|
| |
|
“576G | The gross assets requirement |
| |
(1) | The gross assets requirement in the case of a single company is that |
| |
the value of the company’s gross assets— |
| |
(a) | must not exceed £7 million immediately before the shares in |
| |
respect of which the relief is claimed under this Chapter are |
| 5 |
| |
(b) | must not exceed £8 million immediately afterwards. |
| |
(2) | The gross assets requirement in the case of a parent company is that |
| |
the value of the group assets— |
| |
(a) | must not exceed £7 million immediately before the shares in |
| 10 |
respect of which the relief is claimed under this Chapter are |
| |
| |
(b) | must not exceed £8 million immediately afterwards. |
| |
(3) | The value of the group assets means the aggregate of the values of |
| |
the gross assets of each of the members of the group, disregarding |
| 15 |
any that consist in rights against, or shares in or securities of, another |
| |
| |
| |
“group” means a parent company and its qualifying |
| |
| 20 |
“parent company” means a company that has one or more |
| |
| |
“qualifying subsidiary” is to be read in accordance with section |
| |
| |
“single company” means a company that does not have one or |
| 25 |
more qualifying subsidiaries.” |
| |
127 | After section 576G insert— |
| |
“576H | The unquoted status requirement |
| |
(1) | The unquoted status requirement is that, at the time (“the relevant |
| |
time”) at which the shares in respect of which the relief is claimed |
| 30 |
under this Chapter are issued— |
| |
(a) | the company must be an unquoted company, |
| |
(b) | there must be no arrangements in existence for the company |
| |
to cease to be an unquoted company, and |
| |
(c) | there must be no arrangements in existence for the company |
| 35 |
to become a subsidiary of another company (“the new |
| |
company”) by virtue of an exchange of shares, or shares and |
| |
| |
(i) | section 576J applies in relation to the exchange, and |
| |
(ii) | arrangements have been made with a view to the new |
| 40 |
company ceasing to be an unquoted company. |
| |
(2) | The arrangements referred to in subsection (1)(b) and (c)(ii) do not |
| |
include arrangements in consequence of which any shares, stocks, |
| |
debentures or other securities of the company or the new company |
| |
are at any subsequent time— |
| 45 |
(a) | listed on a stock exchange that is a recognised stock exchange |
| |
by virtue of an order made under section 939 of ITA 2007, or |
| |
|
| |
|
| |
|
(b) | listed on an exchange, or dealt in by any means, designated |
| |
by an order made for the purposes of section 184(3)(b) or (c) |
| |
| |
| if the order was made after the relevant time. |
| |
| 5 |
“arrangements” includes any scheme, agreement or |
| |
understanding, whether or not legally enforceable, |
| |
“debenture” has the meaning given by section 744 of the |
| |
| |
“unquoted company” has the meaning given by section 184(2) |
| 10 |
| |
128 | After section 576H insert— |
| |
“576I | Power to amend requirements by Treasury order |
| |
The Treasury may by order make such amendments of sections 576B |
| |
to 576H as they consider appropriate.” |
| 15 |
129 | After section 576I insert— |
| |
“Qualifying trading companies: supplementary provisions |
| |
576J | Relief after an exchange of shares for shares in another company |
| |
(1) | This section and section 576K apply in relation to shares if— |
| |
(a) | a company (“the new company”) in which the only issued |
| 20 |
shares are subscriber shares acquires all the shares (“old |
| |
shares”) in another company (“the old company”), |
| |
(b) | the consideration for the old shares consists wholly of the |
| |
issue of shares (“new shares”) in the new company, |
| |
(c) | the consideration for the new shares of each description |
| 25 |
consists wholly of old shares of the corresponding |
| |
| |
(d) | new shares of each description are issued to the holders of old |
| |
shares of the corresponding description in respect of and in |
| |
proportion to their holdings, and |
| 30 |
(e) | by virtue of section 127 of the 1992 Act as applied by section |
| |
135(3) of that Act (company reconstructions etc), the |
| |
exchange of shares is not to be treated as involving a disposal |
| |
of the old shares or an acquisition of the new shares. |
| |
| In this subsection references to shares, except the first and that in the |
| 35 |
expression “subscriber shares”, include securities. |
| |
(2) | For the purposes of this Chapter the exchange of shares is not |
| |
regarded as involving any disposal of the old shares or any |
| |
acquisition of the new shares. |
| |
(3) | Nothing in section 576D (the control and independence requirement) |
| 40 |
applies in relation to such an exchange of shares, or shares and |
| |
securities, as is mentioned in subsection (1), or arrangements with a |
| |
view to such an exchange. |
| |
(4) | For the purposes of this section old shares and new shares are of a |
| |
corresponding description if, on the assumption that they were |
| 45 |
|
| |
|
| |
|
shares in the same company, they would be of the same class and |
| |
| |
(5) | References in section 576K to “old shares”, “new shares”, “the old |
| |
company” and “the new company” are to be read in accordance with |
| |
| 5 |
130 | After section 576J insert— |
| |
“576K | Substitution of new shares for old shares |
| |
(1) | Subsection (2) applies if, in the case of any new shares held by a |
| |
company or by a nominee for a company, the old shares for which |
| |
they were exchanged were shares that had been subscribed for by the |
| 10 |
company (“the investor”). |
| |
(2) | This Chapter has effect as if— |
| |
(a) | the new shares had been subscribed for by the investor at the |
| |
time when, and for the amount for which, the old shares were |
| |
subscribed for by the investor, |
| 15 |
(b) | the new shares had been issued by the new company at the |
| |
time when the old shares were issued to the investor by the |
| |
| |
(c) | any requirements of this Chapter which were met at any time |
| |
before the exchange by the old company had been met at that |
| 20 |
| |
(3) | Section 573(6) applies for the purposes of this section.” |
| |
131 | After section 576K insert— |
| |
| |
576L | Interpretation of Chapter |
| 25 |
(1) | In this Chapter (subject to subsections (2) to (5))— |
| |
“excluded company” means a company which— |
| |
(a) | has a trade which consists wholly or mainly of |
| |
dealing in land, in commodities or futures or in |
| |
shares, securities or other financial instruments, |
| 30 |
(b) | has a trade which is not carried on on a commercial |
| |
basis and in such a way that profits in the trade can |
| |
reasonably be expected to be realised, |
| |
(c) | is a holding company of a group other than a trading |
| |
| 35 |
(d) | is a building society or a registered industrial and |
| |
| |
“group” (except in sections 576B and 576G) means a company |
| |
which has one or more 51% subsidiaries together with that or |
| |
| 40 |
“holding company” means a company whose business consists |
| |
wholly or mainly in the holding of shares or securities of |
| |
companies which are its 51% subsidiaries, |
| |
“investment company” has the meaning given by section 130 |
| |
except that it does not include the holding company of a |
| 45 |
| |
|
| |
|
| |
|
“registered industrial and provident society” means a society |
| |
registered or treated as registered under the Industrial and |
| |
Provident Societies Act 1965 or the Industrial and Provident |
| |
Societies Act (Northern Ireland) Act 1969, |
| |
| 5 |
| |
(b) | does not include shares or stock not forming part of a |
| |
company’s ordinary share capital, |
| |
“trading company” means a company other than an excluded |
| |
| 10 |
(a) | a company whose business consists wholly or mainly |
| |
of the carrying on of a trade or trades, or |
| |
(b) | the holding company of a trading group, and |
| |
“trading group” means a group the business of whose |
| |
members, when taken together, consists wholly or mainly in |
| 15 |
the carrying on of a trade or trades. |
| |
(2) | Except as provided by subsection (3), paragraph (b) of the definition |
| |
of “shares” in subsection (1) does not apply in the definition of |
| |
“excluded company” in subsection (1) or in section 576J(1) to (4). |
| |
(3) | Paragraph (b) of that definition applies in relation to the first |
| 20 |
reference to “shares” in section 576J(1). |
| |
(4) | The definition of “shares” in subsection (1) does not apply in sections |
| |
576B(5)(a), 576G(3) and 576H(1)(c) and (2). |
| |
(5) | For the purposes of the definition of “trading group” in subsection |
| |
(1), any trade carried on by a subsidiary which is an excluded |
| 25 |
company is treated as not constituting a trade.” |
| |
132 | Omit section 581A (interest on foreign currency securities etc). |
| |
133 (1) | Amend section 582 (funding bonds issued in respect of interest on certain |
| |
| |
(2) | In subsection (1)(b) omit the words from “or section” to “income tax |
| 30 |
| |
(3) | For subsections (2) and (2A) substitute— |
| |
“(2) | Subsection (2A) applies if an issue of funding bonds is treated as a |
| |
payment of interest as mentioned in subsection (1)(a) and— |
| |
(a) | the person by or through whom the bonds are issued is |
| 35 |
required to retain bonds under section 872(2) of ITA 2007, but |
| |
(b) | it is impracticable for the person to do so. |
| |
(2A) | In that case, tax in respect of the amount of interest treated by virtue |
| |
of subsection (1)(a) as having been paid by the issue of the bonds |
| |
shall be charged under Case VI of Schedule D for the chargeable |
| 40 |
period in which the bonds are issued on the persons receiving or |
| |
| |
134 | Omit section 582A (designated international organisations: miscellaneous |
| |
| |
135 | Omit section 587A (new issues of securities: extra return). |
| 45 |
|
| |
|
| |
|
136 (1) | Amend section 587B (gifts of shares, securities and real property to charities |
| |
| |
| |
(a) | for “Subsections (2) and (3) below apply” substitute “Subsection (2) |
| |
| 5 |
(b) | for “an individual, or a company which is not itself a charity,” |
| |
substitute “a company which is not itself a charity”. |
| |
| |
(a) | omit paragraph (a)(i), |
| |
(b) | in paragraph (a)(ii) omit “in the case of a disposal by a company,”, |
| 10 |
(c) | in paragraph (b) omit the words from “of this Act” to the end, and |
| |
(d) | omit the words from “but paragraph (a)(i)” to the end. |
| |
| |
| |
(a) | for “the person” substitute “the company”, and |
| 15 |
(b) | for “him” substitute “it”. |
| |
(6) | In subsection (6) for “person” substitute “company”. |
| |
(7) | In subsection (7)(a) for “person” substitute “company”. |
| |
(8) | In subsection (8)(a) for “subsections (2) and (3)” substitute “subsection (2)”. |
| |
(9) | In subsection (8B)(a)— |
| 20 |
(a) | for “the person” substitute “the company”, and |
| |
(b) | for “him” substitute “it”. |
| |
| |
(a) | for the definitions of “authorised unit trust” and “open-ended |
| |
investment company” substitute— |
| 25 |
““authorised unit trust” has the meaning given by |
| |
| |
(b) | in the definition of “charity” for “each of the bodies mentioned in |
| |
section 507(1);” substitute “— |
| |
(a) | the Trustees of the National Heritage |
| 30 |
| |
(b) | the Historic Buildings and Monuments |
| |
Commission for England; and |
| |
(c) | the National Endowment for Science, |
| |
Technology and the Arts;”, |
| 35 |
(c) | in the definition of “the incidental costs of making the disposal to the |
| |
person making it” for “person” substitute “company”, and |
| |
(d) | after the definition of “offshore fund” insert— |
| |
““open-ended investment company” is to be read in |
| |
accordance with section 468A(2) to (4);”. |
| 40 |
| |
(a) | for “person”, in both places where it occurs, substitute “company”, |
| |
| |
(b) | for “his”, in both places where it occurs, substitute “its”. |
| |
|
| |
|
| |
|
| |
(a) | for “a person, who” substitute “a company, which”, and |
| |
(b) | for “the person” substitute “the company”. |
| |
(13) | In subsection (12) for “section 587C” substitute “sections 587BA and 587C”. |
| |
137 | After section 587B insert— |
| 5 |
“587BA | Qualifying interests in land held jointly |
| |
(1) | This section applies for the purposes of section 587B where a |
| |
qualifying investment is a qualifying interest in land. |
| |
(2) | Where two or more persons (“the owners”)— |
| |
(a) | are jointly beneficially entitled to the qualifying interest in |
| 10 |
| |
(b) | are, taken together, beneficially entitled in common to the |
| |
qualifying interest in land, |
| |
| relief under section 587B is available if at least one of the owners is a |
| |
qualifying company and all the owners dispose of the whole of their |
| 15 |
beneficial interests in the qualifying interest in land to the charity. |
| |
(3) | Subsection (4) applies if one or more of the owners is not a company. |
| |
(4) | For the purpose of determining whether the owners’ beneficial |
| |
interests are disposed of as mentioned in subsection (2), section |
| |
587B(9B) and (9C) applies as if references to a company included a |
| 20 |
reference to a person who is not a company. |
| |
(5) | Relief under section 587B is available to each of the owners which is |
| |
| |
(6) | If one or more of the owners is an individual— |
| |
(a) | the relevant amount is taken to be the relievable amount |
| 25 |
calculated for the purposes of Chapter 3 of Part 8 of ITA 2007, |
| |
| |
(b) | the amount of relief under section 587B to be given to a |
| |
qualifying company is such share of the relievable amount as |
| |
is allocated to the company by the agreement mentioned in |
| 30 |
section 442(5) of ITA 2007. |
| |
(7) | Subsections (8) to (12) apply if none of the owners is an individual. |
| |
(8) | The amount of relief under section 587B to be given to a qualifying |
| |
company is such share of the relevant amount as is allocated to the |
| |
company by an agreement made between those owners which are |
| 35 |
| |
(9) | Calculate the relevant amount as if— |
| |
(a) | the owners were a single qualifying company, and |
| |
(b) | the disposals of the owners’ beneficial interests were a single |
| |
disposal by that single company of the whole of the beneficial |
| 40 |
interest in the qualifying interest in land. |
| |
(10) | In particular, for the purposes of section 587B(7) calculate the |
| |
consideration for which the disposal is made by virtue of section |
| |
257(2)(a) of the 1992 Act by— |
| |
|
| |
|
| |
|
(a) | calculating, for each owner, the consideration for which the |
| |
disposal of the owner’s beneficial interest is so made, and |
| |
(b) | adding together all the consideration calculated under |
| |
| |
(11) | If one or more of the owners is not a qualifying company, in |
| 5 |
calculating the relevant amount make just and reasonable |
| |
adjustments to reduce the relevant amount to reflect the fact that |
| |
relief under section 587B is not available to that owner or to those |
| |
| |
(12) | If one or more of the owners is within paragraph (b) of section |
| 10 |
587B(8), in calculating the relevant amount make just and reasonable |
| |
adjustments to reduce the relevant amount to reflect the |
| |
requirements of sub-paragraph (ii) of that paragraph. |
| |
(13) | A company is a qualifying company if— |
| |
(a) | it is not itself a charity, and |
| 15 |
(b) | it is not within section 587B(8)(a).” |
| |
138 (1) | Amend section 587C (supplementary provision for gifts of real property) as |
| |
| |
(2) | Omit subsections (2) and (3). |
| |
| 20 |
(a) | for “person” substitute “company”, and |
| |
(b) | for “he” substitute “it”. |
| |
| |
(a) | for “person (or each of the persons) who made the disposal to the |
| |
charity” substitute “following”, and |
| 25 |
| |
“(a) | in a case to which section 587BA does not apply, the |
| |
company which made the disposal, and |
| |
(b) | in a case to which section 587BA applies, each |
| |
qualifying company which is an owner.” |
| 30 |
(5) | In subsection (8) for the words from “the person” to “of them)” substitute “a |
| |
person mentioned in subsection (8A)”. |
| |
(6) | After that subsection insert— |
| |
| |
(a) | in a case to which section 587BA does not apply— |
| 35 |
(i) | the company which made the disposal, or |
| |
(ii) | a person connected with that company, and |
| |
(b) | in a case to which section 587BA applies— |
| |
(i) | a person who is an owner, or |
| |
(ii) | a person connected with such a person.” |
| 40 |
| |
(a) | omit paragraph (a) and the “and” immediately after it, and |
| |
(b) | in paragraph (b) omit “in the case of a company,”. |
| |
|
| |
|