House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

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Crossrail Bill, continued

out which bodies shall bear responsibility and liability for any costs associated

with the building of Crossrail separately indicating the—

(a)
costs to date, and

(b)
projected costs to date.’.

Disposal of surplus property

Stephen Hammond

NC3

To move the following Clause:—

‘(1)
Any land and or property acquired or used for the purposes of this Act, if deemed

thereafter surplus to the needs of this Act, shall be disposed thereof.

(2)
The proceeds of any disposals under subsection (1) shall be made available only

for either—

(a)
the purpose of paying compensation as req uired under this Act, or

(b)
the purpose of paying for the construction of Crossrail or any such related

purpose.’.

NEW SCHEDULE

Mr Tom Harris

NS1

To move the following Schedule:—

‘Transfer schemes: tax provisions

Introduction

Meaning of “public body”

1
In this Schedule “public body” means a person which is a public body for the

purposes of section 66 of FA 2003 (SDLT: transfers involving public bodies).

Meaning of “taxable public body” and “exempt public body”

2    (1)
In this Schedule “taxable public body” means a public body which is within

the charge to corporation tax.

      (2)
In this Schedule “exempt public body” means a public body which is exempt

from corporation tax.

Interpretation: supplementary

3    (1)
In this Schedule—

“CAA 2001” means the Capital Allowances Act 2001 (c. 2);

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Crossrail Bill, continued

“FA”, followed by a year, means the Finance Act of that year;

“ICTA” means the Income and Corporation Taxes Act 1988 (c. 1);

“ITA 2007” means the Income Tax Act 2007 (c. 3);

“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);

“transfer scheme” means a scheme made under Schedule 12 to this Act;

“transferee”, in relation to a transfer in accordance with a transfer scheme,

means the person to whom the transfer is made;

“transferor”, in relation to a transfer in accordance with a transfer scheme,

means the person from whom the transfer is made.

      (2)
So far as it relates to income tax this Schedule is to be construed as one with

the Income Tax Acts.

      (3)
So far as it relates to capital gains tax this Schedule is to be construed as one

with TCGA 1992.

      (4)
So far as it relates to corporation tax this Schedule is to be construed as one

with the Corporation Tax Acts.

      (5)
So far as it relates to capital allowances this Schedule is to be construed as one

with CAA 2001.

Transfers etc between taxable public bodies

Meaning of “relevant transfer” in Part 2 of Schedule

4
In this Part of this Schedule “relevant transfer” means a transfer, in accordance

with a transfer scheme, from a taxable public body to another taxable public

body.

Computation of profits and losses in respect of transfer of trade

5    (1)
This paragraph applies where a taxable public body (“the predecessor”) is

carrying on a trade or a part of a trade and, as a result of a transfer scheme—

(a)
the predecessor ceases to carry on that trade or that part of that trade,

and

(b)
another taxable public body (“the successor”) begins to carry on that

trade or that part of it.

      (2)
For the purpose of computing, in relation to the time when the scheme comes

into force and subsequent times, the relevant trading profits or losses of the

predecessor and the successor—

(a)
the trade or part is to be treated as having been a separate trade at the

time of its commencement and as having been carried on by the

successor at all times since its commencement as a separate trade, and

(b)
the trade carried on by the successor after the time when the scheme

comes into force is to be treated as the same trade as that which it is

treated, by virtue of paragraph (a), as having carried on as a separate

trade before that time.

      (3)
Where a trade or a part of a trade falls to be treated under this paragraph as a

separate trade, such apportionments of receipts, expenses, assets and liabilities

shall be made for the purpose of computing relevant trading profits or losses

as may be just and reasonable.

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      (4)
This paragraph is subject to the other provisions of this Part of this Schedule.

      (5)
In this paragraph “relevant trading profits or losses” means profits or losses

under Case I of Schedule D in respect of the trade or part of a trade in question.

Transfers of trading stock

6    (1)
This paragraph applies if—

(a)
under a relevant transfer trading stock of the transferor is transferred

to the transferee, and

(b)
paragraph 5 does not apply in relation to that transfer.

      (2)
Sub-paragraphs (3) and (4) have effect in computing for any corporation tax

purpose both the profits of the trade in relation to which the stock is trading

stock immediately before the transfer takes effect (“the transferor’s trade”)

and—

(a)
if the stock falls immediately after the transfer takes effect to be treated

as trading stock of the transferee, the profits of the trade in relation to

which it falls to be treated as trading stock (“the transferee’s trade”);

(b)
otherwise, the consideration given by the transferee, or the

expenditure incurred by the transferee, for the acquisition of the stock.

      (3)
The stock must be taken to have been—

(a)
disposed of by the transferor in the course of the transferor’s trade,

(b)
if sub-paragraph (2)(a) applies, acquired by the transferee in the course

of the transferee’s trade, and

(c)
subject to that, disposed of and acquired when the transfer takes effect.

      (4)
The stock must be valued as if the disposal and acquisition had been for a

consideration which in relation to the transferor would have resulted in neither

a profit nor a loss being brought into account in respect of the disposal in the

accounting period of the transferor which ends with, or is current at, the time

when the transfer takes effect.

      (5)
In this paragraph “trading stock” has the same meaning as in section 100 of

ICTA.

Capital allowances: transfer of whole trade

7    (1)
This paragraph applies where a taxable public body (“the predecessor”) is

carrying on a trade and, as a result of a transfer scheme—

(a)
the predecessor ceases to carry on that trade, and

(b)
another taxable public body (“the successor”) begins to carry on that

trade.

      (2)
For the purposes of the allowances and charges provided for by CAA 2001, the

trade is not to be treated as permanently discontinued, nor a new trade as set

up; but sub-paragraphs (3) and (4) are to apply.

      (3)
There are to be made to or on the successor, in accordance with CAA 2001, all

such allowances and charges as would, if the predecessor had continued to

carry on the trade, have fallen to be made to or on the predecessor.

      (4)
The amounts of those allowances and charges are to be computed as if—

(a)
the successor had been carrying on the trade since the predecessor

began to do so, and

(b)
everything done to or by the predecessor had been done to or by the

successor,


but so that transfers in accordance with the scheme, so far as they relate to

assets in use for the purposes of the trade, shall not be treated as giving rise to

an allowance or charge.

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Capital allowances: transfer of part of a trade

8    (1)
Where a taxable public body (“the predecessor”) is carrying on a trade and, as

a result of a transfer scheme—

(a)
the predecessor ceases to carry on a trade, and

(b)
another taxable public body (“the successor”) begins to carry on

activities of that trade as part of a trade carried on by the successor,


then that part of the trade carried on by the successor shall be treated for the

purposes of paragraph 7 as a separate trade.

      (2)
Where a taxable public body (“the predecessor”) is carrying on a trade and, as

a result of a transfer scheme—

(a)
the predecessor ceases to carry on a part of a trade, and

(b)
another taxable public body begins to carry on activities of that part of

that trade,


then the predecessor shall be treated for the purposes of paragraph 7 and sub-

paragraph (1) as having carried on that part of its trade as a separate trade.

      (3)
Where activities fall to be treated for the purposes of this paragraph as a

separate trade, such apportionments of receipts, expenses, assets and liabilities

shall be made for the purposes of CAA 2001 as may be just and reasonable.

Capital allowances: transfer of plant or machinery

9    (1)
This paragraph applies where—

(a)
there is a relevant transfer of plant or machinery,

(b)
paragraph 7 does not apply in relation to that transfer,

(c)
the plant or machinery would be treated for the purposes of CAA 2001

as disposed of by the transferor to the transferee on the transfer taking

effect, and

(d)
the transfer scheme in accordance with which the transfer is made

contains provision for the disposal value of the plant or machinery to

be treated for the purposes of that Act as an amount specified in or

determined in accordance with the scheme.

      (2)
For the purposes of CAA 2001—

(a)
the provision mentioned in sub-paragraph (1)(d) is to have effect for

determining an amount as the disposal value of the plant or machinery

or the price at which a fixture is to be treated as sold,

(b)
the transferee is to be treated as having incurred capital expenditure of

that amount on the provision of the plant or machinery for the purposes

for which it is used by the transferee on and after the taking effect of

the transfer,

(c)
the property is to be treated as belonging to the transferee as a result of

the transferee having incurred that expenditure, and

(d)
in the case of a fixture, the expenditure which falls to be treated as

incurred by the transferee is to be treated for the purposes of sections

181(1) and 182(1) of that Act as being incurred by the giving of a

consideration consisting in a capital sum of that amount.

      (3)
The provision mentioned in sub-paragraph (1)(d) for the determination of an

amount may include provision for a determination—

(a)
to be made by the Secretary of State in a manner described in the

scheme,

(b)
to be made by reference to factors so described or to the opinion of a

person so described, and

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Crossrail Bill, continued

(c)
to be capable of being modified (on one or more occasions) in a

manner and in circumstances so described.

      (4)
The consent of the Treasury is required for the making or modification of a

determination under the provision mentioned in sub-paragraph (1)(d).

      (5)
The consent of the transferee is required for the modification of a

determination under the provision mentioned in sub-paragraph (1)(d).

      (6)
As to the making of a determination or a modification of a determination under

the provision mentioned in sub-paragraph (1)(d), see further paragraph 43.

      (7)
Expressions used in this paragraph and in Part 2 of CAA 2001 have the same

meanings in this paragraph as in that Part.

Capital allowances: transfers not to be sales

10  (1)
This paragraph applies for the purposes of Part 3 of CAA 2001, and the other

provisions of that Act which are relevant to that Part, to a relevant transfer of

the relevant interest in an industrial building or structure.

      (2)
Neither section 559 nor section 573 of that Act is to have effect in relation to

that transfer.

Chargeable gains: assets to be treated as disposed of without a gain or a loss

11  (1)
For the purposes of TCGA 1992 a disposal—

(a)
constituted by a relevant transfer, or

(b)
to which sub-paragraph (2) applies,


is to be taken (in relation to the person to whom the disposal is made as well

as the person making the disposal) to be for a consideration such that no gain

or loss accrues to the person making the disposal.

      (2)
This sub-paragraph applies to a disposal if—

(a)
it is made in accordance with provision contained in a transfer scheme

by virtue of paragraph 5 or 11 of Schedule 12 to this Act,

(b)
the person making the disposal and the person to whom the disposal is

made are taxable public bodies, and

(c)
each of those persons is either the transferor or a transferee under the

scheme.

      (3)
Sub-paragraph (1) is subject to paragraph 12.

Chargeable gains: roll-over relief

12  (1)
This paragraph applies if—

(a)
but for section 154 of TCGA 1992 (depreciating assets) a held-over

gain would have been carried forward to a depreciating asset, and

(b)
the asset is the subject of a relevant transfer.

      (2)
Section 154 is to have effect as if the gain had accrued to, and the claim for it

to be held over had been made by, the transferee and as if the transferor’s

acquisition of the depreciating asset had been the transferee’s acquisition of it.

      (3)
Expressions used in this paragraph and in section 154 have the same meanings

in this paragraph as in that section.

Continuity in relation to transfer of intangible assets

13  (1)
For the purposes of Schedule 29 to FA 2002—

(a)
a relevant transfer of a chargeable intangible asset of the transferor is

to be treated as a tax-neutral transfer, and

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Crossrail Bill, continued

(b)
an intangible fixed asset which is an existing asset of the transferor at

the time of a relevant transfer is to be treated, on and after the transfer,

as an existing asset in the hands of the transferee.

      (2)
Expressions used in this paragraph and in that Schedule have the same

meanings in this paragraph as in that Schedule.

Continuity in relation to loan relationships

14  (1)
For the purposes of the application of Chapter 2 of Part 4 of FA 1996 (loan

relationships) in relation to a relevant transfer, the transferee and the transferor

are to be treated as if, at the time of the transfer, they were members of the same

group.

      (2)
In sub-paragraph (1) the reference to being members of the same group must

be construed in accordance with paragraph 12(8) of Schedule 9 to that Act.

Continuity in relation to derivative contracts

15  (1)
For the purposes of the application of Schedule 26 to FA 2002 (derivative

contracts) in relation to a relevant transfer, the transferee and the transferor are

to be treated as if, at the time of the transfer, they were members of the same

group.

      (2)
In sub-paragraph (1) the reference to being members of the same group must

be construed in accordance with paragraph 28(6) of that Schedule.

Leased assets

16  (1)
This paragraph applies for the purposes of section 781 of ICTA (assets leased

to traders and others) where—

(a)
the interest of the lessor or the lessee under a lease, or any other

interest in an asset, is transferred under a relevant transfer, or

(b)
a lease, or any other interest in a lease, is granted by a taxable public

body to another taxable public body in accordance with provision

contained by virtue of paragraph 5 or 11 of Schedule 12 to this Act in

a transfer scheme.

      (2)
Section 783(4) of ICTA is to be disregarded and the transfer or grant is to be

treated as made without any capital sum having been obtained in respect of the

interest or lease by the transferor or grantor.

      (3)
In the case of the transfer of an interest under a lease, payments made by the

transferor under the lease before the transfer takes effect are to be treated as if

they had been made under that lease by the transferee.

      (4)
Expressions used in this paragraph and in sections 781 to 785 of ICTA have

the same meanings in this paragraph as in those sections.

Transfers etc from taxable public bodies to exempt public bodies

Meaning of “relevant transfer” in Part 3 of Schedule

17
In this Part of this Schedule “relevant transfer” means a transfer, in accordance

with a transfer scheme, from a taxable public body to an exempt public body.

Transfers of trading stock

18  (1)
This paragraph applies if under a relevant transfer trading stock of the

transferor is transferred to the transferee.

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Crossrail Bill, continued

      (2)
Sub-paragraphs (3) and (4) have effect in computing for any corporation tax

purpose the profits of the trade in relation to which the stock is trading stock

immediately before the transfer takes effect (“the transferor’s trade”).

      (3)
The stock must be taken to have been—

(a)
disposed of by the transferor in the course of the transferor’s trade, and

(b)
subject to that, disposed of when the transfer takes effect.

      (4)
The value of the stock is to be taken to be—

(a)
if consideration is given to the transferor in respect of the transfer, an

amount equal to the value of the consideration, or

(b)
if no such consideration is given, nil.

      (5)
For the purposes of this paragraph consideration given to a person connected

with the transferor is to be treated as given to the transferor.

      (6)
In this paragraph “trading stock” has the same meaning as in section 100 of

ICTA.

      (7)
For the purposes of this paragraph whether a person is connected with another

person is determined in accordance with section 839 of ICTA (connected

persons).

Capital allowances: determination of disposal value of plant or machinery

19  (1)
This paragraph applies to a relevant transfer of plant or machinery which is a

disposal event for the purposes of Part 2 of CAA 2001 (capital allowances for

plant and machinery).

      (2)
For the purposes of the application of section 61 of that Act in relation to the

transferor, the disposal value of the plant or machinery is to be treated—

(a)
if a capital sum is received by the transferor by way of consideration

or compensation in respect of the transfer, as an amount equal to that

sum, or

(b)
if no such sum is received, as nil.

      (3)
For the purposes of this paragraph a sum received by a person connected with

the transferor is to be treated as received by the transferor.

      (4)
Section 88 of CAA 2001 (sales at an undervalue) is to be disregarded.

      (5)
This paragraph is subject to sections 63(5) and 68 of CAA 2001.

Capital allowances: determination of disposal value of fixtures

20  (1)
This paragraph applies to a relevant transfer if—

(a)
it is a disposal event for the purposes of Part 2 of CAA 2001, and

(b)
by virtue of the transfer a person is treated by section 188 of that Act

as ceasing to own a fixture.

      (2)
For the purposes of the application of section 196 of that Act in relation to the

transferor, the disposal value of the fixture is to be treated—

(a)
if a capital sum is received by the transferor by way of consideration

or compensation in respect of the transfer, as an amount equal to that

portion of that sum which, if the person to whom the disposal is made

were entitled to an allowance, would fall to be treated for the purposes

of Part 2 of that Act as expenditure incurred by that person on the

provision of the fixture, or

(b)
if no such sum is received, as nil.

      (3)
For the purposes of this paragraph a sum received by a person connected with

the transferor is to be treated as received by the transferor.

      (4)
This paragraph is subject to section 63(5) of CAA 2001.