|
| |
|
| |
83X (3) | The company is liable to a penalty where it— |
| |
(a) | fraudulently or negligently makes a claim for a film tax |
| |
credit that is incorrect, or |
| |
(b) | discovers that a claim for a film tax credit made by it |
| 5 |
(neither fraudulently nor negligently) is incorrect and does |
| |
not remedy the error without unreasonable delay. |
| |
(4) | The penalty is an amount not exceeding the excess film tax credit |
| |
claimed, that is, the difference between— |
| |
(a) | the amount (if any) of the film tax credit to which the |
| 10 |
company is entitled for the accounting period to which the |
| |
| |
(b) | the amount of the film tax credit claimed by the company |
| |
| |
| 15 |
Provisional entitlement to relief |
| |
| |
30 (1) | In this Part of this Schedule— |
| |
“the company” means the film production company; |
| |
“the final accounting period” means the accounting period of the |
| 20 |
| |
(a) | the film is completed, or |
| |
(b) | where the company does not complete the film, it abandons |
| |
film-making activities in relation to it; |
| |
“interim accounting period” means any earlier accounting period of the |
| 25 |
company during which film-making activities are carried on in |
| |
| |
“interim certificate” and “final certificate” refer to certificates under |
| |
Schedule 1 to the Films Act 1985 (c. 21) (certification of films as |
| |
British films for purposes of film tax relief); |
| 30 |
| |
| |
(b) | relief under section 45 (transfer of terminal losses from one |
| |
qualifying film to another). |
| |
(2) | The company tax return of the company for the final accounting period must |
| 35 |
state that the film has been completed or, as the case may be, that the |
| |
company has abandoned film-making activities in relation to it. |
| |
Certification as a British film |
| |
31 (1) | The company is not entitled to relief for an interim accounting period unless |
| |
its company tax return for the period is accompanied by an interim |
| 40 |
| |
(2) | If an interim certificate ceases to be in force (otherwise than on being |
| |
superseded by a final certificate) or is revoked, the company— |
| |
|
| |
|
| |
|
(a) | is not entitled to relief for any period for which its entitlement |
| |
depended on the certificate, and |
| |
(b) | must amend accordingly its company tax return for any such period. |
| |
(3) | If the film is completed by the company— |
| |
(a) | its company tax return for the final accounting period must be |
| 5 |
accompanied by a final certificate; |
| |
(b) | if that requirement is met, the final certificate has effect for the final |
| |
accounting period and for any interim accounting period; |
| |
(c) | if that requirement is not met, the company— |
| |
(i) | is not entitled to relief for any period, and |
| 10 |
(ii) | must amend accordingly its company tax return for any |
| |
period for which relief was claimed. |
| |
(4) | If the company abandons film-making activities in relation to the film— |
| |
(a) | its company tax return for the final accounting period may be |
| |
accompanied by an interim certificate; and |
| 15 |
(b) | the abandonment of film-making activities does not affect any |
| |
entitlement to relief in that or any previous accounting period. |
| |
(5) | If a final certificate is revoked, the company— |
| |
(a) | is not entitled to relief for any period, and |
| |
(b) | must amend accordingly its company tax return for any period for |
| 20 |
which relief was claimed. |
| |
The UK expenditure condition |
| |
32 (1) | The company is not entitled to relief for an interim accounting period |
| |
| |
(a) | its company tax return for the period states the amount of planned |
| 25 |
core expenditure on the film that is UK expenditure, and |
| |
(b) | that amount is such as to indicate that the condition in section 41 (the |
| |
UK expenditure condition) will be met on completion of the film. |
| |
| If those requirements are met, the company is provisionally treated in |
| |
relation to that period as if that condition was met. |
| 30 |
(2) | If such a statement is made but it subsequently appears that condition will |
| |
not be met on completion of the film, the company— |
| |
(a) | is not entitled to relief for any period for which its entitlement |
| |
depended on such a statement, and |
| |
(b) | must amend accordingly its company tax return for any such period. |
| 35 |
(3) | When the film is completed or, as the case may be, the company abandons |
| |
film-making activities in relation to it— |
| |
(a) | the company tax return for the final accounting period must— |
| |
(i) | state that the film has been completed or, as the case may be, |
| |
the company has abandoned film-making activities in |
| 40 |
| |
(ii) | be accompanied by a final statement of the amount of core |
| |
expenditure on the film that is UK expenditure; and |
| |
(b) | if the return shows that the condition in section 41 is not met, the |
| |
| 45 |
(i) | is not entitled to relief for any period, and |
| |
|
| |
|
| |
|
(ii) | must amend accordingly its company tax return for any |
| |
period for which relief was claimed. |
| |
Whether film a limited-budget film |
| |
33 (1) | The company is not entitled to film tax relief for an interim accounting |
| |
period on the basis that the film is a limited-budget film unless— |
| 5 |
(a) | its company tax return for the period states the amount of planned |
| |
core expenditure on the film, and |
| |
(b) | that amount is such as to indicate that the condition in section 34(2) |
| |
(definition of “limited-budget film”) will be met on completion of the |
| |
| 10 |
| In that case, the film is provisionally treated in relation to that period as if |
| |
| |
(2) | If it subsequently appears that the condition will not be met on completion |
| |
of the film, the company— |
| |
(a) | is not entitled to film tax relief for any period on the basis that the |
| 15 |
film is a limited-budget film, and |
| |
(b) | must amend accordingly its company tax return for any such period |
| |
for which relief has been claimed on that basis. |
| |
(3) | When the film is completed or, as the case may be, the company abandons |
| |
film-making activities in relation to it— |
| 20 |
(a) | its company tax return for the final accounting period must— |
| |
(i) | state that the film has been completed or, as the case may be, |
| |
the company has abandoned film-making activities in |
| |
| |
(ii) | be accompanied by a final statement of the core expenditure |
| 25 |
| |
(b) | if the return shows that the film is not a limited-budget film, or (as |
| |
the case may be) that having regard to the proportion of work on the |
| |
film that was completed, it would not have been a limited-budget |
| |
film if it had been completed, the company— |
| 30 |
(i) | is not entitled to film tax relief for any period on the basis that |
| |
the film is a limited-budget film, and |
| |
(ii) | must amend accordingly its company tax return for any |
| |
period for which such relief was claimed on that basis. |
| |
Time limit for amendments and assessments |
| 35 |
34 | Any amendment or assessment necessary to give effect to the provisions of |
| |
this Part of this Schedule may be made notwithstanding any limitation on |
| |
the time within which an amendment or assessment may normally be made. |
| |
|
| |
|
| |
|
| |
| |
Avoidance involving financial arrangements |
| |
Dividend stripping: subsequent sales etc of rights to receive dividends etc |
| |
1 (1) | Section 730 of ICTA (transfers of rights to receive distributions in respect of |
| |
shares) is amended as follows. |
| 5 |
(2) | Omit subsection (3) (proceeds of subsequent sales etc of rights to receive |
| |
distributions not to be regarded as income of the seller etc). |
| |
(3) | The amendment made by this paragraph has effect in relation to sales or |
| |
other realisations on or after 20th January 2006. |
| |
Deemed interest: cash collateral under stock lending arrangements |
| 10 |
2 (1) | After section 736B of ICTA (deemed manufactured payments in the case of |
| |
stock lending arrangements) insert— |
| |
“736C | Deemed interest: cash collateral under stock lending arrangements |
| |
(1) | This section applies where— |
| |
(a) | the borrower under a stock lending arrangement is treated |
| 15 |
under section 736B(2) as paying under that arrangement an |
| |
amount representative of interest on any securities (“the |
| |
| |
(b) | an amount of money (“cash collateral”) is payable to or for the |
| |
benefit of the lender for the purpose of securing the discharge |
| 20 |
of the requirement to transfer the relevant securities back to |
| |
| |
(c) | the stock lending arrangement is designed to produce a |
| |
return to the borrower which equates, in substance, to the |
| |
return on an investment of money at interest, and |
| 25 |
(d) | the main purpose, or one of the main purposes, of the stock |
| |
lending arrangement is the obtaining of a tax advantage. |
| |
(2) | Where this section applies— |
| |
(a) | the Tax Acts are to apply as if the borrower receives an |
| |
amount of interest payable in respect of the cash collateral, |
| 30 |
| |
(b) | the amount of the interest is calculated in accordance with the |
| |
following provisions of this section (see, in particular, |
| |
| |
(3) | The interest is treated for the purposes of the Tax Acts as if it were |
| 35 |
received on the date (“the return date”) on which the borrower |
| |
transfers the relevant securities back to the lender. |
| |
(4) | The interest is treated for the purposes of the Tax Acts as if it were |
| |
payable in respect of the period (“the interest period”)— |
| |
(a) | beginning with the date on which the lender transfers the |
| 40 |
relevant securities to the borrower, and |
| |
(b) | ending with the return date. |
| |
|
| |
|
| |
|
(5) | The rate of interest payable in respect of the cash collateral is a rate |
| |
that is reasonably comparable to the rate that the borrower could |
| |
obtain by placing the cash collateral on deposit for the interest |
| |
| |
(6) | For the purposes of this section, the amount of the cash collateral on |
| 5 |
which the interest is payable is taken to be— |
| |
(a) | in any case where the amount of the cash collateral varies at |
| |
any time on or before the return date, the highest amount of |
| |
the cash collateral at any time on or before the return date, |
| |
| 10 |
(b) | in any other case, the amount of the cash collateral as at the |
| |
| |
(7) | The amount of the interest which the borrower is treated as receiving |
| |
in respect of the cash collateral for the interest period is reduced (but |
| |
not below nil) by any interest which the borrower actually receives |
| 15 |
in respect of that collateral for that period. |
| |
(8) | If the borrower is a person within the charge to income tax, the |
| |
interest which the borrower is treated as receiving is charged to |
| |
income tax under Chapter 2 of Part 4 of ITTOIA 2005 (interest). |
| |
(9) | If the borrower is a company within the charge to corporation tax— |
| 20 |
(a) | the interest which the borrower is treated as receiving is |
| |
treated for the purposes of Chapter 2 of Part 4 of the Finance |
| |
Act 1996 (loan relationships) as payable to it on a money debt, |
| |
(b) | that money debt is treated for those purposes as a |
| |
relationship to which section 100 of the Finance Act 1996 |
| 25 |
applies (money debts etc not arising from the lending of |
| |
| |
(c) | the credits to be brought into account for those purposes in |
| |
respect of the interest must be determined using an |
| |
amortised cost basis of accounting. |
| 30 |
(10) | The fact that the borrower is treated as receiving an amount of |
| |
interest is not to be taken as implying that the interest is payable by |
| |
the lender or any other person. |
| |
(11) | For the purposes of this section— |
| |
“money” includes money expressed in a currency other than |
| 35 |
| |
“stock lending arrangement” and “securities” have the same |
| |
meanings as in section 263B of the 1992 Act, |
| |
“tax advantage” has the meaning given by section 709(1). |
| |
(12) | For the purposes of this section— |
| 40 |
(a) | any reference to the transfer of securities back has the same |
| |
meaning as in section 263B of the 1992 Act (see, in particular, |
| |
sections 263B(5) and 263C(1) of that Act), but |
| |
(b) | if it becomes apparent that the borrower will not comply with |
| |
the requirement to transfer any securities back, the borrower |
| 45 |
is treated as if he transfers them back on the date on which it |
| |
| |
(13) | For the purposes of this section it does not matter— |
| |
|
| |
|
| |
|
(a) | whether the cash collateral is payable by the borrower or by |
| |
| |
(b) | whether the cash collateral is payable under the stock lending |
| |
arrangement or under any other arrangement, |
| |
(c) | whether collateral in another form is also provided in |
| 5 |
connection with the stock lending arrangement.”. |
| |
(2) | Section 736C of ICTA has effect in relation to any stock lending arrangement |
| |
made on or after 5th December 2005. |
| |
(3) | In relation to any stock lending arrangement made on or after that date but |
| |
before 22nd March 2006, that section has effect as if subsection (6) were |
| 10 |
| |
| |
(a) | a stock lending arrangement was made before 5th December 2005 in |
| |
respect of any securities (“the original securities”), and |
| |
(b) | on or after that date the lender under the stock lending arrangement |
| 15 |
transfers securities (“the substituted securities”) in substitution for |
| |
some or all of the original securities, |
| |
| section 736C of ICTA has effect as if that arrangement were made on the date |
| |
of the substitution (and the substituted securities were the relevant |
| |
| 20 |
Quasi-stock lending arrangements and quasi-cash collateral |
| |
3 (1) | In section 736B of ICTA (deemed manufactured payments in the case of |
| |
stock lending arrangements) at the end insert— |
| |
“(4) | See section 736D for provision treating certain arrangements as stock |
| |
lending arrangements for the purposes of this section.”. |
| 25 |
(2) | In section 736C of ICTA (deemed interest: cash collateral under stock |
| |
lending arrangements), as inserted by paragraph 2 above, at the end insert— |
| |
| |
(a) | for provision treating certain arrangements as stock lending |
| |
arrangements for the purposes of this section, and |
| 30 |
(b) | for provision treating certain amounts as cash collateral for |
| |
| |
(3) | After that section insert— |
| |
“736D | Quasi-stock lending arrangements and quasi-cash collateral |
| |
(1) | In this section “quasi-stock lending arrangement” means so much of |
| 35 |
any arrangements between two or more persons as are not stock |
| |
lending arrangements, but are arrangements under which— |
| |
(a) | a person (“the lender”) transfers securities to another person |
| |
| |
(b) | a requirement is imposed on a person to transfer any or all of |
| 40 |
the securities, or any other property, back to the lender or any |
| |
| |
| and it does not matter whether the person on whom that |
| |
requirement is imposed is the borrower or any other person. |
| |
|
| |
|
| |
|
(2) | In this section “quasi-cash collateral”, in relation to any stock lending |
| |
arrangement or quasi-stock lending arrangement, means— |
| |
(a) | any money which is payable for a relevant purpose, plus |
| |
(b) | any other property which is transferable for a relevant |
| |
| 5 |
(3) | Money or other property is payable or transferable for a relevant |
| |
purpose if it is payable or transferable to or for the benefit of— |
| |
(a) | the lender under the stock lending arrangement or quasi- |
| |
stock lending arrangement, or |
| |
(b) | a person connected with that lender, |
| 10 |
| for the purpose of securing the discharge of the requirement to |
| |
transfer any or all of the securities, or any other property, back to that |
| |
lender or any other person. |
| |
(4) | For the purposes of sections 736B and 736C, a quasi-stock lending |
| |
arrangement is treated as if it were a stock lending arrangement. |
| 15 |
(5) | For the purposes of section 736C, in relation to any stock lending |
| |
arrangement or quasi-stock lending arrangement,— |
| |
(a) | quasi-cash collateral is treated as if it were cash collateral, and |
| |
(b) | the amount of the quasi-cash collateral in relation to the stock |
| |
lending arrangement or quasi-stock lending arrangement is |
| 20 |
taken to be the amount of the cash collateral. |
| |
(6) | If any property other than money is transferable for a relevant |
| |
purpose, the amount of the quasi-cash collateral so far as relating to |
| |
that property is determined by reference to its market value. |
| |
| 25 |
(a) | section 736C applies in relation to a quasi-stock lending |
| |
| |
(b) | the person for whom the tax advantage was designed to be |
| |
obtained is a person (“the other person”) other than the |
| |
borrower under that arrangement, |
| 30 |
| that section has effect as if the other person were the person who |
| |
receives the amount of interest mentioned in that section. |
| |
(8) | In any case where section 736C applies in relation to a quasi-stock |
| |
| |
(a) | any reference in that section to cash collateral being payable |
| 35 |
to or for the benefit of the lender includes its being payable to |
| |
or for the benefit of a person connected with the lender, |
| |
(b) | the reference in subsection (1)(c) of that section to a return to |
| |
the borrower includes a return to any other person, and |
| |
(c) | any reference in that section to the transfer back of the |
| 40 |
relevant securities by the borrower to the lender includes the |
| |
transfer back of any or all of the securities, or any other |
| |
property, by any person to the lender or any other person. |
| |
(9) | Section 839 (connected persons) applies for the purposes of this |
| |
| 45 |
| |
|
| |
|