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Finance Bill
Schedule 37 — Stock lending: stamp taxes in the event of insolvency
Part 2 — Stamp duty reserve tax

318

 

3     (1)  

In consequence of the amendment made by paragraph 2, section 88(1C)

(disregard of certain instruments falling within section 80C(1)) is amended

as follows.

      (2)  

At the beginning of the words after paragraph (c) insert “then, if section 80D

does not apply,”.

5

Part 2

Stamp duty reserve tax

4          

Part 4 of FA 1986 (stamp duty reserve tax) is amended as follows.

5          

After section 89AA insert—

“89AB   

Section 87: exception for repurchases and stock lending in case of

10

insolvency

(1)   

This section applies where—

(a)   

P and Q have entered into an arrangement falling within

section 89AA(1),

(b)   

the only reason that the conditions in subsection (2A) or (3) of

15

that section are not met is that chargeable securities of the

same kind and amount as those transferred to P or P’s

nominee are not transferred to Q or Q’s nominee, and

(c)   

the conditions in subsection (2) below are met.

(2)   

The conditions in this subsection are that—

20

(a)   

P and Q are not connected persons within the meaning of

section 839 of the Taxes Act 1988,

(b)   

after Q has transferred securities under the arrangement,

either P or Q becomes insolvent,

(c)   

it becomes apparent (whether before or after the insolvency

25

occurs) that, as a result of the insolvency, securities will not

be transferred to Q or Q’s nominee in accordance with the

arrangement.

(3)   

Section 87 does not apply as regards an agreement to transfer

chargeable securities to P or P’s nominee, or Q or Q’s nominee, in

30

accordance with the arrangement.

(4)   

Subsections (5) and (6) apply if—

(a)   

the party who does not become insolvent (“the solvent

party”) or the solvent party’s nominee acquires replacement

securities, and

35

(b)   

the replacement securities are acquired before the end of the

period of 30 days beginning with the day on which the

insolvency occurs (“the insolvency date”).

(5)   

Where collateral is provided under the arrangement (or under

arrangements of which that arrangement forms part), section 87 does

40

not apply as regards any agreement to transfer to the solvent party

or the solvent party’s nominee—

(a)   

replacement securities acquired using the collateral (whether

directly or indirectly), or

 
 

Finance Bill
Schedule 37 — Stock lending: stamp taxes in the event of insolvency
Part 2 — Stamp duty reserve tax

319

 

(b)   

where the solvent party uses the whole of the value of the

collateral to acquire replacement securities, any further

replacement securities.

(6)   

Where no collateral is provided as mentioned in subsection (5),

section 87 does not apply as regards any agreement to transfer

5

replacement securities to the solvent party or the solvent party’s

nominee.

(7)   

Subsections (5) and (6) may apply as regards more than one

agreement (and where those subsections apply as regards more than

one agreement, the agreements may be with different persons).

10

(8)   

But those subsections apply only as regards replacement securities

up to the amount of securities which will not be transferred as a

result of the insolvency.

(9)   

For the purposes of this section, a person becomes insolvent—

(a)   

if a company voluntary arrangement takes effect under Part

15

1 of the Insolvency Act 1986,

(b)   

if an administration application (within the meaning of

Schedule B1 to that Act) is made or a receiver or manager, or

an administrative receiver, is appointed,

(c)   

on the commencement of a creditor’s voluntary winding up

20

(within the meaning of Part 4 of that Act) or a winding up by

the court under Chapter 6 of that Part,

(d)   

if an individual voluntary arrangement takes effect under

Part 8 of that Act,

(e)   

on the presentation of a bankruptcy petition (within the

25

meaning of Part 9 of that Act),

(f)   

if a compromise or arrangement takes effect under Part 26 of

the Companies Act 2006,

(g)   

if a bank insolvency order takes effect under Part 2 of the

Banking Act 2009,

30

(h)   

if a bank administration order takes effect under Part 3 of that

Act, or

(i)   

on the occurrence of any corresponding event which has

effect under or as a result of the law of Scotland or Northern

Ireland or a country or territory outside the United Kingdom.

35

(10)   

In this section—

“collateral” means an amount of money or other property

which is payable to, or made available for the benefit of, a

party to an arrangement or that party’s nominee for the

purpose of securing the discharge of the requirement to

40

transfer securities to that party or the nominee;

“replacement securities”, in the event of a party to an

arrangement becoming insolvent, are chargeable securities of

the same kind as the securities which will not be transferred

to the other party or that party’s nominee as a result of the

45

insolvency.”

 
 

Finance Bill
Schedule 38 — Capital allowances for oil decommissioning expenditure

320

 

Schedule 38

Section 83

 

Capital allowances for oil decommissioning expenditure

1          

CAA 2001 is amended as follows.

2     (1)  

Section 163 (meaning of “general decommissioning expenditure”) is

amended as follows.

5

      (2)  

In subsection (1), for “(3) and (4)” substitute “(3) to (4)”.

      (3)  

After subsection (3) insert—

“(3A)   

The expenditure must have been incurred wholly or substantially in

complying with—

(a)   

an approved abandonment programme,

10

(b)   

a condition to which the approval of an abandonment

programme is subject, or

(c)   

a condition imposed by the Secretary of State, or an

agreement made with the Secretary of State—

(i)   

before the approval of an abandonment programme,

15

and

(ii)   

in relation to the decommissioning of the plant or

machinery.”

      (4)  

In subsection (5)(b), insert at the beginning ““abandonment programme”,

“approval” and “approved” (in relation to an abandonment programme),”.

20

3     (1)  

Section 164 (general decommissioning expenditure incurred before

cessation of ring fence trade) is amended as follows.

      (2)  

For subsection (1) substitute—

“(1)   

A person (“R”) carrying on a ring fence trade may elect to have a

special allowance made to R for a chargeable period (the “relevant

25

chargeable period”) if conditions A and B are met.

(1A)   

Condition A is that one or more of these paragraphs applies—

(a)   

R incurs general decommissioning expenditure in the

relevant chargeable period in respect of decommissioning

carried out in that period;

30

(b)   

R incurs general decommissioning expenditure in the

relevant chargeable period in respect of decommissioning

carried out in a previous chargeable period;

(c)   

R incurred general decommissioning expenditure in a

previous chargeable period in respect of decommissioning

35

that has not been carried out until the relevant chargeable

period.

(1B)   

Condition B is that the plant or machinery concerned has been

brought into use for the purposes of the ring fence trade.”

      (3)  

In subsection (2)(a), for the words from “the chargeable period” to the end

40

substitute “the relevant chargeable period, and”.

      (4)  

In subsection (3)—

(a)   

in paragraph (a), omit the “and” at the end, and

 
 

Finance Bill
Schedule 38 — Capital allowances for oil decommissioning expenditure

321

 

(b)   

after that paragraph insert—

“(aa)   

the chargeable period in which the expenditure was

incurred,

(ab)   

the decommissioning to which the expenditure

relates,

5

(ac)   

the chargeable period in which the decommissioning

was carried out, and”.

      (5)  

In subsection (4)(a), for the words from “the chargeable period” to the end

substitute “the relevant chargeable period, and”.

      (6)  

In subsection (5), for the words from “a chargeable period” to the end,

10

substitute “the relevant chargeable period is equal to the amount of the

general decommissioning expenditure to which the election relates.”

      (7)  

After that subsection insert—

“(5A)   

But subsection (5) is subject to subsections (5B) and (6).

(5B)   

If an amount of general decommissioning expenditure to which the

15

election relates is disproportionate to the relevant decommissioning

carried out in the specified decommissioning period then, for the

purposes of this section, the election is to be taken to specify only the

allowable expenditure.

(5C)   

The application of subsection (5B) to an amount of general

20

decommissioning expenditure does not prevent a person from

making an election under this section for a subsequent chargeable

period specifying the non-allowable expenditure.

(5D)   

In subsections (5B) and (5C)—

“allowable expenditure”, in relation to general

25

decommissioning expenditure, means the amount of the

expenditure that is proportionate to the relevant

decommissioning carried out in the specified

decommissioning period;

“non-allowable expenditure”, in relation to general

30

decommissioning expenditure, means so much of that

expenditure as is not allowable expenditure;

“relevant decommissioning”, in relation to general

decommissioning expenditure, means the decommissioning

to which the expenditure relates;

35

“specified decommissioning period”, in relation to relevant

decommissioning, means the chargeable period specified in

the election as the period in which the decommissioning was

carried out;

“specified expenditure period”, in relation to general

40

decommissioning expenditure, means the chargeable period

specified in the election as the period in which the

expenditure was incurred.”

4     (1)  

Section 165 (general decommissioning expenditure after ceasing ring fence

trade) is amended as follows.

45

      (2)  

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

“(b)   

the decommissioning condition is met in relation to a

notional accounting period, and”.

 
 

Finance Bill
Schedule 38 — Capital allowances for oil decommissioning expenditure

322

 

      (3)  

After that subsection insert—

“(1A)   

The decommissioning condition is met in relation to a notional

accounting period (the “relevant period”) if one or more of these

paragraphs applies—

(a)   

the former trader incurs general decommissioning

5

expenditure in the relevant period in respect of

decommissioning carried out in that period,

(b)   

the former trader incurs general decommissioning

expenditure in the relevant period in respect of

decommissioning carried out in—

10

(i)   

a previous notional accounting period, or

(ii)   

a chargeable period falling before the first notional

accounting period, and

(c)   

the former trader incurred general decommissioning

expenditure in—

15

(i)   

a previous notional accounting period, or

(ii)   

a chargeable period falling before the first notional

accounting period,

   

in respect of decommissioning that has not been carried out

until the relevant period.

20

(1B)   

“Notional accounting period” means each of the following periods—

(a)   

the period that—

(i)   

begins with the day following the last day on which

the former trader carried on the ring fence trade, and

(ii)   

ends with the day on which the first termination

25

event subsequently occurs, and

(b)   

each period that—

(i)   

begins with the day following the last day of a period

determined under paragraph (a) or this paragraph,

and

30

(ii)   

ends with the day on which the first termination

event subsequently occurs;

   

but there are to be no notional accounting periods after the end of the

post-cessation period.

(1C)   

“Termination event”, in relation to a notional accounting period,

35

means each of the following—

(a)   

the end of the period of 12 months beginning with the first

day of the notional accounting period,

(b)   

the occurrence of an accounting date of the former trader or,

if there is a period for which the former trader does not make

40

up accounts, the end of that period (but see subsections (6A)

and (6B)), and

(c)   

the end of the post-cessation period.”

      (4)  

In subsection (3)—

(a)   

after “applies” insert “in relation to a notional accounting period”,

45

and

(b)   

in paragraph (a), after “relevant decommissioning cost” insert “for

that period, or the aggregate of all the relevant decommissioning

costs for that period,”.

 
 

Finance Bill
Schedule 38 — Capital allowances for oil decommissioning expenditure

323

 

      (5)  

In subsection (4), for the definition of “the relevant decommissioning cost”

substitute—

““relevant decommissioning cost”, for a notional accounting

period, means the amount by which general

decommissioning expenditure falling within paragraph (a),

5

(b) or (c) of subsection (1A) in relation to that period exceeds

any amounts received before or during that period for the

remains of any plant or machinery on whose demolition any

of the general decommissioning expenditure was incurred.”

      (6)  

After subsection (4A) insert—

10

“(4B)   

If an amount of general decommissioning expenditure is

disproportionate to the relevant decommissioning carried out in the

decommissioning period then, for the purposes of this section, only

the allowable expenditure is to be taken to have been incurred in the

expenditure period.

15

(4C)   

The application of subsection (4B) to an amount of general

decommissioning expenditure does not prevent the non-allowable

expenditure from being taken into account under this section in

relation to a subsequent notional accounting period.

(4D)   

In subsections (4B) and (4C)—

20

“allowable expenditure”, in relation to general

decommissioning expenditure, means the amount of the

expenditure that is proportionate to the relevant

decommissioning carried out in the decommissioning

period;

25

“decommissioning period”, in relation to relevant

decommissioning, means the notional accounting period or

chargeable period in which the decommissioning was carried

out;

“expenditure period”, in relation to general decommissioning

30

expenditure, means the notional accounting period or

chargeable period in which the expenditure was incurred;

“non-allowable expenditure”, in relation to general

decommissioning expenditure, means so much of that

expenditure as is not allowable expenditure;

35

“relevant decommissioning”, in relation to general

decommissioning expenditure, means the decommissioning

to which the expenditure relates.”

      (7)  

After subsection (6) insert—

“(6A)   

If the former trader—

40

(a)   

carries on more than one trade,

(b)   

makes up accounts of any of them to different dates, and

(c)   

does not make up general accounts for the whole of the

company’s activities,

   

subsection (1C)(b) applies with reference to the accounting date of

45

such one of the trades as the former trader may determine.

(6B)   

If the Commissioners for Her Majesty’s Revenue and Customs are of

the opinion, on reasonable grounds, that a date determined by the

former trader for the purposes of subsection (6A) is inappropriate,

 
 

Finance Bill
Schedule 39 — PRT: blended oil

324

 

the Commissioners may by notice direct that the accounting date of

such other of the trades referred to in that subsection as appears to

the Commissioners to be appropriate is to be used instead.”

5          

The amendments made by this Schedule have effect in relation to

expenditure incurred on or after 22 April 2009.

5

Schedule 39

Section 84

 

PRT: blended oil

1          

Part 5 of FA 1987 (oil taxation) is amended as follows.

2          

For section 63 (blends of oil from two or more fields) substitute—

“63     

Blends of oil from two or more fields

10

(1)   

This section applies if, at any time before its disposal or relevant

appropriation, oil won from an oil field (“the relevant field”) in a

chargeable period (“the relevant period”) is mixed with oil won from

one or more other oil fields.

(2)   

A relevant participator’s share of oil won from the relevant field in

15

the relevant period is to be taken to be the amount of the blended oil

that it is just and reasonable (for the purposes of the oil taxation

legislation) to allocate to the participator in respect of the relevant

period.

(3)   

In making the allocation regard must be had (in particular) to the

20

quantity and quality of the oil derived from each of the originating

fields.

(4)   

If the participators in the originating fields select a method for

making the allocation, that method is to be used to determine that

allocation.

25

(5)   

But that is subject to Schedule 12.

(6)   

If the participators in the originating fields fail to select a method for

making the allocation, HMRC may select a method.

(7)   

In a case where only some oil won from the relevant field in the

relevant period is, before its disposal or relevant appropriation,

30

mixed with oil won from one or more other fields, subsection (2) has

effect for the purpose of determining the amount of the blended oil

that is to be taken to be included in a relevant participator’s share of

oil won from the relevant field.

(8)   

Schedule 12 contains provision supplementing this section.

35

(9)   

In this section and Schedule 12—

“blended oil” means oil that consists of oil from two or more oil

fields that has been mixed;

“foreign field” means an area which is a foreign field for the

purposes of section 12 of the Oil Taxation Act 1983;

40

 
 

 
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