|
| |
|
“contracting state”) are not to be subject in any other contracting state |
| |
| |
| |
(b) | any requirement connected with taxation, |
| |
| which is other or more burdensome than the taxation and connected |
| 5 |
requirements to which nationals of that other state in the same |
| |
circumstances (in particular with respect to residence) are or may be |
| |
| |
(6) | In subsection (5) “national”, in relation to a contracting state, |
| |
| 10 |
(a) | an individual possessing the nationality or citizenship of the |
| |
| |
(b) | a legal person, partnership or association deriving its status |
| |
as such from the laws in force in that contracting state. |
| |
(7) | Regulations under this section may— |
| 15 |
(a) | describe a territory by reference to the double taxation relief |
| |
arrangements for the time being in force in relation to the |
| |
| |
(b) | make different provision in relation to different descriptions |
| |
| 20 |
(c) | make provision having effect in relation to the tax year |
| |
current on the day on which the regulations are made. |
| |
(8) | No regulations may be made under this section unless a draft of the |
| |
instrument containing them has been laid before, and approved by a |
| |
resolution of, the House of Commons.” |
| 25 |
6 (1) | Section 397C (meaning of “minority shareholder”) is amended as follows. |
| |
| |
(a) | for “397A” substitute “397AA”, and |
| |
(b) | omit “non-UK resident”. |
| |
(3) | After that subsection insert— |
| 30 |
“(1A) | Where the company has more than one class of share, the reference |
| |
in subsection (1) to the company’s issued share capital is to issued |
| |
share capital of the same class as the share in respect of which the |
| |
| |
| 35 |
“(8) | For the purposes of this section, shares are not of the same class if the |
| |
amounts paid up on them (otherwise than by way of premium) are |
| |
| |
7 | In section 398(1) (increase in amount or value of dividends where tax credit |
| |
available), for “397A(2)” substitute “397A(1)”. |
| 40 |
8 | In section 873 (orders and regulations), after subsection (3) insert— |
| |
“(4) | Further, subsection (2) does not apply if any other Parliamentary |
| |
procedure is expressly provided to apply in relation to the order or |
| |
| |
|
| |
|
| |
|
Consequential amendments of other Acts |
| |
| |
(a) | sections 8(1AA)(b) and 8A(1AA)(b) (personal return and trustee |
| |
return: amount payable by way of income tax), |
| |
(b) | section 9(1)(b) (self-assessment of amount payable by way of income |
| 5 |
| |
(c) | sections 12AA(1A)(b) and 12AB(5) (partnership return etc; amount |
| |
payable by way of income tax), and |
| |
(d) | sections 59A(8)(b) and 59B(2)(b) (payments of and on account of |
| |
| 10 |
| for “397A(2)” substitute “397A(1)” |
| |
| |
(a) | in section 824(4A)(b) (repayment supplements: individuals and |
| |
others), for “397A(2)” substitute “397A(1)”, and |
| |
(b) | in section 840ZA(3)(b) (meaning of “tax advantage”), after “397(1)” |
| 15 |
| |
11 | In section 171(2B) of FA 1993 (Lloyd’s underwriters etc: taxation of profits |
| |
and allowance of losses), for “397A(2)” substitute “397A(1)”. |
| |
12 | In Part 2 of Schedule 1 to ITEPA 2003 (definitions), in the entry for “tax |
| |
credit”, in the second column, after “397(1)” insert “or 397A(1)”. |
| 20 |
| |
(a) | in section 504(4)(b) (provisions that do not apply to income of |
| |
unauthorised unit trusts), |
| |
(b) | in sections 592(2), 593(2) and 594(2) (stock lending arrangements and |
| |
| 25 |
(c) | in section 989 (definitions), in the definition of “tax credit”, |
| |
| for “397A(2)” substitute “397A(1)”. |
| |
| |
14 (1) | The amendments made by this Schedule have effect in relation to— |
| |
(a) | qualifying distributions arising on or after 22 April 2009, |
| 30 |
(b) | cash dividends paid over to a person under paragraph 68(4) of |
| |
Schedule 2 of ITEPA 2003 on or after 22 April 2009, |
| |
(c) | dividends treated under section 407 of ITTOIA 2005 as paid to a |
| |
person on or after 22 April 2009, and |
| |
(d) | manufactured overseas dividends that are representative of a |
| 35 |
distribution within paragraph (a), (b) or (c). |
| |
| |
“manufactured overseas dividend” has the same meaning as in Chapter |
| |
2 of Part 11 of ITA 2007; |
| |
“qualifying distribution” has the meaning given in section 989 of ITA |
| 40 |
| |
|
| |
|
| |
|
| |
| |
Loan relationships: connected parties |
| |
| |
1 | Part 5 of CTA 2009 (loan relationships) is amended as follows. |
| |
| 5 |
2 (1) | Section 374 (late interest: connection between debtor and person standing in |
| |
position of creditor) is amended as follows. |
| |
| |
(a) | in paragraph (b), after “company” insert “(“C”)”, and |
| |
(b) | insert at the end (not as part of paragraph (b))— |
| 10 |
| “and the condition in subsection (1A) is met.” |
| |
(3) | After that subsection insert— |
| |
“(1A) | The condition is that C is— |
| |
(a) | resident for tax purposes in a non-qualifying territory at any |
| |
time in the actual accrual period, or |
| 15 |
(b) | effectively managed in a non-taxing non-qualifying territory |
| |
| |
| |
“(3) | For the purposes of this section— |
| |
(a) | “non-qualifying territory” has the meaning given by |
| 20 |
paragraph 5E of Schedule 28AA to ICTA, |
| |
(b) | a non-qualifying territory is “non-taxing” if companies are |
| |
not under its law liable to tax by reason of domicile, residence |
| |
or place of management, and |
| |
(c) | “resident for tax purposes” means liable, under the law of the |
| 25 |
non-qualifying territory, to tax there by reason of domicile, |
| |
residence or place of management.” |
| |
| |
3 (1) | Section 375 (late interest: loans to close companies by participators etc) is |
| |
| 30 |
(2) | In subsection (1), insert at the end (not as part of paragraph (b))— |
| |
| “and, where subsection (4A) applies, the non-qualifying territory |
| |
| |
(3) | In subsections (3)(b) and (4)(b), after “resident” insert “for tax purposes”. |
| |
(4) | After subsection (4) insert— |
| 35 |
“(4A) | This subsection applies if C is a company; and the non-qualifying |
| |
territory condition is that C is— |
| |
(a) | resident for tax purposes in a non-qualifying territory at any |
| |
time in the actual accrual period, or |
| |
|
| |
|
| |
|
(b) | effectively managed in a non-taxing non-qualifying territory |
| |
| |
4 (1) | Section 376 (interpretation of section 375) is amended as follows. |
| |
(2) | In subsection (5), for the definition of “resident” substitute— |
| |
““resident for tax purposes” means liable, under the law of the |
| 5 |
non-qualifying territory, to tax there by reason of domicile, |
| |
residence or place of management, and”. |
| |
| |
“(6) | For the purposes of section 375, a non-qualifying territory is “non- |
| |
taxing” if companies are not under its law liable to tax by reason of |
| 10 |
domicile, residence or place of management.” |
| |
| |
5 (1) | Section 377 (late interest: party to loan relationship having major interest in |
| |
other party) is amended as follows. |
| |
(2) | The existing provision becomes subsection (1) of that section. |
| 15 |
(3) | In that subsection, omit the “and” at the end of paragraph (a) and insert at |
| |
| |
(c) | the condition in subsection (2) is met.” |
| |
(4) | After that subsection insert— |
| |
“(2) | The condition is that C is— |
| 20 |
(a) | resident for tax purposes in a non-qualifying territory at any |
| |
time in the actual accrual period, or |
| |
(b) | effectively managed in a non-taxing non-qualifying territory |
| |
| |
(3) | For the purposes of this section— |
| 25 |
(a) | “non-qualifying territory” has the meaning given by |
| |
paragraph 5E of Schedule 28AA to ICTA, |
| |
(b) | a non-qualifying territory is “non-taxing” if companies are |
| |
not under its law liable to tax by reason of domicile, residence |
| |
or place of management, and |
| 30 |
(c) | “resident for tax purposes” means liable, under the law of the |
| |
non-qualifying territory, to tax there by reason of domicile, |
| |
residence or place of management.” |
| |
| |
6 (1) | Section 407 (postponement until redemption of debits for connected |
| 35 |
companies’ deeply discounted securities) is amended as follows. |
| |
| |
(a) | in paragraph (b), after “company” insert “(“the creditor company”)”, |
| |
(b) | omit the “and” at the end of paragraph (d), and |
| |
(c) | insert at the end “, and |
| 40 |
(f) | the condition in subsection (1A) is met.” |
| |
|
| |
|
| |
|
(3) | After that subsection insert— |
| |
“(1A) | The condition is that the creditor company is— |
| |
(a) | resident for tax purposes in a non-qualifying territory at any |
| |
time in the relevant period, or |
| |
(b) | effectively managed in a non-taxing non-qualifying territory |
| 5 |
| |
| |
“(6) | For the purposes of this section— |
| |
(a) | “non-qualifying territory” has the meaning given by |
| |
paragraph 5E of Schedule 28AA to ICTA, |
| 10 |
(b) | a non-qualifying territory is “non-taxing” if companies are |
| |
not under its law liable to tax by reason of domicile, residence |
| |
or place of management, and |
| |
(c) | “resident for tax purposes” means liable, under the law of the |
| |
non-qualifying territory, to tax there by reason of domicile, |
| 15 |
residence or place of management.” |
| |
| |
7 | Section 409(1) (postponement until redemption of debits for close |
| |
companies’ deeply discounted securities)— |
| |
(a) | in paragraph (b), after “there is a person” insert “(“C”)”, and |
| 20 |
(b) | insert at the end (not as part of paragraph (d))— |
| |
| “and, where it applies, the non-qualifying territory condition |
| |
| |
8 (1) | Section 410 (interpretation of section 409) is amended as follows. |
| |
(2) | In subsections (3)(b) and (4)(b), after “resident” insert “for tax purposes”. |
| 25 |
(3) | After subsection (4) insert— |
| |
“(4A) | The non-qualifying territory condition applies if C is a company; and |
| |
the non-qualifying territory condition is that C is— |
| |
(a) | resident for tax purposes in a non-qualifying territory at any |
| |
time in the relevant period, or |
| 30 |
(b) | effectively managed in a non-taxing non-qualifying territory |
| |
| |
(4) | In subsection (5), for the definition of “resident” substitute— |
| |
““resident for tax purposes” means liable, under the law of the |
| |
non-qualifying territory, to tax there by reason of domicile, |
| 35 |
residence or place of management, and”. |
| |
(5) | After that subsection insert— |
| |
“(5A) | For the purposes of this section, a non-qualifying territory is “non- |
| |
taxing” if companies are not under its law liable to tax by reason of |
| |
domicile, residence or place of management.” |
| 40 |
Commencement and transitional provision |
| |
9 (1) | The amendments made by this Schedule have effect where the actual accrual |
| |
period (within the meaning of Chapter 8 of Part 5 of CTA 2009), or the |
| |
|
| |
|
| |
|
relevant period (within the meaning of section 407(1) or 409(1) of that Act), |
| |
begins on or after 1 April 2009. |
| |
(2) | But a company may elect that any or all of the amendments made by this |
| |
Schedule do not have effect in relation to the first accounting period for |
| |
which they would otherwise apply. |
| 5 |
(3) | However, no election may be made under sub-paragraph (2) in relation to |
| |
an accounting period ending after 31 March 2011. |
| |
(4) | An election under sub-paragraph (2) must be made in the corporation tax |
| |
return for the accounting period in relation to which the election is to have |
| |
| 10 |
| |
| |
Foreign exchange: anti-avoidance |
| |
| |
1 | Chapter 3 of Part 5 of CTA 2009 (loan relationships: credits and debits to be |
| |
taken into account) is amended as follows. |
| 15 |
2 | In section 328 (exchange gains and losses), after subsection (4) insert— |
| |
“(4A) | Subsections (3) and (4) do not have effect to disapply subsection (1) |
| |
in the case of an exchange gain arising in an accounting period of a |
| |
| |
(a) | the exchange gain arises in relation to an asset or liability |
| 20 |
representing a loan relationship of the company, |
| |
(b) | the loan relationship is part of arrangements that have a one- |
| |
way exchange effect in relation to the company in the |
| |
accounting period (see section 328A), and |
| |
(c) | the arrangements cause the company or any other company |
| 25 |
to gain a tax advantage (other than a negligible tax |
| |
| |
3 | After that section insert— |
| |
“328A | Arrangements that have a “one-way exchange effect” |
| |
(1) | For the purposes of section 328, arrangements (“the arrangements”) |
| 30 |
have a “one-way exchange effect” in relation to a company |
| |
(“company A”) in an accounting period of that company (“the |
| |
relevant accounting period”) if the following two conditions are met. |
| |
(2) | The first condition is that the arrangements include an option or a |
| |
relevant contingent contract. |
| 35 |
(3) | The second condition is that, in relation to any day in the relevant |
| |
accounting period (“the test day”)— |
| |
(a) | amount A is not equal to amount B, and |
| |
(b) | the difference between amounts A and B is not the same as it |
| |
would be were those amounts calculated disregarding the |
| 40 |
| |
|
| |
|
| |
|
| |
(a) | the sum of the relevant exchange losses of company A, and of |
| |
each company connected with company A, that arise in |
| |
accounting periods of those companies that end on the test |
| |
| 5 |
(b) | the sum of the relevant exchange gains of those companies |
| |
that arise in such accounting periods. |
| |
| |
(a) | the sum of the relevant exchange gains of company A, and of |
| |
each company connected with company A, that would have |
| 10 |
arisen in accounting periods of those companies that end on |
| |
| |
(b) | the sum of the relevant exchange losses of those companies |
| |
that would have arisen in such accounting periods, |
| |
| if exchange gains and losses of those companies in those accounting |
| 15 |
periods were calculated in accordance with section 328D |
| |
(counterfactual currency movement assumptions). |
| |
(6) | For the purposes of subsections (4) and (5), an accounting period of |
| |
company A, or of a company connected with company A, in which |
| |
the test day falls and that does not end on that day is to be treated as |
| 20 |
if it did end on that day. |
| |
(7) | In this section “the matching rules” means— |
| |
(a) | section 328(3) and (4), and |
| |
(b) | section 606(3) and (4). |
| |
328B | Meaning of “relevant exchange gain” and “relevant exchange loss” |
| 25 |
(1) | For the purposes of section 328A an exchange gain or loss of a |
| |
company is “relevant” if— |
| |
(a) | it arises in relation to— |
| |
(i) | an asset or liability representing a loan relationship to |
| |
which the company is a party, or |
| 30 |
(ii) | a relevant contract to which the company is a party, |
| |
(b) | the loan relationship or relevant contract is part of the |
| |
| |
(c) | a debit or credit in respect of the exchange gain or loss is |
| |
required to be brought into account by the company for the |
| 35 |
purposes of corporation tax. |
| |
(2) | For the purposes of subsection (1)(c)— |
| |
(a) | the arrangements are to be treated as not having a one-way |
| |
exchange effect in relation to the company for the purposes of |
| |
section 328 or 606 (if they would otherwise have had such an |
| 40 |
| |
(b) | sections 441 and 442 (loan relationships: unallowable |
| |
purposes) and 690 to 692 (derivative contracts: unallowable |
| |
purposes) are to be disregarded. |
| |
328C | Meaning of “test day” |
| 45 |
(1) | This section makes provision for the purposes of section 328A as to |
| |
whether a day in an accounting period of company A is a “test day”. |
| |
|
| |
|