Finance Bill

House of Commons

Session 2006 - 07
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Finance Bill

Finance Bill
Schedule 26 — Meaning of “recognised stock exchange” etc
282

2
For section 841 of ICTA substitute—
“841
Meaning of “recognised stock exchange” etc
(1)
In the Corporation Tax Acts “recognised stock exchange” has the
same meaning as in the Income Tax Acts (see subsections (1) and (2)
of section 1005 of ITA 2007).
5
(2)
References in the Corporation Tax Acts to securities which are listed
on a recognised stock exchange are to be read in accordance with
subsections (3) and (4) of that section.
(3)
References in the Corporation Tax Acts to securities which are
included in the official UK list are to be read in accordance with
10
subsection (5) of that section.
(4)
In this section “securities” includes shares and stock.”
3
In section 288 of TCGA 1992 (interpretation), after subsection (5) insert—
“(5A)
References in this Act to shares or securities which are listed on a
recognised stock exchange shall be construed in accordance with
15
subsections (3) and (4) of section 1005 of ITA 2007.
(5B)
References in this Act to shares or securities which are included in
the official UK list shall be construed in accordance with subsection
(5) of that section.”
Valuation of shares listed on recognised stock exchange for purposes of TCGA 1992 etc
20
4     (1)
In section 272 of TCGA 1992 (valuation: general), for subsections (3) and (4)
substitute—
“(3)
The Treasury may make regulations as to the manner for
determining for the purposes of this Act—
(a)
the market value at any time of shares or securities which are
25
included in the official UK list, and
(b)
the market value at any time of shares or securities which are
listed on a recognised stock exchange outside the United
Kingdom.
(4)
The regulations may—
30
(a)
make different provision for different cases, and
(b)
contain incidental, supplemental, consequential and
transitional provision and savings.”
      (2)
The amendment made by sub-paragraph (1) has effect where the date of
valuation falls on or after such day as may be appointed by the Treasury by
35
order; and different days may be appointed for different purposes.
5     (1)
In ITTOIA 2005, for sections 450 and 451 substitute—
“450
Market value of strips etc
(1)
The Treasury may make regulations as to the manner for
determining—
40
(a)
the market value at any time of a strip for the purposes of this
Chapter, and

Finance Bill
Schedule 26 — Meaning of “recognised stock exchange” etc
283

(b)
the market value at any time of a security exchanged for
strips of that security for the purposes of section 445(1).
(2)
The regulations may—
(a)
make different provision for different cases, and
(b)
contain incidental, supplemental, consequential and
5
transitional provision and savings.”
      (2)
The amendment made by sub-paragraph (1) has effect where the date of
valuation falls on or after such day as may be appointed by the Treasury by
order; and different days may be appointed for different purposes.
Minor and consequential amendments
10
6
In section 90(8) of FA 1986 (exceptions to the charge to SDRT), for paragraph
(b) substitute—
“(b)
references to anything listed on a recognised stock exchange
shall be construed in accordance with section 1005 of the
Income Tax Act 2007;”.
15
7     (1)
ICTA is amended as follows.
      (2)
In section 210(4) (bonus issue following repayment of share capital), in the
definition of “preference shares”, for “listed in the Official List of the Stock
Exchange” substitute “included in the official UK list”.
      (3)
In section 312(1E)(a) (interpretation of Chapter 3 of Part 7), for “section 841”
20
substitute “section 1005(1)(b) of ITA 2007”.
      (4)
In section 415(1)(b) (certain quoted companies not to be close companies),
for “in the official list of” substitute “on”.
      (5)
In section 576H(2)(a) (the unquoted status requirement), for “1005”
substitute “1005(1)(b)”.
25
      (6)
In section 587B (gifts of shares, securities and real property to charities etc)—
(a)
in subsection (9), in the definition of “qualifying investment”, for “or
dealt in on a recognised stock exchange” substitute “on a recognised
stock exchange or dealt in on any designated market in the United
Kingdom”, and
30
(b)
after that subsection insert—
“(9ZA)
In paragraph (a) of the definition of “qualifying investment”
in subsection (9) above, “designated” means designated by
an order made by the Commissioners for Her Majesty’s
Revenue and Customs for the purposes of that paragraph.
35
(9ZB)
An order under subsection (9ZA) above may—
(a)
designate a market by name or by reference to any
class or description of market, and
(b)
vary or revoke a previous order under that
subsection.”
40
      (7)
In section 704 (prescribed circumstances mentioned in section 703(1)), in
paragraph D(2)(b), for “listed in the Official List of the Stock Exchange, and
are dealt in on the Stock Exchange” substitute “included in the official UK
list, and are dealt in on a recognised stock exchange in the United Kingdom”.

Finance Bill
Schedule 26 — Meaning of “recognised stock exchange” etc
284

      (8)
In section 828(2) (orders and regulations made by the Treasury or the Board),
after “conferred by section” insert “587B(9ZA) or”.
      (9)
In section 842(1)(c) (investment trusts), for “listed in the Official List of the
Stock Exchange” substitute “included in the official UK list”.
     (10)
In paragraph 5 of Schedule 20 (charities: qualifying investments and loans),
5
omit “, or which are dealt in on the Unlisted Securities Market”.
8     (1)
TCGA 1992 is amended as follows.
      (2)
In section 130(1)(a) (composite new holdings)—
(a)
for “had quoted market values” substitute “were listed”, and
(b)
omit “in the United Kingdom or elsewhere”.
10
      (3)
In section 144(8)(a) (options and forfeited deposits), for “quoted on”
substitute “listed on”.
      (4)
In section 146(4)(b) (options: application of rules as to wasting assets), omit
“in the United Kingdom or elsewhere”.
      (5)
In section 273(2) (unquoted shares and securities), for “quoted” substitute
15
“listed”.
      (6)
Omit section 285 (recognised investment exchanges).
9
In paragraph 4(2C)(b) of Schedule 26 to FA 2002 (derivative contracts:
contracts excluded by virtue of their underlying subject matter), for
“quoted” substitute “listed”.
20
10    (1)
ITEPA 2003 (persons to whom section 421J applies) is amended as follows.
      (2)
In section 421L (persons to whom section 421J applies)—
(a)
in paragraph (b) of subsection (6), for “or dealt in on a recognised
stock exchange” substitute “on a recognised stock exchange or dealt
in on any designated market in the United Kingdom”, and
25
(b)
after that subsection insert—
“(7)
In subsection (6)(b) “designated” means designated by an
order made by the Commissioners for Her Majesty’s
Revenue and Customs for the purposes of that provision.
(8)
An order under subsection (7) may—
30
(a)
designate a market by name or by reference to any
class or description of market, and
(b)
vary or revoke a previous order under that
subsection.”
      (3)
In section 717(2) (orders and regulations made by Treasury or
35
Commissioners), insert at the end “or section 421L(7) (persons to whom
section 421J applies: order in relation to excluded securities).”
11    (1)
ITTOIA 2005 is amended as follows.
      (2)
In section 443(2) (application of Chapter 8 of Part 4 to strips of government
securities)—
40
(a)
at the end of paragraph (e) insert “and”, and
(b)
omit paragraph (g).

Finance Bill
Schedule 26 — Meaning of “recognised stock exchange” etc
285

      (3)
In section 460(3) (minor definitions in Chapter 8 of Part 4), omit “or 451”.
12    (1)
ITA 2007 is amended as follows.
      (2)
In section 143(2)(a) (losses on disposal of shares: the unquoted status
requirement), for “1005” substitute “1005(1)(b)”.
      (3)
In section 151(2) (interpretation of Chapter 6 of Part 4), for “the Stock
5
Exchange” substitute “a recognised stock exchange”.
      (4)
In section 184 (EIS: the unquoted status requirement)—
(a)
in subsection (3)(a), for the words from “the Stock Exchange” to the
end substitute “a recognised stock exchange,”, and
(b)
in subsection (6)(a), for “1005” substitute “1005(1)(b)”.
10
      (5)
In section 257(5) (minor definitions in Part 5), for “the Stock Exchange”
substitute “a recognised stock exchange”.
      (6)
In section 274(2) (requirements for the giving of VCT approval), for “listed
throughout the relevant period in the Official List of the Stock Exchange”
substitute “included in the official UK list throughout the relevant period”.
15
      (7)
In section 295(3) (VCTs: the unquoted status requirement)—
(a)
in paragraph (a), for the words from “the Stock Exchange” to the end
substitute “a recognised stock exchange,”, and
(b)
in paragraph (c), omit “on the Unlisted Securities Market or dealt in”.
      (8)
In section 382(2) (minor definitions in Part 7), for “the Stock Exchange”
20
substitute “a recognised stock exchange”.
      (9)
In section 397(6) (eligibility requirements for interest on loans within section
396), in the definition of “unquoted company”, for “listed in the Official List
of the Stock Exchange” substitute “included in the official UK list”.
     (10)
In section 432 (gifts of shares, securities and real property to charities etc:
25
meaning of “qualifying investment”)—
(a)
in subsection (1)(a), for “or dealt in on a recognised stock exchange”
substitute “on a recognised stock exchange or dealt in on any
designated market in the United Kingdom”,
(b)
in subsection (2), after “In this section—” insert—
30
““designated” means designated by an order made by
the Commissioners for Her Majesty’s Revenue and
Customs for the purposes of subsection (1)(a),”, and
(c)
after that subsection insert—
“(3)
An order under subsection (2) may—
35
(a)
designate a market by name or by reference to any
class or description of market, and
(b)
vary or revoke a previous order under that
subsection.”
     (11)
In section 691(1)(b) (meaning of “relevant company” in sections 689 and
40
690), for sub-paragraphs (i) and (ii) substitute—
“(i)
included in the official UK list, and
(ii)
dealt in on a recognised stock exchange in the United
Kingdom regularly or from time to time.”

Finance Bill
Schedule 27 — Repeals
Part 1 — Environment
286

     (12)
In section 989 (list of Income Tax Acts definitions), after the definition of
“settlor” insert—
““shares, stock or other securities included in the official UK
list” is to be read in accordance with section 1005,
“shares, stock or other securities listed on a recognised stock
5
exchange” is to be read in accordance with section 1005,”.
     (13)
Omit section 1010 (application of Income Tax Acts to recognised investment
exchanges).
     (14)
In section 1014(2)(g) (orders and regulations)—
(a)
after sub-paragraph (ii) (but before the “and”) insert—
10
“(iia)
section 432(2) (gifts of shares, securities and
real property to charities etc: meaning of
“qualifying investment”),”, and
(b)
in sub-paragraph (iii), for “1005(1)(b)” substitute “1005(1)”.
     (15)
In Schedule 4 (index of defined expressions), after the entry relating to
15
“share loss relief (in Chapter 6 of Part 4)” insert—

“shares, stock or other securities
section 1005

included in the official UK list

shares, stock or other securities
section 1005”.

listed on a recognised stock

20

exchange

Schedule 27
Section 112

Repeals
Part 1
Environment
25
(1) Exempt aggregates: railways etc

Short title and chapter
Extent of repeal

Finance Act 2001 (c. 9)
In section 17(3), the word “or” at the end of

paragraph (d).

Finance Bill
Schedule 27 — Repeals
Part 2 — Income tax, corporation tax and capital gains tax
287

(2) Climate change levy: reduced-rate supplies etc

Short title and chapter
Extent of repeal

Finance Act 2000 (c. 17)
In Schedule 6—

(a)
in paragraph 11, in sub-paragraph (1),

the words “has, before the supply is

5

made, notified the supplier” and “that

he” (in both places), and, in sub-

paragraph (3), the words “has, before the

supply is made, notified the supplier

that” and “he”,

10

(b)
paragraph 45(2) to (4), and

(c)
in paragraph 101, sub-paragraph (1),

and, in sub-paragraph (3), the words

“notification or”.


The repeal of paragraph 45(2) to (4) of Schedule 6 to FA 2000 has effect in
15
accordance with Schedule 2 to this Act.
Part 2
Income tax, corporation tax and capital gains tax
(1) Restrictions on trade loss relief for partners

Short title and chapter
Extent of repeal

20

Income Tax Act 2007 (c. 3)
In section 104(5), the words “(see section 112)”.

Section 106.

In section 107(2), the words “(see section 112)”.

In section 110(1)(a), the words “(see section

112)”.

25

Section 112(1) to (5).

In section 115(1)(d), the words “(see section

112)”.

Section 116.


These repeals have effect in accordance with Schedule 4 to this Act.
30
(2) Extension of restrictions on allowable capital losses

Short title and chapter
Extent of repeal

Taxation of Chargeable Gains
Section 8(2A) to (2C).

Act 1992 (c. 12)

Finance Act 2006 (c. 25)
Section 69.

35

These repeals have effect in accordance with section 27 of this Act.

Finance Bill
Schedule 27 — Repeals
Part 2 — Income tax, corporation tax and capital gains tax
288

(3) Avoidance involving financial arrangements

Short title and chapter
Extent of repeal

Income and Corporation Taxes
Section 347A.

Act 1988 (c. 1)
Section 660C(4).

Finance Act 1988 (c. 39)
Section 36(1).

5

Capital Allowances Act 2001
In section 228F—

(c. 2)
(a)
subsection (4), and

(b)
in subsection (8), paragraph (b) (together

with the word “and” before it).

Income Tax (Trading and Other
In Schedule 1, paragraph 272(4).

10

Income) Act 2005 (c. 5)

Income Tax Act 2007 (c. 3)
In Schedule 1, paragraph 52.


These repeals have effect in accordance with Schedule 5 to this Act.
(4) Restrictions on companies buying losses or gains: tax avoidance schemes

Short title and chapter
Extent of repeal

15

Taxation of Chargeable Gains
In section 184A(2), the words “unless the gains

Act 1992 (c. 12)
accrue to the company on a disposal of a pre-

change asset”.

In section 184B(2), the words “unless the loss

accrues to the company on a disposal of a pre-

20

change asset”.

Finance Act 2006 (c. 25)
In section 70(9)—

(a)
in paragraph (a), the words “or 184B”,

(b)
paragraph (d) (together with the word

“and” following it), and

25

(c)
in paragraph (e), the words “, or a

qualifying gain for the purposes of

section 184B of that Act,”.


These repeals have effect in accordance with section 31 of this Act.
(5) Employee benefit contributions
30

Short title and chapter
Extent of repeal

Finance Act 2003 (c. 14)
In Schedule 24, in paragraph 9(1), the definition

of “the third party”.

Finance Act 2004 (c. 12)
Section 245(2).

Income Tax (Trading and Other
In Schedule 1, paragraph 624(2).

35

Income) Act 2005 (c. 5)


These repeals have effect in accordance with section 33 of this Act.