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 8 — Minor and consequential amendments
Part 8 — Leasing arrangements: finance leases and loans
371

“cumulative accountancy rental
section 614BH(5), as it

excess (in Chapter 3 of Part 11A)
has effect as a result of

section 614CD”

“cumulative normal rental excess
section 614BJ(5)”

(in Chapter 2 of Part 11A)

5

“cumulative normal rental excess
section 614BJ(5), as it

(in Chapter 3 of Part 11A)
has effect as a result of

section 614CD”

“the current lessor (in Part 11A)
section 614DG”

“finance lessor (in Part 11A)
section 614DG”

10

“for accounting purposes (in Part
section 614DG”

11A)

“lease (in Part 11A)
section 614DG”

“the leasing arrangements (in
section 614DG”

Part 11A)

15

“the lessee (in Part 11A)
section 614DG”

“the lessor (in Part 11A)
section 614DG”

“major lump sum (in Part 11A)
section 614BC(5)”

“normal rent (in Part 11A)
section 614AA”

“normal rental excess (in Chapter 2
section 614BJ(1) to (4)”

20

of Part 11A)

“normal rental excess (in Chapter 3
section 614BJ(1) to (4),

of Part 11A)
as it has effect as a

result of section 614CD”

“pay (in Part 11A)
section 614DG”

25

“period of account (in Part 11A)
section 614DB(1) to (3)”

“post-25 November 1996 scheme
section 614D(1)(b)”

(in Part 11A)

“pre-26 November 1996 scheme (in
section 614D(1)(a)”

Part 11A)

30

“related period of account (in
section 614DB(5)”

Part 11A)

“related tax year (in Part 11A)
section 614DB(4)”

“rent (in Part 11A)
section 614DG”

“the rental earnings (in Part 11A)
section 614AC”

35

“sum (in Part 11A)
section 614DG”

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 9 — Sale and lease-back etc
372

Part 9
Sale and lease-back etc
Income and Corporation Taxes Act 1988 (c. 1)
240
ICTA is amended as follows.
241
Omit section 24 (which has come to apply only for the interpretation of
5
section 780 of ICTA).
242
Omit sections 779 to 785 (sale and lease-back etc).
Taxation of Chargeable Gains Act 1992 (c. 12)
243
TCGA 1992 is amended as follows.
244
In Schedule 8 (leases) in paragraph 9(2) (gain reduced by amount on which
10
income tax charged by reference to a capital sum) for “section 785 of the
Taxes Act” substitute “section 681DM of ITA 2007”.
Broadcasting Act 1996 (c. 55)
245
The Broadcasting Act 1996 is amended as follows.
246   (1)
Amend Schedule 7 (transfer schemes: taxation provisions) as follows.
15
      (2)
In paragraph 22(1) after “reliefs)” insert “, and sections 681AD and 681AE of
the Income Tax Act 2007 (which make corresponding provision),”.
      (3)
In paragraph 22(2)—
(a)
before “and” insert “or section 681AA or 681AB of the Income Tax
Act 2007”, and
20
(b)
after the second occurrence of “2010” (which is inserted by CTA
2010) insert “or section 681AM of the Income Tax Act 2007”.
      (4)
In paragraph 23(1) after “consideration)” insert “, and Chapter 2 of Part 12A
of the Income Tax Act 2007 (which makes corresponding provision),”.
      (5)
In paragraph 23(3) before “and sub-paragraph (2)” insert “, or section 681BA
25
of the Income Tax Act 2007,”.
      (6)
In paragraph 24(1) after “others)” insert “and Chapter 4 of Part 12A of the
Income Tax Act 2007 (which makes corresponding provision),”.
      (7)
In paragraph 24(2) for “leases: special cases)” substitute “lease of trading
asset), and section 681CC of the Income Tax Act 2007 (which makes
30
corresponding provision),”.
      (8)
For paragraph 24(3) substitute—
    “(3)
In sub-paragraph (1)—
“lease” has the meaning given by section 884 of the
Corporation Tax Act 2010 or section 681DN of the Income
35
Tax Act 2007, and
“relevant asset” has the meaning given by section 885 of the
Corporation Tax Act 2010 or section 681DO of the Income
Tax Act 2007.

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 9 — Sale and lease-back etc
373

      (4)
In sub-paragraph (2)—
“lease” has the meaning given by section 868 of the
Corporation Tax Act 2010 or section 681CF of the Income
Tax Act 2007, and
“relevant asset” has the meaning given by section 869 of the
5
Corporation Tax Act 2010 or section 681CG of the Income
Tax Act 2007.”
Finance Act 1999 (c. 16)
247
FA 1999 is amended as follows.
248
In section 97(6), in the definition of “lease”, for “sections 781 to 784 of the
10
Taxes Act 1988” substitute “Chapter 3 of Part 19 of CTA 2010 (see section
868)”.
Greater London Authority Act 1999 (c. 29)
249
The Greater London Authority Act 1999 is amended as follows.
250   (1)
Amend paragraph 13 of Schedule 33 (taxation provisions: public-private
15
partnership agreements: sale and leasebacks) as follows.
      (2)
In sub-paragraph (1) before “shall” insert “, nor any of sections 681AD,
681AE and 681CC of the Income Tax Act 2007 (which make corresponding
provision),”.
      (3)
In sub-paragraph (2) for “that Act” substitute “the Corporation Tax Act 2010
20
and Chapter 4 of Part 12A of the Income Tax Act 2007”.
Transport Act 2000 (c. 38)
251
The Transport Act 2000 is amended as follows.
252
In paragraph 15 of Schedule 7 (transfer schemes: tax: leased assets)—
(a)
in sub-paragraph (1) before “(assets” insert “or Chapter 4 of Part 12A
25
of the Income Tax Act 2007”, and
(b)
in sub-paragraph (2) for “that Act” substitute “the Corporation Tax
Act 2010 and section 681DI of the Income Tax Act 2007”.
Income Tax (Trading and Other Income) Act 2005 (c. 5)
253
ITTOIA 2005 is amended as follows.
30
254   (1)
Amend section 49 (car or motor cycle hire: supplementary) as follows.
      (2)
In subsection (2)(a) omit “(see subsection (3))”.
      (3)
For subsections (3) to (5) substitute—
“(3)
For this purpose “hire-purchase agreement” has the meaning given
by section 998A of ITA 2007.”
35
255
In section 100(4) (meaning of sale and lease-back arrangement) after “as is
described in” insert “section 681AA(1) or (2), 681AB(1) or (2) or 681BA of ITA
2007 or”.

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 9 — Sale and lease-back etc
374

Income Tax Act 2007 (c. 3)
256
ITA 2007 is amended as follows.
257
In section 2 (overview of Act) after subsection (12) insert—
“(12A)
Part 12A is about sale and lease-back etc.”
258
In section 989 at the appropriate place insert—
5
““hire-purchase agreement” is to be read in accordance with
section 998A,”.
259
After section 998 insert—
“998A
Meaning of “hire-purchase agreement”
(1)
This section applies for the purposes of the provisions of the Income
10
Tax Acts which apply this section.
(2)
A hire-purchase agreement is an agreement in whose case each of
conditions A to C is met.
(3)
Condition A is that under the agreement goods are bailed (or in
Scotland hired) in return for periodical payments by the person to
15
whom they are bailed (or hired).
(4)
Condition B is that under the agreement the property in the goods
will pass to the person to whom they are bailed (or hired) if the terms
of the agreement are complied with and one or more of the following
events occurs—
20
(a)
the exercise of an option to purchase by that person,
(b)
the doing of another specified act by any party to the
agreement,
(c)
the happening of another specified event.
(5)
Condition C is that the agreement is not a conditional sale
25
agreement.
(6)
In subsection (5) “conditional sale agreement” means an agreement
for the sale of goods under which—
(a)
the purchase price or part of it is payable by instalments, and
(b)
the property in the goods is to remain in the seller (even
30
though they are to be in the possession of the buyer) until
conditions specified in the agreement are met (whether as to
the payment of instalments or otherwise).”
260   (1)
Amend section 1016(2) (table of provisions to which section applies) as
follows.
35
      (2)
In Part 2 of the table at the appropriate place insert—

“Section 681BB(8) and (9)
New lease after assignment or

surrender”

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 9 — Sale and lease-back etc
375

      (3)
In Part 2 of the table at the appropriate place insert—

“Section 681DD
Leased assets: capital sums”

      (4)
In Part 3 of the table omit the entry for section 780(3A)(a) of ICTA.
      (5)
In Part 3 of the table omit the entry for section 781(1) of ICTA.
261
In Schedule 4 (index of defined expressions) at the appropriate places
5
insert—

“associated (in Chapter 1 of Part 12A)
section 681AM”

“associates (in Chapter 4 of Part 12A)
section 681DL”

“capital sum (in Chapter 4 of Part 12A)
section 681DM”

“deduction by way of relevant income tax
section 681AC(1)”

10

relief (in Chapter 1 of Part 12A)

“deduction by way of relevant income tax
section 681BK”

relief (in Chapter 2 of Part 12A)

“deduction by way of relevant tax relief (in
section 681DP”

Chapter 4 of Part 12A)

15

“dispositions of interests in land outside the
section 681AN”

United Kingdom (in Chapter 1 of Part 12A)

“interests in land outside the United
section 681AN”

Kingdom (in Chapter 1 of Part 12A)

“lease (in Chapter 1 of Part 12A)
section 681AL(2)”

20

“lease (in Chapter 2 of Part 12A)
section 681BM(2), (3)”

“lease (in Chapter 3 of Part 12A)
section 681CF”

“lease (in Chapter 4 of Part 12A)
section 681DN”

“lessee (in Chapter 2 of Part 12A)
section 681BM(4)”

“lessor (in Chapter 2 of Part 12A)
section 681BM(4)”

25

“linked (in relation to a person) (in Chapter
section 681BL”

2 of Part 12A)

“relevant asset (in Chapter 3 of Part 12A)
section 681CG”

“relevant asset (in Chapter 4 of Part 12A)
section 681DO”

“relevant deduction from earnings (in
section 681AC(2)”

30

Chapter 1 of Part 12A)

“rent (in Chapter 1 of Part 12A)
section 681AL(3), (4)”

“rent (in Chapter 2 of Part 12A)
section 681BM(5)”

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 10 — Factoring of income etc
376

“sum obtained in respect of an interest in an
section 681DG”

asset (in Chapter 4 of Part 12A)

“sum obtained in respect of the lessee’s
section 681DH”.

interest in a lease of an asset (in Chapter 4 of

Part 12A)

5

Corporation Tax Act 2009 (c. 4)
262
CTA 2009 is amended as follows.
263
In section 97(4) (meaning of sale and lease-back arrangement) after “as is
described in” insert “section 681AA(1) or (2) or 681AB(1) or (2) of ITA 2007
or”.
10
Part 10
Factoring of income etc
Income and Corporation Taxes Act 1988 (c. 1)
264
ICTA is amended as follows.
265
Omit sections 774A to 774G (factoring of income receipts etc).
15
266
Omit section 786 (transactions associated with loans or credit).
Taxation of Chargeable Gains Act 1992 (c. 12)
267
TCGA 1992 is amended as follows.
268   (1)
Amend section 263E (structured finance arrangements) as follows.
      (2)
In subsection (1)(a) for “section 774B of the Taxes Act” substitute “section
20
809BZB or 809BZC of ITA 2007”.
      (3)
In subsection (6) in the definition of “the borrower” for “section 774A of the
Taxes Act” substitute “the defining section”.
      (4)
In subsection (6) after the definition of “the borrower” insert—
““the defining section” in relation to a structured finance
25
arrangement—
(a)
means section 809BZA of ITA 2007 if it is section
809BZB or 809BZC of ITA 2007 that applies in relation
to the arrangement, and
(b)
means section 758 of CTA 2010 if it is section 759 or
30
760 of CTA 2010 that applies in relation to the
arrangement,”.
      (5)
In subsection (6) in the definition of “the lender” for “that section” substitute
“the defining section”.
      (6)
In subsection (6) in the definition of “security” for “subsection (2)(c) and (d)
35
of that section” substitute “subsection (2)(b) and (c) of the defining section”.

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 10 — Factoring of income etc
377

Income Tax (Trading and Other Income) Act 2005 (c. 5)
269
ITTOIA 2005 is amended as follows.
270
After section 281 insert—
“281A
Sums to which sections 277 to 281 do not apply
(1)
This section applies if a grant of a lease constitutes a disposal of an
5
asset for the purposes of section 809BZA(2)(b) or 809BZF(2)(a) of ITA
2007 (disposals under finance arrangements).
(2)
Sections 277 to 281 do not apply in relation to a premium paid in
respect of the grant.”
Income Tax Act 2007 (c. 3)
10
271
ITA 2007 is amended as follows.
272
In section 2(13) (overview of Part 13) omit the “or” after paragraph (e), and
after paragraph (f) insert—
“(g)
finance arrangements (Chapter 5B),
(h)
loan or credit transactions (Chapter 5C),”.
15
273
For section 809AZE (transfers of income streams: exception for transfer by
way of security) substitute—
“809AZE
Exception: transfer by way of security
(1)
This Chapter does not apply if—
(a)
the consideration for the transfer is the advance under a
20
type 1 finance arrangement, and
(b)
the transferor is, or is a member of a partnership which is, the
borrower in relation to the arrangement.
(2)
This Chapter does not apply if—
(a)
the consideration for the transfer is the advance under a
25
type 2 finance arrangement or a type 3 finance arrangement,
and
(b)
the transferor is a member of the partnership which receives
that advance under the arrangement.
(3)
In this section—
30
“type 1 finance arrangement” has the meaning given for the
purposes of Chapter 5B by section 809BZA,
“type 2 finance arrangement” has the meaning given for the
purposes of Chapter 5B by section 809BZF, and
“type 3 finance arrangement” has the meaning given for the
35
purposes of Chapter 5B by section 809BZJ.”
274   (1)
Amend section 1016(2) (table of provisions to which section applies) as
follows.