Finance Act 1993

• (4) If the responsible person makes an election, the Commissioners may assume that each participator agrees to the election being made (unless it appears to the Commissioners that a participator does not agree).

Method of election

2

An election must be made in writing.

3

An election must be notified to the Commissioners.

Effect of election

4

An election is deemed to have been made on the date on which notification of the election was sent to the Commissioners.

No unrelievable field losses from field

5

If an election is made, the field ceases to be taxable with effect from the start of the first chargeable period to begin after the election is made.

Cancellation of election by Commissioners

6

From the start of the first chargeable period to begin after an election is made, no allowable loss that accrues from the oil field is an allowable unrelievable field loss for the purposes of petroleum revenue tax.

7

• (1) In this Schedule—

• “Commissioners” means the Commissioners for Her Majesty‘s Revenue and Customs;

• “participator”, in relation to a particular time, means a person who is a participator in the chargeable period which includes that time.

• (2) Expressions used in this Schedule and in Part 1 of the Oil Taxation Act 1975 have the same meaning in this Schedule as in Part 1 of that Act.

Effect of cancellation

8

• (1) If the Commissioners cancel an election under paragraph 6, the election is to be treated as though it had never had effect.

• (2) But that does not make a person liable for anything that the person did, or did not do, in consequence of the election having effect before its cancellation.

• (3) If the Commissioners cancel an election, the enactments relating to petroleum revenue tax apply to the oil field subject to sub-paragraphs (4) to (7).

• (4) The Commissioners may specify the periods within which PRT returns for the relevant chargeable periods must be delivered.

• (5) If the Commissioners specify the period within which a PRT return must be delivered, the provisions of OTA 1975 set out in sub-paragraph (6) apply to the specified period as if it were a period for the delivery of a PRT return that has been extended under paragraph 2 or 5 of Schedule 2 to OTA 1975.

• (6) The provisions of OTA 1975 referred to in sub-paragraph (5) are—

• (a) paragraph 12A of Schedule 2, and

• (b) paragraph 2(7) and (8) of Schedule 5 (including those provisions as applied to Schedule 6 to OTA 1975 by paragraph 2 of Schedule 6).

• (7) For the purposes of paragraph 4 of Schedule 2 to OTA 1975, the “initial period” is the period of thirty days beginning with the date on which the Commissioners give notice in accordance with paragraph 6 of this Schedule.

• (8) The Commissioners may by regulations make transitional provision (including provision modifying enactments) applicable to cases where elections are made and subsequently cancelled under this Schedule.

• (9) Regulations under sub-paragraph (8)—

• (a) are to be made by statutory instrument, and

• (b) are subject to annulment in pursuance of a resolution of the House of Commons.

• (10) In this paragraph—

• “PRT return” means a return under paragraph 2 or 5 of Schedule 2 to OTA 1975;

• “relevant chargeable periods”, in relation to a cancelled election, means the series of consecutive chargeable periods that—begins with the chargeable period from the start of which the election had effect, andends with the chargeable period during which the election is cancelled.

Appeals

9

• (1) The responsible person may appeal against a decision of the Commissioners under paragraph 2(1).

• (2) Any such appeal must be made within 3 months of the Commissioners giving notice under paragraph 3 of their decision to the responsible person.

10

• (1) A person who is a participator, or a former participator, at the time the Commissioners cancel an election under paragraph 6 may appeal against the cancellation.

• (2) Any such appeal must be made within 3 months of the Commissioners giving notice under paragraph 7 of the cancellation (whether or not the notice was given to the person making the appeal).

11

• (1) Any appeal under paragraph 9 or 10 must be made to the Commissioners—

• (a) by notice in writing, or

• (b) in any other form authorised by direction of the Commissioners.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The provisions of paragraphs 14A to 14I of Schedule 2 to OTA 1975 shall apply in relation to an appeal under paragraphs 9 or 10 above as they apply in relation to an appeal against an assessment or determination made under that Act, subject to any necessary modifications.

Interpretation

12

• (1) In this Schedule—

• “Commissioners” means the Commissioners for Her Majesty's Revenue and Customs ...;

• “election” means an election in writing, or in any other form authorised by direction of the Commissioners, made to the Commissioners;

• “former participator”, in relation to a particular time, means a person who—is not a participator in the chargeable period which includes that time, butwas a participator in any earlier chargeable period;

• “OTA 1975” means the Oil Taxation Act 1975;

• “participator”, in relation to a particular time, means a person who is a participator in the chargeable period which includes that time.

• (2) Expressions used in this Schedule and in Part 1 of OTA 1975 have the same meaning in this Schedule as in that Part of OTA 1975.

The following is the Schedule to be inserted after Schedule 7 to the Taxation of Chargeable Gains Act 1992.

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These repeals have effect in accordance with section 4 of this Act

92DA

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92DB

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92DC

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92DD

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92DE

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Residence: available accommodation.

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

These repeals have effect in accordance with section 5 of this Act.

Re-organisations etc. involving debentures.

Fall in value relief: interests in land.

The following is the Schedule to be inserted after Schedule 7 to the Taxation of Chargeable Gains Act 1992.

These repeals have effect in accordance with section 4 of this Act

The following is the Schedule to be inserted after Schedule 7 to the Taxation of Chargeable Gains Act 1992.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

These repeals have effect in accordance with section 4 of this Act

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The basic rule: sterling to be used

Modifications where loss carried forward.

The following is the Schedule to be inserted after Schedule 7 to the Taxation of Chargeable Gains Act 1992.

Modification of Finance Act 1989.

The following is the Schedule to be inserted after Schedule 7 to the Taxation of Chargeable Gains Act 1992.

These repeals have effect in accordance with section 4 of this Act

PART1A — CONVERSION OF PARTNERSHIPS TO UNDERWRITING THROUGH SUCCESSOR COMPANIES

Introduction

5A

• (1) This Part of this Schedule applies if the following conditions are satisfied.

• (2) Condition 1 is that—

• (a) a Lloyd’s partnership gives notice of its resignation from membership of Lloyd’s in accordance with the rules or practice of Lloyd’s,

• (b) in accordance with the rules or practice, the partnership does not undertake any new insurance business at Lloyd’s after the end of the partnership’s last underwriting year, and

• (c) the partnership does not withdraw that notice.

• (3) Condition 2 is that all of the partnership’s outstanding syndicate capacity is disposed of by the partnership under a conversion arrangement to a successor company (the “syndicate capacity disposal”) with effect from the beginning of the underwriting year next following the partnership’s last underwriting year.

• (4) Condition 3 is that, immediately before the syndicate capacity disposal,—

• (a) the converting partners together control the successor company, and

• (b) the ordinary share capital of the successor company is beneficially owned by the converting partners in the same, or as nearly as may be the same, proportions as those in which pursuant to the partnership agreement the converting partners are at that time treated as having interests in the partnership’s syndicate capacity.

• (5) For the purposes of sub-paragraph (4)(b), ignore any interest of a person other than a converting partner in the partnership’s syndicate capacity.

• (6) Condition 4 is that the syndicate capacity disposal is made in consideration solely of the issue to the converting partners of shares in the successor company.

• (7) Condition 5 is that the successor company starts to carry on its underwriting business in the underwriting year ... next following the partnership’s last underwriting year.

• (8) In this paragraph “the partnership’s last underwriting year”, in relation to a partnership which gives notice of its resignation from Lloyd’s, means the underwriting year during which, or at the end of which, the partnership ceases to be an underwriting member and becomes a non-underwriting member in accordance with the rules or practice of Lloyd’s.

• (9) In this paragraph “outstanding syndicate capacity”, in relation to a partnership, means the syndicate capacity of the partnership other than any which—

• (a) the partnership disposes of to a person other than a successor member at or before the end of the partnership’s last underwriting year, or

• (b) ceases to exist with effect from the end of that year.

Capital gains tax: roll-over relief on disposal of syndicate capacity

5B

• (1) This paragraph applies if—

• (a) the aggregate of any chargeable gains accruing to a converting partner on the syndicate capacity disposal exceeds the aggregate of any allowable losses accruing to the partner on that disposal, and

• (b) the partner makes a claim under this paragraph to an officer of Revenue and Customs.

• (2) The amount of the excess mentioned in sub-paragraph (1)(a) above (“the amount of the syndicate capacity gain”) shall for the purposes of capital gains tax be reduced by the amount of the rolled-over gain.

• (3) For the purpose of computing any chargeable gain accruing to the partner on a disposal by the partner of any issued share or any asset directly or indirectly derived from any issued share—

• (a) the amount of the rolled-over gain shall be apportioned between the issued shares as a whole, and

• (b) the sums allowable as a deduction under section 38(1)(a) of the Gains Tax Act shall be reduced by the amount apportioned to the issued share under paragraph (a) above; but, in the case of a derived asset, the reduction shall be by an appropriate proportion of that amount;

and if the issued shares are not all of the same class, the apportionment between the shares under paragraph (a) above shall be in accordance with their market values at the time they were acquired by the partner.

• (4) In this paragraph “the amount of the rolled-over gain” means the lesser of—

• (a) the amount of the syndicate capacity gain, and

• (b) the aggregate of any sums which would be allowable as a deduction under section 38(1)(a) of the Gains Tax Act if the issued shares were disposed of as a whole by the partner in circumstances giving rise to a chargeable gain.

• (5) In this paragraph the “issued shares” means the shares in the successor company issued to the partner in consideration for the syndicate capacity disposal.

Capital gains tax: roll-over relief on disposal of assets of ancillary trust fund

5C

• (1) This paragraph applies if—

• (a) at the time of, or after, the syndicate capacity disposal, assets forming some or all of the ancillary trust fund of the Lloyd’s partnership or of a converting partner are—

• (i) withdrawn from the fund, and

• (ii) without unreasonable delay, disposed of by the partnership or partner to the successor company (the “ATF disposal”),

• (b) the aggregate of any chargeable gains accruing to a converting partner (the “relevant partner”) on the ATF disposal exceeds the aggregate of any allowable losses available to the relevant partner on that disposal,

• (c) throughout the period beginning with the time of the syndicate capacity disposal and ending with the time of the ATF disposal—

• (i) the converting partners together control the successor company, and

• (ii) the proportion of the successor company’s ordinary share capital beneficially owned by the relevant partner is more than 50% of the proportion of that share capital that was beneficially owned by the relevant partner at the time of the syndicate capacity disposal,

• (d) the consideration received by the relevant partner on the ATF disposal consists solely of the issue to the relevant partner of shares (the “issued shares”) in the successor company, and

• (e) the relevant partner makes a claim under this paragraph to an officer of Revenue and Customs.

• (2) But this paragraph does not apply if—

• (a) the relevant partner could have made a claim under paragraph 5B above, and

• (b) at the time the relevant partner makes a claim under this paragraph, no claim under paragraph 5B above is or has been made by the relevant partner.

• (3) The amount of the excess mentioned in sub-paragraph (1)(b) above (“the amount of the ATF assets gain”) shall for the purposes of capital gains tax be reduced by the amount of the rolled-over gain.

• (4) For the purpose of computing any chargeable gain accruing to the relevant partner on a disposal by the relevant partner of any issued share or any asset directly or indirectly derived from any issued share—

• (a) the amount of the rolled-over gain shall be apportioned between the issued shares as a whole, and

• (b) the sums allowable as a deduction under section 38(1)(a) of the Gains Tax Act are reduced by the amount apportioned to the issued share under paragraph (a) above; but, in the case of a derived asset, the reduction shall be by an appropriate proportion of that amount;

and if the issued shares are not all of the same class, the apportionment between the shares under paragraph (a) above shall be in accordance with their market values at the time they were acquired by the relevant partner.

• (5) In this paragraph “the amount of the rolled-over gain” means the lesser of—

• (a) subject to sub-paragraph (6), the amount of the ATF assets gain, and

• (b) the aggregate amount of any sums which would be allowable as a deduction under section 38(1)(a) of the Gains Tax Act if the issued shares were disposed of as a whole by the relevant partner in circumstances giving rise to a chargeable gain.

• (6) If the market value, immediately before the ATF disposal, of the assets disposed of under that disposal exceeds 120% of the amount of the ATF assets required, the amount of the ATF assets gain shall for the purposes of sub-paragraph (5)(a) be reduced by multiplying it by—

$$RT$where—R is the amount of the ATF assets required, andT is the market value, immediately before the ATF disposal, of the assets disposed of under that disposal.$

• (7) In sub-paragraph (6) above “the amount of the ATF assets required” means the appropriate percentage of the amount of security required to be provided by the successor company in respect of its underwriting business in the underwriting year in which the ATF disposal is made.

• (7A) In sub-paragraph (7) above “the appropriate percentage” means the percentage that equates to the percentage of the ordinary share capital of the successor company that is beneficially owned by the relevant partner immediately before the ATF disposal.

• (8) This paragraph applies—

• (a) in relation to assets forming some or all of the Lloyd’s partnership’s ancillary trust fund, only on the first occasion on or after 19th December 2014 on which the partnership makes an ATF disposal, and

• (b) in relation to assets forming some or all of a converting partner’s ancillary trust fund, only on the first occasion on or after 19th December 2014 on which the partner makes an ATF disposal.

• (9) If a claim made under paragraph 5B is revoked, this paragraph applies as if the claim had never been made.

Interpretation of this Part of this Schedule

5D

• (1) In this Part of this Schedule—

• “ancillary trust fund”—in relation to a Lloyd’s partnership, does not include a premium trust fund but, subject to that, means any trust fund required or authorised by the rules of Lloyd’s, or required by a member’s agent, andin relation to a converting partner, means any trust fund required or authorised by the rules of Lloyd’s in connection with being a partner in, or member of, the partnership, or required by a member’s agent in that connection;

• “control” is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010;

• “converting partner”, in relation to a syndicate capacity disposal by a Lloyd’s partnership,—means any person who, immediately before the disposal, is a partner in, or member of, the partnership and pursuant to the partnership agreement is treated at that time as having an interest in the partnership’s syndicate capacity, butdoes not include any partner or member whose resignation from the partnership takes effect on the day of the disposal;

• “ordinary share capital” has the meaning given by section 989 of ITA 2007;

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “successor company” means a corporate member (within the meaning of Chapter 5 of Part 4 of the Finance Act 1994) which is a successor member;

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “syndicate capacity disposal” has the meaning given by paragraph 5A(3);

• “underwriting business”—in relation to a Lloyd’s partnership, means the partnership’s underwriting business as a member of Lloyd’s, andin relation to a successor company, has the same meaning as in Chapter 5 of Part 4 of the Finance Act 1994.

• (2) For the purposes of this Part of this Schedule, shares comprised in any letter of allotment or similar instrument shall be treated as issued unless—

• (a) the right to the shares conferred by it remains provisional until accepted, and

• (b) there has been no acceptance.

• (3) Paragraphs 5B and 5C above (and paragraph 5A above so far as relating to those paragraphs) are to be construed as one with the Gains Tax Act.

9A

• (1) This paragraph applies if—

• (a) a person makes a claim for relief under or by virtue of Part 1A of this Schedule, and

• (b) the Lloyd’s partnership in respect of which the claim is made withdraws the notice of its resignation from Lloyd’s.

• (2) The person must give written notice of such withdrawal to an officer of Revenue and Customs.

• (3) Such a notice must be given no later than 6 months from the date on which the person first became aware of the withdrawal of the notice of resignation.

• (4) Unless the person proves otherwise, it shall be assumed that the person became aware of the withdrawal of the notice on the day on which it was withdrawn.

• (5) All such adjustments shall be made, whether by discharge or repayment of tax, the making of assessments or otherwise, as are required as a result of the withdrawal of the notice of resignation (notwithstanding any limitation on the time within which any adjustment may be made).

• (6) If a person fails, carelessly or deliberately, to comply with sub-paragraph (2) or (3) above, Schedule 24 to the Finance Act 2007 shall apply as if—

• (a) the person had given HMRC a document of a kind listed in the Table in paragraph 1 of that Schedule, and

• (b) the document contained an inaccuracy which was careless or deliberate on the person’s part and amounted to an understatement of a liability to tax equivalent to the amount of the adjustments required by sub-paragraph (5) to be made.

• (7) In this paragraph “tax” means income tax, capital gains tax or inheritance tax.