|
| |
|
(a) | for paragraph (a) substitute— |
| |
“(a) | by reason only of the qualifying company or any |
| |
other company being wound up or dissolved without |
| |
| |
(i) | the trade concerned is carried on as |
| 5 |
mentioned in subsection (7)(a) above, or |
| |
(ii) | the research and development concerned is |
| |
carried on as mentioned in subsection (7)(b) |
| |
| |
| for a period shorter than four months, and”, |
| 10 |
| |
(i) | omit “it is shown that”, |
| |
(ii) | for “was for” substitute “is for”, |
| |
(iii) | for “not as” substitute “is not”, |
| |
(iv) | for “which was” substitute “which is”, |
| 15 |
(c) | in the full-out words at the end, after “(7)(a)” insert “or, as the case |
| |
| |
| |
(a) | for the words from “Where” to “shorter period.” substitute— |
| |
| “Where, by reason only of anything done as a consequence of |
| 20 |
the qualifying company or any other company being in |
| |
administration or receivership— |
| |
(a) | the trade concerned is carried on as mentioned in |
| |
subsection (7)(a) above for a period shorter than four |
| |
| 25 |
(b) | the research and development concerned is carried on |
| |
as mentioned in subsection (7)(b) above for a period |
| |
shorter than four months, |
| |
| subsection (7)(a) or, as the case may be, (7)(b) above shall |
| |
have effect as if it referred to that shorter period.”, |
| 30 |
(b) | in paragraph (b), after “company” insert “concerned”. |
| |
3 | In section 289B of the Taxes Act 1988 (attribution of relief to shares) in |
| |
subsection (4), for “same day” substitute “same day, but this subsection does |
| |
not apply in relation to section 289A(6) and (7)”. |
| |
4 (1) | In section 290(2) of the Taxes Act 1988 (maximum subscriptions) for |
| 35 |
“£150,000” substitute “£200,000”. |
| |
(2) | The amendment made by this paragraph has effect for the year 2004-2005 |
| |
and subsequent years of assessment. |
| |
5 (1) | Section 293 of the Taxes Act 1988 (qualifying companies) is amended as |
| |
| 40 |
| |
(a) | omit “which is in administration or receivership”, |
| |
(b) | after “by reason” insert “only”, |
| |
(c) | for “its” substitute “the company, or any of its subsidiaries,”. |
| |
(3) | In subsection (4B)(b), after “company” insert “concerned”. |
| 45 |
| |
(a) | after “winding up of the company” insert “or any of its subsidiaries”, |
| |
|
| |
|
| |
|
(b) | after “or the company” insert “or any of its subsidiaries”. |
| |
| |
(a) | for “by reason of” substitute “by reason only of the company or any |
| |
| |
(b) | in paragraph (a), for “and not” substitute “and is not”. |
| 5 |
(6) | After subsection (6) insert— |
| |
“(6ZA) | The company must not at any time in the relevant period have a |
| |
property managing subsidiary which is not a qualifying 90% |
| |
subsidiary of the company. |
| |
(6ZB) | “Property managing subsidiary” means a subsidiary of the company |
| 10 |
whose business consists wholly or mainly in the holding or |
| |
managing of land or any property deriving its value from land. |
| |
(6ZC) | In subsection (6ZB) above, “land” and “property deriving its value |
| |
from land” have the same meaning as in section 776.”. |
| |
6 (1) | In section 300 of the Taxes Act 1988 (value received from company) for |
| 15 |
subsection (2)(b) substitute— |
| |
“(b) | repays, in pursuance of any arrangements for or in |
| |
connection with the acquisition of the shares in |
| |
respect of which the relief is claimed, any debt owed |
| |
to the individual other than a debt which was |
| 20 |
| |
(a) | on or after the date of issue of those shares; |
| |
| |
(b) | otherwise than in consideration of the |
| |
extinguishment of a debt incurred before that |
| 25 |
| |
(2) | Subject to sub-paragraph (3), the amendment made by this paragraph has |
| |
effect in relation to shares issued on or after 17th March 2004. |
| |
(3) | The amendment made by this paragraph does not have effect in relation to |
| |
the repayment of a debt incurred before 17th March 2004 if— |
| 30 |
(a) | the shares were subscribed for before that date, and |
| |
(b) | the debt was incurred on or after the date on which the shares were |
| |
| |
7 (1) | In section 303 of the Taxes Act 1988 (value received by persons other than |
| |
claimants) in subsection (9A), for “section 303AA” substitute “sections |
| 35 |
| |
(2) | The amendment made by this paragraph has effect in relation to any |
| |
repayment (within the meaning of section 303A of the Taxes Act 1988) made |
| |
on or after 17th March 2004. |
| |
8 (1) | In section 303A of the Taxes Act 1988 (restriction on withdrawal of relief |
| 40 |
under section 303) in subsection (6), omit paragraph (a). |
| |
(2) | The amendment made by this paragraph has effect in relation to any |
| |
repayment (within the meaning of section 303A of the Taxes Act 1988) made |
| |
on or after 17th March 2004. |
| |
9 | In section 308 of the Taxes Act 1988 (application to subsidiaries)— |
| 45 |
(a) | in subsection (1)(a), omit the words from “and, except” to “relevant |
| |
| |
|
| |
|
| |
|
| |
(i) | omit paragraphs (a) to (c), |
| |
(ii) | before paragraph (d) insert— |
| |
“(ca) | that more than 50 per cent. of the |
| |
ordinary share capital of the |
| 5 |
subsidiary is owned directly or |
| |
indirectly by the qualifying |
| |
| |
(iii) | in paragraph (e), for “the conditions in paragraphs (a) to” |
| |
substitute “either of the conditions in paragraphs (ca) and”, |
| 10 |
and for “could” substitute “would”, |
| |
(c) | in the opening words of subsection (3), for “the qualifying company” |
| |
substitute “any other company”, |
| |
(d) | in subsection (3)(a)— |
| |
(i) | omit “it is shown that”, |
| 15 |
(ii) | for “and not” substitute “and is not”, |
| |
(e) | omit subsection (3)(b) and the word “and” immediately preceding it, |
| |
(f) | after subsection (3) insert— |
| |
“(3A) | The conditions shall not be regarded as ceasing to be satisfied |
| |
by reason only of anything done as a consequence of the |
| 20 |
subsidiary or any other company being in administration or |
| |
| |
(a) | the entry into administration or receivership, and |
| |
(b) | everything done as a consequence of the company |
| |
concerned being in administration or receivership, |
| 25 |
| 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.”, |
| |
| |
(i) | after “only of” insert “arrangements being in existence for”, |
| 30 |
(ii) | omit “within the relevant period”, |
| |
(iii) | omit “it is shown that”, |
| |
(iv) | after “disposal is” insert “to be”, |
| |
(v) | for “and not” substitute “and is not to be”, |
| |
| 35 |
(i) | after subsection (5A) insert— |
| |
“(5B) | Subsections (2) to (10) of section 838 apply for the purposes of |
| |
subsection (2)(ca) above as they apply for the purposes of |
| |
subsection (1) of that section.”. |
| |
10 (1) | In section 310 of the Taxes Act 1988 (information)— |
| 40 |
| |
(i) | for “289(6),” substitute “289(1D), (6) or (9)(e), 289A(8)(b) or |
| |
| |
(ii) | for “293(8),” substitute “293(4B), (6) or (8),”, |
| |
(iii) | for “or 308(2)(e)” substitute “or 308(2)(e), (3), (3A) or (4)”, |
| 45 |
| |
(i) | in paragraph (a), after “289(6)” insert “or 293(4B) or (6)”, |
| |
|
| |
|
| |
|
(ii) | after paragraph (a) insert— |
| |
“(aa) | in relation to section 289(1D), 289A(8)(b) or |
| |
(8A) or 308(3), (3A) or (4), the claimant, the |
| |
company, any other company in question and |
| |
any person controlling the company or any |
| 5 |
other company in question;”, |
| |
(iii) | in paragraph (c), after “section” insert “289(9)(e),”, |
| |
(c) | after subsection (6) insert— |
| |
“(6A) | The references in subsections (5) and (6) above to subsections |
| |
(3), (3A) and (4) of section 308 are to be read as including |
| 10 |
those provisions as applied by section 289(10) and (11).”. |
| |
(2) | The amendments made by this paragraph have effect in relation to any |
| |
notice given after the passing of this Act in respect of shares issued on or |
| |
| |
11 (1) | Section 312 of the Taxes Act 1988 (interpretation) is amended as follows. |
| 15 |
| |
(a) | before the definition of “control” insert— |
| |
| ““bonus shares” means shares which are issued otherwise than |
| |
for payment (whether in cash or otherwise);”, |
| |
(b) | in the definition of “control” after “sections” insert “289(9),”, |
| 20 |
(c) | after the definition of “research and development” insert— |
| |
| ““qualifying 90% subsidiary”, in relation to any company, is to |
| |
be construed in accordance with section 289(9) to (13);”, |
| |
(d) | in the definition of “termination date”— |
| |
(i) | in paragraph (a), for “the shares were issued wholly or |
| 25 |
mainly in order to raise money” substitute “the money raised |
| |
by the issue was raised wholly or mainly”, |
| |
(ii) | in paragraph (a), for “subsidiary” substitute “qualifying 90% |
| |
subsidiary of the company”, |
| |
(iii) | in paragraph (b), for “the company or subsidiary concerned |
| 30 |
had not” substitute “neither the company nor any of its |
| |
qualifying 90% subsidiaries had”, |
| |
(iv) | in the full-out words at the end, for “it” substitute “the |
| |
company or any qualifying 90% subsidiary of the company”. |
| |
(3) | After subsection (1A) insert— |
| 35 |
“(1ZA) | In determining, for the purposes of the definition of “termination |
| |
date” in subsection (1) above, when a qualifying trade is begun to be |
| |
carried on by a qualifying 90% subsidiary of a company there shall |
| |
be disregarded any carrying on of the trade by it before it became |
| |
such a subsidiary of the company.”. |
| 40 |
| |
| |
12 | Schedule 5B to the Taxation of Chargeable Gains Act 1992 (c. 12) (enterprise |
| |
investment scheme: re-investment) is amended as follows. |
| |
13 (1) | In paragraph 1(2) (definition of qualifying investment)— |
| 45 |
(a) | in paragraph (a), omit “wholly in cash”, |
| |
|
| |
|
| |
|
(b) | after that paragraph insert— |
| |
“(aza) | he subscribed for the shares (other than any of |
| |
them which are bonus shares) wholly in cash,”, |
| |
(c) | in paragraph (c), for the words from “are fully” to “future date)” |
| |
substitute “(other than any of them which are bonus shares) are fully |
| 5 |
| |
(d) | in paragraph (e), after “Act” insert “(read with section 289(1B) to (1E) |
| |
| |
(e) | in paragraph (f), for “all the shares comprised in the issue” substitute |
| |
“the shares (other than any of them which are bonus shares)”, |
| 10 |
(f) | for paragraph (g) substitute— |
| |
“(g) | at least 80 per cent. of the money raised by the issue |
| |
| |
| |
(ii) | all other eligible shares (if any) in the |
| 15 |
company of the same class which are issued |
| |
| |
| is employed wholly for the purpose of that activity |
| |
not later than the time mentioned in section 289(3) |
| |
| 20 |
(2) | After paragraph 1(4) of that paragraph insert— |
| |
“(5) | Shares are not fully paid up for the purposes of sub-paragraph |
| |
(2)(c) above if there is any undertaking to pay cash to any person |
| |
at a future date in respect of the acquisition of the shares.”. |
| |
14 | In paragraph 1A (failure of conditions of application)— |
| 25 |
(a) | in sub-paragraph (1), after “the shares” insert “mentioned in sub- |
| |
paragraph (2)(a) of that paragraph”, |
| |
(b) | in sub-paragraph (2), after “the shares” insert “mentioned in sub- |
| |
paragraph (2)(a) of that paragraph”, |
| |
(c) | in sub-paragraph (3), for “an issue of eligible shares,” substitute “the |
| 30 |
shares mentioned in sub-paragraph (2)(a) of that paragraph,”, |
| |
(d) | in sub-paragraph (4), for “an issue of eligible shares, the shares” |
| |
substitute “the issue of eligible shares, the shares mentioned in sub- |
| |
paragraph (2)(a) of that paragraph”, |
| |
(e) | in sub-paragraph (5)(b), after “the shares” insert “mentioned in |
| 35 |
paragraph 1(2)(a) above”. |
| |
15 (1) | In paragraph 10 (re-investment in same company, etc)— |
| |
(a) | in sub-paragraph (1), for “other securities” substitute “securities”, |
| |
(b) | after sub-paragraph (3) insert— |
| |
“(4) | In this paragraph “group of companies” means a company |
| 40 |
which has one or more 51 per cent. subsidiaries, together |
| |
with those subsidiaries.”. |
| |
(2) | The amendments made by this paragraph have effect, for the purposes of |
| |
paragraph 10(1) of Schedule 5B to the Taxation of Chargeable Gains Act 1992 |
| |
(c. 12), in relation to holdings of shares or securities disposed of on or after |
| 45 |
| |
(3) | The amendment made by sub-paragraph (1)(b) has effect, for the purposes |
| |
of paragraph 10(2) of that Schedule, in relation to eligible shares in a relevant |
| |
company issued on or after 17th March 2004. |
| |
|
| |
|
| |
|
16 (1) | In paragraph 13 (value received by investor) in sub-paragraph (2)(b)(i), for |
| |
“on which he subscribed for the shares” substitute “of issue of the shares”. |
| |
(2) | Subject to sub-paragraph (3), the amendment made by this paragraph has |
| |
effect in relation to shares issued on or after 17th March 2004. |
| |
(3) | The amendment made by this paragraph does not have effect in relation to |
| 5 |
the repayment of a debt incurred before 17th March 2004 if— |
| |
(a) | the shares were subscribed for before that date, and |
| |
(b) | the debt was incurred on or after the date on which the shares were |
| |
| |
17 (1) | In paragraph 14 (value received by other persons) in sub-paragraph (7), for |
| 10 |
“paragraph 14AA” substitute “paragraphs 14AA and 14A”. |
| |
(2) | The amendment made by this paragraph has effect in relation to any |
| |
repayment (within the meaning of paragraph 14A of Schedule 5B to the |
| |
Taxation of Chargeable Gains Act 1992 (c. 12)) made on or after 17th March |
| |
| 15 |
18 (1) | In paragraph 14A (certain receipts to be disregarded for the purposes of |
| |
paragraph 14) in sub-paragraph (6), omit paragraph (a). |
| |
(2) | The amendment made by this paragraph has effect in relation to any |
| |
repayment (within the meaning of paragraph 14A of Schedule 5B to the |
| |
Taxation of Chargeable Gains Act 1992) made on or after 17th March 2004. |
| 20 |
19 (1) | In paragraph 16 (information)— |
| |
(a) | in sub-paragraph (6), for “293(8) or 308(2)(e)” substitute “289(1D) or |
| |
(9)(e), 289A(8)(b) or (8A), 293(4B), (6) or (8) or 308(2)(e), (3), (3A) or |
| |
| |
(b) | in sub-paragraph (7)— |
| 25 |
(i) | in paragraph (a), after “above” insert “or section 293(4B) or (6) |
| |
| |
(ii) | after paragraph (a) insert— |
| |
“(aa) | in relation to section 289(1D), 289A(8)(b) or |
| |
(8A) or 308(3), (3A) or (4) of the Taxes Act, |
| 30 |
the claimant, the company, any other |
| |
company in question and any person |
| |
controlling the company or any other |
| |
| |
(iii) | in paragraph (c), after “section” insert “289(9)(e),”, |
| 35 |
(iv) | in the full-out words at the end, for “(a)” substitute “(a), (aa)”, |
| |
(c) | after sub-paragraph (7) insert— |
| |
“(7A) | The references in sub-paragraphs (6) and (7) above to |
| |
subsections (3), (3A) and (4) of section 308 of the Taxes Act |
| |
are to be read as including those provisions as applied by |
| 40 |
section 289(10) and (11) of that Act.”. |
| |
(2) | The amendments made by this paragraph have effect in relation to any |
| |
notice given after the passing of this Act in respect of shares issued on or |
| |
| |
20 (1) | In paragraph 19(1) (interpretation)— |
| 45 |
(a) | before the definition of “arrangements” insert— |
| |
| ““51 per cent. subsidiary” has the meaning given by section 838 |
| |
| |
|
| |
|
| |
|
(b) | after the definition of “associate” insert— |
| |
| ““bonus shares” means shares which are issued otherwise than |
| |
for payment (whether in cash or otherwise);”. |
| |
(2) | The amendment made by sub-paragraph (1)(a) has effect in relation to |
| |
shares issued on or after 17th March 2004, except that, for the purposes of the |
| 5 |
amendment made by sub-paragraph (1)(b) of paragraph 15 of this Schedule, |
| |
it has effect in accordance with sub-paragraphs (2) and (3) of that paragraph. |
| |
| |
| |
21 | Except where otherwise provided, the amendments made by this Schedule |
| 10 |
have effect in relation to shares issued on or after 17th March 2004. |
| |
| |
| |
| |
| |
Increase in relief on investments and distributions |
| 15 |
1 | In paragraph 1(3) of Schedule 15B to the Taxes Act 1988 (maximum amount |
| |
in respect of which claim for income tax relief may be made) for “£100,000” |
| |
| |
2 | In paragraph 8(1) of that Schedule (meaning of “permitted maximum”) for |
| |
“£100,000” substitute “£200,000”. |
| 20 |
3 | The amendments made by this Part have effect for the year 2004-05 and |
| |
subsequent years of assessment. |
| |
| |
Abolition of deferral relief |
| |
| 25 |
4 | Section 151A(3) of the Taxation of Chargeable Gains Act 1992 (c. 12) (which |
| |
introduces Schedule 5C) shall cease to have effect. |
| |
5 | Schedule 5C to that Act (venture capital trusts: deferred charge on re- |
| |
investment) shall cease to have effect. |
| |
| 30 |
6 (1) | The Taxation of Chargeable Gains Act 1992 is amended as follows. |
| |
(2) | In paragraph 2(4) of Schedule 5B (enterprise investment scheme: re- |
| |
investment) omit “or Schedule 5C”. |
| |
|
| |
|