|
| |
|
(b) | for paragraph (a) substitute— |
| |
“(a) | on the provision of which the company has not |
| |
incurred qualifying expenditure for the purposes |
| |
| |
(aa) | of which the company is the lessor under a long |
| 5 |
| |
(3) | For sub-paragraph (2) substitute— |
| |
“(2) | For the purposes of paragraph 16 “PM” is the aggregate of the |
| |
amounts in sub-paragraph (2A), but subject to paragraph 17A. |
| |
| 10 |
(a) | the amounts (if any) which would be shown in respect of |
| |
plant or machinery in the appropriate balance sheet of the |
| |
relevant company drawn up as at the start of the relevant |
| |
| |
(b) | the amounts (if any) which would be shown in the |
| 15 |
appropriate balance sheet of the relevant company drawn |
| |
up as at the end of the relevant day in respect of relevant |
| |
transferred plant or machinery. |
| |
(2B) | For the purposes of sub-paragraph (2A)(b) plant or machinery is |
| |
“relevant transferred plant or machinery” if an amount in respect |
| 20 |
of it would be shown in the appropriate balance sheet of an |
| |
associated company drawn up as at the start of the relevant day.” |
| |
(4) | In sub-paragraph (3), for “this purpose” substitute “the purposes of this |
| |
| |
(5) | In sub-paragraph (7)(a), omit “as at the start of the relevant day”. |
| 25 |
| |
6 | After paragraph 17 insert— |
| |
“17A (1) | Where this paragraph applies in relation to any plant or |
| |
| |
(a) | any amount included in the aggregate mentioned in |
| 30 |
paragraph 17(2) in respect of the plant or machinery is to |
| |
be deducted from that aggregate, and |
| |
(b) | the market value of the plant or machinery as at the |
| |
relevant day is to be added to that aggregate (or, if that |
| |
aggregate is nil, is to constitute PM). |
| 35 |
(2) | This paragraph applies in relation to plant or machinery if |
| |
| |
| |
(a) | the plant or machinery falls within sub-paragraph (4) at |
| |
the start of the relevant day, or |
| 40 |
(b) | the plant or machinery falls within that sub-paragraph at |
| |
the end of the relevant day, having been acquired by the |
| |
relevant company from an associated company on that |
| |
| |
|
| |
|
| |
|
(4) | Plant or machinery falls within this sub-paragraph if the relevant |
| |
| |
(a) | is the lessee of the plant or machinery under a long funding |
| |
| |
(b) | is treated as the owner of the plant or machinery under |
| 5 |
section 67 of CAA 2001 (hire purchase and similar |
| |
| |
| |
(a) | the relevant company is the lessee of the plant or |
| |
machinery under a long funding operating lease at the |
| 10 |
start of the relevant day, or |
| |
(b) | the relevant company is the lessee of the plant or |
| |
machinery under such a lease at the end of the relevant day |
| |
and the plant or machinery was acquired by the relevant |
| |
company from an associated company on that day.” |
| 15 |
| |
7 | In paragraph 22(2) (migration), for “owned by the company” substitute “in |
| |
respect of which an amount would be shown in a balance sheet of the |
| |
company drawn up immediately before the relevant day in accordance with |
| |
generally accepted accounting practice”. |
| 20 |
| |
8 | Omit paragraph 40 (relationship of Schedule with section 228K of CAA |
| |
| |
| |
9 | In paragraph 41 (definitions), after sub-paragraph (5) insert— |
| 25 |
“(5A) | “Long funding finance lease”, “long funding lease” and “long |
| |
funding operating lease” have the same meaning as in Part 2 of |
| |
CAA 2001 (see section 70YI of that Act).” |
| |
| |
10 | In paragraph 42 (index), in the table, after the entry relating to “fixture” |
| 30 |
| |
| “long funding finance lease |
| | | | | | | | | | long funding operating lease |
| | | |
|
| 35 |
11 | In FA 2007, in Schedule 6, omit paragraph 2(3). |
| |
|
| |
|
| |
|
| |
12 | The amendments made by this Schedule have effect where the relevant day |
| |
is on or after 13 November 2008. |
| |
| |
| |
Leases of plant or machinery |
| 5 |
Disposal values: commencement of long funding finance leases |
| |
1 (1) | Section 61 of CAA 2001 (disposal events and disposal values) is amended as |
| |
| |
(2) | In the Table in subsection (2), for item 5A substitute— |
| |
| | | | | 10 | | | | | | | | | finance lease of the plant |
| | | | | | | | | | | | | | | | | | | | | 15 | | | | | | | | | | | | | | | | | | |
|
(3) | After subsection (5) insert— |
| |
“(5A) | In item 5A of the Table “qualifying lease payments” means the |
| 20 |
minimum payments under the lease (including any initial payment), |
| |
| |
(a) | so much of any payment as, under generally accepted |
| |
accounting practice, falls (or would fall) to be treated as the |
| |
gross return on investment in respect of the lease, |
| 25 |
(b) | so much of any payment as represents charges for services, |
| |
| |
(c) | so much of any payment as represents qualifying UK or |
| |
foreign tax (within the meaning of section 70YE) to be paid by |
| |
| 30 |
(4) | Omit subsections (6) to (9). |
| |
2 | Accordingly, in FA 2008, in Schedule 20, omit paragraph 4. |
| |
3 (1) | Section 25A of TCGA 1992 (long funding leases of plant or machinery: |
| |
deemed disposals) is amended as follows. |
| |
(2) | In subsection (2)(a), for “the value described in subsection (4)(a) or (b)” |
| 35 |
substitute “the relevant disposal value”. |
| |
(3) | For subsections (4) to (4D) substitute— |
| |
“(4) | “Relevant disposal value” means— |
| |
|
| |
|
| |
|
(a) | in relation to a long funding finance lease, the disposal value |
| |
described in item 5A of the table in section 61(2) of the Capital |
| |
Allowances Act (disposal values), and |
| |
(b) | in relation to a long funding operating lease, the disposal |
| |
value described in item 5B of that table.” |
| 5 |
(4) | In subsection (5), omit ““market value”,”. |
| |
4 | Accordingly, in FA 2008, in Schedule 20, omit paragraph 5. |
| |
5 (1) | The amendments made by paragraphs 1 and 2 have effect in relation to |
| |
leases whose inception is on or after 13 November 2008. |
| |
(2) | The amendments made by paragraphs 3 and 4 have effect in relation to |
| 10 |
leases whose inception is on or after 22 April 2009. |
| |
Disposal values: termination etc of long funding leases |
| |
6 | In section 66 of CAA 2001 (list of provisions outside Chapter 5 of Part 2 of |
| |
that Act about disposal values), in the list, insert at the appropriate place— |
| |
| | long funding leases: disposal |
| | 15 | | | events and disposal values”. |
| | |
|
7 (1) | Section 70E of CAA 2001 (long funding leases: disposal events and disposal |
| |
values) is amended as follows. |
| |
(2) | In subsection (1), for paragraph (c) substitute— |
| |
“(c) | a relevant event occurs.” |
| 20 |
(3) | After that subsection insert— |
| |
“(1A) | A relevant event occurs if— |
| |
(a) | the lease terminates, |
| |
(b) | the plant or machinery begins to be used wholly or partly for |
| |
purposes other than those of the qualifying activity, or |
| 25 |
(c) | the qualifying activity is permanently discontinued.” |
| |
(4) | In subsection (2)(a), for “termination of the lease” substitute “relevant |
| |
| |
(5) | For subsections (3) to (8) substitute— |
| |
“(2A) | The amount of the disposal value is—![equation: plus[id[plus[times[char[Q],char[E]],minus[times[char[Q],char[A]]]]],char[R]]](missing.gif) |
| 30 |
| |
QE is the person’s qualifying expenditure on the provision of |
| |
| |
QA is the qualifying amount (see subsections (2B) to (2E)); |
| |
R is any relevant rebate (see subsections (2F) and (2G)). |
| 35 |
(2B) | In the case of a long funding operating lease, “the qualifying |
| |
amount” means the aggregate amount of the reductions made under |
| |
section 502K of ICTA or section 148I of ITTOIA 2005 for periods of |
| |
account in which the person was the lessee. |
| |
|
| |
|
| |
|
(2C) | In the case of a long funding finance lease, “the qualifying amount” |
| |
| |
(a) | the payments made to the lessor by the person under the |
| |
lease (including any initial payment), and |
| |
(b) | the payments made to the lessor by the person under a |
| 5 |
guarantee of any residual amount (as defined in section |
| |
| |
| subject to subsection (2D). |
| |
(2D) | The following are excluded from the “qualifying amount” under |
| |
| 10 |
(a) | so much of any payment as, in accordance with generally |
| |
accepted accounting practice, falls (or would fall) to be |
| |
shown in the person’s accounts as finance charges in respect |
| |
| |
(b) | so much of any payment as represents charges for services, |
| 15 |
| |
(c) | so much of any payment as represents qualifying UK or |
| |
foreign tax (within the meaning of section 70YE) to be paid by |
| |
| |
(2E) | In the case of a long funding finance lease that is not a transaction at |
| 20 |
arm’s length, “the qualifying amount” includes only so much of the |
| |
amounts described in subsection (2C) as would reasonably be |
| |
expected to have been paid if the lease had been such a transaction. |
| |
(2F) | “Relevant rebate” means— |
| |
(a) | in a case falling within subsection (1A)(a), any amount |
| 25 |
calculated by reference to the termination value that is |
| |
payable for the benefit (directly or indirectly) of the person or |
| |
another person connected with that person, or |
| |
(b) | in a case falling within subsection (1A)(b) or (c), any such |
| |
amount that would have been so payable if, when the |
| 30 |
relevant event occurred, the lease had terminated and the |
| |
plant or machinery had been sold for its market value at that |
| |
| |
(2G) | In the case of a lease that is not a transaction at arm’s length, |
| |
“relevant rebate” includes any amount that would reasonably be |
| 35 |
expected to have fallen within subsection (2F) if the lease had been |
| |
| |
(2H) | The amount of the disposal value brought into account under this |
| |
section cannot be less than nil.” |
| |
(6) | In subsection (9), for “termination of the lease” substitute “relevant event”. |
| 40 |
8 | The amendments made by paragraphs 6 and 7 have effect in relation to cases |
| |
where the relevant event occurs on or after 13 November 2008. |
| |
Capital receipts treated as income |
| |
9 (1) | Section 785C of ICTA (plant and machinery leases: capital receipts to be |
| |
treated as income: interpretation) is amended as follows. |
| 45 |
(2) | In subsection (6), for “subsection (9)” substitute “subsections (9) and (9A)”. |
| |
|
| |
|
| |
|
| |
(a) | in paragraph (a), insert at the end “or”, and |
| |
(b) | omit paragraph (c) (and the “or” before it). |
| |
(4) | After subsection (9) insert— |
| |
| 5 |
(a) | a capital payment is an initial payment under a long-funding |
| |
| |
(b) | under section 61 of the Capital Allowances Act (disposal |
| |
events and disposal values), the commencement of the term |
| |
of the lease is an event that requires the lessor to bring a |
| 10 |
disposal value into account, |
| |
| the capital payment is only “relevant” to the extent that it exceeds the |
| |
| |
(9B) | “Commencement”, “disposal value”, “initial payment”, “long |
| |
funding lease” and “the term” have the same meaning as in Part 2 of |
| 15 |
the Capital Allowances Act.” |
| |
10 (1) | Section 809ZB of ITA 2007 (plant and machinery leases: capital receipts to be |
| |
treated as income: interpretation) is amended as follows. |
| |
(2) | In subsection (6), for “subsection (9)” substitute “subsections (9) and (9A)”. |
| |
| 20 |
(a) | in paragraph (a), insert at the end “or”, and |
| |
(b) | omit paragraph (c) (and the “or” before it). |
| |
(4) | After subsection (9) insert— |
| |
| |
(a) | a capital payment is an initial payment under a long-funding |
| 25 |
| |
(b) | under section 61 of CAA 2001 (disposal events and disposal |
| |
values), the commencement of the term of the lease is an |
| |
event that requires the lessor to bring a disposal value into |
| |
| 30 |
| the capital payment is only “relevant” to the extent that it exceeds the |
| |
| |
(9B) | “Commencement”, “disposal value”, “initial payment”, “long |
| |
funding lease” and “the term” have the same meaning as in Part 2 of |
| |
| 35 |
11 (1) | The amendments made by paragraphs 9 and 10 have effect in relation to |
| |
payments made under leases whose inception is on or after 13 November |
| |
2008 (subject to sub-paragraph (2)). |
| |
(2) | In relation to payments made under leases whose inception is before 22 |
| |
April 2009, section 785C(9A) of ICTA and section 809ZB(9A) of ITA 2007 |
| 40 |
(inserted by this Schedule) have effect as if, for the words following |
| |
paragraph (b), there were substituted “the capital payment is not |
| |
| |
|
| |
|
| |
|
Transfer and long funding leaseback: restrictions on lessee’s allowances |
| |
12 | In section 51A(10) of CAA 2001 (annual investment allowances), insert at the |
| |
| |
| “section 70DA(2) (transfer and long funding leaseback: no |
| |
annual investment allowance for lessee),”. |
| 5 |
13 | In section 52(5) of CAA 2001 (first-year allowances), insert at the appropriate |
| |
| |
| “section 70DA(2) (transfer and long funding leaseback: no |
| |
first-year allowance for lessee),”. |
| |
14 | In section 57(3) of CAA 2001 (available qualifying expenditure), insert at the |
| 10 |
| |
| “section 70DA (transfer and long funding leaseback);”. |
| |
15 | In CAA 2001, after section 70D insert— |
| |
“70DA | Transfer and long funding leaseback: restrictions on lessee’s |
| |
| 15 |
(1) | This section applies where— |
| |
(a) | a person (“S”) transfers plant or machinery to another person |
| |
| |
(b) | at any time after the date of the transfer, the plant or |
| |
machinery is available to be used by S, or a person (other than |
| 20 |
B) who is connected with S (“CS”), under a plant or |
| |
| |
(c) | that lease is a long funding lease. |
| |
(2) | No annual investment allowance or first-year allowance is to be |
| |
made in respect of the expenditure of S or CS under the lease. |
| 25 |
(3) | The amount, if any, by which E exceeds D is to be left out of account |
| |
in determining the available qualifying expenditure of S or CS. |
| |
(4) | E is the capital expenditure of S or CS on the provision of the plant or |
| |
machinery under the long funding lease. |
| |
(5) | If S is required to bring a disposal value into account under this Part |
| 30 |
because of the transfer referred to in subsection (1)(a), D is that |
| |
| |
(6) | Otherwise, D is whichever of the following is the smallest— |
| |
(a) | the market value of the plant or machinery; |
| |
(b) | if S incurred capital expenditure on the provision of the plant |
| 35 |
or machinery before the transfer referred to in subsection |
| |
(1)(a), the amount of that expenditure; |
| |
(c) | if a person connected with S incurred capital expenditure on |
| |
the provision of the plant or machinery before that transfer, |
| |
the amount of that expenditure. |
| 40 |
(7) | Section 70Y(3) applies to references in this section to a transfer of |
| |
plant or machinery by a person. |
| |
(8) | For the purposes of this section, a transfer involving the grant of a |
| |
lease takes place on the commencement of the term of the lease.” |
| |
|
| |
|