Office of Public Sector Information
PART 3 continued CHAPTER 5 continued
(1) No liability to income tax arises in respect of the provision for an employee of—
(a) an eye and eyesight test, or
(b) special corrective appliances that an eye and eyesight test shows are necessary,
if conditions A and B are met.
(2) Condition A is that the provision of the test or appliances is required by regulations made under the Health and Safety at Work etc. Act 1974.
(3) Condition B is that tests and appliances of the kind mentioned in subsection (1) are made available generally to those employees of the employer in question for whom they are required to be provided by the regulations.”
(3) In section 266 (exemption of non-cash vouchers for exempt benefits), at the end of subsection (3) insert “, or
(f) section 320A (eye tests and special corrective appliances).”
(4) In section 267 (exemption of credit-tokens used for exempt benefits), at the end of subsection (2) insert “, and
(h) section 320A (eye tests and special corrective appliances).”
(5) This section has effect for the year 2006-07 and subsequent years of assessment.
In Chapter 4 of Part 3 of ITEPA 2003 (taxable benefits: vouchers and credit-tokens), after section 96 insert—
(1) The Treasury may by regulations provide for exemption from any liability that would otherwise arise by virtue of this Chapter in respect of—
(a) non-cash vouchers which are or can be used to obtain specified exempt benefits, or which evidence an employee’s entitlement to specified exempt benefits;
(b) credit-tokens which are used to obtain specified exempt benefits.
(2) In this section—
“exempt benefit” means a benefit the direct provision of which is exempted from liability to income tax by a provision of Part 4 (employment income: exemptions), and
“specified” means specified in the regulations.
(3) Regulations under this section may operate by amending section 266 (exemption of non-cash vouchers for exempt benefits) or section 267 (exemption of credit-tokens used for exempt benefits).”
(1) In section 369 of ITTOIA 2005 (charge to tax on interest), in subsection (3) (non-exhaustive list of exemptions), in paragraph (e) (exemptions under sections 749 to 756)—
(a) for “756” substitute “756A”, and
(b) for “and interest on certain foreign currency securities)” substitute “, certain foreign currency securities and interest on certain deposits of victims of National-Socialist persecution)”.
(2) After section 756 of ITTOIA 2005 (which securities and loans are foreign currency ones for section 755) insert—
(1) No liability to income tax arises in respect of interest which is paid—
(a) to or in respect of a victim of National-Socialist persecution,
(b) under a qualifying compensation scheme, and
(c) for a qualifying purpose in respect of a qualifying deposit of the victim.
(2) A scheme is a qualifying compensation scheme if—
(a) it is constituted (whether under the law of any part of the United Kingdom or elsewhere) by an instrument in writing, and
(b) the purpose of the scheme, or one of its purposes, is to make payments of interest to or in respect of victims of National-Socialist persecution for qualifying purposes in respect of qualifying deposits.
(3) Interest is paid for a qualifying purpose in respect of a deposit if—
(a) it is paid for meeting a liability in respect of interest on the deposit, or
(b) it is paid for compensating for the effects of inflation on the deposit.
(4) In relation to a victim of National-Socialist persecution, a deposit is a qualifying deposit if it was made—
(a) by, or on behalf of, the victim, and
(b) on or before 5th June 1945.
(5) In this section “deposit” has the meaning given by section 481(3) of ICTA.”.
(3) In section 783 of ITTOIA 2005 (general disregard of exempt income for income tax purposes)—
(a) for subsection (2) (exception to general disregard) substitute—
“(2) There are exceptions to this in the following cases.
(2A) Interest on deposits in ordinary accounts with the National Savings Bank which is exempt under this Part from every charge to income tax is not to be ignored for the purpose of providing information.
(2B) Interest paid to or in respect of victims of National-Socialist persecution which is so exempt is not to be ignored for the purposes of sections 17 and 18 of TMA 1970 (information provisions relating to interest).”, and
(b) in subsection (3) (subsection (2) without prejudice to other exceptions) for “This express exception to subsection (1) is” substitute “These express exceptions to subsection (1) are”.
(4) After section 268 of TCGA 1992 (decorations for valour or gallant conduct) insert—
(1) A gain accruing on a disposal is not a chargeable gain if it accrues on—
(a) a disposal of the right to receive the whole or any part of a qualifying payment in respect of National-Socialist persecution, or
(b) a disposal of an interest in any such right.
(2) A payment is a qualifying payment in respect of National-Socialist persecution if it is payable as mentioned in paragraphs (a) to (c) of section 756A(1) of ITTOIA 2005 (income tax exemption for payments to or in respect of victims of National-Socialist persecution).
(3) In this section “interest”, in relation to any right, means an interest as a co-owner of the right.
(4) It does not matter—
(a) whether the right is owned jointly or in common, or
(b) whether or not the interests of the co-owners are equal.”.
(5) If at any time before claims could have been made under any qualifying compensation scheme—
(a) a person beneficially entitled to a qualifying deposit has died, and
(b) no information in respect of that deposit was contained in any account relating to that deceased person under any provision of IHTA 1984,
that deposit is to be ignored for all purposes of IHTA 1984.
(6) For this purpose “qualifying compensation scheme” and “qualifying deposit” have the same meaning as in section 756A of ITTOIA 2005.
(7) Subsection (2) has effect (and is deemed always to have had effect)—
(a) for the year 1996-97, and
(b) subsequent years of assessment.
(8) Subsection (4) has effect (and is deemed always to have had effect) in relation to disposals made on or after 6th April 1996; but no loss accruing on a disposal made before 6th April 2006 is, as a result of that subsection, to cease to be an allowable loss.
(9) In relation to any time before 6th April 2005 (the commencement of ITTOIA 2005)—
(a) the section inserted by subsection (2) is to be treated as if it were inserted into ICTA (and as if, in subsection (5) of that section, “of ICTA” were omitted), and
(b) any reference to that section in any enactment is to be read accordingly.
(10) In relation to the year 2005-06 or any earlier year of assessment, all such adjustments are to be made as are required to give effect to the exemptions conferred as a result of this section.
(11) But the adjustments are to be made only if the person entitled to the exemption makes a claim for the exemption on or before 31st January 2012.
(12) The adjustments may be made by discharge or repayment of tax, the making of an assessment or otherwise.
(1) In this section “LOCOG” means the private company limited by guarantee incorporated on 22nd October 2004 with the Company Number 05267819 and with the name The London Organising Committee of the Olympic Games Limited.
(2) LOCOG shall be exempt from corporation tax.
(3) Section 349(1) of ICTA (annual payments: deductions of tax) shall not apply to payments to LOCOG.
(4) A claim may be made for any repayment of income tax required as a result of an exemption conferred by this section.
(5) The Treasury may by regulations provide for subsections (2) to (4) to apply to a wholly-owned subsidiary of LOCOG (within the meaning of section 736 of the Companies Act 1985 (c. 6)) as they apply to LOCOG.
(6) Subsection (7) applies if it appears to the Treasury—
(a) that LOCOG has been or may have been, or is or may be, directly or indirectly connected with another person, or
(b) has been or may have been, or is or may be, acting in association or co-operation with another person (whether by virtue of part-ownership, partnership, membership of a group or consortium or in any other way).
(7) The Treasury may make regulations—
(a) restricting the application of a provision of this section to a specified extent;
(b) removing or restricting an exemption or relief under an enactment relating to corporation tax, income tax or capital gains tax;
(c) preventing a loss or expense of a specified kind from being used or treated in a specified way for purposes of corporation tax, income tax or capital gains tax;
(d) wholly or to a specified extent preventing an allowance from being claimed for purposes of corporation tax, income tax or capital gains tax;
(e) providing for a transfer of property to be disregarded, or treated in a specified way, for purposes of corporation tax, income tax or capital gains tax;
(f) providing for specified action taken by LOCOG or the other person to have, or not to have, a specified effect for purposes of corporation tax, income tax or capital gains tax;
(g) providing for an enactment relating to the treatment of groups of companies for purposes of corporation tax, income tax or capital gains tax to be wholly or partly disapplied or to be applied with modifications;
(h) making any other provision which appears to the Treasury to be expedient for the purpose of preventing this section from being used or relied upon otherwise than in connection with the functions of LOCOG under the Host City Contract;
and provision made under any of paragraphs (b) to (h) may relate to LOCOG or to the other person mentioned in subsection (6).
(8) If it appears to the Treasury that LOCOG has undertaken, is undertaking or may undertake activities other than in pursuance of the Host City Contract, the Treasury may make regulations restricting the application of a provision of this section to a specified extent.
(9) Regulations under subsection (5) may include provision of a kind similar to that which may be made under subsection (7) or (8).
(1) Regulations under section 65(5) to (8)—
(a) may make provision which applies generally or only in specified cases or circumstances,
(b) may make different provision for different cases or circumstances,
(c) may have retrospective effect, and
(d) may include incidental, consequential or transitional provision.
(2) Regulations under section 65 shall be made by statutory instrument.
(3) Regulations under section 65(5)—
(a) shall be subject to annulment in pursuance of a resolution of the House of Commons, or
(b) if they include provision by virtue of section 65(9), may not be made unless a draft has been laid before and approved by resolution of the House of Commons.
(4) Regulations under section 65(7) or (8) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.
(5) In section 65 “the Host City Contract” has the meaning given by section 1 of the London Olympic Games and Paralympic Games Act 2006.
(6) Section 65 shall be treated as having come into force on 22nd October 2004.
(7) The Treasury may by order made by statutory instrument repeal section 65 and this section.
(1) The Treasury may make regulations—
(a) providing for the International Olympic Committee to be treated for the purposes of corporation tax as not having a permanent establishment in the United Kingdom;
(b) providing for the International Olympic Committee not to be chargeable to income tax or capital gains tax;
(c) disapplying section 349(1) and (2) of ICTA (annual payments: deductions of tax) to payments to the International Olympic Committee.
(2) The Treasury may make regulations—
(a) providing for a specified person or class of person appearing to the Treasury to be owned or controlled by the International Olympic Committee to be treated for the purposes of corporation tax as not having a permanent establishment in the United Kingdom;
(b) providing for a specified person or class of person appearing to the Treasury to be owned or controlled by the International Olympic Committee not to be chargeable to income tax or capital gains tax;
(c) disapplying section 349(1) and (2) of ICTA to payments to a specified person or class of person appearing to the Treasury to be owned or controlled by the International Olympic Committee.
(3) Regulations under this section—
(a) may make provision which applies generally or only in specified cases or circumstances,
(b) may make different provision for different cases or circumstances,
(c) may have retrospective effect, and
(d) may include incidental, consequential or transitional provision.
(4) Regulations under this section—
(a) shall be made by statutory instrument, and
(b) shall be subject to annulment in pursuance of a resolution of the House of Commons.
(5) A claim may be made for any repayment of income tax required as a result of an exemption conferred under this section.
(1) The Treasury may make regulations—
(a) exempting specified classes of person from income tax in respect of specified classes of income arising from participation in London Olympic events;
(b) providing for specified classes of activity undertaken in connection with London Olympic events to be disregarded for purposes of corporation tax, income tax or capital gains tax;
(c) providing for specified classes of activity in connection with London Olympic events to be disregarded in determining for fiscal purposes whether a person has a permanent establishment in the United Kingdom;
(d) disapplying section 349(1) of ICTA (annual payments: deductions of tax) in consequence of provision made under paragraphs (a) to (c) above.
(2) The regulations may specify classes of person wholly or partly by reference to—
(a) residence outside the United Kingdom, determined in such manner as the regulations may provide;
(b) documents issued or authority given by such persons exercising functions in connection with the London Olympics as the regulations may provide.
(3) Regulations under this section—
(a) may make provision which applies generally or only in specified cases or circumstances,
(b) may make different provision for different cases or circumstances, and
(c) may include incidental, consequential or transitional provision.
(4) Regulations under this section—
(a) shall be made by statutory instrument, and
(b) shall be subject to annulment in pursuance of a resolution of the House of Commons.
(5) In this section “London Olympic event” and “the London Olympics” have the meaning given by section 1 of the London Olympic Games and Paralympic Games Act 2006.
(1) Section 8 of TCGA 1992 (company’s total profits to include chargeable gains) is amended as follows.
(2) In subsection (2) (exclusion of loss as allowable loss)—
(a) for “does not include a loss” substitute “does not include—
(a) a loss”, and
(b) at the end insert “, or
(b) a loss accruing to a company in disqualifying circumstances (see subsection (2A))”.
(3) After subsection (2) insert—
“(2A) For the purposes of subsection (2)(b), a loss accrues to a company in disqualifying circumstances if—
(a) it accrues to the company directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
(b) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage.
(2B) For the purposes of subsection (2A)—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
“tax advantage” has the meaning given by section 184D.
(2C) For the purposes of subsection (2A) it does not matter—
(a) whether the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or
(b) whether the tax advantage is secured for the company or for any other company.”.
(4) In section 834(1) of ICTA (interpretation of the Corporation Tax Acts), in the definition of “allowable loss”, at the end insert “or a loss accruing to a company in disqualifying circumstances (within the meaning of section 8(2)(b) of the 1992 Act)”.
(5) The amendments made by this section have effect in relation to any loss accruing on any disposal that is made on or after 5th December 2005.
(1) TCGA 1992 is amended as follows.
(2) After section 184 insert—
(1) This section applies for the purposes of corporation tax in respect of chargeable gains if—
(a) at any time (“the relevant time”) there is a qualifying change of ownership in relation to a company (“the relevant company”) (see section 184C),
(b) a loss (a “qualifying loss”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)),
(c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage (see section 184D), and
(d) the advantage involves the deduction of a qualifying loss from any chargeable gains (whether or not it also involves anything else).
(2) A qualifying loss accruing to a company is not to be deductible from chargeable gains accruing to the company unless the gains accrue to the company on a disposal of a pre-change asset.
(3) In this section a “pre-change asset” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F).
(4) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
(5) For the purposes of this section it does not matter—
(a) whether a qualifying loss accrues before, after or at the relevant time,
(b) whether a qualifying loss accrues at a time when there are no chargeable gains from which it could be deducted (or could otherwise have been deducted), or
(c) whether the tax advantage is secured for the company to which a qualifying loss accrues or for any other company.
(1) This section applies for the purposes of corporation tax in respect of chargeable gains if—
(a) at any time (“the relevant time”) there is a qualifying change of ownership in relation to a company (“the relevant company”) (see section 184C),
(b) a gain (a “qualifying gain”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)),
(c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, and
(d) the advantage involves the deduction of a loss from a qualifying gain (whether or not it also involves anything else).
(2) In the case of a qualifying gain accruing to a company, a loss accruing to the company is not to be deductible from the gain unless the loss accrues to the company on a disposal of a pre-change asset.
(3) In this section a “pre-change asset” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F).
(4) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
(5) For the purposes of this section it does not matter—
(a) whether a qualifying gain accrues before, after or at the relevant time,
(b) whether a qualifying gain accrues at a time when there are no losses which could be deducted (or could otherwise have been deducted) from the gain, or
(c) whether the tax advantage is secured for the company to which a qualifying gain accrues or for any other company.
(1) For the purposes of sections 184A and 184B, there is a qualifying change of ownership in relation to a company at any time if any one or more of the following occur at that time—
(a) the company joins a group of companies (see subsections (2) to (5)),
(b) the company ceases to be a member of a group of companies,
(c) the company becomes subject to different control (see subsections (6) to (9)).
(2) Whether a company is a member of a group of companies at any time is determined in accordance with section 170.
(3) But, apart from in the excepted case, nothing in section 170(10) or (10A) is to prevent all the companies of one group from being regarded as joining another group when the principal company of the first group becomes a member of the other group at any time.
(4) The excepted case is the case where—
(a) the persons owning the shares of the principal company of the first group immediately before that time are the same as the persons owning the shares of the principal company of the other group immediately after that time,
(b) the principal company of the other group was not the principal company of any group immediately before that time, and
(c) immediately after that time the principal company of the other group had assets consisting entirely (or almost entirely) of shares of the principal company of the first group.
(5) For this purpose, references to shares of a company are to the shares comprised in the issued share capital of the company.
(6) The general rule is that a company becomes subject to different control at any time if any one or more of the following occur—
(a) a person has control of the company at that time (whether alone or together with one or more others) and the person did not previously have control of the company,
(b) a person has control of the company at that time together with one or more others and the person previously had control of the company alone,
(c) a person ceases to have control of the company at that time (whether the person had control alone or together with one or more others).
(7) The general rule is subject to the following exceptions.
(8) A company does not become subject to different control in any case where it joins a group of companies and the case is the excepted case mentioned above.
(9) A company (“the subsidiary”) does not become subject to different control at any time in any case where—
(a) immediately before that time the subsidiary is the 75 per cent. subsidiary of another company, and
(b) (although there is a change in the direct ownership of the subsidiary) that other company continues immediately after that time to own it as a 75 per cent. subsidiary.
For the purposes of sections 184A and 184B, “tax advantage” means—
(a) relief or increased relief from corporation tax,
(b) repayment or increased repayment of corporation tax,
(c) the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax, or
(d) the avoidance of a possible assessment to corporation tax.
(1) If—
(a) a company other than the relevant company makes a disposal of an asset, and
(b) the asset has been disposed of at any time after the relevant time by a disposal to which section 171(1) does not apply (a “non-section 171(1) transfer”),
the asset ceases to be regarded as a pre-change asset for the purposes of sections 184A and 184B (but see also subsections (10) and (11)).
Finance Act 2006