|
| |
|
Group members with income from oil extraction subject to particular tax treatment in UK |
| |
56 (1) | In calculating the available amount, an amount disclosed in the income |
| |
statement of the worldwide group (“the external finance amount”) must be |
| |
disregarded if the following conditions are met. |
| |
(2) | Condition A is that a member of the worldwide group is treated in a relevant |
| 5 |
accounting period as carrying on a ring fence trade (see section 502 of ICTA). |
| |
(3) | Condition B is that the external finance amount falls to be brought into |
| |
account for the purposes of corporation tax in calculating the profits of that |
| |
trade for that accounting period. |
| |
(4) | In this paragraph “relevant accounting period”, in relation to a member of |
| 10 |
the worldwide group, means an accounting period of the member that falls |
| |
wholly or partly within the period of account. |
| |
Group members with income from shipping subject to particular tax treatment in UK |
| |
57 (1) | In calculating the available amount, an amount disclosed in the income |
| |
statement of the worldwide group (“the external finance amount”) must be |
| 15 |
disregarded if the following conditions are met. |
| |
(2) | Condition A is that a member of the worldwide group is, for a relevant |
| |
accounting period, a tonnage tax company for the purposes of Schedule 22 |
| |
| |
(3) | Condition B is that the external finance amount— |
| 20 |
(a) | is taken into account in computing relevant shipping profits of that |
| |
company for that accounting period, or |
| |
(b) | comprises deductible finance costs outside the ring fence, to the |
| |
extent that they are adjusted under paragraph 61 or 62 of Schedule |
| |
| 25 |
| |
“relevant accounting period”, in relation to a member of the worldwide |
| |
group, means an accounting period of the member that falls wholly |
| |
or partly within the period of account; |
| |
“relevant shipping profits” has the same meaning as in Schedule 22 to |
| 30 |
FA 2000 (see Part 6 of that Schedule). |
| |
Group members with income from property rental subject to particular tax treatment in UK |
| |
58 (1) | In calculating the available amount, an amount disclosed in the income |
| |
statement of the worldwide group (“the external finance amount”) must be |
| |
disregarded if the following conditions are met. |
| 35 |
(2) | Condition A is that a member of the worldwide group is treated in a relevant |
| |
accounting period as carrying on a separate business under section 113 of FA |
| |
2006 (ring-fencing of tax exempt business). |
| |
(3) | Condition B is that the external finance amount falls to be brought into |
| |
account in calculating the profits arising from that business in that |
| 40 |
| |
|
| |
|
| |
|
(4) | In this paragraph “relevant accounting period”, in relation to a member of |
| |
the worldwide group, means an accounting period of the member that falls |
| |
wholly or partly within the period of account. |
| |
Meaning of accounting expressions used in this Part |
| |
59 | Subject to any provision to the contrary, expressions used in this Part have |
| 5 |
the meaning for the time being given by international accounting standards. |
| |
| |
Other interpretative provisions |
| |
| |
60 | In this Schedule “the worldwide group” means any group of entities that— |
| 10 |
| |
(b) | contains one or more relevant group companies. |
| |
| |
61 (1) | Subject to sub-paragraphs (2) and (3), in this Schedule “group” has the |
| |
meaning for the time being given by international accounting standards. |
| 15 |
(2) | Where a group would (apart from this sub-paragraph) contain more than |
| |
one ultimate parent, each of those ultimate parents, together with its |
| |
subsidiaries, is to be treated as a separate group. |
| |
(3) | An entity that is a parent of the ultimate parent of a group is to be treated as |
| |
not being a member of the group. |
| 20 |
(4) | Sub-paragraphs (2) and (3) do not apply for the purposes of paragraph 62. |
| |
Meaning of “ultimate parent” |
| |
62 (1) | For the purposes of this Schedule “ultimate parent”, in relation to a group, |
| |
| |
(a) | is a member of the group, |
| 25 |
(b) | is a corporate entity or a relevant non-corporate entity, |
| |
(c) | is not a subsidiary (whether direct or indirect) of a corporate entity |
| |
or a relevant non-corporate entity, and |
| |
(d) | is not a collective investment scheme. |
| |
(2) | For the purposes of this paragraph, any interests in another entity held by an |
| 30 |
entity in its capacity as a member of a partnership or unincorporated |
| |
association are to be disregarded. |
| |
| |
“collective investment scheme” has the meaning given by section 235 of |
| |
| 35 |
“partnership” and “unincorporated association” include an entity |
| |
established under the law of a country or territory outside the United |
| |
Kingdom of a similar character to a partnership or unincorporated |
| |
association, and “member” is to be read accordingly. |
| |
|
| |
|
| |
|
Meaning of “corporate entity” |
| |
63 (1) | In this Schedule “corporate entity” means (subject to sub-paragraph (4))— |
| |
(a) | a body corporate incorporated under the laws of any part of the |
| |
United Kingdom or any other country or territory, or |
| |
(b) | any other entity that meets conditions A and B. |
| 5 |
(2) | Condition A is that the person or persons who have an interest in the entity |
| |
hold shares in the entity, or interests corresponding to shares. |
| |
(3) | Condition B is that the amount of profits to which each person who has an |
| |
interest in the entity is entitled depends upon a decision that— |
| |
(a) | is taken by the entity or members of the entity, and |
| 10 |
(b) | is taken after the period in which the profits arise. |
| |
(4) | The following are not corporate entities for the purposes of this Schedule— |
| |
| |
(b) | a Minister of the Crown, |
| |
(c) | a government department, |
| 15 |
(d) | a Northern Ireland department, or |
| |
(e) | a foreign sovereign power. |
| |
Meaning of “relevant non-corporate entity” |
| |
64 (1) | In this Schedule “relevant non-corporate entity” means an entity— |
| |
(a) | that is not a corporate entity, and |
| 20 |
(b) | in relation to which conditions A and B are met. |
| |
(2) | Condition A is that shares or other interests in the entity are listed on a |
| |
recognised stock exchange. |
| |
(3) | Condition B is that the shares or other interests in the entity are sufficiently |
| |
| 25 |
(4) | For this purpose shares or other interests in an entity are “sufficiently widely |
| |
held” if no participator in the entity holds more than 10% by value of all the |
| |
shares or other interests in the entity. |
| |
(5) | Section 417(1) of ICTA (meaning of participator) applies for the purposes of |
| |
| 30 |
(6) | In the application of that provision for those purposes, references to a |
| |
company are to be treated as references to an entity. |
| |
Treatment of entities stapled to corporate entities or relevant non-corporate entities |
| |
65 (1) | Where a corporate entity is stapled to another entity, the two entities are |
| |
treated for the purposes of this Schedule as if— |
| 35 |
(a) | they were one entity, and |
| |
(b) | that one entity were a corporate entity. |
| |
(2) | Where a relevant non-corporate entity is stapled to another entity, the two |
| |
entities are treated as if— |
| |
(a) | they were one entity, and |
| 40 |
(b) | that one entity were a relevant non-corporate entity. |
| |
|
| |
|
| |
|
(3) | For the purposes of this paragraph an entity (“entity A”) is “stapled” to |
| |
another (“entity B”) if, in consequence of the nature of the rights attaching to |
| |
the shares or other interests in entity A (including any terms or conditions |
| |
attaching to the right to transfer the interests), it is necessary or |
| |
advantageous for a person who has, disposes of or acquires shares or other |
| 5 |
interests in entity A also to have, to dispose of or to acquire shares or other |
| |
| |
Treatment of business combinations |
| |
66 (1) | This paragraph applies where two corporate entities are— |
| |
(a) | not subsidiaries of the same entity, but |
| 10 |
(b) | are treated under international accounting standards as a single |
| |
economic entity by reason of being a business combination achieved |
| |
| |
(2) | The two entities are treated for the purposes of this Schedule as if— |
| |
(a) | they were one entity, and |
| 15 |
(b) | that one entity were a corporate entity. |
| |
Meaning of “large” in relation to a group |
| |
67 (1) | For the purposes of this Schedule a group is “large” at any time if (and only |
| |
if) any member of the group is not at that time within the category of micro, |
| |
small and medium-sized enterprises as defined in the Annex to Commission |
| 20 |
Recommendation 2003/361/EC of 6 May 2003 (“the Annex”). |
| |
(2) | In its application by virtue of sub-paragraph (1), the Annex has effect subject |
| |
to the following qualifications. |
| |
(3) | Where a member of the group is in liquidation or administration, the rights |
| |
of the liquidator or administrator (in that capacity) are to be left out of |
| 25 |
account when applying Article 3(3)(b). |
| |
(4) | Article 3 has effect with the omission of paragraph 5 (declaration in good |
| |
faith where control cannot be determined etc). |
| |
(5) | The first sentence of Article 4(1) has effect as if the reference to the latest |
| |
approved accounting period of a member of the group were to the current |
| 30 |
accounting period of that member. |
| |
(6) | Article 4 has effect with the omission of— |
| |
(a) | the second sentence of paragraph (1) (data to be taken into account |
| |
from date of closure of accounts), |
| |
(b) | paragraph 2 (no change of status unless ceilings exceeded for two |
| 35 |
consecutive periods), and |
| |
(c) | paragraph 3 (estimate in case of newly established enterprise). |
| |
Meaning of “UK group company” and “relevant group company” |
| |
68 (1) | This paragraph applies for the purposes of this Schedule. |
| |
(2) | A company is a “UK group company” if— |
| 40 |
(a) | it meets condition A, and |
| |
(b) | it is a member of the worldwide group. |
| |
|
| |
|
| |
|
(3) | A company is a “relevant group company” if— |
| |
(a) | it meets condition A, and |
| |
(b) | it meets condition B. |
| |
(4) | Condition A is that the company— |
| |
(a) | is resident in the United Kingdom, or |
| 5 |
(b) | is not resident in the United Kingdom and is carrying on a trade in |
| |
the United Kingdom through a permanent establishment in the |
| |
| |
(5) | Condition B is that the company is either— |
| |
(a) | the ultimate parent of the worldwide group, or |
| 10 |
(b) | a relevant subsidiary of the ultimate parent of the worldwide group. |
| |
(6) | A company is a “relevant subsidiary” of the ultimate parent of the |
| |
| |
(a) | the company is a 75% subsidiary of the ultimate parent, |
| |
(b) | the ultimate parent is beneficially entitled to at least 75% of any |
| 15 |
profits available for distribution to equity holders of the company, or |
| |
(c) | the ultimate parent would be beneficially entitled to at least 75% of |
| |
any assets of the company available for distribution to its equity |
| |
| |
(7) | A company that would not otherwise be a relevant subsidiary of the |
| 20 |
ultimate parent of the worldwide group is treated as such if any member of |
| |
the group is a party to arrangements the main purpose, or one of the main |
| |
purposes, of which is to secure that the company is not a relevant subsidiary |
| |
for the purposes of this paragraph. |
| |
(8) | Schedule 18 to ICTA (equity holders and profits or assets available for |
| 25 |
distribution) applies in relation to sub-paragraph (6)(b) and (c) as it applies |
| |
in relation to section 413(7) of that Act. |
| |
(9) | The reference in sub-paragraph (7) to arrangements is to any arrangements, |
| |
scheme or understanding of any kind whatever, whether or not legally |
| |
enforceable, involving a single transaction or two or more transactions. |
| 30 |
Financial statements of the worldwide group |
| |
69 (1) | This paragraph applies for the purposes of this Schedule. |
| |
(2) | References to financial statements of the worldwide group are to |
| |
consolidated financial statements of the ultimate parent and its subsidiaries; |
| |
and references to a balance sheet of the worldwide group or an income |
| 35 |
statement of the worldwide group are to be read accordingly. |
| |
(3) | In sub-paragraph (2) “income statement” includes a consolidated profit and |
| |
loss account or other equivalent financial statement. |
| |
(4) | References to a period of account of the worldwide group are to a period in |
| |
respect of which financial statements of the worldwide group are drawn up. |
| 40 |
Non-compliant financial statements of worldwide group |
| |
70 (1) | This paragraph applies where— |
| |
|
| |
|
| |
|
(a) | financial statements of the worldwide group are drawn up in respect |
| |
| |
(b) | those financial statements are not drawn up in accordance with |
| |
acceptable accounting standards, and |
| |
(c) | the amounts disclosed in those financial statements are materially |
| 5 |
different from those that would be disclosed in IAS financial |
| |
statements for the period. |
| |
(2) | This Schedule (apart from this paragraph) applies as if IAS financial |
| |
statements had been drawn up in respect of the period. |
| |
(3) | In this paragraph “acceptable accounting standards”, in relation to a period, |
| 10 |
| |
(a) | international accounting standards, |
| |
(b) | accounting standards that meet conditions A to C, or |
| |
(c) | such other accounting standards as may be specified in regulations |
| |
made by the Commissioners. |
| 15 |
| |
(a) | the companies whose results are included in the financial statements |
| |
of the worldwide group for the period, and |
| |
(b) | the companies whose results would be included in IAS financial |
| |
statements of the worldwide group for the period, were such |
| 20 |
| |
| |
| |
(a) | the transactions whose results are reflected in the amounts |
| |
mentioned in paragraph 55(1)(a) to (g) in the income statement of the |
| 25 |
worldwide group for the period, and |
| |
(b) | the transactions whose results would be reflected in those amounts |
| |
in an income statement of the worldwide group for the period, were |
| |
such a statement drawn up, |
| |
| 30 |
(6) | Condition C is that the amounts mentioned in paragraph 55(1)(a) to (d) in |
| |
the income statement of the worldwide group for the period are calculated |
| |
using the effective interest method. |
| |
(7) | In this paragraph, references to IAS financial statements of the worldwide |
| |
group for a period are to financial statements of the group for the period |
| 35 |
drawn up in accordance with international accounting standards. |
| |
Non-existent financial statements of worldwide group |
| |
71 (1) | This paragraph applies where financial statements of the worldwide group |
| |
are not drawn up in respect of a period (“the relevant period”). |
| |
(2) | If the relevant period is 12 months or less, this Schedule (apart from this |
| 40 |
paragraph) applies as if IAS financial statements had been drawn up in |
| |
respect of the relevant period. |
| |
(3) | If the relevant period is more than 12 months, this Schedule (apart from this |
| |
paragraph) applies as if IAS financial statements had been drawn up in |
| |
respect of each period to which sub-paragraph (4) applies. |
| 45 |
|
| |
|
| |
|
(4) | This sub-paragraph applies to a period if— |
| |
(a) | it is the first period of 12 months falling within the relevant period, |
| |
(b) | it is a period of 12 months falling within the relevant period that |
| |
begins immediately after the end of the period mentioned in |
| |
paragraph (a), or immediately after the end of a period determined |
| 5 |
| |
(c) | it is a period of less than 12 months that— |
| |
(i) | begins immediately after the end of the period mentioned in |
| |
paragraph (a) or after the end of a period determined under |
| |
| 10 |
(ii) | ends at the end of the relevant period. |
| |
(5) | In this paragraph, references to IAS financial statements of the worldwide |
| |
group for a period are to financial statements of the group for the period |
| |
drawn up in accordance with international accounting standards. |
| |
References to amounts disclosed in financial statements |
| 15 |
72 (1) | References in this Schedule to amounts disclosed in financial statements |
| |
include an amount comprised in an amount so disclosed. |
| |
(2) | References in this Schedule to amounts disclosed in financial statements do |
| |
| |
(a) | any amount disclosed in respect of a group pension scheme, or |
| 20 |
(b) | any amount disclosed in respect of any entity that is not a member of |
| |
| |
Translation of amounts disclosed in financial statements into sterling |
| |
73 (1) | References in this Schedule (except in Part 2) to an amount disclosed in |
| |
financial statements for a period are, where the amount is expressed in a |
| 25 |
currency other than sterling, to that amount translated into its sterling |
| |
| |
(2) | The exchange rate by reference to which the amount is to be translated is the |
| |
average rate of exchange for the period calculated from daily spot rates. |
| |
Expressions taking their meaning from international accounting standards |
| 30 |
74 (1) | For the purposes of this Schedule the following expressions have the |
| |
meaning for the time being given by international accounting standards— |
| |
“effective interest method”; |
| |
| |
| 35 |
| |
(2) | The Commissioners may by order amend this paragraph. |
| |
Meaning of “relevant accounting period” |
| |
75 | For the purposes of this Schedule a “relevant accounting period” of a |
| |
company, in relation to a period of account of the worldwide group, means |
| 40 |
any accounting period that falls wholly or partly within the period of |
| |
account of the worldwide group. |
| |
|
| |
|