PART 2 continued
(1) In Schedule 29 to FA 2002 (gains and losses of a company from intangible fixed assets), after paragraph 95 (meaning of “related party”) insert—
95A (1) For the purposes of this Schedule, a person (“P”) shall be treated as a related party in relation to a company (“C”) within a Case in paragraph 95(1) if P would be a related party in relation to C within that Case but for any person (other than an individual) being the subject of—
(a) insolvency arrangements, or
(b) equivalent arrangements under the law of any country or territory (whether made when the person is solvent or insolvent).
(2) For the purpose of this paragraph, “insolvency arrangements” includes—
(a) arrangements under which a person acts as the liquidator, provisional liquidator, receiver, administrator or administrative receiver of a company or partnership, and
(b) voluntary arrangements proposed or approved in relation to a company or partnership under Part 1 of the Insolvency Act 1986 or Part 2 of the Insolvency (Northern Ireland) Order 1989.
(3) In this paragraph—
“administrative receiver” means an administrative receiver within the meaning of section 251 of the Insolvency Act 1986 or Article 5(1) of the Insolvency (Northern Ireland) Order 1989,
“administrator” means a person appointed to manage the affairs, business and property of the company or partnership under Schedule B1 to that Act or to that Order, and
“receiver” means a person appointed as receiver of some or all of the property of the company or partnership under an enactment or under an instrument issued for the purpose of representing security for, or the rights of creditors in respect of, any debt.”
(2) Subject to subsections (4) and (5), the amendment made by subsection (1) has effect in relation to the debits and credits to be brought into account for accounting periods beginning on or after 12 March 2008.
(3) For the purposes of subsection (2), an accounting period beginning before, and ending on or after, that day is treated as if so much of that period as falls before that day, and so much of that period as falls on or after that day, were separate periods.
(4) The amendment made by subsection (1) does not have effect for the purpose of determining whether a person was a related party in relation to a company at a time before 12 March 2008.
(5) That amendment has effect, for the purposes of paragraph 92 of Schedule 29 to FA 2002 as it applies otherwise than for determining the debits and credits to be brought into account under that Schedule, in relation to any transfer of an asset made on or after 12 March 2008.
(1) In Part 17 of ICTA (tax avoidance)—
(a) in section 704 (cancellation of corporation tax advantages: the prescribed circumstances), omit—
(i) paragraph B (and the “OR” after it), and
(ii) in paragraph C(1), paragraph (b) (and the “or” before it),
(b) in section 709 (definitions), omit subsection (2A),
(c) omit sections 731 to 735 (purchase and sale of securities), and
(d) omit section 736 (company dealing in securities: distribution materially reducing value of holding).
(2) In Part 13 of ITA 2007 (tax avoidance)—
(a) in section 684(2) (person liable to counteraction of income tax advantage), omit the entry relating to section 687 of that Act,
(b) omit section 687 (deductions from profits obtained following distribution or dealings), and
(c) in section 688 (receipt of consideration representing company’s assets, future receipts or trading stock), omit—
(i) in subsection (3), paragraph (b) (and the “or” before it), and
(ii) subsections (4), (5) and (9).
(3) In consequence of the amendments made by subsection (1)(a) and (b), omit—
(a) in FA 1997, section 73, and
(b) in ITA 2007, paragraph 155(4) and (5) and (6)(b) of Schedule 1.
(4) In consequence of the amendments made by subsection (1)(c) and (d), omit—
(a) in ICTA, sections 343(5) and 738,
(b) in FA 1990, section 53,
(c) in FA 1991, sections 55 and 56,
(d) in TCGA 1992, paragraph 14(40) and (41) of Schedule 10,
(e) in FA 1994, paragraph 17 of Schedule 16,
(f) in FA 1995, section 81,
(g) in FA 1996—
(i) paragraph 36 of Schedule 20, and
(ii) paragraph 9 of Schedule 38,
(h) in FA 1997, section 77,
(i) in F(No.2)A 1997—
(i) section 26, and
(ii) paragraph 14 of Schedule 6,
(j) in FA 2003, paragraph 6 of Schedule 38,
(k) in ITTOIA 2005, paragraphs 302 and 303 of Schedule 1,
(l) in ITA 2007—
(i) in section 64(8), paragraph (f) (and the “and” before it),
(ii) in section 72(5), paragraph (f) (and the “and” before it),
(iii) in section 448(3), “and section 451”,
(iv) in section 449(3), “and section 451”,
(v) section 451,
(vi) in section 505, in subsection (4) “and section 506” and, in subsection (5) “and in section 506”,
(vii) section 506, and
(viii) paragraphs 167 to 170 of Schedule 1, and
(m) in FA 2007, paragraph 6 of Schedule 14.
(5) The amendments made by subsections (1)(a) and (b), (2) and (3) have effect in relation to transactions in securities entered into on or after 1 April 2008.
(6) The amendment made by subsection (1)(c) has effect in relation to cases where the purchase by the first buyer (within the meaning of section 731(2) of ICTA) is made on or after that date.
(7) The amendment made by subsection (1)(d) has effect in relation to distributions made on or after that date.
(8) The amendments made by subsection (4) have effect in accordance with subsections (6) and (7).
(1) In section 685A of ITTOIA 2005 (settlor-interested settlements), after subsection (5) insert—
“(5A) If the recipient of the annual payment is treated by subsection (3) as having paid income tax in respect of the annual payment, the amount of the payment is treated as the highest part of the recipient’s total income for all income tax purposes except the purposes of sections 535 to 537 (gains from contracts for life insurance etc: top slicing relief).
(5B) See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between—
(a) the rule in subsection (5A), and
(b) other rules requiring particular income to be treated as the highest part of a person’s income.”
(2) In section 1012(4) of ITA 2007 (relationship between rules on highest part of total income), after the entry relating to section 465A of ITOIA 2005 insert—
“section 685A(5A) of ITTOIA 2005 (payments from trustees of settlor-interested settlements to be treated as highest part of total income),”.
(3) The amendments made by this section have effect for the tax year 2006-07 and subsequent tax years.
(1) In section 13(2) of ITA 2007 (income charged at dividend upper rate: individuals)—
(a) omit “and” at the end of paragraph (a), and
(b) at the end of paragraph (b) insert “, and
(c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005.”
(2) The amendments made by subsection (1) have effect for the tax year 2008-09 and subsequent tax years.
(1) In section 964 of ITA 2007, omit subsection (5) (sums representing income tax deducted from annual payments not to be taken into account for the purpose of calculating amounts to be paid on account of income tax).
(2) The repeal made by subsection (1) has effect for the purpose of calculating the amount of any payments to be made under section 59A of TMA 1970 on account of liability to income tax for the tax year 2008-09 and subsequent tax years.
(1) In section 278 of ICTA (non-residents eligible for reliefs)—
(a) in subsection (2)(a), omit “or an EEA national”, and
(b) omit subsection (9).
(2) In section 56(3) of ITA 2007 (non-UK residents eligible for personal allowances and tax reductions), before paragraph (a) insert—
“(za) is a national of an EEA state,”.
(3) Accordingly, omit section 145 of FA 1996 (personal reliefs for non-resident EEA nationals).
(4) The amendments made by this section have effect for the tax year 2008-09 and subsequent tax years.