Most Gracious Sovereign WE, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and to grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Most Gracious Sovereign
Income tax, corporation tax and capital gains tax
Income tax and corporation tax
Schedule 1 contains provision extending foster-care relief to other forms of care.
Part 6 of ITTOIA 2005 (exempt income) is amended as follows.
In section 744 (payments to adopters: England and Wales)—
the existing provision becomes subsection (1),
in that subsection, omit the “and” before paragraph (e) and after that paragraph insert—,
after that subsection insert—, and
in the heading, after “adopters” insert “ , etc ”.
In section 745 (payments to adopters: Scotland)—
the existing provision becomes subsection (1),
in that subsection, omit the “and” before paragraph (d) and after that paragraph insert—,
after that subsection insert—, and
in the heading, after “adopters” insert “ , etc ”.
In section 746 (payments to adopters: Northern Ireland)—
the existing provision becomes subsection (1),
in that subsection, omit the “and” before paragraph (c) and after that paragraph insert—,
after that subsection insert—, and
in the heading, after “adopters” insert “ , etc ”.
The amendments made by this section have effect in relation to the tax year 2010-11 and subsequent tax years.
Chapter 2 of Part 7 of ITTOIA 2005 (qualifying care relief) is amended as follows.
In section 824 (capital allowances: introduction), after subsection (2) insert—
For section 825 substitute—
The amendments made by this section have effect in relation to chargeable periods ending on or after the day on which this Act is passed (“the commencement day”).
For anyone who was a relevant individual for the most recent chargeable period ending before the commencement day, sections 825B and 825C of ITTOIA 2005 have effect (on and after that day) as if references in those sections to section 825A were references to section 825 as it was in force immediately before the commencement day.
Section 378 of ITEPA 2003 (deductions from seafarers' earnings: eligibility) is amended as follows.
In subsection (1)(a), after “relevant taxable earnings” insert “ or EEA-resident earnings ”.
After subsection (5) insert—
The amendments made by this section have effect for the tax year 2011-12 and subsequent tax years but only in relation to eligible periods beginning on or after 6 April 2011.
Schedule 2 contains provision about venture capital schemes.
Schedule 5 to ITEPA 2003 (enterprise management incentives) is amended as follows.
In paragraph 8 (qualifying companies: introduction), omit the “and” at the end of the entry relating to “number of employees” and after the entry relating to “trading activities” insert
After paragraph 14 insert—
In paragraph 15(1) (meaning of “qualifying trade”), omit paragraph (a) (requirement that trade be carried on wholly or mainly in United Kingdom).
The amendments made by this section have effect in relation to options granted on or after the day on which this Act is passed.
Section 646 of ITTOIA 2005 (adjustments between settlor and trustees etc) is amended as follows.
For subsection (4) substitute—
In subsection (5), for “excess” substitute “ repayment ”.
After subsection (6) insert—
In subsection (7), for “Any” substitute “ Subject to subsections (6A) and (6B), any ”.
The amendments made by this section have effect in relation to repayments of tax for the tax year 2010-11 or any subsequent tax year.
In Chapter 16 of Part 15 of ITA 2007, after section 963 (collection of income tax on certain payments by other persons) insert—
Schedule 3 contains provision about company distributions.
Schedule 4 contains provision about the issue of stock dividends by a company UK REIT or the principal company of a group UK REIT.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule 6 contains provision about claims for group relief from corporation tax made by companies which are members of, or owned by, a consortium.
Part 13 of CTA 2009 (additional relief for expenditure on research and development) is amended as follows.
In section 1052 (qualifying expenditure on in-house direct R&D)—
in subsection (1), for “conditions A to E” substitute “ conditions A, B, D and E ”, and
omit subsection (4) (condition C: intellectual property created as result of research and development to which expenditure is attributable to be vested in company).
In section 1053 (qualifying expenditure on contracted out R&D)—
in subsection (1)(b), for “conditions A to D” substitute “ conditions A, C and D ”, and
omit subsection (3) (condition B: same intellectual property condition).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Omit section 1139 (meaning of “intellectual property”).
In Schedule 4 to CTA 2009 (index of defined expressions), omit the entry relating to “intellectual property (in Part 13)”.
The amendments made by this section have effect in relation to expenditure incurred by a company in an accounting period ending on or after 9 December 2009.
Section 1201 of CTA 2009 (film tax credit claimable where company has surrenderable loss) is amended as follows.
In subsection (2)—
for “any period” substitute “ an accounting period ”, and
in paragraph (a), for “the company's loss” substitute “ the company's available loss ”.
After that subsection insert—
In subsection (4), in the definition of “S”, for “surrendered in previous periods” substitute “ previously surrendered ”.
After that subsection insert—
In section 1202(4) of that Act (company's loss reduced by amount surrendered), for “loss in the separate film trade” substitute “ available loss ”.
The amendments made by this section have effect in relation to accounting periods ending on or after 9 December 2009.
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.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chargeable gains
In section 223(8) of TCGA 1992 (amount of relief), before the “and” at the end of paragraph (a) insert—.
In section 224 of that Act (amount of relief: further provisions), insert at the end—
In that Act, after section 225C insert—
The amendments made by this section have effect in relation to disposals made on or after 9 December 2009.
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.
After section 198G of TCGA 1992 insert—
The amendment made by this section has effect in relation to disposals made on or after 22 April 2009 (whether the acquisition takes place before, on or after that date).
Capital allowances
Schedule 7 contains provision about first-year allowances on zero-emission goods vehicles.
Other taxes and duties
Value added tax
Schedule 8 contains—
provision about input tax, and
provision about supplies under paragraph 5(4) of Schedule 4 to VATA 1994.
In section 9A of VATA 1994 (reverse charge on gas and electricity supplied by persons outside the United Kingdom)—
for subsection (5) substitute—, and
in the heading, for “and electricity” substitute “ , electricity, heat or cooling ”.
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, ”.
The amendments made by this section have effect in relation to supplies made on or after 1 January 2011.
Schedule 8 to VATA 1994 (zero-rating) is amended as follows.
In Note (A1) of Group 8 (transport: definition of “qualifying aircraft” etc), for paragraph (b) substitute—
After that Note insert—
The amendments made by this section have effect in relation to supplies made, and acquisitions and importations taking place, on or after 1 January 2011.
In Schedule 8 to VATA 1994 (zero-rating), in Group 8—
in item 4 (transport of passengers), for “the Post Office company” substitute “ a universal service provider ”, and
after Note (4D) insert—
In Schedule 9 to that Act (exemptions), for Group 3 (postal services) substitute—
The following provisions are omitted—
in section 96(1) of VATA 1994, the definition of “the Post Office company”, and
paragraph 22(3) and (4) of Schedule 8 to the Postal Services Act 2000.
The amendments made by this section have effect in relation to supplies made on or after 31 January 2011.
Tobacco products duty
In section 4 of TPDA 1979 (calculation of duty on long cigarettes)—and, in the heading, for “9 cm.” substitute “ 8 cm. ”.
for “than 9 cm.” substitute “ than 8 cm. ”, and
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 any) ”,
The amendments made by this section come into force on 1 January 2011.
Landfill tax
In section 42 of FA 1996 (amount of landfill tax), for subsection (4) substitute—
The amendment made by this section has effect in relation to disposals made, or treated as made, on or after 1 April 2011.
Administration
Schedule 9 contains amendments of FA 2009 relating to late payment interest and repayment interest on amounts of corporation tax and petroleum revenue tax.
That Schedule comes into force on such day as the Treasury may by order appoint.
An order under subsection (2)—
may commence a provision generally or only for specified purposes, and
may appoint different days for different provisions or for different purposes.
The Treasury may by order make any incidental, supplemental, consequential, transitional, transitory or saving provision which appears appropriate in consequence of, or otherwise in connection with, that Schedule.
An order under subsection (4) may—
make different provision for different purposes, and
make provision amending, repealing or revoking any Act or subordinate legislation whenever passed or made (including this Act and any Act amended by it).
An order under this section is to be made by statutory instrument.
A statutory instrument containing an order under subsection (4) which includes provision amending or repealing any provision of an Act is subject to annulment in pursuance of a resolution of the House of Commons.
Schedule 10 contains provision amending Schedule 55 to FA 2009 (penalties in respect of failures to make returns and other documents relating to liabilities for tax).
Schedule 10 comes into force on such day as the Treasury may by order appoint.
An order under subsection (2)—
may commence a provision generally or only for specified purposes, and
may appoint different days for different provisions or for different purposes.
The Treasury may by order make any incidental, supplemental, consequential, transitional, transitory or saving provision which appears appropriate in consequence of, or otherwise in connection with, that Schedule.
An order under subsection (4) may—
make different provision for different purposes, and
make provision amending, repealing or revoking any Act or subordinate legislation whenever passed or made (including this Act and any Act amended by it).
An order under this section is to be made by statutory instrument.
A statutory instrument containing an order under subsection (4) which includes provision amending or repealing any provision of an Act is subject to annulment in pursuance of a resolution of the House of Commons.
Schedule 11 contains provision amending Schedule 56 to FA 2009 (penalties in respect of failures to comply with obligations to pay tax).
Schedule 11 comes into force on such day as the Treasury may by order appoint.
An order under subsection (2)—
may commence a provision generally or only for specified purposes, and
may appoint different days for different provisions or for different purposes.
The Treasury may by order make any incidental, supplemental, consequential, transitional, transitory or saving provision which appears appropriate in consequence of, or otherwise in connection with, that Schedule.
An order under subsection (4) may—
make different provision for different purposes, and
make provision amending, repealing or revoking any Act or subordinate legislation whenever passed or made (including this Act and any Act amended by it).
An order under this section is to be made by statutory instrument.
A statutory instrument containing an order under subsection (4) which includes provision amending or repealing any provision of an Act is subject to annulment in pursuance of a resolution of the House of Commons.
Schedule 12 contains—
provision amending Part 4 of FA 2003 (stamp duty land tax) in respect of the recovery of overpaid tax etc, and
provision amending Schedule 2 to OTA 1975 (management and collection of petroleum revenue tax) in respect of the recovery of overpaid tax etc.
The amendments made by Schedule 12 have effect in relation to claims made on or after 1 April 2011.
The Treasury may by order make any incidental, supplemental, consequential, transitional, transitory or saving provision which appears appropriate in consequence of, or otherwise in connection with, that Schedule.
An order under this section may—
make different provision for different purposes, and
make provision amending, repealing or revoking any Act or subordinate legislation whenever passed or made (including this Act and any Act amended by it).
An order under this section is to be made by statutory instrument.
A statutory instrument containing an order under this section which includes provision amending or repealing any provision of an Act is subject to annulment in pursuance of a resolution of the House of Commons.
Schedule 13 contains provision about information and inspection powers, record-keeping and time limits for assessments and claims involving excise duties.
The amendments made by that Schedule come into force on such day as the Treasury may by order made by statutory instrument appoint.
An order under subsection (2)—
may appoint different days for different provisions or for different purposes, and
may include transitional provision and savings.
Miscellaneous provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In section 67 of the Pensions Act 2008 (duty to establish pension scheme) —
omit subsection (3), and
in subsection (4), for “that Chapter” substitute “ Chapter 2 of Part 4 of the Finance Act 2004 ”.
Schedule 14 contains provision about the taxation of settlements the purpose of which is to make compensation payments to or in respect of individuals affected by an asbestos-related condition.
Final provisions
In this Act—“BGDA 1981” means the Betting and Gaming Duties Act 1981;“CAA 2001” means the Capital Allowances Act 2001;“CTA 2009” means the Corporation Tax Act 2009;“CTA 2010” means the Corporation Tax Act 2010;“HODA 1979” means the Hydrocarbon Oil Duties Act 1979;“ICTA” means the Income and Corporation Taxes Act 1988;“IHTA 1984” means the Inheritance Tax Act 1984;“ITA 2007” means the Income Tax Act 2007;“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;“OTA 1975” means the Oil Taxation Act 1975;“TCGA 1992” means the Taxation of Chargeable Gains Act 1992;“TIOPA 2010” means the Taxation (International and Other Provisions) Act 2010;“TMA 1970” means the Taxes Management Act 1970;“TPDA 1979” means the Tobacco Products Duty Act 1979;“VATA 1994” means the Value Added Tax Act 1994;“VERA 1994” means the Vehicle Excise and Registration Act 1994.
In this Act—“FA”, followed by a year, means the Finance Act of that year;“F(No.2)A”, followed by a year, means the Finance (No.2) Act of that year.
This Act may be cited as the Finance (No. 3) Act 2010.
Shared lives care
Extension of foster-care relief
Chapter 2 of Part 7 of ITTOIA 2005 (foster-care relief) is amended as follows.
Section 803 (overview of Chapter 2) is amended as follows.
For subsection (1) substitute—
In subsections (2) and (5), for “foster-care” substitute “ qualifying care ”.
Section 804 (person who qualifies for relief) is amended as follows.
For subsection (1) substitute—
In subsection (3), for “foster-care” substitute “ qualifying care ”.
After that subsection insert—
After section 804 insert—
In section 805(1) (meaning of “foster-care receipts”)—
for “foster-care” substitute “ qualifying care ”, and
in paragraph (a), for “foster care” substitute “ qualifying care ”.
Accordingly, in the heading of section 805, for “foster-care” substitute “ qualifying care ”.
After section 805 insert—
After section 806 insert—
In section 807 (calculation of “total foster-care receipts”), for “foster-care” substitute “ qualifying care ”.
Accordingly, in the heading of that section, for “foster-care” substitute “ qualifying care ”.
In section 808(1)(b) (the individual's limit), before “child” insert “ adult or ”.
For section 809 substitute—
In section 810(1) (share of fixed income: income period not a year), for “foster-care” substitute “ qualifying care ”.
Section 811 (the amount per child) is amended as follows.
For subsection (1) substitute—
In subsection (3), for “subsection (2)” substitute “ subsection (1A) or (2) ”.
In subsection (4), for “foster care for a child” substitute “ qualifying care for an adult or child ”.
Accordingly, in the heading, before “child” insert “ adult or ”.
For section 812 substitute—
In section 813(1) (full foster-care relief: trading income), for “foster-care” substitute “ qualifying care ”.
Accordingly, in the heading of section 813, for “foster-care” substitute “ qualifying care ”.
In section 814(1) (full foster-care relief: income chargeable under Chapter 8 of Part 5), for “foster-care” substitute “ qualifying care ”.
Accordingly, in the heading of section 814, for “foster-care” substitute “ qualifying care ”.
In section 815(a) and (b) (alternative calculation of profits: introduction), for “foster-care” substitute “ qualifying care ”.
In section 816(1) and (2)(a) (alternative calculation of profits: trading income), for “foster-care” substitute “ qualifying care ”.
In section 817(1) and (2)(a) (alternative calculation of profits: income chargeable under Chapter 8 of Part 5), for “foster-care” substitute “ qualifying care ”.
In section 818(1)(a) and (b) (election for alternative method of calculating profits), for “foster-care” substitute “ qualifying care ”.
In section 819(1)(b) (adjustment of assessment), for “foster care” substitute “ qualifying care ”.
In section 820(a) and (b) (periods of account not ending on 5th April), for “foster-care” substitute “ qualifying care ”.
Section 821 (meaning of “relevant limit”) is amended as follows.
In subsection (1)—
for “foster-care” substitute “ qualifying care ”, and
in paragraph (b), before “child” insert “ adult or ”.
In subsection (2), before “child”, in both places where it occurs, insert “ adult or ”.
In section 822(1) (full relief), for “foster-care” substitute “ qualifying care ”.
In section 823(1)(a) and (2)(a) (alternative method of calculating profits), for “foster-care” substitute “ qualifying care ”.
In section 824(1)(a) and (2)(b) (capital allowances: introduction), for “foster-care” substitute “ qualifying care ”.
In section 825(2) and (4)(a) (carried forward unrelieved qualifying expenditure), for “foster care” substitute “ qualifying care ”.
In section 826(b) (excluded capital expenditure), for “foster care” substitute “ qualifying care ”.
In section 827(a) (excluded capital expenditure: subsequent treatment of asset), for “foster care” substitute “ qualifying care ”.
Accordingly, for the heading of Chapter 2 of Part 7 of ITTOIA 2005 substitute “ qualifying care relief ”.
Consequential amendments
ITTOIA 2005 is amended as follows.
In section 1(5) (overview of Act), for “foster-care” substitute “ qualifying care ”.
In section 23 (rent-a-room and foster-care relief)—
in subsection (3), for “foster-care” substitute “ qualifying care ”, and
in subsection (4), for “foster care” substitute “ qualifying care ”.
Accordingly—
in the heading of that section, for “foster-care” substitute “ qualifying care ”, and
in the heading immediately preceding that section, for “foster-care” substitute “ qualifying care ”.
In section 688(2)(b) (income charged), for “foster care” substitute “ qualifying care ”.
In the heading of Part 7, for “FOSTER-CARE” substitute “ QUALIFYING CARE ”.
In the table in Part 2 of Schedule 4 (index of expressions defined in this Act etc)—and
omit the entries for “foster-care receipts” and “foster-care relief”,
after the entry for “provides foster care” insert—,
after the entry for “purchased life annuity” insert—,
after the entry for “residence” insert—,
in the entry for “total foster-care receipts”, for “foster-care” substitute “ qualifying care ”.
Commencement
The amendments made by this Schedule have effect for the tax year 2010-11 and subsequent tax years.
But an individual within sub-paragraph (3) may elect to be treated for income tax purposes as if those amendments had effect instead for the tax year 2011-12 and subsequent tax years (and accordingly to remain entitled, for the tax year 2010-11, to the benefit of any relevant concession so far as applicable to the individual).
An individual is within this sub-paragraph if the individual has qualifying care receipts for the tax year 2010-11 in respect of the provision of shared lives care (with or without qualifying care receipts in respect of the provision of foster care).
A relevant concession is an existing HMRC concession (within the meaning of section 160 of FA 2008)—
which is in force immediately before the passing of this Act, and
to which effect is given (in whole or in part) by this Schedule.
An election under sub-paragraph (2) must be made on or before the first anniversary of the normal self-assessment filing date for the tax year 2010-11 (or such later date as an officer of Revenue and Customs may, in a particular case, allow).
Transitional provision
This paragraph applies if—
an individual had qualifying care receipts in respect of the provision of shared lives care—
for the pre-commencement tax year, or
for a continuous series of tax years up to and including the pre-commencement tax year,
the receipts were receipts of a trade,
a relevant concession applied to the individual in respect of those receipts, and
the individual did not derive any taxable income, other than qualifying care receipts, from the trade.
Sections 824 to 827 of ITTOIA 2005 (capital allowances) are to have effect as if the individual had been a relevant individual for—
the pre-commencement tax year, or
if sub-paragraph (1)(a)(ii) applies, the pre-commencement tax year and each earlier tax year in the series.
“The pre-commencement tax year” means the tax year immediately preceding—
for an individual who makes an election under paragraph 36, the tax year 2011-12,
otherwise, the tax year 2010-11.
“Relevant concession” has the same meaning as in paragraph 36.
Venture capital schemes
Enterprise investment scheme
Part 5 of ITA 2007 (enterprise investment scheme) is amended as follows.
In section 179 (meaning of “qualifying business activity”)—
in subsection (2)(b)(i), omit “wholly or mainly in the United Kingdom”,
omit subsection (3),
in subsection (4)(b)(i) and (ii), omit “wholly or mainly in the United Kingdom”, and
omit subsection (5).
In section 180 (overview of Chapter 4), before paragraph (a) insert—.
Before section 181 insert—
After section 191 (and before the italic heading “Excluded activities”) insert—
Venture capital trusts
Part 6 of ITA 2007 (venture capital trusts) is amended as follows.
In section 274 (requirements for the giving of approval)—
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 regulated market ”,
in the last entry in the table, in columns 1 and 2, for “30%” substitute “ 70% ”,
in paragraphs (c) and (d) of subsection (3), for “30%” substitute “ 70% ”, and
at the end insert—
In section 275(3)(b) (alternative requirements for the giving of approval), for “30%” substitute “ 70% ”.
In section 278(1) (conditions relating to value of investments: general), for “30%” substitute “ 70% ”.
In section 280(2) (conditions relating to qualifying holdings and eligible shares), for “30%” substitute “ 70% ”.
In section 285 (interpretation of Chapter 3 of Part 6), for subsection (3) substitute—
In section 286 (qualifying holdings: introduction), in subsection (3), before paragraph (a) insert—.
Before section 287 insert—
In section 289(5) (the proportion of eligible shares requirement), for “285(3)” substitute “ 285(3A) and (3B) ”.
In section 291 (carrying on of qualifying activity requirement)—
in subsection (2), for “A qualifying trade carried on wholly or mainly in the United Kingdom” substitute “ Carrying on a qualifying trade ”,
in subsection (3), omit “wholly or mainly in the United Kingdom”, and
in subsection (4)(b), omit “wholly or mainly in the United Kingdom”.
In section 300(2) (meaning of “qualifying trade”), for paragraphs (a) and (b) substitute—.
After section 302 (and before the italic heading “Excluded activities”) insert—
In section 313 (interpretation of Chapter 4 of Part 6)—
in subsection (6), omit the “and” at the end of paragraph (a) and after paragraph (b) insert, and
after subsection (7) insert—
Interpretation
Chapter 1 of Part 16 of ITA 2007 (definitions) is amended as follows.
In section 989 (the definitions), omit the definition of “permanent establishment”.
After section 1007 insert—
Schedule 4 to that Act (index of defined expressions) is amended as follows.
In column 2 of the entry for “eligible shares (in Chapter 3 of Part 6)”, for “285(3)” substitute “ 285(3A) and (3B) ”.
In column 1 of the entry for “the 30% eligible shares condition (in Chapter 3 of Part 6)”, for “30%” substitute “ 70% ”.
For the entry for “permanent establishment” substitute—.
Consequential repeal
In consequence of the amendment made by paragraph 3(2), omit paragraph 562(6) of Schedule 1 to CTA 2010.
Commencement of amendments relating to 70% eligible shares condition
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 commencement day.
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—
are issued before the commencement day, or
are issued on or after that day and are acquired by the investing company before 6 April 2018 by means of the investment of protected money.
In this paragraph “protected money” means—
money raised by the issue before the commencement day of shares in or securities of the investing company, or
money derived from the investment of such money.
Commencement of other provisions of this Schedule
The amendments made by paragraph 1 have effect in relation to shares issued on or after the commencement day.
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 effect in relation to shares issued at any time).
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 commencement day.
The amendments made by paragraph 2(9) and (13) have effect in relation to shares issued at any time.
Meaning of “the commencement day”
In paragraphs 6 and 7 “the commencement day” means such day as the Treasury may by order appoint.
An order may appoint different days for different provisions or different purposes.
Company distributions
Meaning of “distribution” in the Corporation Tax Acts
Part 23 of CTA 2010 (company distributions) is amended as follows.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After section 1027 insert—
Meaning of “distribution” in Income Tax Acts
In section 989 of ITA 2007 (definitions for the purposes of the Income Tax Acts), in the definition of “distribution”, after “Chapters 2 to 5 of Part 23 of CTA 2010” insert “ , disregarding section 1027A of that Act ”.
Distributions subject to the charge to corporation tax on income
Part 9A of CTA 2009 (company distributions) is amended as follows.
In section 931A (charge to tax), omit subsection (2) and for subsection (3) substitute—
In section 931H (dividends derived from transactions not designed to reduce tax)—
in the heading, for “Dividends” substitute “ Distributions ”,
in subsection (1)—
after “dividend” insert “ or other distribution ”, and
for “paid” substitute “ made ”,
in subsection (2), for “dividend is paid” substitute “ distribution is made ”,
in subsections (3) and (4)—
for “dividend” substitute “ distribution ”, and
for “paid” substitute “ made ”, and
in subsection (5)—
for “dividend” substitute “ distribution ”,
for “paid” (in both places) substitute “ made ”, and
for “dividends” substitute “ distributions ”.
After section 931R insert—
Distributions giving rise to deemed disposals
TCGA 1992 is amended as follows.
In section 22 (disposal where capital sums derived from assets), after subsection (3), insert—
In section 122 (deemed disposal on receipt of certain distributions), after subsection (5) insert—
Commencement
The amendments made by this Schedule have effect in relation to distributions made on or after 1 July 2009.
An amendment corresponding to that made by paragraph 1, having effect in relation to distributions made on or after 1 July 2009, is to be treated as having been made in section 211 of ICTA.
Treatment of distributions of UK resident companies made before 1 July 2009
Section 1285 of CTA 2009 (UK company distributions exempt from corporation tax) and section 208 of ICTA (which was the predecessor of section 1285 of CTA 2009) are to be treated as always having had effect (before their repeal) as if references in them to a distribution included a distribution to which sub-paragraph (2) applies.
This sub-paragraph applies to a distribution that—
falls within the meaning of Chapters 2 to 5 of Part 23 of CTA 2010, as amended by paragraph 1, but
does not fall within that meaning disregarding that amendment.
Section 22 of TCGA 1992 (disposal where capital sums derived from assets) is to be treated as always having had effect as if subsection (1) of that section did not apply where a company receives, or becomes entitled to receive—
a capital distribution within the meaning of section 122 of that Act made before 1 July 2009, or
a distribution that is exempt from corporation tax under section 1285 of CTA 2009 or section 208 of ICTA, as modified by sub-paragraph (1).
Section 122 of that Act (deemed disposal on receipt of certain distributions) is to be treated as always having had effect as if references in it to a capital distribution did not include a distribution that is exempt from corporation tax under section 1285 of CTA 2009 or section 208 of ICTA, as modified by sub-paragraph (1).
Election to opt out of effect of Schedule in relation to a distribution made before 22 June 2010
If a company so elects, this Schedule has effect in relation to a relevant distribution received by the company as if—
the amendments made by paragraphs 1 to 4 were of no effect, and
paragraphs 5(2) and 6 were of no effect.
An election under this paragraph has effect only in relation to such distributions as are specified in the election.
In this paragraph “relevant distribution” means a distribution made before 22 June 2010.
REITs: stock dividends
Amendment of TCGA 1992
After section 142 of TCGA 1992 (capital gains on stock dividends) insert—
Amendment of ITA 2007
In section 973 of ITA 2007 (REITs: income tax due in respect of distributions), after subsection (3) insert—
Amendment of CTA 2010
Part 12 of CTA 2010 (Real Estate Investment Trusts) is amended as follows.
Section 530 (condition as to distribution of profits) is amended as follows.
In subsection (1), omit paragraph (b) (but not the word “and” at the end of it).
In subsection (4), omit paragraph (a) (including the word “and” at the end of it).
After subsection (6) insert—
In section 549 (distributions: supplementary), after subsection (2) insert—
In section 550 (attribution of distributions), in subsection (2)(a), for “payments” substitute “ distributions ”.
In section 553 (meaning of “holder of excessive rights”), in subsection (2)(a), for “dividends” substitute “ distributions ”.
After section 554 (regulations: distributions to holders of excessive rights) insert—
Section 564 (breach of condition as to distribution of profits) is amended as follows.
In subsection (5)(a), omit “by way of dividend”.
After subsection (9) insert—
After section 599 (calculation of profits) insert—
In section 605 (property rental business: exclusion of business producing listed income), after subsection (2) insert—
Commencement
The amendments made by this Schedule have effect in relation to distributions made on or after the day on which this Act is passed.
Financing costs and income of group companies
Introduction
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Amendment of Chapter 1 (introduction)
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Amendments of Chapter 2 (application of Part)
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Amendments of Chapter 3 (disallowance of deductions)
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Amendment of Chapter 4 (exemption of financing income)
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Amendments of Chapter 5 (intra-group financing income where payer denied deduction)
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Amendments of Chapter 7 (“financing expense amount” and “financing income amount”)
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Amendment of Chapter 8 (the “tested expense amount” and “tested income amount”)
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Amendments of Chapter 9 (the “available amount”)
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Amendments of Chapter 10 (other interpretative provisions)
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Amendment of transitional provision
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Amendments of index of defined expressions
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Commencement
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Election to defer the application of some of the amendments made by this Schedule
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Consortium claims for group relief
Introductory
Chapter 4 of Part 5 of CTA 2010 (claims for group relief) is amended as follows.
Ability to claim group relief where link company established in the EEA
In section 129 (overview of Chapter), in subsection (2), for “Sections 130 to 134” substitute “ Sections 130 to 134A ”.
In section 130(2) (group relief claims on amounts surrenderable under Chapter 2), in Requirement 3—
in paragraph (c), for “section 133(1), (3) and (4)” substitute “ section 133(1) and (3) to (8) ”, and
in paragraph (d), for “section 133(2), (3) and (4)” substitute “ section 133(2) to (8) ”.
Section 133 (conditions to be met for consortium claims for group relief) is amended as follows.
In subsection (1)—
omit the “and” at the end of paragraph (e), and
for paragraph (f) substitute—
In subsection (2)—
omit the “and” at the end of paragraph (e), and
for paragraph (f) substitute—
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Section 146 (maximum amount of group relief in consortium claims) is amended as follows.
In subsection (3)—
omit the “and” at the end of paragraph (a), and
after that paragraph insert—.
In subsection (6), at the end insert “ , assuming that the link company was UK related. ”
In subsection (8)—
omit the “and” at the end of the definition of “consortium claim”, and
at the end insert
Limitations on group relief based on proportion of voting power held by company
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.
In subsection (3)—
omit the “and” at the end of paragraph (b), and
at the end of paragraph (c) insert
In subsection (4)(a), for “paragraphs (a) to (c)” substitute “ paragraphs (a) to (d) ”.
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.
In subsection (3)—
omit the “and” at the end of paragraph (b), and
at the end of paragraph (c) insert
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
After section 146 insert—
Commencement
The amendments made by this Schedule have effect in relation to accounting periods beginning on or after 12 July 2010.
First-year allowances for zero-emission goods vehicles
CAA 2001 is amended as follows.
In section 39 (first-year allowances available for certain types of qualifying expenditure only), at the appropriate place in the list insert—.
After section 45D insert—
In section 46 (general exclusions applying to first-year qualifying expenditure), in subsection (1), at the appropriate place in the list insert—.
Section 52 (first-year allowances) is amended as follows.
In subsection (3), at the appropriate place in the Table insert—
In subsection (5)—
omit the “and” at the end of the entry for section 210, and
after that entry insert—.
After section 212S insert—
The amendments made by this Schedule have effect—
for the purposes of corporation tax, for chargeable periods ending on or after 1 April 2010, and
for the purposes of income tax, for chargeable periods ending on or after 6 April 2010.
Value added tax: non-business use of business assets etc
Input tax
Section 24 of VATA 1994 (input tax and output tax) is amended as follows.
Omit subsection (3) (accommodation used for domestic purposes by company director etc).
In subsection (5) (goods or services used partly for business purposes), for the words after “other purposes” substitute
After that subsection insert—
In subsection (6) (powers to make regulations), after paragraph (d) insert—
After that subsection insert—
Omit subsection (7) (definition of “director” etc).
The amendments made by sub-paragraphs (2), (4) and (7) come into force on 1 January 2011 and apply in relation to VAT incurred by a taxable person on or after that date.
For the purposes of sub-paragraph (8), the VAT “incurred” by a person in respect of an asset is—and VAT within paragraphs (a) to (d) is incurred at the time of the supply, acquisition or importation in question.
VAT on the supply to the person of the asset,
VAT on the supply to the person of any goods or services the expenditure on which constitutes expenditure related to the asset,
VAT on the acquisition by the person from another member State of the asset or anything comprised in it, and
VAT paid or payable by the person on the importation of the asset or anything comprised in it from a place outside the member States;
Non-business use of certain assets not to be treated as supply of services
In paragraph 5 of Schedule 4 to VATA 1994 (matters to be treated as supply of goods or services), after sub-paragraph (4) (non-business use of business asset treated as supply of services) insert—
This paragraph comes into force on 1 January 2011.
This paragraph does not apply in relation to an asset in respect of which the person in question or any of that person's predecessors incurred VAT before 1 January 2011.
But, where VAT is incurred by such a person before that date in respect of the asset, VAT incurred by such a person on or after that date in respect of the asset is not to be treated as referable to that person's business purposes by virtue of paragraph 5(4) and (6) of Schedule 4 to VATA 1994 if, and to the extent that, the asset is used or to be used for that person's private use or the private use of that person's staff, or more generally for purposes other than those of that person's business.
For the purposes of this paragraph—“asset” means anything falling within any of paragraphs (a) to (f) of paragraph 5(4A) of Schedule 4 to VATA 1994 (as inserted by sub-paragraph (1) above);“the person in question” means the person carrying on the business referred to in paragraph 5(4) of that Schedule;“predecessor” has the same meaning as in paragraph 5 of that Schedule; and references to the VAT “incurred” by a person in respect of an asset are to be construed in accordance with paragraph 1(9).
Output tax charge where credit attributable to purported paragraph 5(4) supply
Sub-paragraph (2) applies where—
some or all of that credit was allowed before 22 January 2010,
disregarding sub-paragraph (2), the thing done or to be done is not or would not be a paragraph 5(4) supply, and
the credit allowed as mentioned in paragraph (a) is not reversed in full.
The thing done or to be done is to be treated for the purposes of VATA 1994 as if it were or would be a paragraph 5(4) supply.
the deduction of input tax under section 25(2) of that Act from any output tax that is due to the Commissioners;
a payment by the Commissioners in respect of the credit under section 25(3) of that Act;
the setting off of the credit against a sum payable to the Commissioners, whether under section 81(3) of that Act or section 130 of FA 2008 or otherwise.
In this paragraph—“paragraph 5(4) supply” means a supply under paragraph 5(4) of Schedule 4 to VATA 1994 (goods held or used for the purposes of a business which are put to private use etc);“predecessor” has the same meaning as in paragraph 5 of that Schedule.
This paragraph is to be treated as having always had effect.
Interest
Corporation tax
Amendments of sections 101 to 104
FA 2009 is amended as follows.
In section 101 (late payment interest on sums due to HMRC), omit subsection (2)(a).
Section 102 (repayment interest on sums to be paid by HMRC) is amended as follows.
Omit subsection (2)(a).
In subsection (4), before paragraph (a) insert—.
After section 103 insert—
In section 104(1), for “103” substitute “ 103A (and Schedules 53 to 54A) ”.
Amendments of Schedule 53
Schedule 53 to FA 2009 (late payment interest) is amended as follows.
In Part 1 (special provision as to amount carrying late payment interest), after paragraph 2 insert—
In Part 2 (special provision as to late payment interest start date), after paragraph 6 insert—
Amendments of Schedule 54
Schedule 54 to FA 2009 (repayment interest) is amended as follows.
Insert at the beginning—
In Part 2 (special provision as to repayment interest start date), after paragraph 9A insert—
New Schedule
After Schedule 54 to FA 2009 insert—
Petroleum revenue tax
FA 2009 is amended as follows.
In section 101 (late payment interest on sums due to HMRC), omit subsection (2)(b).
In section 102 (repayment interest on sums to be paid by HMRC), omit subsection (2)(b).
Schedule 53 (late payment interest) is amended as follows.
After paragraph 11 insert—
After paragraph 14 insert—
In Schedule 54 (repayment interest), after paragraph 12 insert—
Penalty for failure to make returns etc
Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended as follows.
Paragraph 1 (penalty for failure) is amended as follows.
In sub-paragraph (2), for “13” substitute “ 13J ”.
In sub-paragraph (4), in the definition of “filing date”, at the end insert“ (or, in the case of a return mentioned in item 7AA or 7AB of the Table, to the tax authorities to whom the return is required to be delivered) ”.
The Table is amended as follows.
After item 7 insert—.
Insert at the end—.
For paragraph 2 (amount of penalty for occasional or annual returns) and the italic heading preceding it substitute—
Paragraph 6 (amount of penalty for occasional returns and annual returns) is amended as follows.
In sub-paragraph (2), after “P” in the first place it occurs insert “ deliberately ”.
In sub-paragraph (5), for “any other case” substitute “ any case not falling within sub-paragraph (2) ”.
Paragraph 11 (amount of penalty for certain CIS returns after 12 months) is amended as follows.
In sub-paragraph (2), after “P” in the first place it occurs insert “ deliberately ”.
In sub-paragraph (5), for “any other case” substitute “ any case not falling within sub-paragraph (2) ”.
Paragraph 12 (amount of penalty for other CIS returns after 12 months) is amended as follows.
In sub-paragraph (2), after “P” insert “ deliberately ”.
After paragraph 13 insert—
In paragraph 14(1) (reductions for disclosure), for “or 11(3) or (4)” substitute “ , 11(3) or (4), 13E(3) or (4) or 13J(3) or (4) ”.
In paragraph 15(5) (reductions for disclosure not below certain amounts)—
for “paragraph 11(3) or (4)” substitute “ sub-paragraph (3) or (4) of any of paragraphs 11, 13E and 13J ”, and
for “paragraph 11(3)(b) or (4)(b) (as the case may be)” substitute “ paragraph (b) of that sub-paragraph ”.
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For paragraph 23(1) (no liability where there is reasonable excuse for failure) substitute—
Penalty for failure to make payments on time
Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended as follows.
Paragraph 1 (penalty for failure) is amended as follows.
In sub-paragraph (2), for “8” substitute “ 8J ”.
After sub-paragraph (4) insert—
The Table is amended as follows.
In item 2, in column 3, omit “(except an amount falling within item 20)”.
In item 4, in column 4, for “section 62” substitute “ section 71 ”.
After item 6 insert—.
After item 11 insert—.
After item 13 insert—.
After item 16 insert—.
After item 17 insert—.
Omit item 20.
In item 23—
in columns 2 and 3, for “items 1 to 6, 9 or 10” substitute “ items 1 to 6A, 6BA, 6BB, 6C, 9, 10 , 11A or 11B to 11M ”, and
in column 3, for “any of items 18 to 20” substitute “ item 18 or 19 ”.
In item 24—
in column 2, for “items 1 to 6, 9 or 10” substitute “ items 1 to 6A, 6BA, 6BB, 6C, 9, 10 , 11A or 11B to 11M ”, and
in column 3, for “any of items 18 to 20” substitute “ item 18 or 19 ”.
In paragraph 2 (assessments and determinations in default of return), in paragraph (c), for “10” substitute “ 11M ”.
After paragraph 2 insert—
Paragraph 3 (amount of penalty for occasional amounts and amounts due for periods of 6 months or more) is amended as follows.
Sub-paragraph (1) is amended as follows.
In paragraph (a), for “... 3B and 7 to 24” substitute “ ... 3B, 6B, 7 to 11ZA and 12 to 24 ”.
In paragraph (b)—
for “item 2 or 4” substitute “ any of items 2, 4, 6A, 6C and 11A to 11M ”, and
omit the “and” at the end.
After paragraph (c) insert
After sub-paragraph (1) insert—
For paragraph 6 substitute—
After paragraph 8 insert—
After paragraph 8J insert—
Paragraph 11 (assessment) is amended as follows.
In sub-paragraph (4), for “unpaid tax” substitute “ tax which was due or payable ”.
After sub-paragraph (4) insert—
For paragraph 16(1) (no liability where there is reasonable excuse for failure) substitute—
Recovery of overpaid tax etc
Stamp duty land tax
Part 4 of FA 2003 (stamp duty land tax) is amended as follows.
New provisions relating to overpaid tax
In Schedule 10 (returns, enquiries, assessments and appeals), for paragraph 34 and the italic heading preceding it substitute—
Consequential amendments
In section 113 (functions conferred on “the Inland Revenue”), omit subsection (3)(b)(ii).
Schedule 10 (returns, enquiries, assessments and appeals) is amended as follows.
In the heading at the beginning of Part 6, after “Relief in the case of” insert “ overpaid tax or ”.
In paragraph 45(1) (determination of market value by relevant tribunal), for “paragraphs 34(6) or” substitute “ paragraph ”.
In Schedule 11A (claims not included in returns etc), in paragraph 14(5) (application of provisions of Schedule 10)—
for “and 44” substitute “ , 44 and 45 ”, and
omit “(settling of appeals by agreement)”.
Petroleum revenue tax
Claims for recovery of overpaid tax etc
Schedule 2 to OTA 1975 (management and collection of petroleum revenue tax) is amended as follows.
In the Table in paragraph 1(1) (applying provisions of TMA 1970 in relation to management and collection of petroleum revenue tax), omit the entry relating to section 33 of TMA 1970.
In paragraph 10(1A) (time limit for assessments and determinations) for “and 12B” substitute “ , 12B and 13E ”.
In paragraph 12(1B) (disapplication of time limits for further assessments and determinations)—
omit the “or” at the end of paragraph (a), and
after that paragraph insert—.
After paragraph 13 insert—
Paragraph 14 (appeals) is amended as follows.
After sub-paragraph (1) insert—
In sub-paragraph (9) for “section 33 of the Taxes Management Act 1970 as applied by paragraph 1 above” substitute “ paragraph 13A ”.
In sub-paragraph (10) for “the appeal that” substitute “ an appeal under sub-paragraph (1) ”.
After sub-paragraph (10) insert—
Consequential amendments
Schedule 24 to FA 2007 (penalties for errors) is amended as follows.
In the Table in paragraph 1, after the first entry relating to petroleum revenue tax insert—
In paragraph 1(5), after “Oil Taxation Act 1975” insert “ or a statement or declaration under paragraph 13A of that Schedule ”.
In FA 2009—
in Schedule 51 (time limits for assessments, claims etc), omit paragraph 18(2), and
in Schedule 52 (recovery of overpaid tax etc), omit paragraph 11.
Excise duties: compliance checks
Record-keeping
Section 118A of CEMA 1979 (duty of revenue traders to keep records) is amended as follows.
In subsection (1)(b), for “require” substitute “ specify in writing (and different lesser periods may be specified for different cases) ”.
For subsection (3) substitute—
Omit subsections (4) to (6).
In consequence of the amendment made by paragraph 1(4)—
in FA 1994, omit section 256(3), and
in the Criminal Procedure (Consequential Provisions) (Scotland) Act 1995, omit paragraph 18(2) of Schedule 4.
Time limits
Assessments
Section 12 of FA 1994 (assessments to excise duty) is amended as follows.
In subsections (4)(a) and (5), for “three years” substitute “ 4 years ”.
In subsection (5), for the words from “in the case” to the end substitute “ in any case falling within subsection (5A)(a) or (b) ”.
After subsection (5) insert—
After subsection (6) insert—
Omit subsection (7).
The amendments made by this paragraph have effect in relation to the making of assessments under section 20AAB(4) of HODA 1979 as to the making of assessments under section 12(1) of FA 1994 (see section 20AAB(5) of HODA 1979).
In consequence of the amendment made by paragraph 3(6), omit paragraph 22 of Schedule 6 to the Serious Crime Act 2007.
Section 12A of FA 1994 (other assessments relating to excise duty matters) is amended as follows.
In subsections (4)(a) and (6), for “three years” substitute “ 4 years ”.
In subsection (6), for the words from “where the assessment” to the end substitute “ falling within section 12(5A)(a) or (b) ”.
After subsection (6) insert—
Schedule 4A to BGDA 1981 (unlicensed amusement machines) is amended as follows.
In paragraph 2(3)(a), for “three years” substitute “ 4 years ”.
In sub-paragraph (5) of paragraph 6—
for “three years” substitute “ 4 years ”, and
omit “or (7)”.
For sub-paragraph (6) of that paragraph substitute—
Omit sub-paragraph (7) of that paragraph.
Claims
In section 137A(4) of CEMA 1979 (recovery of overpaid excise duty), for “three years” substitute “ 4 years ”.
In Schedule 3 to FA 2001 (excise duty: payments by Commissioners in case of error or delay), in each of the following provisions, for “three years” substitute “ 4 years ”
paragraph 7(1)(d),
paragraph 8(1)(e),
paragraph 9(1)(g), and
paragraph 10(1)(b).
Information and inspection powers
CEMA 1979 is amended as follows.
In section 112 (power of entry upon premises etc of revenue traders), after subsection (6) insert—
After that section insert—
After section 118B insert—
In section 118C (entry and search of premises and persons), omit subsections (2), (2A) and (2B).
In section 118D (order for access to recorded information), in subsection (5), for “118B and 118C” substitute “ 118B to 118C ”.
Section 118G (offences under Part 9) is amended as follows.
The existing provisions become subsection (1).
After that subsection insert—
Section 161A (power to search premises: search warrant) is amended as follows.
After subsection (2) insert—
In subsection (3), for “subsections (1) and (2)” substitute “ subsections (1), (2) and (2A) ”.
Asbestos compensation settlements
Inheritance tax
Section 58 of IHTA 1984 (relevant property) is amended as follows.
For the word “and” at the end of subsection (1)(e) substitute—.
After subsection (3) insert—
The amendments made by this paragraph are treated as having come into force on 6 April 2006.
Capital gains tax
Section 271 of TCGA 1992 (other miscellaneous exemptions) is amended as follows.
After subsection (1)(e) insert—.
After subsection (1) insert—
The amendments made by this paragraph are treated as having come into force on 6 April 2006.
Income tax
ITA 2007 is amended as follows.
In section 462(11) (overview of Part), after “charitable trusts” insert “ and section 838A for special provision about asbestos compensation settlements ”.
After section 838 (exemption from income tax for local authorities and local authority associations) insert—
The amendments made by sub-paragraphs (2) and (3) are treated as having had effect for the tax year 2007-08 and subsequent tax years.
ICTA is treated as having had effect for the tax year 2006-07 with an amendment, after section 518 of that Act, which corresponds to that made by sub-paragraph (3).