Finance Bill

House of Commons

Session 2006 - 07
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Finance Bill

Finance Bill
Part 7 — Miscellaneous
76

(7)
An order under this section in relation to a proposal or arrangements is
without prejudice to the possible application of section 308, other than
by virtue of this section, to the proposal or arrangements.”
(3)
In section 307 (“promoter”), insert at the end—
“(6)
In the application of this Part to a proposal or arrangements which are
5
not notifiable, a reference to a promoter is a reference to a person who
would be a promoter under subsections (1) to (5) if the proposal or
arrangements were notifiable.”
(4)
After section 308 insert—
“308A
Supplemental information
10
(1)
This section applies where—
(a)
a promoter (P) has provided information in purported
compliance with section 308(1) or (3), but
(b)
HMRC believe that P has not provided all the prescribed
information.
15
(2)
HMRC may apply to the Special Commissioners for an order requiring
P to provide specified information about, or documents relating to, the
notifiable proposal or arrangements.
(3)
The Special Commissioners may make an order under subsection (2) in
respect of information or documents only if satisfied that HMRC have
20
reasonable grounds for suspecting that the information or
documents—
(a)
form part of the prescribed information, or
(b)
will support or explain the prescribed information.
(4)
A requirement by virtue of subsection (2) shall be treated as part of P’s
25
duty under section 308(1) or (3).
(5)
In so far as P’s duty under section 308(1) or (3) arises out of a
requirement by virtue of subsection (2) above, the prescribed period
shall begin after a date prescribed for the purpose.
(6)
In so far as P’s duty under section 308(1) or (3) arises out of a
30
requirement by virtue of subsection (2) above, the prescribed period—
(a)
may be of a different length than the prescribed period for the
purpose of other applications of section 308(1) or (3), and
(b)
may be extended by HMRC by direction.”
(5)
After section 313 insert—
35
“313A
Pre-disclosure enquiry
(1)
Where HMRC suspect that a person (P) is the promoter of a proposal or
arrangements which may be notifiable, they may by written notice
require P to state—
(a)
whether in P’s opinion the proposal or arrangements are
40
notifiable by P, and
(b)
if not, the reasons for P’s opinion.
(2)
A notice must specify the proposal or arrangements to which it relates.
(3)
For the purpose of subsection (1)(b)—

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(a)
it is not sufficient to refer to the fact that a lawyer or other
professional has given an opinion,
(b)
the reasons must show, by reference to this Part and regulations
under it, why P thinks the proposal or arrangements are not
notifiable by P, and
5
(c)
in particular, if P asserts that the arrangements do not fall
within any description prescribed under section 306(1)(a), the
reasons must provide sufficient information to enable HMRC to
confirm the assertion.
(4)
P must comply with a requirement under or by virtue of subsection (1)
10
within—
(a)
the prescribed period, or
(b)
such longer period as HMRC may direct.
313B
Reasons for non-disclosure: supporting information
(1)
Where HMRC receive from a person (P) a statement of reasons why a
15
proposal or arrangements are not notifiable by P, HMRC may apply to
the Special Commissioners for an order requiring P to provide specified
information or documents in support of the reasons.
(2)
P must comply with a requirement under or by virtue of subsection (1)
within—
20
(a)
the prescribed period, or
(b)
such longer period as HMRC may direct.
(3)
The power under subsection (1)—
(a)
may be exercised more than once, and
(b)
applies whether or not the statement of reasons was received
25
under section 313A(1)(b).”
(6)
After section 314 insert—
“314A
Order to disclose
(1)
HMRC may apply to the Special Commissioners for an order that—
(a)
a proposal is notifiable, or
30
(b)
arrangements are notifiable.
(2)
An application must specify—
(a)
the proposal or arrangements in respect of which the order is
sought, and
(b)
the promoter.
35
(3)
On an application the Special Commissioners may make the order only
if satisfied that section 306(1)(a) to (c) applies to the relevant
arrangements.”
(7)
After section 317 insert—
“317A
Special Commissioners: procedure
40
Sections 56B to 56D of the Taxes Management Act 1970 (procedure)
shall apply (with any necessary modifications) to applications under
this Part as to appeals.”
(8)
In section 318(1) (interpretation)—

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(a)
after the definition of “corporation tax” insert—
““HMRC” means the Commissioners for Her Majesty’s
Revenue and Customs;” and
(b)
after the definition of “reference number” insert—
““the Special Commissioners” has the meaning given by
5
section 4 of the Taxes Management Act 1970;”.
(9)
In section 98C of TMA 1970 (notifications under Part 7 of FA 2004)—
(a)
in subsection (2), at the end insert—

“, and
(e)
sections 313A and 313B (duty of promoter to respond to
10
inquiry).”, and
(b)
after that subsection insert—
“(2A)
Where a failure to comply with a provision mentioned in
subsection (2) concerns a proposal or arrangements in respect of
which an order has been made under section 306A of the
15
Finance Act 2004 (doubt as to notifiability), the amount
specified in subsection (1)(b) above shall be increased to the
prescribed sum.
(2B)
Where a failure to comply with a provision mentioned in
subsection (2) concerns a proposal or arrangements in respect of
20
which an order has been made under section 314A of the
Finance Act 2004 (order to disclose), the amount specified in
subsection (1)(b) above shall be increased to the prescribed sum
in relation to days falling after the prescribed period.
(2C)
In subsection (2A) and (2B)—
25
(a)
“the prescribed sum” means a sum prescribed by the
Treasury by regulations, and
(b)
“the prescribed period” means a period beginning with
the date of the order under section 314A and prescribed
by the Commissioners by regulations.
30
(2D)
The making of an order under section 314A of that Act does not
of itself mean that, for the purposes of section 118(2) of this Act,
a person either did or did not have a reasonable excuse for non-
compliance before the order was made.
(2E)
Where an order is made under section 314A of that Act then for
35
the purposes of section 118(2) of this Act—
(a)
the person identified in the order as the promoter of the
proposal or arrangements cannot, in respect of any time
after the end of the period mentioned in subsection (2B),
rely on doubt as to notifiability as an excuse for failure
40
to comply with section 308 of that Act, and
(b)
any delay in compliance with that section after the end
of that period is unreasonable unless attributable to
something other than doubt as to notifiability.
(2F)
Regulations under subsection (2C)—
45
(a)
may include incidental or transitional provision,
(b)
shall be made by statutory instrument,

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(c)
in the case of regulations under subsection (2C)(a), shall
not be made unless a draft has been laid before and
approved by resolution of the House of Commons, and
(d)
in the case of regulations under subsection (2C)(b), shall
be subject to annulment in pursuance of a resolution of
5
the House of Commons.”
(10)
The amendments made by this section come into force on the passing of this
Act; and—
(a)
regulations made under section 56B of TMA 1970 (Special
Commissioners: procedure) before the passing of this Act apply (with
10
any necessary modifications) to applications under Part 7 of FA 2004 as
amended by this section as they apply to appeals (but subject to any
regulations made after the passing of this Act), and
(b)
a power under Part 7 of FA 2004 as amended by this section may be
exercised in relation to, or by virtue of, matters arising wholly or partly
15
before the passing of this Act.
108
Meaning of “recognised stock exchange” etc
Schedule 26 contains—
(a)
new definitions of “recognised stock exchange” for the purposes of the
Tax Acts and TCGA 1992,
20
(b)
provision for the valuation for the purposes of TCGA 1992 of certain
shares or securities listed on recognised stock exchanges,
(c)
provision for the valuation for the purposes of Chapter 8 of Part 4 of
ITTOIA 2005 of strips and securities exchanged for strips, and
(d)
minor and consequential amendments in relation to stock exchanges.
25
109
Mergers Directive: regulations
(1)
The Treasury may by regulations make provision about—
(a)
the tax consequences of a merger to form an SE or SCE,
(b)
the tax consequences of a merger where—
(i)
each party to the merger is resident in a member State, and
30
(ii)
the parties are not all resident in the same member State,
(c)
the tax consequences of a transfer between companies of a business or
part of a business, where—
(i)
each party to the transfer is resident in a member State, and
(ii)
the parties are not all resident in the same member State,
35
(d)
the tax consequences of a share exchange to which section 135 of TCGA
1992 (exchange of securities) applies where companies A and B are
resident in different member States,
(e)
the residence of an SE or SCE.
(2)
Regulations may, in particular, make provision—
40
(a)
about the taxation of chargeable gains (including conferring relief from
taxation in relation to transfers or mergers which satisfy specified
conditions),
(b)
conferring relief from taxation on a distribution of a company which
satisfies specified conditions,
45
(c)
about the treatment of securities issued on a transfer or merger,

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Part 8 — Final provisions
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(d)
about the treatment of loan relationships,
(e)
about the treatment of derivative contracts,
(f)
about the treatment of intangible fixed assets, and
(g)
about capital allowances.
(3)
Regulations may make provision only if the Treasury think it necessary or
5
expedient for the purposes of complying with the United Kingdom’s
obligations under the Mergers Directive.
(4)
In this section—
“the Mergers Directive” means Council Directive 90/434/EEC,
“SCE” means an SCE formed in accordance with Council Regulation (EC)
10
1435/2003 on the Statute for a European Cooperative Society, and
“SE” means an SE formed in accordance with Council Regulation (EC)
2157/2001 on the Statute for a European Company.
(5)
Regulations under this section may—
(a)
amend the Taxes Acts,
15
(b)
make incidental or consequential amendments of enactments other
than the Taxes Acts,
(c)
make provision having retrospective effect,
(d)
make provision generally or only for specified cases or circumstances,
(e)
make different provision for different cases or circumstances,
20
(f)
make incidental, consequential or transitional provision.
(6)
In this section “the Taxes Acts” has the meaning given by section 118(1) of TMA
1970.
110
Excise duties: small consignment relief
(1)
The Excise Duties (Small Non-Commercial Consignments) Relief Regulations
25
1986 (S.I. 1986/938) are revoked.
(2)
The revocation made by subsection (1) does not apply in relation to goods
consigned before the day on which this Act is passed.
Part 8
Final provisions
30
111
Interpretation
(1)
In this Act—
“BGDA 1981” means the Betting and Gaming Duties Act 1981 (c. 63),
“CAA 2001” means the Capital Allowances Act 2001 (c. 2),
“CEMA 1979” means the Customs and Excise Management Act 1979 (c. 2),
35
“CRCA 2005” means the Commissioners for Revenue and Customs Act
2005 (c. 11),
“ICTA” means the Income and Corporation Taxes Act 1988 (c. 1),
“IHTA 1984” means the Inheritance Tax Act 1984 (c. 51),
“ITA 2007” means the Income Tax Act 2007 (c. 3),
40
“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003
(c. 1),

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“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act
2005 (c. 5),
“TCGA 1992” means the Taxation of Chargeable Gains Act 1992 (c. 12),
“TMA 1970” means the Taxes Management Act 1970 (c. 9),
“VATA 1994” means the Value Added Tax Act 1994 (c. 23), and
5
“VERA 1994” means the Vehicle Excise and Registration Act 1994 (c. 22).
(2)
In this Act—
“FA”, followed by a year, means the Finance Act of that year, and
“F(No.2)A”, followed by a year, means the Finance (No.2) Act of that year.
112
Repeals
10
Schedule 27 contains repeals.
113
Short title
This Act may be cited as the Finance Act 2007.