|
| |
|
Continuing operation of section 392 of ITEPA 2003 |
| |
53 | Section 392 of ITEPA 2003 (non-approved schemes: relief where no benefits |
| |
are paid or payable) continues to have effect in relation to a sum charged to |
| |
tax by virtue of section 386 of ITEPA 2003 or section 595 of ICTA (charges on |
| |
payments to schemes) before 6th April 2006. |
| 5 |
Benefits taxable under Chapter 2 of Part 6 of ITEPA 2003: contributions taxed pre- |
| |
| |
54 (1) | Paragraph 55 or 56 has effect where— |
| |
(a) | section 394 of ITEPA 2003 (charge on benefits from non-approved |
| |
schemes) operates (or would otherwise operate) by reason of the |
| 10 |
provision of a lump sum under an employer-financed retirement |
| |
benefits scheme on or after 6th April 2006, and |
| |
(b) | before that date an employer has paid any sum or sums, with a view |
| |
to the provision of benefits under the scheme, in respect of which an |
| |
| 15 |
(2) | For the purposes of sub-paragraph (1)(a) section 394 of ITEPA 2003 operates |
| |
| |
(a) | an amount counts as employment income of an individual under |
| |
| |
(b) | the person who is, or persons who are, the responsible person in |
| 20 |
relation to the scheme is or are chargeable to tax under Case VI of |
| |
Schedule D by virtue of that section. |
| |
(3) | For the purposes of sub-paragraph (1)(b) an employee is taxed in respect of |
| |
| |
(a) | the employee is assessed to tax by virtue of section 595(1) of ICTA |
| 25 |
(charges on payments) in respect of the sum or sums, or |
| |
(b) | the sum or sums counts or count as employment income of the |
| |
employee under section 386(1) of ITEPA 2003 (charges on payments). |
| |
(4) | It is to be assumed, unless the contrary is shown, that neither paragraph 55 |
| |
nor paragraph 56 has effect. |
| 30 |
55 (1) | This paragraph has effect if— |
| |
(a) | all of the income and gains accruing to the scheme are brought into |
| |
charge to tax and the lump sum is provided to the employee, a |
| |
relative of the employee, the personal representatives of the |
| |
employee, an ex-spouse of the employee or any other individual |
| 35 |
designated by the employee, or |
| |
(b) | the scheme was entered into before 1st September 1993 and has not |
| |
been varied on or after that date with a view to the provision of |
| |
benefits under the scheme. |
| |
(2) | In a case where the employer has not paid any sum or sums with a view to |
| 40 |
the provision of benefits under the scheme since before 6th April 2006, |
| |
section 394 of ITEPA 2003 (charge on benefits from non-approved schemes) |
| |
does not apply in relation to the lump sum. |
| |
(3) | In a case where the employer has paid any sum or sums with a view to the |
| |
provision of benefits under the scheme on or after 6th April 2006— |
| 45 |
(a) | section 394 of ITEPA 2003 does not apply in relation to so much of |
| |
the lump sum as does not exceed the appropriate fraction of the |
| |
|
| |
|
| |
|
amount of the market value of the assets of the scheme on 5th April |
| |
2006 as increased under sub-paragraph (4), and |
| |
(b) | only any sum or sums paid by the employee after that date with a |
| |
view to the provision of benefits under the scheme is or are to be |
| |
taken into account under section 395 of ITEPA 2003 (general rules). |
| 5 |
(4) | For the purposes of sub-paragraph (3)(a)— |
| |
(a) | “the appropriate fraction” of the amount of the market value of the |
| |
assets of the scheme on 5th April 2006 is the same fraction as the |
| |
fraction of the assets of the scheme to which the employee would |
| |
have been entitled had the scheme been wound up on that date, and |
| 10 |
(b) | the amount of the market value of the assets of the scheme on that |
| |
date is to be increased by the percentage by which the retail prices |
| |
index for the month in which the lump sum is provided is greater |
| |
than that for April 2006. |
| |
| 15 |
| “ex-spouse”, in relation to an employee, means the other party to a |
| |
marriage with the employee that has been dissolved or annulled, |
| |
| |
| “relative”, in relation to an employee, means— |
| |
(a) | the wife or husband of the employee, |
| 20 |
(b) | the widow or widower of the employee, |
| |
(c) | a child of the employee, or |
| |
(d) | a dependant of the employee. |
| |
56 (1) | This paragraph has effect if paragraph 55 does not. |
| |
(2) | Section 394 of ITEPA 2003 (charge on benefits from non-approved schemes) |
| 25 |
does not apply in relation to so much of the lump sum as does not exceed the |
| |
sum, or the aggregate of the sums, referred to in paragraph 54(1)(b). |
| |
(3) | And the reference in section 395 of that Act (general rules) to the amount of |
| |
the lump sum is to the amount of the remainder of the lump sum. |
| |
| 30 |
57 (1) | This paragraph applies in relation to a fund or scheme— |
| |
(a) | which is not a registered pension scheme or a superannuation fund |
| |
to which section 615(3) of ICTA applies, but |
| |
(b) | to which section 151 of the Inheritance Tax Act 1984 (c. 51) (treatment |
| |
of pension rights) applied immediately before 6th April 2006. |
| 35 |
(2) | If no contributions are made under the fund or scheme on or after that |
| |
| |
(a) | section 151 of the Inheritance Tax Act 1984 continues to apply to the |
| |
fund or scheme on and after that date for all purposes of that Act, and |
| |
(b) | property which is part of or held for the purposes of the fund or |
| 40 |
scheme does not constitute relevant property for the purposes of |
| |
Chapter 3 of Part 3 of that Act (settlements without interest in |
| |
| |
(3) | In any other case, paragraphs 58 and 59 apply to the fund or scheme on and |
| |
| 45 |
58 (1) | The proportion of the assets of the fund or scheme which at any time is the |
| |
protected proportion of those assets does not at that time constitute relevant |
| |
|
| |
|
| |
|
property for the purposes of Chapter 3 of Part 3 of the Inheritance Tax Act |
| |
1984 (settlements without interest in possession). |
| |
(2) | “The protected proportion” of the assets of the fund or scheme at a time is— |
| |
| |
| V is the market value of the assets of the fund or scheme at that time, |
| 5 |
| |
| ACV is the adjusted commencement value, that is an amount equal to |
| |
the market value of the assets of the fund or scheme on 5th April |
| |
2006, but subject to the adjustments provided by sub-paragraph (3). |
| |
| 10 |
(a) | an increase by the percentage by which the retail prices index for the |
| |
month of September immediately preceding the time in question is |
| |
greater than that for April 2006, and |
| |
(b) | a reduction by the amount of any relevant payments made under the |
| |
fund or scheme on or after 6th April 2006 and before that time. |
| 15 |
(4) | “Relevant payments” are payments other than— |
| |
(a) | payments of costs or expenses, or |
| |
(b) | payments which are (or will be) income of any person for any of the |
| |
| |
59 (1) | Section 151 of the Inheritance Tax Act 1984 (c. 51) (treatment of pension |
| 20 |
rights) continues to apply to so much of the assets of the fund or scheme at |
| |
any time as does not exceed the amount that is the protected amount at that |
| |
| |
(2) | But sub-paragraph (1) does not affect the operation of subsection (1)(d) of |
| |
section 58 of that Act (because paragraph 58 makes provision about the |
| 25 |
extent to which the assets of the fund or scheme constitute relevant property |
| |
within the meaning given by that section). |
| |
(3) | If inheritance tax has not previously been chargeable (otherwise than only |
| |
because of this paragraph) by reference to the value of the assets of the fund |
| |
or scheme on or after 6th April 2006, the protected amount is an amount |
| 30 |
equal to the amount of the market value of the assets of the fund or scheme |
| |
on 5th April 2006, but subject to the adjustments provided by sub-paragraph |
| |
| |
| |
(a) | an increase by the percentage by which the retail prices index for the |
| 35 |
month of September immediately preceding the time in question is |
| |
greater than that for April 2006, and |
| |
(b) | a reduction by the amount of any relevant payments made under the |
| |
fund or scheme on or after 6th April 2006 and before that time. |
| |
(5) | If inheritance tax would (apart from this paragraph) have previously been |
| 40 |
chargeable by reference to the value of the assets of the fund or scheme on |
| |
one or more occasions on or after 6th April 2006, the protected amount is |
| |
what it was immediately before the occasion, or (where there has been more |
| |
than one) the last occasion, on which inheritance tax would have been so |
| |
chargeable (“the relevant tax occasion”), but— |
| 45 |
(a) | reduced by the value of the property on which inheritance tax would |
| |
have been chargeable on the relevant tax occasion, and |
| |
|
| |
|
| |
|
(b) | subject to the adjustments provided by sub-paragraph (6). |
| |
(6) | The adjustments are — |
| |
(a) | an increase by the percentage by which the retail prices index for the |
| |
month of September immediately preceding the time in question is |
| |
greater than that for the month in which the relevant tax occasion |
| 5 |
| |
(b) | a reduction by the amount of any payments made under the fund or |
| |
scheme since the relevant tax occasion. |
| |
(7) | “Relevant payments” are payments other than— |
| |
(a) | payments of costs or expenses, or |
| 10 |
(b) | payments which are (or will be) income of any person for any of the |
| |
| |
| |
| |
Oil taxation: tax-exempt tariffing receipts and assets producing them |
| |
| 15 |
Amendments of the Oil Taxation Act 1983 relating to allowable expenditure |
| |
| |
| |
1 | The Oil Taxation Act 1983 (c. 56) is amended in accordance with the |
| |
following provisions of this Part. |
| 20 |
Expenditure incurred on long-term assets other than non-dedicated mobile assets |
| |
2 (1) | Section 3 (expenditure incurred on long-term assets other than non- |
| |
dedicated mobile assets) is amended as follows. |
| |
(2) | In subsection (4) (whole of expenditure to be allowable, except as provided |
| |
by the provisions there specified) for “section 4” substitute “sections 3A and |
| 25 |
| |
Exclusion from s.3(4) of expenditure on assets giving rise to tax-exempt tariffing receipts |
| |
3 | After section 3 insert— |
| |
“3A | Exclusion from section 3(4) of expenditure on assets giving rise to tax- |
| |
exempt tariffing receipts |
| 30 |
(1) | This section applies where— |
| |
(a) | expenditure incurred on or after 1st January 2004 falls within |
| |
| |
(b) | some of the use (or expected use) of the asset in relation to |
| |
which the expenditure was incurred is use in a way that gives |
| 35 |
rise to tax-exempt tariffing receipts (see section 6A(2) below). |
| |
(2) | In any such case, such part of the expenditure as it is just and |
| |
reasonable to apportion to the use mentioned in subsection (1)(b) |
| |
|
| |
|
| |
|
above shall be excluded from the expenditure which is allowable as |
| |
mentioned in section 3(4) above.”. |
| |
Expenditure related to exempt gas: asset use giving rise to tax-exempt tariffing receipts |
| |
4 (1) | Section 4 (expenditure related to exempt gas and deballasting) is amended |
| |
| 5 |
(2) | After subsection (5) insert— |
| |
| |
(a) | expenditure would (apart from this subsection) fall within |
| |
paragraph (a) of subsection (5) above, and |
| |
(b) | the asset has, at any time in the period of 6 years ending with |
| 10 |
the date on which the expenditure was incurred, been used in |
| |
a way that gives rise to tax-exempt tariffing receipts, |
| |
| the expenditure shall not be regarded for the purposes of that |
| |
subsection as expenditure incurred in enhancing the value of the |
| |
asset with a view to the subsequent disposal of the asset, or of an |
| 15 |
interest in it, to the extent that the amount of the expenditure falls to |
| |
be reduced in accordance with subsection (7) below. |
| |
(7) | The reduction is to be made by applying section 7A below in relation |
| |
to the expenditure as it applies in relation to disposal receipts in |
| |
respect of a disposal, but with the substitution— |
| 20 |
(a) | for references to the disponor, of references to the person |
| |
incurring the expenditure (“the relevant participator”), |
| |
(b) | for references to the amount or value (apart from that section) |
| |
of any disposal receipts of the disponor in respect of the |
| |
disposal, of references to the amount which would, apart |
| 25 |
from subsection (6) above, be the amount of the expenditure |
| |
incurred by the relevant participator with a view to the |
| |
subsequent disposal of the asset or of an interest in it, |
| |
(c) | for references to the interest disposed of, of references to the |
| |
asset or interest whose subsequent disposal gives or is |
| 30 |
expected to give rise to disposal receipts, |
| |
(d) | for references to the date of the disposal, of references to the |
| |
date on which the expenditure was incurred, |
| |
| and taking the reference in subsection (6)(b) of that section to a |
| |
reduction made by virtue of that section as a reference to a reduction |
| 35 |
made by virtue of that section for the purposes of section 7(9) of this |
| |
| |
Disposal receipts from assets used in a way that gives rise to tax-exempt tariffing receipts |
| |
5 (1) | Section 7 (chargeable receipts from disposals) is amended as follows. |
| |
(2) | In subsection (4) (no account to be taken of disposal more than 2 years after |
| 40 |
cessation of use in connection with any oil field whatsoever or ceasing to |
| |
give rise to tariff receipts)— |
| |
(a) | at the end of paragraph (b) insert “or |
| |
(c) | ceases to give rise to tax-exempt tariffing receipts of |
| |
| 45 |
(b) | in the closing words, for “later” substitute “latest”. |
| |
|
| |
|
| |
|
(3) | After subsection (8) insert— |
| |
“(9) | In determining the amount or value of the disposal receipts of the |
| |
participator in question in a case where the qualifying asset has been |
| |
used in a way that gives rise to tax-exempt tariffing receipts, the |
| |
amount or value (apart from this subsection) of any disposal receipts |
| 5 |
of his in respect of the disposal shall be reduced in accordance with |
| |
| |
(4) | After section 7 insert— |
| |
“7A | Reduction of disposal receipts: use giving rise to tax-exempt tariffing |
| |
| 10 |
(1) | Where this section applies, the amount or value (apart from this |
| |
section) of any disposal receipts of the participator (“the disponor”) |
| |
in respect of the disposal shall be reduced in accordance with the |
| |
following provisions of this section. |
| |
(2) | The reduction is to be made by multiplying that amount or value by |
| 15 |
the fraction that is equal to— |
| |
| |
| T is the aggregate of the tax-exempt tariffing use of the asset in |
| |
| |
(a) | the disponor, so far as referable to the interest |
| 20 |
| |
(b) | each of the previous owners, so far as referable to that |
| |
previous owner’s represented interest, and |
| |
| A is the aggregate of all use of the asset in the reference period |
| |
| 25 |
(a) | the disponor, so far as referable to the interest |
| |
| |
(b) | each of the previous owners, so far as referable to that |
| |
previous owner’s represented interest, |
| |
| but only taking into account for this purpose use of the asset by a |
| 30 |
person at a time when he is or was a participator in a taxable field. |
| |
(4) | For the purposes of this section— |
| |
| “the interest disposed of” means the asset, or the interest in an |
| |
asset, the disposal of which gives rise to the disposal receipts |
| |
mentioned in subsection (1) above; |
| 35 |
| “previous owner” means any person from whom the disponor |
| |
directly or indirectly derives his title to the whole or any part |
| |
of the interest disposed of; |
| |
| “the reference period” means the shorter of the following |
| |
periods ending with the date of the disposal— |
| 40 |
(a) | the period of 6 years; or |
| |
(b) | the period beginning with the bringing into existence |
| |
| |
|
| |
|
| |
|
| “represented interest”, in the case of a previous owner, means |
| |
so much of the interest which that previous owner had in the |
| |
asset as is represented in the interest disposed of; |
| |
| “tax-exempt tariffing use”, in relation to an asset, means use of |
| |
the asset in a way that gives rise to tax-exempt tariffing |
| 5 |
| |
(5) | Any apportionment that falls to be made for the purpose of |
| |
determining a previous owner’s represented interest shall be made |
| |
using a method which is just and reasonable, having regard to— |
| |
(a) | the proportion of any person’s interest that was acquired |
| 10 |
from any particular person, and |
| |
(b) | the proportion of any person’s interest that was transferred |
| |
to any particular person. |
| |
| |
(a) | the disponor or any previous owner acquired the asset or an |
| 15 |
interest in the asset from another person, and |
| |
(b) | on that other person’s corresponding disposal of the asset or |
| |
interest a reduction was made by virtue of this section, |
| |
| use of the asset shall not be brought into account in determining T or |
| |
A in the formula in subsection (2) above to the extent that it was so |
| 20 |
brought into account in relation to that corresponding disposal. |
| |
(7) | Where paragraph 9 of Schedule 2 to this Act (reduction of disposal |
| |
receipts in respect of brought-in assets) applies in relation to an asset, |
| |
no account shall be taken for the purposes of this section of any use |
| |
of the asset during the initial period. |
| 25 |
| In this subsection “the initial period”, in relation to an asset, has the |
| |
same meaning as it has in relation to that asset in paragraph 7 of |
| |
Schedule 1 to this Act (restriction on allowable expenditure on |
| |
| |
(8) | For the purposes of this section, the amount of use of an asset— |
| 30 |
(a) | where the use is in relation to oil, is to be determined by |
| |
reference to the volume of oil in relation to which the asset is |
| |
| |
(b) | where the use is otherwise than in relation to oil, is to be |
| |
determined on a just and reasonable basis. |
| 35 |
(9) | For the purposes of this section, the extent to which use of an asset is |
| |
| |
(a) | the interest disposed of, or |
| |
(b) | the represented interest of a previous owner, |
| |
| shall be determined on a just and reasonable basis, having regard to |
| 40 |
the size of the interest in question and the size from time to time of |
| |
the whole interest in the asset of the disponor or, as the case may be, |
| |
| |
Assets no longer in use for the principal field |
| |
6 (1) | In Schedule 1 (allowable expenditure) in Part 1 (extensions of allowable |
| 45 |
expenditure for assets generating receipts) paragraph 3 is amended as |
| |
| |
|
| |
|