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Finance (No. 2) Bill


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

57

 

(6)   

Neither consortium condition 2 nor consortium condition 3 is met

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

5

EEA.

(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

10

75% of A’s ordinary share capital otherwise than through a

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

15

(c)   

in a case where neither company is the 75% subsidiary of the

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

20

least 75% of B’s ordinary share capital, otherwise than

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

25

if—

(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.

30

(2)   

In this section “EEA territory”, in relation to any time, means a

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.

35

      (2)  

In subsection (3)—

(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”.

40

      (3)  

In subsection (6), at the end insert “, assuming that the link company was UK

related.”

      (4)  

In subsection (8)—

(a)   

omit the “and” at the end of the definition of “consortium claim”, and

 
 

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

58

 

(b)   

at the end insert “, and

“UK related”, in relation to a company, has the meaning

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

5

is available in cases where the surrendering company is owned by a

consortium) 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

10

(d)   

the proportion of the voting power in the

surrendering company that is directly possessed by

the claimant company.”

      (3)  

In subsection (4)(a), for “paragraphs (a) to (c)” substitute “paragraphs (a) to

(d)”.

15

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)

is amended as follows.

      (2)  

In subsection (3)—

(a)   

omit the “and” at the end of paragraph (b), and

20

(b)   

at the end of paragraph (c) insert “, and

(d)   

the proportion of the voting power in the claimant

company that is directly possessed by the

surrendering company.”

      (3)  

In subsection (4)(a), for “paragraphs (a) to (c)” substitute “paragraphs (a) to

25

(d)”.

Limitations on group relief where arrangements preventing control are in place

9          

After section 146 insert—

“146A   

Conditions 1 and 2: surrendering company not controlled by claimant

company etc

30

(1)   

This section applies if—

(a)   

the claimant company makes a claim for group relief based

on consortium condition 1,

(b)   

it is the surrendering company that is owned by the

consortium, and

35

(c)   

during any part of the overlapping period, arrangements

within subsection (3) are in place which enable a person to

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.

40

(2)   

This section also applies if—

(a)   

the claimant company makes a claim for group relief based

on consortium condition 2, and

 
 

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

59

 

(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

consortium, from controlling the surrendering company.

5

(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

the arrangements, and

10

(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

15

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

20

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

25

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

30

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

35

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

40

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

45

arrangements, and

 
 

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

60

 

(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

claimant company’s total profits for the overlapping period were

5

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.

(6)   

Section 1139 (“tax advantage”) applies for the purposes of this

10

section.”

Commencement

10         

The amendments made by this Schedule have effect in relation to accounting

periods beginning on or after 12 July 2010.

Schedule 7

15

Section 18

 

First-year allowances for zero-emission goods vehicles

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,”.

 

20

3          

After section 45D insert—

“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,

25

(b)   

it is incurred on the provision of a zero-emission goods

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

30

exclusions).

(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

35

which is of a design primarily suited for the conveyance of

goods or burden of any description;

“the relevant date” means—

 
 

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

61

 

(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

the charge to income tax, 6 April 2010;

“zero-emission goods vehicle” means a goods vehicle which

5

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,

as goods vehicles for the purposes of this section.

(5)   

This section is subject to section 45DB.

10

45DB    

Exclusions from allowances under section 45DA

(1)   

Expenditure incurred by a person is not first-year qualifying

expenditure under section 45DA if it is within subsection (2), (4) or

(6).

(2)   

Expenditure is within this subsection if, at the time a claim is made

15

under section 3 for a section 45DA allowance in respect of the

expenditure, the person who incurred the expenditure is, or forms

part of, an undertaking within subsection (3).

(3)   

An undertaking is within this subsection if one or both of the

following conditions are met—

20

(a)   

it is reasonable to assume that the undertaking would be

regarded as a firm in difficulty for the purposes of the

Community Guidelines on State Aid for Rescuing and

Restructuring Firms in Difficulty (2004/C 244/02);

(b)   

the undertaking is subject to an outstanding recovery order

25

made by virtue of Article 108(2) of the Treaty on the

Functioning of the European Union (Commission Decision

declaring aid illegal and incompatible with the common

market).

(4)   

Expenditure is within this subsection if it is incurred for the purposes

30

of a qualifying activity—

(a)   

in the fishery or aquaculture sector, as covered by Council

Regulation (EC) No 104/2000, or

(b)   

relating to the management of waste of undertakings.

(5)   

In subsection (4)(b) the reference to waste of undertakings does not

35

include waste of the person who incurred the expenditure or of any

other person forming part of the same undertaking as that person.

(6)   

Expenditure is within this subsection to the extent that it is taken into

account for the purposes of a relevant grant, or relevant payment,

made towards that expenditure.

40

(7)   

A grant or payment is relevant if it is—

(a)   

a notified State aid, other than an allowance under this Part,

or

(b)   

a grant or subsidy, other than a notified State aid, which the

Treasury by order declares to be relevant for the purposes of

45

the withholding of a section 45DA allowance.

 
 

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

62

 

(8)   

If a relevant grant or relevant payment towards the expenditure is

made after the making of a section 45DA allowance, the allowance is

to be withdrawn to that extent.

(9)   

All such assessments and adjustments of assessments are to be made

as are necessary to give effect to subsection (8).

5

(10)   

Any such assessment or adjustment is not out of time if it is made

within 3 years of the end of the chargeable period in which the grant

or payment was made.

(11)   

In this section—

“General Block Exemption Regulation” means Commission

10

Regulation (EC) No. 800/2008 (General block exemption

Regulation);

“management” and “waste” have the meaning given by Article

1 of Directive 2006/12/EC of the European Parliament and of

the Council;

15

“notified State aid” means a State aid notified to and approved

by the European Commission;

“section 45DA allowance” means a first year allowance in

respect of expenditure that is first-year qualifying

expenditure under section 45DA;

20

“undertaking” means—

(a)   

an autonomous enterprise, or

(b)   

an enterprise (not within paragraph (a)) and its

partner enterprises (if any) and its linked enterprises

(if any),

25

and for this purpose “enterprise”, “autonomous enterprise”,

“partner enterprises” and “linked enterprises” have the

meaning given by Annex 1 to the General Block Exemption

Regulation.

(12)   

The Treasury may by order make such provision amending this

30

section as appears to them appropriate for the purpose of giving

effect to any future amendments of or instrument replacing—

(a)   

the General Block Exemption Regulation,

(b)   

the Community Guidelines on State Aid for Rescuing and

Restructuring Firms in Difficulty (2004/C 244/02),

35

(c)   

Council Regulation (EC) No 104/2000,

(d)   

Directive 2006/12/EC of the European Parliament and of the

Council, or

(e)   

the Treaty on the Functioning of the European Union.”

4          

In section 46 (general exclusions applying to first-year qualifying

40

expenditure), in subsection (1), at the appropriate place in the list insert—

 

“section 45DA

(expenditure on zero-emission goods

 
  

vehicles),”.

 

5     (1)  

Section 52 (first-year allowances) is amended as follows.

      (2)  

In subsection (3), at the appropriate place in the Table insert—

45

 
 

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

63

 
 

“Expenditure qualifying under section 45DA

100%”.

 
 

(expenditure on zero-emission goods vehicles)

  

      (3)  

In subsection (5)—

(a)   

omit the “and” at the end of the entry for section 210, and

(b)   

after that entry insert—

5

“ section 212T (cap on first-year allowances: zero-

emission goods vehicles), and”.

6          

After section 212S insert—

“Chapter 16B

Cap on first-year allowances: zero-emission goods vehicles

10

212T    

Cap on first-year allowances: zero-emission goods vehicles

(1)   

A section 45DA allowance is not available in respect of expenditure

(“the current expenditure”) incurred by a person (“the investor”)—

(a)   

if section 45DA allowances have previously been made in

respect of undertaking expenditure of 85 million euros, or

15

(b)   

(where paragraph (a) does not apply) if, and to the extent

that, the aggregate of—

(i)   

the undertaking expenditure in respect of which

section 45DA allowances have previously been made,

and

20

(ii)   

the current expenditure,

   

exceeds 85 million euros.

(2)   

“Undertaking expenditure” means—

(a)   

expenditure incurred by the investor,

(b)   

if the investor is a partnership, expenditure incurred (at any

25

time) by a person who is a partner enterprise forming part of

the investor at the time the current expenditure is incurred,

and

(c)   

if the investor and one or more other persons together form,

or have at any time formed, an undertaking, expenditure

30

which is—

(i)   

incurred by that undertaking, or

(ii)   

incurred by any of those other persons at a relevant

time.

(3)   

Expenditure is incurred by a person at a “relevant time” if it is

35

incurred—

(a)   

at a time when the investor and the person are part of the

same undertaking, or

(b)   

at a time before the investor and the person became part of

the same undertaking (or, if they became part of the same

40

undertaking on more than one occasion, before the last time).

(4)   

For the purposes of subsection (1), expenditure incurred in a

currency other than the euro is to be converted into its equivalent in

 
 

 
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