Finance Act 2002

Application of Schedule to existing Lloyd’s syndicate capacity

129

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

Roll-over relief: application in relation to disposal of existing asset after commencement

130

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

Roll-over relief: application in relation to degrouping charge on existing asset arising after commencement

131

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

Roll-over relief: transitory interaction with relief on replacement of business asset

132

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

Part 15 — Interpretation

References to expenditure on an asset

133

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

References to amounts recognised in profit and loss account

134

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

Meaning of “accounting value”

135

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

Meaning of “adjustments required for tax purposes”

136

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

Meaning of “chargeable intangible asset” and “chargeable realisation gain”

137

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

Interpretation provisions relating to insurance companies

138

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

Meaning of “royalty”

139

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

Meaning of “tax-neutral transfer”

140

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

Meaning of “the Inland Revenue”

141

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

Meaning of “the Taxes Acts”

142

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

Index of defined expressions

143

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

SCHEDULE 30

General provisions about deductions

1

• (1) For sections 337 and 337A of the Taxes Act 1988 (corporation tax: general provisions about taxation of income) substitute—

(337) (1) Where a company begins or ceases— (a) to carry on a trade, or (b) to be within the charge to corporation tax in respect of a trade, the company’s income shall be computed as if that were the commencement or, as the case may be, the discontinuance of the trade, whether or not the trade is in fact commenced or discontinued. (2) Subsection (1) applies to a Schedule A business or overseas property business as it applies to a trade. (337A) (1) For the purposes of corporation tax, subject to any provision of the Corporation Tax Acts expressly authorising a deduction— (a) a company’s profits shall be computed without any deduction in respect of dividends or other distributions, and (b) a company’s income from any source shall be computed without any deduction in respect of charges on income. (2) In computing a company’s income from any source for the purposes of corporation tax— (a) no deduction shall be made in respect of interest except in accordance with Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships); and (b) no deduction shall be made in respect of losses from intangible fixed assets within Schedule 29 to the Finance Act 2002 except in accordance with that Schedule.

.

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

• (3) In section 214(1) of the Taxes Act 1988 (chargeable payments connected with exempt distributions), in paragraph (c) (payments not to be treated as distributions for purposes of certain provisions) for “sections 337(2) and 338(2)(a)" substitute “ section 337A(1) ”.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Surrender of non-trading loss by way of group relief

2

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

Extension of charitable exemption to non-trading gains

3

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

Change in ownership of company with unused non-trading loss

4

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

Double taxation relief

5

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

Value-shifting provisions

6

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

SCHEDULE 31

The following Schedule is inserted after Schedule 7AC to the Taxation of Chargeable Gains Act 1992 (c. 12)—

SCHEDULE 32

Individuals

1

Chapter 3 of Part 2 of the Finance Act 1993 (c. 34) (Lloyd’s underwriters, etc) is amended as follows.

2

In section 178(stop loss and quota share insurance), in subsection (1) (deductions), for paragraph (c) substitute—

(c) where an amount is payable by him under a quota share contract— (i) so much of that amount as exceeds the amount of transferred losses that are declared on or before the date the contract takes effect (“the declared amount”), or (ii) if the contract does not take effect, the amount so payable under the contract.

.

3

After subsection (3) of that section insert—

(3A) Where the amount payable by a member under a quota share contract is less than the declared amount, the difference between the two amounts shall be treated as a trading receipt in computing the profits arising from the member’s underwriting business in the year of assessment which corresponds to the underwriting year in which the contract takes effect. (3B) Where a member has entered a quota share contract, any amount paid by him to cover a cash call in respect of transferred losses that are not declared at the time the contract takes effect shall be treated— (a) for the purposes of subsection (1)(c)(i) and (3A) above, as an amount payable under the contract, and (b) for the purposes of section 172, as a payment made at the time the contract takes effect.

.

4

For subsection (4) of that section substitute—

(4) For the purposes of this section— - “cash call” has the same meaning as in Part 1 of Schedule 20 to this Act; - “quota share contract” means any contract between a member and another person which— 1. is made in accordance with the rules or practice of Lloyd’s, and 2. provides for that other person to take over any rights and liabilities of the member under any of the syndicates of which he is a member; - “transferred loss”, in relation to such a contract, means a loss for which that other person takes over liability under the contract (disregarding, in the case of a loss that has been declared at the time it is taken over, any part of it in respect of which the member has paid a cash call before that time).

.

5

In section 184(1) (interpretation), in the definition of “stop-loss insurance", after “business" insert “ , except insurance taken out by entering a quota share contract (within the meaning of section 178 above) ”.

Corporate bodies

6

Chapter 5 of Part 4 of the Finance Act 1994 (c. 9) (Lloyd’s underwriters: corporations etc) is amended as follows.

7

In section 225 (stop loss and quota share insurance), in subsection (1) (deductions), for paragraph (b) substitute—

(b) where an amount is payable by it under a quota share contract— (i) so much of that amount as exceeds the amount of transferred losses that are declared on or before the date the contract takes effect (“the declared amount”), or (ii) if the contract does not take effect, the amount so payable under the contract.

.

8

After subsection (3) of that section insert—

(3A) Where the amount payable by a corporate member under a quota share contract is less than the declared amount— (a) if the underwriting year in which the contract takes effect falls within a single accounting period, the difference between the two amounts (“the surplus”) shall be treated as a trading receipt in computing the profits arising from the member’s underwriting business for that period, and (b) if that underwriting year falls within two or more accounting periods, the apportioned part of the surplus shall be treated as a trading receipt in computing the profits arising from the member’s underwriting business for each of those periods. (3B) Where a corporate member has entered a quota share contract, any amount paid by it to cover a cash call in respect of transferred losses that are not declared at the time the contract takes effect shall be treated, for the purposes of subsections (1)(b)(i) and (3A) above, as an amount payable under the contract at that time.

.

9

For subsection (4) of that section substitute—

(4) In this section— - “apportioned part”, in relation to any insurance money or other amount, means a part apportioned under section 72 of the Taxes Act 1988; - “cash call” means a request for funds which, in pursuance of a contract made in accordance with the rules and practices of Lloyd’s, is made to a corporate member by the agent of a syndicate of which it is a member; - “quota share contract” means any contract between a corporate member and another person which— 1. is made in accordance with the rules or practice of Lloyd’s; and 2. provides for that other person to take over any rights and liabilities of the member under any of the syndicates of which it is a member; - “transferred loss”, in relation to such a contract, means a loss for which that other person takes over liability under the contract (disregarding, in the case of a loss that has been declared at the time it is taken over, any part of it in respect of which the member has paid a cash call before that time).

.

10

In section 230(1) (interpretation), in the definition of “stop-loss insurance", after “business" insert “ , except insurance taken out by entering a quota share contract (within the meaning of section 225 above) ”.

SCHEDULE 33

Part 1 — Venture capital trusts: winding up

Meaning of “VCT-in-liquidation”

1

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

Power to treat VCT-in-liquidation as VCT

2

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

Power to treat conditions for VCT approval as fulfilled with respect to VCT-in-liquidation

3

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

Power to make provision about distributions by VCT-in-liquidation

4

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

Power to facilitate disposals to VCT by VCT-in-liquidation

5

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

Provision in respect of periods before and after winding-up

6

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

Part 1: supplementary provisions and interpretation

7

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

Part 2 — Venture capital trusts: mergers

Power to facilitate mergers of VCTs

8

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

Provision that may be made by regulations under paragraph 8(1)

9

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

Meaning of “merger” and “successor company”

10

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

Part 3 — Time allowed for VCT to invest money raised by further share issue

Power to disapply, or limit operation of, section 842AA(5B) of the Taxes Act 1988

11

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

Withdrawal of VCT approval in cases for which provision made under paragraph 11

12

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

Consequential amendment in section 842AA(5A) of the Taxes Act 1988

13

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

Part 4 — Supplementary

Extension of existing powers to give effect to VCT reliefs

14

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

Penalties for non-compliance with regulations under this Schedule

15

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

Regulations under this Schedule: inclusion of supplementary etc provisions

16

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

Interpretation of Schedule

17

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

SCHEDULE 34

Introduction

1

• (1) The provisions of this Schedule supplement section 111 (withdrawal of group relief).

• (2) Expressions used in this Schedule that are defined for the purposes of that section have the same meaning in this Schedule.

Relief not withdrawn if transferor company leaves group

2

• (1) Section 111 does not apply if the transferee company ceases to be a member of the same group as the transferor company by reason of the latter company leaving the group.

• (2) The transferor company is regarded as leaving the group if the companies cease to be members of the same group by reason of a transaction relating to shares in—

• (a) the transferor company, or

• (b) another company that as a result of the transaction ceases to be a member of the same group as the transferee company.

Relief not withdrawn in case of winding-up

3

• (1) Section 111 does not apply if the transferee company ceases to be a member of the same group as the transferor company by reason of anything done for the purposes of, or in the course of, winding up the transferor company or another company that is above the transferor company in the group structure.

• (2) For the purposes of this paragraph a company is “above” the transferor company in the group structure if it is the parent (within the meaning of the relevant group relief provision)—

• (a) of the transferor company, or

• (b) of another company that is above the transferor company in the group structure.

Relief not withdrawn in case of exempt acquisition

4

• (1) Section 111 does not apply if—

• (a) the transferee company ceases to be a member of the same group as the transferor company as a result of an acquisition of shares by another company (“the parent company”) in relation to which acquisition relief applies, and

• (b) the transferee company is immediately after that acquisition a member of the same group as the parent company (“the new group”).

• (2) For this purpose—

• (a) “acquisition relief” means relief under section 75 of the Finance Act 1986 (c. 41); and

• (b) references to an acquisition in relation to which such relief applies are to an acquisition such that an instrument effecting the transfer of the shares is exempt from stamp duty by virtue of that provision.

• (3) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed—

• (a) the transferee company ceases to be a member of the new group, and

• (b) at the time when the transferee company ceases to be a member of the new group it or a relevant associated company (as defined in sub-paragraph (4) below) holds an estate or interest in land that—

• (i) was transferred to the transferee company by the relevant instrument, or

• (ii) is derived from an estate or interest that was so transferred,

and that has not subsequently been transferred at market value by a duly stamped instrument on which ad valorem duty was paid and in respect of which group relief was not claimed,

section 111 and the provisions of this Schedule apply as if the transferee had then ceased to be a member of the same group as the transferor company and had then held the estate or interest referred to in paragraph (b).

• (4) In sub-paragraph (3)(b) “relevant associated company”, in relation to the transferee company, means a company that is in the same group as the transferee company immediately before the transferee company ceases to be a member of the new group and which ceases to be a member of the new group in consequence of the transferee company so ceasing.

Interest

5

• (1) If any duty payable under section 111 is not paid within the period of 30 days within which payment is to be made, interest is payable on the amount remaining unpaid.

• (2) The provisions of section 15A(3) to (5) of the Stamp Act 1891 (c. 39) (rate of interest on unpaid duty, etc) apply in relation to interest under sub-paragraph (1).

Duty of transferee company to notify particulars

6

• (1) The transferee company shall, within the period of 30 days mentioned in section 111(2)(b) within which payment is to be made, notify the Commissioners of—

• (a) the date on which it ceased to be a member of the same group as the transferor company,

• (b) the relevant land held by it at that time,

• (c) the nature of the relevant instrument, the date on which it was executed, the parties to the instrument and the date on which the instrument was stamped,

• (d) the market value of the land transferred to it by the relevant instrument at the date on which that instrument was executed, and

• (e) the amount of duty and interest payable by it under section 111 or this Schedule.

• (2) In sub-paragraph (1)(b) the “relevant land” held by the transferee company means every estate or interest to in relation to which section 111(1)(c) applies.

• (3) In section 98(5) of the Taxes Management Act 1970 (c. 9) (penalty for failure to provide information), in the second column of the Table, at the appropriate place insert “paragraph 6 of Schedule 34 to the Finance Act 2002".

Determination, collection and recovery of duty and interest

7

The provisions of regulations under section 98 of the Finance Act 1986 (c. 41) (stamp duty reserve tax: administration etc), and the provisions of the Taxes Management Act 1970 (c. 9) applied by those regulations, have effect with the necessary modifications in relation to—

• (a) the determination by the Commissioners of the duty payable under section 111 or the interest payable thereon,

• (b) appeals against any such determination, and

• (c) the collection and recovery of any such duty or interest,

as if it were an amount of stamp duty reserve tax.

Recovery of group relief from from another group company or controlling director

8

• (1) This paragraph applies where—

• (a) an amount is payable under section 111 or this Schedule by the transferee company,

• (b) a notice of determination of the amount payable has been issued by the Commissioners, and

• (c) the whole or part of that amount is unpaid six months after the date on which it became payable.

• (2) The following persons may, by notice under paragraph 9, be required to pay the unpaid amount—

• (a) the transferor company;

• (b) any company that, at any relevant time, was a member of the same group as the transferee company and was above it in the group structure;

• (c) any person who at any relevant time was a controlling director of the transferee company or of a company having control of the transferee company.

• (3) For the purposes of this paragraph—

• (a) a “relevant time” means any time between the execution of the relevant instrument and the transferee company ceasing to be a member of the same group as the transferor company;

• (b) a company is “above” another company in a group structure if it is the parent (within the meaning of the relevant group relief provision)—

• (i) of that company, or

• (ii) of another company that is above that company in the group structure.

• (4) In this paragraph—

• “director”, in relation to a company, has the meaning given by section 67(1) and (2) of the Income Tax (Earnings and Pensions) Act 2003 and includes any person falling within section 452(1) of the Corporation Tax Act 2010;

• “controlling director”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010).

Recovery of group relief from another group company or controlling director: procedure and time limit

9

• (1) The Commissioners may serve a notice on a person within paragraph 8(2) requiring him, within 30 days of the service of the notice, to pay the amount that remains unpaid.

• (2) Any notice under this paragraph must be served before the end of the period of three years beginning with the date on which the notice of determination mentioned in paragraph 8(1)(b) is issued.

• (3) The notice must state the amount required to be paid by the person on whom the notice is served.

• (4) The notice has effect—

• (a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

• (b) for the purposes of appeals,

as if it were a notice of determination and that amount were an amount of stamp duty reserve tax due from that person.

• (5) A person who has paid an amount in pursuance of a notice under this paragraph may recover that amount from the transferee company.

• (6) A payment in pursuance of a notice under this paragraph is not allowed as a deduction in computing any income, profits or losses for any tax purposes.

Power to require information

10

• (1) The Commissioners may by notice require any person to furnish them within such time, not being less than 30 days, as may be specified in the notice with such information (including documents or records) as the Commissioners may reasonably require for the purposes of section 111 or this Schedule.

• (2) A relevant lawyer shall not be obliged in pursuance of a notice under this paragraph to disclose, without his client’s consent, any information with respect to which a claim to professional privilege could be maintained.

• (2A) “Relevant lawyer” means a barrister, advocate, solicitor or other legal representative communications with whom may be the subject of a claim to professional privilege.

• (3) In section 98(5) of the Taxes Management Act 1970 (c. 9) (penalty for failure to comply with notice to provide information), in the first column of the Table, at the appropriate place insert “paragraph 10 of Schedule 34 to the Finance Act 2002".

Supplementary

11

Section 111 and this Schedule shall be construed as one with the Stamp Act 1891 (c. 39).

SCHEDULE 35

Introduction

1

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

Change of control due to exempt transfer

2

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

Change of control due to intra-group transfer

3

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

Change of control due to exempt share acquisition

4

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

Change of control due to interest of loan creditor

5

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

Interest

6

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

Duty of acquiring company to notify particulars

7

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

Determination, collection and recovery of duty and interest

8

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

Recovery of section 76 relief from from another group company or controlling director

9

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

Recovery of section 76 relief from another group company or controlling director: procedure and time limit

10

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

Power to require information

11

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

Supplementary

12

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

SCHEDULE 36

Part 1 — Subsales

Introduction

1

This Part of this Schedule has effect for affording relief from duty under section 115 (contracts chargeable as conveyances) on a subsale.

Meaning of “subsale”

2

For the purposes of this Schedule there is a subsale—

• (a) where the purchaser under a contract or agreement for the sale of an estate or interest in land in the United Kingdom (“the original sale”), without having obtained a conveyance of the property contracted to be sold, contracts to sell the whole or part of the property to another person, or

• (b) where the sub-purchaser under a subsale of an estate or interest in land in the United Kingdom, without having obtained a conveyance of the property contracted to be sold, contracts to sell to another person the whole or part of the property contracted to be sold by the original sale,

so as to entitle that person to call for a conveyance from the original seller.

Relief where duty paid on original sale or earlier subsale

3

• (1) Where duty under section 115 has been paid—

• (a) on the original sale, or

• (b) on an intervening subsale,

duty under that section on a subsale, or subsequent subsale, is chargeable only in respect of the amount (if any) by which the chargeable consideration on that transaction exceeds the chargeable consideration on the earlier transaction.

• (2) If there is more than one such earlier transaction on which duty has been paid, the reference in sub-paragraph (1) to the chargeable consideration on the earlier transaction shall be read as a reference to the higher or highest amount of chargeable consideration on which duty has been paid.

• (3) If the subsale does not relate to the whole of the property to which the earlier transaction related, the references in sub-paragraphs (1) and (2) to the chargeable consideration on an earlier transaction shall be read as references to an appropriate proportion of that consideration.

• (4) What is an appropriate proportion shall be determined on a just and reasonable basis having regard to the subject matter of the subsale and of the earlier transaction.

• (5) For the purposes of this paragraph the chargeable consideration on a transaction is the consideration that falls to be brought into account in determining the duty chargeable on it.

• (6) Where under this paragraph duty on a subsale is chargeable in respect of part only of the consideration for the subsale, it is chargeable at the rate that would be applicable if the whole of the chargeable consideration on the subsale were taken into account.

Part 2 — Subsequent conveyance or transfer

Introduction

4

• (1) This Part of this Schedule has effect for affording relief where ad valorem duty is chargeable both—

• (a) under section 115 on a contract or agreement (“the original sale”), and

• (b) on a subsequent conveyance or transfer by the original seller to the purchaser, or a sub-purchaser, in conformity with that contract or agreement.

• (2) References in this Part to the purchaser under the original sale, or a sub-purchaser under a subsale, include a person by whom the rights of the purchaser, or a sub-purchaser, are exercisable by virtue of any assignment (in Scotland, assignation) or agreement (other than a subsale).

Conveyance or transfer of property contracted to be sold

5

• (1) Where the original seller conveys the whole of the property contracted to be sold—

• (a) to the purchaser, or

• (b) to a sub-purchaser in circumstances in which section 58(4) of the Stamp Act 1891 (c. 39) applies (conveyance chargeable only on consideration moving from sub-purchaser),

the conveyance or transfer is chargeable with duty only to the extent (if any) that the ad valorem duty chargeable on it (apart from this sub-paragraph) exceeds the duty paid under section 115 on the original sale together with the amount of any such duty paid on an intervening subsale.

• (2) Where—

• (a) the original seller conveys the property contracted to be sold to different sub-purchasers in parts or parcels, and

• (b) section 58(5) of the Stamp Act 1891 (c. 39) applies (conveyance chargeable only on consideration moving from sub-purchaser),

the conveyance or transfer of each part or parcel is chargeable with duty only to the extent (if any) that the ad valorem duty chargeable on it (apart from this sub-paragraph) exceeds an appropriate proportion of the ad valorem duty paid on the original sale together with an appropriate proportion of any such duty paid on an intervening subsale.

• (3) What is an appropriate proportion shall be determined on a just and reasonable basis having regard to the subject matter of the conveyance or transfer and of the earlier transaction.

• (4) Where sub-paragraph (1) or (2) applies to reduce or extinguish the duty payable on a conveyance or transfer, the Commissioners shall, upon application and upon production of the earlier instrument or instruments, duly stamped, either—

• (a) denote the payment of the whole of the ad valorem duty upon the conveyance or transfer, or

• (b) transfer to the conveyance or transfer the ad valorem duty paid on the earlier instrument or instruments.

Repayment of duty in certain cases

6

• (1) Where—

• (a) duty is paid under section 115 on the original sale,

• (b) one or more conveyances or transfers are executed in conformity with that contract or agreement so that the whole of the property contracted to be sold is duly conveyed to a purchaser or to one or more sub-purchasers,

• (c) those conveyances or transfers are all duly stamped, and

• (d) the aggregate amount of the duty that would have been paid on those conveyances or transfers but for duty having been previously paid on the original sale is less than the duty paid on the original sale,

the Commissioners shall repay the difference to the person by whom the duty was paid on the original sale.

• (2) If duty has been paid under section 115 on one or more intervening subsales, sub-paragraph (1) has effect with the following modifications—

• (a) the reference to duty having been paid on the original sale shall be read as a reference to duty having been paid either on the original sale or on an intervening subsale;

• (b) the reference to the amount of duty paid on the original sale shall be read as a reference to the aggregate of the amounts paid on the original sale and any intervening subsales, and

• (c) any repayment shall be apportioned among the persons by whom those amounts were paid.

• (3) The apportionment mentioned in sub-paragraph (2)(c) shall be made on a just and reasonable basis having regard to the subject matter of the original sale and of the subsale or subsales in question.

Part 3 — General supplementary provisions

Construction of references to duty on transactions

7

Any reference in section 115 or this Schedule to duty chargeable or paid on a transaction is to duty chargeable or paid on the stamping of the instrument by which the transaction is effected.

Transactions relating to land in the UK and to other property

8

• (1) Where a transaction relates both to land in the United Kingdom and to other property, section 115 and this Schedule apply as if there were separate transactions.

• (2) Similarly, the reference in section 115(1)(b) to a series of transactions is to a series of transactions so far as relating to land in the United Kingdom.

• (3) If, in a case where a transaction or series of transactions relates partly to land in the United Kingdom and partly to other property, the consideration is not apportioned in a manner that is just and reasonable, section 115 and this Schedule shall have effect as if the consideration had been apportioned in such a manner.

Person claiming relief to establish entitlement

9

It is for a person claiming any relief under this Schedule to prove to the satisfaction of the Commissioners that he is entitled to relief and in what amount.

Construction as one

10

Section 115 and this Schedule shall be construed as one with the Stamp Act 1891 (c. 39).

SCHEDULE 37

Reduction of stamp duty where instrument partly relating to goodwill

1

• (1) This paragraph applies where stamp duty under Part 1 of Schedule 13 to the Finance Act 1999 (c. 16) (conveyance or transfer on sale) is chargeable on an instrument that relates partly to goodwill and partly to property other than goodwill.

• (2) In such a case—

• (a) the consideration in respect of which duty would otherwise be charged shall be apportioned, on a just and reasonable basis, as between the goodwill and the other property, and

• (b) the instrument shall be charged only in respect of the consideration attributed to the other property.

• (3) This paragraph applies to instruments executed on or after 23rd April 2002.

Apportionment of consideration for stamp duty purposes

2

• (1) Where part of the property referred to in section 58(1) of the Stamp Act 1891 (c. 39) (consideration to be apportioned between different instruments as parties think fit) consists of goodwill, that provision shall have effect as if “the parties think fit" read “is just and reasonable".

• (2) Where—

• (a) part of the property referred to in section 58(2) of the Stamp Act 1891 (property contracted to be purchased by two or more persons etc) consists of goodwill, and

• (b) both or (as the case may be) all the relevant persons are connected with one another,

that provision shall have effect as if the words from “for distinct parts of the consideration" to the end of the subsection read “, the consideration shall be apportioned in such manner as is just and reasonable, so that a distinct consideration for each separate part or parcel is set forth in the conveyance relating thereto, and such conveyance is to be charged with ad valorem duty in respect of such distinct consideration.".

• (3) In a case where sub-paragraph (1) or (2) applies and the consideration is apportioned in a manner that is not just and reasonable, the enactments relating to stamp duty shall have effect as if—

• (a) the consideration had been apportioned in a manner that is just and reasonable, and

• (b) the amount of any distinct consideration set forth in any conveyance relating to a separate part or parcel of property were such amount as is found by a just and reasonable apportionment (and not the amount actually set forth).

• (4) For the purposes of sub-paragraph (2)—

• (a) a person is a relevant person if he is a person by or for whom the property is contracted to be purchased;

• (b) the question whether persons are connected with one another shall be determined in accordance with section 1122 of the Corporation Tax Act 2010.

• (5) This paragraph applies to instruments executed on or after 23rd April 2002.

Certification of instruments for stamp duty purposes

3

• (1) Goodwill shall be disregarded for the purposes of paragraph 6 of Schedule 13 to the Finance Act 1999 (c. 19) (certification of instrument as not forming part of transaction or series of transactions exceeding specified amount).

• (2) Any statement as mentioned in paragraph 6(1) of that Schedule shall be construed as leaving out of account any matter which is to be so disregarded.

• (3) This paragraph applies to instruments executed on or after 23rd April 2002.

Acquisition under statute

4

• (1) Section 12 of the Finance Act 1895 (c. 16) (property vested by Act or purchased under statutory powers) does not require any person who is authorised to purchase any property as mentioned in that section after 23rd April 2002 to include any goodwill in the instrument of conveyance required by that section to be produced to the Commissioners.

• (2) If the property consists wholly of goodwill no instrument of conveyance need be produced to the Commissioners under that section.

• (3) This paragraph applies where the Act mentioned in that section, and by virtue of which property is vested or a person is authorised to purchase property, is passed after 23rd April 2002.

Interpretation

5

In this Schedule “the enactments relating to stamp duty” means the Stamp Act 1891 (c.39) and any enactment amending that Act or that is to be construed as one with that Act.

SCHEDULE 38

Introduction

1

This Schedule makes amendments to provisions of Part 2 of the Finance Act 2001 (c. 9) (aggregates levy).

The charge

2

In section 16(1) (charge to aggregates levy), for “A levy" substitute “ A tax ”.

Meaning of “aggregate” etc

3

• (1) Section 17 (meaning of “aggregate" etc) is amended as follows.

• (2) In subsection (2) (meaning of “taxable" aggregate), for paragraph (d) substitute—

(d) it is aggregate that on the commencement date is on a site other than— (i) its originating site, or (ii) a site that is required to be registered under the name of a person who is the operator, or one of the operators, of that originating site.

.

• (3) In subsection (3)(d) (exemption for aggregate won in the course of road works), in sub-paragraph (ii) for “otherwise than wholly or mainly" substitute “ not ”.

• (4) In subsection (4), in paragraph (d) (exemption for cuttings from oil drilling)—

• (a) after “the Petroleum Act 1998" insert “ or the Petroleum (Production) Act (Northern Ireland) 1964 ”;

• (b) omit the words from “otherwise" to the end (which restrict the exemption to off-shore drilling).

Exempt processes

4

• (1) Section 18 (exempt processes) is amended as follows.

• (2) In subsection (2)(c) (exemption for production of lime etc), for “some other substance" substitute “ anything else ”.

• (3) In subsection (3) (meaning of “relevant substance"), omit paragraphs (d) (calcite) and (h) (flint).

Commercial exploitation

5

• (1) Section 19 (commercial exploitation) is amended as follows.

• (2) In subsection (2) (description of sites removal of aggregate from which counts as exploitation), in paragraph (b) for the words from “who is the operator" to the end substitute “ under whose name that originating site is also registered ”.

• (3) After subsection (3) (meaning of “commercial" exploitation) insert—

(3A) For the purposes of subsection (3)(a) above “business” includes any activity of a Government department, local authority or charity.

.

• (4) In subsection (4) (exemption in certain cases where aggregate is won from one site and incorporated into a neighbouring site), for the words “adjacent land" in both places substitute “ other land ”.

Responsibility for commercial exploitation

6

In section 22 (which determines who is taken to be responsible for exploitation of aggregate), at the end of subsection (2) (responsibility for “commercial" exploitation) insert—

For the purposes of this subsection “business” includes any activity of a Government department, local authority or charity.

.

The register

7

In section 24 (the register), in subsection (6) (premises that may be registered) insert after paragraph (c)—

(ca) for mixing, otherwise than in permitted circumstances (within the meaning given by section 19(7)), any aggregate with any material or substance other than water,

.

Insolvency etc

8

In section 37 (regulations about cases of insolvency etc), in subsection (7) (meaning of “insolvency procedure) omit paragraphs (g) to (j) (appointment of receiver and other interim or provisional orders).

Notification of registrability etc

9

• (1) Paragraph 1 of Schedule 4 (notification of registrability etc) is amended as follows.

• (2) For sub-paragraph (1) substitute—

(1) An unregistered person who— (a) is required to be registered for the purposes of aggregates levy, or (b) has formed the intention of carrying out taxable activities that are registrable, shall notify the Commissioners of that fact. (1A) An unregistered person who— (a) would be required to be registered for the purposes of aggregates levy but for an exemption by virtue of regulations under section 24(4) of this Act, or (b) has formed the intention of carrying out taxable activities that would be registrable but for such an exemption, shall, in such cases or circumstances as may be prescribed in the regulations, notify the Commissioners of that fact. (1B) For the purposes of sub-paragraphs (1) and (1A) above, taxable activities are “registrable” if a person carrying them out is, by reason of doing so, required by section 24(2) of this Act to be registered for the purposes of aggregates levy.

.

• (3) In sub-paragraphs (2) and (5), after “sub-paragraph (1)" insert “ or (1A) ”.

Restriction on powers to provide for set-off

10

In paragraph 11 of Schedule 8 (restriction on powers to provide for set-off), in sub-paragraph (2) (meaning of “insolvency procedure") omit paragraphs (f), (g) and (h) (appointment of receiver and other interim or provisional orders).

SCHEDULE 39

Introduction

1

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

Enforcement of claims in the United Kingdom

2

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

Power to make supplementary provision by regulations

3

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

Proceedings on contested claims

4

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

Claims determined in taxpayer’s favour

5

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

Other supplementary provisions

6

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

SCHEDULE 40

Part 1 — Excise duties

Part 2 — Value added tax

Part 3 — Income tax, corporation tax and capital gains tax

Part 4 — Other taxes

Part 5 — Miscellaneous

Rates of duty on cider

Reduced rates of duty on beer from small breweries

Amusement machine licences: excepted machines

Amusement machine licence duty: rates

Rates of gaming duty

Pool betting duty etc

Disclosure of information for vehicle excise duty exemptions

Cars registered on or after 1st March 2001: rates of duty

Registered vehicles etc

Disclosure of information for vehicle excise duty exemptions

Motorcycles (and motorcycle trade licences): rates of duty

Calculating cylinder capacity of vehicles

Disallowance of input tax where consideration not paid

Invoices

Relief from VAT on acquisition if importation would attract relief

Exemptions for disposals by companies with substantial shareholding

Share exchanges and company reconstructions

Deduction of personal losses from gains treated as accruing to settlors

Tax relief for expenditure on vaccine research etc

Expenditure involving crime

Life policies etc: chargeable events

Expenditure on green technologies: leasing

Accounting method where rate of interest etc is reset

Discounted securities etc

Discounted securities etc

Expenditure involving crime

Land in disadvantaged areas

Election to forgo roll-over relief on transfer of business

Shares acquired on same day: election for alternative treatment

Withdrawal of group relief

Tax relief for expenditure on vaccine research etc

Expenditure on green technologies: leasing

Gift aid: election to be treated as if gift made in previous tax year

Withdrawal of relief for company acquisitions

Climate change levy: exemption for renewable sources

Expenditure involving crime

Aggregates levy: amendments to provisions exempting spoil etc

Aggregates levy: amendments to provisions about civil penalties

Administration of UK gilts

Aggregates levy: crushing and cutting rock

Exclusion of bioblend from rebates on heavy oil

Aggregates levy: transitional relief for Northern Ireland

Climate change levy: certification requirement

Aggregates levy: amendments to provisions about civil penalties

Interpretation

Deduction of tax by persons dealing in financial instruments

Landfill tax: rate

Climate change levy: exemption for renewable sources

Amendment in the Excise Duties (Surcharges or Rebates) Act 1979

Commencement provision for certain consequential amendments

Introductory

First-year qualifying expenditure

Introductory

Overseas life insurance companies

Overseas life insurance companies

Finance Act 2000

Meaning of “loan relationship” etc: method of settlement

Building society shares: regulations for deduction of tax

Amount of first-year allowances

The Finance Act 1994

Plant or machinery used for less than five years in a ring fence trade

“Inland Revenue"

Group relief

Interpretation

General scheme

The Finance Act 1994

Meaning of “VCT-in-liquidation"

Interest

Climate change levy: electricity produced from coal mine methane

Exempt processes

Claims for tax credits

First-year qualifying expenditure: plant and machinery for use wholly in a ring fence trade

General scheme

Introduction

Section 86

Exchange gains and losses from loan relationships etc

Miscellaneous amendments

Transfers of income arising from securities

Foreign tax on items giving rise to a non-trading credit

Foreign tax on items giving rise to a non-trading credit

Funding bonds issued in respect of interest on certain debts

Penalty for failure to provide information etc

Foreign tax on items giving rise to a non-trading credit

Administration of UK gilts

Interpretation

Biodiesel and bioblend not to be treated as fuel substitute

Repayment of duty in case of biodiesel used otherwise than as road fuel

Venture capital trusts

Joint enterprise companies

Amendments in Schedule 5 to the Finance Act 1994

Information etc

Credit-tokens and non-cash vouchers

Taxation of benefit where income received free of tax

Priority between charges under sections 148 and 595 of the Taxes Act 1988

The following Schedule is inserted after Schedule 7AA to the Taxation of Chargeable Gains Act 1992 (c. 12)—

Registration and termination

“Inland Revenue"

Other expressions

Introductory

First-year qualifying expenditure

Finance Act 2000

Registration and termination

“Inland Revenue"

Discounted securities of close companies

Supplementary charge in respect of ring fence trades

Intangible fixed assets: assets entirely excluded: financial assets

Distributions

Artificially inflated claims for first-year allowances

Section 87

Election for Schedule to apply for years earlier than 2003-04

Recovery of excessive tax credits

Claims for tax credits

Commencement

Meaning of “investment"

Open to the whole community

Bad debt etc: departure not permitted by paragraph 6: subsequent cessation of connection

Repo transactions and stock lending

Funding bonds issued in respect of interest on certain debts

Single asset pool in relation to cars above cost threshold

Limits on credit: corporation tax

Extension of section 100 to exchange gains and losses and to items other than money debts

The basic rule: sterling to be used

Non-trading deficit on loan relationships

Foreign tax on items giving rise to a non-trading credit

Non-trading deficit on loan relationships

Bad debts etc where parties have a connection

Meaning of “related transaction”

Exchange gains and losses where loan not on arm’s length terms

Special provisions for insurers: apportionments

Limits on credit: corporation tax

Foreign tax on items giving rise to a non-trading credit

Claim to carry back deficit to previous accounting periods

Restriction of relief for payments of interest

Investment trusts

Deficit carried forward and set against non-trading profits of succeeding accounting periods

Foreign tax on items giving rise to a non-trading credit

Repo transactions and stock lending

Discounted securities where companies have a connection

Repo transactions and stock lending

Discounted securities of close companies

Building society shares: incidental costs of issuing qualifying shares

Transfers of income arising from securities

Adjustments in the case of chargeable assets etc

Group relief

Foreign tax on items giving rise to a non-trading credit

Group relief

Building society shares: incidental costs of issuing qualifying shares

Anti-avoidance: change of accounting period

Funding bonds issued in respect of interest on certain debts

Restriction of relief for payments of interest

Change in ownership of investment company

Investment trusts

Application of accounting methods

Recovery of degrouping charge from another group company or controlling director: time limit

Venture capital trusts

Change in ownership of company with unused non-trading loss

Value-shifting provisions

Responsibility for commercial exploitation

Introduction

Exempt processes

Commercial exploitation

Interest charged to capital

Exchange gains and losses where derivative contracts not on arm’s length terms

Derivative contracts ceasing to be held for purposes of trade

Derivative contracts which are to be taxed on a chargeable gains basis

Building society shares: regulations for deduction of tax

Group relief

Discounted securities where companies have a connection

Surrender of non-trading loss by way of group relief

The Finance Act 1996

The Finance Act 1996

Anti-avoidance: change of accounting period

The Finance Act 2002

Qualifying contracts to which company ceases to be party before commencement day

Recovery of degrouping charge from another group company or controlling director: time limit

European Economic Interest Groupings

Transfers of income arising from securities

Extension of charitable exemption to non-trading gains

Limits on credit: corporation tax

Corporate bodies

Payments between group members in respect of reliefs

Change in ownership of company with unused non-trading loss

Extension of existing powers to give effect to VCT reliefs

Interest charged to capital

Non-trading deficit carried forward from last old accounting period

61A

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

Underlying subject matter which is subordinate or of small value disregarded

Meaning of “underlying subject matter”

Transactions within groups

Derivative contracts ceasing to be held for purposes of trade

Contracts where underlying subject matter of different excluded types

Surrender of non-trading loss by way of group relief

The Finance Act 1996

Restriction on powers to provide for set-off

Exempt processes

Writing down at fixed rate: election for fixed-rate basis

Payments between group members in respect of reliefs

Surrender of non-trading loss by way of group relief

Change in ownership of company with unused non-trading loss

Individuals

The following Schedule is inserted after Schedule 7AC to the Taxation of Chargeable Gains Act 1992 (c. 12)—

Corporate bodies

Power to treat VCT-in-liquidation as VCT

Penalties for non-compliance with regulations under this Schedule

Meaning of “aggregate" etc

Exempt processes

Commercial exploitation

The register

Introduction

2 The repeals in the Finance Act 1988 have effect in accordance with section 5(8)(b) of this Act.

2 The other repeals have effect in accordance with section 12 of this Act.

2 The repeal of paragraph 7 of Schedule 4 to the Finance Act 1995 has effect in accordance with section 18(3) of this Act.

The repeal in section 473(2) of the Taxes Act 1988 has effect in accordance with section 67(4)(a) of this Act.

The other repeals shall be deemed to have come into force on 1st April 2002.

Editorial notes

[^c10569681]: S. 4 wholly in force; s. 4(1) in force at 1.6.2002 for specified purposes, otherwise s. 4 in force at 24.7.2002, see s. 4(2)(3)

[^c10569691]: S. 5(6)(a) power fully exercised: 25.7.2002 appointed by S.I. 2002/1926, art. 2

[^c10569701]: S. 6(3) power wholly exercised: 1.4.2003 appointed for specified purposes by S.I. 2002/3056, art. 2

[^c10569711]: S. 12 wholly in force; s. 12(1) in force at 31.3.2002 or 24th April 2002, otherwise s. 12 in force at 24.7.2002, see. s. 12(5)-(7)

[^c10569721]: S. 14 wholly in force; s. 14(2)-(6) in force at 24.7.2002 and s. 14(1) in force at 25.7.2002 by s. 14(5)

[^c10569741]: S. 22(3) power fully exercised: 1.1.2003 appointed by S.I. 2002/3028, art. 2

[^c10569751]: s. 69 repealed (with effect in accordance with s. 83(3)) by 2002 c. 23, s. 141, Sch. 40, Pt. 3(13) Note 2

[^c10569761]: S. 70 repealed (with effect in accordance with s. 83(3)) by 2002 c. 23, s. 141, Sch. 40, Pt. 3(13) Note 2

[^c10569771]: S. 78 repealed (with effect in accordance with s. 83(3)) by 2002 c. 23, ss. 83, 141, Sch. 27 para. 25, Sch. 40, Pt. 3(13) Note 2

[^c10569781]: Sch. 1 para. 2 wholly in force; Sch. 1 para. 2 in force for specified purposes at 1.6.2002, otherwise Sch. 1 para. 2 in force at 24.7.2002, see. s. 4

[^c10569801]: Sch. 4 para. 2 wholly in force; Sch. 4 para. 2 in force at 31.3.2002 for specified purposes, otherwise in force at 24.7.2002, see. s. 12(5)(7)(a)(8)

[^c10569811]: Sch. 4 para. 6 wholly in force; Sch. 4 para. 6(b) in force at 31.3.2002; Sch. 4 para. 6(a)(c) in force at 24.4.2002, see s. 12(5)(6)

[^c10569821]: Sch. 6 para. 10 wholly in force; Sch. 6 para. 10(1)(2)(5)-(11)(13)(14) in force at 24.4.2002; Sch. 6 para. 10(3)(4)(12) in force at 24.7.2002, see s. 12(6)(7)(b)

[^c10569831]: Sch. 4 para. 12 wholly in force; Sch. 4 para. 12(1)(3) in force at 24.4.2002; Sch. 4 para. 12(2) in force at 24.7.2002, see. s. 12(6)(7)(b)

[^key-3a8d0a7a38515e30cbbed2e72ab2be58]: S. 22 has effect as specified by The Finance Act 2002, section 22, (Appointed Day) Order 2002 (S.I. 2002/3028), art. 2

[^key-048194944e3136689f5d61ba7f6be5b4]: S. 66 modified by SI 1997/473 reg. 53E (as inserted (30.1.2003) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 2003 (S.I. 2003/23), regs. 1(1), 10

[^key-ebc4386c5fd3b70ada67f260f1f9fc6a]: S. 123(1) has effect as specified by The Finance Act 2002, section 123, (Appointed Day) Order 2003 (S.I. 2003/603), art. 2

[^key-8df0ca5d5143b3437a715cce1986ac90]: Sch. 3 para. 1 in force at 24.7.2002 for specified purposes , see s. 6(3)(4); Sch. 3 para. 1 in force at 1.4.2003 in so far as not already in force by S.I. 2002/3056, art. 2

[^key-d3386899b138c95ce4aa33c99afb3704]: S. 39 repealed (with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 8 Pt. 1 (with Sch. 7)

[^key-e349547307ba5c523efa006dfde4cb72]: Ss. 33-37 repealed (with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 8 Pt. 1 (with Sch. 7)

[^key-affd30e8709d932066fea883bca34703]: Sch. 6 repealed (with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 8 Pt. 1 (with Sch. 7)

[^key-7496e350baa055c9fc36867ff53d4a6b]: S. 41 repealed (with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 8 Pt. 1 (with Sch. 7)

[^key-0127aefcdc9b9ec2d532b41ec2a29a43]: Words in s. 103(4)(f) repealed (with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 8 Pt. 1 (with Sch. 7)

[^key-9ab57ca85761d6de6a6864711a2651f5]: S. 111(4A) inserted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(5)(11) (with s. 126(9)(10))

[^key-fa2a7d2cd9dcc4b658048c101aab041f]: Words in s. 111(1)(b) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(2)(11) (with s. 126(9)(10))

[^key-a619fc4eadd2ef3636498b4889310866]: Words in s. 111(1)(c) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(3)(a)(i)(11) (with s. 126(9)(10))

[^key-892e66e9e6c3a7579c0f174ebba096dc]: Words in s. 111(1)(c) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(3)(a)(ii)(11) (with s. 126(9)(10))

[^key-3209d69aefca5dd855f6cd545bdc828e]: Words in s. 111(1)(c) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(3)(c)(11) (with s. 126(9)(10))

[^key-505ef23a00066089b0c170b287a8906a]: Words in s. 111(1)(c)(i) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(3)(b)(11) (with s. 126(9)(10))

[^key-b26eac916c910865fd45a3f6e164ce4c]: Words in s. 111(3) inserted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(4)(a)(11) (with s. 126(9)(10))