Crossrail Bill

House of Commons

Session 2007 - 08
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Crossrail Bill

Crossrail Bill
Schedule 13 — Transfer schemes: tax provisions
Part 3 — Transfers etc from taxable public bodies to exempt public bodies
210

      (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
5
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
10
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.
15
      (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.
Capital allowances: determination of capital value of industrial buildings etc.
21    (1)
This paragraph applies for the purposes of Part 3 of CAA 2001, and the other
20
provisions of that Act which are relevant to that Part, in relation to a relevant
transfer of the relevant interest in an industrial building or structure.
      (2)
This paragraph is subject to section 36 of FA 2007 (which makes provision
about balancing adjustments etc under Part 3 of CAA 2001).
      (3)
The transfer is to be treated as a sale of that relevant interest.
25
      (4)
The net proceeds of that sale are 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.
30
      (5)
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.
      (6)
Sections 567 to 570 of CAA 2001 (sales treated as being for alternative
amount) are not to have effect in relation to that sale.
Chargeable gains: assets to be treated as disposed of without a gain or a loss
35
22    (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 to be for a consideration such that no gain or loss accrues to the
person making the disposal.
40
      (2)
This sub-paragraph applies to a disposal if—

Crossrail Bill
Schedule 13 — Transfer schemes: tax provisions
Part 4 — Transfers from exempt public bodies to taxable public bodies
211

(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 is a taxable public body,
(c)
the person to whom the disposal is made is an exempt public body,
and
5
(d)
each of those persons is either the transferor or a transferee under the
scheme.
Neutral effect of transfer of intangible assets
23    (1)
For the purposes of Schedule 29 to FA 2002, a relevant transfer of a
chargeable intangible asset of the transferor is to be treated as not involving
10
any realisation of the asset by the transferor.
      (2)
Expressions used in this paragraph and in that Schedule have the same
meanings in this paragraph as in that Schedule.
Neutral effect of transfer for loan relationships and derivative contracts
24
No credit or debit shall be required or allowed, in respect of a relevant
15
transfer, to be brought into account in the transferor’s case—
(a)
for the purposes of Chapter 2 of Part 4 of FA 1996 (loan
relationships), or
(b)
for the purposes of Schedule 26 to FA 2002 (derivative contracts).
Leased assets
20
25    (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
25
body to an exempt 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
30
the interest or lease by the transferor or grantor.
      (3)
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 4
Transfers from exempt public bodies to taxable public bodies
35
Meaning of “relevant transfer” in Part 4 of Schedule
26
In this Part of this Schedule “relevant transfer” means a transfer, in
accordance with a transfer scheme, from an exempt public body to a taxable
public body.

Crossrail Bill
Schedule 13 — Transfer schemes: tax provisions
Part 4 — Transfers from exempt public bodies to taxable public bodies
212

Capital allowances: transfer of plant or machinery
27    (1)
This paragraph applies where—
(a)
there is a relevant transfer of plant or machinery,
(b)
the plant or machinery would have been treated for the purposes of
CAA 2001 (had the transferor incurred expenditure qualifying for
5
allowances under Part 2 of that Act on the provision of the plant or
machinery) as disposed of by the transferor to the transferee on the
transfer taking effect, and
(c)
the transfer scheme in accordance with which the transfer is made
contains provision for the transferee to be treated for the purposes of
10
that Act as having incurred capital expenditure of an amount
specified in or determined in accordance with the scheme on the
provision of the plant or machinery.
      (2)
For the purposes of CAA 2001—
(a)
the transferee is to be treated as having incurred capital expenditure
15
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,
(b)
the property is to be treated as belonging to the transferee as a result
of the transferee having incurred that expenditure, and
20
(c)
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)(c) for the determination of an
25
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
30
(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)(c).
      (5)
The consent of the transferee is required for the modification of a
35
determination under the provision mentioned in sub-paragraph (1)(c).
      (6)
As to the making of a determination or a modification of a determination
under the provision mentioned in sub-paragraph (1)(c), see further
paragraph 43.
      (7)
Expressions used in this paragraph and in Part 2 of CAA 2001 have the same
40
meanings in this paragraph as in that Part.
Capital allowances: determination of capital value of industrial buildings etc.
28    (1)
This paragraph applies where there is a relevant transfer of the relevant
interest in an industrial building or structure and the transfer scheme in
accordance with which the transfer is made contains provision specifying
45
for the purposes of section 311 of CAA 2001—

Crossrail Bill
Schedule 13 — Transfer schemes: tax provisions
Part 5 — Other provisions concerning transfers between public bodies
213

(a)
the amount to be taken as the amount of the residue of qualifying
expenditure immediately after the event, and
(b)
the period to be taken as the period from the date of the event to the
end of the period of 25 years beginning with the day on which the
building or structure was first used.
5
      (2)
For the purposes of that section—
(a)
the transfer is to be treated as the occurrence of a relevant event,
(b)
the residue of qualifying expenditure immediately after the event is
to be taken to be the amount specified by virtue of sub-paragraph
(1)(a), and
10
(c)
the period from the date of the event to the end of the period of 25
years beginning with the day on which the building or structure was
first used is to be taken to be the period specified by virtue of sub-
paragraph (1)(b).
      (3)
Expressions used in this paragraph and in Part 3 of CAA 2001 have the same
15
meanings in this paragraph as in that Part.
Part 5
Other provisions concerning transfers between public bodies
Meaning of “relevant transfer” in Part 5 of Schedule
29
In this Part of this Schedule “relevant transfer” means a transfer, in
20
accordance with a transfer scheme, from a public body to another public
body.
Trading losses: change in ownership
30    (1)
This paragraph applies to a relevant transfer of all the issued share capital of
a company (the “transferred company”).
25
      (2)
For the purposes of sections 768 to 768E of ICTA, the transfer is not to be
taken to result in a change in the ownership of—
(a)
the transferred company, or
(b)
a company which is a wholly-owned subsidiary of the transferred
company when the transfer takes effect.
30
Chargeable gains: degrouping charges
31    (1)
This paragraph applies if a company (“the degrouped company”)—
(a)
acquired an asset from another company at a time when both were
members of the same group of companies (“the old group”),
(b)
ceases by virtue of a relevant transfer to be a member of the old
35
group, and
(c)
becomes by virtue of the transfer a member of the same group of
companies as the transferee (“the new group”).
      (2)
Section 179 of TCGA 1992 (company ceasing to be member of group) is not
to treat the degrouped company as having by virtue of the transfer sold and
40
immediately reacquired the asset.

Crossrail Bill
Schedule 13 — Transfer schemes: tax provisions
Part 6 — Transfers etc involving private persons
214

      (3)
Where sub-paragraph (2) has applied to an asset, section 179 of TCGA 1992
is to have effect on and after the first subsequent occasion on which the
degrouped company ceases to be a member of the new group otherwise than
by virtue of a relevant transfer as if—
(a)
the degrouped company, and
5
(b)
the company from which it acquired the asset,

had been members of the new group at the time of acquisition.
      (4)
If, disregarding any preparatory transactions, a company would be
regarded by virtue of a relevant transfer—
(a)
as ceasing to be a member of a group of companies for the purposes
10
of section 179 of TCGA 1992 (and, accordingly, of this paragraph), or
(b)
as becoming a member of a group of companies for the purposes of
this paragraph,

it is to be regarded for those purposes as so doing by virtue of the relevant
transfer and not by virtue of any preparatory transactions.
15
      (5)
In this paragraph “preparatory transactions” means anything done under or
by virtue of this Act for the purpose of initiating, advancing or facilitating
the relevant transfer in question.
      (6)
Expressions used in this paragraph and in section 179 of TCGA 1992 have
the same meanings in this paragraph as in that section.
20
Stamp duty
32    (1)
Stamp duty is not to be chargeable—
(a)
on a transfer scheme in the case of which the transferor and each
transferee is a public body, or
(b)
on an instrument certified by the Secretary of State to the
25
Commissioners for Her Majesty’s Revenue and Customs as made for
the purposes of such a transfer scheme, or as made for purposes
connected with such a transfer scheme.
      (2)
But where, by virtue of sub-paragraph (1), stamp duty is not chargeable on
a scheme or instrument, the scheme or instrument is to be treated as duly
30
stamped only if—
(a)
in accordance with section 12 of the Stamp Act 1891 (c. 39) it has been
stamped with a stamp denoting either that it is not chargeable to
duty or that it has been duly stamped, or
(b)
it is stamped with the duty to which it would be chargeable apart
35
from sub-paragraph (1).
      (3)
In this paragraph “instrument” has the same meaning as in the Stamp Act
1891.
Part 6
Transfers etc involving private persons
40
Meaning of “relevant transfer” in Part 6 of Schedule
33
In this Part of this Schedule “relevant transfer” means a transfer, in
accordance with a transfer scheme, from or to a person other than a public
body.

Crossrail Bill
Schedule 13 — Transfer schemes: tax provisions
Part 6 — Transfers etc involving private persons
215

Transfers of trading stock
34    (1)
This paragraph applies if under a relevant transfer trading stock of the
transferor is transferred to the transferee.
      (2)
Sub-paragraphs (3) and (4) have effect in computing for any corporation tax
or income tax purpose both the profits of the trade in relation to which the
5
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
10
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—
15
(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.
20
      (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
25
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 (as respects corporation tax) or section 174 of ITTOIA 2005 (as respects
income tax).
      (7)
For the purposes of this paragraph whether a person is connected with
30
another person is determined in accordance with section 839 of ICTA (as
respects corporation tax) or section 993 of ITA 2007 (as respects income tax).
Capital allowances: determination of disposal value of plant or machinery
35    (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
35
for plant and machinery).
      (2)
For the purposes of the application of section 61 of that Act (disposal events
and disposal value) 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
40
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.
45

Crossrail Bill
Schedule 13 — Transfer schemes: tax provisions
Part 6 — Transfers etc involving private persons
216

      (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
36    (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
5
(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
10
or compensation in respect of the transfer, as an amount equal to that
portion of that sum which falls (or, 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
15
(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.
Capital allowances: section 265 of CAA 2001 not to apply in relation to transferee
20
37    (1)
This paragraph applies in relation to a relevant transfer.
      (2)
For the purposes of the application of Part 2 of CAA 2001 in relation to the
transferee, section 265 of that Act (successions: general) is to be disregarded.
Capital allowances: determination of capital value of industrial buildings etc.
38    (1)
This paragraph applies for the purposes of Part 3 of CAA 2001, and the other
25
provisions of that Act which are relevant to that Part, in relation to a relevant
transfer of the relevant interest in an industrial building or structure.
      (2)
This paragraph is subject to section 36 of FA 2007 (which makes provision
about balancing adjustments etc under Part 3 of CAA 2001).
      (3)
The transfer is to be treated as a sale of that relevant interest.
30
      (4)
The net proceeds of that sale are 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.
35
      (5)
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.
      (6)
Sections 567 to 570 of CAA 2001 (sales treated as being for alternative
amount) are not to have effect in relation to that sale.