|
| |
|
(3) | For sub-paragraph (9) substitute— |
| |
“(9) | Paragraph (b) of sub-paragraph (8) above applies if— |
| |
(a) | the relevant day falls on or after 22 March 2006, |
| |
(b) | the plant or machinery was acquired directly or indirectly |
| |
from a person who was connected with the company when |
| 5 |
the acquisition took place, and |
| |
(c) | either the acquisition took place on or after 5 December |
| |
2005 or the person from whom the plant or machinery was |
| |
so acquired was also connected with the company on that |
| |
| 10 |
| |
3 | After paragraph 13 insert— |
| |
“No qualifying change of ownership where principal company’s interest in |
| |
consortium company unchanged |
| |
13A (1) | This paragraph applies if— |
| 15 |
(a) | a company (“company A”) is owned by a consortium, and |
| |
(b) | a relevant change in the relationship between company A |
| |
and a principal company of company A occurs on any day, |
| |
| but the principal company’s interest in company A remains |
| |
| 20 |
(2) | For the purposes of this Schedule, there is no qualifying change of |
| |
ownership in relation to company A on that day as a result of that |
| |
change in that relationship. |
| |
(3) | For the purposes of this paragraph the principal company’s |
| |
interest in company A remains unchanged if the percentage of the |
| 25 |
ordinary share capital of company A that is beneficially owned |
| |
directly or indirectly by the principal company is the same at the |
| |
beginning and end of that day. |
| |
(4) | Section 838(2) and (4) to (10) of ICTA apply for construing sub- |
| |
| 30 |
| |
4 (1) | Paragraph 17 (meaning of “PM” in paragraph 16) is amended as follows. |
| |
(2) | In sub-paragraph (7)(b), for “acquires any plant or machinery directly or |
| |
indirectly from a person who is connected with the company” substitute |
| |
“acquired any plant or machinery in circumstances in which this paragraph |
| 35 |
| |
(3) | For sub-paragraph (8) substitute— |
| |
“(8) | Paragraph (b) of sub-paragraph (7) above applies if— |
| |
(a) | the relevant day falls on or after 22 March 2006, |
| |
(b) | the plant or machinery was acquired directly or indirectly |
| 40 |
from a person who was connected with the company when |
| |
the acquisition took place, and |
| |
|
| |
|
| |
|
(c) | either the acquisition took place on or after 5 December |
| |
2005 or the person from whom the plant or machinery was |
| |
so acquired was also connected with the company on that |
| |
| |
| 5 |
5 | In paragraph 23 (leasing business carried on by company in partnership: |
| |
change in company’s interest in business), for sub-paragraph (6) |
| |
| |
“(6) | This paragraph is subject to paragraph 23A and is supplemented |
| |
| 10 |
| |
6 | After that paragraph insert— |
| |
“23A (1) | Paragraph 23 does not apply where conditions A, B and C are met. |
| |
(2) | Condition A is that at the end of the relevant day none of the |
| |
companies by which the business was carried on any longer have |
| 15 |
any share in the profits or loss of the business. |
| |
(3) | Condition B is that, in consequence of what happens on the |
| |
relevant day, the disposal value of all of the plant and machinery |
| |
which was used for the purposes of the business and in respect of |
| |
which capital allowances have been claimed is to be brought into |
| 20 |
account under section 61 of CAA 2001. |
| |
(4) | Condition C is that the disposal value to be brought into account |
| |
in relation to all of the plant or machinery is the price which the |
| |
plant or machinery would fetch in the open market on that day.” |
| |
| 25 |
7 (1) | Paragraph 32 (leasing business carried on by a company in partnership: |
| |
amount of expense) is amended as follows. |
| |
(2) | In sub-paragraph (1)— |
| |
(a) | in sub-paragraph (c), for “increases at any time on” substitute “is |
| |
greater at the end of that day than at the start of”, and |
| 30 |
(b) | in sub-paragraph (d), omit “at that time” (in both places). |
| |
(3) | For sub-paragraph (3) substitute— |
| |
“(3) | The appropriate percentage is—![equation: over[times[char[O],char[C],char[I]],times[char[P],char[C],char[D]]]](missing.gif) |
| |
| |
OCI is the increase in the other company’s percentage share |
| 35 |
in the profits or losses of the business which is wholly |
| |
attributable to the change in the partner company’s |
| |
interest in the business, and |
| |
PCD is the decrease in the partner company’s percentage |
| |
share in the profits or losses of the business.” |
| 40 |
|
| |
|
| |
|
| |
8 (1) | Paragraph 39 (relief for expense otherwise giving rise to carried forward |
| |
loss) is amended as follows. |
| |
(2) | In sub-paragraph (1)— |
| |
(a) | in paragraph (c), insert at the end “or a later accounting period,”, |
| 5 |
(b) | in paragraph (d), after “company” insert “after the accounting period |
| |
in which the loss is made”, and |
| |
(c) | in paragraph (e), for “12 months beginning with” substitute “5 years |
| |
beginning immediately after”. |
| |
| 10 |
(a) | in paragraph (b), for “, and” substitute “or a later accounting |
| |
| |
(b) | in paragraph (c), after “company” insert “after the accounting period |
| |
in which the loss is made”, and |
| |
(c) | after that paragraph insert “and |
| 15 |
(d) | the subsequent accounting period starts within the period of |
| |
5 years beginning with the day that is the relevant day within |
| |
the meaning of paragraph 23(1) and does not start as a result |
| |
| |
(4) | In sub-paragraph (2)— |
| 20 |
(a) | after “33” insert “or this sub-paragraph”, and |
| |
(b) | for “an expense” substitute “giving rise to an expense of the relevant |
| |
| |
(5) | After that sub-paragraph insert— |
| |
“(2A) | The relevant amount is the amount of the loss treated as an |
| 25 |
expense increased by![equation: cross[over[char[D],num[365.0000000000000000,"365"]],char[R]]](missing.gif) |
| |
| |
D is the number of days in the accounting period in which the |
| |
| |
R is the percentage rate applicable to section 826 of ICTA |
| 30 |
under section 178 of FA 1989.” |
| |
(6) | In sub-paragraph (3), after “The” insert “amount of the”. |
| |
(7) | In sub-paragraph (4)— |
| |
(a) | after “33” insert “or this paragraph”, and |
| |
(b) | for “the expense under that paragraph” substitute “that expense”. |
| 35 |
| |
9 (1) | The amendments made by paragraph 8 have effect in relation to losses |
| |
incurred in accounting periods ending on or after 22 April 2009. |
| |
(2) | The other amendments made by this Schedule have effect where the |
| |
relevant day is on or after that date. |
| 40 |
|
| |
|
| |
|
| |
| |
Tax relief for business expenditure on cars and motor cycles |
| |
| |
| |
Plant and machinery allowances for cars and motor cycles |
| 5 |
1 | Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows. |
| |
2 | In section 38B (general exclusions from AIA qualifying expenditure), in |
| |
general exclusion 2, for “81” substitute “268A”. |
| |
3 | In section 46(2) (general exclusions from first year allowances), in general |
| |
exclusion 2, for “81” substitute “268A”. |
| 10 |
4 | Omit sections 74 to 79 (cars above the cost threshold). |
| |
5 | Omit section 81 (extended meaning of “car”) and section 82 (qualifying hire |
| |
| |
6 | In section 84 (cases in which short-life asset treatment is ruled out), in the |
| |
Table, in item 3, in the first column, for “81” substitute “268A”. |
| 15 |
7 (1) | Section 104A (special rate expenditure) is amended as follows. |
| |
| |
(a) | in paragraph (a), after “the” insert “first”, |
| |
(b) | omit “and” at the end of paragraph (c), and |
| |
(c) | insert at the end “, and |
| 20 |
(e) | expenditure incurred on or after the second relevant |
| |
date on the provision of a car that is not a main rate |
| |
| |
(3) | In subsection (2), after “The” insert “first”. |
| |
(4) | After that subsection insert— |
| 25 |
“(3) | The second relevant date is— |
| |
(a) | for corporation tax purposes, 1 April 2009, and |
| |
(b) | for income tax purposes, 6 April 2009. |
| |
| |
“car” has the meaning given in section 268A; |
| 30 |
“main rate car” has the meaning given in section 104AA.” |
| |
8 | After that section insert— |
| |
“104AA | Meaning of “main rate car” |
| |
(1) | “Main rate car” means— |
| |
(a) | a car that is first registered before 1 March 2001, |
| 35 |
(b) | a car that has low CO2 emissions, or |
| |
(c) | a car that is electrically-propelled. |
| |
|
| |
|
| |
|
(2) | For the purposes of this section a car has low CO2 emissions if it |
| |
meets conditions A and B. |
| |
(3) | Condition A is that, when the car is first registered, it is so registered |
| |
on the basis of a qualifying emissions certificate. |
| |
(4) | Condition B is that the applicable CO2 emissions figure in relation to |
| 5 |
the car does not exceed 160 grams per kilometre driven. |
| |
(5) | The Treasury may by order amend the amount from time to time |
| |
specified in subsection (4). |
| |
(6) | An order under subsection (5) may contain transitional provision |
| |
| 10 |
| |
“applicable CO2 emissions figure” and “qualifying emissions |
| |
certificate” have the meanings given in section 268C; |
| |
“car” has the meaning given in section 268A; |
| |
“electrically-propelled” has the meaning given in section 268B.” |
| 15 |
9 | After section 104E insert— |
| |
“104F | Special rate cars: discontinued activity continued by relevant |
| |
| |
(1) | This section applies if— |
| |
(a) | a company (“the taxpayer”) has incurred special rate |
| 20 |
expenditure within section 104A(1)(e) (expenditure on a car |
| |
other than a main rate car) to which section 104C applies |
| |
(allocation to special rate pool), |
| |
(b) | the qualifying activity carried on by the taxpayer is |
| |
permanently discontinued, and |
| 25 |
(c) | conditions A, B and C are met. |
| |
(2) | Condition A is that the qualifying activity carried on by the taxpayer |
| |
consisted of or included (other than incidentally) making cars |
| |
available to other persons. |
| |
(3) | Condition B is that, at any time in the 6 months after the taxpayer’s |
| 30 |
qualifying activity is permanently discontinued, the qualifying |
| |
activity of a group relief company consists of or includes (other than |
| |
incidentally) making cars available to other persons. |
| |
(4) | Condition C is that the balancing allowance (“SBA”) to which the |
| |
taxpayer would be entitled (but for this section) in respect of the |
| 35 |
special rate pool is greater than—![equation: plus[times[char[B],char[C]],minus[times[char[O],char[B],char[A]]]]](missing.gif) |
| |
| |
BC is the total of the balancing charges (if any) to which the |
| |
taxpayer is liable for the final chargeable period in respect of |
| |
| 40 |
OBA is the total of the balancing allowances to which the |
| |
taxpayer is entitled for that period in respect of any pool |
| |
other than the special rate pool. |
| |
| For the purposes of this section, if BC — OBA is a negative amount, |
| |
it is to be treated as if it were nil. |
| 45 |
|
| |
|
| |
|
(5) | The balancing allowance to which the taxpayer is entitled in respect |
| |
of the special rate pool is reduced to an amount equal to BC — OBA. |
| |
(6) | The relevant company is to be treated as having incurred qualifying |
| |
expenditure within section 104A(1)(e) (“notional expenditure”), |
| |
whether or not the relevant company owns cars previously owned |
| 5 |
| |
(7) | The amount of the notional expenditure is an amount equal to the |
| |
amount by which SBA exceeds BC — OBA. |
| |
(8) | The relevant company is to be treated as having incurred the |
| |
notional expenditure on the day after the end of the taxpayer’s final |
| 10 |
| |
(9) | If part of the chargeable period in which the relevant company is |
| |
treated as incurring expenditure under this section (“the acquisition |
| |
period”) overlaps with the taxpayer’s penultimate chargeable |
| |
| 15 |
(a) | the part of the expenditure which is proportional to that part |
| |
of the acquisition period is not to be taken into account in |
| |
determining the relevant company’s available qualifying |
| |
expenditure for the acquisition period, but |
| |
(b) | this does not prevent that part of the expenditure being taken |
| 20 |
into account in determining the relevant company’s available |
| |
qualifying expenditure for any subsequent chargeable |
| |
| |
| |
“car” has the meaning given in section 268A; |
| 25 |
“company” means any body corporate; |
| |
“group relief company” means— |
| |
(a) | a company to which group relief under Chapter 4 of |
| |
Part 10 of ICTA would be available (on the making of |
| |
a claim) in respect of balancing allowances |
| 30 |
surrendered by the taxpayer in the taxpayer’s final |
| |
| |
(b) | a company to which such relief would be available |
| |
(on the making of a claim) in respect of balancing |
| |
allowances surrendered by a company within |
| 35 |
| |
“main rate car” has the meaning given in section 104AA; |
| |
“penultimate chargeable period” means the chargeable period |
| |
preceding the final chargeable period; |
| |
“the relevant company” means the group relief company |
| 40 |
mentioned in subsection (3) or, if there is more than one, the |
| |
| |
(a) | nominated by the taxpayer not more than 6 months |
| |
after the end of the taxpayer’s final chargeable period, |
| |
| 45 |
(b) | in the absence of such a nomination, nominated by |
| |
Her Majesty’s Revenue and Customs.” |
| |
|
| |
|
| |
|
10 | After section 208 insert— |
| |
“208A | Cars: disposal value in avoidance cases |
| |
(1) | This section applies if— |
| |
(a) | a disposal value is required to be brought into account under |
| |
| 5 |
(b) | the disposal event is that the person ceases to own a section |
| |
206 car because of a sale or the performance of a contract, and |
| |
(c) | allowances under this Part in respect of the person’s |
| |
expenditure under that transaction are restricted under |
| |
section 217 or 218 (anti-avoidance). |
| 10 |
(2) | A car is a section 206 car if expenditure on the provision of the car is |
| |
required to be allocated to a single asset pool under that section. |
| |
(3) | The disposal value to be brought into account is— |
| |
(a) | the market value of the car at the time of the disposal event, |
| |
| 15 |
(b) | if less, the capital expenditure incurred, or treated as |
| |
incurred, on the provision of the car by the person disposing |
| |
| |
(4) | The person acquiring the car is to be treated as having incurred |
| |
capital expenditure on its provision of an amount equal to the |
| 20 |
disposal value required to be brought into account under subsection |
| |
| |
(5) | In this section “car” has the meaning given in section 268A.” |
| |
11 | After section 268 insert— |
| |
| 25 |
268A | Meaning of “car” and “motor cycle” |
| |
(1) | In this Part “car” means a mechanically propelled road vehicle other |
| |
| |
| |
(b) | a vehicle of a construction primarily suited for the |
| 30 |
conveyance of goods or burden of any description, or |
| |
(c) | a vehicle of a type not commonly used as a private vehicle |
| |
and unsuitable for such use. |
| |
(2) | In this Part “motor cycle” has the meaning given by section 185(1) of |
| |
the Road Traffic Act 1988. |
| 35 |
268B | Electrically-propelled vehicles |
| |
For the purposes of this Part a vehicle is electrically-propelled only |
| |
| |
(a) | it is propelled solely by electrical power, and |
| |
(b) | that power is derived from— |
| 40 |
(i) | a source external to the vehicle, or |
| |
(ii) | an electrical storage battery which is not connected to |
| |
any source of power when the vehicle is in motion. |
| |
|
| |
|