(1) In CAA 2001, omit section 29 (expenditure on required fire precautions).
(2) In section 23(2) of that Act, omit “section 29 (fire safety);”.
(3) In consequence of the amendment made by subsection (1)—
(a) in the Fire and Rescue Services Act 2004 (c. 21), omit paragraph 96 of Schedule 1, and
(b) in the Fire and Rescue Services (Northern Ireland) Order 2006 (S.I. 2006/1254 (N.I. 9)), omit paragraph 24 of Schedule 3 (and the entry relating to CAA 2001 in Schedule 4).
(4) The amendments made by subsections (1) and (2) have effect—
(a) for corporation tax purposes, in relation to expenditure incurred on or after 1 April 2008, and
(b) for income tax purposes, in relation to expenditure incurred on or after 6 April 2008.
(1) In section 23 of CAA 2001 (expenditure unaffected by sections 21 and 22)—
(a) in subsection (2), after the entry for section 33 insert— “ section 33A (integral features); ”, and
(b) in subsection (4), in List C—
(i) in item 2, omit “Electrical systems (including lighting systems) and cold water,”,
(ii) omit item 3, and
(iii) in item 6, for “Lifts, hoists, escalators and moving walkways.” substitute “ Hoists. ”
(2) After section 33 of that Act insert—
Expenditure on integral features
Expenditure on provision or replacement of integral features
33A (1) This section applies where a person carrying on a qualifying activity incurs expenditure on the provision or replacement of an integral feature of a building or structure used by the person for the purposes of the qualifying activity.
(2) This Part (including in particular section 11(4)) applies as if—
(a) the expenditure were capital expenditure on the provision of plant or machinery for the purposes of the qualifying activity, and
(b) the person who incurred the expenditure owned plant or machinery as a result of incurring it.
(3) If the expenditure is qualifying expenditure, it may not be deducted in calculating the income from the qualifying activity.
(4) If the expenditure is not qualifying expenditure, whether it may be so deducted is to be determined without regard to this section.
(5) For the purposes of this section each of the following is an integral feature—
(a) an electrical system (including a lighting system),
(b) a cold water system,
(c) a space or water heating system, a powered system of ventilation, air cooling or air purification, and any floor or ceiling comprised in such a system,
(d) a lift, an escalator or a moving walkway,
(e) external solar shading.
(6) The items listed in subsection (5) do not include any asset whose principal purpose is to insulate or enclose the interior of a building or to provide an interior wall, floor or ceiling which (in each case) is intended to remain permanently in place.
(7) The Treasury may by order—
(a) provide that subsection (5) does not include a feature of a building or structure specified in the order, expenditure on which would (if not within subsection (5)) be qualifying expenditure other than special rate expenditure, and
(b) add to the list in subsection (5) a feature of a building or structure expenditure on the provision of which would not (apart from the order) be expenditure on the provision of plant or machinery.
(8) An order under subsection (7) may make such incidental, supplemental, consequential and transitional provision as the Treasury thinks fit.
Meaning of “replacement” in section 33A
33B (1) Expenditure to which this section applies is to be treated for the purposes of section 33A as expenditure on the replacement of an integral feature.
(2) This section applies to expenditure incurred by a person on an integral feature if the amount of the expenditure is more than 50% of the cost of replacing the integral feature at the time the expenditure is incurred.
(3) Subsection (4) applies where—
(a) a person incurs expenditure (“initial expenditure”) on an integral feature which is not more than 50% of the cost of replacing the integral feature at the time it is incurred, but
(b) in the period of 12 months beginning with the initial expenditure being incurred the person incurs further expenditure on the integral feature.
(4) If the aggregate of—
(a) the amount of the initial expenditure, and
(b) the amount (or the aggregate of the amounts) of the further expenditure,
is more than 50% of the cost of replacing the integral feature at the time the initial expenditure was incurred, this section applies to the initial expenditure and the further expenditure.
(5) Where section 33A applies because of subsection (4), all such assessments and adjustments of assessments are to be made as are necessary to give effect to that section.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) In Chapter 4 of Part 2 of ITTOIA 2005 (rules restricting deductions from trade profits), after section 55 insert—
Integral features
Expenditure on integral features
55A Section 33A(3) of CAA 2001 provides that no deduction is allowed in respect of certain expenditure on an integral feature of a building or structure (within the meaning of that section).
(5) In the table in section 272(2) of ITTOIA 2005 (provisions of Part 2 applicable to profits of property business), after the entry relating to section 55 insert—
section 55A | expenditure on integral features
(6) The amendments made by this section have effect—
(a) for corporation tax purposes, in relation to expenditure incurred on or after 1 April 2008, and
(b) for income tax purposes, in relation to expenditure incurred on or after 6 April 2008.
75 First-year allowance for small and medium-sized enterprises discontinued
(1) CAA 2001 is amended as follows.
(2) Omit section 44 (expenditure incurred by small or medium-sized enterprises).
(3) In consequence of the repeal made by subsection (2)—
(a) in the list in section 39 (provisions under which first-year allowances available), omit the entry relating to section 44,
(b) in the list in section 46(1) (provisions subject to general exclusions), omit the entry relating to section 44,
(c) omit sections 47 to 49 (definition of small and medium-sized enterprises), and
(d) in section 52(3) (first-year allowances) omit—
(i) in the table, the entry relating to expenditure qualifying under section 44, and
(ii) the words from “In the case” to the end.
(4) Omit the following provisions (which relate to provisions repealed by subsection (3))—
(a) section 142 of FA 2004 (increase in first-year allowance under section 44 for 2004),
(b) section 30 of FA 2006 (increase in first-year allowance under section 44 for 2006), and
(c) section 37 of FA 2007 (increase in first-year allowance under section 44 for 2007).
(5) The repeals made by subsections (2) and (3) have effect in relation to expenditure incurred on or after the relevant date.
(6) But subsection (7) applies in relation to an additional VAT liability incurred on or after the relevant date which under section 235 of CAA 2001 is treated as qualifying expenditure.
(7) If the original expenditure (within the meaning of that section) was first-year qualifying expenditure by virtue of section 44 of CAA 2001, Chapter 18 of Part 2 of that Act (additional VAT liabilities and rebates) applies to the additional VAT liability as if the provisions repealed by this section were not so repealed.
(8) The relevant date is—
(a) for corporation tax purposes, 1 April 2008, and
(b) for income tax purposes, 6 April 2008.
(1) CAA 2001 is amended as follows.
(2) Omit sections 40 to 43 (first-year allowance for Northern Ireland expenditure incurred on or before 11 May 2002).
(3) Omit section 45 (first-year allowance for ICT expenditure incurred on or before 31 March 2004).
(4) In Schedule 3 (transitionals and savings), omit paragraphs 46 to 51 (first-year allowance for additional VAT liabilities).
(5) In consequence of the amendments made by subsections (2) to (4), omit the following provisions—
(a) in the list in section 39 (provisions under which first-year allowances available), the entries relating to section 40 and section 45,
(b) in section 46 (general exclusions)—
(i) in the list in subsection (1), the entries relating to section 40 and section 45, and
(ii) in the heading, from “applying” to “45”,
(c) section 51 (disclosure of information between HMRC and Northern Ireland department),
(d) in the table in section 52(3) (first-year allowances), the entries relating to expenditure qualifying under section 40 and expenditure qualifying under section 45,
(e) section 237(2) (exception to section 236 where section 43 applies), and
(f) in Schedule 3 (transitionals and savings), paragraph 14 (application of section 45).
(6) In consequence of the amendments made by this section, omit—
(a) in section 98 of TMA 1970, in the second column of the table, in the entry relating to requirements imposed by CAA 2001, “43(5) and (6),”,
(b) sections 165 and 166 of FA 2003, and
(c) paragraph 84 of Schedule 4 to CRCA 2005.
(7) Subsection (8) applies in relation to an additional VAT liability incurred on or after the day this section comes into force which under section 235 of CAA 2001 is treated as qualifying expenditure.
(8) If the original expenditure (within the meaning of that section) was first-year qualifying expenditure by virtue of a provision repealed by subsections (2) to (4), Chapter 18 of Part 2 of that Act (additional VAT liabilities and rebates) applies to the additional VAT liability as if that provision were not so repealed.
(1) Section 45D of CAA 2001 (expenditure on cars with low carbon dioxide emissions) is amended as follows.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) In consequence of the amendment made by subsection (2)—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) The amendment made by subsection (3) has effect in relation to expenditure incurred on or after 1 April 2008.
(6) But in relation to expenditure incurred on the hiring of a car—
(a) for a period of hire which begins on or before 31 March 2008, and
(b) under a contract entered into on or before 31 March 2008,
section 50 of ITTOIA 2005 applies on and after 1 April 2008 as if the amendment made by subsection (3) did not have effect.
(1) Section 45E of CAA 2001 (expenditure on plant or machinery for gas refuelling station) is amended as follows.
(2) In subsection (1)(a), for “2008” substitute “ 2013 ”.
(3) After “natural gas” (in each place) insert “ , biogas ”.
(4) In subsection (4), before the definition of “gas refuelling station” insert—
“biogas” means gas produced by the anaerobic conversion of organic matter and used for propelling vehicles;
.
(5) The amendments made by subsections (3) and (4) have effect in relation to expenditure incurred on or after 1 April 2008.
(1) Section 56 of CAA 2001 (amount of allowances and charges) is amended as follows.
(2) In subsection (1), for “25%” substitute “ 20% ”.
(3) After that subsection insert—
(1A) But in relation to qualifying expenditure incurred wholly for the purposes of a ring fence trade in respect of which tax is chargeable under section 501A of ICTA (supplementary charge in respect of ring fence trades), the amount of the writing-down allowance to which a person is entitled for a chargeable period is 25% of the amount by which AQE exceeds TDR.
(4) In subsection (2), for “Subsection (1) is” substitute “ Subsections (1) and (1A) are ”.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8) The amendments made by this section have effect in relation to chargeable periods—
(a) beginning on or after the relevant date, and
(b) beginning before, and ending on or after, the relevant date.
(9) But in respect of a chargeable period within subsection (8)(b), they apply as if in—
(a) section 56(1) of CAA 2001,
(b) the provisions listed in subsection (6), and
(c) paragraph 99(5) of Schedule 22 to FA 2000,
the references to 20% were to x%.
(10) For the purposes of subsection (9)—
x
=
(
25
×
BRD
CP
)
+
(
20
×
ARD
CP
)
Where x would be a figure with more than 2 decimal places, it is to be rounded up to the nearest second decimal place.
(11) In subsection (10)—
BRD is the number of days in the chargeable period before the relevant date,
ARD is the number of days in the chargeable period on and after the relevant date, and
CP is the number of days in the chargeable period.
(12) The relevant date is—
(a) for corporation tax purposes, 1 April 2008, and
(b) for income tax purposes, 6 April 2008.
(1) CAA 2001 is amended as follows.
(2) In section 56(2) (amount of allowances and charges), before paragraph (a) insert—
(za) section 56A (small main pools and special rate pools),
.
(3) After section 56 insert—
Writing-down allowances for small pools
56A (1) This section applies in relation to the main pool and the special rate pool.
(2) Where the amount by which AQE exceeds TDR is less than or equal to the small pool limit, the amount of the writing-down allowance to which a person is entitled for a chargeable period is the amount by which AQE exceeds TDR.
(3) The small pool limit is £1,000, except that—
(a) if the chargeable period is more or less than a year, it is proportionately increased or reduced, and
(b) if the qualifying activity has been carried on for part only of the chargeable period, it is proportionately reduced.
(4) A person claiming a writing-down allowance under this section may require the allowance to be reduced to a specified amount.
(5) The Treasury may by order substitute for the amount for the time being specified in subsection (3) such other amount as it thinks fit.
(6) An order under subsection (5) may make such incidental, supplemental, consequential and transitional provision as the Treasury thinks fit.
(4) In section 59(1) (definition of unrelieved qualifying expenditure)—
(a) after “that period” insert “ (a) ”, and
(b) after “TDR” insert
, and
(b) where section 56A(2) applies, the person does not claim a writing-down allowance of the amount by which AQE exceeds TDR.
(5) The amendments made by this section have effect—
(a) for corporation tax purposes, in relation to chargeable periods beginning on or after 1 April 2008, and
(b) for income tax purposes, in relation to chargeable periods beginning on or after 6 April 2008.
83 Existing long-life asset expenditure treated as special rate expenditure
(1) This section applies in relation to long-life asset expenditure—
(a) incurred before the relevant date, and
(b) allocated to a pool in a chargeable period beginning before the relevant date.
(2) In relation to a transitional chargeable period, section 102 of CAA 2001 applies as if the percentage figure specified in subsection (1) of that section were x%, where—
x
=
(
6
×
BRD
CP
)
+
(
10
×
ARD
CP
)
Where x would be a figure with more than 2 decimal places, it is to be rounded up to the nearest second decimal place.
(3) In subsection (2)—
BRD is the number of days in the chargeable period before the relevant date,
ARD is the number of days in the chargeable period on and after the relevant date, and
CP is the number of days in the chargeable period.
(4) Any unrelieved qualifying expenditure in a long-life asset pool at the end of—
(a) a transitional chargeable period, or
(b) a chargeable period which ends immediately before the relevant date,
is to be carried forward to the special rate pool.
(5) In subsequent chargeable periods, expenditure so carried forward is to be treated for the purposes of CAA 2001 as if it were special rate expenditure carried forward in the special rate pool from the chargeable period mentioned in subsection (4).
(6) Any unrelieved qualifying expenditure in a single asset pool at the end of—
(a) a transitional chargeable period, or
(b) a chargeable period which ends immediately before the relevant date,
is in subsequent chargeable periods to be treated for the purposes of CAA 2001 as if it were special rate expenditure carried forward in the single asset pool from that chargeable period.
(7) Where expenditure is treated as special rate expenditure because of this section, for the purposes of section 104E of CAA 2001—
(a) the reference in subsection (1)(a) of that section to section 104D of CAA 2001 includes a reference to section 102 of that Act (writing-down allowances in respect of long-life asset expenditure), and
(b) the allowances that could have been made to the taxpayer in respect of the expenditure include allowances that could have been made under section 102 of that Act for chargeable periods before that in which the expenditure was first treated as special rate expenditure.
(8) A “transitional chargeable period” is one which begins before, and ends on or after, the relevant date.
(9) “The relevant date” means—
(a) for corporation tax purposes, 1 April 2008, and
(b) for income tax purposes, 6 April 2008.
(10) Expressions used in this section and in CAA 2001 have the same meaning in this section as in that Act.
(1) Parts 3 and 4 of CAA 2001 (industrial buildings allowances and agricultural buildings allowances) do not apply in relation to expenditure incurred on or after the relevant date.
(2) Omit those Parts of that Act.
(3) The amendment made by subsection (2) has effect in relation to chargeable periods beginning on or after the relevant date.
(4) The relevant date is—
(a) for corporation tax purposes, 1 April 2011, and
(b) for income tax purposes, 6 April 2011.
(5) Schedule 27 contains amendments and savings related to this section.
88 Power to make consequential and transitional provision
(1) The Treasury may by order make such amendments (including repeals and revocations) of enactments or instruments as may appear appropriate in consequence of, or otherwise in connection with, sections 71 to 87.
(2) The Treasury may by order make such transitional or saving provision as may appear appropriate in consequence of, or otherwise in connection with, those sections.
(3) An order under subsection (1) may make transitional provision and savings.
(4) An order under subsection (1) or (2) may—
(a) make different provision for different cases, and
(b) include provision having effect in relation to times before the order is made if that provision does not increase any person's liability to tax.
(5) An order under subsection (1) or (2) is to be made by statutory instrument.
(6) A statutory instrument containing an order under subsection (1) or (2) is subject to annulment in pursuance of a resolution of the House of Commons.
(1) In Part 4 of FA 2004 (pension schemes etc), after section 199 insert—
Indirect contributions
199A (1) This section applies where an employer (“E”)—
(a) pays contributions under a registered pension scheme (“the original scheme”) in a chargeable period, and
(b) would (apart from subsection (4)) be entitled in the next chargeable period to an amount of relief in respect of a payment within subsection (2),
and the avoidance condition is met.
(2) A payment is within this subsection if all or part of the payment is intended to facilitate the payment of pension contributions under the original scheme or a substitute scheme by a person other than E.
(3) The avoidance condition is that—
(a) section 197 would apply if, in the chargeable period mentioned in subsection (1)(b), E paid pension contributions under the original scheme of the amount of the relevant relief, and
(b) the purpose, or one of the purposes, of facilitating the payment of pension contributions by a person other than E is to enable pension contributions to be paid without that section applying.
(4) For the purposes of the spreading provisions, the amount of the relevant relief is to be treated as the amount of a pension contribution paid by E under the original scheme in the chargeable period mentioned in subsection (1)(b).
(5) The “relevant relief” is the relief to which the employer would (apart from subsection (4)) be entitled in that chargeable period in respect of—
(a) the payment within subsection (2), or
(b) where only part of the payment is intended to facilitate the payment of pension contributions as mentioned in that subsection, that part of the payment.
(6) A “substitute scheme” is any registered pension scheme—
(a) to which there is a relevant transfer in the period of 2 years ending with the day on which the payment within subsection (2) is made, or
(b) to which it is envisaged that a relevant transfer will or may be made after that day.
(7) A relevant transfer is a recognised transfer from the original scheme of more than 30% of the aggregate of—
(a) in a case within subsection (6)(a), the amount of the sums and the market value of the assets held for the purposes of, or representing accrued rights under, the original scheme immediately before the transfer, and
(b) in a case within subsection (6)(b), the amount of those sums and the market value of those assets on the day on which the payment is made.
(8) If there is a transfer from a substitute scheme to another registered pension scheme which would have been a relevant transfer had it been a transfer from the original scheme at the time the relevant transfer was made, that other scheme is also a substitute scheme.
(9) In subsection (1)(b) the reference to relief in respect of a payment within subsection (2) includes relief for a liability in respect of the making of the payment by a person other than E.
(10) In this section references to E being entitled to an amount of relief are to an amount—
(a) being deductible in computing the amount of the profits of E for the purposes of Part 2 of ITTOIA 2005 (trading income) or Case I or II of Schedule D,
(b) being expenses of management of E for the purposes of section 75 of ICTA (expenses of management: companies with investment business), or
(c) being brought into account at Step 1 in section 76(7) of ICTA (expenses of insurance companies) in respect of E.
(11) In this section—
“the spreading provisions” means sections 197 and 198 and this section, and
“chargeable period” has the meaning given by section 197.
(2) The amendment made by this section has effect in relation to payments within section 199A(2) of FA 2004 made on or after 10 October 2007, except for such payments made pursuant to a contract entered into before 9 October 2007.
(1) Sections 58B and 58C of FA 2003 (relief from SDLT on first acquisition of zero-carbon homes) are amended as follows.
(2) In section 58B, for subsection (2) substitute—
(2) For the purposes of this section—
(a) a building, or a part of a building, is a dwelling if it is constructed for use as a single dwelling, and
(b) “first acquisition”, in relation to a dwelling, means its acquisition when it has not previously been occupied.
(3) Section 58C is amended as follows.
(4) In subsection (1), for “building” substitute “ dwelling ”.
(5) In subsection (2), after paragraph (c) insert—
(d) provide for the charging of fees of a reasonable amount in respect of services provided as part of a scheme or process of certification.
(6) In subsection (3)—
(a) for “a building” substitute “ a dwelling ”, and
(b) for “building itself” substitute “ building which, or part of which, constitutes the dwelling ”.
(7) The amendments made by subsections (2), (4) and (6) are treated as always having had effect; and provision included in regulations by virtue of those amendments may be made so as to have effect in relation to acquisitions on or after 1 October 2007.
(1) Part 4 of FA 2003 (stamp duty land tax) is amended as follows.
(2) For section 77 substitute—
Notifiable transactions
77 (1) A land transaction is notifiable if it is—
(a) an acquisition of a major interest in land that does not fall within one or more of the exceptions in section 77A,
(b) an acquisition of a chargeable interest other than a major interest in land where there is chargeable consideration in respect of which tax is chargeable at a rate of 1% or higher or would be so chargeable but for a relief,
(c) a land transaction that a person is treated as entering into by virtue of section 44A(3), or
(d) a notional land transaction under section 75A.
(2) This section has effect subject to—
(a) sections 71A(7) and 72A(7), and
(b) paragraph 30 of Schedule 15.
(3) In this section “relief” does not include an exemption from charge under Schedule 3.
Exceptions for certain acquisitions of major interests in land
77A (1) The exceptions referred to in section 77(1)(a) are as follows.
1 An acquisition which is exempt from charge under Schedule 3.
2 An acquisition (other than the grant, assignment or surrender of a lease) where the chargeable consideration for that acquisition, together with the chargeable consideration for any linked transactions, is less than £40,000.
3 The grant of a lease for a term of 7 years or more where—
(a) any chargeable consideration other than rent is less than £40,000, and
(b) the relevant rent is less than £1,000.
4 The assignment or surrender of a lease where—
(a) the lease was originally granted for a term of 7 years or more, and
(b) the chargeable consideration for the assignment or surrender is less than £40,000.
5 The grant of a lease for a term of less than 7 years where the chargeable consideration does not exceed the zero rate threshold.
6 The assignment or surrender of a lease where—
(a) the lease was originally granted for a term of less than 7 years, and
(b) the chargeable consideration for the assignment or surrender does not exceed the zero rate threshold.
(2) Chargeable consideration for an acquisition does not exceed the zero rate threshold if it does not consist of or include—
(a) any amount in respect of which tax is chargeable at a rate of 1% or higher, or
(b) any amount in respect of which tax would be so chargeable but for a relief.
(3) In this section—
“annual rent” has the meaning given in paragraph 9A of Schedule 5,
“relevant rent” means—
the annual rent, or
in the case of the grant of a lease to which paragraph 11 or 19 of Schedule 15 applies, the relevant chargeable proportion of the annual rent (as calculated in accordance with that paragraph), and
“relief” does not include an exemption from charge under Schedule 3.
(3) In section 79(2) (registration of land transactions), after “every” insert “ notifiable ”.
(4) Schedule 30 contains consequential provision.
(5) The amendments made by this section and that Schedule have effect in relation to transactions with an effective date on or after 12 March 2008.
95 Charge where consideration includes rent: 0% band
(1) Schedule 5 to FA 2003 (amount of SDLT chargeable: rent) is amended as follows.
(2) In paragraph 9 (SDLT chargeable in respect of consideration other than rent)—
(a) in sub-paragraph (1), insert at the end “ (but see paragraph 9A) ”, and
(b) omit sub-paragraphs (2), (2A) and (3),
and, accordingly, in the heading before that paragraph, insert at the end “ : general ”.
(3) After that paragraph insert—
Tax chargeable in respect of consideration other than rent: 0% band
9A (1) This paragraph applies in the case of a transaction to which this Schedule applies where there is chargeable consideration other than rent.
(2) If—
(a) the relevant land consists entirely of land that is non-residential property, and
(b) the relevant rent is at least £1,000,
the 0% band in Table B in section 55(2) does not apply in relation to the consideration other than rent and any case that would have fallen within that band is treated as falling within the 1% band.
(3) Sub-paragraphs (4) and (5) apply if—
(a) the relevant land is partly residential property and partly non-residential property, and
(b) the relevant rent attributable, on a just and reasonable apportionment, to the land that is non-residential property is at least £1,000.
(4) For the purpose of determining the amount of tax chargeable under section 55 in relation to the consideration other than rent, the transaction (or, where it is one of a number of linked transactions, that set of transactions) is treated as if it were two separate transactions (or sets of linked transactions), namely—
(a) one whose subject-matter consists of all of the interests in land that is residential property, and
(b) one whose subject-matter consists of all of the interests in land that is non-residential property.
(5) For that purpose, the chargeable consideration attributable to each of those separate transactions (or sets of linked transactions) is the chargeable consideration so attributable on a just and reasonable apportionment.
(6) In this paragraph “the relevant rent” means—
(a) the annual rent in relation to the transaction in question, or
(b) if that transaction is one of a number of linked transactions for which the chargeable consideration consists of or includes rent, the total of the annual rents in relation to all of those transactions.
(7) In sub-paragraph (6) the “annual rent” means the average annual rent over the term of the lease or, if—
(a) different amounts of rent are payable for different parts of the term, and
(b) those amounts (or any of them) are ascertainable at the effective date of the transaction,
the average annual rent over the period for which the highest ascertainable rent is payable.
(8) In this paragraph “relevant land” has the meaning given in section 55(3) and (4).
(4) Each of the following provisions of Schedule 6 to that Act (SDLT: disadvantaged areas relief) is amended in accordance with subsection (5)—
(a) paragraph 5(4) (residential land wholly situated in disadvantaged area),
(b) paragraph 6(6) (mixed land wholly situated in disadvantaged area),
(c) paragraph 9(4) (residential land partly situated in disadvantaged area), and
(d) paragraph 10(6) (mixed land wholly partly situated in disadvantaged area).
(5) In those provisions—
(a) in paragraph (a), omit sub-paragraph (i) (and the “and” after it), and
(b) omit paragraph (b).
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) In Schedule 8 to that Act (SDLT: charities relief), in paragraph 3—
(a) in sub-paragraph (3)(b), for “does not exceed £600” substitute “ is less than £1,000 ”, and
(b) in sub-paragraph (5), for “9(2)” substitute “ 9A ”.
(8) In Schedule 9 to that Act (SDLT: right to buy etc), after paragraph 4A insert—
Shared ownership lease: grant not linked with staircasing transactions etc
4B (1) For the purpose of determining the rate of tax chargeable on the grant of a shared ownership lease of a dwelling, the grant shall be treated as if it were not linked to—
(a) any acquisition of an interest in the dwelling to which paragraph 4A applies, or
(b) a transfer of the reversion to the lessee or lessees under the terms of the lease.
(2) In this paragraph “shared ownership lease” has the same meaning as in paragraph 4A.
(9) In that Schedule, in paragraphs 10(1) and (2) and 11(b) (shared ownership trusts), omit “additional”.
(10) In that Schedule, insert at the end—
Shared ownership trust: declaration not linked with staircasing transactions etc
12 For the purpose of determining the rate of tax chargeable on the declaration of a shared ownership trust, the declaration shall be treated as if it were not linked to—
(a) any equity-acquisition payment under the trust or any consequent increase in the purchaser's beneficial interest in the trust property, or
(b) a transfer to the purchaser of an interest in the trust property upon the termination of the trust.
(11) In Schedule 15 to that Act (SDLT: partnerships)—
(a) in paragraph 11(2B)(a), for “9(2A)” substitute “ 9A(6) ”,
(b) in paragraph 19(2B), for “9(2A)” substitute “ 9A(6) ”, and
(c) in paragraph 23(3)(c), for “9(2)” substitute “ 9A ”.
(12) In Schedule 17A to that Act (SDLT: further provisions relating to leases), in paragraph 18A(5)(a)—
(a) for “9(2)” substitute “ 9A ”,
(b) for “the Tables” substitute “ Table B ”, and
(c) for “the relevant rental figure exceeds £600” substitute “ the relevant rent attributable to non-residential property is not less than £1,000 ”.
(13) The amendments made by this section have effect in relation to transactions with an effective date on or after 12 March 2008.
(1) Part 1 of Schedule 7 to FA 2003 (group relief) is amended as follows.
(2) In paragraph 3(5), for “paragraph 4” substitute “ paragraphs 4 and 4ZA ”.
(3) In paragraph 4 (cases in which group relief not withdrawn)—
(a) omit sub-paragraphs (2) and (3), and
(b) in sub-paragraph (5), for “sub-paragraphs (3) and (4)” substitute “ sub-paragraph (4) ”.
(4) After that paragraph insert—
Group relief not withdrawn where vendor leaves group
4ZA (1) Group relief is not withdrawn under paragraph 3 where the purchaser ceases to be a member of the same group as the vendor because the vendor leaves the group.
(2) The vendor is regarded as leaving the group if the companies cease to be members of the same group by reason of a transaction relating to shares in—
(a) the vendor, or
(b) another company that—
(i) is above the vendor in the group structure, and
(ii) as a result of the transaction ceases to be a member of the same group as the purchaser.
(3) For the purpose of sub-paragraph (2) a company is “above” the vendor in the group structure if the vendor, or another company that is above the vendor in the group structure, is a 75% subsidiary of the company.
(4) But if there is a change in the control of the purchaser after the vendor leaves the group, paragraphs 3, 4(6) and (7), 5 and 6 have effect as if the purchaser had then ceased to be a member of the same group as the vendor (but see sub-paragraph (7)).
(5) For the purposes of this paragraph there is a change in the control of the purchaser if—
(a) a person who controls the purchaser (alone or with others) ceases to do so,
(b) a person obtains control of the purchaser (alone or with others), or
(c) the purchaser is wound up.
(6) For the purposes of sub-paragraph (5) a person does not control, or obtain control of, the purchaser if that person is under the control of another person or other persons.
(7) Sub-paragraph (4) does not apply where—
(a) there is a change in the control of the purchaser because a loan creditor (within the meaning of section 417(7) to (9) of the Taxes Act 1988) obtains control of, or ceases to control, the purchaser, and
(b) the other persons who controlled the purchaser before that change continue to do so.
(8) In this paragraph references to “control” shall be interpreted in accordance with section 416 of the Taxes Act 1988 (subject to sub-paragraph (6)).
(5) In paragraph 4A (withdrawal of group relief in certain cases involving successive transactions)—
(a) in sub-paragraph (1), in the words following paragraph (d), for “and 4” substitute “ , 4 and 4ZA ”,
(b) after that sub-paragraph insert—
(1A) Sub-paragraph (1) has effect subject to sub-paragraph (3A).
,
(c) in sub-paragraph (3)—
(i) for “sub-paragraph (1)(a)” substitute “ this paragraph ”, and
(ii) for “this sub-paragraph” substitute “ this paragraph ”, and
(d) after sub-paragraph (3) insert—
(3A) Sub-paragraph (1) does not apply where—
(a) there is a change in the control of the purchaser because a loan creditor (within the meaning of section 417(7) to (9) of the Taxes Act 1988) obtains control of, or ceases to control, the purchaser, and
(b) the other persons who controlled the purchaser before that change continue to do so.
(6) The amendments made by this section have effect in relation to transactions with an effective date on or after 13 March 2008.
97 Transfers of interests in property-investment partnerships
(1) Schedule 31 contains provision relating to stamp duty land tax chargeable on transfers to, and of interests in, property-investment partnerships.
(2) Part 1 of that Schedule (transfer of interest in partnership: “relevant partnership property”), and this section so far as relating to that Part—
(a) have effect in respect of transfers occurring on or after 19 July 2007 (subject to subsection (3)), and
(b) are treated as having come into force on that day.
(3) Subsections (14) and (17) of section 72 of FA 2007 (partnerships) apply in relation to the amendments made by Part 1 of that Schedule as they apply in relation to the amendments made by subsections (6) and (10) of that section.
98 Exemption from ad valorem stamp duty for low value transactions
(1) Paragraph 1 of Schedule 13 to FA 1999 (charge to stamp duty on conveyance or transfer on sale) is amended as follows.
(2) In sub-paragraph (3), for “(4)” substitute “ (3A) ”.
(3) After that sub-paragraph insert—
(3A) Stamp duty is not chargeable under sub-paragraph (1) on a transfer of stock or marketable securities where—
(a) the amount or value of the consideration for the sale is £1,000 or under, and
(b) the instrument is certified at £1,000.
(4) In paragraph 6(1) (meaning of instrument being certified at an amount), for “paragraph” substitute “ paragraphs 1(3A) and ”.
(5) The amendments made by this section have effect in relation to instruments executed on or after 13 March 2008 and not stamped before 19 March 2008.
(6) For the purposes of section 14(4) of the Stamp Act 1891 (c. 39) (instruments not to be given in evidence etc unless stamped in accordance with the law in force at the time of first execution), the law in force at the time of execution of an instrument—
(a) executed on or after 13 March 2008 but before 19 March 2008, and
(b) not stamped before 19 March 2008,
shall be deemed to be the law as varied in accordance with this section.
99 Abolition of fixed stamp duty on certain instruments
(1) Schedule 32 contains provision abolishing fixed stamp duty on certain instruments.
(2) The amendments and saving made by that Schedule have effect in relation to instruments executed on or after 13 March 2008 and not stamped before 19 March 2008.
(3) For the purposes of section 14(4) of the Stamp Act 1891 (instruments not to be given in evidence etc unless stamped in accordance with the law in force at the time of first execution), the law in force at the time of execution of an instrument—
(a) executed on or after 13 March 2008 but before 19 March 2008, and
(b) not stamped before 19 March 2008,
shall be deemed to be the law as varied in accordance with Schedule 32.
(1) In FA 1985, omit section 82(5) and (9) (adjudication of certain gifts inter vivos).
(2) Accordingly, omit paragraph 9 of Schedule 14 to FA 1999.
(3) The amendments made by this section have effect in relation to instruments executed on or after 13 March 2008, other than instruments effecting a land transaction (within the meaning of paragraph 22 of Schedule 32).
(4) For the purposes of section 14(4) of the Stamp Act 1891 (instruments not to be given in evidence etc unless stamped in accordance with the law in force at the time of first execution), the law in force at the time of execution of such an instrument shall be deemed to be the law as varied in accordance with this section.
(1) Section 79 of FA 1986 (stamp duty and loan capital) is amended as follows.
(2) In subsection (6), for “subsection (7)” substitute “ subsections (7) to (7B) ”.
(3) After subsection (7A) insert—
(7B) Subsection (4) shall not be prevented from applying to a capital market instrument by virtue of subsection (6)(b) by reason only that the capital market investment concerned carries or has carried a right to interest which ceases or reduces if, or to the extent that, the issuer, after meeting or providing for other obligations specified in the capital market arrangement concerned, has insufficient funds available from that capital market arrangement to pay all or part of the interest otherwise due.
(4) After subsection (12) insert—
(13) In this section—
“capital market instrument” means an instrument transferring a capital market investment issued as part of a capital market arrangement, and
“capital market investment” and “capital market arrangement” have the same meaning as in section 72B of the Insolvency Act 1986 (see paragraphs 1 to 3 of Schedule 2A to that Act).
(5) The amendments made by this section have effect in relation to any instrument executed on or after the day on which this Act is passed.
(1) In section 12 of OTA 1975 (interpretation of Part 1), the definition of “participator” is amended as follows.
(2) In the words before paragraph (a), after “chargeable period” insert “ (“the relevant chargeable period”) ”.
(3) In paragraphs (a), (b) and (c), for “that chargeable period” substitute “ the relevant chargeable period ”.
(4) At the end of paragraph (c) insert
and
(d) a former participator to whom an amount is attributed under paragraph 2A(2) of Schedule 5 in respect of a default payment made in relation to the field in the relevant chargeable period; and
(e) a former participator to whom an amount was attributed under paragraph 2A(2) of Schedule 5 in respect of a default payment made in relation to the field in either of the two chargeable periods preceding the relevant chargeable period; and
(f) a person who—
(i) made a default payment in relation to the field (whether the person was then a current participator or former participator),
(ii) is not a participator during the relevant chargeable period under any of paragraphs (a) to (e) of this definition, and
(iii) receives, in the relevant chargeable period, reimbursement expenditure (within the meaning of section 108(1)(c) of the Finance Act 1991) in respect of the default payment; and
(g) a person who—
(i) made a default payment in relation to the field (whether the person was then a current participator or former participator),
(ii) is not a participator during the relevant chargeable period under any of paragraphs (a) to (f) of this definition, and
(iii) received, in either of the two chargeable periods preceding the relevant chargeable period, reimbursement expenditure (within the meaning of section 108(1)(c) of the Finance Act 1991) in respect of the default payment;
(and for the purposes of paragraphs (f)(i) and (g)(i), “current participator”, “former participator” and “default payment” have the same meaning as in paragraph 2A of Schedule 5;
.
(5) The amendments made by this section have effect in relation to expenditure incurred after 30 June 2008.
103 Abandonment expenditure: default by participator met by former participator
(1) In Schedule 5 to OTA 1975 (allowance of expenditure, other than abortive exploration expenditure), for paragraph 2A substitute—
2A (1) This paragraph applies if—
(a) a current participator (“the defaulter”) has defaulted on a liability under—
(i) a relevant agreement, or
(ii) an abandonment programme,
to make a payment towards abandonment expenditure, and
(b) a current or former participator (“the contributing participator”) pays an amount in or towards meeting the whole or part of the default (“a default payment”).
(2) If a claim is made under this Schedule for the allowance of the abandonment expenditure, the amount of the default payment is to be attributed to the contributing participator for the purposes of paragraphs 2(4)(b) and 3(1)(c).
(3) But the amount attributed under sub-paragraph (2) may not exceed—
(a) so much of the sum in default as the contributing participator is required to meet in accordance with—
(i) the relevant agreement, or
(ii) the abandonment programme, or
(b) such other amount as the participator may be required to meet in accordance with a direction given under Part 4 of the Petroleum Act 1998.
(4) Sub-paragraph (2) is subject to paragraph 2B.
(5) In determining the amount which is to be attributed to the contributing participator under sub-paragraph (2), account shall be taken of the whole of the defaulter's interest in the relevant oil field.
(6) But in determining the share of the abandonment expenditure to be attributed to the defaulter under paragraph 2(4)(b), the amount which would be attributed by reference to the defaulter's interest in the relevant oil field is to be reduced or (as the case may be) extinguished by the deduction of the aggregate of—
(a) the amount attributed to the contributing participator under sub-paragraph (2), and
(b) any other amounts attributed under sub-paragraph (2) to other current or former participators who make default payments in respect of the defaulter's default.
2B (1) No amount is to be attributed to a contributing participator under paragraph 2A(2) unless the following conditions are all met.
(2) The first condition is that the contributing participator is not connected with the defaulter, applying section 839 of the Taxes Act (connected persons) for the purposes of this sub-paragraph.
(3) The second condition is that, at the end of the claim period for which the claim is made, the defaulter still has an interest in the relevant oil field which, under paragraph 2(4)(b), falls to be taken into account in determining the shares in the abandonment expenditure.
(4) The third condition is that the relevant participators have taken all reasonable steps by way of legal remedy—
(a) to secure that the defaulter meets the whole of the liability referred to in paragraph 2A(1)(a), and
(b) to enforce any guarantee or other security provided in respect of that liability.
(5) In sub-paragraph (4) “relevant participators” means—
(a) each current participator (other than the defaulter), and
(b) each former participator who makes a default payment in respect of the defaulter's default.
2C (1) An amount attributed under paragraph 2A(2) is—
(a) in the case of a current participator, to be an addition to the share of the abandonment expenditure referable to the current participator's interest in the oil field, or
(b) in the case of a former participator, to be the share of the abandonment expenditure referable to the former participator's interest in the oil field.
(2) In paragraphs 2A and 2B and this paragraph—
“abandonment expenditure” means expenditure which is allowable for an oil field by virtue of section 3(1)(i) or (j);
“abandonment programme” means an abandonment programme approved under Part 4 of the Petroleum Act 1998 (including any such programme as revised);
“current participator” means a person who is, by virtue of paragraph (a), (b) or (c) of the definition in section 12, a participator in the relevant oil field in the chargeable period in which the abandonment expenditure is incurred;
“former participator” means a person who—
is not a current participator, but
was, by virtue of paragraph (a), (b) or (c) of the definition in section 12, a participator in the relevant oil field in any chargeable period before the chargeable period in which the abandonment expenditure is incurred;
“relevant agreement” has the meaning given by section 104(5)(a) of the Finance Act 1991;
“relevant oil field” means the oil field to which the abandonment expenditure relates;
“sum in default” means the amount of the payment which the defaulter is liable to make as mentioned in paragraph 2A(1)(a), less the aggregate of—
so much of that payment as has been made by the defaulter, and
so much of that payment as has been met by virtue of any guarantee or security provided in respect of the defaulter's liability.
(3) For the purposes of paragraph 2A, a current participator is to be regarded as defaulting on a liability to make a payment towards abandonment expenditure if the following conditions are met.
(4) The first condition is that the current participator has failed to make the payment in full on the due day.
(5) The second condition is that—
(a) any of the payment remains unpaid on the sixtieth day after the due day, or
(b) before that sixtieth day, the current participator's interest in a relevant licence becomes liable under the relevant agreement to be sold or forfeited, in whole or in part, by reason of the failure to meet the liability.
(6) In sub-paragraphs (4) and (5) “due day” means the day on which the payment towards abandonment expenditure becomes due under the relevant agreement or the abandonment programme.
(2) The amendment made by subsection (1) has effect in relation to expenditure incurred after 30 June 2008.
(1) Section 62 of FA 1987 (returns of relevant sales of oil) is amended as follows.
(2) After subsection (3) insert—
(3A) Subsection (4) applies to a participator in an oil field in any case where—
(a) paragraph 2 of Schedule 2 to the principal Act requires the participator to make a return for any chargeable period (including cases where the latest time for the delivery of that return is deferred), and
(b) there are any relevant sales of Category 2 oil (as defined in subsection (6) below).
(3) In subsection (4), for the words before paragraph (a) substitute—
(4) In such a case, that participator shall also be required, not later than the end of the second month after the end of that chargeable period, to deliver to the Board a return of all relevant sales of Category 2 oil stating—
.
(4) In subsection (4), in paragraphs (d), (e) and (f), for “oil” (in each place) substitute “ Category 2 oil ”.
(5) In subsection (6)—
(a) in the words before paragraph (a), for “oil”, in each place except in the expression “oil field”, substitute “ Category 2 oil ”,
(b) in paragraph (a), for “subsection (4)” substitute “ subsection (3A) ”,
(c) in paragraph (c), for “oil” substitute “ Category 2 oil ”, and
(d) omit paragraph (d) and the “and” before it.
(6) After subsection (8) insert—
(8A) For provision about the meaning of “Category 2 oil”, see paragraph 2 of Schedule 3 to the principal Act (which applies by virtue of section 72(6) below).
(7) The amendments made by this section have effect in relation to chargeable periods ending on or after 30 June 2008.
107 Elections for oil fields to become non-taxable
(1) Section 185 of FA 1993 is amended as follows.
(2) Before subsection (1) insert—
(A1) In this Part of this Act—
“non-taxable field” means an oil field which meets the conditions in subsection (1), (1ZA) or (1A), and
“taxable field” means an oil field which is not a non-taxable field.
(3) In subsection (1)—
(a) for the words before paragraph (a) substitute—
(1) An oil field meets the conditions in this subsection if it is an oil field—
, and
(b) omit the words after paragraph (b).
(4) After that subsection insert—
(1ZA) An oil field meets the conditions in this subsection if—
(a) the field does not meet the conditions in subsection (1), and
(b) an election under Schedule 20A that the field is to be non-taxable is in effect.
(5) In subsection (1A), before paragraph (a) insert—
(za) the field does not meet the conditions in subsection (1),
.
(6) Before Schedule 21 to FA 1993, insert Schedule 20A that is set out in Part 1 of Schedule 33 to this Act.
(7) Part 2 of Schedule 33 contains other amendments relating to the amendments made by this section.
108 Capital allowances: plant and machinery for use in ring fence trade
(1) In section 52(3) of CAA 2001 (amount of first-year allowances), for the two entries in the table relating to section 45F substitute—
Expenditure qualifying under section 45F (expenditure for use wholly in a ring fence trade) | 100%
.
(2) The amendment made by subsection (1) has effect in relation to expenditure incurred on or after 12 March 2008.
109 Capital allowances: decommissioning expenditure
(1) Section 163 of CAA 2001 (meaning of “abandonment expenditure”) is amended as follows.
(2) For the heading substitute “ Meaning of “general decommissioning expenditure” .
(3) For subsections (1) to (3) substitute—
(1) Expenditure is “general decommissioning expenditure” for the purposes of sections 164 and 165 if the conditions in subsections (3) and (4) are met.
(2) But that is subject to subsections (4ZA) to (4ZC).
(3) The expenditure must have been incurred on decommissioning plant or machinery—
(a) which has been brought into use for the purposes of a ring fence trade, and
(b) which—
(i) is, or forms part of, an offshore installation or a submarine pipeline, or
(ii) when last in use for the purposes of a ring fence trade, was, or formed part of, such an installation or pipeline.
(4) After subsection (4) insert—
(4ZA) An amount of general decommissioning expenditure determined in accordance with subsection (1) is to be reduced under subsection (4ZB) if it appears that the decommissioned plant and machinery—
(a) was brought into use partly for the purposes of the ring fence trade and partly for the purposes of another trade, or
(b) was brought into use wholly for the purposes of the ring fence trade, but has, at any time since, not been used wholly for those purposes.
(4ZB) The amount determined in accordance with subsection (1) is to be reduced to an amount which is just and reasonable having regard to the relevant circumstances.
(4ZC) The relevant circumstances include, in particular, the extent to which the decommissioned plant and machinery has not been used for the purposes of the ring fence trade.
(5) In subsection (5)(b), omit “ “abandonment programme”,”.
(6) Schedule 34 contains amendments consequential on this section.
(7) The amendments made by this section and that Schedule have effect in relation to expenditure incurred on or after 12 March 2008.
110 Capital allowances: abandonment expenditure after ceasing ring fence trade
(1) Section 165 of CAA 2001 (abandonment expenditure within 3 years of ceasing ring fence trade) is amended as follows.
(2) In the heading, for “within 3 years of” substitute “ after ”.
(3) For subsection (2) substitute—
(2) “The post-cessation period” means the period that—
(a) begins with the day following the last day on which the former trader carried on the ring fence trade, and
(b) ends with the day on which condition A and condition B are both met (or, if they are met on different days, the later of those days).
(2A) Condition A is met if each approved abandonment programme that relates wholly or partly to relevant plant and machinery has ceased to have effect.
(2B) Condition B is met if the Secretary of State is satisfied that no other abandonment programmes that relate wholly or partly to relevant plant and machinery will be approved.
(2C) For the purposes of condition A, an approved abandonment programme ceases to have effect if and when—
(a) the programme has been carried out to the satisfaction of the Secretary of State, or
(b) approval of the programme has been withdrawn.
(4) After subsection (4) insert—
(4A) Abandonment expenditure is to be disregarded for the purposes of this section if the expenditure is incurred in decommissioning plant and machinery at a time—
(a) after an abandonment programme relating wholly or partly to the plant and machinery has had its approval withdrawn, and
(b) when no other abandonment programme relating wholly or partly to the plant and machinery is approved.
(5) After subsection (5) insert—
(6) For the purposes of this section, it does not matter if approval of an abandonment programme that relates to relevant plant and machinery (including approval of the first such programme) is given before or after the start of the post-cessation period.
(7) In this section—
“abandonment programme” means an abandonment programme under Part 4 of the Petroleum Act 1998;
“approved”, in relation to an abandonment programme, means approved or revised under Part 4 of the Petroleum Act 1998 (and “approval” is to be construed accordingly);
“relevant plant and machinery” means plant and machinery—
which has been brought into use for the purposes of the ring fence trade that has ceased, and
which, when last in use for the purposes of that ring fence trade, was, or formed part of, an offshore installation or submarine pipeline;
and for this purpose “offshore installation” and “submarine pipeline” have the same meaning as in Part 4 of the Petroleum Act 1998;
“withdrawn”, in relation to approval of an abandonment programme, means withdrawn under Part 4 of the Petroleum Act 1998.
(6) Section 393A of ICTA (losses: set off against profits of the same, or an earlier, accounting period) is amended as follows.
(7) In subsection (11)—
(a) for “In any case where” substitute “ Subsection (11A) applies in any case where ”,
(b) in paragraph (a), for “within 3 years of” substitute “ after ”, and
(c) omit the words after paragraph (b).
(8) After that subsection insert—
(11A) In relation to any claim under subsection (1)—
(a) to the extent that the claim relates to an increase falling within subsection (11)(a), this section shall have effect as if—
(i) in subsection (10), “the relevant period” were substituted for “ the period of two years ”, and
(ii) after subsection (10) there were inserted—
(10ZA) In subsection (10) “relevant period” means the period calculated by adding two years to the post-cessation period (within the meaning of section 165 of the Capital Allowances Act).
;
(b) to the extent that the claim relates to expenditure falling within subsection (11)(b), subsection (10) shall have effect with the substitution of “ five years ” for “two years”.
(9) The amendments made by this section have effect in relation to ring fence trades that cease to be carried on or after 12 March 2008.
111 Losses: set off against profits of earlier accounting periods
(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Schedule 35 contains minor and consequential amendments relating to the amendments made by this section.
(3) The amendments made by this section and that Schedule have effect in relation to losses incurred in accounting periods beginning on or after 12 March 2008.