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Finance Act 2001 (c. 9)(The document as of February, 2008) Page 6 Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16 | P.17 | P.18 | P.19 | P.20 | P.21 | P.22 | P.23 | P.24 | P.25 | P.26 | P.27 | P.28
(4) In paragraph 4 (controlled foreign company dividends passing up a chain of related companies) at the end of sub-paragraph (1) (which provides for a payment made by a controlled foreign company to be regarded as made to a United Kingdom resident) add "and shall be taken to satisfy the conditions in paragraph 2(1A) above". (5) At the end of sub-paragraph (1A) of that paragraph (requirement that the subsequent dividend is taken into account in computing corporation tax) add-- " and-- (a) it is chargeable neither under Case I of Schedule D nor under Case VI of that Schedule in circumstances where by virtue of section 436, 439B or 441 profits are computed in accordance with the provisions of this Act applicable to Case I; or (b) if it is chargeable under Case I, or under Case VI in the circumstances described in paragraph (a) above, it is not involved in a UK tax avoidance scheme; and paragraph 4A below has effect for the purposes of paragraph (b) above. " . (6) In sub-paragraph (2) of that paragraph (interpretation) after "one company is related to another if" insert "neither is resident in the United Kingdom and". (7) After paragraph 4 insert-- " 4A (1) This paragraph has effect for the purposes of paragraph 4(1A)(b) above. (2) No payment to a company resident in the United Kingdom which represents the whole or part of a dividend paid by a controlled foreign company for an accounting period shall be regarded as involved in a UK tax avoidance scheme by reason only that-- (a) there is no charge to tax under section 747(4)(a) if the controlled foreign company pursues an acceptable distribution policy for that accounting period, and (b) so much of the dividend as is represented by that payment will (if paragraph 4(1) above has effect) fall to be brought into account in determining whether the controlled foreign company has done so. (3) "UK tax avoidance scheme" means a scheme or arrangement the purpose, or one of the main purposes, of which is to achieve a reduction in United Kingdom tax. (4) A scheme or arrangement achieves a reduction in United Kingdom tax if, apart from the scheme or arrangement, any company-- (a) would have been liable for any such tax or for a greater amount of any such tax; or (b) would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax. (5) In this paragraph--
(8) This section applies to dividends paid on or after 7th March 2001 by a controlled foreign company for any accounting period of that controlled foreign company which ends on or after that date. (9) In this section "accounting period" and "controlled foreign company" have the same meaning as they have in Chapter 4 of Part 17 of the Taxes Act 1988. Miscellaneous83 Life policies, life annuity contracts and capital redemption policies(1) Schedule 28 to this Act (which makes amendments relating to Chapter 2 of Part 13 of the Taxes Act 1988) has effect. (2) The amendments made by Part 1 of that Schedule (which relate to the assignment or surrender of part of, or a share in, the rights conferred by a policy or contract) have effect, in the case of any policy or contract, in relation to any year (within the meaning given by section 546(4) of the Taxes Act 1988) beginning on or after 6th April 2001. (3) The amendments made by Part 2 of that Schedule (which relate to the provision by insurers etc of information relating to chargeable events happening in connection with a policy or contract) have effect in relation to chargeable events happening on or after 6th April 2002. 84 Exclusion of deductions for deemed manufactured payments(1) Section 736B of the Taxes Act 1988 (deemed manufactured payments in case of stock lending arrangements) is amended as follows. (2) In subsection (2) (application of provisions to deemed manufactured payments) after "shall apply" insert ", subject to subsection (2A) below,". (3) After that subsection insert-- " (2A) The borrower is not entitled, by virtue of anything in Schedule 23A or any provision of regulations under that Schedule, or otherwise-- (a) to any deduction in computing profits or gains for the purposes of income tax or corporation tax, or (b) to any deduction against total income or, as the case may be, total profits, in respect of any such deemed requirement or payment as is provided for by subsection (2) above. Where the borrower is a company, an amount may not be surrendered by way of group relief if a deduction in respect of it is prohibited by this subsection. " (4) This section applies to payments treated under section 736B as made on or after 3rd October 2000. 85 Deduction of tax: payments between companies etc(1) After section 349 of the Taxes Act 1988 (certain payments to be made under deduction of tax) insert-- " 349A Exceptions to section 349 for payments between companies etc(1) The provisions specified in subsection (3) below (which require tax to be deducted on making certain payments) do not apply to a payment made by a company if, at the time the payment is made, the company reasonably believes that one of the conditions specified in section 349B is satisfied. (2) Subsection (1) above has effect subject to any directions under section 349C. (3) The provisions are--
(4) References in subsection (3) above to any provision of section 349 do not include that provision as applied-- (a) under section 777(9) (directions applying section 349(1) to certain payments to non-residents), or (b) by paragraph 4(2) of Schedule 23A (manufactured overseas dividends to be treated as annual payments within section 349). (5) References in this section to the company by which a payment is made do not include a company acting as trustee or agent for another person. (6) For the purposes of this section, a payment by a partnership is treated as made by a company if any member of the partnership is a company. 349B The conditions mentioned in section 349A(1)(1) The first of the conditions mentioned in section 349A(1) is that the person beneficially entitled to the income in respect of which the payment is made is-- (a) a company resident in the United Kingdom, or (b) a partnership each member of which is a company resident in the United Kingdom. (2) The second of those conditions is that-- (a) the person beneficially entitled to the income in respect of which the payment is made is a company not resident in the United Kingdom ("the non-resident company"), (b) the non-resident company carries on a trade in the United Kingdom through a branch or agency, and (c) the payment falls to be brought into account in computing the chargeable profits (within the meaning given by section 11(2)) of the non-resident company. 349C Directions disapplying section 349A(1)(1) The Board may give a direction to a company directing that section 349A(1) is not to apply in relation to any payment that-- (a) is made by the company after the giving of the direction, and (b) is specified in the direction or is of a description so specified. (2) Such a direction shall not be given unless the Board have reasonable grounds for believing as respects each payment to which the direction relates that it is likely that neither of the conditions specified in section 349B will be satisfied in relation to the payment at the time the payment is made. (3) A direction under this section may be varied or revoked by a subsequent such direction. (4) In this section "company" includes a partnership of which any member is a company. 349D Section 349A(1): consequences of reasonable but incorrect belief(1) Where-- (a) a payment is made by a company without an amount representing the income tax on the payment being deducted from the payment, (b) at the time the payment is made, the company reasonably believes that one of the conditions specified in section 349B is satisfied, (c) if the company did not so believe, tax would be deductible from the payment under section 349, and (d) neither of the conditions specified in section 349B is satisfied at the time the payment is made, section 350 applies as if the payment were within section 349 (and Schedule 16 applies as if tax were deductible from the payment under section 349). (2) In this section "company" includes a partnership of which any member is a company. " . (2) In section 98 of the Taxes Management Act 1970 (c. 9) (penalties for failing to make, or making incorrectly, certain returns etc.), after subsection (4) insert-- " (4A) If-- (a) a failure to comply with section 350(1) of, or Schedule 16 to, the principal Act arises from a person's failure to deliver an account, or show the amount, of a payment, and (b) the payment is within subsection (4B) below, subsection (1) above shall have effect as if for "ВЈ300" there were substituted "ВЈ3,000" and as if for "ВЈ60" there were substituted "ВЈ600". (4B) A payment is within this subsection if-- (a) the payment is made by a company without an amount representing the income tax on the payment being deducted from the payment, (b) at the time the payment is made, the company-- (i) does not believe that either of the conditions specified in section 349B of the principal Act is satisfied, or (ii) where it believes that either of those conditions is satisfied, could not reasonably so believe, (c) the payment is one from which tax is deductible under section 349 of the principal Act unless the company reasonably believes that one of those conditions is satisfied, and (d) neither of those conditions is satisfied at the time the payment is made. (4C) In subsection (4B) above "company" includes a partnership of which any member is a company. " . (3) In section 338(4) of the Taxes Act 1988 (when payment by company to non-resident to be treated as charge on income), after paragraph (a) insert-- " (aa) the person beneficially entitled to the income in respect of which the payment is made is a company not resident in the United Kingdom ("the non-resident company"), the non-resident company carries on a trade in the United Kingdom through a branch or agency and the payment falls to be brought into account in computing the chargeable profits (within the meaning given by section 11(2)) of the non-resident company, or " . (4) Subsections (1) to (3) apply to payments made on or after 1st April 2001. (5) Sections 247 and 248 of the Taxes Act 1988 (companies within a group may elect for section 349 not to apply to payments between them) shall cease to have effect. (6) Subsection (5) applies in relation to payments made after the day on which this Act is passed. 86 Profits for purposes of small companies' relief(1) Section 13 of the Taxes Act 1988 (small companies' relief) is amended in accordance with subsections (2) to (4). (2) In subsection (7) (profits of company for accounting period)-- (a) in paragraph (a), omit "resident in the United Kingdom", and (b) in paragraph (b), for "section 247(1A)" substitute "subsection (7A) below". (3) After subsection (7) insert-- " (7A) A company falls within this subsection if-- (a) it is a 75 per cent subsidiary of any other company, or (b) arrangements of any kind (whether in writing or not) are in existence by virtue of which it could become such a subsidiary. " . (4) For subsection (8AA) (interpretation of subsection (7)) substitute-- " (8AA) Section 13ZA applies for the interpretation of subsection (7) above. " . (5) After section 13 of the Taxes Act 1988 insert-- " 13Z AInterpretation of section 13(7)(1) In determining for the purposes of section 13(7) whether one body corporate is a 51 per cent subsidiary of another, that other shall be treated as not being the owner of any share capital-- (a) which it owns indirectly, and (b) which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt. (2) Notwithstanding that at any time a company ("the subsidiary company") is a 51 per cent subsidiary of another company ("the parent company") it shall not be treated at that time as such a subsidiary for the purposes of section 13(7) unless, additionally, at that time-- (a) the parent company would be beneficially entitled to more than 50 per cent of any profits available for distribution to equity holders of the subsidiary company, and (b) the parent company would be beneficially entitled to more than 50 per cent of any assets of the subsidiary company available for distribution to its equity holders on a winding-up. (3) For the purposes of section 13(7) and this section-- (a) "trading or holding company" means a trading company or a company the business of which consists wholly or mainly in the holding of shares or securities of trading companies that are its 90 per cent subsidiaries; (b) "trading company" means a company whose business consists wholly or mainly of the carrying on of a trade or trades; (c) a company is owned by a consortium if 75 per cent or more of the ordinary share capital of the company is beneficially owned between them by companies of which none-- (i) beneficially owns less than 5 per cent of that capital, (ii) would be beneficially entitled to less than 5 per cent of any profits available for distribution to equity holders of the company, or (iii) would be beneficially entitled to less than 5 per cent of any assets of the company available for distribution to its equity holders on a winding up, and those companies are called the members of the consortium. (4) Schedule 18 (equity holders and assets etc. available for distribution) applies for the purposes of subsections (2) and (3)(c) above as it applies for the purposes of section 413(7). " (6) The amendments made by this section apply for the purposes of accounting periods ending on or after 1st April 2001. 87 Tax deductions and credits: end of provisional repayment regime(1) The provisions of section 438A of, and Schedule 19AB to, the Taxes Act 1988 (provisional repayments in respect of tax borne by deduction and tax credits) shall cease to have effect as follows. (2) Those provisions shall not apply in relation to income tax borne by deduction from payments received after 30th September 2001. (3) For the purposes of the following provisions (as they apply in relation to tax credits)-- (a) section 121 of the Finance Act 1993 (c. 34) (application of Schedule 19AB to tax exempt business of friendly societies) and any regulations under that section, and (b) any regulations under section 333B of the Taxes Act 1988 (individual savings account business etc. of insurance companies and friendly societies), that Schedule shall be deemed to continue to apply in relation to pension business of insurance companies as it would do so apart from subsection (2). (4) The power to make regulations under each of the sections referred to in subsection (3) includes power to set out the text of that Schedule as applied by regulations under that section. (5) The provisions of section 438A of, and Schedule 19AB to, the Taxes Act 1988 shall not apply in relation to tax credits in respect of distributions made on or after 6th April 2004. General88 Amendments to the machinery of self-assessment(1) Schedule 29 to this Act (amendments to the machinery of self-assessment) has effect. (2) In that Schedule--
(3) Except as otherwise provided, the amendments in that Schedule have effect as from the passing of this Act in relation to returns-- (a) whether made before or after the passing of this Act, and (b) whether relating to periods before or after the passing of this Act. 89 Recovery proceedings: minor amendments(1) In sections 66(1) and 67(1) of the Taxes Management Act 1970 (c. 9) (proceedings in county court or sheriff court to recover tax due and payable under an assessment), omit the words "under any assessment". This amendment applies in relation to proceedings begun after the passing of this Act. (2) For section 69 of the Taxes Management Act 1970 substitute-- " 69 Recovery of penalty, surcharge or interest(1) This section applies to-- (a) penalties imposed under Part 2, 5A or 10 of this Act or Schedule 18 to the Finance Act 1998; (b) surcharges imposed under Part 5A of this Act; and (c) interest charged under any provision of this Act (or recoverable as if it were interest so charged). (2) An amount by way of penalty, surcharge or interest to which this section applies shall be treated for the purposes of the following provisions as if it were an amount of tax. (3) Those provisions are-- (a) sections 61, 63 and 65 to 68 of this Act; (b) section 35(2)(g)(i) of the Crown Proceedings Act 1947 (rules of court: restriction of set-off or counterclaim where proceedings, or set-off or counterclaim, relate to tax) and any rules of court imposing any such restriction; (c) section 35(2)(b) of that Act as set out in section 50 of that Act (which imposes corresponding restrictions in Scotland). " This amendment applies-- (a) to proceedings begun (or a counterclaim made) after the passing of this Act, and (b) to a set-off first claimed after the passing of this Act. (3) In section 70 of the Taxes Management Act 1970 (c. 9) (evidence), in subsection (2)(a) (certificate of collector as to penalty, surcharge or interest payable), for "payable under Part 9 of this Act" substitute "payable under any provision of this Act or the principal Act". This amendment applies to certificates tendered in evidence after the passing of this Act. 90 Repayment supplements: claim for relief involving two or more years(1) Section 824 of the Taxes Act 1988 (repayment supplements) is amended as follows. (2) After subsection (2B) insert-- " (2C) Subsection (1) above shall apply to a repayment made by the Board as a result of a claim for relief under-- (a) paragraph 2 of Schedule 1B to the Management Act (carry back of loss relief), (b) paragraph 3 of that Schedule (relief for fluctuating profits of farming etc.), or (c) Schedule 4A to this Act (relief for fluctuating profits of creative artists etc.), as if it were a repayment falling within that subsection. " . (3) In subsection (3), after paragraph (aa) insert-- " (ab) if the repayment is a repayment as a result of a claim for relief under any of the provisions mentioned in subsection (2C) above, the relevant time is the 31st January next following the year that is the later year in relation to the claim; " . (4) This section applies in relation to repayments made after the passing of this Act. 91 Power to revise excessive penalties(1) In section 100 of the Taxes Management Act 1970 (determination of penalties by officer of the Board), in subsection (6) (revision of penalty if amount of tax taken into account discovered to be excessive), after "a penalty under" insert "section 93(2), (4) or (5) of this Act or". (2) This section applies in relation to penalties determined at any time whether before or after the passing of this Act. Part 4 Other taxesStamp duty and stamp duty reserve tax92 Stamp duty: exemption for land in disadvantaged areas(1) No stamp duty shall be chargeable under Part 1 or 2, or paragraph 16 of Part 3, of Schedule 13 to the Finance Act 1999 (c. 16) on-- (a) a conveyance or transfer of an estate or interest in land, or (b) a lease of land, if the land is situated in a disadvantaged area. (2) Where stamp duty would be chargeable on an instrument but for subsection (1), that subsection shall have effect in relation to the instrument only if the instrument is certified to the Commissioners as being an instrument on which stamp duty is by virtue of that subsection not chargeable. (3) No instrument which is certified as mentioned in subsection (2) shall be taken to be duly stamped unless-- (a) it is stamped in accordance with section 12 of the Stamp Act 1891 (c. 39) with a particular stamp denoting that it is not chargeable with any duty or that it is duly stamped, or (b) it is stamped with the duty to which it would have been liable but for this section. (4) For the purposes of this section and Schedule 30 to this Act, a disadvantaged area is an area designated as such by regulations made by the Treasury; and any such regulations may-- (a) designate specified areas as disadvantaged areas, or (b) provide for areas of a description specified in the regulations to be designated as disadvantaged areas. (5) If regulations under subsection (4) so provide, the designation of an area as a disadvantaged area shall have effect for such period as may be specified by or determined in accordance with the regulations. (6) Schedule 30 to this Act (which makes further provision about land in disadvantaged areas) shall have effect. (7) This section and Schedule 30 to this Act shall be construed as one with the Stamp Act 1891. (8) The provisions of this section and Schedule 30 to this Act shall have effect in relation to instruments executed on or after such date as may be specified by order made by the Treasury. (9) Regulations under subsection (4)-- (a) may make different provision for different cases, and (b) may contain such incidental, supplementary, consequential or transitional provision as appears to the Treasury to be necessary or expedient. (10) The power to make regulations under subsection (4) shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. (11) The power to make an order under subsection (8) shall be exercisable by statutory instrument. 93 SDRT: unit trust schemes and individual pension accounts(1) Schedule 19 to the Finance Act 1999 (c. 16) (which abolishes charges to stamp duty, and introduces a charge to stamp duty reserve tax, in relation to units under a unit trust scheme) is amended as follows. (2) In paragraph 2(4) (charge to be subject to exclusions provided in paragraphs 6 and 7) after "6" insert ", 6A". (3) In paragraph 4 (proportionate reduction of tax by reference to units issued) at the end insert-- " (6) If a certificate is given in accordance with paragraph 6A(1)(c) in respect of a period which includes the relevant two-week period in the case of the unit in question in sub-paragraph (1), there shall be left out of account in applying this paragraph in relation to that unit-- (a) any issue of a unit which is to be held within an individual pension account, and (b) any surrender of a unit which, immediately before the surrender, was held within an individual pension account. (7) "Individual pension account" has the same meaning in sub-paragraph (6) as it has in paragraph 6A. " (4) After paragraph 6 insert-- " Exclusion of charge in case of individual pension accounts6A (1) There is no charge to tax under this Part of this Schedule on the surrender of the unit if-- (a) immediately before the surrender, the unit is held within an individual pension account, (b) not all the units under the unit trust scheme are so held at that time, and (c) a certificate pursuant to sub-paragraph (2) is contained in, or provided with, the relevant monthly tax return. (2) The certificate must be given by the persons making the relevant monthly tax return and must state-- (a) that at all times in the period to which the return relates the trustees or managers were able to identify which of the units under the scheme were held within individual pension accounts, and (b) that at no time in that period have the trustees or managers imposed any charge on, or recovered any amount from, an IPA unit holder which included an amount directly or indirectly attributable to tax payable by the trustees under this Part of this Schedule. (3) In sub-paragraph (2), "IPA unit holder" means-- (a) a person acquiring, or who has acquired, a unit under the unit trust scheme, where the unit is to be held within an individual pension account, (b) a person holding a unit under the scheme, where the unit is held within an individual pension account, or (c) a person surrendering, or who has surrendered, a unit under the scheme, where immediately before the surrender the unit is or was held within an individual pension account. (4) In this paragraph--
(5) The amendment made by subsection (3) has effect where the relevant two-week period mentioned in paragraph 4(1) of Schedule 19 to the Finance Act 1999 (c. 16) ends after 6th April 2001. (6) The other amendments made by this section have effect in relation to surrenders made or effected on or after 6th April 2001. 94 SDRT: open-ended investment companies and individual pension accounts(1) Where there are two or more classes of shares in an open-ended investment company and the company's instrument of incorporation-- (a) provides that shares of one or more of those classes ("the IPA classes") may only be held within an individual pension account, and (b) does not make such provision in relation to shares of at least one other class, there is no charge to stamp duty reserve tax under Part 2 of Schedule 19 to the Finance Act 1999 (c. 16) on the surrender of a share of any of the IPA classes. (2) References in this section to provisions of Schedule 19 to the Finance Act 1999 (c. 16) are references to those provisions as they have effect in relation to open-ended investment companies by virtue of regulations from time to time in force under section 152 of the Finance Act 1995 (c. 4)(as at 6th April 2001, see regulations 3 to 4B of the 1997 Regulations as amended by regulations 4 and 5 of the 1999 (No.2) Regulations). (3) In this section--
(4) For the purposes of subsections (2) and (3)--
(5) This section has effect in relation to surrenders made or effected on or after 6th April 2001. 95 Exemptions in relation to employee share ownership plans(1) Schedule 8 to the Finance Act 2000 (c. 17) (employee share ownership plans) is amended as follows. (2) After paragraph 116 insert-- " Exemptions from stamp duty and stamp duty reserve tax116A Where, under an approved employee share ownership plan, partnership shares or dividend shares are transferred by the trustees to an employee-- (a) no ad valorem stamp duty is chargeable on any instrument by which the transfer is made, and (b) no stamp duty reserve tax is chargeable on any agreement by the trustees to make the transfer. " (3) This section has effect in relation to-- (a) instruments executed (within the meaning of the Stamp Act 1891 (c. 39)) after the day on which this Act is passed, and (b) agreements to transfer shares made after the day on which this Act is passed. Value added tax96 VAT: children's car seats(1) In paragraph 1 of Schedule A1 to the Value Added Tax Act 1994 (c. 23) (supplies benefiting from 5% reduced rate), after sub-paragraph (4) insert-- " (5) The supplies falling within this paragraph also include supplies of children's car seats. " (2) After paragraph 6 of that Schedule insert-- " Interpretation of paragraph 1(5)7 (1) Paragraph 1(5) above is interpreted in accordance with the provisions of this paragraph. (2) The following are "children's car seats"-- (a) a safety seat; (b) the combination of a safety seat and a related wheeled framework; (c) a booster seat; Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16 | P.17 | P.18 | P.19 | P.20 | P.21 | P.22 | P.23 | P.24 | P.25 | P.26 | P.27 | P.28 -- Back --
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