|
| |
|
(a) | “settlement” has the same meaning as in section 620 |
| |
| |
(b) | “trustee”, in relation to a settlement in relation to |
| |
which there would be no trustees apart from this |
| |
paragraph, means any person in whom the settled |
| 5 |
property or its management is for the time being |
| |
| |
(c) | “principal settlement” and “sub-fund settlement” |
| |
have the meaning given by paragraph 1 of Schedule |
| |
| 10 |
26 | In paragraph 4(12) of Schedule 28AA for the definitions of “settlement” and |
| |
| |
“settlement” and “settlor” have the same meanings as in section |
| |
| |
27 (1) | Paragraph 7 and paragraphs 9 to 26 shall come into force on 6th April 2006 |
| 15 |
(in relation to settlements whenever created). |
| |
(2) | Paragraph 8 shall come into force on 6th April 2007 (in relation to |
| |
settlements whenever created). |
| |
28 (1) | FA 1989 shall be amended as follows. |
| |
(2) | The following provisions shall cease to have effect— |
| 20 |
| |
(b) | section 71(4)(c), and |
| |
| |
| |
(a) | after paragraph (ba) insert “, and”, and |
| 25 |
(b) | after paragraph (bb) omit “, and”. |
| |
| |
(a) | after paragraph (ba) insert “, and”, and |
| |
(b) | after paragraph (bb) omit “, and”. |
| |
(5) | Sub-paragraph (2)(a) and (b) shall have effect in relation to payments made |
| 30 |
on or after 6th April 2006. |
| |
(6) | Sub-paragraph (2)(c) shall have effect from 6th April 2007 (in relation to |
| |
settlements whenever created). |
| |
(7) | Sub-paragraphs (3) and (4) shall come into force on 6th April 2006. |
| |
29 (1) | In section 151(2)(a) of FA 1989 (assessment of trustees) for “the trustees to |
| 35 |
whom the income arises” substitute “the trustees of the settlement in the |
| |
year of assessment in which the income arises”. |
| |
(2) | This paragraph shall come into force on 6th April 2006. |
| |
30 (1) | In section 25(9)(b) of FA 1990— |
| |
(a) | after sub-paragraph (iii) omit “or”, and |
| 40 |
(b) | after sub-paragraph (iv) insert— “or |
| |
(v) | section 685A(2) of that Act (payments from |
| |
settlor-interested settlements);”. |
| |
|
| |
|
| |
|
(2) | This paragraph shall have effect for payments in respect of income made on |
| |
| |
| |
(a) | for “trustees of trusts” in each place in sections 417(2) and 420 |
| |
substitute “trustees of settlements”, |
| 5 |
(b) | in section 420(1)(a) and (c) for “trust” substitute “settlement”, |
| |
(c) | in the title of section 420 for “trust” substitute “settlement”. |
| |
(2) | For section 623 of ITTOIA 2005 (calculation of income) substitute— |
| |
“623 | Calculation of income |
| |
For the purpose of calculating liability to tax under this Chapter (but |
| 10 |
for no other purpose), a settlor shall be allowed the same deductions |
| |
and reliefs as if any amount treated under this Chapter as income of |
| |
the settlor had actually been received by the settlor.” |
| |
(3) | This paragraph shall come into force on 6th April 2006 in respect of |
| |
settlements whenever created, and in respect of loans or advances whenever |
| 15 |
| |
32 (1) | The following provisions of ITTOIA 2005 shall cease to have effect— |
| |
| |
| |
(2) | In section 457(5) of ITTOIA 2005 for “(2) to (4)” substitute “(2) and (3)”. |
| 20 |
(3) | In section 467(7) of that Act for paragraph (b) substitute— |
| |
“(b) | at the rate applicable by virtue of section 686A of ICTA |
| |
(payments treated as income) in any other case.” |
| |
(4) | This paragraph shall have effect in relation to payments made on or after 6th |
| |
April 2006 to the trustees of a settlement (whenever created). |
| 25 |
33 (1) | In sections 628 and 630 of ITTOIA 2005 for “UK trust” in each place |
| |
substitute “UK settlement”. |
| |
(2) | In section 628(6) of that Act for the definition of “UK trust” substitute— |
| |
““UK settlement” means a settlement the trustees of which are |
| |
resident and ordinarily resident in the United Kingdom.” |
| 30 |
(3) | In section 630(1)(b) of that Act for “terms of the trust” substitute “terms of the |
| |
| |
(4) | In section 631(5)(e)(ii) of that Act for “provisions of the trust” substitute |
| |
“terms of the settlement”. |
| |
(5) | This paragraph shall come into force on 6th April 2006. |
| 35 |
34 (1) | After section 629(7) of ITTOIA 2005 insert— |
| |
“(8) | Subsection (1) is subject to section 28A of FA 2005.” |
| |
(2) | This paragraph shall have effect in relation to payments made on or after 6th |
| |
| |
35 (1) | FA 2005 shall be amended as follows. |
| 40 |
|
| |
|
| |
|
(2) | In the following provisions for “trustees” substitute “the trustees of a |
| |
| |
(a) | section 23(1)(a) and (b) (vulnerable persons: introduction), |
| |
(b) | section 24(1) (vulnerable persons: claims), |
| |
(c) | section 25(1)(a) (qualifying trusts: income tax), and |
| 5 |
(d) | section 37(1) (vulnerable person election). |
| |
| |
(a) | for “section 660G(1) and (2) of ICTA” substitute “section 620(1) of |
| |
| |
(b) | for “section 660A of that Act” substitute “sections 624 and 625 of that |
| 10 |
| |
(4) | In section 27(2)(b) (qualifying expenses) for “total income” substitute |
| |
| |
(5) | Section 42(5)(b) shall cease to have effect. |
| |
(6) | In section 43(4) (penalties) for the first reference to “trustees” substitute “the |
| 15 |
trustees of a settlement”. |
| |
(7) | This paragraph shall come into force on 6th April 2006. |
| |
36 (1) | After section 28 of FA 2005 insert— |
| |
“28A | Disapplication of section 629 of ITTOIA 2005 |
| |
(1) | In a case where this section applies, section 629(1) of ITTOIA 2005 |
| 20 |
shall not apply in respect of a payment by the trustees of a settlement |
| |
to a beneficiary under the settlement. |
| |
(2) | This section applies if in a year of assessment— |
| |
(a) | the trustees make a payment to a vulnerable person, |
| |
(b) | the payment is made out of qualifying trusts income, |
| 25 |
(c) | the vulnerable person is a relevant child (within the meaning |
| |
given by section 629 of ITTOIA 2005) of a settlor in relation to |
| |
| |
(d) | the trustees have made a successful claim for special income |
| |
tax treatment under section 25.” |
| 30 |
(2) | This paragraph shall have effect in relation to payments made on or after 6th |
| |
| |
37 (1) | For the purposes of regulations (whenever made) made under a provision of |
| |
| |
(a) | references to settled property, a settlor or trustees shall be read in |
| 35 |
accordance with sections 685A to 685G of ICTA (inserted by |
| |
paragraph 1 of this Schedule), and |
| |
(b) | references to the trustees of a trust shall be treated as references to the |
| |
trustees of a settlement. |
| |
(2) | This paragraph shall come into force on 6th April 2006. |
| 40 |
|
| |
|
| |
|
| |
| |
Investment reliefs: venture capital schemes |
| |
| |
Limits on gross assets of issuers of shares or securities |
| |
Enterprise investment scheme |
| 5 |
1 (1) | In section 293(6A) of ICTA (enterprise investment scheme: limits on value of |
| |
gross assets of share-issuing company or its group)— |
| |
(a) | in paragraph (a) (value must not exceed £15 million immediately |
| |
before issue of eligible shares), for “£15 million” substitute “£7 |
| |
| 10 |
(b) | in paragraph (b) (value must not exceed £16 million immediately |
| |
after issue of eligible shares), for “£16 million” substitute “£8 |
| |
| |
(2) | Sub-paragraph (1) has effect in relation to shares issued on or after 6th April |
| |
2006, subject to sub-paragraphs (3) and (4). |
| 15 |
(3) | Sub-paragraph (1) does not have effect in relation to shares issued on or after |
| |
6th April 2006 to a person who subscribed for them before 22nd March 2006. |
| |
(4) | Sub-paragraph (1) does not have effect in relation to shares issued on or after |
| |
6th April 2006 to the managers of an investment fund approved for the |
| |
purposes of section 311 of ICTA by the Commissioners for Her Majesty’s |
| 20 |
| |
(a) | the fund was approved before 22nd March 2006, |
| |
(b) | investments in the fund have been accepted before 6th April 2006, |
| |
| |
(c) | the shares are issued to the managers as nominee for an individual |
| 25 |
who has (whether or not before 6th April 2006) invested in the fund. |
| |
| |
2 (1) | In paragraph 8(1) of Schedule 28B to ICTA (venture capital trusts: limits on |
| |
value of gross assets of company issuing relevant holding or its group)— |
| |
(a) | in paragraph (a) (value must not exceed £15 million immediately |
| 30 |
before issue of relevant holding), for “£15 million” substitute “£7 |
| |
| |
(b) | in paragraph (b) (value must not exceed £16 million immediately |
| |
after issue of relevant holding), for “£16 million” substitute “£8 |
| |
| 35 |
(2) | Sub-paragraph (1) has effect in relation to relevant holdings issued on or |
| |
after 6th April 2006, subject to sub-paragraph (3). |
| |
(3) | Sub-paragraph (1) does not have effect for the purpose of determining |
| |
whether any shares or securities acquired by a company (“the trust |
| |
company”) by means of the investment of protected money are, for the |
| 40 |
purposes of section 842AA of ICTA, to be regarded as comprised in |
| |
qualifying holdings of the company at any time. |
| |
(4) | In sub-paragraph (3) “protected money” means— |
| |
|
| |
|
| |
|
(a) | money raised by the issue before 6th April 2006 of shares in or |
| |
securities of the trust company, or |
| |
(b) | money derived from the investment by the trust company of any |
| |
| |
Corporate venturing scheme |
| 5 |
3 (1) | In paragraph 22(1) and (2) of Schedule 15 to FA 2000 (corporate venturing |
| |
scheme: limits on value of gross assets of share-issuing company or its |
| |
| |
(a) | in paragraph (a) (value must not exceed £15 million immediately |
| |
before issue of relevant shares), for “£15 million” substitute “£7 |
| 10 |
| |
(b) | in paragraph (b) (value must not exceed £16 million immediately |
| |
after issue of relevant shares), for “£16 million” substitute “£8 |
| |
| |
(2) | Sub-paragraph (1) has effect in relation to shares issued on or after 6th April |
| 15 |
2006, subject to sub-paragraph (3). |
| |
(3) | Sub-paragraph (1) does not have effect in relation to shares issued on or after |
| |
6th April 2006 to a person who subscribed for them before 22nd March 2006. |
| |
| |
Rate of relief for investments in venture capital trusts |
| 20 |
4 (1) | In paragraph 1(5)(a) of Schedule 15B to ICTA (where relief available on |
| |
shares issued by venture capital trust on or after 6th April 2006, income tax |
| |
liability reduced by amount not exceeding the sum subscribed multiplied by |
| |
the lower rate of 20%), for “tax at the lower rate for that year on” substitute |
| |
| 25 |
(2) | In paragraph 3(4) of that Schedule (where shares in venture capital trust |
| |
disposed of by bargain at arm’s length within 3 years of their issue, relief |
| |
given is reduced by reference to consideration for disposal if less than |
| |
amount subscribed), for “tax at the lower rate for the year of assessment for |
| |
which the relief was given on” substitute “30 per cent of”. |
| 30 |
(3) | Sub-paragraphs (1) and (2) have effect in relation to shares issued on or after |
| |
| |
| |
Enterprise investment scheme: maximum subscriptions and carry-back of relief |
| |
5 (1) | In section 289A(4) of ICTA (which limits the amount eligible to be relieved |
| 35 |
in the previous year), for “£25,000” substitute “£50,000”. |
| |
(2) | Sub-paragraph (1) has effect in relation to shares issued on or after 6th April |
| |
| |
6 (1) | In section 290(2) of ICTA (maximum amount eligible for relief in any year), |
| |
for “£200,000” substitute “£400,000”. |
| 40 |
(2) | Sub-paragraph (1) has effect for the year 2006-07 and for subsequent years of |
| |
| |
|
| |
|
| |
|
| |
Lengthening of periods applicable to venture capital trusts |
| |
7 (1) | Schedule 15B to ICTA (venture capital trusts: relief from income tax) is |
| |
| |
(2) | In paragraph 2(3) (no relief for investments linked to loans made within |
| 5 |
period ending immediately before third anniversary of date on which shares |
| |
issued), in the definition of “the relevant period”, for “third” substitute |
| |
| |
(3) | In paragraph 3(1)(b) (loss of investment relief for disposal of shares within |
| |
three years of issue), for “three” substitute “five”. |
| 10 |
(4) | In paragraph 6(1) (meaning of “eligible shares”), for “three” substitute “five”. |
| |
(5) | Sub-paragraphs (1) to (4) have effect in relation to shares issued on or after |
| |
| |
| |
Venture capital trusts: meaning of “investments” |
| 15 |
8 (1) | In section 842AA of ICTA (venture capital trusts: conditions for approval), |
| |
after subsection (11) insert— |
| |
“(11A) | A reference in this section, or in section 842(2)(b) as applied by |
| |
subsection (11)(a) above, to a company’s investments shall be taken |
| |
to include, so far as it would not otherwise do so,— |
| 20 |
(a) | money in the company’s possession, and |
| |
(b) | any sum owed to the company by another person if the |
| |
company has account-holder’s rights over that sum. |
| |
(11B) | For the purposes of subsection (11A)(b) above, a company has |
| |
“account-holder’s rights” over a sum owed to the company if— |
| 25 |
(a) | the company has a right (whether or not the exercise of the |
| |
right is subject to conditions) to require the other person to |
| |
pay out the sum, or amounts out of the sum, to the company |
| |
or at the company’s direction, and |
| |
(b) | the sum is owed to the company— |
| 30 |
(i) | as a result of amounts having been paid to the other |
| |
person by or for the company, or |
| |
(ii) | as a result of the other person having identified a sum |
| |
in respect of which the company may exercise such a |
| |
| 35 |
(11C) | Subsection (11A) above does not have effect to cause a company’s |
| |
investments to be taken to include anything to which the company is |
| |
not beneficially entitled, but for this purpose a company shall be |
| |
taken to be beneficially entitled to— |
| |
(a) | sums subscribed for shares issued by it, and |
| 40 |
(b) | anything to which it is entitled that (directly or indirectly) |
| |
represents any such sums.” |
| |
|
| |
|
| |
|
(2) | Sub-paragraph (1) has effect for the purposes of determining whether, at a |
| |
time on or after 6th April 2007, the conditions specified in section 842AA(2) |
| |
of ICTA are, will be or were fulfilled with respect to a company. |
| |
| |
| |
Accountancy change: spreading of adjustment |
| 5 |
| |
| |
Application of this Part of this Schedule |
| |
1 (1) | This Part of this Schedule applies where— |
| |
(a) | there is a change of accounting approach from one period of account |
| 10 |
to the next in calculating the profits of a business for income tax |
| |
| |
(b) | the later period of account ends on or after 22nd June 2005 and the |
| |
basis on which the profits for that period are calculated is in |
| |
accordance with UK GAAP (including SSAP 9 and Application Note |
| 15 |
G as interpreted by UITF 40), and |
| |
(c) | the earlier period of account ended before that date and the basis on |
| |
which profits for that period were calculated was in accordance with |
| |
UK GAAP (including SSAP 9 and Application Note G, but not as |
| |
| 20 |
| and has effect in relation to any adjustment income under Chapter 17 of Part |
| |
2 of ITTIOIA 2005 attributable to the change of basis from that mentioned in |
| |
paragraph (c) to that mentioned in paragraph (b). |
| |
(2) | In relation to a period for which accounts are drawn up in accordance with |
| |
international accounting standards, the references in sub-paragraph (1) to |
| 25 |
requirements of UK GAAP shall be read as references to the corresponding |
| |
requirements of international accounting standards. |
| |
(3) | In sub-paragraph (1)— |
| |
“SSAP 9” means Statement of Standard Accounting Practice No.9 on |
| |
Long-term contracts, issued by the Accounting Standards Board; |
| 30 |
“Application Note G” means Application Note G to Financial |
| |
Reporting Standard 5 issued by the Accounting Standards Board in |
| |
| |
“UITF 40” means Abstract No.40 on Revenue recognition and service |
| |
contracts, issued by the Urgent Issues Task Force of the Accounting |
| 35 |
Standards Board on 10th March 2005. |
| |
(4) | Any reference in this Part of this Schedule to the date on which the change |
| |
of accounting approach was adopted is to the first day of the first period of |
| |
account for which it was adopted. |
| |
(5) | To determine the amount of adjustment income attributable to the change of |
| 40 |
basis mentioned in the closing words of sub-paragraph (1), assume that |
| |
there was no other change of accounting approach. |
| |
|
| |
|