Finance (No.2) Bill

House of Commons

Session 2010 - 11
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Other Bills before Parliament

Finance (No.2) Bill

Finance (No.2) Bill
Part 1 — Income tax, corporation tax and capital gains tax
12

(8)
In relation to those accounting periods the amendments, and corresponding
amendments of paragraphs 6 and 11 of Schedule 5 to FA 2006, are to be treated
as always having had effect.
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Insurance business transfer schemes: non-profit fund transferred assets
(1)
Chapter 1 of Part 12 of ICTA (insurance companies etc) is amended as follows.
5
(2)
Section 444AB (transfer schemes: charge on transferor in respect of relevant
non-transferred assets and retained assets) is amended as follows.
(3)
In subsection (1)(b), for “or condition” substitute “, AA or”.
(4)
In subsection (2), for the words after “business transfer” substitute “scheme—
(a)
if the transferee is an insurance company or an insurance special
10
purpose vehicle, are not, immediately after their transfer, assets
of the transferee’s long-term insurance fund, or
(b)
if the transferee is not an insurance company, an insurance
special purpose vehicle or a friendly society, would not,
immediately after their transfer, be assets of the transferee’s
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long-term insurance fund if the transferee were an insurance
company with permission under Part 4 of the Financial Services
and Markets Act 2000 to effect or carry out contracts of
insurance,

(“non long-term fund transferred assets”).”
20
(5)
After that subsection insert—
“(2A)
Condition AA is met if—
(a)
the transferee is not an insurance company, an insurance special
purpose vehicle or a friendly society, and
(b)
any of the assets of the transferor’s long-term insurance fund
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which are transferred from the transferor to the transferee by
the insurance business transfer scheme would, immediately
after their transfer, be assets of a non-profit fund of the
transferee if the transferee were an insurance company with
permission under Part 4 of the Financial Services and Markets
30
Act 2000 to effect or carry out contracts of insurance (“non-
profit fund transferred assets”).”
(6)
In subsection (4), for “relevant non-transferred assets or retained assets (or
both)” substitute “non long-term fund transferred assets, non-profit fund
transferred assets or retained assets”.
35
(7)
In subsection (5), for “relevant non-transferred assets;” substitute “non long-
term fund transferred assets, section 444ABAA makes provision for its
calculation in relation to non-profit fund transferred assets”.
(8)
In subsection (8), for “paragraph (2)(a)” substitute “subsection (2)(a) and (b)”.
(9)
In subsection (1) of section 444ABA (relevant amount in relation to relevant
40
non-transferred assets), for “relevant non-transferred assets” substitute “non
long-term fund transferred assets”; and for the heading of that section
substitute “Non long-term fund transferred assets”.

Finance (No.2) Bill
Part 1 — Income tax, corporation tax and capital gains tax
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(10)
After that section insert—
“444ABAA
Non-profit fund transferred assets
(1)
For the purposes of section 444AB the relevant amount in relation to
assets that are non-profit fund transferred assets is—
where—
5
FVA is the fair value of the assets on the transfer date,
ABTO is any amount brought into account in respect of the assets
as a business transfer-out and shown (or treated as shown) in
line 32 of Form 40 in the periodical return of the transferor for
the period of account of the transferor including the transfer
10
date, and
TL is the amount of any non-profit fund transferred liabilities
which are shown (or treated as shown) in any of lines 17, 21 to
23 and 31 to 38, but not in line 61, in Form 14 in the periodical
return for the period of account of the transferor ending (or
15
treated as ending by section 444AA) immediately before the
transfer date or, if there is no period of account of the transferor
so ending (or treated as so ending), the amount of any liabilities
which would be so shown if one did.
(2)
In subsection (1) “non-profit fund transferred liabilities” means such of
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the liabilities of the transferor’s long-term insurance fund as are
transferred from the transferor to the transferee by the insurance
business transfer scheme and were, immediately before their transfer,
liabilities of a non-profit fund of the transferor.
(3)
See section 444AA for the meaning of “the transfer date” in this
25
section.”
(11)
The amendments made by this section have effect in relation to transfers of
business taking place on or after 22 June 2010.
Chargeable gains
16
Capital gains tax private residence relief: adult placement carers
30
(1)
In section 223(8) of TCGA 1992 (amount of relief), before the “and” at the end
of paragraph (a) insert—
“(aa)
section 225D (private residence of adult placement carer),”.
(2)
In section 224 of that Act (amount of relief: further provisions), insert at the
end—
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“(4)
This section is subject to section 225D (private residence of adult
placement carer).”
(3)
In that Act, after section 225C insert—
“225D
Private residence of adult placement carer
(1)
This section applies where a gain to which section 222 applies accrues
40
to an individual (“A”) and, at any time during A’s period of ownership,
part of the dwelling-house was occupied by another person (“B”)—

Finance (No.2) Bill
Part 1 — Income tax, corporation tax and capital gains tax
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(a)
in England and Wales, pursuant to an adult placement scheme,
(b)
in Scotland, pursuant to arrangements which constitute or form
part of an adult placement service involving the provision of
accommodation for B, or
(c)
in Northern Ireland, pursuant to arrangements made with an
5
adult placement agency for the provision of accommodation for
B.
(2)
For the purposes of this Part, in determining the periods during which
the dwelling-house, or any part of the dwelling-house, was A’s only or
main residence, B’s occupation of part of the dwelling-house pursuant
10
to the scheme or arrangement is to be disregarded.
(3)
For the purposes of section 224, the occupation of the part of the
dwelling-house by B pursuant to the scheme or arrangement does not
amount to the use of that part of the dwelling-house by A exclusively
for the purpose of a trade, business, profession or vocation.
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(4)
In this section—
“adult placement agency” means an organisation or
undertaking—
(a)
that arranges for the provision of care and support
(including accommodation) for persons in need, and
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(b)
in respect of which a requirement to register arises
under Article 12 of the Health and Personal Social
Services (Quality, Improvement and Regulation)
(Northern Ireland) Order 2003,
“adult placement scheme” means a scheme—
25
(a)
under which an individual agrees with the person
carrying on the scheme to provide care and support
(including accommodation) to an adult who is in need of
it, and
(b)
in respect of which a requirement to register arises
30
under section 11 of the Care Standards Act 2000, and
“adult placement service” has the meaning given by paragraph 11
of schedule 12 to the Public Services Reform (Scotland) Act
2010.”
(4)
The amendments made by this section have effect in relation to disposals made
35
on or after 9 December 2009.
(5)
Until the coming into force of paragraph 11 of schedule 12 to the Public
Services Reform (Scotland) Act 2010, the reference to that provision in section
225D(4) of TCGA 1992 is to section 2(16) of the Regulation of Care (Scotland)
Act 2001.
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17
Reinvestment of ring fence assets: acquisition by member of group
(1)
After section 198G of TCGA 1992 insert—
“198H
Acquisition by member of same group
Section 198A or 198B is to apply where—
(a)
the disposal is by a company which, at the time of the disposal,
45
is a member of a group of companies (within the meaning given
in section 170),

Finance (No.2) Bill
Part 2 — Other taxes and duties
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(b)
the acquisition is by another company which, at the time of the
acquisition, is a member of the same group, and
(c)
the claim under that section is made by both companies,
as if both companies were the same person.”
(2)
The amendment made by this section has effect in relation to disposals made
5
on or after 22 April 2009 (whether the acquisition takes place before, on or after
that date).
Capital allowances
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First-year allowances on zero-emission goods vehicles
Schedule 7 contains provision about first-year allowances on zero-emission
10
goods vehicles.
Part 2
Other taxes and duties
Value added tax
19
Non-business use of business assets etc
15
Schedule 8 contains—
(a)
provision about input tax, and
(b)
provision about supplies under paragraph 5(4) of Schedule 4 to VATA
1994.
20
Supplies of gas, heat or cooling
20
(1)
In section 9A of VATA 1994 (reverse charge on gas and electricity supplied by
persons outside the United Kingdom)—
(a)
for subsection (5) substitute—
“(5)
“Relevant goods” means—
(a)
gas supplied through a natural gas system situated
25
within the territory of a member State or any network
connected to such a system,
(b)
electricity, and
(c)
heat or cooling supplied through a network.”, and
(b)
in the heading, for “and electricity” substitute “, electricity, heat or
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cooling”.
(2)
In Schedule 4 to VATA 1994 (matters to be treated as supply of goods or
services), in paragraph 3 after “refrigeration” insert “or other cooling,”.
(3)
The amendments made by this section have effect in relation to supplies made
on or after 1 January 2011.
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21
Supplies of aircraft etc
(1)
Schedule 8 to VATA 1994 (zero-rating) is amended as follows.

Finance (No.2) Bill
Part 2 — Other taxes and duties
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(2)
In Note (A1) of Group 8 (transport: definition of “qualifying aircraft” etc), for
paragraph (b) substitute—
“(b)
a “qualifying aircraft” is any aircraft which —
(i)
is used by an airline operating for reward chiefly on
international routes, or
5
(ii)
is used by a State institution and meets the condition in
Note (B1).”
(3)
After that Note insert—
“(B1)
The condition is that the aircraft—
(a)
is of a weight of not less than 8,000 kilograms, and
10
(b)
is neither designed nor adapted for use for recreation or
pleasure.
(C1)
In Note (A1)(b)—
“airline” means an undertaking which provides services for the
carriage by air of passengers or cargo (or both);
15
“State institution” has the same meaning as in Part B of Annex X
to the Council Directive 2006/112/EC on the common system
of value added tax (transactions which member States may
continue to exempt).”
(4)
The amendments made by this section have effect in relation to supplies made,
20
and acquisitions and importations taking place, on or after 1 January 2011.
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Postal services etc
(1)
In Schedule 8 to VATA 1994 (zero-rating), in Group 8—
(a)
in item 4 (transport of passengers), for “the Post Office company”
substitute “a universal service provider”, and
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(b)
after Note (4D) insert—

“(4E) “Universal service provider” means a person who
provides a universal postal service (within the meaning of the
Postal Services Act 2000), or part of such a service, in the
United Kingdom.”
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(2)
In Schedule 9 to that Act (exemptions), for Group 3 (postal services)
substitute—
“GROUP 3 — POSTAL SERVICES

Item No

1 The supply of public postal services by a universal service
35
provider.

2 The supply of goods by a universal service provider which is
incidental to the supply of public postal services by that provider.

NOTES

(1) “Universal service provider” means a person who provides a
40
universal postal service, or part of such a service, in the United
Kingdom.

Finance (No.2) Bill
Part 2 — Other taxes and duties
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(2) Subject to the following Notes, “public postal services”, in relation
to a universal service provider, means any postal services which the
provider is required to provide in the discharge of a licence duty.

(3) Public postal services include postal services which a universal
service provider provides to allow a person access to the provider’s
5
postal facilities, where such services are provided pursuant to a
licence duty.

(4) Services are not “public postal services” if—
(a)
the price is not controlled by or under a licence, or
(b)
any of the other terms on which the services are provided are
10
freely negotiated.

(5) But Note (4) does not apply if a licence duty requires the universal
service provider to make the services available to persons
generally—
(a)
where the price is not controlled by or under the licence, at
15
the same price, or
(b)
where terms are freely negotiated as mentioned in Note
(4)(b), on those terms.

(6) In this Group—
“licence” means a licence under Part 2 of the Postal Services Act
20
2000;
“licence duty” means a duty imposed as a condition of a licence;
“postal facilities”, in relation to a universal service provider,
means the resources and systems deployed by the provider,
for the purpose of discharging any licence duty to provide a
25
universal postal service or part of such a service;
“postal services” and “universal postal service” have the same
meaning as in the Postal Services Act 2000.”
(3)
The following provisions are omitted—
(a)
in section 96(1) of VATA 1994, the definition of “the Post Office
30
company”, and
(b)
paragraph 22(3) and (4) of Schedule 8 to the Postal Services Act 2000.
(4)
The amendments made by this section have effect in relation to supplies made
on or after 31 January 2011.
Tobacco products duty
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Long cigarettes
(1)
In section 4 of TPDA 1979 (calculation of duty on long cigarettes)—
(a)
for “than 9 cm.” substitute “than 8 cm.”, and
(b)
for “each 9 cm. or part thereof” substitute “the first 8 cm. of it, each 3 cm.
portion of the remainder of it (if any) and the remaining portion of it (if
40
any)”,

and, in the heading, for “9 cm.” substitute “8 cm.”.
(2)
The amendments made by this section come into force on 1 January 2011.