|
|
|
|
|
|
|
Navigation
News
|
 |
Finance Act 2002 (c. 23)(The document as of February, 2008) Page 4 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 | P.29 | P.30 | P.31 | P.32 | P.33 | P.34 | P.35 | P.36 | P.37 | P.38 | P.39 | P.40 | P.41 | P.42 " 179B Roll-over of degrouping charge on business assets(1) Where a company is treated by virtue of section 179(3) or (6) as having sold and immediately reacquired an asset at market value, relief under section 152 or 153 (roll-over relief on replacement of business assets) is available in accordance with this section in relation to any gain accruing to the company on the deemed sale. (2) For this purpose, sections 152 and 153 and the other enactments specified in Schedule 7AB apply with the modifications set out in that Schedule. (3) Where there has been an election under section 179A, any claim for relief available in accordance with this section must be made by company C rather than company A. (4) For this purpose, the enactments modified by Schedule 7AB have effect as if-- (a) references to company A, except those in sections 152(1)(a) and (1B), 153(1B), 153A(5), 159(1), 175 and 198(1), were to company C; (b) the references to "that company" in section 159(1) and "the company" in section 185(3)(b) were to company C; (c) the reference to "that trade" in section 198(1) were to a ring fence trade carried on by company C. (5) Where there has been an election under section 179A in respect of part only of the chargeable gain accruing on the deemed sale of an asset, the enactments modified by Schedule 7AB and subsections (3) and (4) above apply as if the deemed sale had been of a separate asset representing a corresponding part of the asset; and any necessary apportionments shall be made accordingly. (6) A reference in this section to company A or to company C is to the company referred to as such in section 179A. " . (2) After Schedule 7AA to the 1992 Act insert the Schedule 7AB set out in Schedule 7 to this Act. (3) In section 86(2) of the Finance Act 1993 (c. 34) (roll-over relief: power to amend section 155 of the 1992 Act by order), at the end add-- " Any such order may make such consequential amendments of Schedule 7AB as appear to the Treasury to be appropriate. " . (4) This section applies-- (a) in relation to a case where a company is treated by virtue of section 179(3) of the 1992 Act as having sold and immediately reacquired an asset, where the company's ceasing to be a member of the group in question happens on or after 1st April 2002; (b) in relation to a case where a company is so treated by virtue of section 179(6) of that Act, where the relevant time (within the meaning of that subsection) is on or after that date. 44 Exemptions for disposals by companies with substantial shareholding(1) In Chapter 1 of Part 6 of the Taxation of Chargeable Gains Act 1992 (c. 12) (provisions relating to chargeable gains of companies), after section 192 insert-- " Disposals by companies with substantial shareholding192A Exemptions for gains or losses on disposal of shares etcSchedule 7AC (exemptions for disposal of shares etc by companies with substantial shareholding) has effect. " . (2) Schedule 8 to this Act (exemptions for disposals by companies with substantial shareholding) has effect. In that Schedule--
(3) This section and Schedule 8 to this Act apply in relation to disposals on or after 1st April 2002. (4) Paragraph 38 of the Schedule 7AC inserted by that Schedule (degrouping: time when deemed sale and reacquisition treated as taking place) has effect where the time of degrouping or relevant time (as defined for the purposes of that paragraph) is on or after that date. (5) The amendment made by paragraph 2 of Schedule 8 to this Act has effect where the company in question ceases to be a member of the group in question on or after that date. 45 Share exchanges and company reconstructions(1) Schedule 9 to this Act (chargeable gains: share exchanges and company reconstructions) has effect. (2) In that Schedule--
46 Taper relief: holding period for business assets(1) In the table in section 2A(5) of the Taxation of Chargeable Gains Act 1992 (calculation of taper relief), for the first two columns (under the heading "Gains on disposals of business assets") substitute--
(2) This section applies to disposals on or after 6th April 2002. 47 Taper relief: minor amendmentsSchedule 10 to this Act contains minor amendments relating to taper relief under the Taxation of Chargeable Gains Act 1992 (c. 12). 48 Use of trading losses against chargeable gains(1) In section 72 of the Finance Act 1991 (c. 31) (use of trading losses against chargeable gains), in subsection (4) (which has the effect that the maximum amount of trading loss that may be so used is calculated by reference to the amount of chargeable gains after taper relief) for "disregarding section 3(1)" substitute "disregarding sections 2A (taper relief) and 3(1) (annual exempt amount)". (2) The amendment in subsection (1) has effect in relation to claims under that section in respect of trading losses sustained in the year 2004-05 or subsequent years of assessment, subject to the following provisions. (3) A person making a claim under section 72 of that Act in respect of a trading loss sustained in the year 2002-03 may elect that, for the purposes of the claim, the amendment made by subsection (1) above shall have effect-- (a) in relation to the chargeable gains accruing to him in the year 2001-02, (b) in relation to the chargeable gains accruing to him in the year 2002-03, or (c) in relation to the chargeable gains accruing to him in the year 2001-02 and the year 2002-03. (4) A person making a claim under that section in respect of a trading loss sustained in the year 2003-04 may elect that, for the purposes of the claim, the amendment made by subsection (1) above shall have effect-- (a) in relation to the chargeable gains accruing to him in the year 2002-03, (b) in relation to the chargeable gains accruing to him in the year 2003-04, or (c) in relation to the chargeable gains accruing to him in the year 2002-03 and the year 2003-04. (5) An election under subsection (3) or (4) must be made-- (a) in writing, (b) to an officer of the Board, (c) within the time for making a claim under section 72 of the Finance Act 1991 in respect of a trading loss sustained in the year 2002-03 or, as the case may be, the year 2003-04, and must specify the year or years of assessment in relation to the chargeable gains of which it is made. 49 Election to forgo roll-over relief on transfer of business(1) After section 162 of the Taxation of Chargeable Gains Act 1992 (c. 12) (roll-over relief on transfer of business) insert-- " 162A Election for section 162 not to apply(1) Section 162 shall not apply where the transferor makes an election under this section. (2) An election under this section must be made by a notice given to an officer of the Board no later than the relevant date. (3) Except where subsection (4) below applies, the relevant date is the second anniversary of the 31st January next following the year of assessment in which the transfer of the business took place. (4) Where, by the end of the year of assessment following the one in which the transfer of the business took place, the transferor has disposed of all the new assets, the relevant date is the first anniversary of the 31st January next following the year of assessment in which the transfer of the business took place. (5) For the purposes of subsection (4) above-- (a) a disposal of any of the new assets by the transferor shall be disregarded if it falls within section 58(1) (transfers between husband and wife); but (b) where a disposal of any assets to a person is disregarded by virtue of paragraph (a) above, a subsequent disposal by that person of any of those assets (other than a disposal to the transferor) shall be regarded as a disposal by the transferor. (6) All such adjustments shall be made, whether by way of discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to an election under this section. (7) Where, immediately before it was transferred, the business was owned by two or more persons-- (a) each of them has a separate entitlement to make an election under this section; (b) an election made by a person by virtue of paragraph (a) above shall apply only to-- (i) the share of the amount of the gain on the old assets, and (ii) the share of the new assets, that is attributable to that person for the purposes of this Act. (8) The reference in subsection (7) above to ownership by two or more persons includes, in Scotland as well as elsewhere in the United Kingdom, a reference to ownership by a partnership consisting of two or more persons. (9) Expressions used in this section and in section 162 have the same meaning in this section as in that one. But references in this section to new assets also include any shares or debentures that are treated by virtue of one or more applications of section 127 (including that section as applied by virtue of any enactment relating to chargeable gains) as the same asset as the new assets. " . (2) This section applies in relation to a transfer of a business on or after 6th April 2002. 50 Shares acquired on same day: election for alternative treatment(1) After section 105 of the Taxation of Chargeable Gains Act 1992 (c. 12) (disposal on or before day of acquisition of shares and other unidentified assets) insert-- " 105A Shares acquired on same day: election for alternative treatment(1) Subsection (2) below applies where an individual-- (a) acquires shares ("the relevant shares") of the same class, on the same day and in the same capacity, and (b) some of the relevant shares ("the approved-scheme shares") are shares acquired by him as a result of-- (i) the exercise of a qualifying option within the meaning of paragraph 1(1) of Schedule 14 to the Finance Act 2000 (enterprise management incentives) in circumstances where paragraph 44, 45 or 46 of that Schedule (exercise of option to acquire shares) applies, or (ii) the exercise of an option to which subsection (1) of section 185 of the Taxes Act (approved share option schemes) applies in circumstances where paragraphs (a) and (b) of subsection (3) of that section apply. (2) Where the individual first makes a disposal of any of the relevant shares, he may elect for subsections (3) to (5) below to have effect in relation to that disposal and all subsequent disposals of any of those shares. (3) In circumstances where section 105 applies, that section shall have effect as if-- (a) paragraph (a) of subsection (1) of that section required the approved-scheme shares to be treated as acquired by the individual by a single transaction separate from the remainder of the relevant shares (which shall also be treated by virtue of that paragraph as acquired by the individual by a single transaction), and (b) subsection (1) of that section required the approved-scheme shares to be treated as disposed of after the remainder of the relevant shares. (4) If the relevant shares include shares to which relief under Chapter 3 of Part 7 of the Taxes Act or deferral relief (within the meaning of Schedule 5B to this Act) is attributable-- (a) paragraph 4(4) of that Schedule has effect as if it required the approved-scheme shares falling within paragraph (a), (b), (c) or (d) of that provision to be treated as disposed of after the remainder of the relevant shares falling within the paragraph in question, and (b) section 299 of the Taxes Act has effect for the purposes of section 150A(4) below as if it required-- (i) the approved-scheme shares falling within paragraph (a), (b), (c) or (d) of subsection (6A) of section 299 of that Act to be treated as disposed of after the remainder of the relevant shares falling within the paragraph in question, and (ii) the approved-scheme shares to which subsection (6B) of that section applies to be treated as disposed of after the remainder of the relevant shares to which that subsection applies. (5) Where section 127 applies in relation to any of the relevant shares ("the reorganisation shares"), that section shall apply separately to such of those shares as are approved-scheme shares and to the remainder of the reorganisation shares (so that those approved-scheme shares and the remainder of the reorganisation shares are treated as comprised in separate holdings of original shares and identified with separate new holdings). (6) In subsection (5)-- (a) the reference to section 127 includes a reference to that section as it is applied by virtue of any enactment relating to chargeable gains, and (b) "original shares" and "new holding" have the same meaning as in section 127 or (as the case may be) that section as applied by virtue of the enactment in question. (7) For the purposes of subsection (1) above-- (a) any shares to which relief under Chapter 3 of Part 7 of the Taxes Act is attributable and which were transferred to an individual as mentioned in section 304 of that Act, and (b) any shares to which deferral relief (within the meaning of Schedule 5B to this Act), but not relief under that Chapter, is attributable and which were acquired by an individual on a disposal to which section 58 above applies, shall be treated as acquired by the individual on the day on which they were issued. (8) In this section the references to Chapter 3 of Part 7, section 299 and section 304 of the Taxes Act shall be read as references to those provisions as they apply to shares issued after 31st December 1993 (enterprise investment scheme). 105B Provision supplementary to section 105A(1) The provisions of section 105A have effect in the case of any disposal notwithstanding that some or all of the securities disposed of are otherwise identified-- (a) by the disposal, or (b) by a transfer or delivery giving effect to it. (2) An election must be made, by a notice given to an officer of the Board, on or before the first anniversary of the 31st January next following the year of assessment in which the individual first makes a disposal of any of the relevant shares. (3) Where-- (a) an election is made in respect of the relevant shares, and (b) any shares ("the other shares") acquired by the individual on the same day and in the same capacity as the relevant shares cease to be treated under section 104(4) as shares of a different class from the relevant shares, the election shall have effect in respect of the other shares from the time they cease to be so treated. (4) In determining for the purposes of section 105A(2) and subsection (2) above whether the individual has made a disposal of any of the relevant shares, sections 122(1) and 128(3) shall be disregarded. (5) No election may be made in respect of ordinary shares in a venture capital trust. For this purpose "ordinary shares" has the meaning given in section 151A(7). (6) For the purposes of section 105A, shares in a company shall not be treated as being of the same class unless they are so treated by the practice of a recognised stock exchange, or would be so treated if dealt with on that recognised stock exchange. (7) In section 105A(2) to (5) and subsections (2) to (4) above, any reference to the relevant shares or to the approved-scheme shares includes a reference to the securities (if any) directly or indirectly derived from the shares in question by virtue of one or more applications of section 127 (including that section as applied by virtue of any enactment relating to chargeable gains). (8) In this section--
and in subsection (4) the reference to section 128(3) includes a reference to that provision as it is applied by virtue of any enactment relating to chargeable gains. " . (2) The amendment made by subsection (1) has effect in relation to shares acquired by an individual on or after 6th April 2002. (3) For this purpose-- (a) any shares to which relief under Chapter 3 of Part 7 of the Taxes Act 1988 is attributable and which were transferred to an individual as mentioned in section 304 of that Act, and (b) any shares to which deferral relief (within the meaning of Schedule 5B to the Taxation of Chargeable Gains Act 1992 (c. 12)), but not relief under that Chapter, is attributable and which were acquired by an individual on a disposal to which section 58 of that Act applies, shall be treated as acquired by the individual on the day on which they were issued. (4) In subsection (3)(a), the references to Chapter 3 of Part 7 and section 304 of the Taxes Act 1988 shall be read as references to those provisions as they apply to shares issued after 31st December 1993 (enterprise investment scheme). 51 Deduction of personal losses from gains treated as accruing to settlorsSchedule 11 to this Act (deduction of personal losses from gains treated as accruing to settlors) has effect. 52 Capital gains tax: variation of dispositions taking effect on death(1) In section 62(7) of the Taxation of Chargeable Gains Act 1992 (c. 12) (election to treat subsequent variation of dispositions taking effect on death as if effected by deceased) for the words from "unless" to the end of the subsection substitute "unless the instrument contains a statement by the persons making the instrument to the effect that they intend the subsection to apply to the variation.". (2) This section applies in relation to instruments made on or after 1st August 2002. New reliefs53 Tax relief for expenditure on research and development(1) Schedule 12 to this Act has effect for accounting periods ending on or after 1st April 2002. (2) In that Schedule--
54 Tax relief for expenditure on vaccine research etc(1) Schedule 13 to this Act (which makes provision for tax relief for companies' expenditure on vaccine research etc) has effect. (2) Schedule 14 to this Act (which makes provision consequential on Schedule 13) has effect. 55 Gifts of medical supplies and equipment(1) This section applies where, for humanitarian purposes, a company makes a gift from trading stock of medical supplies, or medical equipment, for human use. (2) For the purposes of the Tax Acts, no amount shall be required to be brought into account as a trading receipt of the company in consequence of the making of the gift. (3) Any costs of transportation, delivery or distribution incurred by the company in making the gift may be deducted in computing for the purposes of corporation tax the profits of the company's trade for the accounting period in which the costs are incurred. (4) In any case where-- (a) relief is given under subsection (2) in respect of the making of a gift and any benefit received in any accounting period by the company or any connected person is in any way attributable to the making of that gift, or (b) relief is given under subsection (3) and any benefit so received is in any way attributable to the company's incurring of the costs referred to in that subsection, the company shall in respect of that period be charged to corporation tax under Case I of Schedule D or, if the company is not chargeable to corporation tax under that Case for that period, under Case VI of Schedule D on an amount equal to the amount of that benefit. (5) Section 839 of the Taxes Act 1988 (connected persons) applies for the purposes of subsection (4). (6) The Treasury may by order provide that this section is not to have effect in relation to medical supplies or medical equipment of such descriptions as may be specified in the order. (7) This section has effect in relation to gifts made on or after 1 April 2002. 56 R&D tax relief for small and medium-sized enterprises: minor and consequential amendmentsSchedule 15 to this Act (which makes minor amendments to Schedule 20 to the Finance Act 2000 (tax relief for R&D expenditure of small and medium-sized enterprises), including amendments consequential on Schedules 12 and 13 to this Act) has effect for accounting periods ending on or after 1st April 2002. 57 Community investment tax relief(1) Schedule 16 to this Act (community investment tax relief) has effect. (2) Schedule 17 to this Act (which makes provision consequential on the introduction of community investment tax relief) has effect. (3) Schedules 16 and 17 shall come into force on such day as the Treasury may by order appoint. (4) On and after that day-- (a) Schedule 16 shall have effect in relation to-- (i) investments made on or after such day as the Treasury may so appoint, being a day not earlier than 17th April 2002, and (ii) claims made on or after such day as the Treasury may so appoint, (b) paragraphs 2 to 4 of Schedule 17 shall have effect for years of assessment ending on or after the day appointed under paragraph (a)(i), and (c) paragraph 5 of that Schedule shall have effect for accounting periods ending on or after that day. 58 Relief for community amateur sports clubs(1) Schedule 18 to this Act (relief for community amateur sports clubs) has effect. (2) Parts 1, 5 and 6 of that Schedule shall be deemed to have come into force on 1st April 2002. Accordingly, an application under that Schedule by a club to be registered as a community amateur sports club may be granted with effect from that date or any subsequent date before the passing of this Act. (3) Parts 2 and 4 of that Schedule have effect in relation to accounting periods ending on or after 1st April 2002. (4) Part 3 of that Schedule has effect in relation to gifts made on or after 6th April 2002. Capital allowances and related matters59 Cars with low carbon dioxide emissionsSchedule 19 to this Act (first-year allowances in respect of expenditure on cars with low CO2 emissions and exemption from single asset pool rules) has effect in relation to expenditure incurred on or after 17th April 2002. 60 Expense of hiring cars with low carbon dioxide emissions(1) In section 578A of the Taxes Act (expenditure on car hire) after subsection (2) (cars to which section 578A applies) insert-- " (2A) This section does not apply to the hiring of a car, other than a motorcycle, if-- (a) it is an electrically-propelled car, or (b) it is a car with low CO2 emissions. (2B) In subsection (2A) above--
(2) The amendment made by this section has effect in relation to expenditure-- (a) which is incurred on or after 17th April 2002 on the hiring of a car which is first registered on or after that date, and (b) which is incurred on the hiring of a car, for a period of hire which begins on or before 31st March 2008, under a contract entered into on or before 31st March 2008. 61 Plant or machinery for gas refuelling station: first-year allowancesSchedule 20 to this Act (first-year allowances in respect of expenditure on plant or machinery for gas refuelling station) has effect in relation to expenditure incurred on or after 17th April 2002. 62 Expenditure on green technologies: leasing(1) In section 46 of the Capital Allowances Act 2001 (c. 2) (general exclusions affecting first-year qualifying expenditure) after subsection (4) (which is inserted by Schedule 19) insert-- " (5) General exclusion 6 does not prevent expenditure being first-year qualifying expenditure under section 45A, 45D or 45E. " . (2) The amendment made by this section has effect in relation to expenditure incurred on or after 17th April 2002. 63 First-year allowances for expenditure wholly for a ring fence trade(1) Schedule 21 to this Act shall have effect. (2) In that Schedule-- (a) Part 1 makes provision for and in connection with first-year allowances under Part 2 of the Capital Allowances Act 2001 in respect of expenditure incurred by a company on the provision of plant or machinery for use wholly for the purposes of a ring fence trade chargeable to tax under section 501A of the Taxes Act 1988 (inserted by section 91 of this Act); and (b) Part 2 makes provision for and in connection with first-year allowances under Part 5 of that Act (mineral extraction allowances) in respect of expenditure incurred by a company wholly for the purposes of such a trade. (3) The amendments made by that Schedule have effect in relation to expenditure incurred on or after 17th April 2002. Computation of profits64 Adjustment on change of basis(1) The provisions of Schedule 22 to this Act have effect as to the adjustment or adjustments to be made for tax purposes where-- (a) there is, from one period of account to the next of a trade, profession or vocation, a change of basis in computing profits for the purposes of Case I or II of Schedule D, (b) the old basis accorded with the law or practice applicable in relation to the period of account before the change, and (c) the new basis accords with the law and practice applicable in relation to the period of account after the change. For the purposes of paragraphs (b) and (c) the practice applicable in any case means the accepted practice in cases of that description as to how profits should be computed for the purposes of Case I or II of Schedule D. (2) A "change of basis" means-- (a) a relevant change of accounting approach, or (b) a change in the tax adjustments applied. (3) A "relevant change of accounting approach" means a change of accounting principle or practice that, in accordance with generally accepted accounting practice, gives rise to a prior period adjustment. (4) A "tax adjustment" means any such adjustment as is mentioned in section 42(1) of the Finance Act 1998 (c. 36) (adjustments required or authorised by law in computing profits for tax purposes). (5) A "change in the tax adjustments applied"-- (a) does not include a change made in order to comply with amending legislation not applicable to the previous period of account, but (b) includes a change resulting from a change of view as to what is required or authorised by law, or as to whether any adjustment is so required or authorised. (6) The provisions of this section and Schedule 22 to this Act have effect in place of the provisions of section 44 of, and Schedule 6 to, the Finance Act 1998 (c. 36). 65 Postponement of change to mark to market in certain cases(1) This section applies in relation to the computation in accordance with the provisions of Case I of Schedule D of the profits of the insurance business, other than life assurance business, of-- (a) an insurance company, (b) a corporate member of Lloyd's, or (c) a controlled foreign company. (2) For periods of account to which this section applies nothing in-- (a) section 70 of the Taxes Act 1988 (assessment to corporation tax on full amount of profits, etc), or (b) section 42 of the Finance Act 1998 (c. 36) (computation of profits to be on basis giving true and fair view), prevents the company from computing the profits of that business on a realisation basis rather than a mark to market basis. A "realisation basis" means not recognising a profit or loss on an asset until it is realised, and a "mark to market basis" means bringing assets into account in each period of account at a fair value. (3) Subject to subsection (4), this section applies in relation to any period of account that-- (a) began before 1st August 2001, and (b) ends before 31st July 2002. (4) This section does not apply if-- (a) an earlier period of account beginning on or after 1st January 2001 ended with an accounting date different from that with which the previous period of account ended, (b) the change of accounting date was notified-- (i) to the registrar of companies, or (ii) in the case of a company established under the law of a country or territory outside the United Kingdom, to the corresponding authority of that country or territory, on or after 17th April 2002, and (c) the purpose, or one of the purposes, for which the change was made was so that a subsequent period of account would be one to which section 64 above applies (computation of profits: adjustment on change of basis). (5) In this section--
66 Election to continue postponement of mark to market(1) Where section 65 (postponement of change to mark to market in certain cases) applies in relation to a period of account, the company may elect that it shall continue to apply in relation to subsequent periods of account as regards assets held by it on 1st January 2002. Any such election must be made within twelve months after the end of the accounting period of the company current on that date. (2) An insurance company that carries on both long-term business and business other than long-term business may make an election under this section limited to assets held by the company otherwise than in the company's long-term insurance fund. (3) For the purpose of determining whether an election under this section applies to an asset in a case where-- (a) assets are realised by the company in an accounting period beginning on or after 1st January 2002, (b) the assets are of such a kind that the particular assets realised are not readily identifiable, (c) the realisation does not exhaust the company's holding, and (d) some but not all of the company's holding was acquired after 1st January 2002, assets realised shall be identified with assets acquired on the same basis as that used by the company for accounting purposes, unless the basis used by the company is "last in, first out" in which case assets realised shall be identified with assets acquired on or before 1st January 2002 in priority to assets acquired after that day. (4) Where a company has made an election under this section and-- (a) an asset in relation to which the election has effect is transferred to another company ("the transferee company") in pursuance of a transfer scheme, and (b) immediately after the transfer either-- (i) the transferee company is resident in the United Kingdom, or (ii) the asset is held for the purposes of a business carried on by the transferee company in the United Kingdom through a branch or agency, this section applies as if the transferee company had made an election under this section in relation to that asset. (5) In this section--
| |
Other
|