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| (except Clauses 1, 3, 7, 8, 12, 20, 21, 25, 67 and 81 to 84, Schedules 1, 18, 22 and 23, and
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| New Clauses relating to Microgeneration)
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| [sixth and seventh SITTINGS]
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| Clause 27, page 17, line 28, at end insert— |
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| | ‘(A1) | The purpose of this section is that relief for allowable losses shall not be granted |
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| | where a person deliberately and knowingly enters into complex arrangements |
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| | intended to avoid liability to capital gains tax, income tax or corporation tax. |
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| | (A2) | This section shall be construed purposively in line with the principles set out in |
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| | the statement of principles issued by Her Majesty’s Revenue and Customs on 6 |
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| Clause 27, page 17, line 29, at beginning insert ‘Subject to section 16B below,’. |
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| Clause 27, page 17, line 33, leave out ‘, or one of the main purposes,’. |
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| Clause 27, page 17, line 34, after ‘arrangements’, insert ‘taken as a whole’. |
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| Clause 27, page 17, line 34, leave out ‘secure a tax advantage’ and insert ‘avoid a |
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| liability to capital gains tax, corporation tax or income tax’. |
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| Clause 27, page 17, line 34, at end insert ‘; and |
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| | (c) | the arrangements are not prescribed arrangements.’. |
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| Clause 27, page 17, line 34, at end insert ‘; and |
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| | (c) | the arrangements, taken as a whole, are not genuine commercial |
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| Clause 27, page 17, line 34, at end insert— |
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| | ‘(1A) | This section does not apply where the aggregate of a person’s allowable losses |
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| | does not exceed £25,000 in the year of assessment.’. |
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| Clause 27, page 17, line 38, leave out from ‘enforceable),’ to end of line 7 on page |
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| Clause 27, page 17, line 38, leave out ‘and’ and insert— |
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| | ‘ “prescribed” means set out in regulations made by the Commissioners for |
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| | Her Majesty’s Revenue and Customs.’. |
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| Clause 27, page 18, line 11, leave out ‘tax advantage is secured for’ and insert |
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| ‘avoidance of liability to taxation relates to’. |
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| Clause 27, page 18, line 12, at end insert— |
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| | (1) | Section 16A shall not affect the operation of section 135 or 136 in any case where, |
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| | before the issue is made, the Board have, on the application of either company |
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| | mentioned in section 137(1), notified the Company that the Board are satisfied |
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| | that the exchange, reconstruction or amalgamation will be effected for bona fide |
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| | commercial reasons and will not form part of any such scheme or arrangements |
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| | as are mentioned in section 137(1). |
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| | (2) | Any application under subsection (1) above shall be in writing and shall contain |
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| | particulars of the operations that are to be effected; and the Board may, within 30 |
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| | days of the receipt of the application or of any further particulars previously |
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| | required under this subsection, by notice require the applicant to furnish further |
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| | particulars for the purpose of enabling the Board to make their decision; and if |
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| | any such notice is not complied with within 30 days or such longer period as the |
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| | Board may allow, the Board need not proceed further on the application. |
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| | (3) | The Board shall notify their decision to the applicant within 30 days of receiving |
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| | the application or, if they give a notice under subsection (2) above, within 30 days |
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| | of the notice being complied with. |
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| | (4) | If the Board notify the applicant that they are not satisfied as mentioned in |
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| | subsection (1) above or do not notify their decision to the applicant within the |
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| | time required by subsection (3) above, the applicant may within 30 days of the |
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| | notification or of that time require the Board to transmit the application, together |
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| | with any notice given and further particulars furnished under subsection (2) |
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| | above, to the Special Commissioners; and in that event any notification by the |
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| | Special Commissioners shall have effect for the purposes of subsection (1) above |
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| | as if it were a notification by the Board. |
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| | (5) | If any particulars furnished under this section do not fully and accurately disclose |
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| | all facts and considerations material for the decision of the Board or the Special |
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| | Commissioners, any resulting notification that the Board or Commissioners are |
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| | satisfied as mentioned in subsection (1) above shall be void.’. |
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| | Clauses 28 and 29 Agreed to. |
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| Schedule 5, page 109, line 10, at end insert— |
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| | ‘Loan relationships: amounts not fully recognised for accounting purposes |
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| | 10A(1) | Section 85C of FA 1996 (amounts not fully recognised for accounting |
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| | purposes) is amended as follows. |
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| | (a) | in paragraph (c), for the words from “has at any time” to “liability”)” |
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| | substitute “an amount (a “relevant capital contribution”) has at any |
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| | time been contributed to the company which forms part of its capital |
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| | (whether share or other capital)”, and |
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| | (b) | in paragraphs (d) and (e), for “relevant accounting liability” substitute |
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| | “relevant capital contribution”. |
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| | (a) | for “or relevant accounting liability of the company” substitute “of the |
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| | company or any relevant capital contribution made to the company”, |
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| | (b) | for “or liability” (in both places) substitute “or contribution”. |
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| | (4) | The amendments made by this paragraph have effect in relation to periods of |
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| | account ending on or after 9th May 2007. |
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| | (5) | But, in relation to periods of account beginning before that date, amounts are |
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| | to be brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 |
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| | as a result of those amendments only if the amounts relate to any time on or |
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| Schedule 5, page 111, line 15, after ‘investment’ insert ‘or liability’. |
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| Schedule 5, page 111, line 16, after ‘made’ insert ‘, or the liability was incurred,’. |
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| Schedule 5, page 111, line 19, after ‘investment’ insert ‘or liability’. |
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| Schedule 5, page 111, line 26, at beginning insert ‘In the case of amounts relating |
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| Schedule 5, page 111, line 28, after ‘But’ insert ‘in that case’. |
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| Schedule 5, page 111, line 30, at end insert— |
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| | ‘(6) | In the case of amounts relating to liabilities, those amendments have effect in |
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| | relation to accounting periods ending on or after 9th May 2007. |
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| | (7) | But in that case, in relation to accounting periods beginning before that date, |
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| | amounts are to be left out of account as a result of those amendments only if |
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| | they relate to any time on or after that date.’. |
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| | Schedule, as amended, Agreed to. |
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| Schedule 6, page 115, line 5, leave out ‘paragraph 41(8) of that Schedule’ and |
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| insert ‘section 577 of the Capital Allowances Act 2001’. |
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| Schedule 6, page 115, line 11, after ‘2006’, insert ‘but where either the predecessor |
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| or the successor has no principal company as therein provided (because it is itself a |
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| principal company) it shall be deemed for the purposes of this section to be its own |
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| Clause 31, page 23, line 7, leave out ‘and’. |
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| Clause 31, page 23, line 7, at end insert— |
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| | ‘(ca) | after that paragraph insert— |
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| | “(ca) | no qualifying change of ownership occurs at any time in |
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| | relation to the principal company of that group for the |
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| | purposes of section 184A of TCGA 1992 directly or |
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| | indirectly in consequence of, or otherwise in connection |
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| | with, any arrangements the main purpose, or one of the |
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| | main purposes, of which is to secure a tax advantage |
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| | falling within subsection (1)(d) of that section, and”,’. |
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| Clause 31, page 23, line 34, leave out ‘that date’ and insert ‘5th December 2005’. |
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| Clause 31, page 23, line 34, at end insert ‘; but the amendment made by subsection |
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| (5)(ca) has no effect in relation to disposals made before 9th May 2007.’. |
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| | Clause, as amended, Agreed to. |
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| Clause 32, page 24, line 15, after ‘premium’ insert ‘or other consideration’. |
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| | Clause, as amended, Agreed to. |
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| [Adjourned till Tuesday next at 10.30 a.m. |
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