Finance (No.2) Bill

House of Commons

Session 2005 - 06
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Finance (No.2) Bill

Finance (No.2) Bill
Part 8 — Stamp taxes
138

(7)
For the purposes of subsection (6)(b) the contract is varied in a way that
significantly affects the land transaction if (and only if)—
(a)
it is varied so as to substitute a different purchaser in relation to the
land transaction,
(b)
it is varied so as to alter the subject-matter of the land transaction, or
5
(c)
it is varied so as to alter the consideration for the land transaction.
(8)
Expressions which are used in Part 4 of FA 2003 and in this section have the
same meaning in this section as in that Part.
168
Demutualisation of insurance companies
(1)
Schedule 7 to FA 2003 (stamp duty land tax: group relief etc) is amended as
10
follows.
(2)
In paragraph 2 (restrictions on availability of group relief) in sub-paragraph (1)
(no relief if arrangements by virtue of which a person has or could control
purchaser but not vendor) at the end insert—

“For another exception to this, see sub-paragraph (3A).”.
15
(3)
In that paragraph after sub-paragraph (3) (arrangements which are within sub-
paragraph (2)(a)) insert—
   “(3A)
Sub-paragraphs (1) and (2)(b) do not apply to arrangements in so far
as they are for the purpose of facilitating a transfer of the whole or
part of the business of a company to another company in relation to
20
which—
(a)
section 96 of the Finance Act 1997 is intended to apply (stamp
duty relief: demutualisation of insurance companies), and
(b)
the conditions for relief under that section are intended to be
met.”.
25
(4)
In paragraph 4 (cases in which group relief not withdrawn under paragraph
3)—
(a)
after sub-paragraph (6) (the third case where the relief not withdrawn)
insert—
   “(6A)
The fourth case is where—
30
(a)
the purchaser ceases to be a member of the same
group as the vendor as a result of the transfer of the
whole or part of the vendor’s business to another
company (“the acquiring company”) in relation to
which—
35
(i)
section 96 of the Finance Act 1997 applies
(stamp duty relief: demutualisation of
insurance companies), and
(ii)
the conditions for relief under that section are
met, and
40
(b)
the purchaser is immediately after that transfer a
member of the same group as the acquiring
company.”, and
(b)
in sub-paragraph (7) (re-imposition of the withdrawal of the relief), in
the opening words, after “in a case within sub-paragraph (6)” insert “or
45
(6A)”.

Finance (No.2) Bill
Part 8 — Stamp taxes
139

(5)
The amendments made by this section have effect in relation to any transfer
which takes place, or is intended to take place, after 22nd March 2006.
169
Alternative finance
(1)
In sections 71A to 73 of FA 2003 (alternative property finance) for “individual”
substitute “person” (and for “an individual” substitute “a person”).
5
(2)
Sections 71A(6), 72(6), 72A(6) and 73(4) shall cease to have effect.
(3)
In section 73(3) after “chargeable” insert “on a chargeable consideration that is
not less than the market value of the interest and, in the case of the grant of a
lease at a rent, the rent.”
(4)
After section 73 insert—
10
“73A
Sections 71A to 73: supplemental
Sections 71A to 73 do not apply to arrangements in which the first
transaction is exempt from charge by virtue of Schedule 7.”
(5)
This section shall have effect in relation to arrangements in which the effective
date of the first transaction (within the meaning of sections 71A to 73 of FA
15
2003) is on or after the date on which this Act is passed; and section 119(1) of
FA 2003 shall have effect for determining the effective date for the purposes of
this subsection.
Stamp duty
170
Reliefs for certain company acquisitions
20
(1)
Part 3 of FA 1986 (stamp duty) is amended as follows.
(2)
In section 75 (relief for acquisition of target company’s undertaking in
pursuance of reconstruction scheme)—
(a)
in subsection (4) (condition as to registered office etc) omit “that the
registered office of the acquiring company is in the United Kingdom
25
and”, and
(b)
in subsection (5)(c) (condition that any shareholder holds the same
proportion of shares in the companies) after “the same” insert “, or as
nearly as may be the same,”.
(3)
In section 76 (other relief for acquisition of target company’s undertaking), in
30
subsection (3) (condition as to registered office etc) omit “that the registered
office of the acquiring company is in the United Kingdom and”.
(4)
In section 77 (relief for acquisition of target company’s share capital), in
subsection (3) (conditions for relief),—
(a)
omit paragraph (a) (condition as to registered office),
35
(b)
in paragraph (g) (condition that the number of shares of any particular
class bear to all the shares the same proportion) after “the same
proportion” insert “, or as nearly as may be the same proportion,”, and
(c)
in paragraph (h) (condition that proportion of shares of any particular
class held by any shareholder be the same) after “the same” insert “, or
40
as nearly as may be the same,”.

Finance (No.2) Bill
Part 9 — Miscellaneous provisions
140

(5)
The amendments made by this section have effect in relation to instruments
executed after the day on which this Act is passed.
Part 9
Miscellaneous provisions
Landfill tax
5
171
Rate of landfill tax
(1)
In section 42 of FA 1996 (amount of landfill tax) for the amount specified in
subsection (1)(a), and the corresponding amount specified in subsection (2),
substitute “£21”.
(2)
The amendments made by this section have effect in relation to taxable
10
disposals made, or treated as made, on or after 1st April 2006.
Climate change levy
172
Climate change levy: rates
(1)
In Schedule 6 to FA 2000 (climate change levy) for the Table in paragraph 42(1)
(amount payable by way of levy) substitute—
15

Taxable commodity supplied
Rate at which levy payable if

supply is neither a half-rate

supply nor a reduced-rate supply

Electricity
£0.00441 per kilowatt hour

Gas supplied by a gas utility or
£0.00154 per kilowatt hour

20

any gas supplied in a gaseous

state that is of a kind supplied

by a gas utility

Any petroleum gas, or other
£0.00985 per kilogram

gaseous hydrocarbon, supplied

25

in a liquid state

Any other taxable commodity
£0.01201 per kilogram

(2)
This section has effect in relation to supplies treated as taking place on or after
1st April 2007.
173
Abolition of half-rate supplies etc
30
(1)
For the purposes of climate change levy, no supply made on or after 1st April
2006 is a half-rate supply.
(2)
Subsections (3) to (6) have effect for determining when a supply is to be
regarded as made for the purposes of subsection (1).

Finance (No.2) Bill
Part 9 — Miscellaneous provisions
141

(3)
A supply—
(a)
of electricity, or
(b)
of gas that is in a gaseous state and is of a kind supplied by a gas utility,

is to be regarded as made at the time when the electricity or gas is actually
supplied.
5
(4)
In the case of a supply of a taxable commodity not falling within subsection (3)
by a person who is resident in the United Kingdom—
(a)
if the commodity is to be removed, the supply is to be regarded as made
at the time of the removal,
(b)
if the commodity is not to be removed, the supply is to be regarded as
10
made when the commodity is made available to the person to whom it
is supplied.

This subsection does not apply if subsection (6) (deemed self-supply) applies
in the case of the supply.
(5)
In the case of a supply of a taxable commodity not falling within subsection (3)
15
by a person who is not resident in the United Kingdom, the supply is to be
regarded as made—
(a)
when the commodity is delivered to the person to whom it is supplied,
or
(b)
if earlier, when it is made available in the United Kingdom to that
20
person.

This subsection does not apply if subsection (6) (deemed self-supply) applies
in the case of the supply.
(6)
In any case where, by virtue of paragraph 23(3) of Schedule 6 to FA 2000, a
person is, for the purposes of that Schedule, deemed to make a supply to
25
himself of a quantity of a taxable commodity—
(a)
which he has produced, and
(b)
which does not fall within subsection (3),

the supply is to be regarded as made at the time when he produced that
particular quantity of the taxable commodity.
30
(7)
In paragraph 34 of Schedule 6 to FA 2000 (deemed supplies of commodities
other than electricity and certain gas), in sub-paragraph (2) omit the words
“(or, in the case of electricity, consumed)” (which are unnecessary, because the
paragraph does not apply in the case of electricity).
(8)
In consequence of subsection (1), Schedule 6 to FA 2000 (climate change levy)
35
is amended as follows.
(9)
In paragraph 37 (supplies of electricity or gas spanning change of rate etc) in
sub-paragraph (1)(c) omit “half-rate supplies or”.
(10)
In paragraph 38 (other supplies spanning change of rate etc) in sub-paragraph
(1)(c) omit “half-rate supplies or”.
40
(11)
In paragraph 42(1) (amount payable by way of levy)—
(a)
in paragraph (a), for “ neither a half-rate supply nor” substitute “not”;
(b)
omit paragraph (b);
(c)
in paragraph (c), for “ neither a half-rate supply nor” substitute “not”;
(d)
in the Table (and in the Table substituted for it by section 172 of this
45
Act), in the heading to column (2), for “ neither a half-rate supply nor”
substitute “not”.

Finance (No.2) Bill
Part 9 — Miscellaneous provisions
142

(12)
Paragraph 43 (half-rate for supplies to horticultural producers) shall cease to
have effect.
(13)
In paragraph 62 (tax credits) in subsection (1)—
(a)
in paragraph (c)—
(i)
for “ neither a half-rate supply nor” substitute “not”;
5
(ii)
omit “half-rate or”;
(b)
omit paragraph (d).
(14)
In paragraph 101 (civil penalties: incorrect notifications) in sub-paragraph
(2)(a)—
(a)
at the end of sub-paragraph (ii) insert “or”;
10
(b)
omit sub-paragraph (iii).
(15)
In paragraph 147 (interpretation: general) omit the definition of “half-rate
supply”.
(16)
Subsections (8) to (15) come into force on such day as the Treasury may by
order made by statutory instrument appoint.
15
(17)
The power to make an order under subsection (16)—
(a)
may be exercised so as to bring a provision into force only in such cases
as may be described in the order,
(b)
may be exercised so as to make different provision for different cases or
descriptions of case,
20
(c)
includes power to make incidental, consequential, supplemental or
transitional provision or savings.
International tax arrangements
174
International tax enforcement arrangements
(1)
If Her Majesty by Order in Council declares that—
25
(a)
arrangements relating to international tax enforcement which are
specified in the Order have been made in relation to any territory or
territories outside the United Kingdom, and
(b)
it is expedient that those arrangements have effect,

those arrangements have effect (and do so in spite of anything in any
30
enactment or instrument).
(2)
For the purposes of subsection (1) arrangements relate to international tax
enforcement if they relate to any or all of the following—
(a)
the exchange of information foreseeably relevant to the administration,
enforcement or recovery of any UK tax or foreign tax;
35
(b)
the recovery of debts relating to any UK tax or foreign tax;
(c)
the service of documents relating to any UK tax or foreign tax.
(3)
In this section—
“UK tax” means any tax or duty imposed under the domestic law of the
United Kingdom, and
40
“foreign tax” means any tax or duty imposed under the law of the
territory, or any of the territories, in relation to which the arrangements
have been made.

Finance (No.2) Bill
Part 9 — Miscellaneous provisions
143

(4)
Where any arrangements have effect by virtue of this section, no obligation of
secrecy (whether imposed by statute or otherwise)—
(a)
prevents any Minister of the Crown, or person with responsibilities in
any government department, from disclosing to the Commissioners for
Her Majesty’s Revenue and Customs or any authorised Revenue and
5
Customs official any information which is authorised to be disclosed in
accordance with the arrangements to any authorised officer of the
authorities of the territory, or any of the territories, in relation to which
the arrangements have been made, or
(b)
prevents the Commissioners for Her Majesty’s Revenue and Customs
10
or any authorised Revenue and Customs official from disclosing to any
such authorised officer any information which is authorised to be so
disclosed in accordance with the arrangements.
(5)
But neither the Commissioners for Her Majesty’s Revenue and Customs nor
any authorised Revenue and Customs official may disclose any information in
15
pursuance of any arrangements having effect by virtue of this section to any
authorised officer of the authorities of the territory, or any of the territories, in
relation to which the arrangements have been made unless satisfied that the
authorities of the territory concerned are bound by, or have undertaken to
observe, rules of confidentiality with respect to the information which are not
20
less strict than those applying to it in the United Kingdom.
(6)
An Order in Council made under this section revoking an earlier such Order
may contain any transitional provisions that appear appropriate.
(7)
An Order under this section is not to be submitted to Her Majesty in Council
unless a draft of the Order has been laid before and approved by a resolution
25
of the House of Commons.
(8)
Any provisions which—
(a)
are included in an Order in Council made under any of the provisions
specified in subsection (10),
(b)
are in force immediately before the passing of this Act, and
30
(c)
could have been included in an Order in Council under this section had
the Order in Council been made after that time,

have effect after that time as if included in an Order in Council under this
section.
(9)
If any such provisions relate to arrangements covering UK taxes or foreign
35
taxes (or both) other than those in relation to which the Order in Council had
effect, the provisions also have effect after the passing of this Act (by virtue of
subsection (8)) in relation to those other UK taxes or foreign taxes (or both).
(10)
The provisions referred to in subsection (8)(a) are—
(a)
sections 788 and 815C of ICTA (international arrangements relating to
40
income tax, corporation tax and capital gains tax and analogous foreign
taxes), and
(b)
sections 158 and 220A of IHTA 1984 (international arrangements
relating to inheritance tax and analogous foreign taxes).
(11)
In this section “Revenue and Customs official” has the same meaning as in
45
section 18 of the Commissioners for Revenue and Customs Act 2005 (c. 11)
(confidentiality).