Finance Bill

House of Commons

Session 2004 - 05
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Finance Bill

Finance Bill
Schedule 19 — Pension schemes etc.
327

scheme” substitute “(“a transferee pension scheme”) as a result of—
(a)
a block transfer from the pension scheme (“the original
pension scheme”) in relation to which condition A is met
to the transferee pension scheme, or
(b)
a block transfer to the transferee pension scheme from a
5
pension scheme that was a transferee pension scheme in
relation to the original pension scheme by virtue of the
previous application of paragraph (a) or the previous
application (on one or more occasions) of this paragraph.”
      (6)
In paragraph 31(7) (entitlement to lump sums exceeding 25% of
10
uncrystallised rights: condition B), for the words after “the pension scheme”
substitute “(“a transferee pension scheme”) as a result of—
(a)
a block transfer from the pension scheme (“the original
pension scheme”) in relation to which condition A is met
to the transferee pension scheme, or
15
(b)
a block transfer to the transferee pension scheme from a
pension scheme that was a transferee pension scheme in
relation to the original pension scheme by virtue of the
previous application of paragraph (a) or the previous
application (on one or more occasions) of this paragraph.”
20
      (7)
In paragraph 51(5) (pre-commencement entitlement to corresponding
relief), for the words after “a pension scheme” insert “(“a transferee pension
scheme”) if there has been—
(a)
a block transfer from the pension scheme within sub-
paragraph (1) (“the original pension scheme”) to the
25
transferee pension scheme, or
(b)
a block transfer to the transferee pension scheme from a
pension scheme that was a transferee pension scheme in
relation to the original pension scheme by virtue of the
previous application of paragraph (a) or the previous
30
application (on one or more occasions) of this paragraph.”
Transitional provisions: lump sums before normal minimum pension age
56
In Schedule 36 (transitional provisions), after paragraph 23 insert—
“23A  (1)
Where—
(a)
paragraph 19 applies to a benefit crystallisation event
35
occurring in relation to an individual, and
(b)
the benefit crystallisation event consists in the individual
becoming entitled to a pension or a pension
commencement lump sum,

paragraph 2(6) of Schedule 29 has effect as if CSLA were the
40
current standard lifetime allowance reduced by the relevant
percentage (within the meaning of paragraph 19).
      (2)
Sub-paragraph (3) applies where, after the occurrence in relation
to an individual of a benefit crystallisation event in relation to
which paragraph 19 has had effect, another benefit crystallisation
45
event occurs in relation to the individual.
      (3)
If the amount crystallised on the previous benefit crystallisation
event exceeded the available amount of the individual’s lifetime

Finance Bill
Schedule 19 — Pension schemes etc.
328

allowance at the time of that benefit crystallisation event,
paragraph 2(6) of Schedule 29 has effect as if, for the purposes of
AAC, the amount crystallised were the available amount of the
individual’s lifetime allowance at that time.”
Transitional provisions: lump sums exceeding 25% of uncrystallised rights
5
57
In the substituted sub-paragraph (7) set out in paragraph 34(2) of Schedule
36 (entitlement to lump sums exceeding 25% of uncrystallised rights), in the
definition of “ALSA”, for “additional lump sum amount” substitute “greater
of the additional lump sum amount and nil”.
Transitional provisions: inheritance tax
10
58    (1)
Schedule 36 (transitional provisions) is amended as follows.
      (2)
In paragraph 57(1) and (2) (no contributions under scheme after 5th April
2006), for “proportion”, in each place, substitute “percentage”.
      (3)
In paragraph 58(6)(b) (other cases), after “any” insert “relevant”.
Trivial commutation and winding-up lump sums
15
59
In section 636B(3) of ITEPA 2003 (trivial commutation and winding-up lump
sums: taxable pension income to be 75% of lump sum where member has not
become entitled to any benefits under pension scheme), for the words after
“member” substitute “has uncrystallised rights (within the meaning of
section 212 of FA 2004) under any one or more arrangements under the
20
pension scheme, the amount of the taxable pension income—
(a)
if all his rights under the pension scheme are uncrystallised
rights, is 75% of the lump sum, and
(b)
otherwise, is reduced by 25% of the value of the
uncrystallised rights calculated in accordance with that
25
section.”
Application of PAYE to annuities etc.
60
In section 683(3) of ITEPA 2003 (PAYE pension income), after the entry
relating to section 579B of that Act insert—
“section 612, so far as relating to annuities to which section 610
30
applies (annuities under non-registered occupational
pension schemes),”.
61
In Schedule 36 to FA 2004 (transitional provisions), omit—
(a)
paragraph 43 (continuation of Chapter 9 of Part 9 of ITEPA 2003 for
certain annuity contracts with continued exclusion from PAYE), and
35
(b)
paragraph 46 (application of PAYE to certain existing annuity
contracts taxable under section 612 of ITEPA 2003).
62
In sections 348(1A) and 349(1A) of ICTA (deduction of tax), omit—
(a)
paragraph (b), and
(b)
in paragraph (c), “, 610”.
40

Finance Bill
Schedule 20 — Repeals
Part 1 — Excise duties
329

House of Commons Members’ Fund
63
Section 613(1) and (2) of ICTA (tax relief for contributions to House of
Commons Members’ Fund) shall be treated as not having been repealed by
ITEPA 2003.
Commencement
5
64    (1)
Subject as follows, the preceding provisions of this Schedule come into force
on 6th April 2006.
      (2)
Paragraphs 60 to 62 come into force on 6th April 2007.
      (3)
Paragraph 63 comes into force on the day on which this Act is passed.
Schedule 20
10
Section 170

Repeals
Part 1
Excise duties
Vehicle excise duty

Short title and chapter
Extent of repeal

15

Vehicle Excise and Registration
In section 4, subsection (3) and, in subsection

Act 1994 (c. 22)
(7), the words “or (3)”.

Section 7A(4)(a).

In Schedule 1, paragraph 10(3A) and (3B).

Finance Act 1995 (c. 4)
In Schedule 4, paragraph 14(7)(b), (8)(b) and (9).

20

Finance Act 1999 (c. 16)
Section 8(4).

Finance Act 2001 (c. 9)
In Schedule 2, paragraph 6.

Finance Act 2003 (c. 14)
Section 14(1)(a) and (2).

1
The repeal in section 7A of the Vehicle Excise and Registration Act 1994
comes into force on the day on which this Act is passed.
25
2
The remaining repeals have effect in accordance with section 7 of this Act.

Finance Bill
Schedule 20 — Repeals
Part 3 — Income tax, corporation tax and capital gains tax
330

Part 2
Value added tax
Disclosure of avoidance schemes

Short title and chapter
Extent of repeal

Value Added Tax Act 1994 (c.
In Schedule 11A—

5

23)
(a)
in paragraph 6(1), the word “or” at the

end of paragraph (a), and

(b)
in paragraph 11(3), the word “and” at

the end of paragraph (a).


The repeals in Schedule 11A to VATA 1994 come into force in accordance
10
with an order under section 14(2) of this Act.
Part 3
Income tax, corporation tax and capital gains tax
(1) Extension of outplacement services etc exemption: part-time employees

Short title and chapter
Extent of repeal

15

Income Tax (Earnings and
In section 310(4), “full-time”.

Pensions) Act 2003 (c. 1)
In section 311—

(a)
in subsection (3), paragraph (d) and the

word “and” before it;

(b)
in subsection (4)(c), “full-time”.

20

These repeals have effect in accordance with section 25(5) of this Act.
(2) Employee securities: anti-avoidance

Short title and chapter
Extent of repeal

Taxation of Chargeable Gains
In section 119A(3), the words following the

Act 1992 (c. 12)
paragraphs.

25

Income Tax (Earnings and
Section 420(5)(d).

Pensions) Act 2003 (c. 1)
In section 424(1), paragraph (c) and the word

“or” before it.

Finance Act 2004 (c. 12)
Section 86(4).

1
The repeal in TCGA 1992 has effect in accordance with section 35 of this Act.
30
2
The remaining repeals have effect in accordance with Schedule 2 to this Act.
(3) Scientific research organisations

Short title and chapter
Extent of repeal

Income Tax (Trading and Other
Section 88(4)(a).

Income) Act 2005 (c. 00)

35

Finance Bill
Schedule 20 — Repeals
Part 3 — Income tax, corporation tax and capital gains tax
331

Short title and chapter
Extent of repeal

Income Tax (Trading and Other
In Schedule 1, paragraph 55(b).

Income) Act 2005 (c. 00)—

cont.

1
The repeal of section 88(4)(a) of ITTOIA 2005 has effect in accordance with
5
section 37 of this Act.
2
The repeal of paragraph 55(b) of Schedule 1 to that Act has effect in
accordance with section 38 of this Act.
(4) Unit trusts and open-ended investment companies

Short title and chapter
Extent of repeal

10

Income and Corporation Taxes
Section 349B(4)(b).

Act 1988 (c. 1)
Sections 468H to 468Q.

Finance Act 1996 (c. 8)
Paragraphs 2A and 2B of Schedule 10.

Finance Act 2002 (c. 23)
Paragraphs 32 and 33 of Schedule 26.

Income Tax (Trading and Other
Section 373(4) and (6).

15

Income) Act 2005 (c. 00)
Section 376(4) and (6).

Paragraph 151(2) of Schedule 1.


These repeals have effect in accordance with section 65(1) of this Act.
(5) Films: restrictions on relief for production and acquisition expenditure

Short title and chapter
Extent of repeal

20

Finance (No. 2) Act 1992 (c. 48)
Section 40A(5).

In section 42—

(a)
in subsection (2), the word “and”

immediately before paragraph (b), and

(b)
in subsection (3), the word “and”

25

immediately before paragraph (b).

In section 43(1), the definitions of “master disc”,

“master negative” and “master tape”.

Finance (No. 2) Act 1997 (c. 58)
Section 48(3), (4) and (5).

Finance Act 2002 (c. 23)
Section 101.

30

Income Tax (Trading and Other
In section 138 (as substituted by this Act), in

Income) Act 2005 (c. 00)
subsection (5), in Calculation 2, paragraph (c)

and the word “and” immediately before it.

In section 138A(5), Calculation 2.

In section 139—

35

(a)
in subsection (1), the word “and”

immediately before paragraph (e), and

(b)
in subsection (5)(d) the words “, or

section 42 of that Act (but not as applied

by section 48(1) and (2) of F(No.2)A

40

1997),”.

Finance Bill
Schedule 20 — Repeals
Part 3 — Income tax, corporation tax and capital gains tax
332

Short title and chapter
Extent of repeal

Income Tax (Trading and Other
In section 140—

Income) Act 2005 (c. 00)—
(a)
in subsection (1), paragraph (b) and the

cont.
word “and” immediately before

paragraph (f),

5

(b)
subsection (2), and

(c)
in subsection (6)(d), the words “, or

section 42 of that Act (but not as applied

by section 48(1) to (3) of F(No.2)A

1997),”.

10

1
The repeals in section 40A(5) and 43(1) of F(No.2)A 1992 have effect in
accordance with paragraph 31(3) of Schedule 5 to this Act.
2
The repeals in section 42 of that Act have effect in accordance with
paragraph 1(6) to (8) of that Schedule.
3
The repeals in section 48 of F(No.2)A 1997 have effect in accordance with
15
paragraph 10(2) to (4) of that Schedule.
4
The repeal of section 101 of FA 2002 has effect in accordance with paragraph
2(2) and (3) of that Schedule.
5
The repeals in section 138 of ITTOIA 2005 have effect in accordance with
paragraph 11(5) to (7) of that Schedule.
20
6
The repeal in section 138A of that Act has effect in accordance with
paragraph 12(6) to (8) of that Schedule.
7
The repeal in section 139(1) of that Act has effect in accordance with
paragraph 4(4) and (5) of that Schedule.
8
The repeal in section 139(5) of that Act has effect in accordance with
25
paragraph 13 of that Schedule.
9
The repeal in section 140(6) of that Act has effect in accordance with
paragraph 14 of that Schedule.
10
The remaining repeals in that section have effect in accordance with
paragraph 5(4) to (6) of that Schedule.
30

Finance Bill
Schedule 20 — Repeals
Part 3 — Income tax, corporation tax and capital gains tax
333

(6) Partners: removal of restriction on interest relief

Short title and chapter
Extent of repeal

Income and Corporation Taxes
In section 117—

Act 1988 (c. 1)
(a)
in subsection (1), the words “353,” and,

in paragraph (a), the words “, or of

5

interest paid by him in connection with

the carrying on of a trade,”,

(b)
in subsection (2), in the definition of “the

aggregate amount”, the words “353,”

and, in paragraph (a), the words “, or of

10

interest paid by him in connection with

carrying it on,”, and

(c)
in that subsection, in the definition of

“the appropriate time”, the words “or

the interest paid”.

15

In section 118ZB(2), the words “, or interest paid

by him in connection with the carrying on of

a trade,”.

In section 118ZE(1), the words “353,” and “, or

interest paid by him in connection with the

20

carrying on of a trade,”.

In section 118ZF(1), the words “353,” and “, or of

interest paid by him in connection with

carrying it on,”.

In section 118ZG(2)(b)(ii), the words “353,” and

25

“, or of interest paid by him in connection

with carrying it on,”.

In section 118ZJ—

(a)
in subsection (3), the words “353,” and “,

and interest paid by him in connection

30

with carrying it on,”,

(b)
in subsection (4), the words “the sum

of”, paragraph (b) and the word “and”

immediately before that paragraph, and

(c)
in subsection (5), paragraph (b) and the

35

word “and” immediately before it.


These repeals have effect in accordance with section 96(7) to (12) of this Act.
(7) Bad debts and related matters

Short title and chapter
Extent of repeal

Income and Corporation Taxes
Section 74(1)(j) and (2).

40

Act 1988 (c. 1)
Section 94(2).

Section 103(4A).

Finance Act 1994 (c. 9)
Section 144(1), (5) and (6).