Finance Act 2008

• (b) in the heading, after “allowances” insert “ and annual investment allowances ”.

22

In section 78 (arrangements to reduce tax liabilities)—

• (a) in subsection (1)(a), after “the” insert “ annual investment allowance or ”, and

• (b) in the heading, after “allowances” insert “ and annual investment allowances ”.

Part 3 — Commencement

23

• (1) This Schedule has effect in relation to expenditure incurred on or after the relevant date.

• (2) In relation to a chargeable period which—

• (a) begins before the relevant date, and

• (b) ends on or after the relevant date,

the maximum allowance under section 51A of CAA 2001 is to be calculated as if the period beginning with the relevant date and ending with the end of the chargeable period were the chargeable period.

• (3) The relevant date is—

• (a) for corporation tax purposes, 1 April 2008, and

• (b) for income tax purposes, 6 April 2008.

SCHEDULE 25

Part 1 — Amendments of CAA 2001

1

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

2

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

3

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

4

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

5

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

6

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

Part 2 — Amendments of other enactments

ICTA

7

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

FA 1998

8

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

Part 3 — Commencement

9

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

SCHEDULE 26

Part 1 — Amendments of CAA 2001

Introductory

1

CAA 2001 is amended as follows.

Special rate expenditure and the special rate pool

2

After Chapter 10 insert—

(104A) (1) “Special rate expenditure” means— (a) expenditure incurred on or after the relevant date to which section 28 (thermal insulation) applies, (b) expenditure incurred on or after that date to which section 33A (integral features) applies, (c) long-life asset expenditure (within the meaning of Chapter 10) incurred on or after that date, and (d) long-life asset expenditure (within the meaning of that Chapter) incurred before that date but allocated to a pool in a chargeable period beginning on or after that date. (2) The relevant date is— (a) for corporation tax purposes, 1 April 2008, and (b) for income tax purposes, 6 April 2008. (104B) (1) If part only of the capital expenditure on plant and machinery is special rate expenditure— (a) the part which is such expenditure, and (b) the part which is not, are to be treated for the purposes of this Act as expenditure on separate items of plant or machinery. (2) For the purposes of subsection (1), all such apportionments are to be made as are just and reasonable. (104C) (1) Special rate expenditure to which this section applies, if allocated to a pool, must be allocated to a class pool (“the special rate pool”). (2) This section applies to special rate expenditure if— (a) it is incurred wholly and exclusively for the purposes of a qualifying activity, and (b) it is not expenditure which is required to be allocated to a single asset pool. (104D) (1) The amount of the writing-down allowance to which a person is entitled for a chargeable period in respect of expenditure which is special rate expenditure is 10% of the amount by which AQE exceeds TDR (see Chapter 5). (2) Subsection (1) applies even if the special rate expenditure is in a single asset pool. (3) In the case of expenditure in the special rate pool, this section is subject to section 56A (writing-down allowance for small pools). (4) Subsections (3) and (4) of section 56 (proportionate increases or reductions in amount in certain cases) apply for the purposes of subsection (1) of this section as they apply for the purposes of subsection (1) of that section. (104E) (1) This section applies if— (a) section 104D (writing-down allowances at 10%) has had effect in relation to any special rate expenditure incurred by a person (“the taxpayer”), (b) any disposal event occurs in relation to the item on which the expenditure was incurred, (c) the disposal value to be brought into account by the taxpayer would (but for this section) be less than the notional written-down value of the item, and (d) the disposal event is part of, or occurs as a result of, a scheme or arrangement the main purpose or one of the main purposes of which is the obtaining by the taxpayer of a tax advantage under this Part. (2) The disposal value that the taxpayer must bring into account is the notional written-down value of the item. (3) The notional written-down value is— $$QE-A$where—QE is the taxpayer's expenditure on the item that is qualifying expenditure, andA is the total of all allowances which could have been made to the taxpayer in respect of that expenditure if—(a) that expenditure had been the only expenditure that had ever been taken into account in determining the taxpayer's available qualifying expenditure,(b) where the item is a long-life asset, that expenditure had not been prevented by the application of a monetary limit from being long-life asset expenditure, and(c) all allowances had been made in full.$

Consequential amendments

3

In section 54(5) (the different kinds of pools), for “section 101 (long life assets);” substitute “ section 104C (special rate expenditure); ”.

4

In section 56(2) (amount of allowances and charges), for paragraph (a) substitute—

(a) section 104D (special rate expenditure: 10%), and

.

5

In section 65(1) (final chargeable period), for paragraph (b) substitute—

(b) a special rate pool,

.

6

In section 66 (list of provisions about disposal values), for the entry relating to section 104 substitute—

section 104E	special rate expenditure: avoidance cases

.

7

In column 1 of the table in section 84 (cases in which short-life asset treatment is ruled out), for item 4 substitute—

(4) The expenditure is special rate expenditure (see Chapter 10A).

8

Omit section 92 (application of Chapter 10 to part of expenditure).

9

For section 101 (long-life asset pool) substitute—

(101) Chapter 10A (special rate expenditure and the special rate pool) provides for long-life asset expenditure to be allocated to the special rate pool.

10

For section 102 (6% writing-down allowance in respect of long-life asset expenditure) substitute—

(102) Chapter 10A (special rate expenditure and the special rate pool) provides for the writing-down allowance to which a person is entitled in respect of long-life asset expenditure.

11

Omit section 104 (disposal value of long-life assets).

12

In section 266(7) (certain provisions disapplied where election made under section 266)—

• (a) for “104” substitute “ 104E ”, and

• (b) for “of long-life assets” substitute “ in connection with special rate expenditure ”.

13

In Part 2 of Schedule 1 (index of defined expressions), insert at the appropriate place—

special rate expenditure (in Part 2)	section 104A

.

Part 2 — Commencement etc

Commencement

14

• (1) This Schedule has effect in relation to—

• (a) expenditure incurred on or after the relevant date, and

• (b) long-life asset expenditure (within the meaning of Chapter 10 of CAA 2001) incurred before the relevant date but allocated to a pool in a chargeable period beginning on or after that date.

• (2) Sub-paragraph (1) is subject to—

• (a) section 83 (which provides that certain other long-life asset expenditure is to be treated as special rate expenditure for the purposes of CAA 2001), and

• (b) paragraphs 15 to 17.

• (3) The relevant date is—

• (a) for corporation tax purposes, 1 April 2008, and

• (b) for income tax purposes, 6 April 2008.

Sale between connected persons

15

• (1) This paragraph applies where, on or after the relevant date—

• (a) there is a sale of a pre-commencement integral feature,

• (b) the buyer and seller are connected persons (within the meaning of section 575 of CAA 2001), and

• (c) the buyer's expenditure on the integral feature would (apart from this paragraph) be special rate expenditure.

• (2) An integral feature is a pre-commencement integral feature if the seller—

• (a) incurred expenditure on it before the relevant date, or

• (b) incurred expenditure on it on or after that date which was not qualifying expenditure because of a previous application of this paragraph.

• (3) The buyer's expenditure on the integral feature is not qualifying expenditure unless—

• (a) the original expenditure was qualifying expenditure, or

• (b) the buyer's expenditure would have been qualifying expenditure, had it been incurred at the time the original expenditure was incurred.

• (4) The “original expenditure”—

• (a) where the integral feature is a pre-commencement integral feature because of sub-paragraph (2)(a), is the expenditure mentioned in that sub-paragraph, and

• (b) otherwise, is the expenditure incurred on the integral feature before the relevant date by virtue of which this paragraph first applied.

• (5) The “relevant date” has the same meaning as in paragraph 14.

Saving for intra-group transfers

16

• (1) This paragraph applies where, on or after the relevant date—

• (a) there is a sale of a pre-commencement integral feature,

• (b) the buyer and seller are companies which are members of the same group, and

• (c) the buyer's expenditure on the integral feature would (apart from this paragraph) be special rate expenditure.

• (2) An integral feature is a pre-commencement integral feature if qualifying expenditure on it—

• (a) was incurred by the seller before the relevant date and allocated to the seller's main pool, or

• (b) was incurred by the seller on or after that date and allocated to the seller's main pool because of a previous election under this paragraph.

• (3) The buyer and seller may jointly elect for paragraph 17 to apply.

• (4) The election must be made by notice to an officer of Revenue and Customs within 2 years after the date on which the sale takes place.

• (5) All such assessments and adjustments of assessments are to be made as are necessary to give effect to the election.

• (6) Whether the buyer and seller are members of the same group is to be determined in accordance with section 170(3) to (6) of TCGA 1992.

• (7) The “relevant date” has the same meaning as in paragraph 14.

17

• (1) Where this paragraph applies, for the purposes of making allowances and charges under Part 2 of CAA 2001—

• (a) the integral feature is treated as having been sold by the seller to the buyer at a price which gives rise to neither a balancing allowance nor a balancing charge, and

• (b) the buyer's expenditure on the integral feature is treated as qualifying expenditure which is not special rate expenditure (and, if allocated to a pool, is to be allocated to the buyer's main pool).

• (2) Allowances and charges are to be made under Part 2 of CAA 2001 to or on the buyer as if everything done to or by the seller had been done to or by the buyer.

Interpretation

18

Expressions used in this Part of this Schedule and in Part 2 of CAA 2001 have the same meaning in this Part of this Schedule as in that Part of that Act.

SCHEDULE 27

Part 1 — Consequential amendments

CAA 2001

1

CAA 2001 is amended as follows.

2

In section 1 (capital allowances), omit—

• (a) subsection (2)(b) and (c) (entitlement to industrial and agricultural buildings allowances), and

• (b) in subsection (3) “, industrial buildings or agricultural buildings,”.

3

In section 2(3) (general means of giving effect to capital allowances), omit—

• (a) “sections 352 to 355 (industrial buildings allowances);”, and

• (b) “sections 391 and 392 (agricultural buildings allowances);”.

4

In section 3 (claims for capital allowances), omit subsections (4)(b) and (5)(b).

5

• (1) Section 186 (fixture on which an industrial buildings allowance has been made) is amended as follows.

• (2) In subsection (1)(a) and (b), for “is” substitute “ was ”.

• (3) In subsection (3)—

• (a) at the beginning insert “ If the total consideration for the transfer by the past owner exceeds R, ”, and

• (b) in the definition of “R”—

• (i) after “expenditure” insert “ which would have been ”, and

• (ii) at the end insert “ , had the time immediately after the transfer fallen immediately before the repeal of Part 3 by section 84 of the Finance Act 2008. ”

• (4) After that subsection insert—

(3A) Where subsection (3) does not apply, the maximum allowable amount is the part of the consideration for the transfer by the past owner that is attributable to the fixture.

• (5) In subsection (5), for “in Part 3” substitute “ for the purposes of Part 3 immediately before its repeal by section 84 of the Finance Act 2008. ”

6

In section 443(3) (disposal values and disposal events), omit “or 3” and “and industrial building allowances”.

7

In section 448(3) (additional VAT rebate generates disposal value), omit “or 3” and “and industrial buildings allowances”.

8

In section 537 (contribution allowances), omit “, 3, 4” in—

• (a) subsection (1),

• (b) subsection (2)(b)(ii), and

• (c) the heading.

9

Omit section 539 (contribution allowances: industrial buildings).

10

Omit section 540 (contribution allowances: agricultural buildings).

11

In section 542(1) (effect of transfers of trade on contribution allowances), for “Parts 3, 4 and 5” substitute “ Part 5 ”.

12

In section 546 (introduction to Chapter 2 of Part 12), omit paragraph (b).

13

In section 564 (application of procedure in section 563)—

• (a) in subsection (1), for “3” substitute “ 3A ”, and

• (b) omit subsection (3).

14

In section 567(1) (sales treated as for alternative amounts), omit “3,” and “4,”.

15

In section 569 (election to treat sale as being for an alternative amount), omit—

• (a) in subsections (3)(a) and (5)(a), “3 or”, and

• (b) in subsection (5), “319 (building not an industrial building, etc throughout) or”.

16

In section 570 (elections: supplementary), omit—

• (a) in subsection (1), “, 4”, and

• (b) in subsection (3), “3,”.

17

In section 570A(1) (avoidance affecting proceeds of balancing event), omit “3,” and “4,”.

18

In section 573(1) (transfers treated as sales), omit “3,” and “4,”.

19

• (1) Part 2 of Schedule 1 (index of defined expressions) is amended as follows.

• (2) Omit the entries relating to the following defined expressions—

• “adjusted net cost (in Chapter 7 of Part 3)”,

• “agricultural building”,

• “balancing adjustment (in Part 3)”,

• “balancing adjustment (in Part 4)”,

• “balancing event (in Part 3)”,

• “balancing event (in Part 4)”,

• “building (in Part 3_includes structure)”,

• “commercial building (in Part 3, in relation to qualifying enterprise zone expenditure)”,

• “developer, carrying on a trade as (in Chapter 4 of Part 3)”,

• “enterprise zone (in Part 3)”,

• “expenditure on the construction of a building (in Part 3)”,

• “expenditure on the construction of a building (in Part 4)”,

• “highway concession (in Chapter 9 of Part 3)”,

• “husbandry (in Part 4)”,

• “industrial building”,

• “lease and related expressions (in Part 3)”,

• “lease and related expressions (in Part 4)”,

• “proceeds from a balancing event (in Part 3)”,

• “proceeds from a balancing event (in Part 4)”,

• “qualifying enterprise zone expenditure (in Part 3)”,

• “qualifying hotel (in Part 3)”,

• “qualifying trade (in Part 3)”,

• “related agricultural land (in Part 4)”,

• “relevant interest (in Part 3)”,

• “relevant interest (in Part 4)”,

• “residue of qualifying expenditure (in Part 3)”,

• “residue of qualifying expenditure (in Part 4)”, and

• “writing-down period (in Part 4)”.

• (3) In the entry relating to “sale, transfers under Parts 3, 3A, 4, 4A and 10 treated as”, omit “3,” and “4,”.

20

In Schedule 3 (transitional provision and savings), omit—

• (a) paragraphs 56 to 83, and

• (b) paragraph 110.

ICTA

21

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

FA 2000

22

In Schedule 22 (tonnage tax), omit paragraphs 84 and 86.

FA 2001

23

• (1) FA 2001 is amended as follows.

• (2) In Schedule 19 (insertion of Part 4A of CAA 2001: consequential amendments), omit paragraph 4.

• (3) In Schedule 21 (capital allowances: minor amendments), omit paragraphs 5 and 6.

Proceeds of Crime Act 2002 (c. 29)

24

In Schedule 10 to the Proceeds of Crime Act 2002 (tax consequences of transfers under Part 5 of that Act), omit paragraphs 18 to 21.

Energy Act 2004 (c. 20)

25

In Schedule 4 to the Energy Act 2004 (tax exemption for NDA and NDA companies), omit paragraphs 5 and 6.

ITTOIA 2005

26

In Schedule 1 to ITTOIA 2005 (consequential amendments), omit paragraphs 552 to 558.

ITA 2007

27

• (1) ITA 2007 is amended as follows.

• (2) In section 24(1)(b) (reliefs deductible at Step 2), omit the entry relating to Part 3 of CAA 2001.

• (3) In section 25(3) (reliefs deductible at Steps 2 and 3: supplementary), omit the entry relating to section 355 of that Act.

• (4) In Schedule 1 (minor and consequential amendments), omit paragraph 406.

FA 2007

28

In FA 2007, omit section 36 (industrial and agricultural buildings allowances: balancing adjustments).

FA 2008

29

In FA 2008, omit—

• (a) section 85 (phasing out of allowances before abolition),

• (b) section 86 (qualifying enterprise zone expenditure: transitional provision), and

• (c) section 87 (which inserts section 313A of CAA 2001).

Commencement

30

• (1) Subject to sub-paragraph (2), this Part of this Schedule has effect in relation to chargeable periods (within the meaning of CAA 2001) beginning on or after—

• (a) for corporation tax purposes, 1 April 2011, and

• (b) for income tax purposes, 6 April 2011.

• (2) The amendments made by paragraph 5 have effect in relation to a transfer by the past owner (within the meaning of section 186 of CAA 2001) in such a chargeable period.

Part 2 — Savings

Enterprise zone expenditure

31

• (1) Sub-paragraph (2) applies if—

• (a) an initial allowance or a writing down allowance has been made under Part 3 of CAA 2001 in respect of qualifying enterprise zone expenditure, and

• (b) an event occurs in relation to the building on which the expenditure was incurred which, if that Part of that Act remained in force, would be a balancing event in respect of which a balancing charge would be made.

• (2) Unless the event occurs more than 7 years after the building was first used, a balancing charge is to be made in respect of the event as if that Part of that Act remained in force.

32

• (1) Sub-paragraph (2) applies if—

• (a) an initial allowance has been made under Part 3 of CAA 2001 in respect of qualifying enterprise zone expenditure, and

• (b) an event occurs in relation to the building on which the expenditure was incurred which, if section 307 of that Act (withdrawal of allowance if building not industrial building when first used etc) remained in force, would result in the allowance being withdrawn.

• (2) Unless the event occurs more than 7 years after the end of the chargeable period for which the allowance was made, the allowance is to be withdrawn as if that section remained in force.

Definition of structure

33

Despite the repeal of Part 3 of CAA 2001 by section 84, Chapter 2 of that Part continues to have effect for the purposes of paragraph (a) of item 7 in List B in section 22(1) of that Act (structures which are not plant and machinery).

Definition of qualifying trade

34

Despite the repeal of Part 3 of CAA 2001 by section 84, the following provisions continue to have effect for the purposes of section 484 of that Act (dredging allowances: definition of qualifying trade)—

• (a) section 274(1) (definition of qualifying trade), and

• (b) sections 276(3) and 341(4) of that Act (parts of trades and undertakings; meaning of “highway concession”) so far as they relate to the Tables in that section.

Commencement

35

This Part of this Schedule has effect in relation to chargeable periods (within the meaning of CAA 2001) beginning on or after—

• (a) for corporation tax purposes, 1 April 2011, and

• (b) for income tax purposes, 6 April 2011.

SCHEDULE 28

Amendments of Part 4 of FA 2004

1

Part 4 of FA 2004 (pension schemes etc) is amended as follows.

2

• (1) Section 172 (assignment) is amended as follows.

• (2) In subsection (3)—

• (a) in paragraph (a), for “an actual or” substitute “ a ”, and

• (b) in paragraph (b), for “the member” substitute “ a member of the pension scheme ”.

• (3) After subsection (6) insert—

(6A) References in this section to a benefit to which the member or a person has an entitlement under the pension scheme includes rights to payments under— (a) a scheme pension or dependants' scheme pension provided by the scheme administrator or as a result of the application of sums or assets held for the purposes of the pension scheme, or (b) a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme.

3

• (1) Section 172A (surrender) is amended as follows.

• (2) In subsection (1), at the end of paragraph (a) (but before the “or”) insert—

(aa) any rights to payments under a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme,

.

• (3) In subsection (3)(a), for “relating to” substitute “ in respect of ”.

• (4) In subsection (5), after paragraph (c) insert—

(ca) a surrender of (or agreement to surrender) rights to payments under an annuity in any case covered by regulations under paragraph 3(2B) or 17(3) of Schedule 28;

.

• (5) After subsection (9) insert—

(9A) References in this section to a benefit to which the member or a person has an entitlement under the pension scheme includes rights to payments under— (a) a scheme pension or dependants' scheme pension provided by the scheme administrator or as a result of the application of sums or assets held for the purposes of the pension scheme, or (b) a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme.

4

• (1) Section 172B (increase in rights of connected person on death) is amended as follows.

• (2) In subsection (2), at the end of paragraph (a) (but before the “or”) insert—

(aa) rights to payments under a scheme pension or dependants' scheme pension provided by the scheme administrator or as a result of the application of sums or assets held for the purposes of the pension scheme or under a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme,

.

• (3) In subsections (3)(a) and (7)(b), for “is actually or prospectively entitled” substitute “ has an actual or prospective entitlement ”.

• (4) In subsection (7)—

• (a) omit paragraph (a) (including the “and” at the end), and

• (b) in paragraph (b), for “them” substitute “ at least 20 members of the pension scheme ”.

• (5) After subsection (7) insert—

(7A) This section does not apply if— (a) the increase mentioned in subsection (1)(a) is an increase in the rate of a dependants' annuity or dependants' scheme pension or in rights representing a dependants' unsecured pension fund or dependants' alternatively secured pension fund, and (b) the increase is attributable to rights of the dead member to payments under a dependants' annuity or dependants' scheme pension or rights representing a dependants' unsecured pension fund. (7B) References in this section to a benefit to which the member or a person has an entitlement under the pension scheme includes rights to payments under— (a) a scheme pension or dependants' scheme pension provided by the scheme administrator or as a result of the application of sums or assets held for the purposes of the pension scheme, or (b) a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme.

5

In paragraph 16(2) of Schedule 28 (dependants' scheme pension), after “pension” insert “ for the purposes of this Part ”.

Amendments of IHTA 1984

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

Commencement

15

• (1) The amendments made by paragraph 2 have effect in relation to assignments or agreements to assign made on or after 10 October 2007.

• (2) The amendments made by paragraph 3 have effect in relation to surrenders and agreements to surrender made on or after that date.

• (3) The amendments made by paragraphs 4, 7(2), 8, 10 and 11 to 14 have effect in relation to deaths occurring on or after 6 April 2008.

SCHEDULE 29

Authorised member payments

1

• (1) Part 4 of FA 2004 (pension schemes etc) is amended as follows.

• (2) In section 164 (authorised member payments)—

• (a) the existing provision becomes subsection (1), and

• (b) after that subsection insert—

(2) Regulations under subsection (1)(f) may— (a) provide that for the purposes of Part 9 of ITEPA 2003 all or part of a prescribed payment is to be treated as pension under a registered pension scheme, or as a lump sum of a prescribed description, (b) provide that all or part of a prescribed payment is subject to the short service refund lump sum charge or the special lump sum death benefits charge, (c) provide that a prescribed event in relation to a prescribed payment is to be treated for the purposes of the lifetime allowance charge as a benefit crystallisation event, and make provision as to the amount crystallised by that event, (d) include provision having effect in relation to times before the regulations are made if that provision does not increase any person's liability to tax, and “prescribed” means prescribed in regulations under subsection (1)(f).

• (3) In the table in section 216 (benefit crystallisation events and amounts crystallised), insert at the end—

9. If regulations under section 164(1)(f) so provide, the happening of an event prescribed in the regulations in relation to a payment prescribed in the regulations	An amount determined in accordance with the regulations

.

Transfer of lifetime annuities and dependants' annuities

2

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

Definition of investment-regulated pension schemes

3

• (1) In Schedule 29A to FA 2004 (taxable property etc), omit paragraph 2(1)(b) and the “or” before it.

• (2) The amendment made by sub-paragraph (1) is treated as having come into force on 6 April 2006.

Benefit crystallisation event 3

4

Part 4 of FA 2004 (pension schemes etc) is amended as follows.

5

In the table in section 216(1) (benefit crystallisation events), in benefit crystallisation event 3 (becoming entitled to pension at increased annual rate), in column 1, after “rate which” insert

— (a) exceeds the threshold annual rate, and (b)

.

6

Schedule 32 (benefit crystallisation events: supplementary) is amended as follows.

7

• (1) Paragraph 10 (benefit crystallisation event 3: excepted circumstances) is amended as follows.

• (2) The existing provision becomes sub-paragraph (1).

• (3) For paragraph (b) of that sub-paragraph substitute—

(b) that the individual is one of a class of at least 20 pensioner members of the pension scheme, and all the scheme pensions being paid under the pension scheme to pensioner members of that class are at that time increased at the same rate.

• (4) After that sub-paragraph insert—

(2) A class may consist of all the pensioner members of the pension scheme. (3) Sub-paragraph (4) applies where— (a) the annual rate of the individual's pension is increased in excepted circumstances (“the excepted increase”), (b) before the end of the period of 12 months beginning with the date of the excepted increase, the annual rate of the individual's pension is increased in circumstances which would (apart from that sub-paragraph) be excepted circumstances (“the subsequent increase”), and (c) the class by virtue of which sub-paragraph (1)(b) is satisfied on the subsequent increase (“the new class”) is not the class by virtue of which it was satisfied on the excepted increase. (4) If the purpose, or one of the main purposes, of the individual's being included in the new class is to increase the annual rate of the individual's pension without benefit crystallisation event 3 occurring, the subsequent increase is not in excepted circumstances.

8

After that paragraph insert—

(10A) (1) This paragraph applies for the purposes of benefit crystallisation event 3. (2) The threshold annual rate is the annual rate of the pension on the date of which the increase date is the first anniversary, increased by the greatest of— (a) the relevant percentage rate, (b) the relevant indexation percentage, and (c) £250, and rounded up in accordance with sub-paragraph (8). (3) But if the person became entitled to the pension after the date of which the increase date is the first anniversary, the threshold annual rate is the annual rate of the pension on the date on which the person became entitled to the pension, increased and rounded up as mentioned in sub-paragraph (2). (4) The increase date is the date on which the individual becomes entitled to payment of the pension at the increased annual rate. (5) The relevant percentage rate is— (a) in a case where the pension is paid under a pension scheme, or an arrangement under a pension scheme, in relation to which the relevant valuation factor is a number greater than 20, the rate agreed by the Commissioners for Her Majesty's Revenue and Customs and the scheme administrator, and (b) otherwise, 5%. (6) The relevant indexation percentage means— (a) if the retail prices index for the reference month is higher than the retail prices index for the same calendar month in the previous year, the percentage increase in the retail prices index, and (b) if it is not, 0%. (7) The scheme administrator may select as the reference month any month in the period of 12 months ending with the month in which the increase date falls. (8) An amount is rounded up in accordance with this sub-paragraph if it is rounded up to the next greatest amount which— (a) where the pension is payable monthly, gives an amount of whole pounds when divided by 12, or (b) where the pension is payable weekly, gives an amount of whole pounds when divided by 52. (9) If the pension is under a public service pension scheme, any abatement of the pension is to be left out of account in determining for the purposes of this paragraph the annual rate of the pension on the date of which the increase date is the first anniversary (or, where sub-paragraph (3) applies, the date on which the person became entitled to the pension). (10) An individual who becomes entitled to payment of a scheme pension at an increased annual rate on 29 February in any year is to be treated for the purposes of this paragraph as having become so entitled on 28 February in that year. (11) The Treasury may by order substitute for the amount for the time being specified in sub-paragraph (2)(c) a different amount (including an amount to be calculated as a percentage of the standard lifetime allowance).

9

• (1) Paragraph 11 (benefit crystallisation event 3: permitted margin) is amended as follows.

• (2) In sub-paragraph (6)—

• (a) for “month in which the individual becomes entitled to payment of the pension at the increased rate” substitute “ reference month ”, and

• (b) for “month in which the individual became entitled to the pension” substitute “ base month ”.

• (3) After sub-paragraph (7) insert—

(7A) The scheme administrator may select as the reference month any month in the period of 12 months ending with the month in which the individual becomes entitled to payment of the pension at the increased rate. (7B) The base month is the month which is the same number of months before the month in which the individual became entitled to the pension, as the reference month is before the month in which the individual becomes entitled to payment of the pension at the increased rate.

10

In paragraph 13 (benefit crystallisation event 3: meaning of XP), for sub-paragraph (2) substitute—

(2) But if one or more benefit crystallisation events has or have previously occurred by reason of the individual having become entitled to payment of the pension at an increased rate, XP does not include the amount of XP on that event or the aggregate of the amounts of XP on those events. (2A) For the purposes of sub-paragraph (2), the amount of XP on a previous benefit crystallisation event is to be increased by whichever of calculation A and calculation B gives the greater amount. (2B) Calculation A involves increasing the amount of XP on the previous event at the relevant annual percentage rate for the whole of the period— (a) beginning with the month in which the previous event occurred, and (b) ending with the month in which the individual becomes entitled to payment of the pension at the increased rate. (2C) The relevant annual percentage rate has the same meaning as in paragraph 11(4). (2D) Calculation B involves increasing the amount of XP on the previous event by the relevant indexation percentage. (2E) The relevant indexation percentage is— (a) if the retail prices index for the reference month is higher than the retail prices index for the base month, the percentage increase in the retail prices index, and (b) if it is not, 0%. (2F) The scheme administrator may select as the reference month any month in the period of 12 months ending with the month in which the individual becomes entitled to payment of the pension at the increased rate. (2G) The base month is the month which is the same number of months before the month in which the previous event occurred, as the reference month is before the month in which the individual becomes entitled to payment of the pension at the increased rate.

11

In consequence of the amendment made by paragraph 7(3), in Schedule 10 to FA 2005, omit paragraph 44.

12

• (1) The amendments made by paragraphs 9(2) and (3) come into force on 6 April 2008.

• (2) The amendment made by paragraph 10 has effect for the purposes of any benefit crystallisation event 3 occurring on or after 10 October 2007 (including the calculation, for the purposes of such an event, of the amount of XP on any benefit crystallisation event occurring before that date).

• (3) Subject to that, the amendments made by paragraphs 4 to 11 are treated as having come into force on 6 April 2006.

Transitional protection of lump sums

13

• (1) In paragraph 34 of Schedule 36 to FA 2004 (pension commencement lump sums), in the provisions of paragraph 2 of Schedule 29 substituted by sub-paragraph (2)—

• (a) in sub-paragraph (5), omit the words from “and relevant” to “2006” and

• (b) omit sub-paragraphs (6) and (7C).

• (2) The amendments made by sub-paragraph (1) are treated as having come into force on 6 April 2006.

Miscellaneous provision about registered pension schemes

14

• (1) FA 2004 is amended as follows.

• (2) In section 197 (spreading of relief)—

• (a) in subsection (2), for “section 196 (relief for employers in respect of contributions paid)” substitute “ the relieving provisions ”,

• (b) in subsection (4), for “section 196” substitute “ the relieving provisions ”, and

• (c) after subsection (9) insert—

(9A) In this section “the relieving provisions” means the provisions mentioned in subsections (2) to (4) of section 196 (relief for employers in respect of contributions paid), as they have effect under that section.

• (3) In section 199(2) (deemed contributions), for paragraphs (a) to (c) substitute “ the relieving provisions (within the meaning of section 197) and sections 197 and 198 ”.

• (4) In consequence of the amendment made by sub-paragraph (3), in Schedule 1 to ITTOIA 2005 (consequential amendments), omit paragraph 648.

15

In section 215(4)(a) of FA 2004 (amount of lifetime allowance charge), after “first lifetime allowance” insert “ charge ”.

16

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

Employer contributions under exempt approved schemes

17

• (1) This paragraph applies in relation to section 592 of ICTA (which before its repeal made provision about exempt approved pension schemes), where that section had effect as amended by the 2004 Order.

• (2) Section 592 is to be treated as having had effect as if after subsection (4) (as substituted by the 2004 Order) there had been inserted—

(4A) No sums other than contributions made by the employer to the pension scheme in respect of an individual— (a) are deductible in computing the amount of the profits of the employer for the purposes of Part 2 of ITTOIA 2005 or Case I or II of Schedule D, (b) are expenses of management for the purposes of section 75, or (c) are to be brought into account at Step 1 in section 76(7), in connection with the cost of providing benefits under the pension scheme.

• (3) But the words “Part 2 of ITTOIA 2005 or” in subsection (4A)(a) are to be treated as having had effect only in relation to times in relation to which (by virtue of paragraph 253(3) of Schedule 1 to ITTOIA 2005) they had effect in section 592(4)(a).

• (4) In this paragraph “the 2004 Order” means the Finance Act 2004, Sections 38 to 45 and Schedule 6 (Consequential Amendment of Enactments No. 2) Order 2004 (S.I. 2004/3269).

Inheritance tax treatment of non-UK pension schemes

18

• (1) IHTA 1984 is amended as follows.

• (2) In section 12(2) (dispositions conferring benefits under pension scheme), for “or” substitute “ , a qualifying non-UK pension scheme or a ”.

• (3) In section 58 (meaning of relevant property)—

• (a) in subsection (1)(d), for “or” substitute “ , a qualifying non-UK pension scheme or a ”, and

• (b) in subsection (2A)(b), after “member of” insert “ a qualifying non-UK pension scheme or ”.

• (4) In section 151(2), (4) and (5) (treatment of pension rights etc), for “or section” substitute “ , a qualifying non-UK pension scheme or a section ”.

• (5) In section 152 (cash options), for “or section” substitute “ , a qualifying non-UK pension scheme or a section ”.

• (6) After section 271 insert—

(271A) (1) For the purposes of this Act “qualifying non-UK pension scheme” means a pension scheme (other than a registered pension scheme) which— (a) is established in a country or territory outside the United Kingdom, and (b) satisfies any requirements prescribed for the purposes of this section by regulations made by the Commissioners for Her Majesty's Revenue and Customs. (2) “Pension scheme” has the same meaning as in Part 4 of the Finance Act 2004 (see section 150 of that Act). (3) Regulations under this section may include provision having effect in relation to times before the regulations are made if it does not increase any person's liability to tax. (4) The power to make regulations under this section is exercisable by statutory instrument, which is subject to annulment in pursuance of a resolution of the House of Commons.

• (7) In paragraph 56 of Schedule 36 to FA 2004 (pension schemes: transitional provision in relation to inheritance tax)—

• (a) in sub-paragraph (1)(a), after “registered pension scheme” insert “ , a qualifying non-UK pension scheme ”, and

• (b) after sub-paragraph (3) insert—

(4) In this paragraph “qualifying non-UK pension scheme” has the same meaning as in the Inheritance Tax Act 1984 (see section 271A of that Act).

• (8) The amendments made by this paragraph are treated as having come into force on 6 April 2006.

Application of charges to non-UK pension schemes

19

• (1) Schedule 34 to FA 2004 (which applies certain charges to non-UK pension schemes) is amended as follows.

• (2) In paragraph 10(2), in the definition of EI, after “tax year,” insert “ excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003), ”.

• (3) In paragraph 11(2), in the definition of EI, after “tax year,” insert “ excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003), ”.

• (4) The amendment made by sub-paragraph (2) has effect for the tax year 2008-09 and subsequent tax years.

• (5) The amendment made by sub-paragraph (3) has effect—

• (a) for the tax year 2007-08 in accordance with sub-paragraph (6), and

• (b) for the tax year 2008-09 and subsequent tax years.

• (6) For the tax year 2007-08, for the purposes of paragraph 11(1)(b) of Schedule 34 to FA 2004 the appropriate fraction of the contributions mentioned in that paragraph is the aggregate of—

• (a) the appropriate fraction of so much of those contributions as are paid before 12 March 2008, calculated in accordance with paragraph 11(2) unamended by sub-paragraph (3), and

• (b) the appropriate fraction of so much of those contributions as are paid on and after that date, calculated in accordance with paragraph 11(2) as amended by sub-paragraph (3).

SCHEDULE 30

FA 2003

1

Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

2

• (1) Section 79 (registration of land transactions) is amended as follows.

• (2) In subsection (3), omit the word “either”, paragraph (b) and the word “or” before it.

• (3) For subsection (5) substitute—

(5) Part 2 of Schedule 11 imposes a duty to keep and preserve records in respect of transactions that are not notifiable.

• (4) In subsection (6)(a), omit “or self-certificates”.

3

In section 81B(1) (declaration by person authorised to act on behalf of individual), omit “or paragraph 2(1)(c) of Schedule 11” and “or self-certificate”.

4

• (1) Section 103 (joint purchasers) is amended as follows.

• (2) In subsection (4), omit “or paragraph 2(1)(c) of Schedule 11” and “or self-certificate”.

• (3) In subsection (5), omit “or self-certificate”.

5

• (1) Section 122 (index of defined expressions) is amended as follows.

• (2) In the entry for “closure notice”, omit “Schedule 11, paragraph 16(1) (in relation to a self-certificate)”.

• (3) In the entry for “notice of enquiry”, omit “Schedule 11, paragraph 7(1) (in relation to a self-certificate)”.

• (4) In the entry for “notifiable (in relation to a land transaction)”, after “72A(7)” insert “ and paragraph 30 of Schedule 15 ”.

• (5) Omit the entry for “self-certificate”.

6

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

7

In paragraph 36 of Schedule 10 (notice of appeal), in sub-paragraph (5A)(d), for “one for which a self-certificate is due” substitute “ not notifiable ”.

8

Omit Part 1 of Schedule 11 (SDLT: self-certificates).

9

• (1) In Part 2 of that Schedule (duty to keep and preserve records), paragraph 4 is amended as follows.

• (2) Before sub-paragraph (1) insert—

(A1) This paragraph applies where a transaction is not notifiable, unless the transaction is a transaction treated as taking place under a provision listed in section 79(2)(a) to (d).

• (3) In sub-paragraph (1)—

• (a) for “A purchaser who may be required to give a self-certificate” substitute “ The purchaser ”, and

• (b) in paragraph (a), for “to deliver a correct and complete certificate” substitute “ to demonstrate that the transaction is not notifiable ”.

• (4) In sub-paragraph (2), omit the words from “and” to the end.

10

Omit Part 3 of that Schedule (enquiry into self-certificate).

11

Accordingly, in the heading to Schedule 11, for “self-certificates” substitute “ record-keeping where transaction is not notifiable ”.

12

In Schedule 15 (SDLT: partnerships), in paragraph 8(2), omit “or paragraph 2(1)(c) of Schedule 11” and “or self-certificate”.

13

• (1) In Schedule 16 (SDLT: trusts and powers), paragraph 6 is amended as follows.

• (2) In sub-paragraphs (1) and (3), omit “or self-certificate”.

• (3) In sub-paragraph (2), omit “or paragraph 2(1)(c) of Schedule 11” and “or self-certificate”.

14

In Schedule 17A (SDLT: further provisions relating to leases), in paragraphs 3(2) and (5) and 4(1) and (4A), for “section 77” substitute “ sections 77 and 77A ”.

FA 2007

15

In consequence of the preceding provisions of this Schedule, omit section 81 of FA 2007.

SCHEDULE 31

Part 1 — Transfer of interest in partnership: “relevant partnership property”

Paragraph 14 of Schedule 15 to FA 2003

1

• (1) Paragraph 14 of Schedule 15 to FA 2003 (transfer of interest in property-investment partnership) is amended as follows.

• (2) After sub-paragraph (3) insert—

(3A) A transfer to which this paragraph applies is a Type A transfer if it takes the form of arrangements entered into under which— (a) the whole or part of a partner's interest as partner is acquired by another person (who may be an existing partner), and (b) consideration in money or money's worth is given by or on behalf of the person acquiring the interest. (3B) A transfer to which this paragraph applies is also a Type A transfer if it takes the form of arrangements entered into under which— (a) a person becomes a partner, (b) the interest of an existing partner in the partnership is reduced or an existing partner ceases to be a partner, and (c) there is a withdrawal of money or money's worth from the partnership by the existing partner mentioned in paragraph (b) (other than money or money's worth paid from the resources available to the partnership prior to the transfer). (3C) Any other transfer to which this paragraph applies is a Type B transfer.

• (3) In sub-paragraph (5)—

• (a) for “a transfer” substitute “ a Type A transfer ”,

• (b) in paragraph (a), after “any” insert “ chargeable ”, and

• (c) at the end insert

, and (c) any chargeable interest that is not attributable economically to the interest in the partnership that is transferred.

• (4) After that sub-paragraph insert—

(5A) The “relevant partnership property”, in relation to a Type B transfer of an interest in a partnership, is every chargeable interest held as partnership property immediately after the transfer, other than— (a) any chargeable interest that was transferred to the partnership in connection with the transfer, (b) a lease to which paragraph 15 (exclusion of market rent leases) applies, (c) any chargeable interest that is not attributable economically to the interest in the partnership that is transferred, (d) any chargeable interest that was transferred to the partnership on or before 22 July 2004, (e) any chargeable interest in respect of whose transfer to the partnership an election has been made under paragraph 12A, and (f) any other chargeable interest whose transfer to the partnership did not fall within paragraph 10(1)(a), (b) or (c).

Consequential provision

2

In paragraph 15(1) of that Schedule (exclusion of market rent leases), after “14(5)” insert “ or (5A) ”.

3

In paragraph 16(2) of that Schedule (application of provisions about exchanges etc), after “14(5)” insert “ or (5A) (as appropriate) ”.

4

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

Part 2 — Elections in respect of interest transferred to partnership

Election when interest transferred to partnership

5

In paragraph 10 of Schedule 15 to FA 2003 (transfer of chargeable interest to partnership: general) insert at the end—

(8) This paragraph has effect subject to any election under paragraph 12A.

6

After paragraph 12 insert—

(12A) (1) Paragraph 10 does not apply to a transfer of a chargeable interest to a property-investment partnership if the purchaser in relation to the transaction elects for that paragraph not to apply. (2) Where an election under this paragraph is made in respect of a transaction— (a) paragraph 18 (if relevant) is also disapplied, (b) the chargeable consideration for the transaction shall be taken to be the market value of the chargeable interest transferred, and (c) the transaction falls within Part 2 of this Schedule. (3) An election under this paragraph must be included in the land transaction return made in respect of the transaction or in an amendment of that return. (4) Such an election is irrevocable and a land transaction return may not be amended so as to withdraw the election. (5) Where an election under this paragraph in respect of a transaction (the “main transaction”) is made in an amendment of a land transaction return— (a) the election has effect as if it had been made on the date on which the land transaction return was made, and (b) any land transaction return in respect of an affected transaction may be amended (within the period allowed for amendment of that return) to take account of that election. (6) In sub-paragraph (5) “affected transaction”, in relation to the main transaction, means a transaction— (a) to which paragraph 14 applied, and (b) with an effective date on or after the effective date of the main transaction. (7) In this paragraph “property-investment partnership” has the meaning given in paragraph 14(8).

7

In paragraph 18 of that Schedule (transfer of chargeable interest from a partnership) insert at the end—

(8) This paragraph has effect subject to any election under paragraph 12A.

Consequential provision

8

In paragraph 17A(1) of that Schedule (withdrawal of money etc from partnership after transfer of chargeable interest), after paragraph (c) insert—

(d) at the time of the qualifying event, an election has not been made in respect of the land transfer under paragraph 12A.

9

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

Part 3 — Transitional provision

10

Omit section 72(14) of FA 2007 (saving relating to changes to Part 3 of Schedule 15 to FA 2003).

11

• (1) This paragraph applies in the case of a transfer of a chargeable interest to a partnership falling within paragraph 10(1)(a), (b) or (c) of Schedule 15 to FA 2003 where the effective date of the transaction is before the day on which this Act is passed.

• (2) The purchaser in relation to the transaction may at any time before the end of the period of 12 months beginning with that day amend the land transaction return in respect of that transaction so as to make an election under paragraph 12A of Schedule 15 to FA 2003 (inserted by this Schedule).

• (3) An election made in reliance on sub-paragraph (2) has effect as if it had been made on the date on which the land transaction return was made, even though paragraph 12A of Schedule 15 to FA 2003 was not in force at that time.

• (4) Where an election is made in reliance on sub-paragraph (2), the power under paragraph 12A(5)(b) of Schedule 15 to FA 2003 to amend a land transaction return in respect of an affected transaction to take account of that election may be exercised at any time before the end of the period of 12 months beginning with the day on which this Act is passed.

SCHEDULE 32

Part 1 — Abolition of fixed duty

FA 1985

1

Part 3 of FA 1985 (stamp duty) is amended as follows.

2

In section 83 (transfers in connection with divorce, dissolution of civil partnership, etc), omit subsection (2) (fixed duty).

3

In section 84 (death: varying dispositions, and appropriations)—

• (a) omit subsections (8) and (9) (fixed duty and adjudication), and

• (b) in subsection (11) (commencement), omit the words from “and,” to “subsection (8) above”.

FA 1986

4

Part 3 of FA 1986 (stamp duty) is amended as follows.

5

In section 66 (company's purchase of own shares), omit subsection (2A) (fixed duty).

6

In section 67(9) (transfer of securities between depositary receipt systems), for “the stamp duty chargeable on the instrument is £5” substitute “ stamp duty is not chargeable on the instrument ”.

7

In section 70(9) (transfer of securities between clearance systems), for “the stamp duty chargeable on the instrument is £5” substitute “ stamp duty is not chargeable on the instrument ”.

8

In section 72A(1) (transfer of securities between depositary receipt system and clearance system), for paragraph (b) substitute—

(b) stamp duty is not chargeable on the instrument.

FA 1999

9

FA 1999 is amended as follows.

10

• (1) Schedule 13 (instruments chargeable to stamp duty and rates of duty) is amended as follows.

• (2) In paragraph 1(5) (treasury shares), for the words from “any instrument” to the end substitute “ sub-paragraph (1) does not apply to any instrument to which sub-paragraph (6) applies. ”

• (3) In Part 3 (other instruments chargeable to stamp duty and rates of duty) omit—

• (a) paragraph 16 (fixed duty on transfer otherwise than on sale) and the heading before it,

• (b) paragraph 17 (fixed duty on declaration of use or trust) and the heading before it,

• (c) paragraph 18(2) (fixed duty on disposition of certain property in Scotland),

• (d) paragraph 19(1) (fixed duty on duplicate or counterpart),

• (e) paragraph 21(3) (fixed duty on partition or division),

• (f) paragraph 22 (fixed duty on release or renunciation) and the heading before it, and

• (g) paragraph 23 (fixed duty on surrender) and the heading before it.

11

• (1) Schedule 15 (stamp duty: bearer instruments) is amended as follows.

• (2) Omit paragraph 6 (fixed duty on instrument given in substitution for a like instrument stamped ad valorem).

• (3) At the beginning of Part 2 (exemptions) insert—

(12A) (1) Stamp duty is not chargeable on a substitute instrument. (2) A substitute instrument is a bearer instrument given in substitution for a like instrument stamped ad valorem (whether under this Schedule or otherwise) (“the original instrument”). (3) The substitute instrument shall not be treated as duly stamped unless it appears by some stamp impressed on it that the full and proper duty has been paid on the original instrument.

• (4) In paragraph 20 (variation of original terms or conditions), for paragraph (b) substitute—

(b) has been stamped in accordance with paragraph 12A, or

.

• (5) In paragraph 26 (instruments treated as duly stamped), omit paragraph (b) (and the “or” before it).

Part 2 — Consequential provisions and saving

FA 1982

12

In section 129(1) of FA 1982 (exemption from duty on grants, transfers to charities etc), omit “, or paragraph 16,”.

FA 1986

13

Part 3 of FA 1986 (stamp duty) is amended as follows.

14

• (1) Section 67 (stamp duty on certain transfers to depositary receipt systems) is amended as follows.

• (2) In subsection (1), after “instrument” insert “ (other than a bearer instrument) ”.

• (3) In subsection (3), for the words from the beginning to “then,” substitute

In any other case— (a) stamp duty is chargeable on the instrument under this subsection, and (b)

.

• (4) After subsection (9) insert—

(9A) In this section “bearer instrument” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.

15

• (1) Section 70 (stamp duty on certain transfers to a clearance system) is amended as follows.

• (2) In subsection (1), after “instrument” insert “ (other than a bearer instrument) ”.

• (3) In subsection (3), for the words from the beginning to “then,” substitute

In any other case— (a) stamp duty is chargeable on the instrument under this subsection, and (b)

.

• (4) After subsection (9) insert—

(9A) In this section “bearer instrument” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.

FA 1987

16

Part 3 of FA 1987 (stamp duty and stamp duty reserve tax) is amended as follows.

17

In section 50(1) (warrants to purchase Government stock, etc), omit “, or paragraph 16”.

18

In section 55(1) (Crown exemption), omit “, or paragraph 16”.

FA 1990

19

In section 108(1) of FA 1990 (abolition of stamp duty on transfer of securities), insert at the end “ or section 67(3) or 70(3) of the Finance Act 1986 (stamp duty on certain transfers to depositary receipt systems and clearance systems) ”.

FA 1999

20

In Schedule 14 to FA 1999, omit paragraphs 10(b), 11(b), 12(3) and 13(3).

FA 2003

21

In Schedule 40 to FA 2003, omit paragraph 2(b).

Saving for certain land transactions

22

• (1) The following provisions of this Schedule do not have effect in relation to an instrument effecting a land transaction or a duplicate or counterpart of such an instrument—

• (a) paragraphs 1 to 3,

• (b) paragraph 10,

• (c) paragraph 12,

• (d) paragraph 18, and

• (e) the repeal of paragraphs 10(b) and 11(b) of Schedule 14 to FA 1999.

• (2) In sub-paragraph (1) “land transaction” has the same meaning as in Part 4 of FA 2003, except that it does not include a transfer of an interest in a property-investment partnership (within the meaning of Schedule 15 of that Act).

Repeals on abolition day

23

If a day is appointed under section 111 of FA 1990 (abolition day), paragraphs 14 and 15 of this Schedule cease to have effect in accordance with section 108 of that Act.

SCHEDULE 33

Part 1 — New Schedule 20A to FA 1993

1

This is Schedule 20A to be inserted before Schedule 21 to FA 1993—

SCHEDULE 20A (1) (1) The responsible person for a taxable field may make an election that the field is to be non-taxable. (2) An election is irrevocable. (3) The responsible person may not make an election unless each person who is a participator at the time the election is made agrees to the election being made. (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). (2) (1) If an election is made, the Commissioners must decide whether or not the field is no longer taxable. (2) For the purposes of this paragraph, the field is no longer taxable if it appears to the Commissioners that one or other of the following conditions is met in relation to each future chargeable period. (3) Condition A is that no assessable profit will accrue to any participator in the field in that period. (4) Condition B is that the assessable profit accruing to each participator in the field in that period will be equal to, or smaller than, the cash equivalent of that participator's share of the oil allowance for the field in that period. (5) The responsible person must give the Commissioners such information as the Commissioners may reasonably require in connection with their making a decision under sub-paragraph (1). (6) The Commissioners may make such assumptions as they think appropriate for the purposes of making a decision under this paragraph (including assumptions about what, if any, participators there will be in the field in future chargeable periods). (7) In this paragraph— - “assessable profit” means assessable profit before any reduction under section 7 of OTA 1975 (relief for allowable losses); - “future chargeable period”, in relation to a decision by the Commissioners under this paragraph, means a chargeable period that falls at any time after the chargeable period in which the Commissioners make that decision. (3) (1) The Commissioners must give the responsible person notice of their decision under paragraph 2(1). (2) Within one month of being given notice by the Commissioners of their decision, the responsible person must give copies of the notice to each person who is a participator, or a former participator, at the time the Commissioners' notice is given. (3) But the responsible person is not required to give notice to any person to whom it would be impracticable to give notice. (4) (1) An election does not have effect unless the Commissioners decide under paragraph 2(1) that the field is no longer taxable. (2) In such a case, the election has effect from the start of the first chargeable period to begin after the Commissioners give notice under paragraph 3. (3) The election then continues to have effect indefinitely (unless cancelled in accordance with paragraph 6). (5) For as long as the election has effect, no allowable loss that accrues from the oil field is an allowable unrelievable field loss for the purposes of petroleum revenue tax. (6) (1) The Commissioners may cancel an election if, within 3 years of their giving notice under paragraph 3, it appears to them that— (a) information that the responsible person gave the Commissioners in connection with the election was inaccurate or incomplete at the time it was given, and (b) if the information had not been inaccurate or incomplete, the Commissioners would not have made the decision that they made under paragraph 2. (2) For the purposes of sub-paragraph (1) it does not matter whether or not the Commissioners required the information to be given. (7) (1) If the Commissioners cancel an election, they must give notice of the cancellation— (a) to the person who made the election, or (b) if it is impracticable to give notice to that person, to a person who is a participator at the time the election is cancelled, or (c) if it is impracticable to give notice to any such person, to a person who is a former participator at the time the election is cancelled; but the Commissioners are not required to give notice to a person falling within paragraph (c) if it would be impracticable to give notice to any such person. (2) Within one month of being given notice by the Commissioners under sub-paragraph (1), the person must give copies of the notice to each person who is a participator, or a former participator, at the time the Commissioners' notice is given. (3) But that person is not required to give notice to any person to whom it would be impracticable to give notice. (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— 1. begins with the chargeable period from the start of which the election had effect, and 2. ends with the chargeable period during which the election is cancelled. (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) Any appeal under paragraph 9 or 10 is to be determined by the Special Commissioners. (12) (1) In this Schedule— - “Commissioners” means the Commissioners for Her Majesty's Revenue and Customs (except in the expression “Special Commissioners”); - “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— 1. is not a participator in the chargeable period which includes that time, but 2. was 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.

Part 2 — Other amendments

OTA 1975

2

In section 6 of OTA 1975 (allowances of unrelievable loss from abandoned field), in subsection (1A), after “this Act” insert “ and paragraph 5 of Schedule 20A to the Finance Act 1993 ”.

FA 1980

3

In Schedule 17 to FA 1980 (transfers of interests in oil fields), in paragraph 15 (terminal losses), after sub-paragraph (9) insert—

(9A) This paragraph is subject to paragraph 5 of Schedule 20A to the Finance Act 1993.

Oil Taxation Act 1983

4

In section 9 of the Oil Taxation Act 1983 (c. 56) (tariff receipts allowance), in subsection (5)(a), for the words from “other than” to the end substitute

other than— (i) the principal field, or (ii) an oil field that is a non-taxable field by virtue of section 185(1) or (1A) of the Finance Act 1993.

SCHEDULE 34

ICTA

1

In section 393A of ICTA (losses: set off against profits), in subsections (2C)(b) and (11)(a), for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

CAA 2001

2

CAA 2001 is amended as follows.

3

In section 26 (demolition costs), in subsection (5), for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

4

In section 57 (available qualifying expenditure), in the entry in subsection (2) relating to section 165(3) of CAA 2001, for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

5

• (1) Section 164 (abandonment expenditure incurred before cessation of ring fence trade) is amended as follows.

• (2) In the heading, for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

• (3) In subsections (1), (2)(a), (3)(a), (4)(a) and (5), for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

6

• (1) Section 165 (abandonment expenditure within 3 years of ceasing ring fence trade) is amended as follows.

• (2) In the heading, for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

• (3) In subsection (1)(b) and (c), for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

• (4) In subsection (3)—

• (a) in paragraph (a), for “relevant abandonment cost” substitute “ relevant decommissioning cost ”, and

• (b) in paragraph (b), for “abandonment expenditure” substitute “ general decommissioning expenditure ”.

• (5) In subsection (4), in the definition of “the relevant abandonment cost”—

• (a) for “relevant abandonment cost” substitute “ relevant decommissioning cost ”, and

• (b) for “abandonment expenditure”, in each place, substitute “ general decommissioning expenditure ”.

SCHEDULE 35

TMA 1970

1

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

ICTA

2

ICTA is amended as follows.

3

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

4

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

5

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

6