New Clause
1
Transfer
schemes: tax
provisions
Schedule
(Transfer schemes: tax provisions) (tax provisions relating to transfer
schemes) has effect..[Mr.
Harris.]
Brought
up, read the First and Second time, and added to the
Bill.
6
pm
New
Clause
2
Financial
provisions (disclosure of
information)
(1) The
Secretary of State shall publish all relevant details as to the moneys
used to fund the construction and maintenance of Crossrail, beyond
those monies as already provided by Parliament and set out in section
65(1).
(2) The Mayor of London
shall, not less than 12 months after the granting of Royal Assent to
this Act, publish and make available to all who are eligible and
registered to vote in the London Mayoral or Greater London Authority
elections, a statement
indicating
(a) the
agreement he has undertaken and agreed with the Secretary of State for
the proposals of building Crossrail,
and
(b) the potential financial
consequences of this agreement for
London.
(3) The Secretary of
State, after consultation with the Mayor of London and the Transport
Commissioner for London, shall publish an annual statement setting out
which bodies shall bear responsibility and liability for any costs
associated with the building of Crossrail separately indicating
the
(a) costs to date,
and
(b) projected costs to
date..[Stephen
Hammond.]
Brought
up, and read the First
time.
Motion
made
,
and Question put, That the clause be read a
Second
time:
The
Committee divided: Ayes 6, Noes
7.
Division
No.
8
]
Question
accordingly negatived.
New Schedule
1
Transfer
schemes: tax
provisions
Part
1
Introduction
Meaning
of public
body
1 In
this Schedule public body means a person which is a
public body for the purposes of section 66 of FA 2003 (SDLT: transfers
involving public
bodies).
Meaning of
taxable public body and exempt public
body
2 (1) In this Schedule
taxable public body means a public body which is within
the charge to corporation
tax.
(2) In this Schedule
exempt public body means a public body which is exempt
from corporation
tax.
Interpretation:
supplementary
3 (1) In this
Schedule
CAA
2001 means the Capital Allowances Act 2001
(c. 2);
FA,
followed by a year, means the Finance Act of that
year;
ICTA
means the Income and Corporation Taxes Act 1988
(c. 1);
ITA
2007 means the Income Tax Act 2007
(c. 3);
ITTOIA
2005 means the Income Tax (Trading and Other Income) Act 2005
(c. 5);
TCGA
1992 means the Taxation of Chargeable Gains Act 1992
(c. 12);
TMA
1970 means the Taxes Management Act 1970
(c. 9);
transfer
scheme means a scheme made under Schedule 12 to this
Act;
transferee,
in relation to a transfer in accordance with a transfer scheme, means
the person to whom the transfer is
made;
transferor,
in relation to a transfer in accordance with a transfer scheme, means
the person from whom the transfer is
made.
(2) So far as it relates
to income tax this Schedule is to be construed as one with the Income
Tax Acts.
(3) So far as it
relates to capital gains tax this Schedule is to be construed as one
with TCGA 1992.
(4) So far as
it relates to corporation tax this Schedule is to be construed as one
with the Corporation Tax
Acts.
(5) So far as it relates
to capital allowances this Schedule is to be construed as one with CAA
2001.
Part
2
Transfers
etc between taxable public
bodies
Meaning of
relevant transfer in Part 2 of
Schedule
4 In this
Part of this Schedule relevant transfer means a
transfer, in accordance with a transfer scheme, from a taxable public
body to another taxable public
body.
Computation
of profits and losses in respect of transfer of
trade
5 (1) This paragraph applies
where a taxable public body (the predecessor) is
carrying on a trade or a part of a trade and, as a result of a transfer
scheme
(a) the
predecessor ceases to carry on that trade or that part of that trade,
and
(b) another taxable public
body (the successor) begins to carry on that trade or
that part of it.
(2) For the purpose of computing, in relation to the
time when the scheme comes into force and subsequent times, the
relevant trading profits or losses of the predecessor and the
successor
(a) the trade
or part is to be treated as having been a separate trade at the time of
its commencement and as having been carried on by the successor at all
times since its commencement as a separate trade,
and
(b) the trade carried on by
the successor after the time when the scheme comes into force is to be
treated as the same trade as that which it is treated, by virtue of
paragraph (a), as having carried on as a separate trade before that
time.
(3) Where a trade or a
part of a trade falls to be treated under this paragraph as a separate
trade, such apportionments of receipts, expenses, assets and
liabilities shall be made for the purpose of computing relevant trading
profits or losses as may be just and
reasonable.
(4) This paragraph
is subject to the other provisions of this Part of this
Schedule.
(5) In this paragraph
relevant trading profits or losses means profits or
losses under Case I of Schedule D in respect of the trade or part of a
trade in
question.
Transfers
of trading stock
6 (1) This paragraph
applies if
(a) under a
relevant transfer trading stock of the transferor is transferred to the
transferee, and
(b) paragraph 5
does not apply in relation to that
transfer.
(2) Sub-paragraphs
(3) and (4) have effect in computing for any corporation tax purpose
both the profits of the trade in relation to which the stock is trading
stock immediately before the transfer takes effect (the
transferors 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
transferees
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
(a)
disposed of by the transferor in the course of the transferors
trade,
(b) if sub-paragraph
(2)(a) applies, acquired by the transferee in the course of the
transferees trade,
and
(c) subject to that,
disposed of and acquired when the transfer takes
effect.
(4) The stock must be
valued as if the disposal and acquisition had been for a consideration
which in relation to the transferor would have resulted in neither a
profit nor a loss being brought into account in respect of the disposal
in the accounting period of the transferor which ends with, or is
current at, the time when the transfer takes
effect.
(5) In this paragraph
trading stock has the same meaning as in section 100 of
ICTA.
Capital
allowances: transfer of whole trade
7
(1) This paragraph applies where a taxable public body (the
predecessor) is carrying on a trade and, as a result of a
transfer scheme
(a) the
predecessor ceases to carry on that trade,
and
(b) another taxable public
body (the successor) begins to carry on that
trade.
(2) For the purposes of
the allowances and charges provided for by CAA 2001, the trade is not
to be treated as permanently discontinued, nor a new trade as set up;
but sub-paragraphs (3) and (4) are to
apply.
(3) There are to be made
to or on the successor, in accordance with CAA 2001, all such
allowances and charges as would, if the predecessor had continued to
carry on the trade, have fallen to be made to or on the
predecessor.
(4) The amounts of those allowances and charges are
to be computed as
if
(a) the successor
had been carrying on the trade since the predecessor began to do so,
and
(b) everything done to or
by the predecessor had been done to or by the
successor,
but so that
transfers in accordance with the scheme, so far as they relate to
assets in use for the purposes of the trade, shall not be treated as
giving rise to an allowance or
charge.
Capital
allowances: transfer of part of a
trade
8 (1) Where a taxable public
body (the predecessor) is carrying on a trade and, as a
result of a transfer
scheme
(a) the
predecessor ceases to carry on a trade,
and
(b) another taxable public
body (the successor) begins to carry on activities of
that trade as part of a trade carried on by the
successor,
then that part of
the trade carried on by the successor shall be treated for the purposes
of paragraph 7 as a separate
trade.
(2) Where a taxable
public body (the predecessor) is carrying on a trade
and, as a result of a transfer
scheme
(a) the
predecessor ceases to carry on a part of a trade,
and
(b) another taxable public
body begins to carry on activities of that part of that
trade,
then the predecessor
shall be treated for the purposes of paragraph 7 and sub-paragraph (1)
as having carried on that part of its trade as a separate
trade.
(3) Where activities
fall to be treated for the purposes of this paragraph as a separate
trade, such apportionments of receipts, expenses, assets and
liabilities shall be made for the purposes of CAA 2001 as may be just
and
reasonable.
Capital
allowances: transfer of plant or
machinery
9 (1) This paragraph applies
where
(a) there is a
relevant transfer of plant or
machinery,
(b) paragraph 7 does
not apply in relation to that
transfer,
(c) the plant or
machinery would be treated for the purposes of CAA 2001 as disposed of
by the transferor to the transferee on the transfer taking effect,
and
(d) the transfer scheme in
accordance with which the transfer is made contains provision for the
disposal value of the plant or machinery to be treated for the purposes
of that Act as an amount specified in or determined in accordance with
the scheme.
(2) For the
purposes of CAA
2001
(a) the provision
mentioned in sub-paragraph (1)(d) is to have effect for determining an
amount as the disposal value of the plant or machinery or the price at
which a fixture is to be treated as
sold,
(b) the transferee is to
be treated as having incurred capital expenditure 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,
(c) the property is
to be treated as belonging to the transferee as a result of the
transferee having incurred that expenditure,
and
(d) 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)(d) for the determination of an 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
(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)(d).
(5) The consent of the
transferee is required for the modification of a determination under
the provision mentioned in sub-paragraph
(1)(d).
(6) As to the making of
a determination or a modification of a determination under the
provision mentioned in sub-paragraph (1)(d), see further paragraph
43.
(7) Expressions used in
this paragraph and in Part 2 of CAA 2001 have the same meanings in this
paragraph as in that
Part.
Capital
allowances: transfers not to be
sales
10 (1) This paragraph applies
for the purposes of Part 3 of CAA 2001, and the other provisions of
that Act which are relevant to that Part, to a relevant transfer of the
relevant interest in an industrial building or
structure.
(2) Neither section
559 nor section 573 of that Act is to have effect in relation to that
transfer.
Chargeable
gains: assets to be treated as disposed of without a gain or a
loss
11 (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 (in
relation to the person to whom the disposal is made as well as the
person making the disposal) to be for a consideration such that no gain
or loss accrues to the person making the
disposal.
(2) This
sub-paragraph applies to a disposal
if
(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 and the person to whom the disposal is made are taxable public
bodies, and
(c) each of those
persons is either the transferor or a transferee under the
scheme.
(3) Sub-paragraph (1)
is subject to paragraph
12.
Chargeable
gains: roll-over relief
12 (1) This
paragraph applies
if
(a) but for section
154 of TCGA 1992 (depreciating assets) a held-over gain would have been
carried forward to a depreciating asset,
and
(b) the asset is the
subject of a relevant
transfer.
(2) Section 154 is to
have effect as if the gain had accrued to, and the claim for it to be
held over had been made by, the transferee and as if the
transferors acquisition of the depreciating asset had been the
transferees acquisition of
it.
(3) Expressions used in
this paragraph and in section 154 have the same meanings in this
paragraph as in that
section.
Continuity
in relation to transfer of intangible
assets
13 (1) For the purposes of
Schedule 29 to FA
2002
(a) a relevant
transfer of a chargeable intangible asset of the transferor is to be
treated as a tax-neutral transfer,
and
(b) an intangible fixed
asset which is an existing asset of the transferor at the time of a
relevant transfer is to be treated, on and after the transfer, as an
existing asset in the hands of the
transferee.
(2) Expressions
used in this paragraph and in that Schedule have the same meanings in
this paragraph as in that
Schedule.
Continuity in relation to loan
relationships
14 (1) For the purposes
of the application of Chapter 2 of Part 4 of FA 1996 (loan
relationships) in relation to a relevant transfer, the transferee and
the transferor are to be treated as if, at the time of the transfer,
they were members of the same
group.
(2) In sub-paragraph (1)
the reference to being members of the same group must be construed in
accordance with paragraph 12(8) of Schedule 9 to that
Act.
Continuity in
relation to derivative contracts
15
(1) For the purposes of the application of Schedule 26 to FA 2002
(derivative contracts) in relation to a relevant transfer, the
transferee and the transferor are to be treated as if, at the time of
the transfer, they were members of the same
group.
(2) In sub-paragraph (1)
the reference to being members of the same group must be construed in
accordance with paragraph 28(6) of that
Schedule.
Leased
assets
16 (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 body to another
taxable 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 the
interest or lease by the transferor or
grantor.
(3) In the case of the
transfer of an interest under a lease, payments made by the transferor
under the lease before the transfer takes effect are to be treated as
if they had been made under that lease by the
transferee.
(4) 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
3
Transfers
etc from taxable public bodies to exempt public
bodies
Meaning of
relevant transfer in Part 3 of
Schedule
17 In
this Part of this Schedule relevant transfer means a
transfer, in accordance with a transfer scheme, from a taxable public
body to an exempt public
body.
Transfers of trading
stock
18 (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 purpose
the profits of the trade in relation to which the stock is trading
stock immediately before the transfer takes effect (the
transferors
trade).
(3) The stock
must be taken to have
been
(a) disposed of by
the transferor in the course of the transferors trade,
and
(b) subject to that,
disposed of when the transfer takes
effect.
(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 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.
(7) For the purposes of
this paragraph whether a person is connected with another person is
determined in accordance with section 839 of ICTA (connected
persons).
Capital
allowances: determination of disposal value of plant or
machinery
19 (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 for plant and
machinery).
(2) For the
purposes of the application of section 61 of that Act 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 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.
(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
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 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
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.
(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 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.
(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.
(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
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.
(2) This
sub-paragraph applies to a disposal
if
(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
(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 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
transfer, to be brought into account in the transferors
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
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 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 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
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.
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
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 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 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
(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 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
(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 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 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 for the
purposes of section 311 of CAA
2001
(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.
(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
(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 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 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).
(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.
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 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
immediately reacquired the
asset.
(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
(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 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.
(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.
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 Commissioners for
Her Majestys 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
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 from sub-paragraph
(1).
(3) In this paragraph
instrument has the same meaning as in the Stamp Act
1891
(c. 39).
Part
6
Transfers
etc involving private
persons
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.
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
stock is trading stock immediately before the transfer takes effect
(the transferors 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
transferees
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
(a)
disposed of by the transferor in the course of the transferors
trade,
(b) if sub-paragraph
(2)(a) applies, acquired by the transferee in the course of the
transferees trade,
and
(c) subject to that,
disposed of and acquired when the transfer takes
effect.
(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 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 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 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 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.
(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
(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 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
(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
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 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.
(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.
(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: disposals not to be treated as made at market
value
39 (1) Section 17 of TCGA 1992
(disposals and acquisitions treated as made at market value) is not to
have effect in relation
to
(a) a disposal
constituted by a relevant
transfer,
(b) a disposal to
which sub-paragraph (2) applies, or
(c) the acquisition made by the person to whom the
disposal is made;
but this
sub-paragraph does not apply if the person making the disposal is
connected with the person making the
acquisition.
(2) This
sub-paragraph applies to a disposal
if
(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 or the person to whom the disposal is made is a person other
than a public body, and
(c)
each of those persons is either the transferor or a transferee under
the scheme.
(3) If
sub-paragraph (1) applies to the disposal of an asset, the disposal is
to be taken (in relation to the person making the acquisition as well
as the person making the disposal) to
be
(a) in a case where
consideration in money or moneys worth is given by the person
making the acquisition or on his behalf in respect of the vesting of
the asset in him, for a consideration equal to the amount or value of
that consideration, or
(b) in a
case where no such consideration is given, for a consideration of
nil.
Loan
relationships
40 (1) Paragraph 11 of
Schedule 9 to FA 1996 (transactions not at arms length) is not
to have effect where, as a result of a relevant transfer, the
transferee replaces the transferor as a party to a loan
relationship.
(2) Expressions
used in this paragraph and in Chapter 2 of Part 4 of FA 1996 have the
same meanings in this paragraph as in that
Chapter.
Part
7
Other
provisions concerning
transfers
Chargeable
gains: value
shifting
41 No
transfer scheme is to be regarded as a scheme or arrangement for the
purposes of section 30 of TCGA
1992.
Group
relief
42 The power of the Secretary of
State to make a transfer scheme is not to be regarded as
constituting
(a) arrangements
falling within section 410(1) or (2) of ICTA (arrangements for transfer
of company to another group or consortium),
or
(b) option arrangements for
the purposes of paragraph 5B of Schedule 18 to
ICTA.
Modification
of transfer schemes and determinations under paragraph 9(1)(d) or
27(1)(c): companies
43 (1) This
paragraph applies
if
(a) a company
delivers a company tax
return,
(b) subsequently, an
event mentioned in sub-paragraph (2) below occurs,
and
(c) as a result of that
event, the return is
incorrect.
(2) The events
are
(a) the making of
an agreement modifying a transfer scheme under paragraph 14 of
Schedule 12 to this
Act;
(b) a determination or
modification of a determination under the provision mentioned in
paragraph 9(1)(d) or 27(1)(c)
above.
(3) The return may be
amended under paragraph 15 of Schedule 18 to FA 1998 so as to remedy
the error, ignoring any time limit which would otherwise prevent that
happening.
(4) But an amendment
may not be made in reliance on sub-paragraph (3) above more than 12
months after the end of the accounting period of the company during
which (as the case may be)
(a) the agreement is made,
or
(b) the determination or
modification of a determination is
made.
(5) Sub-paragraphs (6)
and (7) below apply if the company does not amend the return so as to
remedy the error before the end of that 12 month
period.
(6) A discovery
assessment or a discovery determination may be made in relation to the
error, ignoring any time limit which would otherwise prevent that
happening.
(7) But such an
assessment or determination may not be made in reliance on
sub-paragraph (6) above more than 24 months after the end of the
accounting period mentioned in sub-paragraph (4)
above.
(8) Expressions used in
this paragraph and in Schedule 18 to FA 1998 have the same meaning in
this paragraph as in that
Schedule.
Modification
of transfer schemes: other persons and
partnerships
44 (1) This paragraph
applies if
(a) a person
delivers a return under section 8, 8A or 12AA of TMA
1970,
(b) subsequently, an
agreement is made modifying a transfer scheme under paragraph 14 of
Schedule 12 to this Act,
and
(c) as a result of that,
the return is incorrect.
(2)
The return may be amended under section 9ZA or 12ABA of TMA 1970 so as
to remedy the error, ignoring any time limit which would otherwise
prevent that happening.
(3) But
an amendment may not be made in reliance on sub-paragraph (2) above
more than 12 months after the end of the year of assessment during
which the agreement modifying the transfer scheme is
made.
(4) If the return is
amended under section 12ABA in reliance on sub-paragraph (2) above,
subsection (3) of that section applies, ignoring any time limit which
would otherwise prevent the officer from proceeding under that
subsection.
(5) Sub-paragraphs
(6) and (7) below apply if the return is not amended under section 9ZA
or 12ABA so as to remedy the error before the end of the 12 month
period mentioned in sub-paragraph (3)
above.
(6) An officer of
Revenue and Customs may proceed under section 29(1) or 30B(1) and (2)
of TMA 1970 in relation to the error, ignoring any time limit which
would otherwise prevent the officer from so
proceeding.
(7) But an
assessment or an amendment may not be made in reliance on sub-paragraph
(6) above more than 24 months after the end of the year of assessment
mentioned in sub-paragraph (3)
above.
Power to
make further provision in relation to transfer
schemes
45 (1) The Treasury may by
regulations make provision for varying the way in which a relevant tax
has effect from time to time (including by virtue of this Schedule) in
relation to
(a) any
property, rights or liabilities transferred in accordance with a
transfer scheme, or
(b)
anything done for the purposes of, or in relation to, or in consequence
of, the transfer of any property, rights or liabilities in accordance
with a transfer scheme.
(2) The
provision that may be made under sub-paragraph (1)(a) includes, in
particular, provision
for
(a) a tax provision
not to apply, or to apply with modifications, in relation to any
property, rights or liabilities
transferred;
(b) any property,
rights or liabilities transferred to be treated in a specified way for
the purposes of a tax
provision;
(c) the Secretary of
State to be required or permitted, with the consent of the Treasury, to
determine, or to specify the method for determining, anything which
needs to be determined for the purposes of any tax
provision so far as relating to any property, rights or liabilities
transferred.
(3) The provision
that may be made under sub-paragraph (1)(b) includes, in particular,
provision for
(a) a tax
provision not to apply, or to apply with modifications, in relation to
anything done for the purposes of, or in relation to, or in consequence
of, the transfer;
(b) anything
done for the purposes of, or in relation to, or in consequence of, the
transfer to have or not to have a specified consequence or to be
treated in a specified way;
(c)
the Secretary of State to be required or permitted, with the consent of
the Treasury, to determine, or to specify the method for determining,
anything which needs to be determined for the purposes of any tax
provision so far as relating to anything done for the purposes of, or
in relation to, or in consequence of, the
transfer.
(4) Regulations under
sub-paragraph (1) may amend this Schedule (apart from this
paragraph).
(5) Regulations
under sub-paragraph (1)
may
(a) make such
supplementary, incidental or consequential provision as the Treasury
think fit, and
(b) make
different provision for different
cases.
(6) The power to make
regulations under sub-paragraph (1) shall be exercisable by statutory
instrument which shall be subject to annulment in pursuance of a
resolution of the House of
Commons.
(7) In this paragraph
references to any property, rights or liabilities transferred in
accordance with a transfer scheme include references to any property,
rights or liabilities transferred, or any interests, rights or
liabilities created, by virtue of paragraph 5 or 11 of Schedule 12 to
this Act.
(8) In this paragraph
references to the transfer of any property, rights or liabilities in
accordance with a transfer scheme include references to the transfer of
any property, rights or liabilities, or the creation of any interests,
rights or liabilities, by virtue of paragraph 5 or 11 of Schedule 12 to
this Act.
(9) In this
paragraph
relevant
tax means income tax, corporation tax, capital gains tax, stamp
duty, stamp duty land tax or stamp duty reserve tax,
and
tax
provision means a provision of an enactment about a relevant
tax.
(10) In sub-paragraph (9)
enactment includes an enactment contained in an
instrument made under an
Act.
(11) Paragraph 18(3) of
Schedule 12 to this Act applies for the purposes of this paragraph as
it applies for the purposes of that
Schedule.
Consequential
amendment
46 In
section 35(3)(d) of TCGA 1992 (no gain no loss disposals), after
sub-paragraph (xvii)
insert
(xviii) paragraph
11 or 22 of Schedule (Transfer schemes: tax provisions) to the
Crossrail Act 2008..[Mr.
Tom
Harris.]
Brought
up, read the First and Second time, and added to the
Bill.
Question
proposed, That the Chairman do report the Bill, as amended, to the
House.
Mr.
Harris:
I want to take this opportunity to thank you, Lady
Winterton, for your service as Chair to the
Committee. As I predicted in our first sitting, it
has been a pleasure to serve under your chairmanship. You have been
extremely clear and genuinely helped the progress of the Bill. I also
thank the Clerk, the Hansard team, the police officers who have
managed to keep
order, my own officials whose advice has been absolutely invaluable and,
of course, my private secretary, Sandra St. Louis.
I noticed the hon. Member for
Wimbledon looking with envy at the ranks of officials who offer me
advice. May I thank him for his very positive approach to the Bill? It
was a pleasure to debate some of the issues with him and with the hon.
Member for Richmond Park. I am not sure whether it is normally done,
but when there are Whips around it is never a bad thing to pay tribute
to the hon. Member for Alyn and Deeside for his contribution and help
throughout this process. If I have missed anyone I
apologise.
Stephen
Hammond:
May I echo the Ministers remarks? It has
been a pleasure to serve under your chairmanship, Lady Winterton. We
have undertaken these proceedings in an orderly and timely way. I am
grateful for your forbearance to those of us who jumped up at the wrong
time and in the wrong place. I think that the Committee has been
characterised by the words, Channel Tunnel
Rail Link Act, compensation,
arbitration and, occasionally,
accountability.
Mr.
Harris:
And any other relevant
parties.
Stephen
Hammond:
Indeed. According to my count, the Minister
kindly said that if I withdrew three of my amendments, he would bring
them back on Report. On that basis, I count the score
as Opposition 3: Government 104. None the less, I pay tribute to the
Minister for his genuine spirit of transparency in obtaining
information for us and debating with us. Like him, I thank the Clerk
for his invaluable help and assistance. I thank the Hansard
reporters and the police. I thank my colleagues, my hon. Friends
the Members for Cities of London and Westminster, for Ilford, North,
for Northampton, South, and for Rugby and
Kenilworth.
Finally, I
thank those who have given the Minister divine inspiration, which has
been extremely helpful in moving the Committee forward. In the same
vein of tribute, I thank my researcher, who has given me divine
inspiration at times. I calculated that as Opposition 1: Government 6.
These proceedings have been useful and helpful, and Members on both
sides of the Committee will agree that we wish to give the Bill speedy,
yet proper, scrutiny in the House. I think that we can be pleased with
what we have tried to do in
Committee.
Susan
Kramer:
I will be brief, but I should like to take the
opportunity to express my thanks for your patience and generosity, Lady
Winterton. I know, from my little experience in working on such Bills,
that it is genuinely appreciated. I wish to express that same sense of
appreciation to the Public Bill Office and to the Clerk. They make a
great deal of difference when one is a novice. Their assistance
in getting things drafted, even elegantly drafted, was valuable. I
thank the Hansard reporters and the police. I would thank my
colleagues, but that is somewhat tricky under the circumstances. I
express thanks, however, to my hon. Friend the Member for Carshalton
and Wallington who covered for me when I was unavoidably absent for
several hours. I appreciate his generosity, as he acted purely from
kindness of spirit.
The views that have been
expressed are all positively in favour of Crossrail. That is an
important message that needs to go out as the Bill makes its progress
through the House. A number of markers have been put down, particularly
on disclosure and the wish of the House to know the details and to
understand the financial structure of the Bill. Such things
should not be forgotten, even though those votes did not
necessarily carry the day. I thank the Minister for his
willingness to provide information and to be
supportive. I only wish that all the Ministers with whom I have dealt
in my two years in the House took a similar
latitude.
The
Chairman:
Before I put the final question, on behalf of
everyone who has been thanked, may I thank
members of the Committee for their thanks? It has been a pleasure to
chair the Bill. We have debated in great good spirit and a lot of
kindly humour, and it has genuinely been a very pleasant experience. It
has also been interesting to watch a Minister on his maiden voyage in
Committee, and we wish him well for the future: the same goes for the
Opposition spokespeople. We are always indebted to the Clerks
Department and to our Clerk in particular for his very valuable advice,
to the reporters of the Official Report and to the police who
have ensured that nothing untoward happened in the
Committee.
Question
put and agreed
to.
Bill, as
amended, to be
reported
Committee
rose at ten minutes past Six
oclock.
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