Finance Bill

House of Commons

Session 2004 - 05
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Finance Bill

Finance Bill
Part 7 — European company statute
129

subsection (3) shall apply after that time, but in relation to liabilities accruing
and matters arising before that time—
(a)
as if the company were still resident in the United Kingdom, and
(b)
where the company has ceased to exist, as if the SE were the company.
(2)
If at any time an SE transfers its registered office from the United Kingdom and
5
ceases to be resident in the United Kingdom, the provision specified in
subsection (3) shall apply after that time, but in relation to liabilities accruing
and matters arising before that time, as if the SE were still resident in the
United Kingdom.
(3)
The provision mentioned in subsections (1) and (2) is Schedule 18 to FA 1998
10
(tax returns, assessments, &c.).
162
Groups
(1)
After section 170(10) of TCGA 1992 (groups: merger, &c.) insert—
“(10A)
Where the principal company of a group (Group 1)—
(a)
becomes an SE by reason of being the acquiring company in the
15
formation of an SE by merger by acquisition (in accordance with
Articles 2(1), 17(2)(a) and 29(1) of Council Regulation (EC)
2157/2001 on the Statute for a European Company (Societas
Europaea)),
(b)
becomes a subsidiary of a holding SE (formed in accordance
20
with Article 2(2) of that Regulation), or
(c)
is transformed into an SE (in accordance with Article 2(4) of that
Regulation),

Group 1 and any group of which the SE is a member on formation shall
be regarded as the same; and the question whether or not a company
25
has ceased to be a member of a group shall be determined accordingly.”
(2)
Subsection (1) shall have effect in relation to the formation of an SE (including
its formation by transformation) which occurs on or after 1st April 2005.
163
Groups: intangible fixed assets
(1)
After paragraph 51 of Schedule 29 to the FA 2002 (groups: continuity) insert—
30
“51A
For the purposes of this Schedule where the principal company of a
group (Group 1)—
(a)
becomes an SE by reason of being the acquiring company in
the formation of an SE by merger by acquisition (in
accordance with Articles 2(1), 17(2)(a) and 29(1) of Council
35
Regulation (EC) 2157/2001 on the Statute for a European
Company (Societas Europaea)),
(b)
becomes a subsidiary of a holding SE (formed in accordance
with Article 2(2) of that Regulation), or
(c)
is transformed into an SE (in accordance with Article 2(4) of
40
that Regulation),

Group 1 and any group of which the SE is a member on formation
shall be regarded as the same; and the question whether or not a
company has ceased to be a member of a group shall be determined
accordingly.”
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Finance Bill
Part 7 — European company statute
130

(2)
Subsection (1) shall have effect in relation to the formation of an SE (including
its formation by transformation) which occurs on or after 1st April 2005.
164
Held-over gains
(1)
In section 116(11) of TCGA 1992 (shares: reorganisation, &c.) after “140A,”
insert “140E,”.
5
(2)
After section 140(6A) of that Act (postponement of charge on transfer of assets
to foreign company) insert—
“(6B)
If, as part of the process of merger forming an SE in circumstances in
which section 140E applies, securities are transferred to the SE by a
transferor company—
10
(a)
the transfer to the SE shall be disregarded for the purposes of
subsection (4), and
(b)
the SE shall be treated as if it were the transferor company in
relation to—
(i)
any subsequent disposal of the securities, and
15
(ii)
any subsequent disposal by the transferee company of
assets to which subsection (5) applies.”
(3)
After section 154(2) of that Act (held over gains: depreciating assets) insert—
“(2A)
If, as part of the process of a merger forming an SE in circumstances in
which section 140E applies, asset No 2 or shares in a company which
20
holds asset No 2 are transferred to the SE, the transfer to the SE shall be
disregarded for the purposes of subsection (2), and—
(a)
if the SE holds asset No 2, it shall be treated for the purposes of
subsection (2), in relation to asset No 2, as if it were the claimant,
or
25
(b)
if the SE holds shares in the company which holds asset No 2,
section 175 shall apply in relation to the group of which the SE
is a member as if it were the same group as any group of which
the claimant was a member before the formation of the SE.
(2B)
If, as part of the process of a merger forming an SE in circumstances in
30
which section 140E applies, the SE becomes a member (whether or not
as the principal company) of a group of which the claimant is also a
member, for the purposes of subsection (2) section 175 shall apply in
relation to the trade carried on by the claimant as if the group of which
the SE is a member were the same group as the group of which the
35
claimant was a member before the formation of the SE.”
(4)
After section 179(1A) of that Act (company ceasing to be member of group)
insert—
“(1B)
Where, as part of the process of a merger to form an SE in circumstances
in which section 140E applies, a company which is a member of a group
40
(“Group 1”) ceases to exist and in consequence of that cessation—
(a)
assets are transferred to the SE, or
(b)
shares in one or more companies which were also members of
the group are transferred to the SE,

a company which has ceased to exist, or the shares in which have been
45
transferred to the SE, shall not be treated for the purposes of this section
as having left Group 1.

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Part 7 — European company statute
131

(1C)
If subsection (1B) applies in relation to a company then for the purposes
of this section—
(a)
the SE and a company which has ceased to exist in consequence
of the merger to form the SE shall be treated as the same entity,
and
5
(b)
if the SE is a member of a group (“Group 2”) following its
formation (whether or not as the principal company of the
group) a company which was a member of Group 1 and became
a member of Group 2 in consequence of the formation of the SE
shall be treated, for the purposes of this section, as if Group 1
10
and Group 2 were the same.”
(5)
This section shall have effect in relation to the formation of an SE in accordance
with Article 2 of Council Regulation (EC) 2157/2001 on the Statute for a
European Company (Societas Europaea) which occurs on or after 1st April
2005.
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165
Restrictions on set-off of pre-entry losses
(1)
Schedule 7A to TCGA 1992 (restrictions on set-off of pre-entry losses) shall be
amended as follows.
(2)
After paragraph 1(3A)(a) insert—
“(aa)
in a case in which (whether or not paragraph (a)(i) also
20
applies)—
(i)
the company is an SE resident in the United Kingdom,
and
(ii)
the asset was transferred to the SE as part of the
process of its formation by the merger by acquisition
25
of two or more companies in accordance with Articles
2(1) and 17(2)(a) or (b) of Council Regulation (EC)
2157/2001 on the Statute for a European Company
(Societas Europaea),

are references to the asset becoming a chargeable asset in
30
relation to the SE or, if at the time of the formation of the SE
the asset was a chargeable asset in relation to a company
which ceased to exist as part of the process of the formation
of the SE, to the asset becoming a chargeable asset in relation
to that company;”
35
(3)
In the definition of “chargeable asset” in paragraph 1(3A) after “section 10B”
insert “(or, if the company is an SE, by reason of the asset having been
transferred to the SE on its formation)”.
(4)
In paragraph 1(6)(a) after “subsection (10)” insert “or (10A)”.
(5)
In paragraph 9(6) after “subsection (10)” insert “or (10A)”.
40
(6)
This section shall have effect in relation to the formation of an SE which occurs
on or after 1st April 2005.

Finance Bill
Part 8 — Miscellaneous matters
132

Part 8
Miscellaneous matters
166
Civil partnerships etc
(1)
In the case of any tax or duty, the Treasury may by regulations make provision
for the purpose of securing that the events or persons specified in column 1 of
5
the Table are treated in the same way as (or a similar way to) the corresponding
events or persons specified in column 2 of the Table.

1. Events or persons
2. Corresponding events or persons

1. The formation of a civil
A marriage.

partnership.

10

2. Persons who are, have been, or
Persons who are, have been, or

may in future be, civil partners of
may in future be, married to each

each other.
other.

3. Persons who are not civil
Persons who are not married to

partners of each other but who are
each other but who are living

15

living together as if they were.
together as husband and wife.

4. Persons who are not civil
Persons who are not married to

partners of each other.
each other.

5. A person who is not a civil
A person who is not married.

partner of any other person.

20
(2)
The provision that may be made by regulations under subsection (1) includes
provision for or in connection with varying, for the purpose specified in
subsection (1), the treatment that would, apart from the regulations, apply—
(a)
on the occurrence of an event specified in column 2 of the Table, or
(b)
in the case of persons specified in column 2 of the Table.
25
(3)
The Treasury may by regulations make provision for the purpose of removing
any inequality of treatment of persons based on gender or, in the case of a
parent, marital status.
(4)
Any power to make regulations under this section is exercisable by statutory
instrument.
30
(5)
A statutory instrument containing regulations under this section shall not be
made unless a draft of the instrument has been laid before, and approved by a
resolution of, the House of Commons.
(6)
The provision that may be made by regulations under this section includes
provision—
35
(a)
amending any enactment, or
(b)
applying any provision of any enactment with or without
modifications.
(7)
Any power to make regulations under this section includes power—
(a)
to make different provision for different cases;
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Finance Bill
Part 8 — Miscellaneous matters
133

(b)
to make incidental, supplemental, consequential or transitional
provision or savings.
(8)
The powers conferred by this section are exercisable in relation to enactments
(including enactments contained in, or made under, this Act) passed or made
at any time before the end of the Session following that in which this Act is
5
passed.
(9)
In this section—
“civil partnership” means a civil partnership which exists under or by
virtue of the Civil Partnership Act 2004 (c. 33) (and “civil partner” is to
be read accordingly);
10
“enactment” includes any provision comprised in—
(a)
an Act of the Scottish Parliament;
(b)
Northern Ireland legislation;
(c)
an instrument made under any enactment.
167
Reorganisation of water and sewerage services in Northern Ireland
15
(1)
In this section “relevant transfer” means a transfer of property, rights or
liabilities where—
(a)
the transfer is of property, rights or liabilities which—
(i)
are specified or described in or determined in accordance with
a scheme, and
20
(ii)
consist of or include relevant property, rights or liabilities,
(b)
the transfer is from a Northern Ireland department or persons which
include a Northern Ireland department to a company or companies
specified in the scheme (“transferee company”), and
(c)
the transfer is effected by or under an enactment which—
25
(i)
is made after the coming into force of this section, and
(ii)
relates to the provision of water or sewerage services in
Northern Ireland.
(2)
In this section “relevant property, rights or liabilities” means property, rights
or liabilities connected with the provision of any water or sewerage services.
30
(3)
The Treasury may by regulations make provision for or in connection with
varying the way in which a relevant tax or duty would, apart from the
regulations, have effect in relation to, or in connection with, any of the
following—
(a)
anything done for the purpose of, or under or in consequence of, a
35
relevant transfer of relevant property, rights or liabilities from a
Northern Ireland department to a transferee company;
(b)
any relevant property, rights or liabilities which are the subject of a
relevant transfer from a Northern Ireland department to a transferee
company;
40
(c)
any relevant property, rights or liabilities of a transferee company.
(4)
The provision that may be made by the regulations includes provision for or in
connection with any of the following—
(a)
a tax provision not to apply or to apply with modifications in
prescribed cases or circumstances;
45
(b)
anything done to have or not to have a specified consequence for the
purposes of a tax provision in prescribed cases or circumstances;

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Part 8 — Miscellaneous matters
134

(c)
any relevant property, rights or liabilities which are the subject of a
relevant transfer from a Northern Ireland department to a transferee
company to be treated in a specified way for the purposes of a tax
provision in prescribed cases or circumstances;
(d)
the withdrawal of relief (whether or not granted by virtue of the
5
regulations), and the charging of tax, in prescribed cases or
circumstances;
(e)
requiring or enabling the Secretary of State, with the consent of the
Treasury, to determine or to specify the method to be used for
determining anything (including amounts or values, or times or
10
periods of time) which needs to be determined for the purposes of any
tax provision (whether or not modified by the regulations) as it applies
in relation to, or in connection with,—
(i)
anything done for the purpose of, or under or in consequence
of, a relevant transfer of relevant property, rights or liabilities
15
from a Northern Ireland department to a transferee company,
or
(ii)
any relevant property, rights or liabilities which are the subject
of a relevant transfer from a Northern Ireland department to a
transferee company.
20
(5)
A provision of regulations made by virtue only of subsection (3)(c) (“a
subsection (3)(c) provision”) (whether or not also by virtue of subsection (4))
shall not have effect for an accounting period of a transferee company unless
the company is wholly owned by the Crown during the whole of that
accounting period.
25
(6)
Regulations under this section may provide that, for the purposes of a
subsection (3)(c) provision, an accounting period of a transferee company shall
be taken to have ended on the company ceasing to be wholly owned by the
Crown.
(7)
For the purposes of this section, a company shall be regarded as wholly owned
30
by the Crown at any time when each of the issued shares in the company is
held by, or by a nominee of,—
(a)
the Treasury,
(b)
the Secretary of State,
(c)
a Northern Ireland department, or
35
(d)
another company which is wholly owned by the Crown.
(8)
In this section—
“enactment” includes a provision comprised in—
(a)
Northern Ireland legislation, or
(b)
an instrument made under an enactment;
40
“prescribed” means prescribed by or determined in accordance with
regulations under this section;
“relevant tax or duty” means income tax, corporation tax, capital gains
tax, stamp duty or stamp duty reserve tax;
“tax provision” means a provision of an enactment about a relevant tax or
45
duty.
(9)
Any power to make regulations under this section is exercisable by statutory
instrument.

Finance Bill
Part 8 — Miscellaneous matters
135

(10)
A statutory instrument containing regulations under this section shall be
subject to annulment in pursuance of a resolution of the House of Commons.
(11)
Any power to make regulations under this section includes power—
(a)
to make different provision for different cases or circumstances;
(b)
to make incidental, supplemental, consequential or transitional
5
provision or savings.
168
EU Mutual Assistance Directive: notifications
(1)
This section applies where, in accordance with Article 8a of the Mutual
Assistance Directive, the competent authority of another member State (“the
applicant authority”) requests the relevant UK authority to notify an
10
instrument to the person to whom the instrument is addressed.
(2)
The relevant UK authority must take the necessary measures to notify the
instrument to that person.
(3)
The notification shall be given in accordance with the law applicable to
notification of similar instruments in the part of the United Kingdom in which
15
it is given.
(4)
The relevant UK authority must—
(a)
inform the applicant authority immediately of its response to the
request, and
(b)
confirm to the applicant authority, as soon as is reasonably practicable,
20
the date on which the instrument was notified to the person concerned.
(5)
The relevant UK authority may request additional information from the
applicant authority for the purpose of giving the notification.
(6)
In this section “the Mutual Assistance Directive” means Council Directive 77/
799/EEC as amended (in particular by Council Directive 2004/56/EC).
25
(7)
In this section “the relevant UK authority” means—
(a)
in relation to matters corresponding to those within the care and
management of the Commissioners of Customs and Excise, those
Commissioners;
(b)
in relation to matters corresponding to those within the care and
30
management of the Commissioners of Inland Revenue, those
Commissioners.
(8)
In this section “instrument” means any instrument or decision which—
(a)
emanates from the administrative authorities of the member State in
which the applicant authority is situated, and
35
(b)
concerns the application in that member State of legislation on taxes
covered by the Mutual Assistance Directive.
(9)
This section has effect in relation to requests received by the relevant UK
authority on or after 1st January 2005.
169
Abolition of statutory adjudicator for National Savings and Investments
40
(1)
After the coming into force of this section, no further disputes shall be referred
to a person appointed under section 84 of the Friendly Societies Act 1992 (c. 40)