House of Commons portcullis
House of Commons
Session 2007 - 08
Internet Publications
Other Bills before Parliament


 
 

Public Bill Committee Proceedings: 27th November 2007      

16

 

Crossrail Bill, continued

 
 

Stephen Hammond

 

Negatived on division  72

 

Clause  61,  page  36,  line  33,  after ‘by’, insert ‘registered’.

 

Stephen Hammond

 

Not called  73

 

Clause  61,  page  37,  line  3,  after ‘office’, insert ‘or the office of its legal

 

representative’.

 

Clause Agreed to.

 


 

Stephen Hammond

 

Negatived on division  74

 

Clause  62,  page  37,  line  39,  leave out subsection (5).

 

Clause Agreed to.

 

Clauses 63 to 66 Agreed to.

 


 

NEW CLAUSES

 

Transfer schemes: tax provisions

 

Mr Tom Harris

 

Added  NC1

 

To move the following Clause:—

 

‘Schedule (Transfer schemes: tax provisions) (tax provisions relating to transfer

 

schemes) has effect.’.

 


 

Financial provisions (disclosure of information)

 

Stephen Hammond

 

Negatived on division  NC2

 

To move the following Clause:—

 

‘(1)    

The Secretary of State shall publish all relevant details as to the moneys used to

 

fund the construction and maintenance of Crossrail, beyond those monies as

 

already provided by Parliament and set out in section 65(1).

 

(2)    

The Mayor of London shall, not less than 12 months after the granting of Royal

 

Assent to this Act, publish and make available to all who are eligible and

 

registered to vote in the London Mayoral or Greater London Authority elections,

 

a statement indicating—


 
 

Public Bill Committee Proceedings: 27th November 2007      

17

 

Crossrail Bill, continued

 
 

(a)    

the agreement he has undertaken and agreed with the Secretary of State

 

for the proposals of building Crossrail, and

 

(b)    

the potential financial consequences of this agreement for London.

 

(3)    

The Secretary of State, after consultation with the Mayor of London and the

 

Transport Commissioner for London, shall publish an annual statement setting

 

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

 

Not called  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

 

Added  NS1

 

To move the following Schedule:—

 

‘Transfer schemes: tax provisions

 

Part 1

 

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.


 
 

Public Bill Committee Proceedings: 27th November 2007      

18

 

Crossrail Bill, continued

 
 

Interpretation: supplementary

 

3    (1)  

In this Schedule—

 

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

 

“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.

 

Part 2

 

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.


 
 

Public Bill Committee Proceedings: 27th November 2007      

19

 

Crossrail Bill, continued

 
 

      (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.

 

      (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


 
 

Public Bill Committee Proceedings: 27th November 2007      

20

 

Crossrail Bill, continued

 
 

(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.

 

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—


 
 

Public Bill Committee Proceedings: 27th November 2007      

21

 

Crossrail Bill, continued

 
 

(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

 

(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.


 
 

Public Bill Committee Proceedings: 27th November 2007      

22

 

Crossrail Bill, continued

 
 

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

 

(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.

 

Part 3

 

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.


 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2007
Revised 28 November 2007