|
| |
| |
(d) | under the terms of the charter the company is responsible as |
| |
| |
(i) | for taking, throughout the period of the charter, management |
| |
decisions in relation to the ship, other than those of a kind |
| |
generally regarded by persons engaged in trade of the kind in |
| 5 |
question as matters of husbandry, and |
| |
(ii) | for defraying all expenses in connection with the ship |
| |
throughout that period, or substantially all such expenses, other |
| |
than those directly incidental to a particular voyage or to the |
| |
employment of the ship during that period, and |
| 10 |
(e) | no arrangements exist by virtue of which a person other than the |
| |
company may be appointed to be responsible for the matters |
| |
mentioned in paragraph (d) on behalf of the company. |
| |
(6) | If in the case of the company carrying on the trade (“the letting company”) the |
| |
charterer is also a company and— |
| 15 |
(a) | the charterer is a qualifying subsidiary of the letting company, or |
| |
(b) | the letting company is a qualifying subsidiary of the charterer, or |
| |
(c) | both companies are qualifying subsidiaries of a third company, |
| |
| subsection (5) has effect with the omission of paragraph (c). |
| |
(7) | If any of the requirements of subsection (4) is not met in relation to any lettings |
| 20 |
of ships, the trade is not, as a result, to be treated as consisting in the carrying |
| |
on of excluded activities if— |
| |
| |
(b) | any other excluded activities |
| |
| do not, taken together, amount to a substantial part of the trade. |
| 25 |
(8) | In this section “pleasure craft” means any ship of a kind primarily used for |
| |
| |
195 | Excluded activities: receipt of royalties and licence fees |
| |
(1) | This section supplements section 192(1)(e) (receipt of royalties and licence |
| |
| 30 |
(2) | If the requirement of subsection (3) is met, a trade is not to be regarded as |
| |
consisting in the carrying on of excluded activities within section 192(1)(e) as a |
| |
result only of its consisting to a substantial extent in the receiving of royalties |
| |
| |
(3) | The requirement of this subsection is that the royalties or licence fees (or all but |
| 35 |
for a part that is not a substantial part in terms of value) are attributable to the |
| |
exploitation of relevant intangible assets. |
| |
(4) | For this purpose an intangible asset is a “relevant intangible asset” if the whole |
| |
or greater part (in terms of value) of it has been created— |
| |
(a) | by the company carrying on the trade, or |
| 40 |
(b) | by a company which at all times during which it created the intangible |
| |
| |
(i) | the holding company of the company carrying on the trade, or |
| |
(ii) | a qualifying subsidiary of that holding company. |
| |
(5) | In the case of an intangible asset that is intellectual property, references to the |
| 45 |
creation of an asset by a company are to its creation in circumstances in which |
| |
| |
| |
|
| |
| |
the right to exploit it vests in the company (whether alone or jointly with |
| |
| |
| |
“holding company” means a company that— |
| |
(a) | has one or more 51% subsidiaries, but |
| 5 |
(b) | is not itself a 51% subsidiary of another company, |
| |
“intangible asset” means any asset which falls to be treated as an |
| |
intangible asset in accordance with generally accepted accountancy |
| |
| |
“intellectual property” means— |
| 10 |
(a) | any patent, trade mark, registered design, copyright, design |
| |
right, performer’s right or plant breeder’s right, or |
| |
(b) | any rights under the law of a country or territory outside the |
| |
United Kingdom which correspond or are similar to those |
| |
falling within paragraph (a). |
| 15 |
196 | Excluded activities: property development |
| |
(1) | This section supplements section 192(1)(g). |
| |
(2) | “Property development” means the development of land— |
| |
(a) | by a company which has, or at any time has had, an interest in the land, |
| |
| 20 |
(b) | with the sole or main object of realising a gain from the disposal of an |
| |
interest in the land when it is developed. |
| |
(3) | For this purpose “interest in land” means, subject to subsection (4)— |
| |
(a) | any estate, interest or right in or over land, including any right affecting |
| |
the use or disposition of land, or |
| 25 |
(b) | any right to obtain such an estate, interest or right from another which |
| |
is conditional on the other’s ability to grant it. |
| |
(4) | References in this section to an interest in land do not include— |
| |
(a) | the interest of a creditor (other than a creditor in respect of a rentcharge) |
| |
whose debt is secured by way of mortgage, an agreement for a |
| 30 |
mortgage or a charge of any kind over land, or |
| |
(b) | in the case of land in Scotland, the interest of a creditor in a charge or |
| |
security of any kind over land. |
| |
197 | Excluded activities: hotels and comparable establishments |
| |
(1) | This section supplements section 192(1)(j). |
| 35 |
(2) | The reference to a comparable establishment is to a guest house, hostel or other |
| |
establishment the main purpose of maintaining which is the provision of |
| |
facilities for overnight accommodation (with or without catering services). |
| |
(3) | The activities of a person are not to be taken to fall within section 192(1)(j) |
| |
unless that person has an estate or interest in, or is in occupation of, the hotel |
| 40 |
or comparable establishment in question. |
| |
| |
| |
|
| |
| |
198 | Excluded activities: nursing homes and residential care homes |
| |
(1) | This section supplements section 192(1)(k). |
| |
(2) | “Nursing home” means any establishment which exists wholly or mainly for |
| |
the provision of nursing care— |
| |
(a) | for persons suffering from sickness, injury or infirmity, or |
| 5 |
(b) | for women who are pregnant or have given birth. |
| |
(3) | “Residential care home” means any establishment which exists wholly or |
| |
mainly for the provision of residential accommodation, together with board |
| |
and personal care, for persons in need of personal care because of— |
| |
| 10 |
(b) | mental or physical disability, |
| |
(c) | past or present dependence on alcohol or drugs, |
| |
(d) | any past illnesses, or |
| |
(e) | past or present mental disorder. |
| |
(4) | The activities of a person are not to be taken to fall within section 192(1)(k) |
| 15 |
unless that person has an estate or interest in, or is in occupation of, the nursing |
| |
home or residential care home in question. |
| |
199 | Excluded activities: provision of services or facilities for another business |
| |
(1) | Providing services or facilities for a business carried on by another person |
| |
(other than a company of which the provider of the services or facilities is a |
| 20 |
qualifying subsidiary) is an excluded activity if— |
| |
(a) | the business consists wholly or as to a substantial part of activities |
| |
falling within any of paragraphs (a) to (k) of section 192(1), and |
| |
(b) | a controlling interest in the business is held by a person who also has a |
| |
controlling interest in the business carried on by the provider of the |
| 25 |
| |
(2) | Subsections (3) to (5) explain what is meant by a controlling interest in a |
| |
business for the purposes of subsection (1)(b). |
| |
(3) | In the case of a business carried on by a company, a person (“A”) has a |
| |
controlling interest in the business if— |
| 30 |
(a) | A controls the company, |
| |
(b) | the company is a close company and A or an associate of A is a director |
| |
of the company and is either— |
| |
(i) | the beneficial owner of more than 30% of the ordinary share |
| |
capital of the company, or |
| 35 |
(ii) | able, directly or through the medium of other companies or by |
| |
any other indirect means, to control more than 30% of that share |
| |
| |
(c) | at least half the business could, in accordance with section 344(2) of |
| |
ICTA (persons to whom company’s trade may be treated as belonging), |
| 40 |
be regarded as belonging to A for the purposes of section 343 of that Act |
| |
(company reconstructions without a change of ownership). |
| |
(4) | In any other case, a person has a controlling interest in a business if the person |
| |
is entitled to at least half the assets used for, or of the income arising from, the |
| |
| 45 |
| |
| |
|
| |
| |
(5) | For the purposes of this section— |
| |
(a) | any rights or powers of a person who is an associate of another are to |
| |
be attributed to that other person, and |
| |
(b) | “business” includes any trade, profession or vocation. |
| |
| 5 |
200 | Power to amend by Treasury order |
| |
The Treasury may by order make such amendments of sections 181, 182, 184 to |
| |
189 and 192 to 199 as they consider appropriate. |
| |
| |
Attribution of and claims for EIS relief |
| 10 |
| |
201 | Attribution of EIS relief to shares |
| |
(1) | References in this Part, in relation to any individual, to the EIS relief |
| |
attributable to any shares or issue of shares are to be read as references to any |
| |
reduction made in the individual’s liability to income tax that is attributed to |
| 15 |
those shares or that issue in accordance with this section. |
| |
| This is subject to the provisions of Chapters 6 and 7 providing for the |
| |
withdrawal or reduction of EIS relief. |
| |
(2) | If an individual’s liability to income tax is reduced in any tax year, then— |
| |
(a) | if the reduction is obtained because of one issue of shares, the amount |
| 20 |
of the reduction is attributed to that issue, and |
| |
(b) | if the reduction is obtained because of two or more issues of shares, the |
| |
| |
(i) | is apportioned between those issues in the same proportions as |
| |
the amounts claimed by the individual in respect of each issue, |
| 25 |
| |
(ii) | is attributed to those issues accordingly. |
| |
(3) | If under this section an amount of any reduction of income tax is attributed to |
| |
an issue of shares (“the original issue”) to an individual, a proportionate part |
| |
of that amount is attributed to each share in respect of which the claim was |
| 30 |
| |
(4) | If corresponding bonus shares are issued to the individual in respect of any |
| |
shares (“the original shares”) to which EIS relief is attributed— |
| |
(a) | a proportionate part of the total amount attributed to the original |
| |
shares immediately before the bonus shares are issued is attributed to |
| 35 |
each of the shares in the holding comprising the original shares and the |
| |
| |
(b) | after the issue of the bonus shares, this Part applies as if the original |
| |
issue had included those shares. |
| |
| |
| |
|
| |
| |
(5) | In subsection (4) “corresponding bonus shares” means bonus shares which are |
| |
in the same company, of the same class, and carry the same rights as the |
| |
| |
(6) | If section 158(1) and (2) applies in the case of any issue of shares as if part of the |
| |
issue had been issued in a previous tax year, this section has effect as if that part |
| 5 |
and the remainder were separate issues of shares (and that part had been |
| |
issued on a day in the previous tax year). |
| |
(7) | If, at a time when EIS relief is attributable to, or to any part of, any issue of |
| |
shares, the relief falls to be withdrawn or reduced under Chapters 6 and 7— |
| |
(a) | if it falls to be withdrawn, the relief attributable to each of the shares in |
| 10 |
question is reduced to nil, and |
| |
(b) | if it falls to be reduced by any amount, the relief attributable to each of |
| |
the shares in question is reduced by a proportionate part of that |
| |
| |
| 15 |
202 | Time for making claims for EIS relief |
| |
(1) | A claim for EIS relief in respect of shares issued by a company in any tax year |
| |
| |
(a) | not earlier than the time the requirement in section 176(2) or (3) (trade |
| |
etc must have been carried on for 4 months) is first met, and |
| 20 |
(b) | not later than the fifth anniversary of the normal self-assessment filing |
| |
| |
(2) | If section 158(1) and (2) applies in the case of any issue of shares as if part of the |
| |
issue had been issued in a previous tax year, this section has effect as if that part |
| |
and the remainder were separate issues of shares (and that part had been |
| 25 |
issued on a day in the previous tax year). |
| |
| |
(1) | The investor is entitled to make a claim for EIS relief in respect of the amount |
| |
subscribed by the investor for the relevant shares if the investor has received |
| |
from the issuing company a compliance certificate in respect of those shares. |
| 30 |
(2) | For the purposes of PAYE regulations no regard is to be had to EIS relief unless |
| |
a claim for it has been duly made. |
| |
(3) | No application may be made under section 55(3) or (4) of TMA 1970 |
| |
(application for postponement of payment of tax pending appeal) on the |
| |
ground that the investor is eligible for EIS relief unless a claim for the relief has |
| 35 |
been duly made by the investor. |
| |
Claims: supporting documents |
| |
204 | Compliance certificates |
| |
(1) | A “compliance certificate” is a certificate which— |
| |
(a) | is issued by the issuing company in respect of the relevant shares, |
| 40 |
| |
| |
|
| |
| |
(b) | states that, except so far as they fall to be met by or in relation to the |
| |
investor, the requirements for EIS relief are for the time being met in |
| |
relation to those shares, and |
| |
(c) | is in such form as the Commissioners for Her Majesty’s Revenue and |
| |
| 5 |
(2) | Before issuing a compliance certificate in respect of the relevant shares, the |
| |
issuing company must provide an officer of Revenue and Customs with a |
| |
compliance statement in respect of the issue of shares which includes the |
| |
| |
(3) | The issuing company must not issue a compliance certificate without the |
| 10 |
authority of an officer of Revenue and Customs. |
| |
(4) | If the issuing company, or a person connected with the issuing company, has |
| |
given notice to an officer of Revenue and Customs under section 241 of this Act |
| |
or paragraph 16(2) or (4) of Schedule 5B to TCGA 1992, a compliance certificate |
| |
must not be issued unless the authority is given or renewed after the receipt of |
| 15 |
| |
(5) | If an officer of Revenue and Customs— |
| |
(a) | has been requested to give or renew an authority to issue a compliance |
| |
| |
(b) | has decided whether or not to do so, |
| 20 |
| the officer must give notice of the officer’s decision to the issuing company. |
| |
205 | Compliance statements |
| |
(1) | A “compliance statement” is a statement, in respect of an issue of shares, to the |
| |
effect that, except so far as they fall to be met by or in relation to the individuals |
| |
to whom shares included in that issue have been issued, the requirements for |
| 25 |
EIS relief (see section 157)— |
| |
(a) | are for the time being met in relation to the shares to which the |
| |
| |
(b) | have been so met at all times since the shares were issued. |
| |
(2) | In determining for the purposes of subsection (1) whether the requirements for |
| 30 |
EIS relief are met at any time in relation to the issue of shares, references in this |
| |
Part to “the relevant shares” are read as references to the shares included in the |
| |
| |
(3) | A compliance statement must be in such form as the Commissioners for Her |
| |
Majesty’s Revenue and Customs direct and must contain— |
| 35 |
(a) | such additional information as the Commissioners reasonably require, |
| |
including in particular information relating to the persons who have |
| |
requested the issue of compliance certificates, |
| |
(b) | a declaration that the statement is correct to the best of the issuing |
| |
company’s knowledge and belief, and |
| 40 |
(c) | such other declarations as the Commissioners may reasonably require. |
| |
(4) | The issuing company may not provide an officer of Revenue and Customs with |
| |
a compliance statement in respect of any shares issued by it in any tax year— |
| |
(a) | before the requirement in section 176(2) or (3) (trade etc must have been |
| |
carried on for 4 months) is met, or |
| 45 |
| |
| |
|
| |
| |
(b) | later than two years after the end of that tax year or, if that requirement |
| |
is first met after the end of that tax year, later than two years after the |
| |
requirement is first met. |
| |
206 | Appeal against refusal to authorise compliance certificate |
| |
For the purpose of the provisions of TMA 1970 relating to appeals, the refusal |
| 5 |
of an officer of Revenue and Customs to authorise the issue of a compliance |
| |
certificate is taken to be a decision disallowing a claim by the issuing company. |
| |
207 | Penalties for fraudulent certificate or statement etc |
| |
The issuing company is liable to a penalty not exceeding £3,000 if— |
| |
(a) | it issues a compliance certificate, or provides a compliance statement, |
| 10 |
which is made fraudulently or negligently, or |
| |
(b) | it issues a compliance certificate in contravention of section 204(3) or |
| |
| |
| |
Withdrawal or reduction of EIS relief |
| 15 |
| |
| |
This Chapter provides for EIS relief to be withdrawn or reduced under— |
| |
(a) | section 209 (disposal of shares), |
| |
(b) | section 211 (call options), |
| 20 |
(c) | section 212 (put options), |
| |
(d) | section 213 (value received by the investor), |
| |
(e) | section 224 (repayments etc of share capital to other persons), |
| |
(f) | section 232 (acquisition of a trade or trading assets), |
| |
(g) | section 233 (acquisition of share capital), and |
| 25 |
(h) | section 234 (relief subsequently found not to have been due). |
| |
| |
| |
(1) | This section applies if— |
| |
(a) | the investor disposes of any of the relevant shares, |
| 30 |
(b) | the disposal takes place before period A ends, and |
| |
(c) | EIS relief is attributable to the shares. |
| |
(2) | If the disposal is not made by way of a bargain made at arm’s length, the EIS |
| |
relief attributable to the shares must be withdrawn. |
| |
(3) | If the disposal is made by way of a bargain made at arm’s length, the EIS relief |
| 35 |
attributable to the shares must— |
| |
| |
| |
|
