Office of Public Sector Information
SCHEDULE 2 continued
64 (1) Omit paragraph 9C (application of section 434D(4) in relation to overseas life insurance company).
(2) In paragraph 10B(2A) (modification of section 440 in relation to overseas life insurance company), in the inserted subsection (4AA), for “Section 81 of the 1990 Act (as it has effect by virtue of section 83(2A) of that Act)” substitute “Section 13 of the Capital Allowances Act (use for qualifying activity of plant or machinery provided for other purposes)”.
65 In paragraph 6(1)(a), for “Part I or II of the 1990 Act in taxing the trade” substitute “Part 2 or 3 of the Capital Allowances Act in calculating the profits of a trade”.
66 (1) In paragraph 10(1)—
(a) for “machinery or plant for the purposes of its trade, that machinery or plant shall be assumed, for the purposes of Part II of the 1990 Act” substitute “plant or machinery for the purposes of its trade, that plant or machinery shall be assumed, for the purposes of Part 2 of the Capital Allowances Act”, and
(b) for “section 81 of that Act (expenditure treated as equivalent to market value at the time the machinery or plant is brought into use)” substitute “section 13 of that Act (use for qualifying activity of plant or machinery provided for other purposes)”.
(2) In paragraph 10(2), for “Part II of the 1990 Act” substitute “Part 2 of the Capital Allowances Act”.
(3) In paragraph 11A—
(a) at the end of the heading insert “and expenditure on car hire”, and
(b) in sub-paragraph (4) for “section 34, 35 or 96 of the 1990 Act” substitute “section 578A or 578B or section 74(2), 75(1), 76(2), (3) or (4) or 511(3) of the Capital Allowances Act”.
67 (1) In paragraph 6(d), for “section 28 of the 1990 Act” substitute “section 253 of the Capital Allowances Act”.
(2) In paragraph 13(1)(e), for “section 28 of the 1990 Act” substitute “section 253 of the Capital Allowances Act”.
68 In paragraph 13(a), for “the 1990 Act” substitute “the Capital Allowances Act”.
69 In paragraph 3(1), for “the Capital Allowances Act 1990 (capital allowances)” substitute “the Capital Allowances Act 2001”.
70 In subsection (5A), for “by virtue of section 434D(6)(a) of the Taxes Act (capital allowances in respect of expenditure on management assets)” substitute “under section 256(2)(a) of the Capital Allowances Act (giving effect to capital allowances referable to basic life assurance and general annuity business of company carrying on life assurance business)”.
71 (1) For paragraph 5(3) substitute—
“(3) Section 291(1) of the Capital Allowances Act 2001 (supplementary provisions with respect to elections) shall not prevent the application of section 290 of that Act (election to treat grant of lease exceeding 50 years as sale) where the lease is a lease to which this sub-paragraph applies.”
(2) In paragraph 5(4)(a), for “section 44 of the Finance Act 1971 or section 24 of the 1990 Act” substitute “Chapter 5 of Part 2 of the Capital Allowances Act 2001”.
(3) In paragraph 5(4)(b), for the words from “section 44” to “Chapter VI of Part II of the 1990 Act” substitute “Chapters 5 and 14 of Part 2 of the Capital Allowances Act 2001”.
(4) For paragraph 5(5) substitute—
“(5) In sub-paragraph (4) above “the transferor” means the transferor under the transfer scheme in question and expressions which are used in Chapter 14 of Part 2 of the Capital Allowances Act 2001 have the same meanings as in that Chapter; and in construing that sub-paragraph section 511(2) of the 1988 Act shall be disregarded.”
72 In subsection (4), for “Section 153 of the Capital Allowances Act 1990” substitute “Section 532 of the Capital Allowances Act 2001”.
73 In subsection (8), for “section 153 of the Capital Allowances Act 1990 (subsidies, contributions, etc.)” substitute “section 532 of the Capital Allowances Act (the general rule excluding contributions)”.
74 (1) In subsection (4)—
(a) for “Capital Allowances Act 1990” substitute “Capital Allowances Act”;
(b) for “machinery or plant” (in each place) substitute “plant or machinery”; and
(c) for “section 24 of that Act” substitute “section 60 of that Act”.
(2) In subsection (5) for “machinery or plant” (in both places) substitute “plant or machinery”.
75 (1) In paragraph 1, omit paragraph (b).
(2) In paragraph 2, omit the words from “subject to deduction” to the end.
76 (1) In paragraph 1, omit paragraph (b).
(2) In paragraph 2, omit the words from “subject to deduction” to the end.
77 In subsection (2), for paragraphs (a) and (b) substitute—
“(a) taken into account in the making of a balancing charge under the Capital Allowances Act but excluding Part 10 of that Act,
(b) brought into account as the disposal value of plant or machinery under Part 2 of that Act, or
(c) brought into account as the disposal value of an asset representing qualifying expenditure under Part 6 of that Act.”
78 (1) In subsection (3), for paragraphs (a) and (b) substitute—
“(a) by a transfer by way of sale in relation to which an election under section 569 of the Capital Allowances Act was made, or
(b) by a transfer to which section 268 of that Act applies,”.
(2) In subsection (4), for paragraph (a) substitute—
“(a) any allowance under the Capital Allowances Act,”.
(3) In subsection (7)—
(a) for “machinery or plant” (in each place) substitute “plant or machinery”,
(b) for “Part II of the 1990 Act, and neither section 79 (assets used only partly for trade purposes) nor section 80 (wear and tear subsidies) of that Act” substitute “Part 2 of the Capital Allowances Act, and neither Chapter 15 (assets provided or used only partly for qualifying activity) nor Chapter 16 (partial depreciation subsidies) of that Part”, and
(c) for “capital expenditure” substitute “qualifying expenditure”.
79 (1) In subsection (2), for paragraphs (b) and (c) substitute—
“(b) either it is expenditure in respect of which the person was entitled to an allowance under section 441 of the Capital Allowances Act (research and development allowances) for a relevant chargeable period which began before the date of the disposal or it would have been such expenditure if the trading condition had been fulfilled, and
(c) on the disposal, section 443 of that Act (disposal values) applies in relation to the expenditure or would apply if the trading condition had been fulfilled (and the expenditure had accordingly been qualifying expenditure under Part 6 of that Act).”
(2) In subsection (3)—
(a) for “section 137 of the 1990 Act” substitute “section 441 of the Capital Allowances Act”, and
(b) omit the definition of “basis year” and the word “and” before it.
(3) In subsection (4), for “trading receipt” substitute “disposal value” and for paragraphs (a) and (b) substitute—
“(a) is required to be brought into account under section 443 of the Capital Allowances Act; or
(b) would be required to be so brought into account if the trading condition had been fulfilled (and the expenditure had accordingly been qualifying expenditure under Part 6 of that Act).”
(4) Omit subsection (5).
(5) In subsection (6)—
(a) for “which had not in fact been allowed or become allowable” substitute “in respect of which the person had not in fact been entitled to an allowance”,
(b) for “section 137 of the 1990 Act” substitute “section 441 of the Capital Allowances Act”, and
(c) omit paragraph (b) and the word “and” before it.
(6) In subsection (8), for “Part VII of the Capital Allowances Act 1990 (allowances for research and development expenditure)” substitute “Part 6 of the Capital Allowances Act (research and development allowances)”.
80 In subsection (1), omit the definition of “the 1990 Act” and after the definition of “building society” insert—
““the Capital Allowances Act” means the Capital Allowances Act 2001;”.
81 In paragraph 7(8), for “section 121 of the 1990 Act” substitute “section 394 of the Capital Allowances Act”.
82 Before section 41 insert—
(1) Expenditure incurred on the production or acquisition of a master version of a film is to be regarded for the purposes of the Tax Acts as expenditure of a revenue nature unless an election under section 40D below has effect with respect to it.
(2) If expenditure on the master version of a film is regarded as expenditure of a revenue nature under subsection (1) above, sums received from the disposal of the master version are to be regarded for the purposes of the Tax Acts as receipts of a revenue nature (if they would not be so regarded apart from this subsection).
(3) For the purposes of subsection (2) above sums received from the disposal of a master version of a film include—
(a) sums received from the disposal of any interest or right in or over the master version, including an interest or right created by the disposal, and
(b) insurance, compensation or similar money derived from the master version.
(4) In this section—
(a) “expenditure of a revenue nature” means expenditure which, if it were incurred in the course of a trade the profits of which are chargeable to tax under Case I of Schedule D, would be taken into account for the purpose of computing the profits or losses of the trade, and
(b) “receipts of a revenue nature” means receipts which, if they were receipts of such a trade, would be taken into account for that purpose.
(5) For the purposes of this section and sections 40B to 40D below, a “master version” of a film means a master negative, master tape or master audio disc of the film and includes any rights in the film (or its soundtrack) that are held or acquired with the master negative, master tape or master audio disc.
(1) In computing the profits or gains accruing to any person from a trade or business which consists of or includes the exploitation of master versions of films, expenditure which is—
(a) incurred on the production or acquisition of a master version of a film, and
(b) expenditure of a revenue nature (whether as a result of section 40A above or otherwise),
must be allocated to relevant periods in accordance with this section.
(2) Subsection (1) above does not apply if an election under section 40D below has effect with respect to the expenditure.
(3) In this section “relevant period” means—
(a) a period for which the accounts of the trade or business concerned are made up, or
(b) if no accounts of the trade or business concerned are made up for a period—
(i) if the profits or gains accrue to a company within the charge to corporation tax, the accounting period of the company;
(ii) in any other case, the period the profits or gains of which are taken into account in assessing the income of the trade or business for a year of assessment.
(4) The amount of expenditure falling within subsection (1) above which falls to be allocated to any relevant period is so much as is just and reasonable, having regard to—
(a) the amount of that expenditure which remains unallocated at the beginning of that period,
(b) the proportion which the estimated value of the master version of the film which is realised in that period (whether by way of income or otherwise) bears to the aggregate of the value so realised and the estimated remaining value of the master version at the end of that period, and
(c) the need to bring the whole of the expenditure falling within subsection (1) above into account over the time during which the value of the master version is expected to be realised.
(5) In addition to any expenditure which is allocated to a relevant period in accordance with subsection (4) above, if a claim is made, there must also be allocated to that period so much of the unallocated expenditure as is specified in the claim and does not exceed the difference between—
(a) the amount allocated to that period in accordance with subsection (4) above, and
(b) the value of the master version of the film which is realised in that period (whether by way of income or otherwise).
(6) A claim under subsection (5) above must be made—
(a) for the purposes of income tax, on or before the first anniversary of the 31st January next following the year of assessment in which ends the relevant period mentioned in that subsection;
(b) for the purposes of corporation tax, not later than two years after the end of the relevant period to which the claim relates.
(7) In subsection (5) above “the unallocated expenditure”, in relation to a relevant period, is any expenditure falling within subsection (1) above—
(a) which does not fall to be allocated to that period in accordance with subsection (4) above, and
(b) which has not been allocated to any earlier relevant period in accordance with subsection (4) or (5) above.
(1) To the extent that a deduction has been made in respect of any expenditure for a relevant period under section 42 below—
(a) that expenditure must not be allocated under section 40B above, and
(b) no other expenditure incurred on the production or acquisition of the master version of the film is to be allocated under section 40B above to the relevant period.
(2) Section 40B above does not apply to the profits of a trade in which the master version of the film constitutes trading stock, as defined by section 100(2) of the Taxes Act 1988.
(1) Sections 40A and 40B above do not apply to expenditure—
(a) in relation to which an election is made under this section, and
(b) which meets the conditions in subsection (2) below.
(2) The conditions are that—
(a) the expenditure is incurred—
(i) by a person who carries on a trade or business which consists of or includes the exploitation of master versions of films, and
(ii) on the production or acquisition of a master version of a film,
(b) the master version is certified by the Secretary of State under paragraph 3 of Schedule 1 to the Films Act 1985 as a qualifying film, tape or disc for the purposes of this section, and
(c) the value of the master version is expected to be realisable over a period of not less than two years.
(3) An election under this section—
(a) must relate to all expenditure incurred (or to be incurred) on the production or acquisition of the master version in question,
(b) must be made by giving notice to the Inland Revenue, in such form as the Board of Inland Revenue may determine, and
(c) is irrevocable.
(4) Notice under subsection (3)(b) above must be given—
(a) for the purposes of income tax, on or before the first anniversary of the 31st January next following the year of assessment in which ends the relevant period in which the master version of the film is completed;
(b) for the purposes of corporation tax, not later than two years after the end of the relevant period in which the master version of the film is completed.
(5) In subsection (4) above “relevant period” has the same meaning as in section 40B above.
(6) For the purposes of subsection (4) above, the master version of a film is completed—
(a) at the time when it is first in a form in which it can reasonably be regarded as ready for copies of it to be made and distributed for presentation to the public, or
(b) if the expenditure in question was incurred on the acquisition of the master version and it was acquired after the time mentioned in paragraph (a) above, at the time it was acquired.
(7) An election may not be made under this section in relation to expenditure on a master version of a film if a claim has been made in respect of any of that expenditure under section 41 or 42 below.”
83 In subsection (1)(c), for “section 68(9) of the 1990 Act” substitute “section 40D above”.
84 (1) In subsection (1)(b)—
(a) for “subsections (3) to (6) of section 68 of the 1990 Act” substitute “section 40B above”, and
(b) for “subsection (9) of that section” substitute “section 40D above”.
(2) In subsection (4)(c), for “section 68(3) to (6) of the 1990 Act, section” substitute “section 40B or”.
(3) In subsection (7), for “section 68(3) to (6) of the 1990 Act” substitute “section 40B above”.
85 In subsection (1)—
(a) for “41 and 42” substitute “40A to 42”,
(b) for “section 68(10) of the 1990 Act” substitute “section 40A(4) above”,
(c) for “section 68 of the 1990 Act”, in each place where it occurs, substitute “section 40D above”,
(d) for “section 68(3) of the 1990 Act” substitute “section 40B(3) above”, and
(e) omit the definition of “the 1990 Act”.
86 (1) In paragraph 9(3)—
(a) for “section 24 of the Capital Allowances Act 1990” substitute “section 55 of the Capital Allowances Act”, and
(b) for “machinery and plant” substitute “plant or machinery”.
(2) In paragraph 9(5)—
(a) for “section 24 of the Capital Allowances Act 1990” substitute “section 55 of the Capital Allowances Act”, and
(b) for “machinery and plant” substitute “plant or machinery”.
(3) In paragraph 11(6)—
(a) for “section 24 of the Capital Allowances Act 1990” substitute “section 55 of the Capital Allowances Act”, and
(b) for “machinery and plant” substitute “plant or machinery”.
87 (1) In paragraph 5(4)—
(a) for “section 11 of the Capital Allowances Act 1990 (long leases)” substitute “section 290 of the Capital Allowances Act 2001 (election to treat grant of lease exceeding 50 years as sale)”,
(b) for “long lease within the meaning” substitute “lease which satisfies the condition in subsection (1)(c)”,
(c) in paragraph (a), for “section 8” substitute “Chapter 8 of Part 3”,
(d) in paragraph (b), for “section 11(6)(a)” substitute “section 291(1)”,
(e) for “sections 157 and 158” substitute “sections 567 to 570”, and
(f) for “section 11” substitute “section 290”.
(2) In paragraph 5(5)—
(a) for “paragraphs (a) and (b) of subsection (1) of section 55 of the Capital Allowances Act 1990 (expenditure incurred by incoming lessee: transfer of allowances)” substitute “section 183(1)(a) and (b) of the Capital Allowances Act (incoming lessee where lessor entitled to allowances)”,
(b) in paragraph (a) for “Part II of that Act” substitute “Part 2 of that Act”,
(c) after that paragraph insert “and”, and
(d) omit paragraph (c) and the word “and” before it.
(3) In paragraph 6(1), for “section 11 of the Capital Allowances Act 1990” substitute “section 290 of the Capital Allowances Act 2001”.
(4) In paragraph 6(4), for “section 55 of the Capital Allowances Act 1990” substitute “section 183 of the Capital Allowances Act 2001”.
88 In subsection (2)—
(a) for “section 28 or 61(1) of the Capital Allowances Act 1990”, substitute “section 19 or 253 of the Capital Allowances Act”, and
(b) for “section 28 or 61(1) of that Act” substitute “section 19 or 253 of that Act”.
89 In subsection (5), for “section 22B, 34, 35, 38C, 38D or 79A of the Capital Allowances Act 1990” substitute “section 578A(2) or (3) of the Taxes Act 1988 or section 43(3), 74(2), 75(1), 76(2), (3) or (4), 99(1), (2) or (3) or 208(1) of the Capital Allowances Act”.
90 In paragraph 19(4) and (5)(b), for “the Capital Allowances Act 1990” substitute “the Capital Allowances Act 2001”.
91 (1) In paragraph 1(1)—
(a) omit the definition of “the Allowances Act”,
(b) after the definition of “the Board” insert—
““the Capital Allowances Act” means the Capital Allowances Act 2001 and includes, where the context admits, enactments which under the Taxes Act 1988 are to be treated as contained in the Capital Allowances Act 2001;”, and
(c) in the definition of “fixture”, for “Chapter VI of Part II of the Allowances Act” substitute “Chapter 14 of Part 2 of the Capital Allowances Act”.
(2) In paragraph 1(4)(c), for “the Capital Allowances Acts” substitute “the Capital Allowances Act”.
(3) In paragraph 20(1) and (2)(a), for “the Capital Allowances Acts” substitute “the Capital Allowances Act”.
(4) In paragraph 20(8), for “section 77 of the Allowances Act (successions to trades: connected persons)” substitute “sections 266 and 267 of the Capital Allowances Act (election where predecessor and successor are connected persons)”.
(5) In paragraph 21(1), for “the Capital Allowances Acts” substitute “the Capital Allowances Act”.
(6) In paragraph 21(2)—
(a) in paragraph (a), for “subsection (6) of section 21 of the Allowances Act (transfer of industrial buildings or structures to be deemed to be sale at market price)” substitute “section 573 of the Capital Allowances Act (transfers treated as sales) as it applies for the purposes of Part 3 of that Act”,
(b) in paragraph (b), for “that subsection” substitute “that section” and for “the Capital Allowances Acts” substitute “that Act”, and
(c) for “by virtue of that subsection or any other provision of those Acts), sections 157 and 158 of the Allowances Act” substitute “under that section or any other provision of the Capital Allowances Act), sections 567 to 570 of that Act”.
(7) In paragraph 21(3)—
(a) for “the Capital Allowances Acts” substitute “the Capital Allowances Act”,
(b) for “those Acts” substitute “that Act”,
(c) in paragraph (a), for “section 26(1) or 59 of the Allowances Act” substitute “section 61(2) to (4), 72(3) to (5), 171, 196 or 423 of the Capital Allowances Act”, and
(d) in paragraph (c), for “section 54” substitute “sections 181(1) and 182(1)”.
(8) In paragraph 22(2)—
(a) for “building or structure” (in both places) substitute “building”,
(b) for “Part I of the Allowances Act” substitute “Part 3 of the Capital Allowances Act”, and
(c) for “sections 157 and 158” substitute “sections 567 to 570”.
(9) In paragraph 22(3)—
(a) for “machinery or plant” (in the first and second places) substitute “plant or machinery”,
(b) for “section 24 of the Allowances Act (balancing adjustments) shall, 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)” substitute “section 55 of the Capital Allowances Act (determination of entitlement or liability) shall, subject to section 62 of that Act (general limit on amount of disposal value)”, and
(c) for “the Capital Allowances Acts” substitute “the Capital Allowances Act”.
(10) In paragraph 22(4)—
(a) for “section 57(2) of the Allowances Act” substitute “section 188 of the Capital Allowances Act”,
(b) for “section 24 of that Act shall, subject to section 26(2) and (3)” substitute “section 55 of that Act shall, subject to section 62”,
(c) in paragraph (a), for “Part II” substitute “Part 2”, and
(d) for “the Capital Allowances Acts” substitute “the Capital Allowances Act”.
92 (1) In paragraph 5(2), for “the 1990 Act” (in both places) substitute “the Capital Allowances Act 2001”.
(2) In paragraph 5(3)—
(a) omit the definition of “the 1990 Act”,
(b) for “section 4 of the 1990 Act” substitute “Chapter 7 of Part 3 of the Capital Allowances Act 2001”, and
(c) for “section 20 of the 1990 Act” substitute “Chapter 3 of Part 3 of the Capital Allowances Act 2001”.
93 (1) In paragraph 1(2)—
(a) after the definition of “the 1988 Act” insert—
““the Capital Allowances Act” includes, where the context admits, enactments which under the 1988 Act are to be treated as contained in the Capital Allowances Act,”, and
(b) in the definition of “fixture”, for “Chapter VI of Part II of the 1990 Act” substitute “Chapter 14 of Part 2 of the Capital Allowances Act”.
Capital Allowances Act 2001