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Finance Bill
Part 2 — Environment

14

 

58C     

Relief for new zero-carbon homes: supplemental

(1)   

Regulations under section 58B—

(a)   

shall include provision about the method of claiming relief

(including documents or information to be provided), and

(b)   

in particular, shall include provision about the evidence to be

5

adduced to show that a building satisfies the definition of “zero-

carbon home”.

(2)   

Regulations by virtue of subsection (1)(b) may, in particular—

(a)   

refer to a scheme or process established by or for the purposes

of an enactment about building;

10

(b)   

establish or provide for the establishment of a scheme or

process of certification;

(c)   

specify, or provide for the approval of, one or more schemes or

processes for certifying energy efficiency.

(3)   

In defining “zero-carbon home” regulations under section 58B may

15

include requirements which may be satisfied in relation to a building

either—

(a)   

by features of the building itself, or

(b)   

by other installations or utilities.

(4)   

Regulations under section 58B may modify the effect of section 108, or

20

another provision of this Part about linked transactions, in relation to a

set of transactions of which at least one is the first acquisition of a

dwelling which is a zero-carbon home.

(5)   

In determining whether section 116(7) applies, and in the application of

section 116(7), a transaction shall be disregarded if or in so far as it

25

involves the first acquisition of a dwelling which is a zero-carbon home.

(6)   

Regulations under section 58B—

(a)   

may provide for relief to be wholly or partly withdrawn if a

dwelling ceases to be a zero-carbon home, and

(b)   

may provide for the reduction or withholding of relief where a

30

person acquires more than one zero-carbon home within a

specified period.

(7)   

Regulations under section 58B may include provision for relief to be

granted in respect of acquisitions occurring during a specified period

before the regulations come into force.”

35

(2)   

In section 114 of FA 2003 (stamp duty land tax: orders and regulations), insert

at the end—

“(5)   

An order or regulations under this Part—

(a)   

may make provision having effect generally or only in specified

cases or circumstances,

40

(b)   

may make different provision for different cases or

circumstances, and

(c)   

may include incidental, consequential or transitional provision

or savings.”

 
 

Finance Bill
Part 2 — Environment

15

 

Domestic microgeneration

20      

Income tax exemption for domestic microgeneration

(1)   

In ITTOIA 2005, after section 782 insert—

“782A   

 Domestic microgeneration

(1)   

No liability to income tax arises in respect of income arising to an

5

individual from the sale of electricity generated by a microgeneration

system if—

(a)   

the system is installed at or near domestic premises occupied by

the individual, and

(b)   

the individual intends that the amount of electricity generated

10

by it will not significantly exceed the amount of electricity

consumed in those premises.

(2)   

In subsection (1)—

“domestic premises” means premises used wholly or mainly as a

separate private dwelling, and

15

“microgeneration system” has the same meaning as in section 4 of

the Climate Change and Sustainable Energy Act 2006.”

(2)   

The amendment made by subsection (1) has effect for the tax year 2007-08 and

subsequent tax years.

21      

Renewables obligation certificates for domestic microgeneration

20

(1)   

In ITTOIA 2005, after section 782A (inserted by section 20) insert—

“782B   

 Renewables obligation certificates for domestic microgeneration

(1)   

No liability to income tax arises in respect of the receipt by an

individual of a renewables obligation certificate if—

(a)   

the individual receives the certificate in connection with the

25

generation of electricity by a microgeneration system,

(b)   

the system is installed at or near domestic premises occupied by

the individual, and

(c)   

the individual intends that the amount of electricity generated

by it will not significantly exceed the amount of electricity

30

consumed in those premises.

(2)   

In subsection (1)—

“domestic premises” and “microgeneration system” have the

same meaning as in section 782A, and

“renewables obligation certificate” means a certificate issued

35

under section 32B of the Electricity Act 1989 or Article 54 of the

Energy (Northern Ireland) Order 2003.”

(2)   

In TCGA 1992, after section 263 insert—

“263AZA 

  Renewables obligation certificates for domestic microgeneration

(1)   

A gain accruing to an individual on a disposal of a renewables

40

obligation certificate is not a chargeable gain if—

 
 

Finance Bill
Part 2 — Environment

16

 

(a)   

the individual acquired the certificate in connection with the

generation of electricity by a microgeneration system,

(b)   

the system is installed at or near domestic premises occupied by

the individual, and

(c)   

the individual intends that the amount of electricity generated

5

by it will not significantly exceed the amount of electricity

consumed in those premises.

(2)   

In subsection (1)—

“domestic premises” means premises used wholly or mainly as a

separate private dwelling,

10

“microgeneration system” has the same meaning as in section 4 of

the Climate Change and Sustainable Energy Act 2006, and

“renewables obligation certificate” means a certificate issued

under section 32B of the Electricity Act 1989 or Article 54 of the

Energy (Northern Ireland) Order 2003.”

15

(3)   

The amendment made by subsection (1) has effect for the tax year 2007-08 and

subsequent tax years.

(4)   

The amendment made by subsection (2) has effect in relation to disposals on or

after 6th April 2007.

Other measures

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22      

Aggregates levy: exemption for aggregate removed from railways etc

(1)   

Section 17(3) of FA 2001 (exempt aggregate) is amended as follows.

(2)   

Omit “or” at the end of paragraph (d).

(3)   

After that paragraph insert—

“(da)   

it consists wholly of aggregate won by being removed from the

25

ground along the line or proposed line of any railway, tramway

or monorail or proposed railway, tramway or monorail and in

the course of excavations carried out—

(i)   

for the purpose of improving or maintaining the

railway, tramway or monorail or of constructing the

30

proposed railway, tramway or monorail; and

(ii)   

not for the purpose of extracting that aggregate;”.

(4)   

Insert “or” at the end of paragraph (e).

(5)   

The amendment made by subsection (3) comes into force on such day as the

Treasury may by order made by statutory instrument appoint.

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23      

Climate change levy: reduced-rate supplies etc

Schedule 2 contains amendments of Schedule 6 to FA 2000 in relation to

reduced-rate supplies and other matters.

24      

Landfill tax: bodies concerned with the environment

(1)   

In section 53(4) of FA 1996 (credit: bodies concerned with the environment),

40

 
 

Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax

17

 

after paragraph (c) insert—

“(ca)   

provision for an environmental body to be and remain

approved only if it complies with conditions imposed from time

to time by the regulatory body or for the regulatory body to be

and remain approved only if it complies with conditions

5

imposed from time to time by the Commissioners (including

provision for the variation or revocation of such conditions);”.

(2)   

The amendment made by subsection (1) is deemed to have come into force on

22nd March 2007.

Part 3

10

Income tax, corporation tax and capital gains tax

Anti-avoidance

25      

Managed service companies

(1)   

Schedule 3 contains provision about managed service companies.

(2)   

That Schedule is deemed to have come into force on 6th April 2007.

15

26      

Restrictions on trade loss relief for partners

Schedule 4 contains provision restricting reliefs for losses made by individuals

carrying on trades in partnership.

27      

Extension of restrictions on allowable capital losses

(1)   

TCGA 1992 is amended as follows.

20

(2)   

In section 8 (company’s total profits to include chargeable gains)—

(a)   

in subsection (2), for the words from “does not include—” to the end

substitute “does not include a loss accruing to a company in such

circumstances that if a gain accrued the company would be exempt

from corporation tax in respect of it.”, and

25

(b)   

omit subsections (2A) to (2C).

(3)   

After section 16 insert—

“16A    

Restrictions on allowable losses

(1)   

For the purposes of this Act, “allowable loss” does not include a loss

accruing to a person if—

30

(a)   

it accrues to the person directly or indirectly in consequence of,

or otherwise in connection with, any arrangements, and

(b)   

the main purpose, or one of the main purposes, of the

arrangements is to secure a tax advantage.

(2)   

For the purposes of subsection (1)—

35

“arrangements” includes any agreement, understanding, scheme,

transaction or series of transactions (whether or not legally

enforceable), and

“tax advantage” means—

 
 

Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax

18

 

(a)   

relief or increased relief from tax,

(b)   

repayment or increased repayment of tax,

(c)   

the avoidance or reduction of a charge to tax or an

assessment to tax, or

(d)   

the avoidance of a possible assessment to tax,

5

and for the purposes of this definition “tax” means capital gains

tax, corporation tax or income tax.

(3)   

For the purposes of subsection (1) it does not matter—

(a)   

whether the loss accrues at a time when there are no chargeable

gains from which it could otherwise have been deducted, or

10

(b)   

whether the tax advantage is secured for the person to whom

the loss accrues or for any other person.”

(4)   

In section 288(1) (interpretation), in the definition of “allowable loss”, after “16”

insert “, 16A”.

(5)   

In section 834(1) of ICTA (interpretation of the Corporation Tax Acts), in the

15

definition of “allowable loss”, for the words from “or a loss” to the end

substitute “or a loss accruing to a company in the circumstances mentioned in

section 16A of the 1992 Act”.

(6)   

The amendments made by this section have effect in relation to losses accruing

on disposals made on or after 6th December 2006.

20

28      

Life policies etc: effect of rebated or reinvested commission

(1)   

In ICTA, after section 548 insert—

“548A   

Effect of rebated or reinvested commission in certain cases

(1)   

This section applies if—

(a)   

a relevant chargeable event occurs in respect of a policy or

25

contract,

(b)   

commission in respect of the policy or contract has at any time

been rebated or reinvested, and

(c)   

condition A or B is met.

(2)   

For the purposes of performing the calculation under section 541(1)(b)

30

or (c) or 543(1)(a) or (b) for the chargeable event, the total amount paid

under the policy or contract by way of premiums in any period is to be

reduced by the total amount of commission attributable to those

premiums that has been rebated or reinvested.

(3)   

Condition A is that the total amount paid under the policy or contract

35

by way of premiums in a relevant period exceeds £100,000.

(4)   

Condition B is that—

(a)   

at a time when the policy or contract was the taxable person’s,

the taxable person’s policies and contracts exceeded the

relevant threshold as respects a relevant period, and

40

(b)   

payments under the policy or contract by way of premiums

were made in that relevant period.

 
 

Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax

19

 

(5)   

In subsection (4)(a) “taxable person” means the person whose policy or

contract the policy or contract is, immediately before the chargeable

event.

(6)   

For the purposes of subsection (4)(a) a person’s policies and contracts

“exceed the relevant threshold” as respects a relevant period if the total

5

amount of payments under them by way of premiums in that relevant

period exceeds the sum specified in subsection (3).

(7)   

In this section “relevant chargeable event” means a chargeable event

within—

(a)   

any of sub-paragraphs (ii) to (iv) of section 540(1)(a) (including

10

those sub-paragraphs as they apply in relation to a qualifying

policy),

(b)   

section 542(1)(a) or (b), or

(c)   

section 545(1)(a) to (c).

(8)   

In this section “relevant period” means—

15

(a)   

the period beginning with the beginning of the year of

assessment in which the chargeable event occurs and ending

with the chargeable event, or

(b)   

any of the 3 preceding years of assessment.

(9)   

References in this section to a premium include, in relation to a contract

20

for a life annuity, lump sum consideration.

(10)   

The Treasury may by order—

(a)   

substitute another sum for the sum for the time being specified

in subsection (3);

(b)   

amend the definition of “relevant period”.

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548B    

Section 548A: further definitions

(1)   

This section supplements section 548A.

(2)   

“Commission”, in relation to a policy or contract, includes any passing

of value to or for the benefit of an intermediary, or a person connected

with an intermediary, that can reasonably be taken to represent a

30

reward in respect of the policy or contract.

(3)   

Commission in respect of a policy or contract is “reinvested” if, as a

result of a waiver of an entitlement to it, there is an increase in the total

value of a relevant person’s policies and contracts.

(4)   

The amount of commission reinvested is the amount of the increase.

35

(5)   

Commission in respect of a policy or contract is “rebated” if—

(a)   

value passes (directly or indirectly) from an intermediary, or a

person connected with an intermediary, to or for the benefit of

a relevant person (and the passing of value does not amount to

the reinvestment of the commission), and

40

(b)   

the passing of value can reasonably be taken to be in respect of

the commission.

(6)   

The amount of commission rebated is the amount of value passed.

(7)   

A policy or contract is a person’s policy or contract if a gain arising in

connection with it would be—

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Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax

20

 

(a)   

a gain for which the person, or (if the person is an individual)

the person’s spouse or civil partner, would be liable to tax

under Chapter 9 of Part 4 of ITTOIA 2005, or

(b)   

treated by virtue of section 547(1) above as forming part of the

person’s income.

5

(8)   

Any necessary apportionment is to be made (on a just and reasonable

basis) as regards—

(a)   

commission which is attributable to two or more premiums,

and

(b)   

any part of such commission that has been rebated or

10

reinvested.

(9)   

Commission which is in respect of one or more policies or contracts

(but is not attributable to particular premiums) is to be attributed to

such premiums as is just and reasonable.

(10)   

In subsections (3) and (5), “relevant person” means—

15

(a)   

any of the policyholders (including any of the persons who hold

the contract),

(b)   

a person who beneficially owns the rights under the policy or

contract,

(c)   

if those rights are held on trust, any of the trustees, or

20

(d)   

a person connected (within the meaning of section 839) with a

person within any of paragraphs (a) to (c).

(11)   

In subsections (8) and (9), references to a premium include, in relation

to a contract for a life annuity, lump sum consideration.”

(2)   

In section 552 of that Act (information: duty of insurers), after subsection (12)

25

insert—

“(13)   

For the purposes of this section, no account is to be taken of the effect

of section 548A above or section 541A of ITTOIA 2005.”

(3)   

In ITTOIA 2005, after section 541 insert—

“Rebated or reinvested commission

30

541A    

Effect of rebated or reinvested commission in certain cases

(1)   

This section applies if—

(a)   

a chargeable event within section 484(1)(a)(i) to (iii), (c) or (e)

occurs in respect of a policy or contract,

(b)   

commission in respect of the policy or contract has at any time

35

been rebated or reinvested, and

(c)   

condition A or B is met.

(2)   

For the purposes of performing the calculation in section 494 (total

allowable deductions) for the chargeable event, the total amount of

premiums under the policy or contract paid in the period mentioned in

40

section 494(1) or (2)(b) is to be reduced by the total amount of

commission attributable to those premiums that has been rebated or

reinvested.

(3)   

Condition A is that the total amount of premiums under the policy or

contract paid in a relevant period exceeds £100,000.

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