Office of Public Sector Information
SCHEDULE 26 continued PART V continued
26 (1) Sub-paragraph (2) applies if in the case of a relevant transfer—
(a) a debt owed to the transferor is transferred to the transferee, and
(b) the transferor would, apart from this paragraph, be the original creditor in relation to that debt for the purposes of section 251 of the 1992 Act (disposal of debts).
(2) The 1992 Act is to have effect as if the transferee (and not the transferor) were the original creditor for those purposes.
27 (1) Sub-paragraphs (2) to (4) apply for the purposes of Part I of the 1990 Act, and the other provisions of that Act which are relevant to that Part, if there is a disposal by virtue of a relevant transfer of the relevant interest in—
(a) an industrial building or structure, or
(b) a qualifying hotel or a commercial building or structure.
(2) The disposal is to be treated as a sale of that relevant interest.
(3) The sale moneys in respect of that sale are to be taken—
(a) if a capital sum is received by the transferor or a person connected with the transferor by way of consideration or compensation in respect of the disposal, to be an amount equal to that capital sum, or
(b) if no such capital sum is received, to be nil.
(4) Sections 157 and 158 of that Act (sales between connected persons or without change of control) are not to have effect in relation to that sale.
(5) Sub-paragraph (6) applies for determining, in the case of machinery or plant which is treated for the purposes of the Capital Allowances Acts as disposed of by virtue of a relevant transfer, the amount which (in consequence of that disposal) is to be brought into account as the disposal value of that machinery or plant for the purposes of section 24 of the 1990 Act (balancing adjustments).
(6) The amount is, subject to section 26(2) and (3) of that Act (disposal value of machinery or plant not to exceed capital expenditure incurred on its provision) to be taken—
(a) if a capital sum is received by the transferor or a person connected with the transferor by way of consideration or compensation in respect of the disposal, to be an amount equal to that capital sum, or
(b) if no such capital sum is received, to be nil.
(7) Sub-paragraph (8) applies if, in consequence of a disposal by virtue of a relevant transfer, a fixture is treated by section 57(2) of the 1990 Act as ceasing to belong to a person at any time.
(8) The amount which, in consequence of that disposal, is to be brought into account as the disposal value of the fixture for the purposes of section 24 of that Act is, subject to section 26(2) and (3) of that Act, to be taken—
(a) if a capital sum is received by the transferor or a person connected with the transferor by way of consideration or compensation in respect of the disposal, to be an amount equal to that portion of that capital sum which falls (or, if the person to whom the disposal is made were entitled to an allowance, would fall) to be treated for the purposes of Part II of that Act as expenditure incurred by that person on the provision of the fixture, or
(b) if no such capital sum is received, to be nil.
(9) Sub-paragraphs (3), (6) and (8) have effect despite any other provision of the Capital Allowances Acts.
28 (1) Sub-paragraphs (2) and (3) apply for the purposes of section 781 of the 1988 Act (assets leased to traders and others) if the interest of the lessor or the lessee under a lease, or any other interest in an asset, is transferred to a person under a relevant transfer.
(2) The transfer is to be treated as made without any capital sum having been obtained in respect of the interest by the transferor; and this is so despite section 783(4) of that Act.
(3) If the interest is an interest under a lease, payments made by the transferor under the lease before the transfer takes effect are to be treated as if they had been made under that lease by the transferee.
(4) Sub-paragraph (5) applies for the purposes of section 781 of the 1988 Act if a lease, or any other interest in an asset, is granted by the transferor by virtue of provision made under paragraph 5 of Schedule 21.
(5) The grant is to be treated as made without any capital sum having been obtained in respect of the lease, or interest, by the transferor; and this is so despite section 783(4) of that Act.
(6) No charge is to arise under section 781(1) of the 1988 Act by virtue of section 783(2) of that Act in a case where the capital sum mentioned in section 781(1)(b)(i) or (ii) of that Act is or forms part of the consideration obtained (or treated by section 783(4) of that Act as obtained) by the transferor on a disposal by virtue of a relevant transfer of securities of a subsidiary of the transferor.
(7) Expressions used in this paragraph and in sections 781 to 785 of the 1988 Act have the same meanings in this paragraph as in those sections.
29 (1) Sub-paragraph (2) applies if, as a result of a relevant transfer, the transferee replaces the transferor as a party to a loan relationship.
(2) Chapter II of Part IV of the [1996 c. 8.] Finance Act 1996 is to have effect in relation to the time when the relevant transfer takes effect and any later time as if—
(a) the transferee had been a party to the loan relationship at the time the transferor became a party to the loan relationship and at all times since that time, and
(b) the loan relationship to which the transferee is a party after the time the transfer takes effect is the same loan relationship as that to which, by virtue of paragraph (a), it is treated as having been a party before that time.
(3) Expressions used in this paragraph and in Chapter II of Part IV of the Finance Act 1996 have the same meanings in this paragraph as in that Chapter.
30 In this Part of this Schedule—
“relevant transfer” means a transfer of property, rights or liabilities by virtue of a scheme under paragraph 2 of Schedule 21 under which the property, rights or liabilities are transferred from a person which is, or has been, a franchise company,
“transferee”, in relation to a relevant transfer, means the person to whom the property, rights or liabilities are transferred, and
“transferor”, in relation to a relevant transfer, means the person from whom the property, rights or liabilities are transferred.
31 (1) Section 17 of the 1992 Act (disposals and acquisitions treated as made at market value) is not to have effect in relation to—
(a) a disposal constituted by a relevant transfer or a disposal by virtue of provision made under paragraph 5 of Schedule 21, or
(b) the acquisition made by the person to whom the disposal is made.
(2) But sub-paragraph (1) does not apply—
(a) if the person making the disposal is connected with the person making the acquisition, or
(b) in the case of a disposal by virtue of provision made under paragraph 5 of Schedule 21, if the disposal is made by or to a person other than the transferor or the transferee.
(3) If sub-paragraph (1) applies to the disposal of an asset, the disposal is to be taken (in relation to the person making the acquisition as well as the person making the disposal) to be—
(a) in a case where consideration in money or money’s worth is given by the person making the acquisition or on his behalf in respect of the vesting of the asset in him, for a consideration equal to the amount or value of that consideration, or
(b) in a case where no such consideration is given, for a consideration of nil.
32 (1) Sub-paragraph (2) applies if a company (“the degrouped company”)—
(a) acquired an asset from another company at any time when both were members of the same group of companies (“the old group”), and
(b) ceases by virtue of a relevant transfer to be a member of the old group.
(2) Section 179 of the 1992 Act (company ceasing to be member of group) is not to treat the degrouped company as having by virtue of the transfer sold and immediately reacquired the asset.
(3) If sub-paragraph (2) applies to an asset, that section is to have effect on and after the first subsequent occasion on which the degrouped company ceases to be a member of a group of companies (“the new group”), otherwise than by virtue of a qualifying transfer, as if the degrouped company and the company from which it acquired the asset had been members of the new group at the time of acquisition.
(4) If, disregarding any preparatory transactions, a company would be regarded for the purposes of section 179 of the 1992 Act (and, accordingly, of this paragraph) as ceasing to be a member of a group of companies by virtue of a qualifying transfer, it is to be regarded for those purposes as so doing by virtue of the qualifying transfer and not by virtue of any preparatory transactions.
(5) In this paragraph “preparatory transaction” means anything done under or by virtue of this Part of this Act for the purpose of initiating, advancing or facilitating the qualifying transfer in question.
(6) Expressions used in this paragraph and in section 179 of the 1992 Act have the same meanings in this paragraph as in that section.
33 (1) Sub-paragraph (2) applies if in the case of a relevant transfer—
(a) a debt owed to the transferor is transferred to the transferee, and
(b) the transferor would, apart from this paragraph, be the original creditor in relation to that debt for the purposes of section 251 of the 1992 Act (disposal of debts).
(2) The 1992 Act is to have effect as if the transferee (and not the transferor) were the original creditor for those purposes.
34 (1) Sub-paragraphs (2) to (5) apply for the purposes of Part I of the 1990 Act, and the other provisions of that Act which are relevant to that Part, if there is a disposal by virtue of a relevant transfer of the relevant interest in—
(a) an industrial building or structure, or
(b) a qualifying hotel or a commercial building or structure.
(2) The disposal is to be treated as a sale of that relevant interest.
(3) The sale moneys in respect of that sale are to be taken—
(a) if a capital sum is received by the transferor or a person connected with the transferor by way of consideration or compensation in respect of the disposal, to be an amount equal to that capital sum, or
(b) if no such capital sum is received, to be nil.
(4) The sale moneys in respect of that sale are to be taken, as respects the transferee only, to include in addition an amount equal to any capital sum received by a person other than the transferor or a person connected with the transferor by way of consideration or compensation in respect of the acquisition of the relevant interest by the transferee.
(5) Sections 157 and 158 of that Act (sales between connected persons or without change of control) are not to have effect in relation to that sale.
(6) Sub-paragraph (7) applies for determining, in the case of machinery or plant which is treated for the purposes of the Capital Allowances Acts as disposed of by virtue of a relevant transfer, the amount which (in consequence of that disposal) is to be brought into account as the disposal value of that machinery or plant for the purposes of section 24 of the 1990 Act (balancing adjustments).
(7) The amount is, subject to section 26(2) and (3) of that Act (disposal value of machinery or plant not to exceed capital expenditure incurred on its provision) to be taken—
(a) if a capital sum is received by the transferor or a person connected with the transferor by way of consideration or compensation in respect of the disposal, to be an amount equal to that capital sum, or
(b) if no such capital sum is received, to be nil.
(8) Sub-paragraph (9) applies if, in consequence of a disposal by virtue of a relevant transfer, a fixture is treated by section 57(2) of the 1990 Act as ceasing to belong to a person at any time.
(9) The amount which, in consequence of that disposal, is to be brought into account as the disposal value of the fixture for the purposes of section 24 of that Act is, subject to section 26(2) and (3) of that Act, to be taken—
(a) if a capital sum is received by the transferor or a person connected with the transferor by way of consideration or compensation in respect of the disposal, to be an amount equal to that portion of that capital sum which falls (or, if the person to whom the disposal is made were entitled to an allowance, would fall) to be treated for the purposes of Part II of that Act as expenditure incurred by that person on the provision of the fixture, or
(b) if no such capital sum is received, to be nil.
(10) Sub-paragraphs (3), (4), (7) and (9) have effect despite any other provision of the Capital Allowances Acts.
35 (1) Paragraph 11 of Schedule 9 to the [1996 c. 8.] Finance Act 1996 is not to have effect in a case where, as a result of a relevant transfer, the transferee replaces the transferor as a party to a loan relationship.
(2) Expressions used in this paragraph and in Chapter II of Part IV of the Finance Act 1996 have the same meanings in this paragraph as in that Chapter.
36 Nothing in this Part of this Act and nothing done under it is to be regarded as a scheme or arrangement for the purposes of section 30 of the 1992 Act (tax-free benefits).
37 In section 35(3)(d) of the 1992 Act (list of provisions for transfers treated as made without gain or loss), after sub-paragraph (xiii) (inserted by paragraph 2(3) of Schedule 7 to this Act) insert—
“(xiv) paragraphs 3 and 9 of Schedule 26 to the Transport Act 2000;”.
38 The existence of the powers of the Secretary of State or the Authority under this Part of this Act is not to be regarded (and nothing else in that Part is to be regarded) as—
(a) constituting arrangements falling within section 410(1) or (2) of the 1988 Act (arrangements for transfer of company to another group or consortium), or
(b) constituting option arrangements for the purposes of paragraph 5B of Schedule 18 to the 1988 Act.
39 (1) Sub-paragraph (2) applies if—
(a) the effect of a scheme under paragraph 1 of Schedule 15, paragraph 31 of Schedule 17, paragraph 1 of Schedule 19 or paragraph 1 of Schedule 25 is modified by an order made by the Secretary of State, or
(b) the effect of a scheme under paragraph 1 of Schedule 21 under which the property, rights or liabilities are transferred to the Secretary of State or a franchise company is modified by an agreement made under paragraph 15 of that Schedule.
(2) The Corporation Tax Acts (including this Schedule) are to have effect as if—
(a) the scheme had been made as modified, and
(b) anything done by or in relation to the preceding holder had (so far as relating to the property, rights or liabilities affected by the modification) been done by or in relation to the subsequent holder.
(3) For the purposes of sub-paragraph (2) the preceding holder is the person who without the modification—
(a) became (under the scheme concerned) entitled or subject to the property, rights or liabilities affected by the modification, or
(b) remained (despite the scheme concerned) entitled or subject to the property, rights or liabilities affected by the modification,
as the case may be.
(4) For the purposes of sub-paragraph (2) the subsequent holder is the person who (in consequence of the modification) becomes, or resumes being, entitled or subject to the property, rights or liabilities affected by the modification.
40 (1) Stamp duty is not to be chargeable on—
(a) a scheme under paragraph 1 of Schedule 15, paragraph 31 of Schedule 17 or paragraph 1 of Schedule 19, 21 or 25, or
(b) an instrument or agreement which is certified to the Commissioners of Inland Revenue by the Secretary of State as made in pursuance of such a scheme.
(2) No such scheme, and no instrument or agreement which is certified as mentioned in sub-paragraph (1)(b), is to be taken to be duly stamped unless—
(a) it has, in accordance with section 12 of the [1891 c. 39.] Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with that duty or that it is duly stamped, or
(b) it is stamped with the duty to which it would be liable, apart from this paragraph.
(3) Section 12 of the [1895 c. 16.] Finance Act 1895 is not to operate to require—
(a) the delivery to the Inland Revenue of a copy of this Act, or
(b) the payment of stamp duty under that section on any copy of this Act,
and is not to apply in relation to an instrument on which, by virtue of sub-paragraph (1), stamp duty is not chargeable.
(4) An agreement to transfer chargeable securities, as defined in section 99 of the [1986 c. 41.] Finance Act 1986, to a person specified in sub-paragraph (2)(a) to (c) of paragraph 1 of Schedule 21 is not to give rise to a charge to stamp duty reserve tax if the agreement is made for the purposes of, or for purposes connected with, a scheme under that paragraph.
Transport Act 2000