|
| |
|
tax year (“the year of the transfer”) after the tax year mentioned in |
| |
| |
(2) | If the settlement has a Schedule 4C pool at the beginning of the |
| |
| |
(a) | the section 2(2) amounts in the Schedule 4C pool are |
| 5 |
increased by the section 2(2) amounts for the settlement |
| |
that are outstanding at the end of the year of the transfer, |
| |
| |
(b) | the section 2(2) amount in the pool for the year of transfer |
| |
is increased (or further increased) by the amount of |
| 10 |
Schedule 4B trust gains accruing by virtue of the further |
| |
| |
(3) | If the settlement does not have a Schedule 4C pool at the beginning |
| |
of the year of the transfer, this Schedule applies in relation to the |
| |
further transfer as it applied in relation to the original transfer. |
| 15 |
(4) | For the purposes of this paragraph a settlement has a Schedule 4C |
| |
pool until the end of the tax year in which all section 2(2) amounts |
| |
in the pool have been reduced to nil.” |
| |
122 | For paragraph 8 substitute— |
| |
“8 (1) | Chargeable gains are treated as accruing in a tax year (“the |
| 20 |
relevant tax year”) to a beneficiary who has received a capital |
| |
payment from the trustees of a relevant settlement in the relevant |
| |
tax year or any earlier tax year if all or part of the capital payment |
| |
is matched (under section 87A as it applies for the relevant tax |
| |
year) with the section 2(2) amount in the Schedule 4C pool for the |
| 25 |
relevant tax year or any earlier tax year. |
| |
(2) | The amount of chargeable gains treated as accruing is equal to— |
| |
(a) | the amount of the capital payment, or |
| |
(b) | if only part of the capital payment is matched, the amount |
| |
| 30 |
(3) | Section 87A applies for a tax year for the purposes of matching |
| |
capital payments received from the trustees of a relevant |
| |
settlement with section 2(2) amounts in the Schedule 4C pool as |
| |
| |
(a) | references to section 2(2) amounts were to section 2(2) |
| 35 |
amounts in the Schedule 4C pool, |
| |
(b) | references to a capital payment received from the trustees |
| |
by a beneficiary were to a capital payment received from |
| |
the trustees of a relevant settlement by a beneficiary who is |
| |
chargeable to tax for that year, |
| 40 |
(c) | in Step 5 of section 87A(2), in the third sentence paragraph |
| |
| |
(d) | for section 87A(3)(b) there were substituted— |
| |
“(b) | all section 2(2) amounts in the Schedule 4C pool have |
| |
been reduced to nil.”, and |
| 45 |
(e) | references in section 87A(4) to section 87 included |
| |
references to this paragraph. |
| |
|
| |
|
| |
|
(4) | Section 87A applies for a tax year by virtue of this paragraph |
| |
before it applies for that year otherwise than by virtue of this |
| |
| |
123 | Omit paragraphs 8B and 8C (including the heading before paragraph 8B). |
| |
124 | In paragraph 9 (available capital payments), omit sub-paragraphs (1) and |
| 5 |
| |
125 (1) | Paragraph 12 (attribution of gains to settlor in section 10A cases) is amended |
| |
| |
(2) | For sub-paragraphs (1) to (3) substitute— |
| |
“(1) | This paragraph applies if— |
| 10 |
(a) | by virtue of section 10A, an amount of chargeable gains |
| |
within section 86(1)(e) that accrued in an intervening year |
| |
to the trustees of a settlement would be treated as accruing |
| |
to a person (“the settlor”) in the year of return, and |
| |
(b) | after paragraph 8 has applied for the year of return, the |
| 15 |
section 2(2) amount for the intervening year that is in the |
| |
Schedule 4C pool for the settlement is less than the amount |
| |
mentioned in paragraph (a). |
| |
(2) | The amount of chargeable gains treated as mentioned in sub- |
| |
paragraph (1)(a) as accruing to the settlor in the year of return is |
| 20 |
limited to the section 2(2) amount referred to in sub-paragraph |
| |
| |
126 | In paragraph 12A(3), for “87(4)” substitute “87(2)”. |
| |
127 (1) | Paragraph 13 (increase in tax payable under this Schedule) is amended as |
| |
| 25 |
(2) | For sub-paragraph (1) substitute— |
| |
“(1) | This paragraph applies if— |
| |
(a) | chargeable gains are treated under paragraph 8 as accruing |
| |
to a beneficiary by virtue of the matching (under section |
| |
87A) of all or part of a capital payment with the section 2(2) |
| 30 |
amount for a tax year (“the relevant tax year”), and |
| |
(b) | the beneficiary is charged to tax by virtue of the matching. |
| |
(1A) | Where part of a capital payment is matched, references in sub- |
| |
paragraphs (2) and (3) to the capital payment are to the part |
| |
| 35 |
(3) | In sub-paragraph (5)(a), for the words from “year of assessment” to the end |
| |
(excluding the “and”) substitute “tax year immediately after the relevant tax |
| |
| |
128 | Omit paragraph 3 and 6(2) and (3) of Schedule 29 to FA 2003. |
| |
Attribution of gains to beneficiaries in cases involving transfers of value: commencement etc |
| 40 |
129 | The amendments made by paragraphs 114 to 128 have effect in relation to |
| |
transfers of value to which Schedule 4B to TCGA 1992 applies that are made |
| |
on or after 6 April 2008. |
| |
|
| |
|
| |
|
130 | Schedule 4C to that Act (as it has effect without those amendments) applies |
| |
for the tax year 2008-09 and subsequent tax years in relation to Schedule 4C |
| |
pools created before 6 April 2008 as if paragraph 7B were omitted. |
| |
Transfers of securities: accrued income profits |
| |
131 | In section 830(4) of ITTOIA 2005 (meaning of “relevant foreign income”)— |
| 5 |
(a) | omit the “and” at the end of paragraph (f), and |
| |
(b) | at the end of paragraph (g) insert “, and |
| |
(h) | section 670A of ITA 2007 (accrued income profits).” |
| |
132 | In section 617 of ITA 2007 (accrued income profits: income charged), after |
| |
| 10 |
“(7) | Subsection (1) is subject to section 832 of ITTOIA 2005 (relevant |
| |
foreign income charged on remittance basis).” |
| |
133 | Omit section 644 of that Act (accrued income profits: individuals to whom |
| |
remittance basis applies). |
| |
134 | After section 670 of that Act insert— |
| 15 |
“Individuals to whom remittance basis applies |
| |
670A | Individuals to whom remittance basis applies |
| |
(1) | This section applies if— |
| |
(a) | accrued income profits are made by an individual as a result |
| |
of a transfer of foreign securities, and |
| 20 |
(b) | section 809B, 809C or 809D (remittance basis) applies to the |
| |
individual for the tax year in which the profits are made. |
| |
(2) | For the purposes of the provisions mentioned in subsection (3), treat |
| |
the accrued income profits as relevant foreign income of the |
| |
| 25 |
| |
(a) | Chapter A1 of Part 14 (remittance basis), and |
| |
(b) | Chapter 2 of Part 8 of ITTOIA 2005 (relevant foreign income |
| |
charged on remittance basis). |
| |
(4) | For the purposes of sections 809K to 809Q (meaning of “remitted to |
| 30 |
the United Kingdom” etc)— |
| |
(a) | if the individual is the transferor— |
| |
(i) | treat any consideration for the transfer as deriving |
| |
from the accrued income profits, and |
| |
(ii) | if on the transfer the individual does not receive |
| 35 |
consideration of an amount equal to the market value |
| |
of the securities, treat the securities as deriving from |
| |
the accrued income profits, and |
| |
(b) | if the individual is the transferee, treat the securities as |
| |
deriving from the accrued income profits. |
| 40 |
(5) | For the purposes of this section securities are “foreign” if any income |
| |
from them would be relevant foreign income.” |
| |
|
| |
|
| |
|
135 | The amendments made by paragraphs 131 to 134 have effect in relation to |
| |
transfers of securities where the settlement day is on or after 6 April 2008. |
| |
Transfers of assets abroad |
| |
136 | ITA 2007 is amended as follows. |
| |
137 | In section 720(4) (transfer of assets abroad: charge where power to enjoy |
| 5 |
income), after “abroad)” insert “and section 726 (non-UK domiciled |
| |
individuals to whom remittance basis applies)”. |
| |
138 | For section 726 substitute— |
| |
“726 | Non-UK domiciled individuals to whom remittance basis applies |
| |
(1) | This section applies in relation to income treated under section 721 as |
| 10 |
arising to an individual in a tax year (“the deemed income”) if— |
| |
(a) | section 809B, 809C or 809D (remittance basis) applies to the |
| |
individual for the year, and |
| |
(b) | the individual is not domiciled in the United Kingdom in the |
| |
| 15 |
(2) | For the purposes of this section the deemed income is “foreign” if |
| |
(and to the extent that) the income mentioned in section 721(2) would |
| |
be relevant foreign income if it were the individual’s. |
| |
(3) | The individual is charged to tax on the foreign deemed income in |
| |
accordance with the following provisions. |
| 20 |
(4) | If in any tax year any of the foreign deemed income is remitted to the |
| |
United Kingdom, tax is charged on the full amount of the foreign |
| |
deemed income so remitted in that year. |
| |
(5) | Sections 809K to 809Q (meaning of “remitted to the United |
| |
Kingdom” etc) apply in relation to the foreign deemed income as if it |
| 25 |
were the individual’s relevant foreign income. |
| |
(6) | For the purposes of those sections, treat so much of the income |
| |
within section 721(2) as would be relevant foreign income if it were |
| |
the individual’s as deriving from the foreign deemed income.” |
| |
139 | In section 727 (transfer of assets abroad: charge where capital sums |
| 30 |
received), after subsection (3) insert— |
| |
“(3A) | But see section 730 (non-UK domiciled individuals to whom |
| |
remittance basis applies).” |
| |
140 | For section 730 substitute— |
| |
“730 | Non-UK domiciled individuals to whom remittance basis applies |
| 35 |
(1) | This section applies in relation to income treated under section 728 as |
| |
arising to an individual in a tax year (“the deemed income”) if— |
| |
(a) | section 809B, 809C or 809D (remittance basis) applies to the |
| |
individual for the year, and |
| |
(b) | the individual is not domiciled in the United Kingdom in the |
| 40 |
| |
|
| |
|
| |
|
(2) | For the purposes of this section the deemed income is “foreign” if |
| |
(and to the extent that) the income mentioned in section 728(1)(a) |
| |
would be relevant foreign income if it were the individual’s. |
| |
(3) | The individual is charged to tax on the foreign deemed income in |
| |
accordance with the following provisions. |
| 5 |
(4) | If in any tax year any of the foreign deemed income is remitted to the |
| |
United Kingdom, tax is charged on the full amount of the foreign |
| |
deemed income so remitted in that year. |
| |
(5) | Sections 809K to 809Q (meaning of “remitted to the United |
| |
Kingdom” etc) apply in relation to the foreign deemed income as if it |
| 10 |
were the individual’s relevant foreign income. |
| |
(6) | For the purposes of those sections, treat so much of the income |
| |
within section 728(1)(a) as would be relevant foreign income if it |
| |
were the individual’s as deriving from the foreign deemed income.” |
| |
141 | In section 731 (transfer of assets abroad: charge where benefit received), after |
| 15 |
| |
“(2A) | But see section 735 (non-UK domiciled individuals to whom |
| |
remittance basis applies).” |
| |
142 | For section 735 substitute— |
| |
“735 | Non-UK domiciled individuals to whom remittance basis applies |
| 20 |
(1) | This section applies if— |
| |
(a) | income is treated under section 732 as arising to an individual |
| |
in a tax year (“the deemed income”), |
| |
(b) | section 809B, 809C or 809D (remittance basis) applies to the |
| |
individual for the year, and |
| 25 |
(c) | the individual is not domiciled in the United Kingdom in the |
| |
| |
(2) | For the purposes of this section the deemed income is “foreign” if |
| |
(and to the extent that) the relevant income to which it relates would |
| |
be relevant foreign income if it were the individual’s. |
| 30 |
(3) | The individual is charged to tax on the foreign deemed income in |
| |
accordance with the following provisions. |
| |
(4) | If in any tax year any of the foreign deemed income is remitted to the |
| |
United Kingdom, tax is charged on the full amount of the foreign |
| |
deemed income so remitted in that year. |
| 35 |
(5) | Sections 809K to 809Q (meaning of “remitted to the United |
| |
Kingdom” etc) apply in relation to the foreign deemed income as if it |
| |
were the individual’s relevant foreign income. |
| |
(6) | For the purposes of those sections treat relevant income, or a benefit, |
| |
that relates to any part of the foreign deemed income as deriving |
| 40 |
from that part of the foreign deemed income. |
| |
735A | Section 735: relevant income and benefits relating to foreign deemed |
| |
| |
(1) | For the purposes of section 735— |
| |
|
| |
|
| |
|
(a) | place the benefits mentioned in Step 1 in the order in which |
| |
they were received by the individual (starting with the |
| |
earliest benefit received), |
| |
(b) | deduct from those benefits so much of any benefit within |
| |
section 734(1)(b) as gives rise as mentioned in section |
| 5 |
734(1)(d) to chargeable gains, |
| |
(c) | place the income mentioned in Step 3 for the tax years |
| |
mentioned in Step 4 (“the relevant income”) in the order in |
| |
which it arose (starting with the earliest income to arise), |
| |
(d) | deduct from that income any income that may not be taken |
| 10 |
into account because of section 743(1) or (2) (no duplication |
| |
| |
(e) | place the income treated under section 732(2) as arising to the |
| |
individual in respect of the benefits in the order in which it is |
| |
treated as arising (starting with the earliest income treated as |
| 15 |
| |
(f) | treat the income mentioned in paragraph (e) as related to— |
| |
| |
(ii) | the relevant income, |
| |
| by matching that income with the benefits and the relevant |
| 20 |
income (in the orders mentioned in paragraphs (a), (c) and |
| |
| |
(2) | In subsection (1) references to a step are to a step in section 733(1).” |
| |
143 | The amendments made by paragraphs 137 to 142 have effect for the tax year |
| |
2008-09 and subsequent tax years. |
| 25 |
| |
| |
| |
Rates of research and development relief and vaccine research relief |
| |
Rates of research and development relief: SMEs |
| |
1 (1) | Part 2 of Schedule 20 to FA 2000 (giving effect to R&D tax relief) is amended |
| 30 |
| |
(2) | In each of the following provisions, for “150%” substitute “175%”— |
| |
(a) | paragraph 13 (deduction in computing profits of trade), |
| |
(b) | paragraph 14(2) (alternative treatment of pre-trading expenditure), |
| |
| 35 |
(c) | paragraph 15(3)(b) (entitlement to R&D tax credit). |
| |
(3) | In paragraph 16(1)(a) (amount of R&D tax credit), for “16%” substitute |
| |
| |
(4) | The amendments made by this paragraph have effect in relation to |
| |
expenditure incurred on or after such day as the Treasury may by order |
| 40 |
| |
(5) | The Treasury may appoint a day before the day on which this Act is passed, |
| |
but not one before 1 April 2008. |
| |
|
| |
|
| |
|
Rates of research and development tax relief: large companies |
| |
2 (1) | In Schedule 12 to FA 2002, in both of the following provisions, for “25%” |
| |
| |
(a) | paragraph 11(2) (deduction in computing profits of trade), and |
| |
(b) | paragraph 15(4) (refunds of contributions to independent research |
| 5 |
| |
(2) | The amendments made by sub-paragraph (1) have effect in relation to |
| |
expenditure incurred on or after 1 April 2008. |
| |
Rates of vaccine research relief |
| |
3 (1) | Schedule 13 to FA 2002 (vaccine research relief) is amended as follows. |
| 10 |
(2) | In each of the following provisions, for “50%” substitute “40%”— |
| |
(a) | paragraph 14(2) (deduction in computing profits of trade: small and |
| |
| |
(b) | paragraph 15(2)(a) (alternative treatment of pre-trading expenditure: |
| |
| 15 |
(c) | paragraph 15A(2) (modifications for larger SMEs claiming R&D tax |
| |
| |
(d) | paragraph 21(2) (deduction in computing profits of trade: large |
| |
| |
(e) | paragraph 25(4)(a)(i) and (b)(i) (refunds of contributions to |
| 20 |
independent research and development). |
| |
(3) | In each of the following provisions, for “150%” substitute “140%”— |
| |
(a) | paragraph 15(2)(b) (alternative treatment of pre-trading |
| |
expenditure: deemed trading loss), |
| |
(b) | paragraph 16A(1) (entitlement to tax credit: modifications for larger |
| 25 |
| |
(c) | paragraph 21(3) (deduction in computing profits of trade: large |
| |
| |
(d) | paragraph 25(4)(a)(ii) and (b)(ii) (refunds of contributions to |
| |
independent research and development). |
| 30 |
(4) | The amendments made by this paragraph have effect in relation to |
| |
expenditure incurred on or after such day as the Treasury may by order |
| |
| |
(5) | The Treasury may appoint a day before the day on which this Act is passed, |
| |
but not one before 1 April 2008. |
| 35 |
| |
| |
Companies in difficulty: SME R&D relief and vaccine research relief |
| |
Research and development relief |
| |
1 (1) | Schedule 20 to FA 2000 (relief for expenditure on research and development) |
| |
| 40 |
|
| |
|