|
| |
|
(a) | in any post-commencement period (“the period of the |
| |
loss”) a qualifying company carrying on a ring fence trade |
| |
incurs a loss in the trade, and |
| |
(b) | some or all of the loss falls to be set off under section 393 |
| |
against trading income from the trade in succeeding |
| 5 |
| |
| so much of the loss as falls to be so set off is a “ring fence loss” of |
| |
| |
(2) | In determining for the purposes of this Part of this Schedule how |
| |
much of a loss incurred in a ring fence trade falls to be set off as |
| 10 |
mentioned in sub-paragraph (1)(b), it shall be assumed that every |
| |
claim is made that could be made by the company under section |
| |
393A to set losses incurred in the ring fence trade against ring |
| |
fence profits of earlier post-commencement periods. |
| |
(3) | So much of a ring fence loss as is attributable to qualifying E&A |
| 15 |
allowances for the period of the loss is a “qualifying E&A loss”. |
| |
(4) | A ring fence loss is attributable to qualifying E&A allowances to |
| |
the extent that the amount of the ring fence loss does not exceed |
| |
the amount of the qualifying E&A allowances for the period of the |
| |
| 20 |
(5) | But a claim for post-commencement supplement may include an |
| |
election for a ring fence loss to be treated— |
| |
(a) | as attributable to qualifying E&A allowances for the period |
| |
of the loss to such lesser extent as may be specified in the |
| |
| 25 |
(b) | as not attributable to such allowances. |
| |
(6) | “Qualifying E&A allowances”, in the case of an accounting period, |
| |
means allowances for that period under Part 6 of the Capital |
| |
Allowances Act in respect of qualifying E&A expenditure |
| |
incurred by the company (including any pre-commencement |
| 30 |
supplement treated under paragraph 9(2) as such an allowance). |
| |
(7) | This paragraph has effect for the purposes of this Part of this |
| |
| |
Ring fence losses and non-qualifying losses |
| |
18 (1) | So much of a ring fence loss as is not a qualifying E&A loss is a |
| 35 |
| |
| |
(a) | a loss was incurred by a qualifying company in its ring |
| |
fence trade in an accounting period ending on or before |
| |
| 40 |
(b) | some or all of that loss falls to be set off under section 393 |
| |
against profits of that trade in accounting periods ending |
| |
| |
| so much of the loss as falls to be so set off is a ring fence loss and |
| |
that loss is a non-qualifying loss. |
| 45 |
(3) | This paragraph has effect for the purposes of this Part of this |
| |
| |
|
| |
|
| |
|
The pool of qualifying E&A losses and the pool of non-qualifying losses |
| |
19 (1) | For the purpose of determining the amount of any post- |
| |
commencement supplement, a qualifying company shall be taken |
| |
at all times in its post-commencement periods to have— |
| |
(a) | a continuing pool of the company’s non-qualifying losses |
| 5 |
(the “non-qualifying pool”), and |
| |
(b) | a continuing mixed pool of the company’s qualifying E&A |
| |
losses and post-commencement supplement (the |
| |
| |
(2) | A pool continues even if the amount in it is nil. |
| 10 |
| |
20 (1) | The non-qualifying pool consists of the company’s non-qualifying |
| |
losses, allocated to the pool in accordance with sub-paragraph (2). |
| |
(2) | A non-qualifying loss is allocated to the pool by adding the |
| |
amount of the non-qualifying loss to the pool in the period of the |
| 15 |
| |
(3) | In the case of a non-qualifying loss incurred in an accounting |
| |
period ending on or before 31st December 2003, the period of the |
| |
loss shall be taken for the purposes of sub-paragraph (2) to be the |
| |
first accounting period of the company that ends on or after 1st |
| 20 |
| |
(4) | The amount in the non-qualifying pool is subject to reductions in |
| |
accordance with the following provisions of this Part of this |
| |
| |
(5) | Where a reduction in the amount in the non-qualifying pool falls |
| 25 |
to be made in any accounting period— |
| |
(a) | the reduction is to be made after the addition to the pool of |
| |
any non-qualifying loss allocated to the pool in that period |
| |
in accordance with sub-paragraph (2), and |
| |
(b) | references to the amount in the non-qualifying pool shall |
| 30 |
be construed accordingly. |
| |
| |
21 (1) | The qualifying pool consists of— |
| |
(a) | the company’s qualifying E&A losses, allocated to the pool |
| |
in accordance with sub-paragraph (2)(a), and |
| 35 |
(b) | the company’s post-commencement supplement, |
| |
allocated to the pool in accordance with sub-paragraph |
| |
| |
(2) | The allocation of qualifying E&A losses and post-commencement |
| |
supplement to the pool is as follows— |
| 40 |
(a) | the amount of a qualifying E&A loss is added to the pool |
| |
in the period of the loss, and |
| |
(b) | if any post-commencement supplement is allowed on a |
| |
claim in respect of a post-commencement period, the |
| |
amount of that supplement is added to the pool in that |
| 45 |
| |
|
| |
|
| |
|
(3) | The amount in the qualifying pool is subject to reductions in |
| |
accordance with the following provisions of this Part of this |
| |
| |
(4) | Where a reduction in the amount in the qualifying pool falls to be |
| |
made in any accounting period, the reduction is to be made— |
| 5 |
(a) | after the addition to the pool of the amount of any |
| |
qualifying E&A losses allocated to the pool in that period |
| |
in accordance with sub-paragraph (2)(a), but |
| |
(b) | before determining, and adding to the pool, the amount of |
| |
any supplement claimed in respect of the period, |
| 10 |
| and references to the amount in the pool shall be construed |
| |
| |
Reductions in respect of utilised ring fence losses |
| |
22 (1) | If one or more ring fence losses are set off under section 393 against |
| |
any profits of a post-commencement period, reductions shall be |
| 15 |
made in that period in accordance with this paragraph. |
| |
(2) | The amount in the non-qualifying pool shall be reduced (but not |
| |
below nil) by setting against it a sum equal to the total amount so |
| |
| |
(3) | If any of that sum remains after being so set against the amount in |
| 20 |
the non-qualifying pool, the amount in the qualifying pool shall be |
| |
reduced (but not below nil) by setting against it so much of that |
| |
| |
Reductions in respect of unrelieved group ring fence profits |
| |
23 (1) | If there is an amount of unrelieved group ring fence profits for a |
| 25 |
post-commencement period, reductions shall be made in that |
| |
period in accordance with this paragraph. |
| |
(2) | In the following provisions of this paragraph, references to the |
| |
remaining amount in a pool are references to so much (if any) of |
| |
the amount in the pool as remains after making any reductions |
| 30 |
that fall to be made in accordance with paragraph 22. |
| |
(3) | The remaining amount in the non-qualifying pool shall be |
| |
reduced (but not below nil) by setting against it a sum equal to the |
| |
aggregate of the amounts of unrelieved group ring fence profits |
| |
| 35 |
(4) | If any of that sum remains after being so set against the remaining |
| |
amount in the non-qualifying pool, the remaining amount in the |
| |
qualifying pool shall be reduced (but not below nil) by setting |
| |
against it so much of that sum as so remains. |
| |
The reference amount for a post-commencement period |
| 40 |
24 | For the purposes of this Part of this Schedule the reference amount |
| |
for a post-commencement period is so much of the amount in the |
| |
qualifying pool as remains after making any reductions required |
| |
| |
|
| |
|
| |
|
| |
| |
Stamp duty land tax and stamp duty |
| |
| |
Amendments to Part 4 of the Finance Act 2003: general |
| |
| 5 |
1 | Part 4 of the Finance Act 2003 (stamp duty land tax) is amended in |
| |
accordance with this Part of this Schedule. |
| |
| |
2 | In section 43 (land transactions)— |
| |
(a) | in paragraph (c) of subsection (3) (variation of chargeable interest), |
| 10 |
after “interest” insert “(other than a lease)”; |
| |
(b) | after that paragraph insert— |
| |
“(d) | the variation of a lease is an acquisition and disposal |
| |
of a chargeable interest only where it takes effect, or is |
| |
treated for the purposes of this Part, as the grant of a |
| 15 |
| |
| |
3 | In section 44 (contract and conveyance), after subsection (9) insert— |
| |
| |
(a) | paragraph 12A of Schedule 17A applies (agreement for |
| 20 |
| |
(b) | paragraph 19(3) to (6) of Schedule 17A applies (missives of let |
| |
| |
| it applies in place of subsections (4), (8) and (9).”. |
| |
Contract providing for conveyance to third party |
| 25 |
4 (1) | After section 44 insert— |
| |
“44A | Contract providing for conveyance to third party |
| |
(1) | This section applies where a contract is entered into under which a |
| |
chargeable interest is to be conveyed by one party to the contract (A) |
| |
at the direction or request of the other (B)— |
| 30 |
(a) | to a person (C) who is not a party to the contract, or |
| |
(b) | either to such a person or to B. |
| |
(2) | B is not regarded as entering into a land transaction by reason of |
| |
entering into the contract, but the following provisions have effect. |
| |
(3) | If the contract is substantially performed B is treated for the purposes |
| 35 |
of this Part as acquiring a chargeable interest, and accordingly as |
| |
entering into a land transaction. |
| |
| The effective date of the transaction is when the contract is |
| |
| |
|
| |
|
| |
|
(4) | Where the contract is (to any extent) afterwards rescinded or |
| |
annulled, or is for any other reason not carried into effect, the tax |
| |
paid by virtue of subsection (3) shall (to that extent) be repaid by the |
| |
| |
| Repayment must be claimed by amendment of the land transaction |
| 5 |
return made in respect of the contract. |
| |
(5) | Subject to subsection (6), section 44 (contract and conveyance) does |
| |
not apply (except so far as it defines “substantial performance”) in |
| |
relation to the contract. |
| |
| 10 |
(a) | this section applies by virtue of subsection (1)(b), and |
| |
(b) | by reason of B’s direction or request, A becomes obliged to |
| |
convey a chargeable interest to B, |
| |
| section 44 applies to that obligation as it applies to a contract for a |
| |
land transaction that is to be completed by a conveyance. |
| 15 |
(7) | Section 44 applies in relation to any contract between B and C, in |
| |
respect of the chargeable interest referred to in subsection (1) above, |
| |
that is to be completed by a conveyance. |
| |
| References to completion in that section, as it so applies, include |
| |
references to conveyance by A to C of the subject matter of the |
| 20 |
contract between B and C. |
| |
(8) | In this section “contract” includes any agreement and “conveyance” |
| |
includes any instrument.”. |
| |
(2) | In section 48 (chargeable interests), after subsection (6) insert— |
| |
“(7) | This section has effect subject to subsection (3) of section 44A |
| 25 |
(contract and conveyance to third party).”. |
| |
(3) | In section 77 (notifiable transactions), after subsection (4) insert— |
| |
“(5) | A land transaction that a person is treated as entering into by virtue |
| |
of subsection (3) of section 44A (contract and conveyance to third |
| |
| 30 |
Contract and conveyance: effect of transfer of rights |
| |
5 (1) | Section 45 (contract and conveyance: effect of transfer of rights) is amended |
| |
| |
| |
(a) | after paragraph (b) insert “, and |
| 35 |
(c) | paragraph 12B of Schedule 17A (assignment of |
| |
agreement for lease) does not apply.”; |
| |
(b) | at the end insert “, and references to the transferor and the transferee |
| |
shall be read accordingly”. |
| |
(3) | For subsection (5) substitute— |
| 40 |
“(5) | Where a transfer of rights relates to part only of the subject-matter of |
| |
the original contract (“the relevant part”)— |
| |
(a) | subsection (8)(b) of section 44 (restriction of charge to tax on |
| |
subsequent conveyance) has effect as if the reference to the |
| |
|
| |
|
| |
|
amount of tax chargeable on that contract were a reference to |
| |
an appropriate proportion of that amount, and |
| |
(b) | a reference in the second sentence of subsection (3) above to |
| |
the original contract, or a reference in subsection (4) above to |
| |
the secondary contract arising from an earlier transfer of |
| 5 |
rights, is to that contract so far as relating to the relevant part |
| |
(and that contract so far as not relating to the relevant part |
| |
shall be treated as a separate contract).”. |
| |
(4) | After that subsection insert— |
| |
“(5A) | In relation to a land transaction treated as taking place by virtue of |
| 10 |
| |
(a) | references in Schedule 7 (group relief) to the vendor shall be |
| |
read as references to the vendor under the original contract; |
| |
(b) | other references in this Part to the vendor shall be read, |
| |
where the context permits, as referring to either the vendor |
| 15 |
under the original contract or the transferor.”. |
| |
(5) | After section 45 insert— |
| |
“45A | Contract providing for conveyance to third party: effect of transfer of |
| |
| |
(1) | This section applies where— |
| 20 |
(a) | a contract (“the original contract”) is entered into under |
| |
which a chargeable interest is to be conveyed by one party to |
| |
the contract (A) at the direction or request of the other (B)— |
| |
(i) | to a person (C) who is not a party to the contract, or |
| |
(ii) | either to such a person or to B, |
| 25 |
| |
(b) | there is an assignment or other transaction (relating to the |
| |
whole or part of the subject-matter of the original contract) as |
| |
a result of which a person (D) becomes entitled to exercise |
| |
any of B’s rights under the original contract in place of B. |
| 30 |
| References in the following provisions of this section to a transfer of |
| |
rights are to any such assignment or other transaction. |
| |
(2) | D is not regarded as entering into a land transaction by reason of the |
| |
transfer of rights, but section 44A (contract providing for conveyance |
| |
to third party) has effect in accordance with the following provisions |
| 35 |
| |
(3) | That section applies as if— |
| |
(a) | D had entered into a contract (a “secondary contract”) in the |
| |
same terms as the original contract except with D as a party |
| |
| 40 |
(b) | the consideration due from D under the secondary contract |
| |
| |
(i) | so much of the consideration under the original |
| |
contract as is referable to the subject-matter of the |
| |
transfer of rights and is to be given (directly or |
| 45 |
indirectly) by D or a person connected with him, and |
| |
(ii) | the consideration given for the transfer of rights. |
| |
|
| |
|
| |
|
(4) | The substantial performance of the original contract shall be |
| |
| |
(a) | it occurs at the same time as, and in connection with, the |
| |
substantial performance of the secondary contract, or |
| |
(b) | it occurs after the transfer of rights. |
| 5 |
(5) | Where there are successive transfers of rights, subsection (3) has |
| |
effect in relation to each of them. |
| |
(6) | The substantial performance of the secondary contract arising from |
| |
an earlier transfer of rights shall be disregarded if— |
| |
(a) | it occurs at the same time as, and in connection with, the |
| 10 |
substantial performance of the secondary contract arising |
| |
from a subsequent transfer of rights, or |
| |
(b) | it occurs after that subsequent transfer. |
| |
(7) | Where a transfer of rights relates to only part of the subject matter of |
| |
the original contract, or to only some of the rights under that |
| 15 |
| |
(a) | a reference in subsection (3)(a) or (4) to the original contract, |
| |
or a reference in subsection (6) to the secondary contract |
| |
arising from an earlier transfer, is to that contract so far as |
| |
relating to that part or those rights, and |
| 20 |
(b) | that contract so far as not relating to that part or those rights |
| |
shall be treated as a separate contract. |
| |
(8) | The effective date of a land transaction treated as entered into by |
| |
virtue of subsection (3) is not earlier than the date of the transfer of |
| |
| 25 |
(9) | In relation to a such a transaction— |
| |
(a) | references in Schedule 7 (group relief) to the vendor shall be |
| |
| |
(b) | other references in this Part to the vendor shall be read, |
| |
where the context permits, as referring to either A or B. |
| 30 |
(10) | Section 839 of the Taxes Act 1988 (connected persons) applies for the |
| |
purposes of subsection (3)(b). |
| |
(11) | In this section “contract” includes any agreement.”. |
| |
(6) | In section 122 (index of defined expressions), in the entry for “vendor” insert |
| |
at the end “(see too sections 45(5A) and 45A(9))”. |
| 35 |
Relief for sale and leaseback arrangements |
| |
6 (1) | Section 57A (sale and leaseback arrangements) (inserted by the Stamp Duty |
| |
and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) |
| |
Regulations 2003 (S.I. 2003/2816)) is amended as follows. |
| |
(2) | In subsection (3) (the qualifying conditions), for paragraph (b) substitute— |
| 40 |
“(aa) | that the sale transaction is entered into wholly or partly in |
| |
consideration of the leaseback transaction being entered into, |
| |
(b) | that the only other consideration (if any) for the sale is the |
| |
payment of money or the assumption, satisfaction or release |
| |
| 45 |
|
| |
|