Energy Bill [HL]

House of Commons

Session 2003 - 04
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Energy Bill [HL]

Energy Bill [HL]
Schedule 8 — Pensions
Part 4 — Other transfers
195

reference to which paragraph 9(7) will apply to him immediately
before the relevant time; and
(b)
in other cases, the scheme by reference to which paragraph 9(7)
applied to him immediately before the time that was the relevant
time in relation to him on the first occasion on which he was owed
5
such a duty;

and the reference, in relation to such a person, to the provisions of that
scheme is a reference to its provisions as in force immediately before the
time specified in sub-paragraph (7).
      (7)
That time is—
10
(a)
in a case falling within sub-paragraph (6)(a), the relevant time; or
(b)
in a case falling within sub-paragraph (6)(b), the relevant time in
relation to the person on the first occasion on which he was owed a
duty under either sub-paragraph (2) or paragraph 11(3).
      (8)
Where a person—
15
(a)
is a participant in a non-nuclear pension scheme by virtue of the
exercise of an option in a case in which the Secretary of State
discharged his duty to that person under sub-paragraph (2) by
reference to that option, or
(b)
is or will become entitled to exercise an option to become a
20
participant in such a pension scheme in a case in which the Secretary
of State discharged his duty to that person under sub-paragraph (2)
by reference to that entitlement,

this Part of this Schedule shall have effect in relation to that person as if that
scheme were a nuclear pension scheme.
25
      (9)
Sub-paragraph (8) does not apply in relation to a person to whom paragraph
9(5)(d)(ii) applied when the Secretary of State discharged his duty to that
person under sub-paragraph (2) unless the person’s employer exercises the
entitlement mentioned in paragraph 9(5)(d)(ii).
     (10)
In this paragraph “relevant time” has the same meaning as in paragraph 9.
30
Protection on a transfer in accordance with transfer arrangements
11    (1)
It shall be the duty of the NDA to secure that provision is made for ensuring
that consultation with the persons specified in sub-paragraph (2) takes place
before any transfer arrangements in relation to which persons are entitled to
pension protection take effect.
35
      (2)
Those persons are—
(a)
the NDA itself;
(b)
the Secretary of State;
(c)
the Treasury;
(d)
persons appearing to the NDA to represent persons who will be
40
entitled to pension protection in relation to the arrangements.
      (3)
Before such transfer arrangements take effect, the NDA must satisfy itself
that every person entitled to pension protection in relation to the
arrangements will be entitled, by virtue of the employment that he will hold
after the relevant time—
45
(a)
to exercise an option of becoming a participant in an appropriate
pension scheme; or

Energy Bill [HL]
Schedule 8 — Pensions
Part 4 — Other transfers
196

(b)
in the case of a person to whom paragraph 9(7)(c) will apply
immediately before the relevant time, to exercise such an option on
or before attaining the age or fulfilling the condition in question.
      (4)
The NDA’s duty under sub-paragraph (3) is owed to every person who is
entitled to pension protection in relation to the transfer arrangements.
5
      (5)
In the case of a person to whom paragraph 9(5)(d)(ii) applies, the references
in sub-paragraph (3) to a person being entitled to exercise an option are to
be construed as references to a person being entitled to exercise an option if
his employer exercises the entitlement mentioned in paragraph 9(5)(d)(ii).
      (6)
For the purposes of sub-paragraph (3), a pension scheme is an appropriate
10
pension scheme in relation to a person if the NDA is satisfied that—
(a)
taking into account the other benefits (if any) that are conferred on or
made available to him as a result of the employment that he will hold
after the relevant time, and
(b)
taking the benefits that are available under the provisions of that
15
pension scheme as a whole,

the benefits that are available under those provisions are no less favourable
than the benefits available under the provisions (taken as a whole) of the
nuclear pension scheme in respect of which he is entitled to protection under
this Part of this Schedule.
20
      (7)
In sub-paragraph (6) the reference to the scheme in respect of which a person
is entitled to protection under this Part of this Schedule is a reference to—
(a)
in the case of a person who has not previously been owed a duty
under either sub-paragraph (3) or paragraph 10(2), the scheme by
reference to which paragraph 9(7) will apply to him immediately
25
before the relevant time; and
(b)
in other cases, the scheme by reference to which paragraph 9(7)
applied to him immediately before the time that was the relevant
time in relation to him on the first occasion on which he was owed
such a duty;
30

and the reference, in relation to such a person, to the provisions of that
scheme is a reference to its provisions as in force immediately before the
time specified in sub-paragraph (8).
      (8)
That time is—
(a)
in a case falling within sub-paragraph (7)(a), the relevant time; or
35
(b)
in a case falling within sub-paragraph (7)(b), the relevant time in
relation to the person on the first occasion on which he was owed a
duty under either sub-paragraph (3) or paragraph 10(2).
      (9)
Where a person—
(a)
is a participant in a non-nuclear pension scheme by virtue of the
40
exercise of an option in a case in which the NDA discharged its duty
to that person under sub-paragraph (3) by reference to that option, or
(b)
is or will become entitled to exercise an option to become a
participant in such a pension scheme in a case in which the NDA
discharged its duty to that person under sub-paragraph (3) by
45
reference to that entitlement,

this Part of this Schedule shall have effect in relation to that person as if that
scheme were a nuclear pension scheme.
     (10)
Sub-paragraph (9) does not apply in relation to a person to whom paragraph
9(5)(d)(ii) applied when the NDA discharged its duty to that person under
50

Energy Bill [HL]
Schedule 8 — Pensions
Part 5 — UKAEA pensions for employees of designated BNFL companies
197

sub-paragraph (3) unless the person’s employer exercises the entitlement
mentioned in paragraph 9(5)(d)(ii).
     (11)
In this paragraph “relevant time” has the same meaning as in paragraph 9.
Modification of NDA schemes
12    (1)
The Secretary of State shall have power by direction to make such
5
modifications of an NDA pension scheme as he considers appropriate for
the purpose of securing—
(a)
in relation to any proposed transfer, or
(b)
in relation to transfers that he considers may occur,

that the scheme will be an appropriate pension scheme for the purposes of
10
paragraph 10 or 11.
      (2)
The NDA shall also have power by direction to make such modifications of
an NDA pension scheme as it considers appropriate for the purpose of
securing—
(a)
in relation to any proposed transfer, or
15
(b)
in relation to transfers that it considers may occur,

that the scheme will be an appropriate pension scheme for the purposes of
paragraph 10 or 11.
      (3)
Before making a modification under this paragraph the Secretary of State
must consult—
20
(a)
the NDA; and
(b)
such persons as appear to him to represent the employees likely to be
affected by the modification.
      (4)
Before making a modification under this paragraph the NDA must—
(a)
consult such persons as appear to it to represent the employees likely
25
to be affected by the modification; and
(b)
obtain the consent of the Secretary of State to the modification.
Part 5
UKAEA pensions for employees of designated BNFL companies
13    (1)
A UKAEA pension scheme may apply to employees of a designated BNFL
30
company which is publicly controlled as it applies to persons to whom it
applies apart from this paragraph.
      (2)
The Secretary of State may, by direction, require the UKAEA to make such
modifications of a UKAEA pension scheme as the Secretary of State
considers appropriate in respect of the participation in such a scheme of
35
employees of a designated BNFL company which is publicly controlled.
      (3)
The Secretary of State may also, by direction, require the UKAEA to make
such modifications of a UKAEA pension scheme as the Secretary of State
considers appropriate for applying the provisions of such a scheme to
persons—
40
(a)
who are directors, or other officers, of a designated BNFL company
which is publicly controlled; and
(b)
who are not employees of that company.

Energy Bill [HL]
Schedule 9 — Taxation provisions relating to nuclear transfer schemes
Part 1 — Transfers to the NDA or a subsidiary of the NDA
198

      (4)
A direction under this paragraph may require the UKAEA to make such
supplemental, consequential and transitional provision modifying a
UKAEA pension scheme as the Secretary of State considers appropriate.
      (5)
Before giving a direction under this paragraph, the Secretary of State must
consult—
5
(a)
the UKAEA;
(b)
the designated BNFL company in question;
(c)
the Treasury; and
(d)
such persons as appear to him to represent the employees, or
directors or other officers, likely to be affected by the direction.
10
      (6)
The power of the Secretary of State to give directions under this paragraph—
(a)
is in addition to the powers of the Secretary of State to give directions
to the UKAEA under paragraphs 5 and 6 of this Schedule or section
3 of the Atomic Energy Authority Act 1954 (c. 32); and
(b)
is to be disregarded in construing those powers.
15
      (7)
A designated BNFL company must pay such amounts to the UKAEA in
respect of the participation in a pension scheme by virtue of this paragraph
of employees of the company, or of any of its directors or other officers, as
are—
(a)
agreed between the company and the UKAEA; or
20
(b)
in the absence of such agreement, determined by the Secretary of
State.
      (8)
In this paragraph “designated BNFL company” has the same meaning as in
Schedule 7.
Schedule 9
25
Section 50

Taxation provisions relating to nuclear transfer schemes
Part 1
Transfers to the NDA or a subsidiary of the NDA
Trading losses: transfer of company carrying on exempt activities
1     (1)
This paragraph applies for the purposes of corporation tax where—
30
(a)
in consequence of a section 42 scheme, a company which is not an
NDA company becomes an NDA company falling within section
30(4)(a); and
(b)
the company carried on exempt activities before the coming into
force of the scheme.
35
      (2)
Trading losses attributable to the exempt activities carried on by the
company before the coming into force of the scheme shall be treated, in
relation to accounting periods beginning at or after that time, as
extinguished.
      (3)
For the purpose of determining the extent to which trading losses incurred
40
by a company are attributable to exempt activities, such apportionments of
receipts, expenses, assets and liabilities shall be made as may be just.

Energy Bill [HL]
Schedule 9 — Taxation provisions relating to nuclear transfer schemes
Part 1 — Transfers to the NDA or a subsidiary of the NDA
199

Trading losses: transfer of undertaking carrying on exempt activities
2     (1)
This paragraph applies for the purposes of corporation tax where—
(a)
a company (“the transferor company”) which is not an NDA
company is carrying on a trade which consists in or includes exempt
activities; and
5
(b)
in consequence of a section 42 scheme—
(i)
the transferor company ceases to carry on that trade or a part
of it which consists in or includes such activities; and
(ii)
the NDA or an NDA company begins to carry on that trade
or that part of it.
10
      (2)
Trading losses attributable to so much of the trade or part of a trade as
consists in exempt activities carried on by the transferor company before the
time when the NDA or the NDA company begins to carry on the trade or
that part of it shall be treated, in relation to accounting periods ending after
that time, as extinguished.
15
      (3)
Subsections (3), (4A), (7) to (9) and (11) of section 343 of the Taxes Act
(company reconstruction without change of ownership) shall apply in
relation to an unextinguished loss sustained by the transferor company in
carrying on the trade or the part of it in question as if—
(a)
the case were a case falling within subsection (1) of that section;
20
(b)
the transferor company were the predecessor; and
(c)
the NDA or the NDA company in question were the successor.
Chargeable gains: assets to be treated as disposed without a gain or a loss
3     (1)
This paragraph applies for the purposes of the 1992 Act where there is a
transfer of an asset to the NDA or a subsidiary of the NDA in accordance
25
with a section 42 scheme.
      (2)
The asset shall be treated as disposed of to the NDA or (as the case may be)
to its subsidiary for a consideration of such amount as would secure that, on
the disposal, neither a gain nor a loss accrues to the transferor.
      (3)
This paragraph has effect subject to paragraph 4.
30
      (4)
This paragraph does not apply in relation to a transfer to the NDA or to a
subsidiary of the NDA in accordance with a nuclear transfer scheme of
securities of a company, in consequence of which that company ceases to be
a relevant site licensee.
      (5)
In this paragraph “relevant site licensee” has the same meaning as in
35
subsection (4) of section 30 (see subsection (5)).
Chargeable gains: assets treated as acquired at nil cost
4     (1)
This paragraph applies for the purposes of the 1992 Act where the NDA or
a subsidiary of the NDA disposes of an asset which—
(a)
was acquired by the NDA or that subsidiary in accordance with a
40
section 42 scheme or a section 43 scheme; and
(b)
is not an asset which, immediately before its transfer to the NDA or
that subsidiary, was comprised in the Nuclear Liabilities Investment
Portfolio.

Energy Bill [HL]
Schedule 9 — Taxation provisions relating to nuclear transfer schemes
Part 1 — Transfers to the NDA or a subsidiary of the NDA
200

      (2)
No amount shall be allowable as a deduction under section 38(1)(a) or (b) of
the 1992 Act (acquisition and enhancement costs) in the computation of the
gain accruing on the disposal.
      (3)
Accordingly, in a case where the disposal is one which under any enactment
is treated as a disposal on which neither a gain nor a loss accrues to the NDA
5
or its subsidiary, the consideration for the disposal shall be treated as equal
to the amount allowable as a deduction from that consideration under
section 38(1)(c) of the 1992 Act (incidental costs of disposal).
      (4)
This paragraph does not apply in the case of a disposal which under
paragraph 29 is to be treated as a disposal on which neither a gain nor a loss
10
accrues to the NDA or a subsidiary of the NDA.
Chargeable gains: degrouping charges
5     (1)
This paragraph applies if a company (“the degrouped company”)—
(a)
acquired an asset from another company at a time when both were
members of the same group of companies (“the old group”); and
15
(b)
ceases, by virtue of a transfer to the NDA or a subsidiary of the NDA
in accordance with a section 42 scheme, to be a member of the old
group.
      (2)
Section 179 of the 1992 Act (company ceasing to be member of group) is not
to treat the degrouped company as having by virtue of the transfer sold and
20
immediately reacquired the asset.
      (3)
Where sub-paragraph (2) has applied to an asset, section 179 of the 1992 Act
is to have effect on and after the first subsequent occasion on which the
degrouped company ceases to be a member of a group of companies (“the
new group”) as if—
25
(a)
the degrouped company, and
(b)
the company from which it acquired the asset,

had been members of the new group at the time of acquisition.
      (4)
Expressions used in this paragraph and in section 179 of the 1992 Act have
the same meanings in this paragraph as in that section.
30
Chargeable gains: disposal of debts
6     (1)
This paragraph applies if—
(a)
a debt owed to any person is transferred to the NDA or a subsidiary
of the NDA in accordance with a section 42 scheme; and
(b)
the transferor would (apart from this paragraph) be the original
35
creditor in relation to that debt for the purposes of section 251 of the
1992 Act (disposal of debts).
      (2)
The 1992 Act is to have effect as if the NDA or (as the case may be) its
subsidiary (and not the transferor) were the original creditor for those
purposes.
40
Capital allowances: transfer of whole trade
7     (1)
This paragraph applies where—
(a)
a company (“the transferor company”) which is not a subsidiary of
the NDA is carrying on a trade; and

Energy Bill [HL]
Schedule 9 — Taxation provisions relating to nuclear transfer schemes
Part 1 — Transfers to the NDA or a subsidiary of the NDA
201

(b)
in consequence of a section 42 scheme, the transferor company ceases
to carry on that trade and the NDA or a subsidiary of the NDA
begins to carry it on.
      (2)
For the purposes of the allowances and charges provided for by the 2001 Act,
the trade is not to be treated as permanently discontinued, nor a new trade
5
as set up; but sub-paragraphs (3) and (4) of this paragraph are to apply.
      (3)
There are to be made to or on the NDA or (as the case may be) its subsidiary,
in accordance with the 2001 Act, all such allowances and charges as would,
if the transferor company had continued to carry on the trade, have fallen to
be made to or on that company.
10
      (4)
The amounts of those allowances and charges are to be computed as if—
(a)
the NDA or its subsidiary had been carrying on the trade since the
transferor company began to do so; and
(b)
everything done to or by the transferor company had been done to
or by the NDA or that subsidiary;
15

but so that transfers in accordance with the section 42 scheme, so far as they
relate to assets in use for the purposes of the trade, shall not be treated as
giving rise to an allowance or charge.
Capital allowances: transfer of part of a trade
8     (1)
Where—
20
(a)
a company (“the transferor company”) which is not a subsidiary of
the NDA is carrying on a trade, and
(b)
in consequence of a section 42 scheme, the transferor company ceases
to carry on that trade and the NDA or a subsidiary of the NDA
begins to carry on activities of the trade as part of a trade carried on
25
by the NDA or that subsidiary,

then that part of the trade carried on by the NDA or its subsidiary shall be
treated for the purposes of paragraph 7 as a separate trade.
      (2)
Where—
(a)
a company (“the transferor company”) which is not a subsidiary of
30
the NDA is carrying on a trade, and
(b)
in consequence of a section 42 scheme, the transferor company ceases
to carry on a part of that trade and the NDA or a subsidiary of the
NDA begins to carry on activities of that part of that trade,

then the transferor company shall be treated for the purposes of paragraph
35
7 and sub-paragraph (1) of this paragraph as having carried on that part of
its trade as a separate trade.
      (3)
Where activities fall to be treated for the purposes of this paragraph as a
separate trade, such apportionments of receipts, expenses, assets and
liabilities shall be made for the purposes of the 2001 Act as may be just.
40
Capital allowances: transfer of plant or machinery
9     (1)
This paragraph applies where—
(a)
there is a transfer of property to the NDA or a subsidiary of the NDA
in accordance with a section 42 scheme;
(b)
the property is plant or machinery; and
45
(c)
paragraph 7 does not apply in relation to the transfer of the plant or
machinery.