Finance (No.2) Bill

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Session 2010 - 11
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Finance (No.2) Bill

Finance (No.2) Bill
Schedule 6 — Consortium claims for group relief
56

Schedule 6
Section 12

Consortium claims for group relief
Introductory
1
Chapter 4 of Part 5 of CTA 2010 (claims for group relief) is amended as
follows.
5
Ability to claim group relief where link company established in the EEA
2
In section 129 (overview of Chapter), in subsection (2), for “Sections 130 to
134” substitute “Sections 130 to 134A”.
3
In section 130(2) (group relief claims on amounts surrenderable under
Chapter 2), in Requirement 3—
10
(a)
in paragraph (c), for “section 133(1), (3) and (4)” substitute “section
133(1) and (3) to (8)”, and
(b)
in paragraph (d), for “section 133(2), (3) and (4)” substitute “section
133(2) to (8)”.
4     (1)
Section 133 (conditions to be met for consortium claims for group relief) is
15
amended as follows.
      (2)
In subsection (1)—
(a)
omit the “and” at the end of paragraph (e), and
(b)
for paragraph (f) substitute—
“(f)
the surrendering company and the claimant company
20
are both UK related, and
(g)
the link company is UK related or established in the
EEA.”
      (3)
In subsection (2)—
(a)
omit the “and” at the end of paragraph (e), and
25
(b)
for paragraph (f) substitute—
“(f)
the surrendering company and the claimant company
are both UK related, and
(g)
the link company is UK related or established in the
EEA.”
30
      (4)
After subsection (4) insert—
“(5)
Subsection (6) applies where the link company—
(a)
is established in the EEA, but
(b)
is not UK related.
(6)
Neither consortium condition 2 nor consortium condition 3 is met
35
unless the link company is a member of the same group of
companies as the other company mentioned in subsection (1)(d) or
(2)(d) without the involvement of a relevant company.
(7)
A “relevant company” is a company that is not established in the
EEA.
40

Finance (No.2) Bill
Schedule 6 — Consortium claims for group relief
57

(8)
For the purposes of subsection (6) a company (“A”) is a member of
the same group of companies as another company (“B”) without the
involvement of a relevant company if—
(a)
in a case where A is the 75% subsidiary of B, B owns at least
75% of A’s ordinary share capital otherwise than through a
5
relevant company,
(b)
in a case where B is the 75% subsidiary of A, A owns at least
75% of B’s ordinary share capital otherwise than through a
relevant company, and
(c)
in a case where neither company is the 75% subsidiary of the
10
other but both are 75% subsidiaries of a third company, the
third company—
(i)
is not a relevant company, and
(ii)
owns at least 75% of A’s ordinary share capital, and at
least 75% of B’s ordinary share capital, otherwise than
15
through a relevant company.”
5
After section 134 (meaning of “UK related” company) insert—
“134A
Companies “established in the EEA”
(1)
For the purposes of section 133 a company is established in the EEA
if—
20
(a)
it is constituted under the law of the United Kingdom or an
EEA territory, and
(b)
it has its registered office, central administration or principal
place of business within the European Economic Area.
(2)
In this section “EEA territory”, in relation to any time, means a
25
territory outside the United Kingdom that is within the European
Economic Area at that time.”
6     (1)
Section 146 (maximum amount of group relief in consortium claims) is
amended as follows.
      (2)
In subsection (3)—
30
(a)
omit the “and” at the end of paragraph (a), and
(b)
after that paragraph insert—
“(aa)
assuming that the link company was UK related,
and”.
      (3)
In subsection (6), at the end insert “, assuming that the link company was UK
35
related.”
      (4)
In subsection (8)—
(a)
omit the “and” at the end of the definition of “consortium claim”, and
(b)
at the end insert “, and
“UK related”, in relation to a company, has the meaning
40
given by section 134.”
Limitations on group relief based on proportion of voting power held by company
7     (1)
Section 143 (which makes provision limiting the amount of group relief that
is available in cases where the surrendering company is owned by a
consortium) is amended as follows.
45

Finance (No.2) Bill
Schedule 6 — Consortium claims for group relief
58

      (2)
In subsection (3)—
(a)
omit the “and” at the end of paragraph (b), and
(b)
at the end of paragraph (c) insert “, and
(d)
the proportion of the voting power in the
surrendering company that is directly possessed by
5
the claimant company.”
      (3)
In subsection (4)(a), for “paragraphs (a) to (c)” substitute “paragraphs (a) to
(d)”.
8     (1)
Section 144 (which makes provision limiting the amount of group relief that
is available in cases where the claimant company is owned by a consortium)
10
is amended as follows.
      (2)
In subsection (3)—
(a)
omit the “and” at the end of paragraph (b), and
(b)
at the end of paragraph (c) insert “, and
(d)
the proportion of the voting power in the claimant
15
company that is directly possessed by the
surrendering company.”
      (3)
In subsection (4)(a), for “paragraphs (a) to (c)” substitute “paragraphs (a) to
(d)”.
Limitations on group relief where arrangements preventing control are in place
20
9
After section 146 insert—
“146A
Conditions 1 and 2: surrendering company not controlled by claimant
company etc
(1)
This section applies if—
(a)
the claimant company makes a claim for group relief based
25
on consortium condition 1,
(b)
it is the surrendering company that is owned by the
consortium, and
(c)
during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
30
prevent the claimant company, either alone or together with
one or more other companies that are members of the
consortium, from controlling the surrendering company.
(2)
This section also applies if—
(a)
the claimant company makes a claim for group relief based
35
on consortium condition 2, and
(b)
during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
prevent the link company, either alone or together with one
or more other companies that are members of the
40
consortium, from controlling the surrendering company.
(3)
Arrangements are within this subsection if—
(a)
the company, either alone or together with one or more other
companies that are members of the consortium, would
control the surrendering company, but for the existence of
45
the arrangements, and

Finance (No.2) Bill
Schedule 6 — Consortium claims for group relief
59

(b)
the arrangements form part of a scheme the main purpose, or
one of the main purposes, of which is to enable the claimant
company to obtain a tax advantage under this Chapter.
(4)
The group relief to be given on the claim is to be determined as if the
surrenderable amount for the overlapping period were 50% of what
5
it would be but for this section (see section 139(2) to determine the
surrenderable amount for the overlapping period).
(5)
In this section “the overlapping period” is to be read in accordance
with section 142.
(6)
Section 1139 (“tax advantage”) applies for the purposes of this
10
section.
146B
Conditions 1 and 3: claimant company not controlled by surrendering
company etc
(1)
This section applies if—
(a)
the claimant company makes a claim for group relief based
15
on consortium condition 1,
(b)
it is the claimant company that is owned by the consortium,
and
(c)
during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
20
prevent the surrendering company, either alone or together
with one or more other companies that are members of the
consortium, from controlling the claimant company.
(2)
This section also applies if—
(a)
the claimant company makes a claim for group relief based
25
on consortium condition 3, and
(b)
during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
prevent the link company, either alone or together with one
or more other companies that are members of the
30
consortium, from controlling the claimant company.
(3)
Arrangements are within this subsection if—
(a)
the company, either alone or together with one or more other
companies that are members of the consortium, would
control the claimant company, but for the existence of the
35
arrangements, and
(b)
the arrangements form part of a scheme the main purpose, or
one of the main purposes, of which is to enable the claimant
company to obtain a tax advantage under this Chapter.
(4)
The group relief to be given on the claim is to be determined as if the
40
claimant company’s total profits for the overlapping period were
50% of what they would be but for this section (see section 140(2) to
determine the total profits for the overlapping period).
(5)
In this section “the overlapping period” is to be read in accordance
with section 142.
45
(6)
Section 1139 (“tax advantage”) applies for the purposes of this
section.”

Finance (No.2) Bill
Schedule 7 — First-year allowances for zero-emission goods vehicles
60

Commencement
10
The amendments made by this Schedule have effect in relation to accounting
periods beginning on or after 12 July 2010.
Schedule 7
Section 18

First-year allowances for zero-emission goods vehicles
5
1
CAA 2001 is amended as follows.
2
In section 39 (first-year allowances available for certain types of qualifying
expenditure only), at the appropriate place in the list insert—

“section 45DA
expenditure on zero-emission goods vehicles,”.

3
After section 45D insert—
10
“45DA
Expenditure on zero-emission goods vehicles
(1)
Expenditure is first-year qualifying expenditure if—
(a)
it is incurred in the period of 5 years beginning with the
relevant date,
(b)
it is incurred on the provision of a zero-emission goods
15
vehicle,
(c)
the vehicle is unused and not second-hand,
(d)
the vehicle is registered, and
(e)
the expenditure is not excluded by section 46 (general
exclusions).
20
(2)
For the purposes of subsection (1)(d) it does not matter whether the
vehicle is first registered before or after the expenditure is incurred.
(3)
In this section—
“goods vehicle” means a mechanically propelled road vehicle
which is of a design primarily suited for the conveyance of
25
goods or burden of any description;
“the relevant date” means—
(a)
in the case of expenditure incurred by a person within
the charge to corporation tax, 1 April 2010, and
(b)
in the case of expenditure incurred by a person within
30
the charge to income tax, 6 April 2010;
“zero-emission goods vehicle” means a goods vehicle which
cannot in any circumstances emit CO2 by being driven.
(4)
The Treasury may by order amend this Chapter so as to provide for
specified descriptions of vehicles to be treated, or not to be treated,
35
as goods vehicles for the purposes of this section.
(5)
This section is subject to section 45DB.