Finance Act 2010

(212A) This Chapter provides for restrictions on the ways in which effect may be given to an allowance in certain circumstances where there has been a qualifying change in relation to a company (“C”). (212B) (1) This Chapter applies where— (a) C carries on a trade (“the relevant trade”) (whether or not in partnership with another person or other persons), (b) there is a qualifying change in relation to C on any day (“the relevant day”), (c) C, or (where the relevant trade is carried on in partnership) the partnership (“P”), has a relevant excess of allowances in relation to the relevant trade, and (d) the qualifying change has an unallowable purpose. (2) Sections 212C to 212I specify when there is a qualifying change in relation to C on the relevant day. (3) Sections 212J to 212L specify when C or P has a relevant excess of allowances in relation to the relevant trade. (4) Section 212M specifies when the qualifying change has an unallowable purpose. (5) Sections 212N to 212S make provision about what happens when this Chapter applies. (212C) (1) There is a qualifying change in relation to C on the relevant day if one or more of conditions A to D is met. (2) Condition A is that— (a) the principal company or companies of C at the beginning of the relevant day is not, or are not, the same as at the end of that day, or (b) there is no principal company of C at the beginning of the relevant day but there is one, or are more than one, at the end of the relevant day. (3) Condition B is that— (a) any principal company of C is a consortium principal company (“CPC”), and (b) CPC's ownership proportion at the end of the relevant day is more than at the beginning of the relevant day. (4) Condition C is that on the relevant day— (a) C ceases to carry on the whole or part of the relevant trade, and (b) it begins to be carried on in partnership by two or more companies, in circumstances in which Chapter 1 of Part 22 of CTA 2010 (transfers of trade without change of ownership) applies in relation to the transfer of the relevant trade. (5) Condition D is that— (a) the relevant trade is, at the beginning of the relevant day, carried on by C in partnership, and (b) C's relevant percentage share in the relevant trade at the end of the relevant day is less than at the beginning of the relevant day (or is nil). (212D) (1) Section 212E explains— (a) what are principal companies of C, and (b) which are consortium principal companies of C, for the purposes of section 212C(2) and (3). (2) Section 212F explains— (a) when a company is owned by a consortium, and (b) who are the members of the consortium, for the purposes of section 212E. (3) Section 212G explains the meaning of “qualifying 75% subsidiary” for the purposes of sections 212E and 212F. (4) Section 212H explains the meaning of “ownership proportion” in section 212C(3). (5) Section 212I explains the meaning of “relevant percentage share” in section 212C(5). (212E) (1) A company (“U”) is a principal company of C if— (a) C is a qualifying 75% subsidiary of U, and (b) U is not a qualifying 75% subsidiary of another company. (2) A company (“V”) is a principal company of C if— (a) C is a qualifying 75% subsidiary of U, (b) U is a qualifying 75% subsidiary of V, and (c) V is not a qualifying 75% subsidiary of another company. (3) If V is a qualifying 75% subsidiary of another company (“W”), W is a principal company of C unless W is a qualifying 75% subsidiary of another company, and so on. (4) A company (“X”) is a principal company of C if— (a) C is owned by a consortium of which X is a member, or (b) C is a qualifying 75% subsidiary of a company owned by a consortium of which X is a member, and X is not a qualifying 75% subsidiary of another company. (5) A company (“Y”) is a principal company of C if— (a) C is owned by a consortium of which X is a member, or (b) C is a qualifying 75% subsidiary of a company owned by a consortium of which X is a member, and X is a qualifying 75% subsidiary of Y but Y is not a qualifying 75% subsidiary of another company. (6) If Y is a qualifying 75% subsidiary of another company (“Z”), Z is a principal company of C unless Z is a qualifying 75% subsidiary of another company, and so on. (7) A company that is a principal company of C by virtue of any of subsections (4) to (6) is a consortium principal company of C. (212F) (1) This section defines what a company being owned by, or a member of, a consortium means for the purposes of section 212E. (2) A company is owned by a consortium if— (a) it is not a qualifying 75% subsidiary of another company, (b) at least 75% of its ordinary share capital is beneficially owned between them by other companies, and (c) none of those other companies owns less than 5% of that capital. (3) Those other companies are the members of the consortium. (212G) (1) For the purposes of sections 212E and 212F a company (“the subsidiary company”) is a qualifying 75% subsidiary of another company (“the parent company”) if condition 1 or 2 is met and condition 3 is met. (2) Condition 1 is that— (a) the subsidiary company has ordinary share capital, and (b) the subsidiary company is a 75% subsidiary of the parent company (see section 1154(3) of CTA 2010). (3) Condition 2 is that— (a) the subsidiary company does not have ordinary share capital, and (b) the parent company has control of the subsidiary company. (4) Condition 3 is that the parent company— (a) is beneficially entitled to at least 75% of any profits available for distribution to equity holders of the subsidiary company, and (b) would be beneficially entitled to at least 75% of any assets of the subsidiary company available for distribution to its equity holders on a winding-up. (5) Chapter 6 of Part 5 of CTA 2010 (equity holders and profits or assets available for distribution) applies for the purposes of subsection (4) as that Chapter applies for the purposes of section 151(4)(a) and (b) of that Act (meaning of “75% subsidiary”). (6) But in a case where the subsidiary company does not have ordinary share capital, Chapter 6 of Part 5 of that Act applies for those purposes as if the members of that company were equity holders of that company for the purposes of that Chapter. (212H) (1) For the purposes of section 212C(3) CPC's “ownership proportion” is the lowest of— (a) the percentage of the ordinary share capital of C that is beneficially owned by CPC, (b) the percentage to which CPC is beneficially entitled of any profits available for distribution to equity holders of C, and (c) the percentage to which CPC would be beneficially entitled of any assets of C available for distribution to its equity holders on a winding-up. (2) Chapter 6 of Part 5 of CTA 2010 applies for the purposes of subsection (1) as that Chapter applies for the purposes of section 143(3)(b) and (c) (condition 1: surrendering company owned by consortium) and section 144(3)(b) and (c) (condition 1: claimant company owned by consortium) of that Act. (3) But in a case where the subsidiary company does not have ordinary share capital, Chapter 6 of Part 5 of that Act applies for those purposes as if the members of that company were equity holders of that company for the purposes of that Chapter. (212I) (1) For the purposes of section 212C(5) C's “relevant percentage share” is C's percentage share in the profits or losses of the trade. (2) For this purpose C's percentage share in the profits or losses of a trade at any time is determined on a just and reasonable basis. (3) In making that determination regard must be had, in particular, to any matter that would be taken into account in determining under section 1262 of CTA 2009 (but without regard to sections 1263 and 1264 of that Act) the company's share at that time in the profits or losses of the trade. (212J) (1) C or P has a relevant excess of allowances in relation to the relevant trade if— $RTWDV>BSV$ (2) Section 212K defines RTWDV and section 212L defines BSV. (3) References in this Chapter to plant and machinery do not include excluded plant and machinery. (4) Plant and machinery is “excluded plant and machinery” if— (a) expenditure incurred on the provision of it is not, as a result of section 34A, qualifying expenditure for the purposes of this Part, or (b) it is, as a result of section 67, treated for the purposes of this Part as owned otherwise than by C or P. (212K) (1) RTWDV is the relevant tax written-down value and is to be found by adding together amounts 1 and 2. (2) Amount 1 is the total amount of any unrelieved qualifying expenditure in respect of plant and machinery contained in— (a) single asset pools, (b) class pools, or (c) the main pool, which is available to be carried forward (in accordance with section 59) from the old period and used in calculating the profits of the relevant trade. (3) Amount 2 is the total of any qualifying expenditure incurred on the provision of a ship for the purposes of the relevant trade which, at the end of the old period, is unrelieved by virtue of notice having been given under section 130. (4) For the purposes of this Part the amount of unrelieved qualifying expenditure contained in any pool which is available to be carried forward (in accordance with section 59) from the old period and used in calculating the profits of the relevant trade is to be calculated on the assumptions— (a) that any qualifying expenditure that could have been (but was not) allocated to the pool before the end of the old period had been so allocated at the end of the old period, (b) that any qualifying expenditure prevented from being allocated to the pool by section 58(5) had been so allocated at the end of the old period, and (c) that any transaction taking place on the relevant day that has the effect of reducing the amount of unrelieved qualifying expenditure in the pool had not taken place. (5) Where condition C in section 212C is met— (a) references in subsection (2) to any unrelieved qualifying expenditure in respect of plant and machinery contained in a pool which is available to be carried forward (in accordance with section 59) from the old period and used in calculating the profits of the relevant trade, and (b) the reference in subsection (3) to any qualifying expenditure incurred on the provision of a ship for the purposes of the relevant trade which, at the end of the old period, is unrelieved by virtue of notice having been given under section 130, are to what it would have been but for the qualifying change. (6) In this section “the old period” means the period which is the old period for the purposes of section 212O (or would be if this Chapter applied): see section 212N(3). (7) The plant and machinery in respect of which there is unrelieved qualifying expenditure such as is mentioned in subsection (2), or qualifying expenditure such as is mentioned in subsection (3), is referred to in the following provisions as “the relevant plant and machinery”. (212L) (1) BSV is the balance sheet value of the relevant plant and machinery and is to be found by adding together the amounts (if any) which would be shown in respect of it in the appropriate balance sheet of C or P. (2) For this purpose the amounts shown in the appropriate balance sheet in respect of the relevant plant or machinery are— (a) the amounts shown in that balance sheet as the net book value (or carrying amount) in respect of it, and (b) the amounts shown in that balance sheet as the net investment in respect of finance leases of it. (3) If— (a) any of the relevant plant or machinery is a fixture in any land, and (b) the amount which falls (or would fall) to be shown in the appropriate balance sheet as the net book value (or carrying amount) of the land would include an amount in respect of the fixture, the amount of the net book value (or carrying amount) in respect of the fixture is determined on a just and reasonable basis. (4) If— (a) any of the relevant plant or machinery is subject to a finance lease, and (b) any land or asset which is not plant or machinery is subject to that lease, the amount of the net investment in respect of the finance lease of that plant or machinery is determined on a just and reasonable basis. (5) In this section any reference to any amount shown in the appropriate balance sheet of C or P is the amount which, assuming that a balance sheet of C or P were drawn up in accordance with subsection (6), would fall to be shown in that balance sheet. (6) A balance sheet is drawn up in accordance with this subsection if it is drawn up in accordance with generally accepted accounting practice so as to reflect the position as at the beginning of the relevant day but adjusted to reflect the disposal of any of the relevant plant or machinery which is disposed of on the relevant day. (7) In this section— - “finance lease” means a lease which, in accordance with generally accepted accounting practice, falls (or would fall) to be treated as a finance lease or loan in accounts of C or P; - “fixture”— 1. means any plant or machinery that is so installed or otherwise fixed in or to a building or other description of land as to become, in law, part of that building or other land, and 2. includes any boiler or water-filled radiator installed in a building as part of a space or water heating system. (212M) (1) The qualifying change has an unallowable purpose if the main purpose, or one of the main purposes, of change arrangements is to obtain a relevant tax advantage (for any person). (2) “Change arrangements” means any arrangements made to bring about, or otherwise connected with, the qualifying change; and “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). (3) “Obtain a relevant tax advantage” means become entitled to a reduction in profits, or an increase in losses, for the purposes of corporation tax in consequence of a claim to allowances in respect of qualifying expenditure in respect of the relevant plant and machinery or qualifying expenditure within section 212K(3). (212N) (1) The accounting period of C which is current on the relevant day ends with that day and a new accounting period of C begins with the following day (but subject to subsection (2)). (2) In a case in which condition A, B or D in section 212C is met and the relevant trade was, at the beginning of the relevant day, carried on by C in partnership with another company or other companies subsection (1) does not apply but— (a) the period which, for the purposes of Part 17 of CTA 2009, is the accounting period of the partnership current on the relevant day ends with that day, and (b) there begins with the following day a new accounting period— (i) of the partnership, or (ii) where condition D is met and C's relevant percentage share in the relevant trade is nil after the qualifying change, of the company or partnership by which the relevant trade is carried on after the relevant change. (3) For the purposes of section 212O “the old period” means the accounting period of C or the partnership in which C carries on the relevant trade which ends with the relevant day. (4) For the purposes of section 212P “the new period” means the accounting period— (a) of C or that partnership, or (b) where condition D is met and C's relevant percentage share in the relevant trade is nil after the qualifying change, of the company or partnership by which the relevant trade is carried on after the relevant change, which begins with the following day. (212O) (1) Section 212P has effect where C or P has an excess of allowances in any single asset pool, any class pool or the main pool at the end of the old period; and a pool in the case of which there is an excess of allowances is referred to in this section and section 212P as a “relevant pool”. (2) For the purposes of this section C or P has an excess of allowances in a pool if— $PA>BSVP$ (3) In this section and section 212Q— - PA, in relation to a pool, is the amount specified in section 212K(2) in relation to the pool, and - BSVP, in relation to a pool, is so much of BSV as, on a just and reasonable apportionment, it is appropriate to attribute to the pool. (4) For the purposes of section 212P the amount of the excess of allowances in relation to any relevant pool (“the relevant pool in question”) is the difference between PA and BSVP. (5) But if, in relation to any other pool— $BSVP>PA$ what would otherwise be the amount of the excess of allowances in relation to the relevant pool in question for the purposes of section 212P is reduced by so much of the difference between BSVP and PA as is not taken into account under this subsection in relation to another relevant pool or under section 212Q(8). (212P) (1) The unrelieved qualifying expenditure in each relevant pool is to be taken to be reduced at the beginning of the new period by the amount of the excess of allowances in relation to the pool. (2) The amount of the excess of allowances is to be treated from the beginning of the new period as if it were qualifying expenditure in a new pool of the same description as the relevant pool (and so subject to the same provisions of this Part, other than this Chapter). (3) Where, following the qualifying change, a person ceases to carry on a trade (or part of a trade) and C begins to carry on (whether or not in partnership) the activities of that trade (or part of a trade) as part of its trade, for the purposes of claiming any allowance in respect of qualifying expenditure in the new pool the carrying on of those activities by C is to be regarded as the carrying on of a separate trade. (4) A loss attributable to an allowance claimed in respect of qualifying expenditure in the new pool may not be set off under section 37 of CTA 2010 (trade loss relief against total profits of same or earlier accounting period) otherwise than against the profits of a qualifying activity carried on by C, or any company that is a member of P, at the beginning of the relevant day. (5) And the amount of such a loss which may be so set off by any person is not to exceed the amount of the loss which would have been available for such set off by the person but for the qualifying change. (6) A loss attributable to an allowance claimed in respect of qualifying expenditure in the new pool may not be set off by way of group relief in accordance with Part 5 of CTA 2010 (surrender of losses by way of group relief) by a company (“the claimant company”) unless it would have been available for such set off but for the qualifying change. (7) And the amount of such a loss which is available for such set off by the claimant company is not to exceed the amount of the loss which would have been available for such set off by the claimant company but for the qualifying change. (8) Where any activity not carried on by C, or a company that is a member of P, at the beginning of the relevant day would otherwise be regarded for the purposes of corporation tax as forming part of a qualifying activity carried on by C or the member of P at that time it is not to be so regarded for the purposes of subsection (4). (9) In a case in which condition C in section 212C is met, the references in subsections (1) and (2) to the beginning of the new period are to the time of the qualifying change (and section 948 of CTA 2010 has effect subject to this section). (212Q) (1) This section has effect where C or P has relevant postponed capital allowances. (2) C or P has relevant postponed capital allowances if amount 2 in section 212K(3) is an amount other than nil. (3) Where, following the qualifying change, a person ceases to carry on a trade (or part of a trade) and C begins to carry on (whether or not in partnership) the activities of that trade (or part of a trade) as part of its trade, for the purposes of claiming any allowance in respect of qualifying expenditure such as is mentioned in section 212K(3) the carrying on of those activities by C is to be regarded as the carrying on of a separate trade. (4) A loss attributable to an allowance claimed in respect of qualifying expenditure such as is mentioned in section 212K(3) may not be set off under section 37 of CTA 2010 otherwise than against the profits of a qualifying activity carried on by C, or any company that is a member of P, at the beginning of the relevant day. (5) And the amount of such a loss which may be so set off by any person is not to exceed the amount of the loss which would have been available for such set off by the person but for the qualifying change. (6) A loss attributable to an allowance claimed in respect of qualifying expenditure such as is mentioned in section 212K(3) may not be set off by way of group relief in accordance with Part 5 of CTA 2010 by a company (“the claimant company”) unless it would have been available for such set off but for the qualifying change. (7) And the amount of such a loss which is available for such set off by the claimant company is not to exceed the amount of the loss which would have been available for such set off by the claimant company but for the qualifying change. (8) If, in relation to any pool— $BSVP>PA$ what would otherwise be the amount of qualifying expenditure such as is mentioned in section 212K(3) is to be treated for the purposes of this section as reduced by so much of the difference between BSVP and PA in relation to the pool as is not taken into account under section 212O(5) in relation to a relevant pool. (9) Where any activity not carried on by C, or a company that is a member of P, at the beginning of the relevant day would otherwise be regarded for the purposes of corporation tax as forming part of a qualifying activity carried on by C or the member of P at that time it is not to be so regarded for the purposes of subsection (4). (212R) Any amount required to be brought into account in connection with a disposal event in respect of any relevant plant and machinery is to be apportioned between the new pool and the relevant pool concerned on a just and reasonable basis. (212S) (1) This section applies if any plant and machinery is transferred on the relevant day and (apart from subsection (4)(c) of section 212K) the transfer would have the effect of reducing RTWDV (as determined in accordance with that section). (2) No person other than C or P is entitled to claim an allowance in respect of the plant or machinery after the transfer.

3

For the heading of Chapter 17 substitute “ Other anti-avoidance ”.

4

Section 247 (giving effect to allowances and charges: trades) is renumbered as subsection (1) of that section; and after that subsection insert—

(2) See Chapter 16A for provision restricting in certain circumstances the ways in which effect may be given to an allowance by virtue of subsection (1)(a).

5

The amendments made by this Schedule have effect where the relevant day is on or after 21 July 2009.

6

But in relation to cases where the relevant day is before 9 December 2009 the amendment made by paragraph 2 has effect—

• (a) with the omission of section 212C(2)(b),

• (b) as if in section 212K(1) “which is amount 1” were substituted for “ and is to be found by adding together amounts 1 and 2 ”,

• (c) with the omission of section 212K(3) and (4)(c),

• (d) with the omission from section 212O(5) of the words “or under section 212Q(8)”,

• (e) with the omission of section 212Q, and

• (f) with the omission of section 212S.

SCHEDULE 5

Restriction of qualifying expenditure

1

• (1) In Chapter 17 of Part 2 of CAA 2001 (plant and machinery: anti-avoidance), after section 228M insert—

(228MA) (1) This section applies where capital expenditure is incurred on the provision of plant or machinery (“the asset”) and at the time the expenditure is incurred— (a) the asset is leased or arrangements exist under which it is to be leased, and (b) arrangements have been entered into in relation to payments under the lease that have the effect of reducing the value of the asset to the lessor (“V”). (2) For the purposes of capital allowances the lessor's qualifying expenditure on the asset is restricted to V. (3) The value of the asset to the lessor is given by— $$V=VI+VR$where—VI is the present value of the lessor's income from the asset, andVR is the present value of the residual value of the asset reduced by the amount of any rental rebate.$ (4) For this purpose— (a) the lessor's income from the asset is the total of all the amounts that— (i) have been received by the lessor, or it is reasonable to expect the lessor will receive, in connection with the lease, and (ii) have been brought into account by the lessor, or it is reasonable to expect the lessor will bring into account, as income in computing profits chargeable to tax, and (b) the residual value of the asset is what it is reasonable to expect will be the market value of the lessor's interest in the asset immediately after the termination of the lease. (5) In determining the lessor's income from the asset, exclude— (a) disposal receipts brought, or to be brought, into account under Part 2, and (b) so much of any amount as represents charges for services or qualifying UK or foreign tax (within the meaning of section 70YE) to be paid by the lessor. (6) Where capital expenditure has previously been incurred by the lessor on the provision of the asset, the reference in subsection (2) to the lessor's qualifying expenditure on the asset is to be read as a reference to the total amount of the lessor's qualifying expenditure on the asset. (7) The following provisions supplement this section— (a) section 228MB provides for the calculation of “present value”, and (b) section 228MC defines what is meant by a rental rebate. (8) In this section and sections 228MB and 228MC “lease” includes any arrangements which provide for plant or machinery to be leased or otherwise made available by a person (“the lessor”) to another person (“the lessee”). (228MB) (1) For the purposes of section 228MA the “present value” of an amount is to be calculated by using the interest rate implicit in the lease. (2) The general rule is that the interest rate implicit in the lease is the interest rate that would apply in accordance with normal commercial criteria, including, in particular, generally accepted accounting practice (where applicable). (3) If the interest rate implicit in the lease cannot be determined in accordance with subsection (2), it is taken to be 1% above LIBOR. (4) For this purpose— (a) LIBOR means the London interbank offered rate on the relevant day for deposits for a term of 12 months in the relevant currency, (b) the relevant day is the day on which the lease was entered into (or if that was not a business day, the first business day after that day), and (c) the relevant currency is the currency in which rentals under the lease are payable. (228MC) (1) For the purposes of section 228MA “rental rebate” means any sum payable to the lessee that is calculated by reference to the termination value of the asset. (2) The general rule is that the termination value of an asset is the value of the asset at or about the time when the lease terminates. (3) Calculation by reference to the termination value includes calculation by reference to any one or more of— (a) the proceeds of sale, if the asset is sold, (b) any insurance proceeds, compensation or similar sums in respect of the asset, and (c) an estimate of the market value of the asset. (4) Calculation by reference to the termination value also includes— (a) determination in a way which, or by reference to factors or criteria which, might reasonably be expected to produce a broadly similar result to calculation by reference to the termination value, or (b) any other form of calculation indirectly by reference to the termination value.

• (2) The amendment made by sub-paragraph (1) has effect in relation to capital expenditure incurred on or after 9 December 2009.

Restriction of deduction for rental rebate

2

• (1) In Chapter 4 of Part 2 of ITTOIA 2005 (trading income: rules restricting deductions), after section 55A insert—

(55B) (1) Where plant or machinery (“the asset”) is leased and a rental rebate is payable by the lessor, the amount of the deduction allowable in respect of the rebate is limited to— (a) the amount of the lessor's income from the lease, or (b) in the case of a finance lease, that amount excluding the finance charge. (2) “Rental rebate” means any sum payable to the lessee that is calculated by reference to the termination value of the asset. (3) For this purpose— (a) the termination value of an asset is the value of the asset at or about the time when the lease terminates, (b) calculation by reference to the termination value includes calculation by reference to any one or more of— (i) the proceeds of sale, if the asset is sold, (ii) any insurance proceeds, compensation or similar sums in respect of the asset, (iii) an estimate of the market value of the asset, and (c) calculation by reference to the termination value also includes— (i) determination in a way which, or by reference to factors or criteria which, might reasonably be expected to produce a broadly similar result to calculation by reference to the termination value, or (ii) any other form of calculation indirectly by reference to the termination value. (4) For the purposes of this section— (a) the income of the lessor from the lease is the total of all the amounts receivable in connection with the lease that have been brought into account in calculating the lessor's income for income tax purposes, excluding— (i) disposal receipts brought into account under Part 2 of CAA 2001 (see section 60(1) of that Act), and (ii) so much of any amount as represents charges for services or qualifying UK or foreign tax (within the meaning of section 70YE of that Act) to be paid by the lessor, and (b) the finance charge, in relation to a finance lease, is— (i) if the lease is one that, under generally accepted accounting practice, falls (or would fall) to be treated as a loan, so much of the rentals under the lease as fall (or would fall) to be treated as interest, or (ii) in any other case, the amount that, in accordance with generally accepted accounting practice, falls (or would fall) to be treated as the gross return on investment. (5) Where the asset is acquired by the lessor in a transaction in relation to which an election is made under section 266 of CAA 2001 (election where predecessor and successor are connected persons), this section applies as if the successor had been the lessor at all material times and everything done to or by the predecessor had been done to or by the successor. (6) Where the whole or part of a rental rebate is disallowed under this section as a deduction in computing profits— (a) the amount disallowed, or (b) if less, the amount by which the rental rebate exceeds the amount of capital expenditure incurred by the lessor, may be treated for the purposes of capital gains tax as an allowable loss accruing to the lessor on the termination of the lease. That allowable loss is deductible only from chargeable gains accruing to the lessor on the disposal of the asset. (7) This section does not apply to a long funding finance lease (see section 148C).

• (2) In Chapter 4 of Part 3 of CTA 2009 (trading income: rules restricting deductions), after section 60 insert—

(60A) (1) Where plant or machinery (“the asset”) is leased and a rental rebate is payable by the lessor, the amount of the deduction allowable in respect of the rebate is limited to— (a) the amount of the lessor's income from the lease, or (b) in the case of a finance lease, that amount excluding the finance charge. (2) “Rental rebate” means any sum payable to the lessee that is calculated by reference to the termination value of the asset. (3) For this purpose— (a) the termination value of an asset is the value of the asset at or about the time when the lease terminates, (b) calculation by reference to the termination value includes calculation by reference to any one or more of— (i) the proceeds of sale, if the asset is sold, (ii) any insurance proceeds, compensation or similar sums in respect of the asset, and (iii) an estimate of the market value of the asset, and (c) calculation by reference to the termination value also includes— (i) determination in a way which, or by reference to factors or criteria which, might reasonably be expected to produce a broadly similar result to calculation by reference to the termination value, or (ii) any other form of calculation indirectly by reference to the termination value. (4) For the purposes of this section— (a) the income of the lessor from the lease is the total of all the amounts receivable in connection with the lease that have been brought into account in calculating the lessor's income for corporation tax purposes, excluding— (i) disposal receipts brought into account under Part 2 of CAA 2001 (see section 60(1) of that Act), and (ii) so much of any amount as represents charges for services or qualifying UK or foreign tax (within the meaning of section 70YE of that Act) to be paid by the lessor, and (b) the finance charge, in relation to a finance lease, is— (i) if the lease is one that, under generally accepted accounting practice, falls (or would fall) to be treated as a loan, so much of the rentals under the lease as fall (or would fall) to be treated as interest, or (ii) in any other case, the amount that, in accordance with generally accepted accounting practice, falls (or would fall) to be treated as the gross return on investment. (5) Where the asset is acquired by the lessor in a transaction— (a) to which section 948 of CTA 2010 applies (modified application of CAA 2001 in case of transfer of trade without change of ownership), or (b) in relation to which an election is made under section 266 of CAA 2001 (election where predecessor and successor are connected persons), this section applies as if the successor had been the lessor at all material times and everything done to or by the predecessor had been done to or by the successor. (6) Where the whole or part of a rental rebate is disallowed under this section as a deduction in computing profits— (a) the amount disallowed, or (b) if less, the amount by which the rental rebate exceeds the amount of capital expenditure incurred by the lessor, may be treated for the purposes of corporation tax in respect of chargeable gains as an allowable loss accruing to the lessor on the termination of the lease. That allowable loss is deductible only from chargeable gains accruing to the lessor on the disposal of the asset. (7) This section does not apply to a long funding finance lease (see section 362 of CTA 2010).

• (3) The amendments made by this paragraph have effect in relation to rental rebates payable on or after 9 December 2009.

Arrangements reducing disposal value of asset

3

• (1) In Chapter 5 of Part 2 of CAA 2001 (plant and machinery: general provisions about charges and allowances), after section 64 insert—

(64A) (1) Where— (a) plant or machinery (“the asset”) is subject to a lease, (b) a disposal event occurs with the result that a disposal value in respect of the asset is to be brought into account under Item 1, 2 or 7 of the Table in section 61(2), and (c) arrangements have been entered into that have the effect of reducing the disposal value of the asset in so far as it is attributable to rentals payable under the lease, the disposal value is to be determined as if the arrangements had not been entered into. (2) Subsection (1) does not apply if— (a) the arrangements take the form of a transfer of relevant receipts within section 809AZA of ITA 2007 and the relevant amount has been treated as income under section 809AZB of that Act, or (b) the arrangements take the form of a transfer of relevant receipts within section 752 of CTA 2010 and the relevant amount has been treated as income under section 753 of that Act.

• (2) The amendment made by sub-paragraph (1) has effect in relation to disposal events taking place on or after 9 December 2009.

SCHEDULE 6

Part 1 — Definition of “charity”, “charitable company” and “charitable trust”

Definition of “charity” etc

1

• (1) For the purposes of the enactments to which this Part applies “charity” means a body of persons or trust that—

• (a) is established for charitable purposes only,

• (b) meets the jurisdiction condition (see paragraph 2),

• (c) meets the registration condition (see paragraph 3), and

• (d) meets the management condition (see paragraph 4).

• (2) For the purposes of the enactments to which this Part applies—

• “charitable company” means a charity that is a body of persons;

• “charitable trust” means a charity that is a trust.

• (3) Sub-paragraphs (1) and (2) are subject to any express provision to the contrary.

• (4) For the meaning of “charitable purpose”, see section 2 of the Charities Act 2011 (which—

• (a) applies regardless of where the body of persons or trust in question is established, and

• (b) for this purpose forms part of the law of each part of the United Kingdom (see sections 7 and 8 of that Act) ).

Jurisdiction condition

2

• (1) A body of persons or trust meets the jurisdiction condition if it falls to be subject to the control of—

• (a) a relevant UK court in the exercise of its jurisdiction with respect to charities, ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In sub-paragraph (1)(a) “a relevant UK court” means—

• (a) the High Court,

• (b) the Court of Session, or

• (c) the High Court in Northern Ireland

(and, for enactments relating to value added tax, includes the High Court of the Isle of Man).

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

Registration condition

3

• (1) A body of persons or trust meets the registration condition if—

• (a) in the case of a body of persons or trust that is a charity within the meaning of section 10 of the Charities Act 2011 , condition A is met, and

• (b) in the case of any other body of persons or trust, condition B is met.

• (2) Condition A is that the body of persons or trust has complied with any requirement to be registered in the register of charities kept under section 29 of the Charities Act 2011.

• (3) Condition B is that the body of persons or trust has complied with any requirement under the law of a territory outside England and Wales to be registered in a register corresponding to that mentioned in sub-paragraph (2).

Management condition

4

• (1) A body of persons or trust meets the management condition if its managers are fit and proper persons to be managers of the body or trust.

• (2) In this paragraph “managers”, in relation to a body of persons or trust, means the persons having the general control and management of the administration of the body or trust.

Periods over which management condition treated as met

5

• (1) This paragraph applies in relation to any period throughout which the management condition is not met.

• (2) The management condition is treated as met throughout the period if the Commissioners for Her Majesty's Revenue and Customs consider that—

• (a) the failure to meet the management condition has not prejudiced the charitable purposes of the body or trust, or

• (b) it is just and reasonable in all the circumstances for the condition to be treated as met throughout the period.

Publication of names and addresses of bodies or trusts regarded by HMRC as charities

6

Her Majesty's Revenue and Customs may publish the name and address of any body of persons or trust that appears to them to meet, or at any time to have met, the definition of a charity in paragraph 1.

Enactments to which this Part applies

7

The enactments to which this Part applies are the enactments relating to—

• (a) income tax

• (b) capital gains tax,

• (c) corporation tax,

• (d) value added tax,

• (e) inheritance tax,

• (f) stamp duty,

• (g) stamp duty land tax, ...

• (h) stamp duty reserve tax , ...

• (i) annual tax on enveloped dwellings., and

• (j) diverted profits tax.

Part 2 — Repeals of superseded definitions and other consequential amendments

FA 1982

8

In section 129(1) of FA 1982 (stamp duty: exemption from duty on grants, transfers to charities etc), for “a body of persons established for charitable purposes only or to the trustees of a trust so established” substitute “ a charitable company or to the trustees of a charitable trust ”.

FA 1983

9

In section 46(3) of FA 1983 (Historic Buildings and Monuments Commission for England) for “a body of persons established for charitable purposes only” substitute “ a charitable company ”.

IHTA 1984

10

In section 272 of IHTA 1984 (general interpretation), omit the definitions of “charity” and “charitable”.

FA 1986

11

In section 90(7) of FA 1986 (stamp duty reserve tax: exceptions from principal charge)—

• (a) in paragraph (a), for “a body of persons established for charitable purposes only” substitute “ a charitable company ”, and

• (b) in paragraph (b), for “a trust so established” substitute “ a charitable trust ”.

FA 1989

12

In paragraph 4 of Schedule 5 to FA 1989 (employee share ownership trusts), omit sub-paragraph (10).

TCGA 1992

13

• (1) TCGA 1992 is amended as follows.

• (2) In section 222(8B)(b)(iii) (relief on disposal of private residence), for “established for charitable purposes only” substitute “ a charitable company ”.

• (3) In section 256 (charities), omit subsections (6) and (8).

• (4) In section 256C (attributing gains to the non-exempt amount: charitable companies), omit subsection (6).

• (5) In section 256D (how gains are attributed to the non-exempt amount: charitable companies), omit subsection (7).

F(No.2)A 1997

14

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

FA 1999

15

• (1) Schedule 19 to FA 1999 (stamp duty and stamp duty reserve tax: unit trusts) is amended as follows.

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

• (3) In paragraph 15(c), for “bodies of persons established for charitable purposes only or trustees of trusts so established” substitute “ charitable companies or trustees of charitable trusts ”.

CAA 2001

16

In section 63(2) of CAA 2001 (cases in which disposal value is nil)—

• (a) in paragraph (a), omit “within the meaning of Part 10 of ITA 2007 (see section 519 of that Act)”, and

• (b) in paragraph (aa), omit “within the meaning of Part 11 of CTA 2010 (see section 467 of that Act)”.

ITEPA 2003

17

• (1) ITEPA 2003 is amended as follows.

• (2) In section 99(3)(b)(ii) (accommodation provided for performance of duties), for “established for charitable purposes only” substitute “ a charitable company ”.

• (3) In section 216(3)(b) (provisions not applicable to lower-paid employments) for “established for charitable purposes only” substitute “ a charitable company ”.

• (4) In section 223(7)(b)(ii) (payments on account of director's tax other than by the director), for “established for charitable purposes only” substitute “ a charitable company ”.

• (5) In section 290(5) (accommodation benefits of ministers of religion), omit the definition of “charity”.

• (6) In section 351 (expenses of ministers of religion), omit subsection (5).

• (7) In section 714(2) (payroll giving: meaning of “donation”), in the definition of “charity”, omit “means any body of persons or trust established for charitable purposes only and”.

FA 2003

18

Schedule 8 to FA 2003 (SDLT: charities relief) is amended as follows.

19

In paragraph 1 (charities relief), omit sub-paragraph (4).

20

In paragraph 4 (charitable trusts), in sub-paragraph (2), omit “and “charity” has the same meaning as in paragraph 1”.

ITTOIA 2005

21

• (1) ITTOIA 2005 is amended as follows.

• (2) In section 410(3)(b) (when stock dividend income arises), for “trust established for charitable purposes only” substitute “ charitable trust ”.

• (3) In section 545(1) (definitions for Chapter 9 of Part 4), omit the definition of “charitable trust”.

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

• (5) In Part 2 of Schedule 4 (index of defined expressions)—

• (a) in the entry for “charitable trust (in Chapter 9 of Part 4)”—

• (i) omit “(in Chapter 9 of Part 4)”, and

• (ii) for “section 545(1)” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”, and

• (b) in the entry for “charity”, for “section 989 of ITA 2007” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”.

F(No.2)A 2005

22

In section 18(3)(b)(i) of F(No.2)A 2005 (authorised unit trusts and OEICS: specific powers) omit “(within the meaning of section 989 of ITA 2007)”.

ITA 2007

23

• (1) ITA 2007 is amended as follows.

• (2) In section 479(1)(b) (special rates for trustees' income), for “trust established for charitable purposes only” substitute “ charitable trust ”.

• (3) In section 481(1)(c) (other special rates for trustees), for “trust established for charitable purposes only” substitute “ charitable trust ”.

• (4) Omit section 519 (meaning of “charitable trust”).

• (5) In section 873(2) (discretionary or accumulation settlements), in paragraphs (a) and (b), for “trust established for charitable purposes only” substitute “ charitable trust ”.

• (6) In section 989 (definitions), omit the definition of “charity”.

• (7) In Schedule 4 (index of defined expressions)—

• (a) in the entry for “charitable trust (in Part 10)”—

• (i) omit “(in Part 10)”, and

• (ii) for “section 519” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”, and

• (b) in the entries for “charity”, “charity (in Chapter 2 of Part 8)” and “charity (in Chapter 3 of Part 8)”, for “section 989” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”.

FA 2008

24

In paragraph 60(2) of Schedule 36 to FA 2008 (references to carrying on a business), omit the definition of “charity”.

CTA 2009

25

• (1) CTA 2009 is amended as follows.

• (2) In section 1319 (other definitions), omit the definition of “charity”.

• (3) In Schedule 4 (index of defined expressions), in the entry for “charity”, for “section 1319” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”.

FA 2009

26

In paragraph 8 of Schedule 49 to FA 2009 (general interpretation), omit the definition of “charity”.

CTA 2010

27

• (1) CTA 2010 is amended as follows.

• (2) In section 202 (meaning of “charity” in Chapter 2 of Part 6)—

• (a) for “means” substitute “ includes ”, and

• (b) omit paragraph (a).

• (3) In section 217 (meaning of “charity” in Chapter 3 of Part 6)—

• (a) for “means” substitute “ includes ”, and

• (b) omit paragraph (a).

• (4) Omit section 467 (meaning of “charitable company” in Part 11).

• (5) In section 610(2)(a) (discretionary payments by trustees to companies), omit “as defined in section 467”.

• (6) In section 1119 (definitions), omit the definition of “charity”.

• (7) In Schedule 4 (index of defined expressions)—

• (a) in the entry for “charitable company (in Part 11)”—

• (i) omit “(in Part 11)”, and

• (ii) for “section 467” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”,

• (b) in the entry for “charity (except in Chapters 2 and 3 of Part 6)” for “section 1119” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”,

• (c) in the entry for “charity (in Chapter 2 of Part 6)”, for “section 202” substitute “ paragraph 1 of Schedule 6 to FA 2010 (and see section 202 of this Act) ”, and

• (d) in the entry for “charity (in Chapter 3 of Part 6)”, for “section 217” substitute “ paragraph 1 of Schedule 6 to FA 2010 (and see section 217 of this Act) ”.

TIOPA 2010

28

In section 326(3) of TIOPA 2010 (charities), omit the definition of “charity” and the “and” immediately after it.

Power to make further consequential provision

29

• (1) The Commissioners for Her Majesty's Revenue and Customs may by order make such further consequential, incidental, supplemental, transitional or transitory provision or saving as appears appropriate in consequence of, or otherwise in connection with, Part 1.

• (2) An order under this paragraph may—

• (a) make different provision for different purposes, and

• (b) make provision repealing, revoking or otherwise amending any enactment or instrument (whenever passed or made).

• (3) An order under this paragraph is to be made by statutory instrument.

• (4) A statutory instrument containing an order under this paragraph is subject to annulment in pursuance of an order of the House of Commons.

Part 3 — Meaning of “community amateur sports club”

30

Chapter 9 of Part 13 of CTA 2010 (community amateur sports clubs) is amended as follows.

31

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

32

After section 661 insert—

(661A) (1) A club meets the location condition for the purposes of section 658 if— (a) it is established in a member State or a relevant territory, and (b) the facilities that it provides for eligible sports are all located in a single member State or relevant territory. (2) In this section “relevant territory” means a territory specified in regulations under paragraph 2(3)(b) of Schedule 6 to FA 2010 (definition of “charity” etc). (661B) (1) A club meets the management condition for the purposes of section 658 if its managers are fit and proper persons to be managers of the club. (2) In this paragraph “managers”, in relation to a club, means the persons having the general control and management of the administration of the club. (661C) (1) This paragraph applies in relation to any period throughout which the management condition is not met. (2) The management condition is treated as met throughout the period if the Commissioners for Her Majesty's Revenue and Customs consider that— (a) the failure to meet the management condition has not prejudiced the purposes of the club, or (b) it is just and reasonable in all the circumstances for the condition to be treated as met throughout the period.

Part 4 — Commencement

Commencement of Part 1

33

• (1) Part 1 is treated as having come into force on 6 April 2010.

• (2) But the definitions of “charity”, “charitable company” and “charitable trust” in that Part do not apply for the purposes of an enactment in relation to which, on that date, another definition applies until such time as that other definition ceases to have effect on the coming into force of provision made by or under Part 2.

• (3) For provision about the coming into force of provision made by that Part, see paragraph 34.

Commencement of Part 2

34

• (1) The repeal of the definition of “charity” in section 989 of ITA 2007 made by paragraph 23(6) above has effect—

• (a) so far as it applies for the purposes of Chapter 2 of Part 8 of that Act (gift aid), in relation to gifts made on or after 6 April 2010, and

• (b) so far as it applies for other purposes, in accordance with such provision as the Treasury may make by order.

• (2) The other amendments made by Part 2 come into force in accordance with such provision as the Treasury may make by order.

• (3) An order under this paragraph may—

• (a) make different provision for different purposes, and

• (b) include transitional provision and savings.

• (4) An order under this paragraph is to be made by statutory instrument.

Commencement of Part 3

35

The amendments made by Part 3 are treated as having come into force on 6 April 2010.

SCHEDULE 7

Gifts by individuals

1

Chapter 3 of Part 8 of ITA 2007 (relief for gifts by individuals of shares, securities and real property to charities etc) is amended as follows.

2

• (1) Section 437 (value of net benefit to charity) is amended as follows.

• (2) In subsection (1), for “market” (in both places) substitute “ relevant ”.

• (3) After that subsection insert—

(1A) In subsection (1) “relevant value” means— (a) where subsection (1B) applies, the lower of the market value and the acquisition value, and (b) otherwise, the market value. (1B) This subsection applies where— (a) the qualifying investment, or anything from which it derives or which it represents (whether in whole or in part and whether directly or indirectly), was acquired by the individual making the disposal within the period of 4 years ending with the day on which the disposal is made, (b) the acquisition was made as part of a scheme, and (c) the main purpose, or one of the main purposes, of the individual in entering into the scheme was to obtain relief, or an increased amount of relief, under this Chapter. (1C) In subsection (1B) “scheme” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

• (4) In subsection (2), after the entry relating to section 438 insert— “ section 438A (acquisition value of qualifying investments), ”.

3

After section 438 insert—

(438A) (1) For the purposes of this Chapter the acquisition value of a qualifying investment disposed of by an individual is— (a) where the qualifying investment was acquired by the individual within the period of 4 years ending with the day on which the disposal is made, the cost to the individual of acquiring it, or (b) where something from which the qualifying investment derives or which it represents was so acquired, such proportion of the cost to the individual of acquiring that thing as is just and reasonable to attribute to the qualifying investment. (2) A reference in subsection (1) to the cost to the individual of an acquisition is to— (a) the consideration given by the individual for the acquisition, less (b) any amount that is received in connection with the acquisition, by the individual or a person connected with the individual, as part of the scheme in question.

4

In Schedule 4 to ITA 2007 (index of defined expressions), after the entry relating to accumulated or discretionary income insert—

acquisition value of a qualifying investment (in Chapter 3 of Part 8)	section 438A

.

Gifts by companies

5

Chapter 3 of Part 6 of CTA 2010 (charitable donations relief: amounts treated as qualifying charitable donations) is amended as follows.

6

• (1) Section 209 (value of net benefit to charity) is amended as follows.

• (2) In subsection (1), for “market” (in both places) substitute “ relevant ”.

• (3) After that subsection insert—

(1A) In subsection (1) “relevant value” means— (a) where subsection (1B) applies, the lower of the market value and the acquisition value, and (b) otherwise, the market value. (1B) This subsection applies where— (a) the qualifying investment, or anything from which it derives or which it represents (whether in whole or in part and whether directly or indirectly), was acquired by the company making the disposal within the period of 4 years ending with the day on which the disposal is made, (b) the acquisition was made as part of a scheme, and (c) the main purpose, or one of the main purposes, of the company in entering into the scheme was to obtain relief, or an increased amount of relief, as a result of this Chapter. (1C) In subsection (1B) “scheme” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

• (4) In subsection (2), after paragraph (a) insert—

(aa) section 210A (acquisition value of qualifying investments),

.

7

After section 210 insert—

(210A) (1) For the purposes of this Chapter the acquisition value of a qualifying investment disposed of by a company is— (a) where the qualifying investment was acquired by the company within the period of 4 years ending with the day on which the disposal is made, the cost to the company of acquiring it, or (b) where something from which the qualifying investment derives or which it represents was so acquired, such proportion of the cost to the company of acquiring that thing as is just and reasonable to attribute to the qualifying investment. (2) A reference in subsection (1) to the cost to the company of an acquisition is to— (a) the consideration given by the company for the acquisition, less (b) any amount that is received in connection with the acquisition, by the company or a person connected with it, as part of the scheme in question.

8

In Schedule 4 to CTA 2010 (index of defined expressions), after the entry relating to accounts (in Chapter 2 of Part 16) insert—

acquisition value of a qualifying investment (in Chapter 3 of Part 6)	section 210A

.

Commencement and corresponding ICTA amendments

9

The amendments made by this Schedule have effect in relation to any disposal made to a charity on or after 15 December 2009.

10

Amendments corresponding to the ones made by paragraphs 6 and 7, having effect in relation to any such disposal, are to be treated as having been made in section 587B of ICTA.

SCHEDULE 8

Payroll giving

1

• (1) In ITA 2007, after section 521 insert—

(521A) (1) This section applies if gifts are made to charitable trusts by individuals and the gifts are donations for the purposes of Part 12 of ITEPA 2003 (payroll giving). (2) Income tax is charged on the gifts under this section. (3) It is charged on the full amount of the gifts arising in the tax year. (4) But a gift is not taken into account in calculating total income so far as it is applied to charitable purposes only. (5) The trustees of the charitable trust are liable for any tax charged under this section.

• (2) In CTA 2010, after section 472 insert—

(472A) (1) If a charitable company receives a gift from an individual and the gift is a donation for the purposes of Part 12 of ITEPA 2003 (payroll giving), the gift is treated as an amount in respect of which the charitable company is chargeable to corporation tax, under the charge to corporation tax on income. (2) But the gift is not taken into account in calculating total profits so far as it is applied to charitable purposes only. (3) The exemption under subsection (2) requires a claim.

Payments to bodies outside the UK: non-charitable expenditure

2

• (1) In section 547(b) of ITA 2007 (payments by charitable trusts to bodies outside the UK), after “such steps as” insert “ the Commissioners for Her Majesty's Revenue and Customs consider ”.

• (2) In section 500(b) of CTA 2010 (payments by charitable companies to bodies outside the UK), after “such steps as” insert “ the Commissioners for Her Majesty's Revenue and Customs consider ”.

Gift aid: disqualified overseas gifts

3

• (1) Chapter 2 of Part 8 of ITA 2007 (gift aid) is amended as follows.

• (2) In section 416 (meaning of “qualifying donation”)—

• (a) in subsection (1)(a) for “G” substitute “ F ”, and

• (b) omit subsection (8).

• (3) Omit section 422 (disqualified overseas gifts).

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

Gift aid administration: charitable trusts

4

• (1) Section 42 of TMA 1970 (procedure for making claims etc) is amended as follows.

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

• (3) After subsection (3) insert—

(3ZA) Subsection (2) above shall not apply in relation to any claim by the trustees of a charitable trust for an amount to be exempt from tax by virtue of section 521(4) of ITA 2007 (gifts entitling donor to gift aid relief: charitable trusts).

5

• (1) ITA 2007 is amended as follows.

• (2) In section 518(4) (overview of Part 10), for “section 538” substitute “ sections 538 and 538A ”.

• (3) After section 538 insert—

(538A) (1) This section applies to claims for amounts to be exempt from tax by virtue of section 521(4) (gifts entitling donor to gift aid relief: charitable trusts). (2) A claim to which this section applies may be made— (a) to an officer of Revenue and Customs, or (b) by being included in a return under section 8A of TMA 1970 (trustee's self-assessment return). (3) In this section— - “free-standing claim” means a claim made as mentioned in subsection (2)(a), and - “tax return claim” means a claim made as mentioned in subsection (2)(b). (4) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision— (a) limiting the number of free-standing claims that may be made by a person in a tax year, or (b) requiring a claim for an amount below an amount specified in the regulations to be made as a tax return claim. (5) The regulations may make different provision for different cases or purposes.

Gift aid administration: charitable companies

6

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

7

In CTA 2010, after section 477 insert—

(477A) (1) This section applies to claims for amounts to be exempt from tax by virtue of— (a) section 472 (gifts qualifying for gift aid relief: charitable companies), or (b) section 475 (gifts qualifying for gift aid relief: eligible bodies). (2) A claim to which this section applies may be made— (a) to an officer of Revenue and Customs, or (b) where the claimant is a company, by being included in the claimant's company tax return. (3) In this section— - “free-standing claim” means a claim made as mentioned in subsection (2)(a), and - “tax return claim” means a claim made as mentioned in subsection (2)(b). (4) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision— (a) limiting the number of free-standing claims that may be made by a person in a tax year, or (b) requiring a claim for an amount below an amount specified in the regulations to be made as a tax return claim. (5) The regulations may make different provision for different cases or purposes.

Commencement

8

• (1) The amendments made by paragraph 1 have effect in relation to gifts made on or after 24 March 2010.

• (2) An amendment corresponding to that made by paragraph 1(2), having effect in relation to gifts made on or after that date, is to be treated as having been made in ICTA.

• (3) The amendments made by paragraph 2 have effect in relation to payments representing expenditure incurred on or after 24 March.

• (4) An amendment corresponding to that made by paragraph 2(2), having effect in relation to payments representing expenditure incurred on or after that date, is to be treated as having been made in ICTA.

• (5) The amendments made by paragraph 3 have effect in relation to gifts made on or after 6 April 2010.

• (6) The amendments made by paragraphs 4 and 6 have effect in relation to claims whenever made.

SCHEDULE 9

1

In TCGA 1992, after section 252 insert—

(252A) Schedule 8A contains provision about the calculation of chargeable gains on disposals of debts to which section 252(1) applies which are not situated in the United Kingdom.

2

In that Act, after Schedule 8 insert—

Schedule 8A (1) (1) This Schedule applies where— (a) an individual makes a disposal of a debt to which section 252(1) applies (“the relevant disposal”), (b) the debt (“the section 252 debt”) is not situated in the United Kingdom, and (c) money or money's worth which is remitted foreign income (“the section 37 amount”) is excluded under section 37 from the consideration for the relevant disposal. (2) For this purpose “remitted foreign income” means income of the individual which is chargeable to income tax on the alternative basis of charge set out in Chapter A1 of Part 14 of ITA 2007 (remittance basis). (3) In determining whether the condition in sub-paragraph (1)(c) is met, the following provisions of this Schedule are to be ignored. (2) (1) This paragraph applies where the section 37 amount constitutes the whole of the unreduced consideration. (2) If the relevant disposal is a part disposal of the section 252 debt, section 42 applies as if the reference in subsection (2)(a) of that section to the consideration for the disposal were a reference to the unreduced consideration for the disposal. (3) Any loss accruing to the individual on the relevant disposal is not an allowable loss. (3) (1) This paragraph applies where the section 37 amount constitutes part of the unreduced consideration. (2) For the purposes of this Act the relevant disposal is to be treated as if it were— (a) a disposal of so much of the section 252 debt as is represented by the section 37 proportion of the sum mentioned in sub-paragraph (3) (“debt A”), and (b) a separate disposal of so much of the section 252 debt as is represented by the remainder of that sum (“debt B”). (3) That sum is— (a) if the relevant disposal is a disposal of the whole of the section 252 debt, the sum referred to in section 252(1), and (b) if the relevant disposal is a part disposal of that debt, the proportion of the sum referred to in section 252(1) to which that part disposal relates. (4) Sub-paragraphs (5) to (9) apply for the purposes of— (a) the computation of the gain accruing on the disposals under sub-paragraph (2), and (b) the application of Chapter 3 of Part 2 of this Act in relation to the part of the debt (if any) which remains undisposed of. (5) The consideration for the disposal (before any exclusion under section 37) is— (a) in the case of debt A, the section 37 amount, and (b) in the case of debt B, the remainder of the unreduced consideration. (6) If the relevant disposal is not a part disposal of the section 252 debt— (a) the section 37 proportion of the debt costs and the disposal costs is to be attributed to debt A, and (b) the remaining debt costs and disposal costs are to be attributed to debt B. (7) Sub-paragraphs (8) and (9) apply if the relevant disposal is a part disposal of the section 252 debt. (8) Section 42(2) applies as if it provided for the debt costs to be apportioned between debt A, debt B and the remainder of the section 252 debt in the proportions which those parts of the section 252 debt bear to one another. (9) The section 37 proportion of the disposal costs is to be attributed to debt A and the remaining disposal costs are to be attributed to debt B. (10) Any loss accruing to the individual on the disposal of debt A is not an allowable loss. (4) In this Schedule— - “debt costs” means the sums which under section 38(1)(a) and (b) are attributable to the section 252 debt; - “disposal costs” means the costs within section 38(1)(c) in relation to the relevant disposal; - “the section 252 debt”, “the relevant disposal” and “the section 37 amount” are to be construed in accordance with paragraph 1; - “the section 37 proportion” means the proportion of the unreduced consideration which constitutes the section 37 amount; - “the unreduced consideration” means the consideration for the relevant disposal ignoring the exclusion of the section 37 amount.

3

The amendments made by this Schedule have effect in relation to disposals on or after 16 December 2009.

SCHEDULE 10

Schedule 24 to FA 2007

1

Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

2

For paragraph 4 substitute—