Taxation (International and Other Provisions) Bill

House of Commons

Session 2009 - 10
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Taxation (International and Other Provisions) Bill

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 19 — Relocation of paragraph 13 of Schedule 13 to FA 2007
343

925B
Debtor repos
(1)
Subsection (2) applies if a company (“the borrower”) has a debtor
repo for the purposes of Chapter 10 of Part 6 of CTA 2009 (see section
548 of that Act).
(2)
The reverse charge provisions of this Chapter have effect in relation
5
to the borrower while the arrangement is in force as if—
(a)
the lender paid the borrower amounts which are
representative of the income payable on the securities that are
initially sold,
(b)
the payments were made under requirements of the
10
arrangement, and
(c)
the payments were made on the dates on which the income is
payable.
(3)
In subsection (2) “the reverse charge provisions of this Chapter”
means—
15
(a)
regulations under section 918(4), and
(b)
sections 920 and 923.
(4)
For the purposes of subsection (2), an arrangement is in force from
the time when the securities are initially sold until the earlier of—
(a)
the time when the subsequent buying of the securities, or
20
similar securities, takes place, and
(b)
the time when it becomes apparent that that buying will not
take place.
925C
Actual payments ignored if section 925A or 925B applies
If section 925A(2) or 925B(2) applies, any payment actually made
25
under an arrangement which is representative of any income
payable on any securities is to be treated for the purposes of sections
918 to 925 as if it had not been made.
925D
Power to modify repo sections
(1)
The Treasury may by regulations provide for all or any of the
30
provisions of sections 925A to 925F to apply with modifications in
relation to—
(a)
cases to which section 925E (non-standard repo cases)
applies, or
(b)
cases involving redemption arrangements, or
35
(c)
both of those cases.
(2)
A case involves redemption arrangements if—
(a)
arrangements, corresponding to those made in cases where a
company has a repo, are made in relation to securities that are
to be redeemed in the period after their sale, and
40
(b)
the arrangements are such that a person (instead of having
the right or obligation to buy those securities, or similar or
other securities, at any subsequent time) has a right or
obligation in respect of the benefits which will result from the
redemption.
45

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 19 — Relocation of paragraph 13 of Schedule 13 to FA 2007
344

(3)
The regulations may make incidental, supplemental, consequential
and transitional provision and savings.
(4)
In this section “modifications” includes exceptions and omissions.
(5)
For the purposes of subsection (2)(a) and section 925E(1), a company
has a repo if—
5
(a)
for the purposes of Chapter 10 of Part 6 of CTA 2009—
(i)
it has a creditor repo (see section 543 of that Act),
(ii)
it has a creditor quasi-repo (see section 544 of that
Act),
(iii)
it has a debtor repo (see section 548 of that Act), or
10
(iv)
it has a debtor quasi-repo (see section 549 of that Act),
or
(b)
as a result of section 547 of that Act, the company has a
creditor repo for the purposes of section 546 of that Act.
925E
Cases where section 925D applies: non-standard repos
15
(1)
This section applies to a case if—
(a)
a company has a repo,
(b)
there has been a sale of the securities under the arrangement
or arrangements by reference to which the company has the
repo, and
20
(c)
any of conditions A to C is met.
(2)
Condition A is that those securities, or similar or other securities, are
not subsequently bought under the arrangement or arrangements.
(3)
Condition B is that provision is made by or under an arrangement for
different or additional securities to be treated as, or as included with,
25
securities which, for the purposes of the subsequent purchase, are to
represent those initially sold.
(4)
Condition C is that provision is made by or under an arrangement
for securities to be treated as not so included.
(5)
Section 925D(5) interprets references in subsection (1) to a company
30
having a repo.
925F
Interpretation of the repo sections
(1)
This section applies for the purposes of sections 925A to 925E and
this section.
(2)
“Arrangement” includes any agreement or understanding (whether
35
or not legally enforceable).
(3)
It does not matter whether or not provision of any arrangement
conferring a right or imposing an obligation on any person to buy
any securities is subject to any conditions.
(4)
“Securities” means shares, stock or other securities issued by—
40
(a)
the government of the United Kingdom,
(b)
any public or local authority in the United Kingdom,
(c)
any UK resident company or other UK resident body,

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 1 — Double taxation relief
345

(d)
a government or public or local authority of a territory
outside the United Kingdom, or
(e)
any other body of persons not resident in the United
Kingdom.
(5)
Securities are similar if they give their holders—
5
(a)
the same rights against the same persons as to capital, interest
and dividends, and
(b)
the same remedies to enforce those rights.
(6)
Subsection (5) applies even if there is a difference in—
(a)
the total nominal amounts of the securities,
10
(b)
the form in which they are held, or
(c)
the manner in which they can be transferred.
(7)
If—
(a)
a person (“A”) buys securities (or has a right or obligation to
buy securities), but
15
(b)
the securities are (or are to be) held for the benefit of another
person (“B”),

B (not A) is treated as buying (or having the right or obligation to
buy) the securities.
(8)
If—
20
(a)
a person (“C”) sells securities, but
(b)
the proceeds of the sale are held for the benefit of another
person (“D”),

D (not C) is treated as selling the securities.”
113
In section 926 (interpretation of Chapter 9 of Part 15) after subsection (1)
25
insert—
“(1A)
Subsection (1) applies subject to provision made in sections 925A to
925F about the interpretation of those sections or any part of them.”
Finance Act 2007 (c. 11)
114
FA 2007 is amended as follows.
30
115
In Schedule 13 (sale and repurchase of securities) omit paragraph 13
(application of Chapter 9 of Part 15 of ITA 2007).
Schedule 8
Section 374

Minor and consequential amendments
Part 1
35
Double taxation relief
Taxes Management Act 1970 (c. 9)
1
TMA 1970 is amended as follows.

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 1 — Double taxation relief
346

2
In section 9A(4)(c) (scope of enquiries) for “section 804ZA of the principal
Act (schemes and arrangements designed to increase relief)” substitute
“section 81(2) of TIOPA 2010 (notice to counteract scheme or arrangement
designed to increase double taxation relief)”.
3     (1)
Amend section 12B (records to be kept for purposes of returns) as follows.
5
      (2)
In subsection (4A)(c) (records of foreign tax: not sufficient to preserve the
information in them) for sub-paragraph (ii) substitute—
“(ii)
which would have been payable under the law of a
territory outside the United Kingdom (“territory F”)
but for a development relief.”
10
      (3)
After subsection (4A) insert—
“(4B)
In subsection (4A)(c) “development relief” means a relief—
(a)
given under the law of territory F with a view to promoting
industrial, commercial, scientific, educational or other
development in a territory outside the United Kingdom, and
15
(b)
about which provision is made in arrangements that have
effect under section 2(1) of TIOPA 2010 (double taxation
relief by agreement with territories outside the United
Kingdom).”
4
In section 24 (power to obtain information about income from securities)
20
after subsection (3) insert—
“(3ZA)
If—
(a)
a person beneficially entitled to income from any securities is
resident in a territory outside the United Kingdom, and
(b)
there are double taxation arrangements with respect to
25
income tax or corporation tax which relate to that territory,

subsection (3) does not exempt any bank from the duty of disclosing
to the Board particulars relating to the income of that person.
(3ZB)
In subsection (3ZA) “double taxation arrangements” means
arrangements which have effect under section 2(1) of TIOPA 2010
30
(double taxation relief by agreement with territories outside the
United Kingdom).”
5
In section 29(7A) (discovery assessments: relaxation of pre-conditions) for
“section 804ZA of the principal Act” substitute “section 81(2) of TIOPA 2010
(notice to counteract scheme or arrangement designed to increase double
35
taxation relief)”.
6
In section 43C(5) (meaning of consequential claim) for “or 43A” substitute
“, 43A or 43D(6)”.
7
In Part 4, after section 43C insert—
“43D
Claims for double taxation relief in relation to petroleum revenue tax
40
(1)
This section has effect in relation to a claim for relief under sections
2 to 6 of TIOPA 2010 in relation to petroleum revenue tax.
(2)
The claim shall be for an amount which is quantified at the time
when the claim is made.

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 1 — Double taxation relief
347

(3)
If, after the claim has been made, the claimant discovers that an error
or mistake has been made in the claim, the claimant may make a
supplementary claim within the time allowed for making the
original claim.
(4)
Schedule 1A to this Act applies as respects the claim, but as if the
5
reference in paragraph 2A(4) to a year of assessment included a
reference to a chargeable period.
(5)
The claim may not be made more than 4 years after the end of the
chargeable period to which it relates, but this is subject to any
provision of the Taxes Acts prescribing a longer or shorter period.
10
(6)
If the claim or a supplementary claim could not have been allowed
but for the making of an assessment to petroleum revenue tax after
the end of the chargeable period to which the claim relates, the claim
or supplementary claim may be made at any time before the end of
the chargeable period following that in which the assessment is
15
made.
(7)
In this section “chargeable period” has the same meaning as in the
Oil Taxation Act 1975 (see section 1(3) and (4) of that Act, under
which a period that is a chargeable period ends with 30 June or 31
December and, apart from the first chargeable period in relation to
20
an oil field, is a period of 6 months).”
Income and Corporation Taxes Act 1988 (c. 1)
8
ICTA is amended as follows.
9
In section 444BB(6) (meaning of “double taxation relief”)—
(a)
in paragraph (b) for “unilateral relief under section 790(1)” substitute
25
“relief under section 18(1)(b) and (2) of TIOPA 2010”, and
(b)
for “having effect by virtue of section 788” substitute “which have
effect under section 2(1) of that Act (double taxation relief by
agreement with territories outside the United Kingdom)”.
10
In section 750(3)(b) (disregard of certain double taxation relief) for “Part
30
XVIII” substitute “Part 2 of TIOPA 2010 (double taxation relief)”.
11
In section 751(6)(a) (“creditable tax” includes amounts of double taxation
relief) for “Part XVIII” substitute “Part 2 of TIOPA 2010 (double taxation
relief)”.
12
In section 755A(4A)(b) (dividend paid by controlled foreign company to
35
company carrying on life assurance business) for “subsection (4) of section
804B of this Act” substitute “subsection (5) of section 97 of TIOPA 2010”.
13
Omit section 788 (giving effect to double taxation arrangements).
14
Omit section 789 (conversion of references to the profits tax in arrangements
given effect under old law).
40
15
Omit section 790 (unilateral relief).
16
Omit section 791 (power to make regulations giving effect to section 788 and
double taxation arrangements).

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 1 — Double taxation relief
348

17
Omit sections 792 to 798C (which contain rules about double taxation relief
by way of credit).
18
Omit sections 799 and 801 to 801B (double taxation relief: dividends).
19
Omit sections 803 to 804E and 804G to 806 (further rules about credit relief).
20    (1)
Amend section 806A as follows.
5
      (2)
In subsection (2)—
(a)
in paragraph (c) for “section 801A” substitute “section 67(6) of
TIOPA 2010”,
(b)
in paragraph (c) for “subsection (1)(b) of that section” substitute
“section 67(3) of that Act”,
10
(c)
in paragraph (d) for “section 803” substitute “section 70(2) of TIOPA
2010”,
(d)
in paragraph (d) for “subsection (1)(b) of that section” substitute
“section 70(1)(d) of that Act”, and
(e)
in paragraph (e) for “section 811” substitute “section 112 of TIOPA
15
2010”.
      (3)
In subsection (4)(a) for “section 797” substitute “section 42(2) of TIOPA
2010”.
      (4)
In subsection (5)—
(a)
for “section 799(1)” substitute “section 57(1) of TIOPA 2010”,
20
(b)
for “section 801(2) or (3)” substitute “section 65(4) of TIOPA 2010”,
and
(c)
for “subsection (2) or (3) of section 801” substitute “section 65(4) of
TIOPA 2010”.
21    (1)
Amend section 806B as follows.
25
      (2)
In subsection (2)(b) for “section 797” substitute “section 42 of TIOPA 2010”.
      (3)
In subsection (3)(b) for “section 799(1)” substitute “section 57(1) of TIOPA
2010”.
      (4)
In subsection (4)—
(a)
in paragraph (a) for “section 799(1)” substitute “section 57(1) of
30
TIOPA 2010”,
(b)
in paragraph (b) for “section 799(1A)” substitute “Step 3 in section
58(1) of TIOPA 2010”,
(c)
in paragraph (b) for “M%” substitute “M”, and
(d)
in paragraph (b)(ii) for “U” substitute “PA”.
35
      (5)
In subsection (5)—
(a)
for “subsection (2) or (3) of section 801” substitute “section 65(4) of
TIOPA 2010”,
(b)
in each of paragraphs (a), (b)(ii) and (c)(ii) for “subsection (2) or (3),
as the case may be, of section 801” substitute “section 65(4) of TIOPA
40
2010”,
(c)
for “section 799(1A)” substitute “Step 3 in section 58(1) of TIOPA
2010”,
(d)
for “M%” substitute “M”, and
(e)
for “U” substitute “PA”.
45

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 1 — Double taxation relief
349

      (6)
In subsection (7)(b) for “section 799(1)” substitute “section 59 of TIOPA
2010”.
      (7)
In subsection (10)—
(a)
in the definition of “lower level dividend” for “section 801(2) or (3)”
substitute “section 65(4) of TIOPA 2010”,
5
(b)
in paragraph (a) of the definition of “the relevant tax” for “section
799(1)” substitute “section 57(1) of TIOPA 2010”, and
(c)
in paragraph (b) of that definition for “section 801(2) or (3)”
substitute “section 65(4) of TIOPA 2010”.
22
In section 806C(3) and (4) for “this Part” substitute “Part 2 of TIOPA 2010”.
10
23
In section 806D(3), (4) and (5) for “this Part” substitute “Part 2 of TIOPA
2010”.
24
In section 806F(1) and (2) for “this Part” substitute “Part 2 of TIOPA 2010”.
25    (1)
Amend section 806J (interpretation of sections 806A to 806J) as follows.
      (2)
In subsection (5)(b) for “subsection (6)(b) of section 790” substitute “section
15
15 or 16 of TIOPA 2010”.
      (3)
In subsection (5) for “subsection (10) of that section” substitute “section 12(3)
of TIOPA 2010”.
      (4)
For subsection (6) substitute—
“(6)
For the purposes of the foreign dividend provisions of this Chapter
20
a company is related to another company if that other company—
(a)
controls directly or indirectly, or
(b)
is a subsidiary of a company which controls directly or
indirectly,

at least 10% of the voting power in the first-mentioned company.”
25
      (5)
In subsection (7) in the definition of “the mixer cap” for “section 799(1)”
substitute “Step 6 in section 58(1) of TIOPA 2010”.
26
Omit sections 806L and 806M (unrelieved foreign tax).
27
Omit sections 807 and 807A (provision, in connection with relief, about
accrued income profits and about loan relationships).
30
28
Omit sections 807B to 807G (provisions related to the Mergers Directive).
29
Omit sections 808A to 809 and 811 (provision, in connection with relief,
about interest, royalties and discretionary trusts, and for deductions where
no credit allowed).
30
In section 812(1)(b) for “section 788(1)” substitute “section 2(1) of TIOPA
35
2010”.
31
In section 814(1)(a) for “section 788(1)” substitute “section 2(1) of TIOPA
2010”.
32
Omit sections 815A to 815B and 816 (provision, in connection with relief,
about transfer of non-UK trades, about foreign enterprises and about cases
40
presented under arrangements, and provision about the Arbitration
Convention and about disclosure of information).