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Finance Bill


Finance Bill
Part 2 — Income tax, corporation tax and capital gains tax

31

 

Miscellaneous anti-avoidance provisions

61      

Financial arrangements avoidance

Schedule 30 contains provision to counter avoidance involving financial

arrangements.

62      

Sale of lessor companies etc: anti-avoidance

5

Schedule 31 contains provision amending Schedule 10 to FA 2006 (sale of lessor

companies etc) to prevent avoidance.

63      

Leases of plant or machinery

Schedule 32 contains provision about leases of plant or machinery.

64      

Long funding leases of films

10

Schedule 33 contains provision about long funding leases of films.

65      

Real Estate Investment Trusts

Schedule 34 contains provision about Real Estate Investment Trusts.

66      

Deductions for employee liabilities

(1)   

ITEPA 2003 is amended as follows.

15

(2)   

In section 346 (deduction for employee liabilities), after subsection (2) insert—

“(2A)   

Nor is a deduction allowed for a payment which falls within paragraph

A, B or C if the payment is made in pursuance of arrangements the

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

of tax.”

20

(3)   

After section 556 insert—

“556A   

 Deductible payments made pursuant to tax avoidance arrangements

No deduction may be made under section 555 if the deductible

payment is made in pursuance of arrangements the main purpose, or

one of the main purposes, of which is the avoidance of tax.”

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(4)   

The amendments made by this section have effect in relation to payments

made on or after 12 January 2009 (irrespective of when the arrangements are

made).

67      

Employment loss relief

(1)   

In section 128 of ITA 2007 (employment loss relief against general income),

30

after subsection (5) insert—

“(5A)   

No claim may be made in respect of the loss if and to the extent that it

is made as a result of anything done in pursuance of arrangements the

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

of tax.”

35

 
 

Finance Bill
Part 2 — Income tax, corporation tax and capital gains tax

32

 

(2)   

The amendment made by subsection (1)—

(a)   

has effect in relation to a loss made in the tax year 2009-10 or a

subsequent tax year, and

(b)   

has effect in relation to a loss made in the tax year 2008-09 if or to the

extent that it is occasioned by an act or omission occurring on or after

5

12 January 2009.

(3)   

Where a person has made a claim under section 128 of ITA 2007 during the

relevant period, no penalty is payable by the person on the ground that any

return, statement or declaration made in connection with the claim contained

an inaccuracy if it would not have done so but for the amendment made by

10

subsection (1).

   

For this purpose “the relevant period” is the period—

(a)   

beginning with 12 January 2009, and

(b)   

ending with 1 April 2009.

(4)   

Subsection (2) of section 59C of TMA 1970 (surcharge on unpaid tax) has effect

15

in relation to tax which would not be payable but for the amendment made by

subsection (1) as if the reference in that subsection to the due date were to the

later of 1 April 2009 and the due date.

68      

No loss relief for losses from contracts for life insurance etc

(1)   

In section 152(8) of ITA 2007 (losses from miscellaneous transactions: cases that

20

are not “section 1016 income”), after “ICTA” insert “or Chapter 9 of Part 4 of

ITTOIA 2005”.

(2)   

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

the tax year 2009-10 or a subsequent tax year.

(3)   

That amendment also has effect for the tax year 2008-09 in relation to a loss

25

arising to a person under a policy of life insurance, a contract for a life annuity

or a contract constituting a capital redemption policy if—

(a)   

the policy is issued in respect of an insurance made, or the contract is

made, on or after 1 April 2009,

(b)   

the policy or contract is varied on or after that date so as to increase the

30

benefits secured (any exercise of rights conferred by the policy or

contract being regarded for this purpose as a variation),

(c)   

there is an assignment (or assignation) to the person (whether or not for

money or money’s worth) on or after that date of the rights, or a share

of the rights, conferred by the policy or contract, or

35

(d)   

all or part of the rights conferred by the policy or contract become held

on or after that date as a security for a debt of the person.

(4)   

Where—

(a)   

a person has made a claim under section 152 of ITA 2007 for the tax year

2008-09 or an earlier tax year in respect of a loss, and

40

(b)   

by virtue of the amendment made by subsection (1) no claim could

have been made in respect of the loss had it been made in the tax year

2009-10,

   

no deduction may be made for the tax year 2009-10 or a subsequent tax year in

accordance with step 2 or 3 in section 153 of ITA 2007 in respect of the loss.

45

 
 

Finance Bill
Part 2 — Income tax, corporation tax and capital gains tax

33

 

69      

Intangible fixed assets and goodwill

(1)   

Part 8 of CTA 2009 (intangible fixed assets) is amended as follows.

(2)   

In section 712(1) (meaning of “intangible asset”), insert at the end “(and

includes an internally-generated intangible asset)”.

(3)   

In section 715 (application of Part 8 to goodwill)—

5

(a)   

in subsection (3), insert at the end “(and includes internally-generated

goodwill)”, and

(b)   

insert at the end—

“(4)   

For the purposes of this Part, goodwill is treated as created in

the course of carrying on the business in question.”

10

(4)   

In section 883 (assets treated as created or acquired when expenditure

incurred)—

(a)   

in subsection (1), for paragraph (b) substitute—

“(b)   

has effect subject to the provisions specified in

subsection (2).”,

15

(b)   

in subsection (2)(a), omit “internally-generated”,

(c)   

in subsection (2)(b), for “certain other internally-generated assets”

substitute “assets representing non-qualifying expenditure”, and

(d)   

in subsection (3), omit “to which this section applies”.

(5)   

In section 884 (internally-generated goodwill: time of creation)—

20

(a)   

omit “internally-generated”,

(b)   

for the words from “before” to the end substitute “—

(a)   

before (and not on or after) 1 April 2002 in a case in

which the business in question was carried on at any

time before that date by the company or a related party,

25

and

(b)   

on or after 1 April 2002 in any other case.”, and

(c)   

in the heading, omit “Internally-generated”.

(6)   

In section 885 (certain other internally-generated assets: time of creation)—

(a)   

in subsection (1)(b), omit “internally-generated”,

30

(b)   

in subsection (7), for “before” to the end substitute “—

(a)   

before (and not on or after) 1 April 2002 in a case in

which the asset in question was held at any time before

that date by the company or a related party, and

(b)   

on or after 1 April 2002 in any other case.”, and

35

(c)   

in the heading, for “Certain other internally-generated assets

substitute “Assets representing non-qualifying expenditure”.

(7)   

The amendments made by this section have effect in relation to accounting

periods beginning on or after 22 April 2009 (and, in relation to those accounting

periods, are to be treated as always having had effect).

40

(8)   

For the purposes of subsection (7), an accounting period beginning before, and

ending on or after, 22 April 2009 is to be treated as if so much of the period as

falls before that date, and so much of the period as falls on or after that date,

were separate accounting periods.

 
 

Finance Bill
Part 2 — Income tax, corporation tax and capital gains tax

34

 

70      

Taxable benefit of living accommodation: lease premiums

(1)   

Chapter 5 of Part 3 of ITEPA 2003 (taxable benefits: living accommodation) is

amended as follows.

(2)   

In section 105 (cash equivalent: cost of accommodation not over £75,000)—

(a)   

in subsection (3), after “is” insert “(subject to subsections (4) and (4A))”,

5

and

(b)   

for subsection (4) substitute—

“(4)   

Subsection (4A) applies where—

(a)   

a rental amount is payable by the person (“P”) at whose

cost the accommodation is provided in respect of the

10

whole or part of the taxable period (“the relevant

period”), and

(b)   

the amount so payable is payable at an annual rate

greater than the annual value.

(4A)   

Where this subsection applies—

15

(a)   

subsection (3) does not apply to the relevant period, and

(b)   

instead the “rental value of the accommodation” for the

relevant period is the rental amount payable by P in

respect of the relevant period.

(4B)   

A reference in subsection (4) or (4A) to a rental amount payable

20

by P in respect of the relevant period is to the sum of—

(a)   

any rent for the period payable by P, and

(b)   

any amount attributed to the period in respect of a lease

premium (see section 105A).”

(3)   

After that section insert—

25

“105A   

 Lease premiums

(1)   

For the purposes of section 105(4B)(b) an amount is attributed to the

relevant period “in respect of a lease premium” if—

(a)   

the property consists of premises, or a part of premises, that are

subject to a lease,

30

(b)   

the premises are not mainly used by P for a purpose other than

the provision of living accommodation to which this Chapter

applies,

(c)   

the lease is for a term of 10 years or less, and

(d)   

at any time before the end of the term of the lease, an amount

35

becomes payable by P in relation to the lease by way of lease

premium.

(2)   

The amount so attributed is— equation: cross[over[char[A],char[B]],char[C]]

   

where—

A is the relevant period (in days);

40

B is the term of the lease (in days);

C is the lease premium total payment.

(3)   

Subsection (4) applies if—

 
 

Finance Bill
Part 3 — Pensions

35

 

(a)   

P or a relevant person has a right to terminate the lease, and

(b)   

if that right were exercised as soon as it is exercisable—

(i)   

the term of the lease would be 10 years or less, and

(ii)   

some or all of the lease premium total payment would

become repayable or would cease to be payable.

5

(4)   

If this subsection applies then for the purposes of this section the term

of the lease is to be determined on the assumption that the right to

terminate is exercised as soon as it is exercisable.

(5)   

In this section—

“lease premium” means any premium payable—

10

(a)   

under a lease, or

(b)   

otherwise under the terms on which a lease is granted;

“the lease premium total payment” means the total amount that,

before the end of the term of the lease, becomes payable by P in

relation to the lease by way of lease premium;

15

“relevant person” means a person other than P who is—

(a)   

a lessee under the lease, or

(b)   

a lessor under the lease who is a person involved in

providing the accommodation.

(6)   

In the application of this section to Scotland, “premium” includes a

20

grassum.”

(4)   

The amendments made by this section have effect in relation to—

(a)   

any lease entered into on or after 22 April 2009, and

(b)   

subject to subsection (5), any lease entered into before that date the term

of which is extended on or after that date.

25

(5)   

In relation to a lease of the kind mentioned in subsection (4)(b) the

amendments made by this section have effect—

(a)   

as if the additional term of the lease created by the extension were the

whole of the term of the lease, and

(b)   

ignoring any lease premium payable in respect of the unextended term

30

of the lease.

(6)   

In this section “lease premium” has the same meaning as in section 105A of

ITEPA 2003.

Part 3

Pensions

35

71      

Special annual allowance charge etc

Schedule 35 contains provision for and in connection with a special annual

allowance charge in respect of pension schemes.

72      

Financial assistance scheme

(1)   

The Treasury may by regulations make provision for and in connection with—

40

(a)   

the application of the relevant taxes in relation to the financial

assistance scheme, and

 
 

Finance Bill
Part 3 — Pensions

36

 

(b)   

the application of the relevant taxes in relation to any person in

connection with the financial assistance scheme.

(2)   

“The financial assistance scheme” means the scheme provided for by

regulations under section 286 of the Pensions Act 2004.

(3)   

The provision that may be made by regulations under this section includes

5

provision imposing any of the relevant taxes (as well as provisions for

exemptions or reliefs).

(4)   

The relevant taxes are—

(a)   

income tax,

(b)   

capital gains tax,

10

(c)   

corporation tax,

(d)   

inheritance tax,

(e)   

value added tax,

(f)   

stamp duty land tax,

(g)   

stamp duty, and

15

(h)   

stamp duty reserve tax.

(5)   

Regulations under this section may, in particular, include provision for and in

connection with the taxation of payments made by virtue of regulations under

section 286 of the Pensions Act 2004.

(6)   

The exemptions and reliefs that may be given by regulations under this section

20

include, in particular, exemption from charges to income tax, corporation tax

or capital gains tax in respect of—

(a)   

income arising from any assets held or managed by, or receipts of, the

person who manages the financial assistance scheme (“the scheme

manager”) and any chargeable gains arising from the disposal of any

25

such assets, and

(b)   

the receipt of fraud compensation payments (within the meaning of

Part 2 of the Pensions Act 2004: see section 182(1) of that Act).

(7)   

Regulations under this section may include provision having effect in relation

to any time before they are made if the provision does not increase any

30

person’s liability to tax.

(8)   

The provision made by regulations under this section may be framed as

provision applying with appropriate modifications provisions having effect in

relation to registered pension schemes; and for this purpose “registered

pension scheme” means a pension scheme within the meaning of Part 4 of FA

35

2004 which is registered under Chapter 2 of that Part of that Act.

(9)   

Regulations under this section may include—

(a)   

provision amending any enactment or instrument, and

(b)   

consequential, supplementary and transitional provision.

(10)   

Regulations under this section are to be made by statutory instrument.

40

(11)   

A statutory instrument containing regulations under this section is subject to

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

 
 

 
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