|
| |
|
Exclusion of debits or credits brought into account under other provisions |
| |
116G | A debit or credit is not required to be brought into account under |
| |
this Part of this Schedule to the extent that a debit or credit |
| |
representing the accounting difference in question is brought into |
| |
account for tax purposes under— |
| 5 |
(a) | paragraph 12 (reversal of accounting gain), |
| |
(b) | paragraph 15 (gain on revaluation), or |
| |
(c) | paragraph 17 (reversal of accounting loss). |
| |
Subsequent events affecting asset subject to adjustment under this Part |
| |
116H (1) | On a further change of accounting policy affecting an intangible |
| 10 |
fixed asset in relation to which this Part of this Schedule has |
| |
applied, the preceding provisions of this Part apply again. |
| |
(2) | On a subsequent part realisation affecting the asset in question, |
| |
| |
46 (1) | Paragraph 134 of Schedule 29 to FA 2002 (intangible fixed assets: references |
| 15 |
to amounts recognised in profit and loss account) is amended as follows. |
| |
(2) | In the paragraph heading for “profit and loss account” substitute “determining |
| |
| |
(3) | Make the existing provision sub-paragraph (1). |
| |
(4) | In that sub-paragraph— |
| 20 |
(a) | in the opening words, for “a company’s profit and loss account” |
| |
substitute “determining a company’s profit or loss” and for |
| |
“include” substitute “are to”; |
| |
(b) | in sub-paragraph (a) after “recognised in” insert “the company’s |
| |
profit and loss account or income statement,”; and |
| 25 |
(c) | omit the words following paragraph (b). |
| |
(5) | After that sub-paragraph insert— |
| |
“(2) | An amount that in accordance with generally accepted accounting |
| |
practice is shown as a prior period adjustment in any such |
| |
statement as is mentioned in sub-paragraph (1) shall be brought |
| 30 |
into account for the purposes of this Schedule in computing the |
| |
company’s profits and losses for the period to which the statement |
| |
| |
| This does not apply to an amount recognised for accounting |
| |
purposes by way of correction of a fundamental error.”. |
| 35 |
47 | In paragraph 143 of Schedule 29 to FA 2002 (intangible fixed assets: index of |
| |
defined expressions) for “profit and loss account (amounts recognised in)” |
| |
substitute “profit and loss (amounts recognised in determining)”. |
| |
| |
48 | In Schedule 5 to ITEPA 2003 (enterprise management incentives), in |
| 40 |
paragraph 59 (index of defined expressions), in the entry relating to the |
| |
expression “generally accepted accounting practice”, for “section 836A of |
| |
ICTA” substitute “section 50(1) of the Finance Act 2004”. |
| |
|
| |
|
| |
|
| |
49 | In section 50 of FA 2004 (generally accepted accounting practice), for |
| |
subsections (2) and (3) substitute— |
| |
“(2) | In the Tax Acts “international accounting standards” has the same |
| |
meaning as in Regulation (EC) No 1606/2002 of the European |
| 5 |
Parliament and the Council of 19 July 2002 on the application of |
| |
international accounting standards. |
| |
(3) | Where the European Commission has in accordance with that |
| |
Regulation adopted an international accounting standard with |
| |
modifications, then as regards matters covered by that standard— |
| 10 |
(a) | generally accepted accounting practice with respect to IAS |
| |
accounts shall be regarded as permitting the use of the |
| |
standard either with or without the modifications, and |
| |
(b) | accounts prepared on either basis shall be regarded for the |
| |
purposes of the Tax Acts as prepared in accordance with |
| 15 |
international accounting standards.”. |
| |
50 | In sections 50(6), 51(6), 52(3) and 54(2) of FA 2004 (periods of account in |
| |
relation to which the sections have effect), omit paragraph (b) and the word |
| |
| |
| This amendment shall be deemed always to have had effect. |
| 20 |
51 | In Part 4 of Schedule 10 to FA 2004 (amendments relating to foreign currency |
| |
accounting), after paragraph 78 insert— |
| |
| |
79 | Where a company carries forward to its first period of account |
| |
beginning on or after 1st January 2005 an amount by way of— |
| 25 |
(a) | management expenses brought forward under section 75 |
| |
| |
(b) | losses brought forward under section 392B or 393 of that |
| |
| |
(c) | non-trading deficits on loan relationships brought forward |
| 30 |
under section 83 of the Finance Act 1996, |
| |
| that amount shall be translated into sterling using the London |
| |
closing exchange rate for the last day of the previous period of |
| |
| |
Power to make certain regulations with limited retrospective effect |
| 35 |
52 (1) | This paragraph applies to regulations under any of the following |
| |
| |
(a) | section 85B of FA 1996; |
| |
(b) | paragraph 19B of Schedule 9 to FA 1996; |
| |
(c) | paragraph 13 or 17C of Schedule 26 to FA 2002. |
| 40 |
(2) | Any such regulations may be made so as to apply to periods of account |
| |
beginning before the regulations are made, but not earlier than the |
| |
beginning of the calendar year in which they are made. |
| |
|
| |
|
| |
|
| |
| |
Section 804ZA: prescribed schemes and arrangements |
| |
| After Schedule 28AA to ICTA insert— |
| |
| |
Section 804ZA: prescribed schemes and arrangements |
| 5 |
| |
1 (1) | A scheme or arrangement, other than a scheme or arrangement |
| |
falling within sub-paragraph (3), is a prescribed scheme or |
| |
arrangement if one or more of paragraphs 2 to 6 apply to it. |
| |
(2) | A scheme or arrangement falling within sub-paragraph (3) is a |
| 10 |
prescribed scheme or arrangement if one or more of paragraphs 2 |
| |
to 6 would, on the assumption in sub-paragraph (4), apply to it. |
| |
(3) | A scheme or arrangement falls within this sub-paragraph if its |
| |
main purpose, or one of its main purposes, is to cause an amount |
| |
of underlying tax allowable in respect of a dividend paid by a |
| 15 |
body corporate resident in a territory outside the United Kingdom |
| |
to be taken into account in the case of a person. |
| |
(4) | The assumption is that the body corporate is resident in the United |
| |
| |
(5) | Nothing in sub-paragraph (4) requires it to be assumed that there |
| 20 |
is any change in the place or places at which the body corporate |
| |
carries on its activities. |
| |
Attribution of foreign tax |
| |
2 | This paragraph applies to a scheme or arrangement if the scheme |
| |
or arrangement enables a person who is party to, or concerned in, |
| 25 |
the scheme or arrangement to pay, in respect of a source of income |
| |
or chargeable gain, an amount of foreign tax all or part of which is |
| |
properly attributable to another source of income or chargeable |
| |
gain (or to more than one such other source). |
| |
Effect of paying foreign tax |
| 30 |
3 (1) | This paragraph applies to a scheme or arrangement if, under the |
| |
scheme or arrangement, sub-paragraph (2) is satisfied in relation |
| |
to a person who has claimed, or is in a position to claim, for a |
| |
chargeable period an allowance under any arrangements by way |
| |
of credit for foreign tax (“the claimant”). |
| 35 |
(2) | This sub-paragraph is satisfied if— |
| |
(a) | an amount of foreign tax is paid by the claimant, and |
| |
(b) | at the time when the claimant entered into the scheme or |
| |
arrangement, it could reasonably be expected that the |
| |
effect of the payment of that amount of foreign tax on the |
| 40 |
foreign tax total would be to increase it by less than the |
| |
|
| |
|
| |
|
amount allowable to the claimant as a credit in respect of |
| |
the payment of that amount of foreign tax. |
| |
(3) | The foreign tax total is the amount found by— |
| |
(a) | aggregating the amounts of foreign tax paid or payable in |
| |
respect of the transaction or transactions forming part of |
| 5 |
the scheme or arrangement by persons party to, or |
| |
concerned in, the scheme or arrangement, and |
| |
(b) | taking into account any reliefs, deductions, reductions or |
| |
allowances against or in respect of any tax that arise to the |
| |
persons party to, or concerned in, the scheme or |
| 10 |
arrangement (including any reliefs, deductions, reductions |
| |
or allowances arising to any one or more of those persons |
| |
as a consequence of the payment by the claimant of that |
| |
| |
Effect of claim, election or other arrangement |
| 15 |
4 (1) | This paragraph applies to a scheme or arrangement if under the |
| |
| |
(a) | a step is taken by a person who is party to, or concerned in, |
| |
the scheme or arrangement, or |
| |
(b) | a step that could have been taken by such a person is not |
| 20 |
| |
| and that action or that failure to act has the effect of increasing a |
| |
claim made by a person who is party to, or concerned, in the |
| |
scheme or arrangement for an allowance by way of credit in |
| |
accordance with this Part or of giving rise to such a claim. |
| 25 |
(2) | The steps mentioned in sub-paragraph (1) are steps that may be |
| |
| |
(a) | under the law of any territory, or |
| |
(b) | under arrangements made in relation to any territory. |
| |
(3) | The steps mentioned in sub-paragraph (1) include— |
| 30 |
(a) | claiming, or otherwise securing the benefit of, reliefs, |
| |
deductions, reductions or allowances; |
| |
(b) | making elections for tax purposes. |
| |
Effect attributable to scheme or arrangement |
| |
5 (1) | This paragraph applies to a scheme or arrangement if, under the |
| 35 |
scheme or arrangement, sub-paragraph (2) is satisfied in relation |
| |
to a person who has claimed, or is in a position to claim, for a |
| |
chargeable period an allowance under any arrangements by way |
| |
of credit for foreign tax. |
| |
(2) | This sub-paragraph is satisfied if amount A is less than amount B. |
| 40 |
(3) | Amount A is the amount of United Kingdom taxes payable by the |
| |
person in respect of income and chargeable gains arising in the |
| |
| |
(4) | Amount B is the amount of United Kingdom taxes that would be |
| |
payable by the person in respect of income and chargeable gains |
| 45 |
arising in the chargeable period if, in determining that amount, the |
| |
|
| |
|
| |
|
transactions constituting, including or forming part of the scheme |
| |
or arrangement were disregarded. |
| |
| |
6 (1) | This paragraph applies to a scheme or arrangement if the scheme |
| |
| 5 |
(a) | the making by a person (“A”) of a relevant payment or |
| |
| |
(b) | the giving, in respect of that payment or payments, of |
| |
consideration that satisfies the requirements of sub- |
| |
| 10 |
(2) | A payment made by A is a relevant payment if all or part of it may |
| |
be brought into account in computing A’s income for the purposes |
| |
| |
(3) | Consideration given in respect of a payment or payments made by |
| |
A satisfies the requirements of this sub-paragraph if— |
| 15 |
(a) | all or part of it consists of a payment or payments made to |
| |
A or a person connected with A, and |
| |
(b) | tax is chargeable in respect of the payment or payments |
| |
under the law of a territory outside the United Kingdom. |
| |
(4) | In this paragraph references to a payment include references to a |
| 20 |
transfer of money’s worth. |
| |
(5) | Section 839 applies for the purposes of this paragraph.” |
| |
| |
| |
| |
Expenses of insurance companies |
| 25 |
1 (1) | Section 76 of ICTA is amended as follows. |
| |
(2) | In subsection (8) (expenses attributable to basic life assurance and general |
| |
annuity business for the purposes of Step 1 are to be those so attributable |
| |
under proper internal accounting practice) in the second sentence (meaning |
| |
of “proper internal accounting practice”) at the end of paragraph (b) insert |
| 30 |
| |
(c) | the Integrated Prudential Sourcebook.”. |
| |
(3) | The amendment made by this paragraph has effect in relation to periods of |
| |
account ending on or after 31st December 2004. |
| |
Interpretative provisions relating to insurance companies |
| 35 |
2 (1) | Section 431(2) of ICTA is amended as follows. |
| |
(2) | Insert the following definition at the appropriate place— |
| |
““the Integrated Prudential Sourcebook” means the Integrated |
| |
Prudential Sourcebook made by the Financial Services |
| |
|
| |
|
| |
|
Authority under the Financial Services and Markets Act |
| |
| |
(3) | For the definition of “liabilities” substitute— |
| |
““liabilities”, in relation to an insurance company, means— |
| |
(a) | the mathematical reserves of the company as |
| 5 |
determined in accordance with chapter 7.3 of the |
| |
Integrated Prudential Sourcebook, and |
| |
(b) | liabilities of the company (whose value falls to be |
| |
determined in accordance with chapter 1.3 of that |
| |
Sourcebook) which arise from deposit back |
| 10 |
arrangements (within the meaning given by that |
| |
| |
(4) | Omit the definition of “long-term liabilities”. |
| |
(5) | For the definition of “value” substitute— |
| |
““value”, in relation to an asset of an insurance company, means |
| 15 |
the value of the asset as determined in accordance with |
| |
chapter 1.3, as read with chapter 3.2, of the Integrated |
| |
| |
(6) | The amendments made by this paragraph have effect in relation to periods |
| |
of account ending on or after 31st December 2004. |
| 20 |
Amendment of Chapter 1 of Part 12 of ICTA etc |
| |
3 | For section 431A of ICTA substitute— |
| |
“431A | Amendment of Chapter etc |
| |
(1) | The Treasury may by order amend any of the following provisions— |
| |
(a) | sections 432ZA, 432A and 432B to 432G and Schedules 19AA |
| 25 |
| |
(b) | sections 83A, 85, 88 and 89 of the Finance Act 1989. |
| |
(2) | The Treasury may by order amend any other insurance company |
| |
taxation provision where it is expedient to do so in consequence of |
| |
the exercise of any power under the Financial Services and Markets |
| 30 |
Act 2000, in so far as that Act relates to insurance companies. |
| |
(3) | Any power conferred by this section to make an order includes |
| |
| |
(a) | different provision for different cases or different purposes, |
| |
| 35 |
(b) | incidental, supplemental, consequential or transitional |
| |
| |
(4) | An order under subsection (1) above may provide for any of its |
| |
provisions to have effect in relation to accounting periods or periods |
| |
of account ending on or after the day on which the order comes into |
| 40 |
force (whenever beginning). |
| |
(5) | Where any exercise of a power under the Financial Services and |
| |
Markets Act 2000 has effect for a period ending on or before, or |
| |
beginning before and ending after, the day on which an order |
| |
containing an amendment in consequence of that exercise is made |
| 45 |
|
| |
|
| |
|
under subsection (2) above, the power conferred by that subsection |
| |
includes power to provide for the amendment to have effect in |
| |
| |
(6) | In this section “insurance company taxation provision” means any of |
| |
| 5 |
(a) | a provision of this Chapter; |
| |
(b) | any other provision of the Tax Acts so far as relating to |
| |
| |
Apportionment of income and gains |
| |
4 (1) | Section 432A of ICTA is amended as follows. |
| 10 |
(2) | In subsection (9A) (meaning of “net value”) for “long-term liabilities” |
| |
substitute “liabilities”. |
| |
(3) | The amendment made by this paragraph has effect in relation to periods of |
| |
account ending on or after 31st December 2004. |
| |
Section 432B apportionment: participating funds |
| 15 |
5 (1) | Section 432E of ICTA is amended as follows. |
| |
(2) | In subsection (2A) (increase in amount determined under subsection (2) |
| |
where amount is taken into account under subsection (2) of section 83 of FA |
| |
1989 by virtue of subsection (2B) of that section) in the opening words— |
| |
(a) | for “an amount is” substitute “an amount or amounts are”; |
| 20 |
(b) | after “subsection (2B) of that section” insert “or by virtue of section |
| |
| |
(3) | In that subsection, for the definition of “RP” substitute— |
| |
| |
(a) | the amount taken into account under subsection (2) of |
| 25 |
section 83 of the Finance Act 1989 by virtue of |
| |
subsection (2B) of that section; |
| |
(b) | the amount so taken into account by virtue of section |
| |
444ACA(2) of this Act; or |
| |
(c) | where amounts are so taken into account by virtue of |
| 30 |
both of those provisions, the aggregate of those |
| |
| |
(4) | The amendments made by this paragraph have effect in relation to insurance |
| |
business transfer schemes (within the meaning given by section 444AC(11) |
| |
of ICTA) taking place on or after 2nd December 2004. |
| 35 |
Transfers of business: modification of section 444AC of ICTA |
| |
6 (1) | Section 444AC of ICTA is amended as follows. |
| |
(2) | In subsection (2) (excess of element of the transferee’s line 15 (or 31) figure |
| |
representing the transferor’s long-term insurance fund over amount |
| |
specified in paragraph (b) not to be regarded as other income of transferee) |
| 40 |
in paragraph (b) (amount of liabilities to policy holders and annuitants |
| |
transferred to transferee)— |
| |
(a) | for “the amount” substitute “the aggregate amount”; |
| |
|
| |
|