Office of Public Sector Information
PART 7 continued
(8) This section does not apply in relation to any contract entered into or varied in an accounting period beginning on or after 1st October 2002 unless the contract arises from the exercise of a currency option which was entered into or varied on or after 30th September 2002 and in an accounting period beginning on or before that date.
(9) In this section the following expressions, namely—
(a) qualifying company,
(b) qualifying contract,
(c) currency contract,
(d) currency option,
have the same meaning as in Chapter 2 of Part 4 of the Finance Act 1994 (c. 9), (disregarding for this purpose the provisions specified in subsection (4)) and references to the exercise of an option shall be construed accordingly.
(10) In this section “statutory accounts” has the meaning given by paragraph 52 of Schedule 26 to the Finance Act 2002 (c. 23).
(11) This section shall be deemed to have come into force on 30th September 2002.
Schedule 37 to this Act (which makes amendments in relation to loan relationships) has effect.
(1) In paragraph 28 of Schedule 26 to the Finance Act 2002 (c. 23), in sub-paragraph (3)(a) (credits and debits to be brought into account: disregard of the transaction or series of transactions except for certain purposes) after “except” insert—
“(i) for the purpose of determining the credits and debits to be brought into account in respect of exchange gains or losses and identifying the company which is to bring them into account, or
(ii)”.
(2) In sub-paragraph (3)(b) of that paragraph (transferor and transferee deemed to be the same person, except for that purpose) for “that purpose” substitute “those purposes”.
(3) For sub-paragraph (4) of that paragraph substitute—
“(4) References in this paragraph to one company replacing another as party to a derivative contract shall include references to a company becoming party to any derivative contract which—
(a) confers rights or imposes liabilities, or
(b) both confers rights and imposes liabilities,
where those rights or liabilities, or rights and liabilities, are equivalent to those of the other company under a derivative contract to which that other company has previously ceased to be party.”.
(4) For paragraph 30 of that Schedule (amount to be brought into account on transaction within a group where transferor uses mark to market basis of accounting) substitute—
“30 (1) Paragraph 28 does not apply where the transferor company uses an authorised mark to market basis of accounting as respects the derivative contract in question, but in any such case—
(a) the amount to be brought into account by the transferor company in respect of the transaction referred to in that paragraph, or in respect of the series of transactions there referred to, taken together, must be the fair value of the derivative contract as at the date of transfer to the transferee company; and
(b) the amount to be brought into account by the transferee company in respect of the transaction referred to in that paragraph, or in respect of the series of transactions there referred to, taken together, must be the same as the amount brought into account by the transferor company in respect of that transaction or, as the case may be, that series of transactions, taken together.
(2) In this paragraph “transferor company” and “transferee company” have the same meaning as in paragraph 28.”.
(5) The amendments made by this section have effect where the date of transfer to the transferee company falls on or after 9th April 2003.
(1) After section 79A of the Taxes Act 1988 (contributions to training and enterprise councils and local enterprise companies) insert—
(1) Notwithstanding anything in section 74, but subject to the provisions of this section, where a person carrying on a trade, profession or vocation makes any contribution (whether in cash or in kind) to a designated urban regeneration company, any expenditure incurred by him in making the contribution may be deducted as an expense in computing the profits of the trade, profession or vocation if it would not otherwise be so deductible.
(2) Where any such contribution is made by an investment company, any expenditure allowable as a deduction under subsection (1) above shall for the purposes of section 75 be treated as expenses of management.
(3) Subsection (1) above does not apply in relation to a contribution made by any person if either he or any person connected with him receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution, whether from the urban regeneration company concerned or from any other person.
(4) In any case where—
(a) relief has been given under subsection (1) above in respect of a contribution, and
(b) any benefit received in any chargeable period by the contributor or any person connected with him is in any way attributable to that contribution,
the contributor shall in respect of that chargeable period be charged to tax under Case I or Case II of Schedule D or, if he is not chargeable to tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
(5) In this section “urban regeneration company” means any body of persons (whether corporate or unincorporate) which the Treasury by order designates as an urban regeneration company for the purposes of this section.
(6) The Treasury may only make an order under subsection (5) above designating a body as an urban regeneration company for the purposes of this section if they consider that each of the criteria in subsection (7) below is satisfied in the case of the body.
(7) The criteria are that—
(a) the sole or main function of the body is to co-ordinate the regeneration of a specific urban area in the United Kingdom;
(b) the body is expected to seek to perform that function by creating a plan for the development of that area and endeavouring to secure that the plan is carried into effect;
(c) in co-ordinating the regeneration of that area, the body is expected to work together with some or all of the public or local authorities which exercise functions in relation to the whole or part of that area.
(8) An order under subsection (5) above may be framed so as to take effect on a date earlier than the making of the order, but not earlier than—
(a) 1st April 2003, in the case of the first order under that subsection, or
(b) three months before the date on which the order is made, in the case of any subsequent order.
(9) Section 839 (connected persons) applies for the purposes of this section.
(10) This section applies to contributions made on or after 1st April 2003.”.
(2) In section 828(4) of the Taxes Act 1988 (orders or regulations under specified provisions not to be subject to Commons negative resolution parliamentary procedure) after “section 1(6),” insert “79B(5),”.
Schedule 38 to this Act (which contains amendments relating to arrangements for the sale and repurchase of securities etc) has effect.
Schedule 39 to this Act (relevant discounted securities: withdrawal of relief for costs and losses, and extension of definition of “strip”) has effect.
(1) Section 469A of the Taxes Act 1988 (court common investment funds) is amended as follows.
(2) In paragraph (c) of subsection (1) (persons entitled as against the Accountant General to share in fund’s investments treated as unit holders in authorised unit trust) for “the persons whose interests entitle them, as against the Accountant General, to share in the fund’s investments” substitute “the persons with qualifying interests”.
(3) After that subsection insert—
“(1A) For the purposes of subsection (1)(c) above, the persons with qualifying interests are—
(a) in relation to shares in the fund held by the Accountant General, the persons whose interests entitle them, as against him, to share in the fund’s investments;
(b) in relation to shares in the fund held by any other person authorised by the Lord Chancellor to hold such shares on behalf of others (an “authorised person”)—
(i) if there are persons whose interests entitle them, as against the authorised person, to share in the fund’s investments, those persons;
(ii) if not, the authorised person;
(c) in relation to shares in the fund held by persons authorised by the Lord Chancellor to hold such shares on their own behalf, those persons.”.
(4) This section has effect in relation to income arising to a common investment fund on or after 6th April 2003.
(5) In this section “common investment fund” means a common investment fund established under section 42 of the Administration of Justice Act 1982 (c. 53).
(1) Schedule 29 to the Finance Act 2002 (c. 23) (gains and losses of a company from intangible fixed assets) is amended as follows.
(2) In paragraph 111 (tax avoidance arrangements to be disregarded)—
(a) in sub-paragraph (1) for the words following “in determining” substitute “whether a debit or credit is to be brought into account under this Schedule or the amount of any such debit or credit”, and
(b) in sub-paragraph (2)—
(i) for “under paragraph 9” in paragraph (a), and
(ii) for “under Part 4” in paragraph (b),
substitute “under this Schedule”.
(3) In paragraph 95(1) (cases in which persons are “related parties”) at the end add—
P is a company and C is another company in the same group.”
(4) The amendments in this section—
(a) have effect in relation to the debits or credits to be brought into account for accounting periods beginning on or after 20th June 2003, and
(b) in relation to the debits or credits to be brought into account for any such period shall be deemed always to have had effect.
(5) For this purpose an accounting period beginning before, and ending on or after, that date is treated as if so much of that period as falls before that date, and so much of that period as falls on or after that date, were separate accounting periods.
Finance Act 2003