 House of Commons |
Session 2005-06 Publications on the internet Index of Amendments |
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Notices of Amendments given on Wednesday 28th June 2006 For other Amendment(s) see the following page(s) of Supplement
to Votes: Consideration of Bill Finance (No. 2) Bill, As Amended Mrs Theresa Villiers
54 Page 403 [Schedule 20], leave out line 1. Mrs Theresa Villiers
55 Page 403, line 2 [Schedule 20], leave out ‘the’ and insert ‘a’. Mrs Theresa Villiers
56 Page 380, line 30 [Schedule 20], at end insert— ‘(4A) Where— (a) section 71 above applied to settled property immediately before 22nd March 2006, (b) on or after that date a beneficiary (within the meaning of section 71 above) (“B”) became entitled to an interest in possession in that settled property, and (c) before that interest in possession had come to an end and while B was under the age of 25 and before [6th April 2008] that settled property became held for the benefit of B on trusts such as are mentioned in subsection (3)(b)(i) above, subsections (3) and (4) above shall apply as though the settled property had become held on the trusts referred to in paragraph (c) above immediately at the time B in fact became entitled to the interest in possession referred to in paragraph (b) above.’. Mrs Theresa Villiers
57 Page 400, line 44 [Schedule 20], at end insert ‘or a disabled person’s interest’. Mrs Theresa Villiers
58 Page 377, line 21 [Schedule 20], after ‘minor’, insert ‘(whether by exercise of trustees’ powers under such a will or otherwise).’. Mrs Theresa Villiers
59 Page 386, line 42 [Schedule 20], after ‘but’, insert ‘(unless B was the spouse or civil partner of the person entitled to the prior interest)’. Fuel duty (remote areas) Danny Alexander
NC4 To move the following Clause:— ‘In the Hydrocarbon Oil Duties Act 1979 (c. 5) section 6 (excise duty on hydrocarbon oil) there is inserted after subsection (1A)— “(1AA) The Treasury may, by order made by statutory instrument, specify lower rates of duty under subsection (1A) in respect of hydrocarbon oil products sold in remote areas. (1AB) For the purposes of this section ‘remote areas’ shall be defined in regulations made by the Treasury by statutory instrument. (1AC) Orders or regulations made under this section shall not come into force unless approved by a resolution of the Commons House of Parliament.”.’. Sir George Young 60 Page 101, line 5 [Clause 112], at end insert ‘; but no charge shall arise under this section in respect of a company whose predominant purpose is investment in residential property.’. Sir George Young 61 Page 101, line 36 [Clause 112], at end insert— ‘(8) The Treasury may by regulations provide for the applilcation of this section to companies whose predominant purpose is investment in residential property.’. Mrs Theresa Villiers
62 Page 135, line 7 [Clause 159], leave out ‘and (4)’ and insert ‘, (4) and (7)’. Energy Products Directive Danny Alexander
NC5 To move the following Clause:— ‘The Chancellor of the Exchequer shall— (a) undertake an investigation into the feasibility of applying for a derogation from the Energy Products Directive to allow a lower rate of fuel duty to apply to remote rural parts of the United Kingdom, giving particular consideration to— (i) the financial impact on the Exchequer, (ii) variations in fuel cost and necessity of use of road transport in remote rural areas, (iii) implications for government policy in respect of lowering carbon emissions, (iv) implications for government policy in respect of social inclusion in rural areas; and (b) not later than 1st May 2007 shall lay before Parliament a report on the results of such investigation.’. VAT and hydrocarbon oil duty offset Mr Alex Salmond
NC6 To move the following Clause:— ‘In the Hydrocarbon Oil Duties Act 1979 (c. 5) section 6 (excise duty on hydrocarbon oil) there is inserted after subsection (1A)— “(1AA) In every Budget Statement the Chancellor of the Exchequer shall provide his forecast for oil prices and set out anticipated yield from fuel duty and VAT on fuel for this price and for a range of prices up to 50 per cent. above his forecast. (1AB) In his 2006 pre-budget report the Chancellor of the Exchequer shall bring forward a mechanism for— (a) using additional revenue from VAT on fuel above forecast to offset fuel duty when the oil price rises above his forecast level, and (b) providing specific fuel duty reductions targeted at fuel sold in sparsely populated areas; and the Chancellor of the Exchequer shall by order define ‘sparsely populated areas’ for the purposes of this section. (1AC) Whenever international oil prices rise above the level estimated by the forecast made in accordance with subsection (1AA), indexed fuel duty increases shall be frozen until the international oil prices return to the forecast level.”.’. Mr Alex Salmond
63 Page 25, line 37 [Clause 24], at end insert— ‘(2) The Chancellor of the Exchequer shall bring forward proposals in his pre-budget report to allow the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly to introduce a variation of the main rate of corporation tax.’. Mr Alex Salmond
64 Page 97, line 14 [Clause 106], leave out ‘6’ and insert ‘5’. Mr Alex Salmond
65 Page 97, line 23 [Clause 106], leave out subsection (5). Mr Alex Salmond
66 Page 97, line 25 [Clause 106], leave out ‘4’ and insert ‘3’. Mr Alex Salmond
67 Page 97, line 34 [Clause 106], leave out ‘5’ and insert ‘4’. Mr Alex Salmond
68 Page 97, line 42 [Clause 106], leave out ‘6’ and insert ‘5’. Mr Alex Salmond
69 Page 129, line 21 [Clause 152], at end insert— ‘(11) The Chancellor of the Exchequer shall bring forward proposals in his pre-budget report to exempt the pipeline infrastructure from the increase in the rate of supplementary charge in subsection (1) above.’. Mr Chancellor of the Exchequer 70 Page 384, line 38 [Schedule 20], at end insert— ‘(2) For the purposes of sections 71A to 71G above, a deceased individual (“D”) shall be taken to have been a parent of another individual (“Y”) if, immediately before D died, D had— (a) parental responsibility for Y under the law of England and Wales, (b) parental responsibilities in relation to Y under the law of Scotland, or (c) parental responsibility for Y under the law of Northern Ireland. (3) In subsection (2)(a) above “parental responsibility” has the same meaning as in the Children Act 1989. (4) In subsection (2)(b) above “parental responsibilities” has the meaning given by section 1(3) of the Children (Scotland) Act 1995. (5) In subsection (2)(c) above “parental responsibility” has the same meaning as in the Children (Northern Ireland) Order 1995.”.’. Mr Chancellor of the Exchequer 71 Page 386, line 29 [Schedule 20], leave out ‘(“B”)’. Mr Chancellor of the Exchequer 72 Page 386, line 30 [Schedule 20], leave out ‘(“the current interest”)’. Mr Chancellor of the Exchequer 73 Page 386, line 33 [Schedule 20], leave out ‘the following conditions are met’ and insert ‘section 49BA or 49BB below so provides’. Mr Chancellor of the Exchequer 74 Page 386, line 34 [Schedule 20], at end insert— ‘49BA Transitional serial interest: interest to which person becomes entitled during period 22nd March 2006 to 5th April 2008 (1) Where a person (“B”) is beneficially entitled to an interest in possession in settled property (“the current interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met.’. Mr Chancellor of the Exchequer 75 Page 387, line 6 [Schedule 20], at end insert— ‘49BB Transitional serial interest: interest to which person becomes entitled on death of spouse or civil partner on or after 6th April 2008 (1) Where a person (“E”) is beneficially entitled to an interest in possession in settled property (“the successor interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met. (2) Condition 1 is that— (a) the settlement commenced before 22nd March 2006, and (b) immediately before 22nd March 2006, the property then comprised in the settlement was property in which a person other than E was beneficially entitled to an interest in possession (“the previous interest”). (3) Condition 2 is that the previous interest came to an end on or after 6th April 2008 on the death of that other person (“F”). (4) Condition 3 is that, immediately before F died, F was the spouse or civil partner of E. (5) Condition 4 is that E became beneficially entitled to the successor interest on F’s death. (6) Condition 5 is that— (a) section 71A below does not apply to the property in which the successor interest subsists, and (b) the successor interest is not a disabled person’s interest.’. Mr Chancellor of the Exchequer 76 Page 387, line 47 [Schedule 20], leave out ‘49B(1)(a)’ and insert ‘49BA’. Mr Chancellor of the Exchequer 77 Page 388, line 4 [Schedule 20], leave out ‘49B(1)(a)’ and insert ‘49BA’. Mr Chancellor of the Exchequer 78 Page 389, line 36 [Schedule 20], leave out from ‘person’ to ‘on’ in line 37 and insert ‘becomes beneficially entitled’. Mr Chancellor of the Exchequer 79 Page 392, line 10 [Schedule 20], leave out ‘or 89A’. Mr Chancellor of the Exchequer 80 Page 396, line 14 [Schedule 20], at end insert— ‘(ab) a disabled person’s interest within section 89B(1)(c) or (d) below, or’. Mr Chancellor of the Exchequer 81 Page 399, line 44 [Schedule 20], after ‘interest,’ insert ‘or a disabled person’s interest within section 89B(1)(c) or (d) below’. Mr Chancellor of the Exchequer 82 Page 400, line 42 [Schedule 20], leave out from ‘applies’ to end of line 44 and insert ‘— (a) as though for “an interest in possession” in each place where that appears in subsection (1) above there were substituted “a postponing interest”, and (b) as though, for the purposes of that subsection, each of the following were a “postponing interest”— (i) an immediate post-death interest; (ii) a disabled person’s interest.”.’. Mr Chancellor of the Exchequer 83 Page 401, line 20 [Schedule 20], at end insert— ‘(ia) a disabled person’s interest within section 89B(1)(c) or (d) below, or’. Mr Chancellor of the Exchequer 84 Page 401, line 27 [Schedule 20], after first ‘interest’ insert ‘, disabled person’s interest’. Mr Chancellor of the Exchequer 85 Page 401, line 29 [Schedule 20], after ‘or’ insert ‘disabled person’s interest or’. Mr Chancellor of the Exchequer 86 Page 401, line 37 [Schedule 20], leave out ‘neither’ and insert ‘— (i) not’. Mr Chancellor of the Exchequer 87 Page 401, line 37 [Schedule 20], leave out ‘nor’ and insert ‘, (ii) not a disabled person’s interest within section 89B(1)(c) or (d) below, and (iii) not’. Mr Chancellor of the Exchequer 88 Page 403, line 7 [Schedule 20], leave out ‘property comprised in the testator’s estate’ and insert ‘the property’. Mr Chancellor of the Exchequer 89 Page 403, line 18 [Schedule 20], at end insert— ‘(5) Subsection (4) above also applies where— (a) a person dies before 22nd March 2006, (b) property comprised in the person’s estate immediately before his death is settled by his will, (c) an event occurs— (i) on or after 22nd March 2006, and (ii) within the period of two years after the testator’s death, that involves causing the property to be held on trusts within subsection (6) below, (d) no immediate post-death interest, and no disabled person’s interest, subsisted in the property at any time in the period beginning with the testator’s death and ending immediately before the event, and (e) no other interest in possession subsisted in the property at any time in the period beginning with the testator’s death and ending immediately before 22nd March 2006. (6) Trusts are within this subsection if they would, had they in fact been established by the testator’s will and had the testator died at the time of the event mentioned in subsection (5)(c) above, have resulted in— (a) an immediate post-death interest subsisting in the property, or (b) section 71A or 71D above applying to the property.”.’. Mr Chancellor of the Exchequer 90 Page 403, line 42 [Schedule 20], after ‘if’ insert ‘— (a)’. Mr Chancellor of the Exchequer 91 Page 403, line 43 [Schedule 20], at end insert ‘, or (b) the person dies under the age of 18 years and, immediately before the person’s death, section 71D of the Inheritance Tax Act 1984 (age 18-to-25 trusts) applies to the property in which the interest subsists.’. Mr Chancellor of the Exchequer 92 Page 404, line 6 [Schedule 20], at end insert— ‘(iii) a disabled person’s interest within section 89B(1)(c) or (d) of that Act, or’. Mr Chancellor of the Exchequer 93 Page 404, line 20 [Schedule 20], leave out ‘(1B)’ and insert ‘(1B)(a)’. Mr Chancellor of the Exchequer 94 Page 404, line 27 [Schedule 20], after ‘if’ insert ‘— (a)’. Mr Chancellor of the Exchequer 95 Page 404, line 28 [Schedule 20], at end insert ‘, or (b) the person dies under the age of 18 years and, immediately before the person’s death, section 71D of the Inheritance Tax Act 1984 (age 18-to-25 trusts) applies to the property in which the interest subsists.”.’. Mr Chancellor of the Exchequer 96 Page 404, line 33 [Schedule 20], at end insert— ‘(db) by virtue of subsection (2) of section 71E of that Act (age 18-to-25 trusts) does not constitute an occasion on which inheritance tax is charged under that section,”.’. Mr Chancellor of the Exchequer 97 Page 470, line 6 [Schedule 23], at end insert— ‘40A In section 256(1) (enhanced lifetime allowance regulations)— (a) in paragraph (d), after “7(1)(b)” insert “or 11A(1)(c)”, and (b) in paragraph (e), after “12(1)” insert “or 15A(1)(b)”.’. Mr Chancellor of the Exchequer 98 Page 171, line 40, [Schedule 5], leave out ‘partly’ and insert ‘mainly’. Mr Chancellor of the Exchequer 99 Page 181, line 2 [Schedule 6], at end insert— ‘Repeal of rent factoring provisions A1 (1) Sections 43A to 43G of ICTA (rent factoring) shall cease to have effect. (2) The amendment made by this paragraph has effect in relation to transactions entered into on or after 6th June 2006.’. Mr Chancellor of the Exchequer 100 Page 185, line 8 [Schedule 6], at end insert— ‘Structured finance arrangements: factoring of income receipts etc 3B (1) After section 774 of ICTA (transactions between dealing company and associated company) insert— (1) For the purposes of section 774B an arrangement is a structured finance arrangement in relation to a person (“the borrower”) if the following condition is met in relation to the borrower. (2) The condition is that— (e) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower. (3) For the purposes of this section, in any case where the borrower is a partnership, references to the accounts of the borrower include the accounts of any member of the partnership. (4) For the purposes of this section and section 774B— (a) references to a person connected with the borrower do not include the lender, and (b) references to a person connected with the lender do not include the borrower. (1) If— (a) an arrangement is a structured finance arrangement in relation to a person (“the borrower”), and (b) the arrangement would (disregarding this section) have had the relevant effect (see subsections (2) and (3)), the arrangement is not to have that effect. (a) an amount of income on which the borrower, or a person connected with the borrower, would otherwise have been charged to tax is not so charged, (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of the borrower, or of a person connected with the borrower, is not so brought into account, or (c) the borrower, or a person connected with the borrower, becomes entitled to an income deduction. (a) an amount of income on which a member of the partnership would otherwise have been charged to tax is not so charged, (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of a member of the partnership is not so brought into account, or (c) a member of the partnership becomes entitled to an income deduction. (4) If— (a) a person in relation to whom the structured finance arrangement would otherwise have had the relevant effect is a person within the charge to income tax, and (b) in accordance with generally accepted accounting practice the accounts of the person record an amount as a finance charge in respect of the advance, that person may treat the amount for income tax purposes as interest payable on a loan. (a) the advance is to be treated, in relation to the company, for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 as a money debt owed by the company, (b) the arrangement is to be treated, in relation to the company, for the purposes of that Chapter as a loan relationship of the company (as a debtor relationship), and (6) For the purposes of this section, in any case where the borrower is a partnership,— (a) references to accounts include the accounts of the partnership, and (b) any deemed interest is treated as payable by the partnership (whether or not the finance charge is recorded in the accounts of the partnership). (7) For the purpose of determining when any deemed interest in respect of the advance is paid— (a) the payments mentioned in section 774A(2)(d) are treated as consisting of amounts for repaying the advance and amounts (“the interest elements”) in respect of interest on the advance, and (b) the interest elements of those payments are treated as paid when those payments are paid, and the deemed interest in respect of the advance is treated as paid at the times when the interest elements are treated as paid. (8) In this section “deemed interest” means any amount which is treated as interest as a result of subsection (4) or (5). (9) This section is subject to the exceptions contained in section 774E. (1) For the purposes of section 774D an arrangement is a structured finance arrangement in relation to a partnership (“the borrower partnership”) if condition A or B is met in relation to the borrower partnership. (2) Condition A is that— (b) the transferor partner is a member of the borrower partnership immediately after the disposal (whether or not a member immediately before the disposal), (g) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower partnership. (3) For the purposes of condition A, references to the accounts of the borrower partnership include the accounts of the transferor partner. (4) Condition B is that— (a) the borrower partnership holds an asset (“the security”) as a partnership asset at any time before the arrangement is made, (c) in accordance with generally accepted accounting practice the accounts of the borrower partnership for that period record a financial liability in respect of the advance, (f) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower partnership. (5) For the purposes of condition B, references to the accounts of the borrower partnership include the accounts of any person who is a member of the partnership immediately before the arrangement is made. (a) the lender, or a person connected with the lender, becomes a member of the borrower partnership at any time, or (7) For the purposes of subsection (6)(b) the reference to a person connected with the lender includes a person who at any time becomes connected with the lender directly or indirectly in consequence of, or otherwise in connection with, the arrangement. (1) This section applies if— (a) an arrangement is a structured finance arrangement in relation to a partnership (“the borrower partnership”), and (b) any relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender would (disregarding this section) have had the following effect. (a) an amount of income on which a relevant member of the borrower partnership would otherwise have been charged to tax is not so charged, (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of a relevant member of the borrower partnership is not so brought into account, or (c) a relevant member of the borrower partnership becomes entitled to an income deduction. (3) In this section “relevant member of the borrower partnership” means— (a) in any case where condition A in section 774C is met in relation to the arrangement, the transferor partner, and (b) in any case where condition B in that section is met in relation to the arrangement, any person other than the lender who is a member of the borrower partnership immediately before the time at which the relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender occurs. Accordingly, the structured finance arrangement is not to have the effect mentioned in subsection (2). (5) The following provisions of this section confer relief from tax the availability of which depends on which of the conditions in section 774C is met in relation to the arrangement. (a) the transferor partner is a person within the charge to income tax, and (b) in accordance with generally accepted accounting practice the accounts of the borrower partnership record an amount as a finance charge in respect of the advance, the transferor partner may treat the amount for income tax purposes as interest payable by the transferor partner on a loan. (a) the advance is to be treated, in relation to the company, for the purposes of paragraph 19 of Schedule 9 to the Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act) as a money debt owed by the borrower partnership, (b) the arrangement is to be treated, in relation to the company, as a transaction for the lending of money from which that debt is treated as arising for those purposes, and (8) For the purposes of subsections (6) and (7), references to the accounts of the borrower partnership include the accounts of the transferor partner. (a) a relevant member of the borrower partnership is a person within the charge to income tax, and (b) in accordance with generally accepted accounting practice the accounts of the borrower partnership record an amount as a finance charge in respect of the advance, the relevant partner may treat the amount for income tax purposes as interest payable by the borrower partnership on a loan. (a) the advance is to be treated, in relation to the company, for the purposes of paragraph 19 of Schedule 9 to the Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act) as a money debt owed by that partnership, (b) the arrangement is to be treated, in relation to the company, as a transaction for the lending of money from which that debt is treated as arising for those purposes, and (c) any amount which, in accordance with generally accepted accounting practice, is recorded in the accounts of the borrower partnership as a finance charge in respect of the advance is to be treated as interest payable by the borrower partnership under that transaction. (11) For the purposes of subsections (9) and (10), references to the accounts of the borrower partnership include the accounts of any relevant member of the borrower partnership. (12) For the purpose of determining when any deemed interest in respect of the advance is paid— (a) the payments mentioned in section 774C(2)(f) or (4)(e) are treated as consisting of amounts for repaying the advance and amounts (“the interest elements”) in respect of interest on the advance, and (b) the interest elements of those payments are treated as paid when those payments are paid, and the deemed interest in respect of the advance is treated as paid at the times when the interest elements are treated as paid. (14) This section is subject to the exceptions contained in section 774E. (a) is charged to tax on a relevant person (see subsection (7)) as an amount of income, (b) is brought into account in calculating for tax purposes any income of a relevant person, or For the purposes of this subsection the effect of section 785A (rent factoring of leases of plant or machinery) is to be disregarded. (2) Subsection (1)(c) is not to be taken as met in any case where— (a) the receipt or proceeds gives rise to a balancing charge, and (b) the amount of the balancing charge is limited by any provision of the Capital Allowances Act. (3) Section 774B or 774D does not apply if, at all times, the whole of the advance under the structured finance arrangement— (a) is a debtor relationship of a relevant person for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships), or (b) would be a debtor relationship of a relevant person for those purposes if that person were a company within the charge to corporation tax. For the purposes of this subsection references to a debtor relationship do not include a relationship to which section 100 of the Finance Act 1996 (money debts etc not arising from the lending of money) applies. (4) Section 774B or 774D does not apply in so far as the structured finance arrangement is an arrangement in relation to which— (a) section 263A of the 1992 Act (agreements for sale and repurchase of securities) applies, (b) paragraph 15 of Schedule 9 to the Finance Act 1996 (repo transactions and stock-lending) applies, or (c) Chapter 5 of Part 2 of the Finance Act 2005 (alternative finance arrangements) has effect. (5) Section 774B or 774D does not apply in so far as— (b) the structured finance arrangement is an arrangement in relation to which sections 228B to 228D of the Capital Allowances Act apply with the modifications contained in section 228F of that Act (lease and finance leaseback). (6) For the purposes of subsection (5)(a), whether plant or machinery is the subject of a sale and finance leaseback is determined in accordance with section 221 of the Capital Allowances Act. But, in applying that section, it is to be assumed that the words “and which are not a long funding lease in the case of the lessor” were omitted from section 219(1)(b) of that Act (meaning of “finance lease”). (a) if section 774B applies, a person in relation to whom the structured finance arrangement would (but for that section) otherwise have had the relevant effect (within the meaning of that section), and (b) if section 774D applies, a relevant member of the borrower partnership (within the meaning of that section). 774F Sections 774B and 774D: power to provide further exceptions (2) Any regulations under subsection (1) may make provision amending section 774E. (3) The power to make regulations under subsection (1) includes— (a) power to make provision having effect in relation to times before the making of the regulations (but not times earlier than 6th June 2006), (b) power to make different provision for different cases or different purposes, and (c) power to make incidental, supplemental, consequential or transitional provision and savings. 774G Sections 774A to 774D: minor definitions etc (1) For the purposes of sections 774A to 774D “arrangement” includes any agreement or understanding (whether or not legally enforceable). (2) For the purposes of sections 774A to 774D “income deduction” means— (a) a deduction in calculating any income for tax purposes, or (b) a deduction against total income or total profits. (3) For the purposes of sections 774A to 774D— (a) references to a person’s receiving any asset include the person’s obtaining directly or indirectly the value of any asset or otherwise deriving directly or indirectly any benefit from it, (b) references to a disposal of an asset include anything which constitutes a disposal of the asset for the purposes of the 1992 Act, (c) references to payments in respect of any asset include obtaining directly or indirectly the value of any asset or otherwise deriving directly or indirectly any benefit from it. (4) For the purposes of sections 774A to 774D, section 839 (connected persons) applies. (5) For the purposes of sections 774A to 774D references to the accounts of any person who is a company include the consolidated group accounts of a group of companies of which it is a member. (6) If any person does not draw up accounts in accordance with generally accepted accounting practice, sections 774A to 774D apply as if the accounts had been drawn up by the person in accordance with that practice. (7) Sections 277 to 281 of ITTOIA 2005 and section 34 above (lease premiums) are not to apply in relation to a premium paid in respect of a grant of a lease where the grant constitutes a disposal of an asset for the purposes of section 774A(2)(c) or 774C(2)(a).”. (2) The amendment made by this paragraph has effect in relation to any arrangements whenever made (but see sub-paragraphs (3) and (4)). (a) to be charged to tax, or (b) to be brought into account in calculating any income for tax purposes or deducted from any income for tax purposes, only if the amounts arise on or after that date. (5) In any case where, in relation to arrangements made before that date, a person is treated, as a result of the amendment made by this paragraph, as being a party to any loan relationship— (a) a period of account is to be treated for the purposes of Chapter 2 of Part 4 of FA 1996 as beginning on that date, and (b) the loan relationship is to be treated for those purposes as being entered into by the person for a consideration equal to the notional carrying value of the liability representing the relationship. (6) For this purpose, the notional carrying value is the amount that would have been the carrying value of the liability in the accounts of the person if a period of account had ended immediately before that date. (7) “Carrying value” has the same meaning here as it has for the purposes of paragraph 19A of Schedule 9 to FA 1996. Rent factoring of leases of plant or machinery 3C (1) Section 785A of ICTA (rent factoring of leases of plant or machinery) is amended as follows. (2) After subsection (5) (provision about partnerships with legal personality) insert— “(5A) This section does not apply in so far as section 774B or 774D (structured finance arrangements) applies in relation to the arrangements mentioned in paragraph (c) of subsection (1) above as a result of the transfer mentioned in that paragraph.”. Transactions associated with loans or credit 3D (1) Section 786 of ICTA (transactions associated with loans or credit) is amended as follows. (2) After subsection (5) (transaction under which a person assigns, surrenders etc income arising from property) insert— “(5ZA) But subsection (5) above does not apply if the person mentioned in that subsection is, as a result of section 774B or 774D (structured finance arrangements), chargeable to tax on the amount of income assigned, surrendered, waived or forgone.”. Structured finance arrangements: chargeable gains treatment of acquisitions and disposals 3E (1) After section 263D of TCGA 1992 (gains accruing to persons paying manufactured dividends) insert— (1) This section applies if— (a) section 774B of the Taxes Act (disregard of intended effects of arrangement involving disposals of assets) applies in relation to a structured finance arrangement, (b) the borrower or a person connected with the borrower makes a disposal of any security at any time under the arrangement to or for the benefit of the lender or a person connected with the lender, and (c) condition A or B is met. (2) Condition A is that the person making the disposal subsequently acquires under the arrangement the asset disposed of by that disposal. (3) Condition B is that— (a) the asset disposed of by that disposal subsequently ceases to exist at any time, and (b) that asset was held by the lender, or a person connected with the lender, from the time of the disposal until that time. (4) The disposal of the security by the borrower or a person connected with the borrower is to be disregarded for the purposes of this Act. (6) In this section— “the borrower”, in relation to a structured finance arrangement, means the person who is the borrower under the arrangement for the purposes of section 774A of the Taxes Act, “the lender”, in relation to a structured finance arrangement, means the person who is the lender under the arrangement for the purposes of that section, “security” means any such asset as is mentioned in subsection (2)(c) and (d) of that section. (7) For the purposes of this section— (a) references to a person connected with the borrower do not include the lender, and (b) references to a person connected with the lender do not include the borrower.”. (2) The amendment made by this paragraph has effect in relation to disposals made on or after 6th June 2006. |
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