Finance Bill

House of Commons

Session 2005 - 06
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Finance Bill

Finance Bill
Part 2 — Income tax, corporation tax and capital gains tax
Chapter 6 — Miscellaneous
37

Miscellaneous
45
Lloyd’s underwriters: assessment and collection of tax
(1)
Omit section 173 of, and Schedule 19 to, FA 1993 (Lloyd’s underwriters:
assessment and collection of tax).
(2)
In section 182 of that Act (regulations) in subsection (1)(a) (power of
5
Commissioners for Her Majesty’s Revenue and Customs to make regulations
providing for assessment and collection of tax charged in accordance with
section 171 of FA 1993, so far as not provided for by Schedule 19 to that Act)
omit “(so far as not provided for by Schedule 19 to this Act)”.
(3)
In that section, at the end insert—
10
“(6)
Any power to make regulations conferred by this section includes
power to make—
(a)
different provision for different cases or different purposes, and
(b)
incidental, supplemental or transitional provision and
savings.”.
15
(4)
Omit section 221 of FA 1994 (Lloyd’s underwriters: corporations etc:
assessment and collection of tax).
(5)
Renumber section 229 of that Act (regulations) as subsection (1) of that section.
(6)
In subsection (1) of that section (as amended by subsection (5) above), in
paragraph (a) (power of Commissioners for Her Majesty’s Revenue and
20
Customs to make regulations providing for assessment and collection of tax
charged in accordance with section 219 of FA 1994, so far as not provided for
by Schedule 19 to FA 1993 as applied by section 221 of FA 1994) omit “(so far
as not provided for by Schedule 19 to the 1993 Act as applied by section 221
above)”.
25
(7)
In that section, at the end insert—
“(2)
Any power to make regulations conferred by this section includes
power to make—
(a)
different provision for different cases or different purposes, and
(b)
incidental, supplemental or transitional provision and
30
savings.”.
(8)
For the purpose of enabling the making of any regulations under—
(a)
section 182(1)(a) of FA 1993 (as amended by subsection (2)), or
(b)
section 229(1)(a) of FA 1994 (as amended by subsection (6)),

subsections (1) to (7) come into force on the day on which this Act is passed.
35
(9)
Subject to that, those subsections come into force in accordance with provision
made by the Treasury by order.
(10)
Section 828(3) of ICTA shall not apply in relation to an order under subsection
(9).
(11)
The Commissioners for Her Majesty’s Revenue and Customs may by
40
regulations make such amendments, repeals or revocations in any enactment
(including an enactment amended by this section) as appear to them to be
appropriate in consequence of any one or more of the following—
(a)
any amendment made by this section;

Finance Bill
Part 2 — Income tax, corporation tax and capital gains tax
Chapter 6 — Miscellaneous
38

(b)
the exercise by them of the power in section 182(1)(a) of FA 1993 (as
amended by subsection (2));
(c)
the exercise by them of the power in section 229(1)(a) of FA 1994 (as
amended by subsection (6)).
(12)
Any power conferred by this section to make an order or regulations includes
5
power to make—
(a)
different provision for different cases or different purposes, and
(b)
incidental, supplemental or transitional provision and savings.
(13)
In this section—
“enactment” includes an enactment comprised in subordinate legislation;
10
“subordinate legislation” has the same meaning as in the Interpretation
Act 1978 (c. 30) (see section 21 of that Act).
46
Energy Act 2004 and Health Protection Agency Act 2004
(1)
This section provides for certain enactments to cease to have effect which relate
to—
15
(a)
the United Kingdom Atomic Energy Authority (“UKAEA”),
(b)
the National Radiological Protection Board (“NRPB”), or
(c)
pension schemes run by UKAEA.
(2)
In ICTA the following provisions shall cease to have effect—
(a)
section 349B(3)(g) (no deduction of tax from certain payments to
20
UKAEA);
(b)
section 349B(3)(h) (no deduction of tax from certain payments to
NRPB);
(c)
section 512(1) and (3) (certain exemptions from income tax and
corporation tax for UKAEA and NRPB);
25
(d)
section 512(2) (treatment of certain income of pension schemes run by
UKAEA).
(3)
In section 271(7) of TCGA 1992 (miscellaneous exemptions from tax in respect
of chargeable gains)—
(a)
for “Memorial Fund, the” substitute “Memorial Fund and the”;
30
(b)
omit “, the United Kingdom Atomic Energy Authority”;
(c)
omit “and the National Radiological Protection Board”;
(d)
omit from “; and for the purposes” to the end of the subsection
(treatment of gains accruing to pension schemes run by UKAEA).
(4)
In subsection (2)—
35
(a)
paragraph (a) has effect in relation to payments made on or after 1st
April 2005;
(b)
paragraph (b) has effect in relation to payments made after 1st April
2005;
(c)
paragraph (c), so far as relating to UKAEA, has effect on and after 1st
40
April 2005;
(d)
paragraph (c), so far as relating to NRPB, has effect after 1st April 2005;
(e)
paragraph (d) has effect in relation to income arising on or after 1st
April 2005.
(5)
In subsection (3)—
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Finance Bill
Part 3 — Stamp taxes
39

(a)
paragraphs (a) and (c) have effect in relation to gains accruing after 1st
April 2005;
(b)
paragraphs (b) and (d) have effect in relation to gains accruing on or
after 1st April 2005.
(6)
The repeal of subsection (3)(g) of section 349B of ICTA does not affect the
5
application of any other provision of that section in relation to UKAEA.
(7)
Nothing in this section affects—
(a)
any accounting period of UKAEA ending before 1st April 2005, or
(b)
any accounting period of NRPB ending on or before 1st April 2005.
Part 3
10
Stamp taxes
Stamp duty land tax
47
E-conveyancing
(1)
In section 9(1) of the Public Finance and Accountability (Scotland) Act 2000
(asp 1) (Keeper of the Registers of Scotland: financial arrangements) after
15
“Sums” insert “(other than payments of stamp duty land tax)”.
(2)
In section 79(1) of FA 2003 (registration of land transactions) after “in relation
to the transaction” insert “or such information about compliance as the
Commissioners for Her Majesty’s Revenue and Customs may specify in
regulations.”
20
(3)
In section 119(1) of FA 2003 (land transactions: effective date) for “the date of
completion” substitute—
“(a)
the date of completion, or
(b)
such alternative date as the Commissioners for Her Majesty’s
Revenue and Customs may prescribe by regulations.”
25
(4)
After paragraph 7(1) of Schedule 10 to FA 2003 (land transaction returns:
correction of errors) insert—
   “(1A)
The power under sub-paragraph (1) may, in such circumstances as
the Commissioners for Her Majesty’s Revenue and Customs may
specify in regulations, be exercised—
30
(a)
in relation to England and Wales, by the Chief Land
Registrar;
(b)
in relation to Scotland, by the Keeper of the Registers of
Scotland;
(c)
in relation to Northern Ireland, by the Registrar of Titles or
35
the registrar of deeds;
(d)
in any case, by such other persons with functions relating to
the registration of land as the regulations may specify.”
(5)
The Commissioners for Her Majesty’s Revenue and Customs—
(a)
may make regulations conferring administrative functions on a land
40
registrar in connection with stamp duty land tax, and
(b)
may make payments to land registrars in respect of the exercise of those
functions.

Finance Bill
Part 3 — Stamp taxes
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(6)
In subsection (5) “land registrar” means—
(a)
in relation to England and Wales, the Chief Land Registrar,
(b)
in relation to Scotland, the Keeper of the Registers of Scotland,
(c)
in relation to Northern Ireland, the Registrar of Titles or the registrar of
deeds, and
5
(d)
in any case, such other persons with functions relating to the
registration of land as regulations under subsection (5) may specify.
(7)
Regulations under subsection (5)—
(a)
shall be made by statutory instrument, and
(b)
shall be subject to annulment in pursuance of a resolution of the House
10
of Commons.
48
Disclosure of information contained in land transaction returns
(1)
After section 78 of FA 2003 insert—
“78A
Disclosure of information contained in land transaction returns
(1)
Relevant information contained in land transaction returns delivered
15
under section 76 (whether before or after the commencement of this
section) is to be available for use—
(a)
by listing officers appointed under section 20 of the Local
Government Finance Act 1992, for the purpose of facilitating the
compilation and maintenance by them of valuation lists in
20
accordance with Chapter 2 of Part 1 of that Act,
(b)
as evidence in an appeal by virtue of section 24(6) of that Act to
a valuation tribunal established under Schedule 11 to the Local
Government Finance Act 1988,
(c)
by the Commissioner of Valuation for Northern Ireland, for the
25
purpose of maintaining a valuation list prepared, and from time
to time altered, by him in accordance with Part 3 of the Rates
(Northern Ireland) Order 1977, and
(d)
by such other persons or for such other purposes as the
Treasury may by regulations prescribe.
30
(2)
In this section, “relevant information” means any information of the
kind mentioned in paragraph 1(4) of Schedule 10 (information
corresponding to particulars required under previous legislation).
(3)
The Treasury may by regulations amend the definition of relevant
information in subsection (2).”
35
(2)
In section 245 of FA 1994 (production of documents: supplementary) for
subsection (2) substitute—
“(2)
The information contained in any document produced to the
Commissioners under section 244(2) above shall be available for use by
the Commissioner of Valuation for Northern Ireland.”
40
(3)
For the heading to Part 6 of FA 1994 substitute “Stamp duty”.
(4)
Regulation 3 of the Stamp Duty Land Tax (Consequential Amendment of
Enactments) Regulations 2005 (S. I. 2005/82) is hereby revoked.
(5)
Subsections (1) to (4) come into force on such day as the Treasury may by order
appoint.
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Finance Bill
Part 3 — Stamp taxes
41

(6)
Section 114(3) of FA 2003 (negative resolution procedure) does not apply to an
order made under subsection (5).
49
Miscellaneous amendments
Schedule 10 (which makes miscellaneous amendments of Part 4 of FA 2003)
has effect.
5
Stamp duty and stamp duty reserve tax
50
Power to extend exceptions relating to recognised exchanges
(1)
The Treasury may by regulations extend the application of the provisions
mentioned in subsection (2) to any market (specified by name or by
description) which—
10
(a)
is not a recognised exchange, but
(b)
is a multilateral trading facility (or, assuming compliance with the
provisions of Title II of the Directive (authorisation and operating
conditions), would be such a facility).
(2)
The provisions referred to in subsection (1) are—
15
(a)
sections 80A and 80C of FA 1986 (stamp duty: exceptions for sales to
intermediaries and for repurchases and stock lending), and
(b)
sections 88A and 89AA of that Act (stamp duty reserve tax: exceptions
for intermediaries and for repurchases and stock lending).
(3)
In this section—
20
“the Directive” means Directive 2004/39/EC of the European Parliament
and of the Council of 21 April 2004 on markets in financial instruments;
“multilateral trading facility” has the same meaning as in the Directive
(see Article 4(15));
“recognised exchange” means any of the following—
25
(a)
an EEA exchange,
(b)
a recognised foreign exchange,
(c)
a recognised foreign options exchange,
within the meaning of the provisions mentioned in subsection (2).
(4)
Regulations under this section may provide for the application of the
30
provisions mentioned in subsection (2) subject to any adaptations appearing to
the Treasury to be necessary or expedient.
(5)
In subsection (1)(b) the words “(or, assuming compliance with the provisions
of Title II of the Directive (authorisation and operating conditions), would be
such a facility)” shall cease to have effect on such day as the Treasury may by
35
order appoint.
(6)
Section 117 of FA 2002 (power to extend the exceptions in subsection (2) to any
market prescribed by order under section 118(3) of the Financial Services and
Markets Act 2000) shall cease to have effect on such day as the Treasury may
by order appoint.
40
(7)
The power to make regulations or an order under this section is exercisable by
statutory instrument.
(8)
A statutory instrument containing—

Finance Bill
Part 4 — European company statute
42

(a)
regulations under this section, or
(b)
an order under subsection (5),

shall be subject to annulment in pursuance of a resolution of the House of
Commons.
Part 4
5
European company statute
51
Chargeable gains
(1)
After section 140D of TCGA 1992 (transfer of non-UK trade) insert—
“Formation of SE by merger
140E
Merger leaving assets within UK tax charge
10
(1)
This section applies where—
(a)
an SE is formed by the merger 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),
15
(b)
each merging company is resident in a member State,
(c)
the merging companies are not all resident in the same State,
and
(d)
section 139 does not apply to any qualifying transferred assets.
(2)
Where this section applies, qualifying transferred assets shall be treated
20
for the purposes of corporation tax on chargeable gains as if acquired
by the SE for a consideration resulting in neither gain nor loss for the
transferor.
(3)
For the purposes of subsections (1) and (2) an asset is a qualifying
transferred asset if—
25
(a)
it is transferred to the SE as part of the process of the merger
forming it, and
(b)
subsections (4) and (5) are satisfied in respect of it.
(4)
This subsection is satisfied in respect of a transferred asset if—
(a)
the transferor is resident in the United Kingdom at the time of
30
the transfer, or
(b)
any gain that would have accrued to the transferor, had it
disposed of the asset immediately before the time of the
transfer, would have been a chargeable gain forming part of the
transferor’s chargeable profits in accordance with section 10B.
35
(5)
This subsection is satisfied in respect of a transferred asset if—
(a)
the transferee SE is resident in the United Kingdom on
formation, or
(b)
any gain that would accrue to the transferee SE were it to
dispose of the asset immediately after the transfer would be a
40
chargeable gain forming part of the SE’s chargeable profits in
accordance with section 10B.

Finance Bill
Part 4 — European company statute
43

(6)
For the purposes of this section a company is resident in a member State
if—
(a)
it is within a charge to tax under the law of the State as being
resident for that purpose, and
(b)
it is not regarded, for the purposes of any double taxation relief
5
arrangements to which the State is a party, as resident in a
territory not within a member State.
(7)
This section does not apply to the formation of an SE by merger if—
(a)
it is not effected for bona fide commercial reasons, or
(b)
it forms part of a scheme or arrangements of which the main
10
purpose, or one of the main purposes, is avoiding liability to
corporation tax, capital gains tax or income tax;

and section 138 (clearance in advance) shall apply to this subsection as
it applies to section 137 (with any necessary modifications).
140F
Merger not leaving assets within UK tax charge
15
(1)
This section applies where—
(a)
an SE is formed by the merger 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),
20
(b)
each merging company is resident in a member State,
(c)
the merging companies are not all resident in the same State,
(d)
in the course of the merger a company resident in the United
Kingdom (“company A”) transfers to a company resident in
another member State (“company B”) all assets and liabilities
25
relating to a business which company A carried on in a member
State other than the United Kingdom through a permanent
establishment, and
(e)
the aggregate of the chargeable gains accruing to company A on
the transfer exceeds the aggregate of any allowable losses so
30
accruing.
(2)
Where this section applies, for the purposes of this Act—
(a)
the allowable losses accruing to company A on the transfer shall
be set off against the chargeable gains so accruing, and
(b)
the transfer shall be treated as giving rise to a single chargeable
35
gain equal to the aggregate of those gains after deducting the
aggregate of those losses.
(3)
Where this section applies, section 815A of the Taxes Act shall also
apply.
(4)
Subsections (6) and (7) of section 140E apply for the purposes of this
40
section as they apply for the purposes of that section.
140G
Treatment of securities issued on merger
(1)
This section applies where—
(a)
an SE is formed by the merger of two or more companies in
accordance with Articles 2(1) and 17(2)(a) or (b) of Council
45
Regulation (EC) 2157/2001 on the Statute for a European
Company (Societas Europaea),