Finance Bill

House of Commons

Session 2007 - 08
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Other Bills before Parliament

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—

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.
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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.
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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—