Finance Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Finance Bill

Finance Bill
Part 2 — Anti-avoidance and revenue protection
13

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Landline duty
Schedule 2 contains provision for and in connection with landline duty.
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Pensions: high income excess relief charge
Schedule 3 contains provision for and in connection with high income excess
relief charge.
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Part 2
Anti-avoidance and revenue protection
Losses, capital allowances etc
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Sideways relief etc
Schedule 4 contains provision about sideways relief etc.
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Property loss relief
(1)
Chapter 4 of Part 4 of ITA 2007 (losses from property businesses) is amended
as follows.
(2)
In section 117 (overview of Chapter), after subsection (2) insert—
“(3)
This Chapter also contains provision restricting relief under this
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Chapter (see section 127A).”
(3)
In section 120 (deduction of property losses from general income), after
subsection (6) insert—
“(7)
See also section 127A (no relief for tax-generated losses attributable to
annual investment allowance).”
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(4)
After section 127 insert—
“Restrictions on relief
127A
No relief for tax-generated losses attributable to annual investment
allowance
(1)
This section applies if—
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(a)
in a tax year a person makes a loss in a UK property business or
overseas property business (whether carried on alone or in
partnership),
(b)
the loss has a capital allowances connection (see section 123(2)),
and
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(c)
the loss arises directly or indirectly in consequence of, or
otherwise in connection with, relevant tax avoidance
arrangements.
(2)
No property loss relief against general income may be given to the
person for so much of the applicable amount of the loss as is
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attributable to an annual investment allowance.

Finance Bill
Part 2 — Anti-avoidance and revenue protection
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(3)
For the purposes of subsection (2), the applicable amount of the loss is
to be treated as attributable to capital allowances before anything else
and to an annual investment allowance before any other capital
allowance.
(4)
In subsection (1) “relevant tax avoidance arrangements” means
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arrangements—
(a)
to which the person is a party, and
(b)
the main purpose, or one of the main purposes, of which is
being in a position to make use of an annual investment
allowance in the obtaining of a reduction in tax liability by
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means of property loss relief against general income.
(5)
In subsection (4) “arrangements” includes any agreement,
understanding, scheme, transaction or series of transactions (whether
or not legally enforceable).
(6)
In this section “the applicable amount of the loss” has the meaning
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given by section 122.”
(5)
The amendments made by this section have effect in relation to a loss if it arises
directly or indirectly in consequence of, or otherwise in connection with—
(a)
arrangements which are entered into on or after 24 March 2010, or
(b)
any transaction forming part of arrangements which is entered into on
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or after that date.
(6)
But those amendments do not have effect where the arrangements are, or any
such transaction is, entered into pursuant to an unconditional obligation in a
contract made before that date.
(7)
“An unconditional obligation” means an obligation which may not be varied
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or extinguished by the exercise of a right (whether or not under the contract).
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Capital allowance buying
Schedule 5 contains provisions about capital allowance buying.
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Leased assets
Schedule 6 contains provisions about leased assets.
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Cushion gas
(1)
Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.
(2)
Section 70J (meaning of “funding lease”) is amended as follows.
(3)
After subsection (1) insert—
“(1A)
A plant or machinery lease is also a “funding lease” if the plant or
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machinery is cushion gas.”
(4)
In subsection (2), for “Subsection (1) is” substitute “Subsections (1) and (1A)
are”.

Finance Bill
Part 2 — Anti-avoidance and revenue protection
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(5)
After subsection (6) insert—
“(7)
In this section “cushion gas” means gas that functions or is intended to
function as plant in a particular gas storage facility.”
(6)
In section 104A(1) (special rate expenditure)—
(a)
omit the “and” at the end of paragraph (d), and
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(b)
after paragraph (e) insert “and
(f)
expenditure incurred on or after 1 April 2010 on the
provision of cushion gas (within the meaning given by
section 70J(7)).”
(7)
After section 104F insert—
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“104G
Disposal events in respect of cushion gas
(1)
This section applies if expenditure incurred by a person on the
provision of cushion gas used in a particular gas storage facility
includes both new expenditure and old expenditure.
(2)
Any disposal event which concerns any of that cushion gas is to be
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treated for the purposes of this Part as relating to cushion gas which is
the subject of the new expenditure before cushion gas which is the
subject of the old expenditure.
(3)
The result of subsection (2) (including any further application of that
subsection) is that a disposal event may be treated as relating—
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(a)
only to cushion gas which is the subject of the new expenditure,
(b)
both to—
(i)
cushion gas which is the subject of the new expenditure,
and
(ii)
cushion gas which is the subject of the old expenditure,
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or
(c)
only to cushion gas which is the subject of the old expenditure.
(4)
If a disposal event is treated, as a result of subsection (2), as relating
both to—
(a)
cushion gas which is the subject of the new expenditure, and
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(b)
cushion gas which is the subject of the old expenditure,

it is to be treated for the purposes of this Part as two separate disposal
events, the first relating to cushion gas within paragraph (a) and the
second relating to cushion gas within paragraph (b).
(5)
In this section—
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“cushion gas” has the meaning given by section 70J(7),
“new expenditure” means expenditure incurred on or after 1 April
2010, and
“old expenditure” means expenditure incurred before that date.”
(8)
The amendments made by subsections (2) to (5) have effect in relation to leases
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whose inception (within the meaning given by section 70YI(1) of CAA 2001) is
on or after 1 April 2010.
(9)
The amendments made by subsection (6) have effect in relation to expenditure
incurred on or after 1 April 2010.

Finance Bill
Part 2 — Anti-avoidance and revenue protection
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(10)
The amendment made by subsection (7) has effect in relation to disposal events
on or after 1 April 2010.
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Sale of lessors: consortium relationships
(1)
Chapters 3 and 4 of Part 9 of CTA 2010 (sales of lessors) are amended as
follows.
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(2)
In section 393(7) (qualifying 75% subsidiaries), omit “or 90%”.
(3)
In section 394 (consortium relationships)—
(a)
in subsections (1)(b), (4) and (5)(b), for “90%” substitute “75%”, and
(b)
in subsection (9)(b), omit “or 90%”.
(4)
In section 398 (qualifying 75% or 90% subsidiary), omit—
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(a)
subsections (5) and (6), and
(b)
in subsection (7)(b), “and “90% subsidiary””,

and, in the heading, omit “or 90%”.
(5)
In section 405(2)(b) and (6) (adjustments to basic amount), for “90%” substitute
“75%”.
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(6)
In sections 408(5)(b) and 430(4)(b) (associated company), for “90%” substitute
“75%”.
(7)
In Schedule 4 to CTA 2010, omit the entry relating to “qualifying 90%
subsidiary (in Chapters 3 to 6 of Part 9)”.
(8)
The amendments made by this section have effect where the relevant day is on
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or after 9 December 2009.
(9)
Corresponding amendments, having effect where the relevant day is on or
after that date, are to be treated as having been made in Schedule 10 to FA 2006.
Charities etc
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Charities and community amateur sports clubs: definitions
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Schedule 7 contains provision about the meaning of “charity” (and related
expressions) and “community amateur sports club”.
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Gifts of shares etc to charities
Schedule 8 contains provision about schemes to obtain or increase relief in
respect of certain gifts to charities.
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Miscellaneous amendments
Schedule 9 contains miscellaneous amendments of provisions relating to
charities.