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 9 — Transitionals and savings etc
Part 1 — General provisions
385

which the section does not apply) for “and” after paragraph (f) substitute—
“(fa)
TIOPA 2010 (see instead section 372 of that Act), and”.
328
In section 1017 (abbreviated references to Acts) for the “and” at the end of
the definition of “TCGA 1992” substitute—
““TIOPA 2010” means the Taxation (International and Other
5
Provisions) Act 2010, and”.
Corporation Tax Act 2009 (c. 4)
329
CTA 2009 is amended as follows.
330
In section 1312 (abbreviated references to Acts) after the definition of “TCGA
1992” insert—
10
““TIOPA 2010” means the Taxation (International and Other
Provisions) Act 2010,”.
Finance Act 2009 (c. 10)
331
FA 2009 is amended as follows.
332
In section 126(1) (abbreviated references to Acts) after the entry for TCGA
15
1992 insert—
““TIOPA 2010” means the Taxation (International and Other
Provisions) Act 2010,”.
Schedule 9
Section 377

Transitionals and savings etc
20
Part 1
General provisions
Continuity of the law: general
1
The repeal of provisions and their enactment in a rewritten form by this Act
does not affect the continuity of the law.
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2
Paragraph 1 does not apply to any change made by this Act in the effect of
the law.
3
Any subordinate legislation or other thing which—
(a)
has been made or done, or has effect as if made or done, under or for
the purposes of a superseded enactment so far as it applied for
30
relevant tax purposes, and
(b)
is in force or effective immediately before the commencement of the
corresponding rewritten provision,

has effect after that commencement as if made or done under or for the
purposes of the rewritten provision.
35
4     (1)
Any reference (express or implied) in this Act, another enactment or an
instrument or document to a rewritten provision is to be read as including,
in relation to times, circumstances or purposes in relation to which any

Taxation (International and Other Provisions) Bill
Schedule 9 — Transitionals and savings etc
Part 1 — General provisions
386

corresponding superseded enactment had effect for relevant tax purposes, a
reference to the superseded enactment so far as applying for those relevant
tax purposes.
      (2)
Any reference (express or implied) in this Act, another enactment or an
instrument or document to—
5
(a)
things done under or for the purposes of a rewritten provision, or
(b)
things falling to be done under or for the purposes of a rewritten
provision,

is to be read as including, in relation to times, circumstances or purposes in
relation to which any corresponding superseded enactment had effect for
10
relevant tax purposes, a reference to things done or falling to be done under
or for the purposes of the superseded enactment so far as applying for those
relevant tax purposes.
5     (1)
Any reference (express or implied) in any enactment, instrument or
document to a superseded enactment in its application for relevant tax
15
purposes is to be read, so far as is required for those relevant tax purposes,
as including, in relation to times, circumstances or purposes in relation to
which any corresponding rewritten provision has effect, a reference to the
rewritten provision.
      (2)
Any reference (express or implied) in any enactment, instrument or
20
document to—
(a)
things done under or for the purposes of a superseded enactment in
its application for relevant tax purposes, or
(b)
things falling to be done under or for the purposes of a superseded
enactment in its application for relevant tax purposes,
25

is to be read, so far as is required for those relevant tax purposes, as
including, in relation to times, circumstances or purposes in relation to
which any corresponding rewritten provision has effect, a reference to
things done or falling to be done under or for the purposes of the rewritten
provision.
30
6
Paragraphs 1 to 5 have effect instead of section 17(2) of the Interpretation Act
1978 (but are without prejudice to any other provision of that Act).
7
Paragraphs 4 and 5 apply only so far as the context permits.
General saving for old transitional provisions and savings
8     (1)
The repeal by this Act of a transitional or saving provision relating to the
35
coming into force of a provision rewritten in this Act does not affect the
operation of the transitional or saving provision, so far as it is not specifically
rewritten in this Act but remains capable of having effect in relation to the
corresponding provision of this Act.
      (2)
The repeal by this Act of an enactment previously repealed subject to
40
savings does not affect the continued operation of those savings.
      (3)
The repeal by this Act of a saving on the previous repeal of an enactment
does not affect the operation of the saving so far as it is not specifically
rewritten in this Act but remains capable of having effect.

Taxation (International and Other Provisions) Bill
Schedule 9 — Transitionals and savings etc
Part 2 — Changes in the law
387

Interpretation
9     (1)
In this Part—
“enactment” includes subordinate legislation (within the meaning of
the Interpretation Act 1978),
“relevant tax purposes” means, in relation to a superseded enactment,
5
tax purposes for which the enactment has been rewritten by this Act,
and
“superseded enactment” means an earlier enactment which has been
rewritten by this Act for certain tax purposes (whether it applied
only for those purposes or for those and other tax purposes).
10
      (2)
References in this Part to the repeal of a provision include references to its
revocation and to its express or implied disapplication for particular tax
purposes.
Part 2
Changes in the law
15
10    (1)
This paragraph applies if, in the case of any person—
(a)
a thing is done or an event occurs before 1 April 2010, and
(b)
because of a change in the law made by this Act, the corporation tax
consequences of that thing or event for the relevant period are
different from what they would otherwise have been.
20
      (2)
This paragraph also applies if, in the case of any person—
(a)
a thing is done or an event occurs before 6 April 2010, and
(b)
because of a change in the law made by this Act, the income tax
consequences of that thing or event for the relevant period are
different from what they would otherwise have been.
25
      (3)
If the person so elects, this Act applies with such modifications as may be
necessary to secure that the consequences for that tax for that period are the
same as they would have been if the change in the law had not been made.
      (4)
In sub-paragraphs (1) and (2) “the relevant period” means—
(a)
for corporation tax purposes, any accounting period beginning
30
before and ending on or after 1 April 2010, and
(b)
for income tax purposes, any period of account beginning before and
ending on or after 6 April 2010.
      (5)
If this paragraph applies in the case of two or more persons in relation to the
same thing or event, an election made under this paragraph by any one of
35
those persons is of no effect unless a corresponding election is made by the
other or each of the others.
      (6)
An election under this paragraph must be made—
(a)
for corporation tax purposes, not later than 2 years after the end of
the accounting period, and
40
(b)
for income tax purposes, on or before the first anniversary of the 31
January following the tax year in which the period of account ends.

Taxation (International and Other Provisions) Bill
Schedule 9 — Transitionals and savings etc
Part 3 — Double taxation relief
388

Part 3
Double taxation relief
Conversion of references to the profits tax in old arrangements
11    (1)
Sub-paragraph (2) applies to any arrangements—
(a)
made in relation to the profits tax (which was abolished by section
5
46(3) of FA 1965), and
(b)
specified in an Order in Council made—
(i)
under section 347 of the Income Tax Act 1952, or
(ii)
under any earlier enactment corresponding to that section.
      (2)
The arrangements have effect—
10
(a)
in relation to corporation tax as they are expressed to have effect in
relation to the profits tax (and not as they had effect in relation to
income tax), and
(b)
in relation to income to which the charge to corporation tax on
income applies, and in relation to gains to which the charge to
15
corporation tax on chargeable gains applies, as they are expressed to
have effect in relation to profits chargeable to the profits tax,

but with the substitution of accounting periods for chargeable accounting
periods.
      (3)
Sub-paragraph (2) applies subject to any contrary provision contained in
20
arrangements—
(a)
made after the passing of FA 1965 (which was passed on 5 August
1965), and
(b)
specified in an Order in Council made—
(i)
under section 347 of the Income Tax Act 1952, or
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(ii)
under any later enactment corresponding to that section.
      (4)
Sub-paragraph (2) applies despite section 18(5) of this Act.
Effect in relation to capital gains tax of arrangements given effect before introduction of that tax
12
Any arrangements specified in an Order in Council made under section 347
of the Income Tax Act 1952 before 5 August 1965, so far as they provide (in
30
whatever terms) for relief from tax chargeable in the United Kingdom on
capital gains, have effect in relation to capital gains tax.
Double taxation arrangements to which section 11(3) applies
13
Section 11(3) does not have effect in relation to arrangements made before 21
March 2000.
35
Unilateral relief for underlying tax on dividends
14    (1)
Condition C in section 15 (credit for underlying tax on dividend paid to sub-
10% associate) is not met if the reduction below the 10% limit took place
before 1st April 1972.
      (2)
Condition C in section 16 (credit for underlying tax on dividend paid by
40
exchanged associate) is not met if the exchange took place before 1st April
1972.

Taxation (International and Other Provisions) Bill
Schedule 9 — Transitionals and savings etc
Part 3 — Double taxation relief
389

Time limits for claims for relief
15    (1)
If article 10 of the 2009 Order applies—
(a)
section 19(2)(a) (claims for relief under section 18(2) in relation to
income tax or capital gains to be made by fourth anniversary of end
of tax year) has effect at times before 1 April 2012 as if for “fourth
5
anniversary of the end of” there were substituted “fifth anniversary
of the 31 January next following”,
(b)
section 19(3)(a) (claims for relief under section 18(2) in relation to
corporation tax to be made within 4 years) has effect at times before
1 April 2012 as if for “4” there were substituted “6”,
10
(c)
section 77(3)(a) (claims for relief under section 73(1) to be made
within 4 years) has effect at times before 1 April 2012 as if for “4”
there were substituted “6”, and
(d)
section 43D(5) of TMA 1970 (which is inserted by Part 1 of Schedule
8 and is about claims for relief under sections 2 to 6 in relation to
15
petroleum revenue tax) has effect at times before 1 April 2012 as if for
“4 years after the end of” there were substituted “5 years after the 31
January next following”.
      (2)
In sub-paragraph (1) “the 2009 Order” means the Finance Act 2008, Schedule
39 (Appointed Day, Transitional Provision and Savings) Order 2009
20
(S.I. 2009/403).
Taking account of underlying tax
16
In relation to distributions paid before 1 July 2009, the amount of any income
or gain is not to be increased under section 31(2)(b) by so much of any
underlying tax within section 31(3)(a) as represents relievable underlying
25
tax, within the meaning of sections 806A to 806J of ICTA, arising in respect
of another dividend and treated as underlying tax under those sections.
Reduction in credit: payment by reference to foreign tax
17
Section 34 does not have effect in relation to payments made before 22 April
2009.
30
Credit against corporation tax on trade income: anti-avoidance
18
Section 45(2) has effect in relation to a credit for foreign tax only if the credit
relates to—
(a)
a payment of foreign tax on or after 22 April 2009, or
(b)
income received on or after that date in respect of which foreign tax
35
has been deducted at source.
Credit against corporation tax on trade income: banks
19
Section 49 has effect in relation to a credit for foreign tax only if the credit
relates to—
(a)
a payment of foreign tax on or after 22 April 2009, or
40
(b)
income received on or after that date in respect of which foreign tax
has been deducted at source.

Taxation (International and Other Provisions) Bill
Schedule 9 — Transitionals and savings etc
Part 3 — Double taxation relief
390

Meaning of “relevant profits” in section 58
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In relation to dividends paid before 1 July 2009, section 59 has effect with the
following modifications—
(a)
the omission of subsections (2) and (3),
(b)
in subsection (4), the omission of “is not within subsection (3) but”,
5
and
(c)
in subsection (5), the omission of “is not within subsection (3) and”.
Conditions for relief for underlying tax paid by company lower in dividend-paying chain
21
Section 65(3)(a) applies with the omission of sub-paragraph (ii) if the
dividend paid by the second company to the first company is paid before 22
10
April 2009.
Application of sections 109 and 110 in relation to pre-1 October 2007 cases
22    (1)
Section 109 does not apply in the case of a debtor repo, within the meaning
given by section 548 of CTA 2009, if the arrangement mentioned in that
section of that Act came into force before 1 October 2007.
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      (2)
Section 110 does not apply in the case of a stock lending arrangement, within
the meaning given by section 263B of TCGA 1992, under which the lender
transfers securities to the borrower otherwise than by way of sale before 1
October 2007.
      (3)
This Act has effect with the modifications set out in sub-paragraphs (4) and
20
(5), but those modifications—
(a)
do not apply in the case of a debtor repo, within the meaning given
by section 548 of CTA 2009, if the arrangement mentioned in that
section comes into force on or after 1 October 2007, and
(b)
do not apply in the case of a stock lending arrangement, within the
25
meaning given by section 263B of TCGA 1992, under which the
lender transfers securities to the borrower otherwise than by way of
sale on or after 1 October 2007.
      (4)
In section 108(3) for “section 109 or 110” substitute “section 109A”.
      (5)
For sections 109 and 110 substitute—
30
“109A
Repo or stock-lending cases in which no disregard under section 108
(1)
Tax attributable to interest accruing to a company under a loan
relationship is within this section if—
(a)
at the time when the interest accrues, the company has ceased
to be a party to the relationship as a result of having made the
35
initial transfer under or in accordance with any repo or stock-
lending arrangements relating to the relationship, and
(b)
that time is in the period for which those arrangements have
effect.
(2)
In this section “repo or stock-lending arrangements”, in relation to a
40
loan relationship, means (subject to subsection (3)) any arrangements
consisting in or involving an agreement or series of agreements
under which provision is made—

Taxation (International and Other Provisions) Bill
Schedule 9 — Transitionals and savings etc
Part 3 — Double taxation relief
391

(a)
for the transfer from one person (“A”) to another of any rights
under the relationship, and
(b)
for A subsequently to be or become entitled, or required—
(i)
to have the same or equivalent rights transferred to A,
or
5
(ii)
to have rights in respect of benefits accruing in respect
of the relationship on redemption.
(3)
Arrangements are not repo or stock-lending arrangements for the
purposes of this section if they are excluded from section 730A of
ICTA by section 730A(8) of ICTA.
10
(4)
For the purposes of subsection (2) rights under a loan relationship
are equivalent to rights under another loan relationship if they entitle
the holder of an asset representing the relationship—
(a)
to the same rights against the same persons as to capital,
interest and dividends, and
15
(b)
to the same remedies for the enforcement of those rights,

despite any difference in the total nominal amounts of the assets, in
the form in which they are held or in the manner in which they can
be transferred.
(5)
In this section—
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(a)
“the initial transfer”, in relation to any repo or stock-lending
arrangements, is a reference to the transfer mentioned in
subsection (2)(a), and
(b)
a reference to the period for which repo or stock-lending
arrangements have effect is a reference to the period from the
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making of the initial transfer until whichever is the earlier of
the following—
(i)
the discharge of the obligations arising by virtue of
the entitlement or requirement mentioned in
subsection (2)(b), or
30
(ii)
the time when it becomes apparent that the discharge
of those obligations will not take place.”
Income increased by amounts paid by reference to foreign tax for which deduction allowed
23
Section 112(3) does not have effect in relation to payments made before 22
April 2009.
35
Offshore fund treated after 1 December 2009 as distributing fund under repealed Chapter 5 of
Part 17 of ICTA
24
In paragraph 5(4)(b) of Schedule 27 to ICTA (offshore funds: distributing
funds) as it has effect as a result of paragraph 3 of Schedule 1 to the Offshore
Funds (Tax) Regulations 2009 (S.I. 2009/3001), the reference to section 811 of
40
ICTA is to be treated as a reference to section 112 of this Act.
Limited effect of amendments of sections 806A to 806J of ICTA
25
The amendments in sections 806A to 806J of ICTA that are made by Part 1 of
Schedule 8 have effect only in relation to distributions paid before 1 July
2009.
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