|
| |
| |
| |
(a) | a partnership holds an asset (“the security”) as a partnership |
| |
asset at any time before the arrangement is made, |
| |
(b) | under the arrangement the partnership receives money or |
| |
another asset (“the advance”) from another person (“the |
| 5 |
| |
(c) | there is a relevant change in relation to the partnership (see |
| |
| |
(d) | under the arrangement the share in the partnership’s profits |
| |
of the person involved in the change is determined by |
| 10 |
reference (wholly or partly) to payments in respect of the |
| |
| |
(3) | Condition B is that in accordance with generally accepted accounting |
| |
| |
(a) | the partnership’s accounts for the period in which the |
| 15 |
advance is received record a financial liability in respect of it, |
| |
| |
(b) | the payments reduce the amount of the financial liability. |
| |
(4) | The reference to the partnership’s accounts includes a reference to |
| |
the accounts of any person who is a member of the partnership |
| 20 |
immediately before the arrangement is made. |
| |
809BZK | Certain tax consequences not to have effect |
| |
(1) | This section applies if— |
| |
(a) | there is a type 3 finance arrangement, and |
| |
(b) | any relevant change in relation to the partnership would |
| 25 |
have the relevant effect (ignoring this section). |
| |
(2) | The relevant effect is that— |
| |
(a) | an amount of income on which a relevant member would |
| |
otherwise have been charged to income tax is not so charged, |
| |
(b) | an amount which would otherwise have been brought into |
| 30 |
account in calculating for income tax purposes any income of |
| |
a relevant member is not so brought into account, or |
| |
(c) | a relevant member becomes entitled to an income deduction. |
| |
(3) | A relevant member is a person who— |
| |
(a) | was a member of the partnership immediately before the |
| 35 |
relevant change in relation to it occurred, and |
| |
| |
(4) | If this section applies— |
| |
(a) | Part 9 of ITTOIA 2005 (partnerships) is to have effect in |
| |
relation to any relevant member as if the relevant change in |
| 40 |
relation to the partnership had not occurred, and |
| |
(b) | accordingly the finance arrangement is not to have the |
| |
| |
(5) | In deciding whether subsection (1)(b) is met assume that amounts of |
| |
income equal to the payments mentioned in section 809BZJ(2)(d) |
| 45 |
were payable to the partnership before the relevant change in |
| |
| |
| |
| |
|
| |
| |
(6) | An income deduction is— |
| |
(a) | a deduction in calculating income for income tax purposes, or |
| |
(b) | a deduction from total income. |
| |
| |
(1) | This section applies if— |
| 5 |
(a) | there is a type 3 finance arrangement, |
| |
(b) | a relevant member is a person within the charge to income |
| |
| |
(c) | in accordance with generally accepted accounting practice |
| |
the partnership’s accounts record an amount as a finance |
| 10 |
charge in respect of the advance. |
| |
(2) | For income tax purposes the relevant member may treat the amount |
| |
as interest payable by the partnership on a loan. |
| |
(3) | The reference in subsection (1) to the partnership’s accounts includes |
| |
a reference to the accounts of any relevant member. |
| 15 |
(4) | If an amount is treated as interest (“deemed interest”) under |
| |
subsection (2), to find out when it is paid— |
| |
(a) | treat the payments mentioned in section 809BZJ(2)(d) as |
| |
consisting of amounts for repaying the advance and amounts |
| |
(“the interest elements”) in respect of interest on the advance, |
| 20 |
(b) | treat the interest elements of the payments as paid when the |
| |
| |
(c) | treat the deemed interest as paid at the times when the |
| |
interest elements are treated as paid. |
| |
(5) | A relevant member is a person who— |
| 25 |
(a) | was a member of the partnership immediately before the |
| |
relevant change in relation to it occurred, and |
| |
| |
5 | After section 809BZL insert— |
| |
| 30 |
809BZM | Exceptions: preliminary |
| |
(1) | Sections 809BZN to 809BZP make provision for finance arrangement |
| |
codes not to apply in certain circumstances. |
| |
(2) | For the purposes of those sections each of the following groups of |
| |
provisions is a finance arrangement code— |
| 35 |
(a) | sections 809BZA to 809BZE (type 1 arrangements), |
| |
(b) | sections 809BZF to 809BZI (type 2 arrangements), and |
| |
(c) | sections 809BZJ to 809BZL (type 3 arrangements). |
| |
| |
(1) | A finance arrangement code does not apply if the whole of the |
| 40 |
advance under the arrangement— |
| |
(a) | is charged to tax on a relevant person as an amount of |
| |
| |
| |
| |
|
| |
| |
(b) | is brought into account in calculating for tax purposes any |
| |
income of a relevant person, or |
| |
(c) | is brought into account for the purposes of any provision of |
| |
CAA 2001 as a disposal receipt, or proceeds from a balancing |
| |
event or disposal event, of a relevant person. |
| 5 |
(2) | Treat subsection (1)(c) as not met if— |
| |
(a) | the receipt gives rise, or proceeds give rise, to a balancing |
| |
| |
(b) | the amount of the balancing charge is limited by any |
| |
| 10 |
(3) | A finance arrangement code does not apply if at all times the whole |
| |
of the advance under the arrangement— |
| |
(a) | is a debtor relationship of a relevant person for the purposes |
| |
of Part 5 of CTA 2009 (loan relationships), or |
| |
(b) | would be a debtor relationship of a relevant person for those |
| 15 |
purposes if that person were a company within the charge to |
| |
| |
(4) | In subsection (3) references to a debtor relationship do not include |
| |
references to a relationship to which Chapter 2 of Part 6 of CTA 2009 |
| |
applies (relevant non-lending relationships). |
| 20 |
(5) | A finance arrangement code does not apply so far as— |
| |
(a) | section 263A of TCGA 1992 applies in relation to the |
| |
arrangement (agreements for sale and repurchase of |
| |
| |
(b) | Schedule 13 to FA 2007 or Chapter 10 of Part 6 of CTA 2009 |
| 25 |
applies in relation to the arrangement (sale and repurchase of |
| |
| |
(6) | A finance arrangement code does not apply so far as Part 10A of this |
| |
Act, Chapter 4 of Part 4 of TCGA 1992 or Chapter 6 of Part 6 of CTA |
| |
2009 has effect in relation to the arrangement (alternative finance |
| 30 |
| |
(7) | A finance arrangement code does not apply so far as the security is |
| |
plant or machinery which is the subject of a sale and finance |
| |
| |
(8) | For the purposes of subsection (7) apply section 221 of CAA 2001 to |
| 35 |
determine whether plant or machinery is the subject of a sale and |
| |
| |
(9) | A finance arrangement code does not apply so far as sections 228B |
| |
and 228C of CAA 2001 (finance leaseback) apply in relation to the |
| |
| 40 |
(10) | Section 809BZO defines a relevant person for the purposes of this |
| |
| |
809BZO | Exceptions: relevant person |
| |
(1) | This section defines a relevant person for the purposes of section |
| |
| 45 |
| |
| |
|
| |
| |
(2) | If (apart from sections 809BZN and 809BZP) sections 809BZA to |
| |
809BZE would apply, each of the following is a relevant person— |
| |
| |
(b) | a person connected with the borrower or (if the borrower is a |
| |
partnership) a member of the partnership. |
| 5 |
(3) | If (apart from sections 809BZN and 809BZP) sections 809BZF to |
| |
809BZI would apply, the transferor is a relevant person. |
| |
(4) | If (apart from sections 809BZN and 809BZP) sections 809BZJ to |
| |
809BZL would apply, a relevant member as there defined is a |
| |
| 10 |
(5) | For the purposes of subsection (2)(b) the persons connected with the |
| |
borrower include any persons who under section 993 (meaning of |
| |
“connected”) are connected with the borrower. |
| |
809BZP | Power to make further exceptions |
| |
(1) | The Treasury may make regulations prescribing other circumstances |
| 15 |
in which a finance arrangement code is not to apply. |
| |
(2) | The regulations may amend sections 809BZN and 809BZO. |
| |
(3) | The power to make regulations includes— |
| |
(a) | power to make provision that has effect in relation to times |
| |
before the making of the regulations (but not times before 6 |
| 20 |
| |
(b) | power to make different provision for different cases or |
| |
| |
(c) | power to make incidental, supplemental, consequential and |
| |
transitional provision and savings.” |
| 25 |
6 | After section 809BZP insert— |
| |
| |
| |
(1) | This section applies for the purposes of this Chapter. |
| |
(2) | A reference to the accounts of a person includes (if the person is a |
| 30 |
company) a reference to the consolidated group accounts of a group |
| |
of companies of which it is a member. |
| |
(3) | In determining whether accounts record an amount as a financial |
| |
liability in respect of an advance, assume that the period in which the |
| |
advance is received ended immediately after the receipt of the |
| 35 |
| |
(4) | If a person does not draw up accounts in accordance with generally |
| |
accepted accounting practice, assume that the person drew up the |
| |
accounts in accordance with that practice. |
| |
| 40 |
| A reference in this Chapter to an arrangement includes a reference to |
| |
an agreement or understanding (whether or not legally enforceable). |
| |
| |
| |
|
