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Finance Bill


Finance Bill
Part 3 — Capital allowances

47

 

(d)   

the purpose, or one of the main purposes, of the sale is the

obtaining of a tax advantage by the buyer under this Part.

(2)   

The writing-down allowance to which the buyer is entitled for the

chargeable period in which the sale takes place is—equation: cross[over[times[char[D],char[I]],times[char[C],char[P]]],times[char[W],char[D],

char[A]]]

   

where—

5

   

DI is the number of days in the chargeable period for which the

  buyer is entitled to the relevant interest,

   

CP is the number of days in the chargeable period, and

   

WDA is the writing-down allowance to which the buyer would

  be entitled apart from this section.”

10

(2)   

The amendment made by subsection (1) has effect in relation to the sale of a

relevant interest on or after 12 March 2008, except for such a sale in pursuance

of a relevant pre-commencement contract (and for this purpose “sale” has the

same meaning as for the purposes of Part 3 of CAA 2001).

(3)   

A contract is a relevant pre-commencement contract if—

15

(a)   

the contract is a contract in writing made before 12 March 2008,

(b)   

the contract is unconditional or its conditions have been satisfied before

that date,

(c)   

no terms remain to be agreed on or after that date, and

(d)   

the contract is not varied in a significant way on or after that date.

20

Supplementary provision

85      

Power to make consequential and transitional provision

(1)   

The Treasury may by order make such amendments (including repeals and

revocations) of enactments or instruments as may appear appropriate in

consequence of, or otherwise in connection with, sections 68 to 84.

25

(2)   

The Treasury may by order make such transitional or saving provision as may

appear appropriate in consequence of, or otherwise in connection with, those

sections.

(3)   

An order under subsection (1) may make transitional provision and savings.

(4)   

An order under subsection (1) or (2) may—

30

(a)   

make different provision for different cases, and

(b)   

include provision having effect in relation to times before the order is

made if that provision does not increase any person’s liability to tax.

(5)   

An order under subsection (1) or (2) is to be made by statutory instrument.

(6)   

A statutory instrument containing an order under subsection (1) or (2) is

35

subject to annulment in pursuance of a resolution of the House of Commons.

 
 

Finance Bill
Part 3 — Capital allowances

48

 

Anti-avoidance

86      

Balancing allowances on transfers of trade

(1)   

After section 343 of ICTA insert—

“343ZA  

 Transfers of trade to obtain balancing allowances

(1)   

This section applies where—

5

(a)   

a company (“the predecessor”) ceases to carry on a trade,

(b)   

another company (“the successor”) begins to carry on the

activities of that trade as its trade or as part of its trade,

(c)   

in the accounting period in which the predecessor ceases to

carry on the trade the predecessor would (apart from this

10

section) be entitled under Part 2 of the Capital Allowances Act

to a balancing allowance in respect of the trade, and

(d)   

the predecessor’s ceasing to carry on the trade is part of a

scheme or arrangement the main purpose, or one of the main

purposes, of which is to entitle the predecessor to that balancing

15

allowance.

(2)   

This section also applies where—

(a)   

a company (“the predecessor”) ceases to carry on part of a trade,

(b)   

another company (“the successor”) begins to carry on the

activities of that part of the trade as its trade or as part of its

20

trade, and

(c)   

the predecessor’s ceasing to carry on the part of the trade

mentioned in paragraph (a) is part of a scheme or arrangement

the main purpose, or one of the main purposes, of which is to

entitle the predecessor, on cessation of the trade, to a balancing

25

allowance in respect of the trade under Part 2 of the Capital

Allowances Act.

(3)   

This section does not apply where section 343 applies.

(4)   

Where this section applies, the Corporation Tax Acts have effect subject

to section 343(2), but as if the words “and are subject to section 343A

30

(company reconstructions involving business of leasing plant or

machinery)” were omitted.

(5)   

Where this section applies because of subsection (1), and the successor

carries on the activities of the trade the predecessor ceased to carry on

as part of the successor’s trade, for the purposes of section 343(2) that

35

part of the successor’s trade is to be treated as a separate trade carried

on by the successor.

(6)   

Where this section applies because of subsection (2), for the purposes of

section 343(2)—

(a)   

that part of the trade which the predecessor ceased to carry on

40

is to be treated as a separate trade carried on by the predecessor,

and

(b)   

where the successor carries on the activities of that part of the

trade as part of its trade, that part of the successor’s trade is to

be treated as a separate trade carried on by the successor.

45

 
 

Finance Bill
Part 4 — Pensions

49

 

(7)   

Where subsection (5) or (6) applies, such apportionment of receipts,

expenses, assets and liabilities is to be made as may be just.

(8)   

Section 343(10) applies to an apportionment under subsection (7) as it

applies to an apportionment under section 343(9).”

(2)   

The amendment made by subsection (1) has effect in relation to the cessation

5

of a trade or part of a trade on or after 12 March 2008.

Part 4

Pensions

87      

Spreading of relief on indirect contributions

(1)   

In Part 4 of FA 2004 (pension schemes etc), after section 199 insert—

10

“199A   

 Indirect contributions

(1)   

This section applies where an employer (“E”)—

(a)   

pays contributions under a registered pension scheme (“the

original scheme”) in a chargeable period, and

(b)   

would (apart from subsection (4)) be entitled in the next

15

chargeable period to an amount of relief in respect of a payment

within subsection (2),

   

and the avoidance condition is met.

(2)   

A payment is within this subsection if all or part of the payment is

intended to facilitate the payment of pension contributions under the

20

original scheme or a substitute scheme by a person other than E.

(3)   

The avoidance condition is that—

(a)   

section 197 would apply if, in the chargeable period mentioned

in subsection (1)(b), E paid pension contributions under the

original scheme of the amount of the relevant relief, and

25

(b)   

the purpose, or one of the purposes, of facilitating the payment

of pension contributions by a person other than E is to enable

pension contributions to be paid without that section applying.

(4)   

For the purposes of the spreading provisions, the amount of the

relevant relief is to be treated as the amount of a pension contribution

30

paid by E under the original scheme in the chargeable period

mentioned in subsection (1)(b).

(5)   

The “relevant relief” is the relief to which the employer would (apart

from subsection (4)) be entitled in that chargeable period in respect of—

(a)   

the payment within subsection (2), or

35

(b)   

where only part of the payment is intended to facilitate the

payment of pension contributions as mentioned in that

subsection, that part of the payment.

(6)   

A “substitute scheme” is any registered pension scheme—

(a)   

to which there is a relevant transfer in the period of 2 years

40

ending with the day on which the payment within subsection

(2) is made, or

 
 

Finance Bill
Part 4 — Pensions

50

 

(b)   

to which it is envisaged that a relevant transfer will or may be

made after that day.

(7)   

A relevant transfer is a recognised transfer from the original scheme of

more than 30% of the aggregate of—

(a)   

in a case within subsection (6)(a), the amount of the sums and

5

the market value of the assets held for the purposes of, or

representing accrued rights under, the original scheme

immediately before the transfer, and

(b)   

in a case within subsection (6)(b), the amount of those sums and

the market value of those assets on the day on which the

10

payment is made.

(8)   

If there is a transfer from a substitute scheme to another registered

pension scheme which would have been a relevant transfer had it been

a transfer from the original scheme at the time the relevant transfer was

made, that other scheme is also a substitute scheme.

15

(9)   

In subsection (1)(b), the reference to relief in respect of a payment

within subsection (2) includes relief for a liability in respect of the

making of the payment by a person other than E.

(10)   

In this section references to E being entitled to an amount of relief are

to an amount—

20

(a)   

being deductible in computing the amount of the profits of E for

the purposes of Part 2 of ITTOIA 2005 (trading income) or Case

I or II of Schedule D,

(b)   

being expenses of management of E for the purposes of section

75 of ICTA (expenses of management: companies with

25

investment business), or

(c)   

being brought into account at Step 1 in section 76(7) of ICTA

(expenses of insurance companies) in respect of E.

(11)   

In this section—

“the spreading provisions” means sections 197 and 198 and this

30

section, and

“chargeable period” has the meaning given by section 197.”

(2)   

The amendment made by this section has effect in relation to payments within

section 199A(2) of FA 2004 made on or after 10 October 2007, except for such

payments made pursuant to a contract entered into before 9 October 2007.

35

88      

Inheritance etc of tax-relieved pension savings

Schedule 28 contains provision about the inheritance etc of tax-relieved

pension savings.

89      

Pension schemes: further provision

Schedule 29 contains further provision about pension schemes.

40

 
 

Finance Bill
Part 5 — Stamp taxes

51

 

Part 5

Stamp taxes

Stamp duty land tax

90      

Zero-carbon homes

(1)   

Sections 58B and 58C of FA 2003 (relief from SDLT on first acquisition of zero-

5

carbon homes) are amended as follows.

(2)   

In section 58B, for subsection (2) substitute—

“(2)   

For the purposes of this section—

(a)   

a building, or a part of a building, is a dwelling if it is

constructed for use as a single dwelling, and

10

(b)   

“first acquisition”, in relation to a dwelling, means its

acquisition when it has not previously been occupied.”

(3)   

Section 58C is amended as follows.

(4)   

In subsection (1), for “building” substitute “dwelling”.

(5)   

In subsection (2), after paragraph (c) insert—

15

“(d)   

provide for the charging of fees of a reasonable amount in

respect of services provided as part of a scheme or process of

certification.”

(6)   

In subsection (3)—

(a)   

for “a building” substitute “a dwelling”, and

20

(b)   

for “building itself” substitute “building which, or part of which,

constitutes the dwelling”.

(7)   

The amendments made by subsections (2), (4) and (6) are treated as always

having had effect; and provision included in regulations by virtue of those

amendments may be made so as to have effect in relation to acquisitions on or

25

after 1 October 2007.

91      

Notification and registration of transactions

(1)   

Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

(2)   

For section 77 substitute—

“77     

Notifiable transactions

30

(1)   

A land transaction is notifiable if it is—

(a)   

an acquisition of a major interest in land that does not fall

within one or more of the exceptions in section 77A,

(b)   

an acquisition of a chargeable interest other than a major

interest in land where there is chargeable consideration in

35

respect of which tax is chargeable at a rate of 1% or higher or

would be so chargeable but for a relief,

(c)   

a land transaction that a person is treated as entering into by

virtue of section 44A(3), or

(d)   

a notional land transaction under section 75A.

40

 
 

Finance Bill
Part 5 — Stamp taxes

52

 

(2)   

This section has effect subject to—

(a)   

sections 71A(7) and 72A(7), and

(b)   

paragraph 30 of Schedule 15.

(3)   

In this section “relief” does not include an exemption from charge

under Schedule 3.

5

77A     

Exceptions for certain acquisitions of major interests in land

(1)   

The exceptions referred to in section 77(1)(a) are as follows.

 

1.

An acquisition which is exempt from charge

 
  

under Schedule 3.

 
 

2.

An acquisition (other than the grant, assignment

 

10

  

or surrender of a lease) where the chargeable

 
  

consideration for that acquisition, together with

 
  

the chargeable consideration for any linked

 
  

transactions, is less than £40,000.

 
 

3.

The grant of a lease for a term of 7 years or more

 

15

  

where—

 
  

(a)   

any chargeable consideration other than

 
  

rent is less than £40,000, and

 
  

(b)   

the relevant rent is less than £1,000.

 
 

4.

The assignment or surrender of a lease where—

 

20

  

(a)   

the lease was originally granted for a term

 
  

of 7 years or more,

 
  

(b)   

the chargeable consideration for the

 
  

assignment or surrender, other than any

 
  

rent, is less than £40,000, and

 

25

  

(c)   

the relevant rent is less than £1,000.

 
 

5.

The grant of a lease for a term of less than 7 years

 
  

where the chargeable consideration does not

 
  

exceed the zero rate threshold.

 
 

6.

The assignment or surrender of a lease where—

 

30

  

(a)   

the lease was originally granted for a term

 
  

of less than 7 years, and

 
  

(b)   

the chargeable consideration does not

 
  

exceed the zero rate threshold.

 

(2)   

Chargeable consideration for an acquisition does not exceed the zero

35

rate threshold if it does not consist of or include—

(a)   

any amount in respect of which tax is chargeable at a rate of 1%

or higher, or

(b)   

any amount in respect of which tax would be so chargeable but

for a relief.

40

(3)   

In this section—

“annual rent” has the meaning given in paragraph 9A of Schedule

5,

“relevant rent” means—

 
 

Finance Bill
Part 5 — Stamp taxes

53

 

(a)   

the annual rent, or

(b)   

in the case of the grant of a lease to which paragraph 11

or 19 of Schedule 15 applies, the relevant chargeable

proportion of the annual rent (as calculated in

accordance with that paragraph), and

5

“relief” does not include an exemption from charge under

Schedule 3.”

(3)   

In section 79(2) (registration of land transactions), after “every” insert

“notifiable”.

(4)   

Schedule 30 contains consequential provision.

10

(5)   

The amendments made by this section and that Schedule have effect in relation

to transactions with an effective date on or after 12 March 2008.

92      

Charge where consideration includes rent: 0% band

(1)   

Schedule 5 to FA 2003 (amount of SDLT chargeable: rent) is amended as

follows.

15

(2)   

In paragraph 9 (SDLT chargeable in respect of consideration other than rent)—

(a)   

in sub-paragraph (1), insert at the end “(but see paragraph 9A)”, and

(b)   

omit sub-paragraphs (2), (2A) and (3),

   

and, accordingly, in the heading before that paragraph, insert at the end “:

general”.

20

(3)   

After that paragraph insert—

“Tax chargeable in respect of consideration other than rent: 0% band

9A    (1)  

This paragraph applies in the case of a transaction to which this

Schedule applies where there is chargeable consideration other than

rent.

25

      (2)  

If—

(a)   

the relevant land consists entirely of land that is non-

residential property, and

(b)   

the relevant rent is at least £1,000,

           

the 0% band in Table B in section 55(2) does not apply in relation to

30

the consideration other than rent and any case that would have fallen

within that band is treated as falling within the 1% band.

      (3)  

Sub-paragraphs (4) and (5) apply if—

(a)   

the relevant land is partly residential property and partly

non-residential property, and

35

(b)   

the relevant rent attributable, on a just and reasonable

apportionment, to the land that is non-residential property is

at least £1,000.

      (4)  

For the purpose of determining the amount of tax chargeable under

section 55 in relation to the consideration other than rent, the

40

transaction (or, where it is one of a number of linked transactions,

that set of transactions) is treated as if it were two separate

transactions (or sets of linked transactions), namely—

 
 

 
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