Mr.
Timms: I beg to move amendment 114, in
schedule 15, page 161, leave out line 9 and
insert— ‘(b) the lower
of— (i) the total
disallowed amount, and (ii) the
tested income
amount.’.
The
Chairman: With this it will be convenient to discuss the
following: Government amendments 117 to
124. Amendment
52, in
schedule 15, page 168, line 18, after
‘A’, insert ‘or condition
B’. Amendment
53, in
schedule 15, page 168, line 20, after
‘A’, insert ‘or condition
B’. Government
amendment
125. Amendment
54, in
schedule 15, page 170, line 19, leave
out ‘from the finance
arrangement’. Amendment
55, in
schedule 15, page 171, line 10, leave
out ‘an investment company’ and insert ‘a company
with investment
business’. Amendment
56, in
schedule 15, page 171, line 11, leave
out ‘4 of ICTA’ and insert ‘16 of CTA
2009’. Amendment
57, in
schedule 15, page 171, line 17, leave
out ‘75 of ICTA’ and insert ‘1219 of CTA
2009’. Government
amendments 128 and
129. Amendment
58, in
schedule 15, page 172, line 25, leave
out from first ‘that’ to first ‘a’ in line
26 and insert ‘is referable
to’. Amendment
60, in
schedule 15, page 173, line 1, leave
out from first ‘that’ to first ‘a’ in line
2 and insert ‘is referable
to’. Government
amendments 130 to 137, 140 to 149 and
154.
Mr.
Timms: This is a rather large set of Government
amendments, all of them necessary to address issues arising in respect
of the debt cap calculation, and to ensure that the debt cap achieves
its policy aims in particular areas.
Amendment 114
concerns limiting the amount of financing income that can be exempted.
Amendment 154 concerns the finance expense and income
accrued before the introduction of debt cap rules. Amendments 130, 132
to 134, 140, 141 and 149 relate to capitalised borrowing
costs.
There are
amendments relating to the exclusion of some expenses or income from
the debt cap calculations. Amendment 124 applies to real estate
investment trusts, for which it has been the intention, from the
outset, to exempt from corporation tax.
Amendments
117 and 118 relate to group treasury companies, amendments 119 to 123
to group treasury services and amendment 129 to already exempt
non-departmental public bodies.
In addition
to the Government amendments, there are a number of Opposition
amendments. I shall be happy to respond to the hon. Member for Fareham
after he speaks to them.
5.30
pm
Mr.
Hoban: Before I move on to my amendments, I want to raise
a question that has been put to me about the group treasury exemption.
The Minister will doubtless be aware that in a number of groups,
trading companies will participate in a cash pooling arrangement
whereby balances are swept from that company into a central account
overnight and transferred back. Such arrangements are considered
necessary to undertake treasury activities. The income would then be
allocated to that company. One of the concerns expressed to me is that,
in such a situation, the trading income is likely to swamp the treasury
income and probably would also swamp the income of the pure treasury
company within a group in such a way that no group company would be
able to qualify as a group treasury
company. It
has been suggested that paragraph 42(6) should be amended so that
whereas at present it includes any company that undertakes treasury
activities for the worldwide group, whether or not it also undertakes
other activities, that should be replaced with the exclusion
“except where
the main activity of that company is conducting
trade.”
That would reflect the
fact that people may be undertaking cash pooling operations as an
adjunct to the trading activity, and might be a way of ensuring that
the very valuable exemption for group treasury companies is capable of
being taken advantage of in those companies in which there are cash
pooling
arrangements. I
come now to my own amendments. Amendments 52 and 53 are quite simple. I
shall explain the issue that I am trying to address. Paragraph 39 of
schedule 15 defines “financing expense amounts” to
include loan relationship debits—condition A—finance
lease rentals, which is condition B, and costs payable on debt
factoring, which is condition C. The definition of finance income
amounts of the company includes income arising from similar
transactions. For
companies engaged in oil extraction activities, finance expense takes
into account amounts that are limited to loan relationship debits, and
financing income takes into account only loan relationship credits. Is
there a reason why companies involved in oil extraction should not be
able to bring into account expenses and income relating to finance
lease rentals—condition B? I should be grateful for the
Minister’s comments on
that. With
regard to amendment 54, sub-paragraph (6) of paragraph 47 on page 170
provides for the conditions in the provision to apply to elections
relating to finance expenses. It relates to carrying forward
non-trading deficits “from the finance arrangement”. My
understanding
is that that is technically incorrect and should be amended. Deficits
under the loan relationship regime are not specific to a relationship;
they are part of a general
calculation. Amendment
55 is another fairly technical amendment. The rules that applied to the
expenses of management of investment companies in part IV of the Income
and Corporation Taxes Act 1988 were amended in 2004 to apply to
companies with investment business as opposed to just
“investment companies”. My amendment would insert the
more up-to-date
language. Amendments
56 and 57 are drafting amendments. The references are to the Income and
Corporation Taxes Act 1988. That has now been rewritten through the
Corporation Tax Act 2009 and my amendments would make the
cross-reference to the 2009 Act rather than the 1988 Act. The draft
legislation that was published in December last year did not take into
account the fact that there needs to be a proper cross-reference to the
new
Act. Amendments
58 and 60 relate to the definitions in paragraphs 52 and 53 of the
tested expense amount and the tested income amount of relevant group
companies. The amounts covered by the definitions are not supposed to
refer to periods when a company is not a member of the group. However,
the relevant provisions refer to transactions that take place when a
company is not a member of the relevant group and do not take account
of the fact that either the income or the expense amount are calculated
with reference to entries in the accounts which would normally be
determined on an accruals basis. The amendments are designed to ensure
that the accrued amounts are taken into account or excluded from the
two definitions of tested income amount and tested expense amount, as
appropriate. Amendment
59 is another drafting amendment. The suggestion is that the
definitions should refer to the whole of the schedule rather than
simply to part 7. I would be grateful for the Minister’s
clarification of whether the drafting in the Bill is correct, or
whether it should refer to the schedule rather than the
part.
Mr.
Timms: I am grateful to the hon. Gentleman for several of
the amendments that he has proposed, and I would be happy to accept
some of them. It always was our intention, as I mentioned earlier, to
exclude companies undertaking oil exploration activities that are
subject to specific rules from the scope of the debt cap. There was a
drafting oversight, and so the provisions do not exclude finance lease
charges from the operation of the debt cap. Amendments 52 and 53 put
that right. I am grateful to the hon. Gentleman for them and am happy
to accept
them. Amendment
54 is also helpful. It removes an erroneous limitation on identifying
the deficits that can be used to determine the amount of finance
expense that can be excluded from the calculation under the debt cap. I
tabled an amendment that was identical in form but that was not
selected. Therefore, I am delighted to accept amendment 54 and again am
grateful to the hon. Gentleman for tabling
it. On
amendments 55 and 56, other rules in the current clauses deal similarly
with excluding financing expense amounts that are payable to group
companies with excess management expenses. The rules incorrectly refer
to legislation in ICTA rather than CTA 2009, as is now appropriate
following consolidation. I am grateful to
Opposition Members for picking up on that point and for tabling
amendment 57. However, as it does not include the whole of the
cross-reference required, I would be grateful if the hon. Gentleman did
not press it. Amendments 55 and 56 do insert the correct
cross-references. The
hon. Member for Fareham spoke to amendments 58 and 60, which
relate to Government amendments 135 to 137. Some groups have interests
in companies that are not controlled by the group, but the group is
nevertheless entitled to more than 75 per cent. of the profits of those
companies. Such a company will not form part of the group for
accounting purposes, so its results will not be included in the
group’s consolidated financial statements. At the moment, such a
company would be treated as a member of the group for the purposes of
calculating the UK measure of net finance expenses. Government
amendment 137 ensures that such a company will be included in the UK
measure of net finance expenses only if it is a member of the group for
accounting purposes.
The draft
clauses as published also contain a rule in paragraph 62(2) that was
intended to deal with a particular consequence affecting the general
partner of a partnership that owns UK companies. That rule is now
redundant due to amendment 137 and could provide avoidance planning
opportunities if not removed, so amendments 135 and 136 will
remove the measures.
Amendments 58
and 60 are intended to deal with a concern about the finance expense
amounts payable and financing income amounts receivable by a UK group
company that relates to a period before or after that company is a
member of the group. The concern is, for example, that where an amount
of financing income relating to a loan made by a UK company before it
joined a group continues to be received by the company when it is a
member of the group, financing income would not be taken into account
in applying the debt cap rules.
I do not
agree that the current rules provide for that outcome. Although
different statutory language might achieve the same result, I do not
think that the amendments are successful. However, it might be helpful
for me to put on record a reassurance that the rules in
paragraphs 52(3) and 53(3) are intended to work so that only
finance expense amounts and financing income amounts that accrue to a
UK company while it is a member of the group under consideration are
taken into account when calculating any disallowance of finance
expenses and any exemption of financing income for the purposes of the
debt cap. I hope that on the basis of that reassurance, the hon.
Gentleman will feel able to withdraw his amendments. Amendment 59 was
dealt with under schedule 14 and accepted this
morning. Finally,
the hon. Gentleman expressed a concern at the beginning of his remarks
that there was a danger of trading income swamping treasury income in
group treasury companies. I do not think that there is a problem,
because the amendments proposed ensure that activities traditionally
undertaken by treasury companies can be excluded. That includes
receiving deposits, making loans, managing cash management schemes and
investing surplus funds. In that way, the danger about which he was
concerned has been dealt
with. Amendment
114 agreed to.
Mr.
Timms: I beg to move amendment 115, in
schedule 15, page 161, line 38, at
end
insert— ‘Balancing
payments between group companies: no charge to, or relief from,
tax 31A (1) This paragraph applies
where— (a) one or more
financing income amounts of a company (“company A”) for
the relevant period of account
are— (i) by virtue of
paragraph 27, not brought into account,
or (ii) by virtue of paragraph
30, reduced, (b) one or more
financing expense amounts of another company (“company
B”) for the relevant period of account
are— (i) by virtue of
paragraph 15, not brought into account,
or (ii) by virtue of paragraph
18, reduced, (c) company A
makes one or more payments (“the balancing payments”) to
company B, and (d) the sole or
main reason for making the balancing payments is that the conditions in
paragraphs (a) and (b) are
met. (2) To the extent that the
sum of the balancing payments does not exceed the amount specified in
sub-paragraph (3), those
payments— (a) are not to
be taken into account in computing profits or losses of either company
A or company B for the purposes of corporation tax,
and (b) are not to be regarded
as distributions for any of the purposes of the Corporation Tax
Acts. (3) The amount referred
to in sub-paragraph (2) is the lower
of— (a) the sum of the
financing income amounts mentioned in sub-paragraph (1)(a),
and (b) the sum of the
financing expense amounts mentioned in sub-paragraph
(1)(b).’. The
amendment aims simply to ensure that balancing payments made within a
group are done in a tax-neutral way. The amendment allows businesses to
act as they see fit with regard to compensatory payments and ensure
that tax law does not intervene. I hope that the amendment will be
widely accepted across the Committee.
Amendment
115 agreed
to. Amendments
made: 116, in schedule 15, page 165, line 18, at end
insert— ‘Part
5A Anti-avoidance Schemes
involving manipulation of rules in Part
2 38A (1) A period of account of the
worldwide group that, apart from this paragraph, is not within
paragraph 2(1) is treated as within that provision if conditions A to C
are met. (2) Condition A is
that— (a) at any time
before the end of the period, a scheme is entered into,
and (b) if the scheme had not
been entered into, the period would have been within paragraph
2(1). (3) Condition B is that
the main purpose, or one of the main purposes, of any party to the
scheme on entering into the scheme is to secure that the period is not
within paragraph 2(1). (4)
Condition C is that the scheme is not an excluded
scheme. Schemes
involving manipulation of rules in Parts 3 and
4 38B (1) Where conditions A to C are
met in relation to a period of account of the worldwide group
(“the relevant period of account”), the tested expense
amount, the tested income amount and the available amount for the
period are to be calculated in accordance with paragraph
38D.
(2) Condition A is
that— (a) at any time
before the end of the relevant period of account, a scheme is entered
into, and (b) the main purpose,
or one of the main purposes, of any party to the scheme on entering
into it is to secure that the amount of the relevant net deduction
(within the meaning given by paragraph 38C) is lower than it would be
if that amount were calculated in accordance with paragraph
38D. (3) Condition B is that a
result of the scheme is
that— (a) the sum of the
profits of UK group companies that arise in relevant accounting periods
and that are chargeable to corporation tax is less than it would be if
that sum were determined in accordance with paragraph 38D,
or (b) the sum of the losses of
UK group companies that arise in relevant accounting periods (other
than any taken into account in calculating profits within paragraph
(a)) and that are capable of being a carried-back amount or a
carried-forward amount is higher than it would be if that sum were
determined in accordance with paragraph
38D. (4) Condition C is that
the scheme is not an excluded
scheme. (5) In a case
where— (a) a profit or
loss arises in an accounting period of a UK group company,
and (b) a proportion of that
period does not fall within the relevant period of
account, the profit or loss is
to be reduced, for the purposes of condition B, by the same
proportion. Meaning
of “relevant net
deduction” 38C (1) In paragraph
38B(2) the “relevant net deduction”
means— (a) the amount by
which the total disallowed amount exceeds the tested income amount,
or (b) if the total disallowed
amount does not exceed the tested income amount,
nil. (2) In this paragraph the
“total disallowed amount”
means— (a) the amount by
which the tested expense amount exceeds the available amount,
or (b) if the tested expense
amount does not exceed the available amount,
nil. Calculation
of amounts 38D (1) References in
paragraph 38B to the calculation of any amount or sum in accordance
with this paragraph are to the calculation of that amount or sum on the
following assumptions. (2) The
assumptions are
that— (a) the scheme in
question was not entered into,
and (b) instead, anything that
it is more likely than not would have been done or not done had this
Schedule not had effect in relation to the relevant period of account,
was done or not
done. Meaning of
“carried-back amount” and “carried-forward
amount” 38E (1) In paragraph
38B “carried-back amount”
means— (a) an amount
carried back under section 393A(1)(b) of ICTA (trading
losses), (b) an amount carried
back by virtue of a claim under section 459(1)(b) of CTA 2009
(non-trading deficits from loan relationships),
or (c) an amount carried back
under section 389(2) of CTA 2009 (deficits of insurance
companies). (2) In paragraph
38B “carried-forward amount”
means— (a) an amount
carried forward under section 76(12) or (13) of ICTA (certain expenses
of insurance companies), (b) an
amount carried forward under section 392A(2) or (3) of ICTA (UK
property business losses),
(c) an amount carried forward under section
392B(1)(b) of ICTA (overseas property business
losses), (d) an amount carried
forward under section 393(1) of ICTA (trading
losses), (e) an amount carried
forward under section 396(1) of ICTA (losses from miscellaneous
transactions), (f) an amount
carried forward under section 436A(4) of ICTA (insurance companies:
losses from gross roll-up
business), (g) an amount
carried forward under section 8(1)(b) of TCGA 1992 (allowable
losses), (h) an amount carried
forward under section 391(2) of CTA 2009 (deficits of insurance
companies), (i) an amount
carried forward under section 457(3) of CTA 2009 (non-trading deficits
from loan relationships), (j)
an amount carried forward under section 753(3) of CTA 2009 (non-trading
loss on intangible fixed
assets), (k) an amount carried
forward under section 925(3) of CTA 2009 (patent income: relief for
expenses), or (l) an amount
carried forward under section 1223 of CTA 2009 (expenses of management
and other
amounts). Schemes
involving manipulation of rules in Part
5 38F (1) This paragraph applies to a
financing income amount of a company received during a period of
account of the worldwide group
if— (a) apart from this
paragraph, the financing income amount would, by virtue of paragraph
32, not be brought into account for the purposes of corporation
tax, and (b) conditions A to C
are met. (2) Condition A is
that, at any time before the financing income amount is received, a
scheme is entered into that secures that any of the conditions in
sub-paragraphs (2) to (4) of paragraph 32 (“the relevant
paragraph 32 condition”) is met in relation to the
amount. (3) Condition B is that
the purpose, or one of the main purposes, of any party to the scheme on
entering into the scheme is to secure that the relevant paragraph 32
condition is met. (4) Condition
C is that the scheme is not an excluded
scheme. (5) Where this
paragraph applies to a financing income amount, the relevant paragraph
32 condition is treated as not met in relation to the
amount. (6) Paragraph 38
(meaning of references to a “financing income amount” of
a company) applies for the purposes of this
paragraph. Meaning
of “scheme” and “excluded
scheme” 38G (1) For the
purposes of this Part “scheme” includes any scheme,
arrangements or understanding of any kind whatever, whether or not
legally enforceable, involving a single transaction or two or more
transactions. (2) For the
purposes of this Part a scheme is “excluded” if it is of
a description specified in regulations made by the
Commissioners. (3) Regulations
under sub-paragraph (2) may make different provision for different
purposes.’. Amendment
117, in
schedule 15, page 167, line 11, leave
out ‘is’ and insert
‘, and all other amounts that are
relevant amounts in respect of the group treasury company and the
relevant period,
are’. Amendment
118, in
schedule 15, page 167, line 13, leave
out ‘this purpose’ and insert
‘the purposes of this paragraph in
respect of the relevant period’.
Amendment 119,
in
schedule 15, page 167, line 15, at
end insert— ‘(3A)
If two or more members of the worldwide group are group treasury
companies in the relevant period, an election under this paragraph made
by any of them is not valid unless each of them makes such an election
in respect of the relevant period before the end of the 3 year period
mentioned in sub-paragraph
(3).’. Amendment
120, in
schedule 15, page 167, line 25, leave
out ‘not UK companies’ and insert
‘neither UK group companies nor
relevant group
companies’. Amendment
121, in
schedule 15, page 167, line 28, leave
out ‘that are UK companies’ and insert
‘each of which is either a UK
group company or a relevant group
company’. Amendment
122, in
schedule 15, page 167, line 38, leave
out ‘and’ and
insert— ‘(ca) subscribing
for or holding shares in another company which is a UK group company
and a group treasury
company, (cb) investing in debt
securities,
and’. Amendment
123, in
schedule 15, page 168, line 6, at
end insert— ‘“debt
security” has the same meaning as in the FSA
Handbook.’. Amendment
124, in
schedule 15, page 168, line 13, at
end
insert— ‘Real
estate investment trusts 42A (1) This
paragraph applies where, apart from this paragraph, an amount
(“the relevant amount”)
is— (a) a financing
expense amount of a company by virtue of meeting condition A in
paragraph 39, or (b) a
financing income amount of a company by virtue of meeting condition A
in paragraph 40. (2) The
relevant amount is treated as not being a financing expense amount or a
financing income amount of the company if the finance arrangement is
one to which section 211 of CTA 2009 does not apply by virtue of
section 120(3)(a) of FA 2006.’.—(Mr.
Timms.) Amendment
52, in
schedule 15, page 168, line 18, after
‘A’, insert ‘or condition
B’. Amendment
53, in
schedule 15, page 168, line 20, after
‘A’, insert ‘or condition
B’.—(Mr.
Hoban.) Amendment
125, in
schedule 15, page 170, line 3, at
end insert— ‘(7) The
Commissioners may by regulations make provision (including provision
conferring a discretion on the Commissioners) about circumstances in
which regulations under sub-paragraph (4) are not to apply in relation
to the finance arrangements.’. —(Mr.
Timms.) Amendment
54, in
schedule 15, page 170, line 19, leave
out ‘from the finance
arrangement’.. Amendment
55, in
schedule 15, page 171, line 10, leave
out ‘an investment company’ and insert ‘a company
with investment
business’. Amendment
56, in
schedule 15, page 171, line 11, leave
out ‘4 of ICTA’ and insert ‘16 of CTA
2009’.—(Mr.
Hoban.) Amendment
128, in
schedule 15, page 171, line 17, leave
out ‘75 of ICTA (expenses of management: companies with
investment business)’ and insert
‘1219 of CTA 2009 (expenses of
management of a company’s investment
business)’.
Amendment 129,
in
schedule 15, page 171, line 42, at
end
insert— ‘Charities 50A
(1) This paragraph applies where, apart from this paragraph, an amount
(“the relevant amount”) is a financing expense amount of
a company by virtue of meeting condition A, B or C in paragraph
39. (2) The relevant amount is
treated as not being a financing expense amount of the company if the
creditor is a charity. (3) In
this
paragraph— “charity”
means any body of persons or trust established for charitable purposes
only; “creditor”
means— (c) in a case
where the relevant amount is a debit that meets condition A in
paragraph 39, the loan creditor who receives the payment in relation to
which the relevant amount
arises; (d) in a case where the
relevant amount meets condition B or C in paragraph 39, the recipient
of the payment in relation to which the relevant amount
arises. Educational
and public bodies 50B (1) This
paragraph applies where, apart from this paragraph, an amount
(“the relevant amount”) is a financing expense amount of
a company by virtue of meeting condition A, B or C in paragraph
39. (2) The relevant amount is
treated as not being a financing expense amount of the company if the
creditor is— (a) a
designated educational
establishment, (b) a health
service body, (c) a local
authority, or (d) a person that
is prescribed, or is of a description of persons prescribed, in an
order made by the Commissioners for the purposes of this
paragraph. (3) The
Commissioners may not prescribe a person, or a description of persons,
for the purposes of this paragraph unless they are satisfied that the
person, or each of the persons within the description, has functions
some or all of which are of a public
nature. (4) In this
paragraph— “creditor”
means— (e) in a case
where the relevant amount is a debit that meets condition A in
paragraph 39, the loan creditor who receives the payment in relation to
which the relevant amount
arises; (f) in a case where the
relevant amount meets condition B or C in paragraph 39, the recipient
of the payment in relation to which the relevant amount
arises; “designated
educational establishment” has the same meaning as in section
105 of CTA 2009; “health
service body” has the same meaning as in section 519A of
ICTA.’.—(Mr.
Timms.) Amendment
59, in
schedule 15, page 172, line 33, leave
out ‘Part’ and insert
‘Schedule’.—(Mr.
Hoban.) Amendment
130, in
schedule 15, page 173, line 24, leave
out ‘income statement’ and insert ‘financial
statements’. Amendment
131, in
schedule 15, page 173, line 36, leave
out
‘redeemable’. Amendment
132, in
schedule 15, page 174, line 2, leave
out ‘income statement’ and insert ‘financial
statements’. Amendment
133, in
schedule 15, page 174, line 14, leave
out ‘income statement’ and insert ‘financial
statements’. Amendment
134, in
schedule 15, page 174, line 33, leave
out ‘income statement’ and insert ‘financial
statements’.
Amendment 135,
in
schedule 15, page 175, line 30, leave
out sub-paragraph
(2). Amendment
136, in schedule 15, page 175, leave out
lines 36 to
39. Amendment
137, in
schedule 15, page 178, line 13, after
‘if’ insert ‘the company is a
member of the worldwide group
and’. Amendment
138, in
schedule 15, page 178, line 20, leave
out sub-paragraph
(7). Amendment
139, in
schedule 15, page 178, line 28, leave
out sub-paragraph
(9). Amendment
140, in
schedule 15, page 178, line 35, leave
out ‘or an income statement of the worldwide
group’. Amendment
141, in
schedule 15, page 178, line 37, leave
out sub-paragraph
(3). Amendment
142, in
schedule 15, page 179, line 3, leave
out from ‘not’ to ‘and’ in line 4 and
insert
‘acceptable’. Amendment
143, in
schedule 15, page 179, line 10, leave
out sub-paragraph (3) and
insert— ‘(3) For the
purposes of this paragraph financial statements are
“acceptable”
if— (a) they are drawn
up in accordance with international accounting
standards, (b) they meet such
conditions relating to accounting standards, or accounting principles
or practice, as may be specified in regulations made by the
Commissioners, or (c)
conditions A to C are
met.’. Amendment
144, in
schedule 15, page 179, line 18, leave
out ‘of the worldwide group for the
period’. Amendment
145, in
schedule 15, page 179, line 20, after
second ‘the’ insert
‘same’. Amendment
146, in
schedule 15, page 179, line 25, leave
out from ‘the’ to ‘, and’ in line 26 and
insert ‘financial
statements’. Amendment
147, in
schedule 15, page 179, line 28, leave
out from ‘in’ to ‘drawn’ in line 29 and
insert ‘IAS financial
statements of the worldwide group for the same period, were such
statements’. Amendment
148, in
schedule 15, page 179, line 32, leave
out from first ‘the’ to ‘are’ and insert
‘financial
statements’. Amendment
149, in
schedule 15, page 180, line 17, at
end insert— ‘ (1A)
References in this Schedule to amounts disclosed in financial
statements do not include, in the case of an amount
that— (a) is an amount
mentioned in paragraph 55(1)(a) to (g),
and (b) has been capitalised
and is accordingly included in the balance sheet comprised in the
financial statements, any part
of that amount that was included in a balance sheet comprised in
financial statements for an earlier
period.’. Amendment
150, in
schedule 15, page 181, line 4, at
end insert— ‘“FSA
Handbook” means the Handbook made by the Financial Services
Authority under FISMA
2000;’. Amendment
151, in
schedule 15, page 181, line 12, at
end insert— ‘ In
paragraph 5 of Schedule 28AA to ICTA (provision not at
arm’s length), after sub-paragraph (8) (as inserted by
paragraph 14 of Schedule 14 to this Act)
insert—
“(9) For the purposes of sub-paragraph (1),
Schedule 15 to FA 2009 (tax treatment of financing costs and income) is
to be
disregarded.”’. Amendment
152, in
schedule 15, page 181, line 15, after
‘group’ insert
‘— (a)
’. Amendment
153, in
schedule 15, page 181, line 15, at
end insert ‘, or (b) to which
paragraph 79
applies. Anti-avoidance:
change of period of account of worldwide
group 79 This paragraph
applies to a period of account of the worldwide group (“the
relevant period of account”)
if— (a) the ultimate parent of the
group changes the date to which financial statements of the group are
drawn up, (b) as a result of
the change, the relevant period of
account— (i) begins
before 1 January 2010, and (ii)
includes a period that would, if the change had not been made, have
fallen within a period of account beginning on or after that date,
and (c) the main purpose, or
one of the main purposes, of the ultimate parent of the group in making
the change is to secure that the first period of account in relation to
which this Schedule has effect does not include any period falling
within the relevant period of
account.’. Amendment
154, in
schedule 15, page 181, line 15, at
end
insert— ‘Transitional
provision (1) An amount that would,
apart from this paragraph, meet condition A, B or C in paragraph 39
(definition of “financing expense amount”) does not meet
that condition if it is a debit that, but for a relevant enactment,
would be brought into account for the purposes of corporation tax in an
accounting period beginning before 1 January
2010. (2) For this purpose the
following are “relevant
enactments”— (a)
section 373 of CTA 2009 (late interest treated as not accruing until
paid in some cases), (b)
section 407 of that Act (postponement until redemption of debits for
connected companies’ deeply discounted
securities), (c) section 409 of
that Act (postponement until redemption of debits for close
companies’ deeply discounted securities),
and (d)
regulation 3A of the Loan Relationships and
Derivative Contracts (Change of Accounting Practice) Regulations 2004
(S.I. 2004/3271) (prescribed debits and credits brought into account
over prescribed period). (3) An
amount that would, apart from this paragraph, meet condition A, B or C
in paragraph 40 (definition of “financing income amount”)
does not meet that condition if it is a credit that, but for the
regulation mentioned in sub-paragraph (2)(d) of this paragraph, would
be brought into account for the purposes of corporation tax in an
accounting period beginning before 1 January
2010.’.—(Mr.
Timms.) 5.45
pm
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