|
| |
|
| but so that transfers in accordance with the 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 |
| |
13 (1) | Where a person (“the predecessor”) is carrying on a trade and, in |
| 5 |
consequence of a scheme made under section 1(2)— |
| |
(a) | the predecessor ceases to carry on a trade, and |
| |
(b) | a person who is not a national authority (“the successor”) begins to |
| |
carry on activities of that trade as part of a trade carried on by the |
| |
| 10 |
| then that part of the trade carried on by the successor shall be treated for the |
| |
purposes of paragraph 12 as a separate trade. |
| |
(2) | Where a person (“the predecessor”) is carrying on a trade and, in |
| |
consequence of a scheme made under section 1(2)— |
| |
(a) | the predecessor ceases to carry on a part of a trade, and |
| 15 |
(b) | a person who is not a national authority begins to carry on activities |
| |
of that part of that trade, |
| |
| then the predecessor shall be treated for the purposes of paragraph 12 and |
| |
sub-paragraph (1) of this paragraph as having carried on that part of its trade |
| |
| 20 |
(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 and |
| |
| |
Capital allowances: transfer of plant or machinery |
| 25 |
14 (1) | This paragraph applies where— |
| |
(a) | there is a relevant transfer of plant or machinery; |
| |
(b) | paragraph 12 does not apply in relation to that transfer; |
| |
(c) | the plant or machinery would be treated for the purposes of the 2001 |
| |
Act as disposed of by the transferor to the transferee on the transfer |
| 30 |
| |
(d) | the scheme in accordance with which the transfer is made contains |
| |
provision for the disposal value of the plant or machinery to be |
| |
treated for the purposes of that Act as an amount specified in or |
| |
determined in accordance with the scheme. |
| 35 |
(2) | For the purposes of the 2001 Act— |
| |
(a) | the provision mentioned in sub-paragraph (1)(d) is to have effect |
| |
(instead of section 61(2) to (4), 72(3) to (5), 88, 171, 196 or 423 of that |
| |
Act) for determining an amount as the disposal value of the plant or |
| |
machinery or the price at which a fixture is to be treated as sold; |
| 40 |
(b) | the transferee is to be treated as having incurred capital expenditure |
| |
of that amount on the provision of the plant or machinery for the |
| |
purposes for which it is used by the transferee on and after the taking |
| |
| |
(c) | the property is to be treated as belonging to the transferee in |
| 45 |
consequence of the transferee having incurred that expenditure; and |
| |
|
| |
|
| |
|
(d) | in the case of a fixture, the expenditure which falls to be treated as |
| |
incurred by the transferee is to be treated for the purposes of sections |
| |
181(1) and 182(1) of that Act to be incurred by the giving of a |
| |
consideration consisting in a capital sum of that amount. |
| |
(3) | The provision mentioned in sub-paragraph (1)(d) for the determination of |
| 5 |
an amount may include provision for a determination— |
| |
(a) | to be made by the Secretary of State in a manner described in the |
| |
| |
(b) | to be made by reference to factors so described or to the opinion of a |
| |
| 10 |
(c) | to be capable of being modified (on one or more occasions) in a |
| |
manner and in circumstances so described. |
| |
(4) | The consent of the Treasury is required for the making or modification of a |
| |
determination under the provision mentioned in sub-paragraph (1)(d). |
| |
(5) | The consent of the transferee is required for the modification of a |
| 15 |
determination under the provision mentioned in sub-paragraph (1)(d). |
| |
(6) | If there is a determination or a modification of a determination under the |
| |
provision mentioned in sub-paragraph (1)(d), all necessary adjustments— |
| |
(a) | must be made by making assessments or by repayment or discharge |
| |
| 20 |
(b) | must be made despite any limitation on the time within which |
| |
| |
(7) | Expressions used in this paragraph and in Part 2 of the 2001 Act have the |
| |
same meanings in this paragraph as in that Part. |
| |
Capital allowances: determination of capital value of industrial buildings etc. |
| 25 |
15 (1) | This paragraph applies for the purposes of Part 3 of the 2001 Act, and the |
| |
other provisions of that Act which are relevant to that Part, to a relevant |
| |
transfer of the relevant interest in an industrial building or structure. |
| |
(2) | Section 573 of that Act is not to have effect in relation to that transfer. |
| |
Chargeable gains: assets to be treated as disposed of without a gain or a loss |
| 30 |
16 | For the purposes of the 1992 Act, a relevant transfer of an asset is to be |
| |
treated as a disposal of that asset to the transferee for a consideration of such |
| |
amount as would secure that, on the disposal, neither a gain nor a loss |
| |
accrues to the transferor. |
| |
Continuity in relation to transfer of intangible assets |
| 35 |
17 (1) | For the purposes of Schedule 29 to the Finance Act 2002 (c. 23)— |
| |
(a) | a relevant transfer of a chargeable intangible asset of the transferor is |
| |
to be treated as a tax-neutral transfer; and |
| |
(b) | an intangible fixed asset which is an existing asset of the transferor at |
| |
the time of the transfer is to be treated, on and after the transfer, as |
| 40 |
an existing asset in the hands of the transferee. |
| |
(2) | Expressions used in this paragraph and in that Schedule have the same |
| |
meanings in this paragraph as in that Schedule. |
| |
|
| |
|
| |
|
Continuity in relation to loan relationships |
| |
18 (1) | For the purposes of the application of Chapter 2 of Part 4 of the Finance Act |
| |
1996 (c. 8) (loan relationships) in relation to a relevant transfer, the transferee |
| |
and the transferor are to be treated as if, at the time of the transfer, they were |
| |
members of the same group. |
| 5 |
(2) | In sub-paragraph (1), the reference to being members of the same group |
| |
must be construed in accordance with paragraph 12(8) of Schedule 9 to that |
| |
| |
Continuity in relation to derivative contracts |
| |
19 (1) | For the purposes of the application of Schedule 26 to the Finance Act 2002 |
| 10 |
(c. 23) (derivative contracts) in relation to a relevant transfer, the transferee |
| |
and the transferor are to be treated as if, at the time of the transfer, they were |
| |
members of the same group. |
| |
(2) | In sub-paragraph (1), the reference to being members of the same group |
| |
must be construed in accordance with paragraph 28(6) of that Schedule. |
| 15 |
| |
20 (1) | This paragraph applies for the purposes of section 781 of the Taxes Act |
| |
(assets leased to traders and others) where— |
| |
(a) | the interest of the lessor or the lessee under a lease, or any other |
| |
interest in an asset, is transferred under a relevant transfer; or |
| 20 |
(b) | a lease, or any other interest in a lease, is granted to a person who is |
| |
not a national authority in accordance with provision contained by |
| |
virtue of paragraph 3 or 4 of Schedule 2 in a scheme made under |
| |
| |
(2) | Section 783(4) of that Act is to be disregarded and the transfer or grant is to |
| 25 |
be treated as made without any capital sum having been obtained in respect |
| |
of the interest or lease by the transferor or grantor. |
| |
(3) | In the case of the transfer of an interest under a lease, payments made by the |
| |
transferor under the lease before the transfer takes effect are to be treated as |
| |
if they had been made under that lease by the transferee. |
| 30 |
(4) | Expressions used in this paragraph and in sections 781 to 785 of that Act |
| |
have the same meanings in this paragraph as in those sections. |
| |
| |
Transfers under section 12 schemes |
| |
Meaning of “relevant transfer” in Part 3 of Schedule |
| 35 |
21 | In this Part of this Schedule, “relevant transfer” means a transfer in |
| |
accordance with a scheme made under section 12. |
| |
|
| |
|
| |
|
Capital allowances: determination of disposal value of plant or machinery |
| |
22 (1) | This paragraph applies to a relevant transfer of plant or machinery which is |
| |
a disposal event for the purposes of Part 2 of the 2001 Act (capital allowances |
| |
for plant and machinery). |
| |
(2) | For the purposes of the application of section 61 of that Act in relation to the |
| 5 |
transferor, the disposal value of the plant or machinery is to be treated— |
| |
(a) | if a capital sum is received by the transferor by way of consideration |
| |
or compensation in respect of the transfer, as an amount equal to that |
| |
| |
(b) | if no such sum is received, as nil. |
| 10 |
(3) | For the purposes of this paragraph a sum received by a person connected |
| |
with the transferor is to be treated as received by the transferor. |
| |
(4) | Section 88 of the 2001 Act (sales at an undervalue) is to be disregarded. |
| |
(5) | This paragraph is subject to sections 63(5) and 68 of the 2001 Act. |
| |
Capital allowances: determination of disposal value of fixtures |
| 15 |
23 (1) | This paragraph applies to a relevant transfer if— |
| |
(a) | it is a disposal event for the purposes of Part 2 of the 2001 Act; and |
| |
(b) | by virtue of the transfer a person is treated by section 188 of that Act |
| |
as ceasing to own a fixture. |
| |
(2) | For the purposes of the application of section 196 of that Act in relation to the |
| 20 |
transferor, the disposal value of the fixture is to be treated— |
| |
(a) | if a capital sum is received by the transferor by way of consideration |
| |
or compensation in respect of the transfer, as an amount equal to that |
| |
portion of that sum which falls (or, if the person to whom the |
| |
disposal is made were entitled to an allowance, would fall) to be |
| 25 |
treated for the purposes of Part 2 of that Act as expenditure incurred |
| |
by that person on the provision of the fixture; or |
| |
(b) | if no such sum is received, as nil. |
| |
(3) | For the purposes of this paragraph a sum received by a person connected |
| |
with the transferor is to be treated as received by the transferor. |
| 30 |
(4) | This paragraph is subject to section 63(5) of the 2001 Act. |
| |
Capital allowances: determination of capital value of industrial buildings etc. |
| |
24 (1) | This paragraph applies for the purposes of Part 3 of the 2001 Act, and the |
| |
other provisions of that Act which are relevant to that Part, in relation to a |
| |
relevant transfer of the relevant interest in an industrial building or |
| 35 |
| |
(2) | The transfer is to be treated as a sale of that relevant interest. |
| |
(3) | The net proceeds of that sale, in relation to the transferor, are to be treated— |
| |
(a) | if a capital sum is received by the transferor by way of consideration |
| |
or compensation in respect of the transfer, as an amount equal to that |
| 40 |
| |
(b) | if no such sum is received, as nil. |
| |
|
| |
|
| |
|
(4) | Sections 567 to 570 of the 2001 Act (sales treated as being for alternative |
| |
amount) are not to have effect in relation to that sale. |
| |
(5) | For the purposes of this paragraph a sum received by a person connected |
| |
with the transferor is to be treated as received by the transferor. |
| |
Chargeable gains: disposals not be treated as made at market value |
| 5 |
25 (1) | Section 17 of the 1992 Act (disposals and acquisitions treated as made at |
| |
market value) is not to have effect in relation to— |
| |
(a) | a disposal constituted by a relevant transfer or a disposal in |
| |
accordance with provision contained by virtue of paragraph 3 or 4 of |
| |
Schedule 2 to this Act in a scheme made under section 12 of this Act; |
| 10 |
| |
(b) | the acquisition made by the person to whom the disposal is made. |
| |
(2) | But sub-paragraph (1) does not apply— |
| |
(a) | if the person making the disposal is connected with the person |
| |
making the acquisition; or |
| 15 |
(b) | in the case of a disposal in accordance with provision contained in a |
| |
scheme by virtue of paragraph 3 or 4 of Schedule 2, if the disposal is |
| |
made by or to a person other than the transferor or transferee. |
| |
(3) | If sub-paragraph (1) applies to the disposal of an asset, the disposal is to be |
| |
taken (in relation to the person making the acquisition as well as the person |
| 20 |
making the disposal) to be— |
| |
(a) | in a case where consideration in money or money’s worth is given by |
| |
the person making the acquisition or on his behalf in respect of the |
| |
vesting of the asset in him, for a consideration equal to the amount |
| |
or value of that consideration; or |
| 25 |
(b) | in a case, where no such consideration is given, for a consideration of |
| |
| |
Chargeable gains: degrouping charges |
| |
26 (1) | This paragraph applies if a company (“the degrouped company”)— |
| |
(a) | acquired an asset from another company at a time when both were |
| 30 |
members of the same group of companies (“the old group”); and |
| |
(b) | ceases by virtue of a relevant transfer to be a member of the old |
| |
| |
(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 |
| 35 |
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”) otherwise than by virtue of a relevant transfer as if— |
| 40 |
(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) | If, disregarding any preparatory transactions, a company would be |
| |
regarded for the purposes of section 179 of the 1992 Act (and, accordingly, |
| 45 |
|
| |
|
| |
|
of this paragraph) as ceasing to be a member of a group of companies by |
| |
virtue of a relevant transfer, it is to be regarded for those purposes as so |
| |
doing by virtue of the relevant transfer and not by virtue of any preparatory |
| |
| |
(5) | In this paragraph, “preparatory transactions” means anything done under or |
| 5 |
by virtue of the 1993 Act or this Act for the purpose of initiating, advancing |
| |
or facilitating the relevant transfer in question. |
| |
(6) | Expressions used in this paragraph and in section 179 of the 1992 Act have |
| |
the same meanings in this paragraph as in that section. |
| |
Chargeable gains: disposal of debts |
| 10 |
27 (1) | This paragraph applies to a relevant transfer of a debt owed to the transferor |
| |
if the transferor would (apart from this paragraph) be the original creditor |
| |
in relation to that debt for the purposes of section 251 of the 1992 Act |
| |
| |
(2) | The 1992 Act is to have effect as if the transferee (and not the transferor) were |
| 15 |
the original creditor for those purposes. |
| |
| |
28 (1) | Paragraph 11 of Schedule 9 to the Finance Act 1996 (c. 8) is not to have effect |
| |
where, as a result of a relevant transfer, the transferee replaces the transferor |
| |
as a party to a loan relationship. |
| 20 |
(2) | Expressions used in this paragraph and in Chapter 2 of Part 4 of the Finance |
| |
Act 1996 have the same meanings in this paragraph as in that Chapter. |
| |
| |
Other provisions concerning transfers |
| |
| 25 |
29 (1) | Stamp duty is not to be chargeable— |
| |
(a) | on a scheme made under section 1(2); or |
| |
(b) | on an instrument certified by the Secretary of State to the |
| |
Commissioners of Inland Revenue as made for the purposes of such |
| |
a scheme, or as made for purposes connected with such a scheme. |
| 30 |
(2) | But where, by virtue of sub-paragraph (1), stamp duty is not chargeable on |
| |
a scheme or instrument, the scheme or instrument is to be treated as duly |
| |
| |
(a) | in accordance with section 12 of the Stamp Act 1891 (c. 39) it has been |
| |
stamped with a stamp denoting either that it is not chargeable to |
| 35 |
duty or that it has been duly stamped; or |
| |
(b) | it is stamped with the duty to which it would be chargeable apart |
| |
| |
(3) | In this paragraph, “instrument” has the same meaning as in the Stamp Act |
| |
| 40 |
|
| |
|
| |
|
| |
30 (1) | No transfer in accordance with a scheme made under section 1(2) is to give |
| |
rise to any liability to stamp duty land tax. |
| |
(2) | Relief under this paragraph must be claimed in a land transaction return or |
| |
in an amendment of a land transaction return. |
| 5 |
(3) | In sub-paragraph (2), “land transaction return” has the meaning given by |
| |
section 76(1) of the Finance Act 2003 (c. 14). |
| |
Chargeable gains: value shifting |
| |
31 | No scheme made under section 1(2) or 12 is to be regarded as a scheme or |
| |
arrangement for the purposes of section 30 of the 1992 Act. |
| 10 |
| |
32 | Neither the power of the Secretary of State to make a scheme under section |
| |
1(2) nor the power of the Secretary of State or the Scottish Ministers to make |
| |
a scheme under section 12 is to be regarded as constituting— |
| |
(a) | arrangements falling within section 410(1) or (2) of the Taxes Act |
| 15 |
(arrangements for transfer of company to another group or |
| |
| |
(b) | option arrangements for the purposes of paragraph 5B of Schedule |
| |
| |
| 20 |
33 | In section 35(3)(d) of the 1992 Act (no gain no loss disposals), after sub- |
| |
| |
“(xvi) | paragraph 5 or 16 of Schedule 10 to the Railways Act |
| |
| |
| 25 |
Interpretation of Schedule |
| |
| |
“the 1992 Act” means the Taxation of Chargeable Gains Act 1992 (c. 12); |
| |
“the 2001 Act” means the Capital Allowances Act 2001 (c. 2); |
| |
“national authority” means— |
| 30 |
(a) | the Secretary of State; |
| |
(b) | the Scottish Ministers; or |
| |
(c) | the National Assembly for Wales; |
| |
“the Taxes Act” means the Income and Corporation Taxes Act 1988 |
| |
| 35 |
“transferee”, in relation to a transfer in accordance with a scheme made |
| |
under section 1(2) or 12, means the person to whom the transfer is |
| |
| |
“transferor”, in relation to a transfer in accordance with a scheme made |
| |
under section 1(2) or 12, means the person from whom the transfer is |
| 40 |
| |
|
| |
|