Taxation (International and Other Provisions) Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Taxation (International and Other Provisions) Bill

Taxation (International and Other Provisions) Bill
Part 2 — Double taxation relief
Chapter 2 — Double taxation relief by way of credit
59

102
Interpreting sections 99 to 101 for life assurance or gross roll-up business
(1)
This section has effect for the interpretation of sections 99 to 101 if the category
of business concerned—
(a)
is life assurance business, or
(b)
is gross roll-up business.
5
(2)
The “total income” of the category of business concerned for the period of
account in question is the amount (if any) by which—
(a)
so much of the total income shown in the revenue account in the
periodical return of the company concerned for that period as is
referable to that category of business,
10

exceeds—
(b)
so much of any commissions payable and any expenses of management
incurred in connection with the acquisition of the business, as shown in
that return, as is referable to that category of business.
(3)
If any amounts are to be brought into account in accordance with section 83 of
15
FA 1989, the amounts that are referable to the category of business concerned
are to be determined for the purposes of subsection (2) in accordance with
sections 432B to 432G of ICTA.
(4)
The “total relevant expenses” of the category of business concerned for any
period of account is the amount of the claims incurred—
20
(a)
increased by any increase in the liabilities of the company, or
(b)
reduced (but not below nil) by any decrease in the liabilities of the
company.
(5)
For the purposes of subsection (4), the amounts to be taken into account in the
case of any period of account are the amounts as shown in the company’s
25
periodical return for the period so far as referable to the category of business
concerned.
103
Interpreting sections 99 to 101 for other insurance business
(1)
This section has effect for the interpretation of sections 99 to 101 if the category
of business concerned—
30
(a)
is not life assurance business, and
(b)
is not gross roll-up business.
(2)
The “total income” of the category of business concerned for any period of
account is the amount (if any) by which—
(a)
the sum of the amounts specified in subsection (3),
35

exceeds—
(b)
the sum of the amounts specified in subsection (4).
(3)
The amounts mentioned in subsection (2)(a) are—
(a)
earned premiums, net of reinsurance,
(b)
investment income and gains, and
40
(c)
other technical income, net of reinsurance.
(4)
The amounts mentioned in subsection (2)(b) are—
(a)
acquisition costs,
(b)
the change in deferred acquisition costs, and
(c)
losses on investments.
45

Taxation (International and Other Provisions) Bill
Part 2 — Double taxation relief
Chapter 3 — Miscellaneous provisions
60

(5)
The “total relevant expenses” of the category of business concerned for any
period of account is the sum of—
(a)
the claims incurred, net of reinsurance,
(b)
the changes in other technical provisions, net of reinsurance,
(c)
the change in the equalisation provision, and
5
(d)
investment management expenses,

unless that sum is a negative amount, in which case the total relevant expenses
is to be taken to be nil.
(6)
The amounts to be taken into account for the purposes of the paragraphs of
subsections (3) to (5) are the amounts taken into account for the purposes of
10
corporation tax.
(7)
Expressions used—
(a)
in the paragraphs of subsections (3) to (5), and
(b)
in the provisions of section B of Part 1 of Schedule 3 to the Large and
Medium-sized Companies and Groups (Accounts and Reports)
15
Regulations 2008 (S.I. 2008/410) which relate to the profit and loss
account format (within the meaning of paragraph 1(1) and (2) of that
Schedule),

have the same meaning in those paragraphs as they have in those provisions.
104
Interpreting sections 100 and 101: amounts referable to category of business
20
(1)
This section applies for the purposes of the operation of sections 100 and 101 in
relation to any income or gain in respect of which credit is to be allowed under
any double taxation arrangements or under unilateral relief arrangements for
a territory outside the United Kingdom.
(2)
The amount of the income or gain that is referable to a category of insurance
25
business is the same fraction of the income or gain as the fraction found under
subsection (3).
(3)
Apply sections 97 and 98 in relation to—
(a)
that category of business,
(b)
the income or gain, and
30
(c)
the double taxation arrangements, or unilateral relief arrangements,
mentioned in subsection (1),

in order to find the fraction of the foreign tax that is attributable to that category
of business.
Chapter 3
35
Miscellaneous provisions
Application of Part for capital gains tax purposes
105
Meaning of “chargeable gain”
In this Part so far as it relates to capital gains tax “chargeable gain” has the same
meaning as in TCGA 1992 (see, in particular, section 15(2) of that Act).
40

Taxation (International and Other Provisions) Bill
Part 2 — Double taxation relief
Chapter 3 — Miscellaneous provisions
61

106
Chapters 1 and 2 apply to capital gains tax separately from other taxes
(1)
Subsection (2) applies if foreign gains tax may be brought into account under
Chapters 1 and 2 so far as they apply for capital gains tax purposes.
(2)
The foreign gains tax is not to be taken into account under those Chapters so
far as they apply otherwise than for capital gains tax purposes.
5
(3)
Subsection (2) applies whether or not relief in respect of the foreign gains tax is
given under those Chapters so far as they apply for capital gains tax purposes.
(4)
Foreign non-gains tax is not be taken into account under those Chapters so far
as they apply for capital gains tax purposes.
(5)
In this section—
10
“foreign gains tax” means any tax which—
(a)
is imposed by the law of a territory outside the United
Kingdom, and
(b)
is of a similar character to capital gains tax, and
“foreign non-gains tax” means tax which—
15
(a)
is imposed by the law of a territory outside the United
Kingdom, and
(b)
is not foreign gains tax.
When foreign tax disregarded in applying Part for corporation tax purposes
107
Disregard of foreign tax referable to derivative contract
20
(1)
In applying this Part for corporation tax purposes in relation to a company,
disregard tax within subsection (2).
(2)
Tax is within this subsection in relation to a company so far as the tax—
(a)
is tax under the law of a territory outside the United Kingdom, and
(b)
is attributable, on a just and reasonable apportionment, to so much of a
25
notional interest payment as, on such an apportionment, is attributable
to a time when the company is not a party to the derivative contract
concerned.
(3)
For the purposes of this section, a payment is a “notional interest payment” if—
(a)
a derivative contract specifies—
30
(i)
a notional principal amount,
(ii)
a period, and
(iii)
a rate of interest,
(b)
the amount of the payment is determined (wholly or mainly) by
applying a rate to the specified notional principal amount for the
35
specified period, and
(c)
the value of the rate is the same at all times as that of the specified rate
of interest.
108
Disregard of foreign tax attributable to interest under a loan relationship
(1)
In applying this Part for corporation tax purposes in relation to a company,
40
disregard tax within subsection (2).
(2)
Tax is within this subsection in relation to a company so far as the tax—

Taxation (International and Other Provisions) Bill
Part 2 — Double taxation relief
Chapter 3 — Miscellaneous provisions
62

(a)
is tax under the law of a territory outside the United Kingdom, and
(b)
is attributable, on a just and reasonable apportionment, to interest
accruing under a loan relationship at a time when the company is not a
party to the relationship.
(3)
Tax within subsection (2) is not to be disregarded under subsection (1) if the tax
5
is also within section 109 or 110.
109
Repo 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
10
party to the relationship by reason of having made the initial sale under
or in accordance with any debtor repo relating to the relationship, and
(b)
that time is in the period for which the repo has effect.
(2)
In this section—
“debtor repo” has the meaning given by the repo-definition section,
15
“the initial sale”, in relation to a debtor repo, means the sale mentioned in
condition C in the repo-definition section, and
“the repo-definition section” means section 548 of CTA 2009.
(3)
In this section, a reference to the period for which a debtor repo has effect is to
the period from the making of the initial sale until the earlier of—
20
(a)
the time when the subsequent purchase mentioned in condition D in
the repo-definition section takes place, and
(b)
the time when it becomes apparent that that subsequent purchase will
not take place.
110
Stock-lending cases in which no disregard under section 108
25
(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 by reason of having made the initial transfer
under or in accordance with any stock lending arrangement relating to
30
that relationship, and
(b)
that time is in the period for which the arrangement has effect.
(2)
In this section—
“the initial transfer”, in relation to a stock lending arrangement, means the
transfer mentioned in section 263B(1)(a) of TCGA 1992, and
35
“stock lending arrangement” has the meaning given by section 263B of
TCGA 1992.
(3)
In this section, a reference to the period for which a stock lending arrangement
has effect is to the period from the making of the initial transfer until the earlier
of—
40
(a)
the time when the transfer mentioned in section 263B(1)(b) of TCGA
1992 takes place, and
(b)
the time when it becomes apparent that that transfer will not take place.