Taxation (International and Other Provisions) Bill

House of Commons

Session 2009 - 10
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Other Bills before Parliament

Taxation (International and Other Provisions) Bill

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 10 — Relocation of sections 130 to 132 of FA 1988
326

“controlling director”, in relation to a company, means a
director of the company who has control of the company,
“group” has the meaning which would be given by section 170
of the 1992 Act if in that section for references to 75 per cent
subsidiaries there were substituted references to 51 per cent
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subsidiaries, and
“pre-migration year” means the period of 12 months ending
with the time when the migrating company ceases to be
resident in the United Kingdom.
109F
Interpretation of sections 109B to 109E
10
(1)
In sections 109B to 109E, any reference to the tax payable by a
company includes a reference to—
(a)
any amount which the company is liable to pay under section
77C (territorial extension of charge to tax),
(b)
any amount of tax which the company is liable to pay under
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regulations made under section 684 of ITEPA 2003 (PAYE),
(c)
any amount which the company is liable to pay under
sections 61 and 62(1)(a) of the Finance Act 2004 (sub-
contractors in the construction industry),
(d)
any income tax which the company is liable to pay in respect
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of payments within section 946 of ITA 2007 (collection of tax:
deposit-takers, building societies and certain companies),
and
(e)
any amount representing income tax which the company is
liable to pay under section 966 of ITA 2007 (entertainers and
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sportsmen).
(2)
In sections 109B to 109E read in accordance with subsection (1), any
reference to the tax payable by a company in respect of periods
beginning before any particular time includes a reference to any
interest—
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(a)
on the tax so payable, or
(b)
on tax paid by the company in respect of such periods,

which the company is liable to pay in respect of periods beginning
before or after that time.
(3)
In sections 109B to 109E “director”, in relation to a company, is to be
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read in accordance with the following provisions—
(a)
section 67(1) and (2) of ITEPA 2003, and
(b)
section 452 of CTA 2010.
(4)
In sections 109B to 109E, any reference to a person having control of
a company is to be read in accordance with sections 450 and 451 of
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CTA 2010.”
Finance Act 1988 (c. 39)
55
FA 1988 is amended as follows.
56
Omit sections 130 to 132 (company migration).

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 12 — Relocation of Schedule 12 to F(No.2)A 1992 so far as applying for income tax purposes
327

Part 11
Relocation of section 151 of FA 1989
Taxes Management Act 1970 (c. 9)
57
TMA 1970 is amended as follows.
58
After section 30A insert—
5
“30AA
Assessing income tax on trustees and personal representatives
(1)
Income tax charged on income arising to trustees of a settlement may
be assessed and charged on, and in the name of, any one or more of
the assessable trustees.
(2)
Income tax charged on income arising to the personal
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representatives of a deceased person may be assessed and charged
on, and in the name of, any one or more of the assessable
representatives.
(3)
In subsection (1) “the assessable trustees” means—
(a)
the trustees of the settlement in the tax year in which the
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income arises, and
(b)
any subsequent trustees of the settlement.
(4)
In subsection (2) “the assessable representatives” means—
(a)
the persons who, in the tax year in which the income arises,
are personal representatives of the deceased person, and
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(b)
any subsequent personal representatives of the deceased
person.”
Finance Act 1989 (c. 26)
59
FA 1989 is amended as follows.
60
Omit section 151 (assessment of trustees and personal representatives).
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Income Tax (Trading and Other Income) Act 2005 (c. 5)
61
ITTOIA 2005 is amended as follows.
62
In Schedule 2 (transitionals and savings etc) omit paragraph 91
(interpretation of section 151(2) of FA 1989).
Part 12
30
Relocation of Schedule 12 to F(No.2)A 1992 so far as applying for income tax
purposes
Finance (No.2) Act 1992 (c. 48)
63
F(No.2)A 1992 is amended as follows.
64
Omit section 66 (which introduces Schedule 12).
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65
Omit Schedule 12 (banks etc in compulsory liquidation).

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 12 — Relocation of Schedule 12 to F(No.2)A 1992 so far as applying for income tax purposes
328

Income Tax (Trading and Other Income) Act 2005 (c. 5)
66
ITTOIA 2005 is amended as follows.
67
In section 369 (charge to tax on interest) after subsection (4) insert—
“(5)
See also Chapter 3A of Part 14 of ITA 2007 (which provides for the
receipts of certain types of company being wound up to be charged
5
to income tax under that Chapter instead of under any other
provision that would otherwise apply).”
Income Tax Act 2007 (c. 3)
68
ITA 2007 is amended as follows.
69
In section 2(14) (overview of Act: Part 14) after paragraph (c) insert “, and
10
(d)
imposition of the charge to income tax on the receipts of
certain types of company being wound up (Chapter 3A).”
70
In section 3(2) (overview of charges to income tax)—
(a)
omit the “and” immediately before paragraph (e), and
(b)
after paragraph (e) insert “, and
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(f)
Chapter 3A of Part 14 of this Act (banks etc in
compulsory liquidation).”
71
After section 837 insert—
“Chapter 3A
Banks etc in compulsory liquidation
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837A
Overview of Chapter
(1)
This Chapter provides for the receipts of certain types of company
being wound up to be charged to income tax.
(2)
For provision charging the receipts of such companies to corporation
tax, see Chapter 6 of Part 13 of CTA 2010.
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837B
Application of Chapter
(1)
This Chapter applies if—
(a)
a company is being or has been wound up by the court in the
United Kingdom, and
(b)
conditions A, B and C are met.
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(2)
Condition A is that the company was, at any time within the period
mentioned in subsection (5), lawfully carrying on a business of
accepting deposits as—
(a)
a person of the kind mentioned in paragraph (b) of the
definition of “bank” in section 991(2) (persons with
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permission under Part 4 of FISMA 2000 to accept deposits), or
(b)
a permitted EEA credit institution.
(3)
Condition B is that the company has permanently ceased to carry on
the trade that included the business of accepting deposits (the
“deposit-taking trade”).
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Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 12 — Relocation of Schedule 12 to F(No.2)A 1992 so far as applying for income tax purposes
329

(4)
Condition C is that the company is insolvent and—
(a)
was so when the winding up proceedings started, or
(b)
became so at any time in the period of 12 months following
the day on which those proceedings started.
(5)
The period referred to in subsection (2) is the period of 12 months
5
ending with the earlier of—
(a)
the day on which the winding up proceedings started, and
(b)
the day on which the company permanently ceased to carry
on the deposit-taking trade.
(6)
In subsection (2)(b) a “permitted EEA credit institution” means an
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EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to
FISMA 2000 (credit institutions authorised by home state regulator)
which has permission to accept deposits under paragraph 15 of that
Schedule.
837C
Charge to income tax on winding up receipts
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(1)
Winding up receipts arising from the deposit-taking trade are
chargeable to income tax.
(2)
Subsection (1) applies in relation to a winding up receipt only so far
as its value was not brought into account in calculating the profits of
the trade of any period before the permanent cessation of the trade.
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(3)
A “winding up receipt” means (subject to subsection (4)) a sum
received by the company or its liquidator after—
(a)
the start of the winding up proceedings, or
(b)
if later, the permanent cessation of the deposit-taking trade.
(4)
The following are not winding up receipts—
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(a)
a sum received on behalf of a person entitled to the sum to the
exclusion of the company and its liquidator, and
(b)
a sum realised by the transfer of an asset required to be
valued under section 173 of ITTOIA 2005 (valuation of
trading stock on cessation).
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837D
Transfer of rights to payment
(1)
This section applies if—
(a)
the company or its liquidator transfers for value to another
person the right to receive a sum arising from the deposit-
taking trade, and
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(b)
the sum is one which, if received by the company or its
liquidator, would be a winding up receipt.
(2)
If the transfer is at arm’s length, this Chapter has effect as if the
amount or value of the consideration for the transfer were a winding
up receipt arising from the deposit-taking trade.
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(3)
If the transfer is not at arm’s length, this Chapter has effect as if the
value of the right transferred as between parties at arm’s length were
a winding up receipt arising from the deposit-taking trade.