Finance Bill

House of Commons

Session 2007 - 08
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Finance Bill

Finance Bill (Volume I)
Part 3 — Capital allowances
49

Supplementary provision
86
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 69 to 85.
5
(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—
10
(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
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subject to annulment in pursuance of a resolution of the House of Commons.
Anti-avoidance
87
Balancing allowances on transfers of trade
(1)
After section 343 of ICTA insert—
“343ZA
Transfers of trade to obtain balancing allowances
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(1)
This section applies where—
(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
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carry on the trade the predecessor would (apart from this
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
30
purposes, of which is to entitle the predecessor to that balancing
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
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activities of that part of the trade as its trade or as part of its
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
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entitle the predecessor, on cessation of the trade, to a balancing

Finance Bill (Volume I)
Part 4 — Pensions
50

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
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(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
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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
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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.
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(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
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of a trade or part of a trade on or after 12 March 2008.
Part 4
Pensions
88
Spreading of relief on indirect contributions
(1)
In Part 4 of FA 2004 (pension schemes etc), after section 199 insert—
30
“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
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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
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original scheme or a substitute scheme by a person other than E.
(3)
The avoidance condition is that—

Finance Bill (Volume I)
Part 4 — Pensions
51

(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
(b)
the purpose, or one of the purposes, of facilitating the payment
of pension contributions by a person other than E is to enable
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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
paid by E under the original scheme in the chargeable period
mentioned in subsection (1)(b).
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(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
(b)
where only part of the payment is intended to facilitate the
payment of pension contributions as mentioned in that
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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
ending with the day on which the payment within subsection
(2) is made, or
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(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
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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
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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.
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(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—
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(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
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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.

Finance Bill (Volume I)
Part 5 — Stamp taxes
52

(11)
In this section—
“the spreading provisions” means sections 197 and 198 and this
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
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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.
89
Inheritance etc of tax-relieved pension savings
Schedule 28 contains provision about the inheritance etc of tax-relieved
pension savings.
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90
Pension schemes: further provision
Schedule 29 contains further provision about pension schemes.
Part 5
Stamp taxes
Stamp duty land tax
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91
Zero-carbon homes
(1)
Sections 58B and 58C of FA 2003 (relief from SDLT on first acquisition of zero-
carbon homes) are amended as follows.
(2)
In section 58B, for subsection (2) substitute—
“(2)
For the purposes of this section—
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(a)
a building, or a part of a building, is a dwelling if it is
constructed for use as a single dwelling, and
(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.
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(4)
In subsection (1), for “building” substitute “dwelling”.
(5)
In subsection (2), after paragraph (c) insert—
“(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.”
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(6)
In subsection (3)—
(a)
for “a building” substitute “a dwelling”, and
(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
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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
after 1 October 2007.