|
| |
|
(a) | after the commencement of the regulations, or |
| |
(b) | in the calendar year during which the regulations are |
| |
| |
8 | In section 117 (cancellation of tax advantage), insert at the end— |
| |
“(8) | On an appeal under subsection (7) the Special Commissioners may— |
| 5 |
| |
(b) | affirm the notice, or |
| |
| |
9 | In section 120 (calculation of profits)— |
| |
(a) | in paragraph (a) of subsection (4), for “an asset,” substitute “an asset |
| 10 |
by the exploitation of which tax-exempt business is conducted,” |
| |
(b) | after that paragraph insert— |
| |
“(aa) | a derivative contract is hedging in relation to a |
| |
company if or in so far as it is acquired as a hedge of |
| |
risk in relation to a liability incurred in connection |
| 15 |
with tax-exempt business,” and |
| |
(c) | after that subsection insert— |
| |
“(4A) | In subsection (4)(a) the reference to an asset includes a |
| |
| |
(a) | the value of an asset, and |
| 20 |
(b) | profits attributable to it.” |
| |
10 | In section 123(a) (attribution of distributions), for “Condition 4” substitute |
| |
| |
11 | After section 126 (movement of assets into ring fence) insert— |
| |
| 25 |
(1) | This section applies if— |
| |
(a) | C (tax-exempt) disposes of an asset to a 75% subsidiary (“S”) |
| |
| |
(b) | C (residual) disposes of its interest in S to another company |
| |
| 30 |
(c) | on the date when it acquires the interest in S, P gives a notice |
| |
under section 109 (as modified by paragraph 8 of Schedule |
| |
17) which specifies an accounting period which begins within |
| |
the period of six months beginning with the date of the |
| |
disposal of the asset, and |
| 35 |
(d) | this Part begins to apply to the group of which S is a member |
| |
from the beginning of the specified accounting period. |
| |
(2) | P may give a notice under section 109 (as modified by paragraph 8 of |
| |
Schedule 17) in accordance with subsection (1)(c) even if it does not |
| |
expect to satisfy Conditions 3 to 6 of section 106 throughout the |
| 40 |
accounting period specified in the notice. |
| |
(3) | Where this section applies— |
| |
(a) | sections 111 and 112 shall not apply to the group of which S |
| |
is a member in relation to the asset disposed of by C (tax- |
| |
exempt) or in relation to business conducted by the |
| 45 |
exploitation of that asset, and |
| |
|
| |
|
| |
|
(b) | section 125 shall not apply to the disposal of the asset by C |
| |
| |
(4) | But if, at the end of the period of six months mentioned in subsection |
| |
(1)(c), Conditions 3 to 6 of section 106 are not satisfied in relation to |
| |
P, subsection (3) shall be treated as not having had effect.” |
| 5 |
12 | In section 127 (interpretation), for “126” substitute “126A”. |
| |
13 | In section 133 (early exit), insert at the end— |
| |
“(6) | On an appeal under subsection (5) the Special Commissioners may— |
| |
| |
(b) | affirm the direction, or |
| 10 |
| |
14 | In section 138 (joint ventures), after subsection (3) insert— |
| |
“(4) | Regulations may make provision having retrospective effect in |
| |
respect of the calendar year in which they are made.” |
| |
15 | In paragraph 3 of Schedule 16 (excluded income: owner-occupied property), |
| 15 |
after sub-paragraph (3) insert— |
| |
“(3A) | For the purpose of Condition 2, no account shall be taken of the |
| |
fact that a property may fall to be described as owner-occupied by |
| |
reason only of the provision by the company of services to an |
| |
| 20 |
(a) | is in exclusive occupation of the property, and |
| |
(b) | is not connected with a member of the group (within the |
| |
meaning given by section 839 of ICTA).” |
| |
16 (1) | Schedule 17 (modifications for groups) is amended as follows. |
| |
(2) | In paragraph 2(b), for “Conditions 1 to 3” substitute “Conditions 1 and 2”. |
| 25 |
(3) | Omit paragraph 6(2) and (3). |
| |
(4) | In paragraph 6(4) and (5), for “Condition 4” substitute “Condition 3”. |
| |
(5) | In paragraph 14, in the substituted subsection (2)— |
| |
(a) | in the formula in the opening words, omit “+ Financing Costs (all)”, |
| |
(b) | in paragraph (a), after “allowances” insert “, of losses from a previous |
| 30 |
accounting period and of amounts taken into account under section |
| |
| |
| |
(6) | after paragraph 33 insert— |
| |
| 35 |
34 (1) | This paragraph applies in relation to a company if— |
| |
(a) | the company ceases to be a member of a group (“Group 1”) |
| |
| |
(b) | at the time immediately after it ceases to be a member of |
| |
| 40 |
(i) | it satisfies Conditions 1 and 2 of section 106 and the |
| |
conditions specified in sections 107 and 108, or |
| |
|
| |
|
| |
|
(ii) | it is a member of another group (“Group 2”) which |
| |
satisfies those conditions as modified by the |
| |
provisions of paragraphs 5 to 7 above, |
| |
(c) | the company (or the principal company of Group 2) gives |
| |
a notice under section 109 (or that section as modified by |
| 5 |
paragraph 8 above) no later than the date on which it |
| |
ceases to be a member of Group 1, and |
| |
(d) | the notice specifies an accounting period which begins on |
| |
the day on which the company ceases to be a member of |
| |
| 10 |
(2) | A company may give a notice under section 109 (or that section as |
| |
modified by paragraph 8 above) in accordance with sub- |
| |
paragraph (1)(c) even if it does not expect to satisfy Conditions 3 |
| |
to 6 of section 106 throughout the accounting period specified in |
| |
| 15 |
(3) | Where this paragraph applies, the company shall be treated as a |
| |
company to which Part 4 applies (or as a member of a group to |
| |
which Part 4 applies) during the period of six months beginning |
| |
with the time when it ceases to be a member of Group 1. |
| |
(4) | Where this paragraph applies, the following provisions of Part 4 |
| 20 |
| |
(a) | section 111 (or that section as modified by paragraphs 9 |
| |
| |
(b) | section 112 (or that section as modified by paragraph 11 |
| |
| 25 |
(c) | section 131 (as modified by paragraphs 25 and 26 above).” |
| |
(5) | But if, at the end of the period of six months mentioned in sub- |
| |
paragraph (3), Conditions 3 to 6 of section 106 are not satisfied in |
| |
relation to the company, this paragraph shall not have effect and |
| |
the company shall be treated as having ceased to be a company to |
| 30 |
which Part 4 applies (or a member of a group to which Part 4 |
| |
applies) on the date on which it ceased to be a member of Group |
| |
| |
17 | In section 505(1) of ICTA (charities: exemptions), after paragraph (a) insert— |
| |
“(aa) | exemption from tax under Schedules A and D, or under Parts |
| 35 |
2 and 3 of ITTOIA 2005, in respect of distributions to which |
| |
section 121 of the Finance Act 2006 (Real Estate Investment |
| |
Trusts: distributions) applies to the extent that the |
| |
| |
(i) | arise in respect of shares vested in a person for |
| 40 |
| |
(ii) | are applied to charitable purposes only;”. |
| |
18 | In section 531 of ITA 2007 (charities: exemptions)— |
| |
(a) | after subsection (2) insert— |
| |
“(2A) | Distributions to which section 121 of FA 2006 (Real Estate |
| 45 |
Investment Trusts: distributions) applies and which are |
| |
chargeable to income tax under Part 2 or Part 3 of ITTOIA |
| |
2005 are not taken into account in calculating total income so |
| |
|
| |
|
| |
|
far as they arise in respect of shares vested in a person in trust |
| |
for a charitable trust or for charitable purposes.”, and |
| |
(b) | in subsection (3), for “and (2)” substitute “to (2A)”. |
| |
| |
| |
Pensions schemes: abolition of relief for life assurance premium contributions |
| 5 |
| |
| |
1 | Part 4 of FA 2004 (pension schemes etc) is amended as follows. |
| |
Life assurance premium contributions not to be relievable pension contributions |
| |
2 | In section 188(3) (relief for members’ contributions: contributions which are |
| 10 |
not relievable pension contributions), after paragraph (a) insert— |
| |
“(aa) | any contributions which are life assurance premium |
| |
contributions (see section 195A),”. |
| |
Life assurance premium contributions |
| |
3 | After section 195 insert— |
| 15 |
“195A | Life assurance premium contributions |
| |
(1) | Contributions paid by or on behalf of an individual under a |
| |
registered pension scheme are life assurance premium contributions |
| |
for the purposes of section 188(3)(aa) if— |
| |
(a) | rights under a non-group life policy (see subsection (2)) are |
| 20 |
(or later become) held for the purposes of the pension |
| |
| |
(b) | the contributions are treated by this section as paid in respect |
| |
of premiums under the non-group life policy (see subsections |
| |
| 25 |
(2) | For the purposes of this section a “non-group life policy” is a policy |
| |
of insurance under which the only benefits which may become |
| |
payable are benefits payable in consequence, or in anticipation, of— |
| |
(a) | the death of the individual or one of a group of individuals |
| |
which includes the individual, or |
| 30 |
(b) | the deaths of more than one of a group of individuals— |
| |
(i) | which includes the individual, and |
| |
(ii) | the other members of which are connected with the |
| |
| |
(3) | Contributions paid by or on behalf of the individual under the |
| 35 |
pension scheme are treated as paid in respect of premiums under the |
| |
non-group life policy if— |
| |
(a) | the payment of the contributions constitutes the payment of |
| |
premiums under the policy, or |
| |
|
| |
|
| |
|
(b) | the person by whom the contributions are paid intends the |
| |
contributions (or an amount equivalent to them) to be |
| |
applied towards paying premiums under the policy. |
| |
(4) | Where the amount of the premiums under the policy in a tax year |
| |
exceeds the amount of any contributions treated as paid in respect of |
| 5 |
the premiums by subsection (3), other contributions paid by or on |
| |
behalf of the individual under the pension scheme in the tax year are |
| |
treated as paid in respect of premiums under the policy to the extent |
| |
that their amount does not exceed the difference between the amount |
| |
of the premiums and the amount of any contributions treated as paid |
| 10 |
in respect of the premiums by subsection (3). |
| |
| |
(a) | the benefits under the policy relate to the death of one or |
| |
more of a group of individuals, and |
| |
(b) | contributions are also paid under the pension scheme in the |
| 15 |
tax year by or on behalf of another member or other members |
| |
| |
| the amount of the contributions paid by or on behalf of the |
| |
individual which are treated as paid in respect of premiums under |
| |
the policy by subsection (4) does not exceed what is just and |
| 20 |
reasonable having regard to the operation of section 188(3)(aa) in |
| |
relation to the contributions paid by or on behalf of another member |
| |
or other members of the group. |
| |
(6) | The Commissioners for Her Majesty’s Revenue and Customs may by |
| |
regulations amend subsections (2) to (5). |
| 25 |
(7) | Regulations under subsection (6) which limit— |
| |
(a) | the policies of insurance which are non-group life assurance |
| |
policies for the purposes of this section, or |
| |
(b) | the contributions which are treated by this section as paid in |
| |
respect of premiums under such policies, |
| 30 |
| may be made so as to have effect in relation to times before they are |
| |
| |
(8) | For the purposes of this section an individual (“A”) is connected with |
| |
another individual (“B”) if— |
| |
(a) | A is B’s spouse or civil partner, |
| 35 |
(b) | A is a relative of B, |
| |
(c) | A is the spouse or civil partner of a relative of B, |
| |
(d) | A is a relative of B’s spouse or civil partner, or |
| |
(e) | A is the spouse or civil partner of a relative of B’s spouse or |
| |
| 40 |
| and for the purposes of this subsection “relative” means brother, |
| |
sister, ancestor or lineal descendant.” |
| |
Commencement: schemes other than occupational pension schemes |
| |
4 (1) | In relation to contributions under any pension scheme that is not an |
| |
occupational pension scheme, the amendments made by this Schedule have |
| 45 |
effect in relation to contributions paid on or after 6th April 2007. |
| |
|
| |
|
| |
|
(2) | But they do not have effect in relation to such contributions paid at any time |
| |
if the contributions are treated as paid in respect of premiums under a policy |
| |
of insurance which at that time is a protected policy (see paragraph 5). |
| |
5 (1) | This paragraph specifies when a policy of insurance is a protected policy in |
| |
a case where the rights under it are held for the purposes of a pension |
| 5 |
scheme that is not an occupational pension scheme. |
| |
(2) | A policy of insurance within sub-paragraph (3) or (4) is a protected policy |
| |
but only until a relevant event occurs (see sub-paragraphs (5) and (6)). |
| |
(3) | A policy of insurance is within this sub-paragraph if— |
| |
(a) | it is issued in respect of insurances made before 6th December 2006, |
| 10 |
(b) | the pension scheme became a registered pension scheme before that |
| |
| |
(c) | rights under the policy became held for the purposes of the pension |
| |
| |
(4) | A policy of insurance is within this sub-paragraph if— |
| 15 |
(a) | it is issued in respect of insurances made before 1st August 2007, |
| |
(b) | the pension scheme became a registered pension scheme before that |
| |
| |
(c) | rights under the policy became held for the purposes of the pension |
| |
| 20 |
(d) | the policy was issued in pursuance of a proposal made in writing (by |
| |
whatever means) and received by or on behalf of the insurer before |
| |
| |
(e) | the amount of the benefits payable under the policy (at the latest of |
| |
the time when the insurances were made, the pension scheme was |
| 25 |
registered or rights under the policy became held for the purposes of |
| |
the pension scheme) is no more than the amount applied for in the |
| |
| |
(f) | the period for which benefits are so payable (at the latest of those |
| |
times) is no longer than the period specified in the proposal, and |
| 30 |
(g) | the policy is not a protected policy by virtue of sub-paragraph (3). |
| |
(5) | In sub-paragraph (4)(d) “the appropriate date” means— |
| |
(a) | 13th April 2007, in any case where, on the day of the making of the |
| |
insurances in respect of which the policy of insurance was issued, the |
| |
rights of the individual under the pension scheme included an actual |
| 35 |
or prospective entitlement to a pension, and |
| |
(b) | 14th December 2006, in any other case. |
| |
(6) | For the purposes of sub-paragraph (2) a “relevant event” occurs if, after the |
| |
relevant time, the terms of the policy are varied so as to— |
| |
(a) | increase the benefits payable under the policy, or |
| 40 |
(b) | extend the period during which benefits are so payable. |
| |
(7) | But where, on the day of the variation, the rights of the individual under the |
| |
pension scheme included an actual or prospective entitlement to a pension, |
| |
a relevant event does not occur by virtue of the variation if it was made in |
| |
pursuance of a proposal made in writing (by whatever means) and received |
| 45 |
by or on behalf of the insurer before 13th April 2007. |
| |
| |
|
| |
|
| |
|
(a) | in the case of a policy of insurance within sub-paragraph (3) which is |
| |
issued in respect of insurances made before 6th April 2006, is 20th |
| |
| |
(b) | in the case of any other policy of insurance within sub-paragraph (3), |
| |
is 5th December 2006, and |
| 5 |
(c) | in the case of a policy of insurance within sub-paragraph (4), is the |
| |
time when it became a protected policy. |
| |
Commencement: occupational pension schemes |
| |
6 (1) | In relation to contributions under any occupational pension scheme, the |
| |
amendments made by this Schedule have effect in relation to contributions |
| 10 |
paid on or after 1st August 2007. |
| |
(2) | But they do not have effect in relation to such contributions paid at any time |
| |
if the contributions are treated as paid in respect of premiums under a policy |
| |
of insurance which at that time is a protected policy (see paragraph 7). |
| |
7 (1) | This paragraph specifies when a policy of insurance is a protected policy in |
| 15 |
a case where the rights under it are held for the purposes of an occupational |
| |
| |
(2) | A policy of insurance within sub-paragraph (3) or (4) is a protected policy |
| |
but only until a relevant event occurs (see sub-paragraphs (5) to (7)). |
| |
(3) | A policy of insurance is within this sub-paragraph if— |
| 20 |
(a) | it is issued in respect of insurances made before 21st March 2007, |
| |
(b) | the pension scheme became a registered pension scheme before that |
| |
| |
(c) | rights under the policy became held for the purposes of the pension |
| |
| 25 |
(4) | A policy of insurance is within this sub-paragraph if— |
| |
(a) | it is issued in respect of insurances made before 1st August 2007, |
| |
(b) | the pension scheme became a registered pension scheme before that |
| |
| |
(c) | rights under the policy became held for the purposes of the pension |
| 30 |
| |
(d) | the policy was issued in pursuance of a proposal made in writing (by |
| |
whatever means) and received by or on behalf of the insurer before |
| |
| |
(e) | the amount of the benefits payable under the policy (at the latest of |
| 35 |
the time when the insurances were made, the pension scheme was |
| |
registered or rights under the policy became held for the purposes of |
| |
the pension scheme) is no more than the amount applied for in the |
| |
| |
(f) | the period for which benefits are so payable (at the latest of those |
| 40 |
times) is no longer than the period specified in the proposal, and |
| |
(g) | the policy is not a protected policy by virtue of sub-paragraph (3). |
| |
(5) | For the purposes of sub-paragraph (2) a “relevant event” occurs if, after the |
| |
relevant time, the terms of the policy are varied so as to— |
| |
(a) | increase the benefits payable under the policy, or |
| 45 |
(b) | extend the period during which benefits are so payable. |
| |
|
| |
|