|
| |
|
(c) | a relevant concession applied to the individual in respect of those |
| |
| |
(d) | the individual did not derive any taxable income, other than |
| |
qualifying care receipts, from the trade. |
| |
(2) | Sections 824 to 827 of ITTOIA 2005 (capital allowances) are to have effect as |
| 5 |
if the individual had been a relevant individual for— |
| |
(a) | the pre-commencement tax year, or |
| |
(b) | if sub-paragraph (1)(a)(ii) applies, the pre-commencement tax year |
| |
and each earlier tax year in the series. |
| |
(3) | “The pre-commencement tax year” means the tax year immediately |
| 10 |
| |
(a) | for an individual who makes an election under paragraph 36, the tax |
| |
| |
(b) | otherwise, the tax year 2010-11. |
| |
(4) | “Relevant concession” has the same meaning as in paragraph 36. |
| 15 |
| |
| |
| |
Enterprise investment scheme |
| |
1 (1) | Part 5 of ITA 2007 (enterprise investment scheme) is amended as follows. |
| |
(2) | In section 179 (meaning of “qualifying business activity”)— |
| 20 |
(a) | in subsection (2)(b)(i), omit “wholly or mainly in the United |
| |
| |
| |
(c) | in subsection (4)(b)(i) and (ii), omit “wholly or mainly in the United |
| |
| 25 |
| |
(3) | In section 180 (overview of Chapter 4), before paragraph (a) insert— |
| |
“(za) | UK permanent establishment (see section 180A), |
| |
(zb) | financial health (see section 180B),”. |
| |
(4) | Before section 181 insert— |
| 30 |
“180A | The UK permanent establishment requirement |
| |
(1) | The issuing company must meet the UK permanent establishment |
| |
requirement throughout period B. |
| |
(2) | The UK permanent establishment requirement is that the issuing |
| |
company has a permanent establishment in the United Kingdom. |
| 35 |
180B | The financial health requirement |
| |
(1) | The issuing company must meet the financial health requirement at |
| |
the beginning of period B. |
| |
|
| |
|
| |
|
(2) | The financial health requirement is that the issuing company is not |
| |
| |
(3) | The issuing company is “in difficulty” if it is reasonable to assume |
| |
that it would be regarded as a firm in difficulty for the purposes of |
| |
the Community Guidelines on State Aid for Rescuing and |
| 5 |
Restructuring Firms in Difficulty (2004/C 244/02).” |
| |
(5) | After section 191 (and before the italic heading “Excluded activities”) insert— |
| |
“191A | Meaning of “permanent establishment” |
| |
(1) | This section applies for the purposes of this Part. |
| |
(2) | A company has a “permanent establishment” in the United Kingdom |
| 10 |
| |
(a) | it has a fixed place of business there through which the |
| |
business of the company is wholly or partly carried on, or |
| |
(b) | an agent acting on behalf of the company has and habitually |
| |
exercises there authority to enter into contracts on behalf of |
| 15 |
| |
(3) | For the purposes of this section “fixed place of business” includes |
| |
(without prejudice to the generality of that expression)— |
| |
(a) | a place of management, |
| |
| 20 |
| |
| |
| |
(f) | a mine, an oil or gas well, a quarry or any other place of |
| |
extraction of natural resources, and |
| 25 |
(g) | a building site or construction or installation project. |
| |
(4) | If the condition in subsection (5) is met, a company is not regarded as |
| |
having a permanent establishment in the United Kingdom by reason |
| |
| |
(a) | a fixed place of business is maintained there for the purpose |
| 30 |
of carrying on activities for the company, or |
| |
(b) | an agent carries on activities there for and on behalf of the |
| |
| |
(5) | The condition is that, in relation to the business of the company as a |
| |
whole, the activities carried on are only of a preparatory or auxiliary |
| 35 |
| |
(6) | For this purpose “activities of a preparatory or auxiliary character” |
| |
include (without prejudice to the generality of that expression)— |
| |
(a) | the use of facilities for the purpose of storage, display or |
| |
delivery of goods or merchandise belonging to the company, |
| 40 |
(b) | the maintenance of a stock of goods or merchandise |
| |
belonging to the company for the purpose of storage, display |
| |
| |
(c) | the maintenance of a stock of goods or merchandise |
| |
belonging to the company for the purpose of processing by |
| 45 |
| |
|
| |
|
| |
|
(d) | purchasing goods or merchandise, or collecting information, |
| |
| |
(7) | A company is not regarded as having a permanent establishment in |
| |
the United Kingdom by reason of the fact that it carries on business |
| |
there through an agent of independent status (including a broker or |
| 5 |
a general commission agent) acting in the ordinary course of the |
| |
| |
(8) | A company is not regarded as having a permanent establishment in |
| |
the United Kingdom by reason of the fact that it controls a company |
| |
| 10 |
(a) | is resident there, or |
| |
(b) | carries on business there (whether through a permanent |
| |
establishment or otherwise). |
| |
(9) | The Treasury may by regulations amend this section.” |
| |
| 15 |
2 (1) | Part 6 of ITA 2007 (venture capital trusts) is amended as follows. |
| |
(2) | In section 274 (requirements for the giving of approval)— |
| |
(a) | in the table in subsection (2), in the first entry, in column 2, for |
| |
“included in the official UK list” substitute “admitted to trading on a |
| |
| 20 |
(b) | in the last entry in the table, in columns 1 and 2, for “30%” substitute |
| |
| |
(c) | in paragraphs (c) and (d) of subsection (3), for “30%” substitute |
| |
| |
| 25 |
“(4) | In this section “regulated market” has the same meaning as |
| |
in Directive 2004/39/EC of the European Parliament and |
| |
of the Council on markets in financial instruments (see |
| |
| |
(5) | The Treasury may by regulations amend— |
| 30 |
(a) | the first entry in the table in subsection (2) (the |
| |
| |
| |
(3) | In section 275(3)(b) (alternative requirements for the giving of approval), for |
| |
| 35 |
(4) | In section 278(1) (conditions relating to value of investments: general), for |
| |
| |
(5) | In section 280(2) (conditions relating to qualifying holdings and eligible |
| |
shares), for “30%” substitute “70%”. |
| |
(6) | In section 285 (interpretation of Chapter 3 of Part 6), for subsection (3) |
| 40 |
| |
“(3A) | For the purposes of this Chapter, shares in a company are “eligible” |
| |
| |
|
| |
|
| |
|
(a) | a present or future preferential right to dividends that is |
| |
| |
(b) | a present or future preferential right to the company’s assets |
| |
| |
(c) | a present or future right to be redeemed. |
| 5 |
(3B) | A preferential right to dividends carried by a share in a company is |
| |
within this subsection if— |
| |
(a) | the amount of any dividends payable pursuant to the right, |
| |
or the date or dates on which they are payable, depend to any |
| |
extent on a decision of the company, the holder of the share |
| 10 |
| |
(b) | the amount of any dividends that become payable at any time |
| |
pursuant to the right includes any amount that became |
| |
payable at any earlier time pursuant to the right, but has not |
| |
| 15 |
(7) | In section 286 (qualifying holdings: introduction), in subsection (3), before |
| |
| |
“(za) | UK permanent establishment (see section 286A), |
| |
(zb) | financial health (see section 286B),”. |
| |
(8) | Before section 287 insert— |
| 20 |
“286A | The UK permanent establishment requirement |
| |
| The requirement of this section, at any time on or after the issue of |
| |
the relevant holding, is that the relevant company has a permanent |
| |
establishment in the United Kingdom at all times from the issue of |
| |
the holding to the time in question. |
| 25 |
286B | The financial health requirement |
| |
(1) | The requirement of this section is that the relevant company is not, at |
| |
the time of the issue of the relevant holding, in difficulty. |
| |
(2) | The relevant company is “in difficulty” if it is reasonable to assume |
| |
that it would be regarded as a firm in difficulty for the purposes of |
| 30 |
the Community Guidelines on State Aid for Rescuing and |
| |
Restructuring Firms in Difficulty (2004/C 244/02).” |
| |
(9) | In section 289(5) (the proportion of eligible shares requirement), for “285(3)” |
| |
substitute “285(3A) and (3B)”. |
| |
(10) | In section 291 (carrying on of qualifying activity requirement)— |
| 35 |
(a) | in subsection (2), for “A qualifying trade carried on wholly or mainly |
| |
in the United Kingdom” substitute “Carrying on a qualifying trade”, |
| |
(b) | in subsection (3), omit “wholly or mainly in the United Kingdom”, |
| |
| |
(c) | in subsection (4)(b), omit “wholly or mainly in the United Kingdom”. |
| 40 |
(11) | In section 300(2) (meaning of “qualifying trade”), for paragraphs (a) and (b) |
| |
| |
“(a) | that a trade will be derived which will be a qualifying trade, |
| |
| |
(b) | that a trade will benefit which is or will be a qualifying |
| 45 |
| |
|
| |
|
| |
|
(12) | After section 302 (and before the italic heading “Excluded activities”) insert— |
| |
“302A | Meaning of “permanent establishment” |
| |
(1) | This section applies for the purposes of this Chapter. |
| |
(2) | A company has a “permanent establishment” in the United Kingdom |
| |
| 5 |
(a) | it has a fixed place of business there through which the |
| |
business of the company is wholly or partly carried on, or |
| |
(b) | an agent acting on behalf of the company has and habitually |
| |
exercises there authority to enter into contracts on behalf of |
| |
| 10 |
(3) | For the purposes of this section “fixed place of business” includes |
| |
(without prejudice to the generality of that expression)— |
| |
(a) | a place of management, |
| |
| |
| 15 |
| |
| |
(f) | a mine, an oil or gas well, a quarry or any other place of |
| |
extraction of natural resources, and |
| |
(g) | a building site or construction or installation project. |
| 20 |
(4) | If the condition in subsection (5) is met, a company is not regarded as |
| |
having a permanent establishment in the United Kingdom by reason |
| |
| |
(a) | a fixed place of business is maintained there for the purpose |
| |
of carrying on activities for the company, or |
| 25 |
(b) | an agent carries on activities there for and on behalf of the |
| |
| |
(5) | The condition is that, in relation to the business of the company as a |
| |
whole, the activities carried on are only of a preparatory or auxiliary |
| |
| 30 |
(6) | For this purpose “activities of a preparatory or auxiliary character” |
| |
include (without prejudice to the generality of that expression)— |
| |
(a) | the use of facilities for the purpose of storage, display or |
| |
delivery of goods or merchandise belonging to the company, |
| |
(b) | the maintenance of a stock of goods or merchandise |
| 35 |
belonging to the company for the purpose of storage, display |
| |
| |
(c) | the maintenance of a stock of goods or merchandise |
| |
belonging to the company for the purpose of processing by |
| |
| 40 |
(d) | purchasing goods or merchandise, or collecting information, |
| |
| |
(7) | A company is not regarded as having a permanent establishment in |
| |
the United Kingdom by reason of the fact that it carries on business |
| |
there through an agent of independent status (including a broker or |
| 45 |
a general commission agent) acting in the ordinary course of the |
| |
| |
|
| |
|
| |
|
(8) | A company is not regarded as having a permanent establishment in |
| |
the United Kingdom by reason of the fact that it controls a company |
| |
| |
(a) | is resident there, or |
| |
(b) | carries on business there (whether through a permanent |
| 5 |
establishment or otherwise). |
| |
(9) | The Treasury may by regulations amend this section.” |
| |
(13) | In section 313 (interpretation of Chapter 4 of Part 6)— |
| |
(a) | in subsection (6), omit the “and” at the end of paragraph (a) and after |
| |
paragraph (b) insert “, and |
| 10 |
(c) | any right to dividends carried by shares in the |
| |
company where the shares— |
| |
(i) | are eligible shares, and |
| |
(ii) | are held by the investing company.”, and |
| |
(b) | after subsection (7) insert— |
| 15 |
“(8) | In subsection (6) “eligible shares” has the same meaning as in |
| |
Chapter 3 (see section 285(3A) and (3B)).” |
| |
| |
3 (1) | Chapter 1 of Part 16 of ITA 2007 (definitions) is amended as follows. |
| |
(2) | In section 989 (the definitions), omit the definition of “permanent |
| 20 |
| |
(3) | After section 1007 insert— |
| |
“1007A | Meaning of “permanent establishment” |
| |
(1) | In the Income Tax Acts “permanent establishment”, in relation to a |
| |
company, is to be read in accordance with Chapter 2 of Part 24 of |
| 25 |
| |
(2) | This section does not apply for the purposes of— |
| |
(a) | Part 5 of this Act (see instead section 191A), or |
| |
(b) | Chapter 4 of Part 6 of this Act (see instead section 302A).” |
| |
4 (1) | Schedule 4 to that Act (index of defined expressions) is amended as follows. |
| 30 |
(2) | In column 2 of the entry for “eligible shares (in Chapter 3 of Part 6)”, for |
| |
“285(3)” substitute “285(3A) and (3B)”. |
| |
(3) | In column 1 of the entry for “the 30% eligible shares condition (in Chapter 3 |
| |
of Part 6)”, for “30%” substitute “70%”. |
| |
(4) | For the entry for “permanent establishment” substitute— |
| 35 |
| “permanent establishment (except in |
| | | | | Part 5 and Chapter 4 of Part 6) |
| | | | | permanent establishment (in Part 5) |
| | | |
|
|
| |
|
| |
|
| permanent establishment (in Chapter |
| | | | | | | | |
|
|
| |
5 | In consequence of the amendment made by paragraph 3(2), omit paragraph |
| |
562(6) of Schedule 1 to CTA 2010. |
| 5 |
Commencement of amendments relating to 70% eligible shares condition |
| |
6 (1) | The amendments made by paragraphs 2(2)(b) and (c), (3) to (6) and 4(2) and |
| |
(3) have effect in relation to accounting periods ending on or after the |
| |
| |
| This is subject to the following provisions of this paragraph. |
| 10 |
(2) | The amendments mentioned in sub-paragraph (1) do not have effect in |
| |
relation to shares or securities held by a company (“the investing company”) |
| |
if the shares or securities— |
| |
(a) | are issued before the commencement day, or |
| |
(b) | are issued on or after that day and are acquired by the investing |
| 15 |
company by means of the investment of protected money. |
| |
(3) | In this paragraph “protected money” means— |
| |
(a) | money raised by the issue before the commencement day of shares |
| |
in or securities of the investing company, or |
| |
(b) | money derived from the investment of such money. |
| 20 |
Commencement of other provisions of this Schedule |
| |
7 (1) | The amendments made by paragraph 1 have effect in relation to shares |
| |
issued on or after the commencement day. |
| |
(2) | The amendments made by paragraph 2(2)(a) and (d) have effect in relation |
| |
to accounting periods ending on or after the commencement day (and have |
| 25 |
effect in relation to shares issued at any time). |
| |
(3) | The amendments made by paragraphs 2(7), (8) and (10) to (12), 3, 4(4) and 5 |
| |
have effect in relation to shares or securities issued on or after the |
| |
| |
(4) | The amendments made by paragraph 2(9) and (13) have effect in relation to |
| 30 |
shares issued at any time. |
| |
Meaning of “the commencement day” |
| |
8 (1) | In paragraphs 6 and 7 “the commencement day” means such day as the |
| |
Treasury may by order appoint. |
| |
(2) | An order may appoint different days for different provisions or different |
| 35 |
| |
|
| |
|