence |
| 15 |
of the issuing company or any other company |
| |
being in administration or receivership, the funded |
| |
trade is carried on as mentioned in sub-paragraph |
| |
(2)(a) for a period shorter than four months, and”, |
| |
(f) | in sub-paragraph (6)(b), after “company” insert “concerned”. |
| 20 |
13 | In paragraph 102 (minor definitions etc) after sub-paragraph (7) insert— |
| |
“(8) | In determining for the purposes of paragraph 3(2), 23(5) or 36(1B) |
| |
when a trade is begun to be carried on by a qualifying 90% |
| |
subsidiary of the issuing company there shall be disregarded any |
| |
carrying on of the trade by it before it became such a subsidiary.”. |
| 25 |
14 | In paragraph 103 (index of defined expressions), after the entry for |
| |
“qualifying subsidiary” insert— |
| |
| “qualifying 90% subsidiary |
| paragraph 23(10) and (11)”. |
| | |
|
15 | The amendments made by this Schedule have effect in relation to shares |
| |
issued on or after 17th March 2004. |
| 30 |
| |
| |
Chargeable gains: restriction of gifts relief etc |
| |
Penalties for failure to furnish particulars etc |
| |
1 (1) | Section 98 of the Taxes Management Act 1970 (c. 9) is amended as follows. |
| |
(2) | In the first column of the Table, insert at the appropriate place— |
| 35 |
| “Section 169G(2) of the 1992 Act.”. |
| |
Charge on settlor with interest in settlement etc: supplementary provisions |
| |
2 (1) | Section 79 of the Taxation of Chargeable Gains Act 1992 (c. 12) is amended |
| |
| |
|
| |
|
| |
|
(2) | After subsection (5) insert— |
| |
“(5A) | In subsection (5) above “arrangements” includes any scheme, |
| |
agreement or understanding, whether or not legally enforceable.”. |
| |
(3) | In subsection (6) (power of inspector to require information for purposes of |
| |
sections 77, 78 and 79) for “inspector” substitute “officer of the Board”. |
| 5 |
Relief for gifts of business assets |
| |
3 (1) | Section 165 of the Taxation of Chargeable Gains Act 1992 is amended as |
| |
| |
(2) | In subsection (1) (circumstances in which subsection (4) applies, subject to |
| |
certain provisions) for “and 169” substitute “, 169, 169B and 169C”. |
| 10 |
(3) | In subsection (3) (relief not to apply to disposal in certain cases) after |
| |
| |
“(ba) | in the case of a disposal of shares or securities, the transferee |
| |
| |
(4) | In subsection (8) (definitions) for paragraph (aa) substitute— |
| 15 |
“(aa) | “holding company” has the meaning given by paragraph |
| |
22(1), “trading company” has the meaning given by |
| |
paragraph 22A, and “trading group” has the meaning given |
| |
by paragraph 22B, of Schedule A1; and”. |
| |
(5) | In subsection (10) (deduction to be allowed in computing chargeable gain on |
| 20 |
subsequent disposal by transferee, where disposal by transferor is |
| |
chargeable transfer for inheritance tax purposes) for “after 13th March 1989, |
| |
in respect of which a claim is made under this section,” substitute “in |
| |
relation to which subsection (4) above applies”. |
| |
Gifts relief not to be available on certain transfers to settlor-interested settlements etc |
| 25 |
4 | After section 169A of the Taxation of Chargeable Gains Act 1992 (c. 12) |
| |
| |
“Gifts to settlor-interested settlements etc |
| |
169B | Gifts to settlor-interested settlements etc |
| |
(1) | Neither section 165(4) nor section 260(3) shall apply in relation to a |
| 30 |
disposal (“the relevant disposal”)— |
| |
(a) | made by a person (“the transferor”) to the trustees of a |
| |
| |
(b) | in respect of which Condition 1 or Condition 2 below is |
| |
| 35 |
(2) | Condition 1 is that, immediately after the making of the relevant |
| |
| |
(a) | there is a settlor (see section 169E) who has an interest in the |
| |
settlement (see section 169F), or |
| |
(b) | an arrangement (see section 169G) subsists under which such |
| 40 |
an interest will or may be acquired by a settlor. |
| |
| |
|
| |
|