Finance Act 2010

• Citation: 2010 c. 13
• Sections: 291

Section 1 Charge, main rates, thresholds and allowances etc for 2010-11

(1) Income tax is charged for the tax year 2010-11.

(2) For that tax year—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(c) the additional rate is 50%.

(3) The amounts specified in the following provisions of ITA 2007 are the same for the tax year 2010-11 as for the tax year 2009-10—

(a) sections 10(5) and 12(3) (basic rate limit and starting rate limit for savings),

(b) sections 35, 36(1), 37(1) and 38(1) (personal allowances and blind person's allowance),

(c) sections 43, 45(3)(a) and (b) and 46(3)(a) and (b) (tax reductions for married couples and civil partners), and

(d) sections 36(2), 37(2), 45(4) and 46(4) (adjusted net income limit).

Section 2 Charge and main rate for financial year 2011

(1) Corporation tax is charged for the financial year 2011.

(2) For that year the rate of corporation tax is—

(a) 26% on profits of companies other than ring fence profits, and

(b) 30% on ring fence profits of companies.

(3) In subsection (2) “ ring fence profits ” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

Section 3 Small profits rates and fractions for financial year 2010

(1) For the financial year 2010 the small profits rate is—

(a) 21% on profits of companies other than ring fence profits, and

(b) 19% on ring fence profits of companies.

(2) For the purposes of Part 3 of CTA 2010, for that year—

(a) the standard fraction is 7/400ths, and

(b) the ring fence fraction is 11/400ths.

(3) In subsection (1) “ ring fence profits ” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

Section 4 Increase in entrepreneurs' relief

(1) In section 169N(3) of TCGA 1992 (limit on entrepreneurs' relief)—

(a) for “£1 million” (in both places) substitute “ £2 million ” , and

(b) in paragraph (b), after “total of” insert “ so much of ” and insert at the end “ as was subject to reduction under subsection (2) ” .

(2) The amendments made by subsection (1) have effect in relation to qualifying business disposals occurring on or after 6 April 2010.

Section 5 Annual investment allowance

(1) In section 51A(5) of CAA 2001 (entitlement to annual investment allowance: maximum allowance), for “£50,000” substitute “ £100,000 ” .

(2) The amendment made by subsection (1) has effect in relation to expenditure incurred on or after the relevant date.

(3) Subsections (4) and (5) apply in relation to a chargeable period (“the actual chargeable period”) which—

(a) begins before the relevant date, and

(b) ends on or after that date.

(4) The maximum allowance under section 51A of CAA 2001 for the actual chargeable period is the sum of each maximum allowance that would be found if—

(a) the period beginning with the first day of the chargeable period and ending with the day before the relevant date, and

(b) the period beginning with the relevant date and ending with the last day of the chargeable period,

were treated as separate chargeable periods.

(5) But, so far as concerns expenditure incurred before the relevant date, the maximum allowance under section 51A of that Act for the actual chargeable period is to be calculated as if the amendment made by subsection (1) had not been made.

(6) In this section “ the relevant date ” means—

(a) for corporation tax purposes, 1 April 2010, and

(b) for income tax purposes, 6 April 2010.

Section 6 Relief for first-time buyers

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Section 7 Rate in respect of residential property where consideration over £1m

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(2) The amendment made by subsection (1) has effect in relation to any land transaction of which the effective date is on or after 6 April 2011.

(3) But that amendment does not have effect in relation to any transaction—

(a) effected in pursuance of a contract entered into and substantially performed before 25 March 2010, or

(b) effected in pursuance of a contract entered into before that date and not excluded by subsection (4).

(4) A transaction effected in pursuance of a contract entered into before 25 March 2010 is excluded by this subsection if—

(a) there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 25 March 2010,

(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

(c) on or after that date there is an assignment (or assignation), subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

Section 8 Rate bands

(1) The Table substituted in Schedule 1 to IHTA 1984 by section 155(1)(b) and (4) of FA 2006 (which provides for a rate of nil per cent on such portion of the value concerned as does not exceed £325,000 and a rate of 40 per cent on such portion as exceeds that amount) has effect in relation to chargeable transfers made on or after 6 April 2010.

(2) Accordingly, omit—

(a) in IHTA 1984, the Table substituted in Schedule 1 in relation to chargeable transfers made on or after that date (which provided for a rate of nil per cent on such portion of the value concerned as does not exceed £350,000 and a rate of 40 per cent on such portion as exceeds that amount), and

(b) in FA 2007, section 4 (which substituted it).

(3) Section 8 of IHTA 1984 (indexation) does not have effect by virtue of any difference between the retail prices index for the month of September in 2010, 2011, 2012 or 2013 and the previous September.

Section 9 Rates of alcoholic liquor duties

(1) ALDA 1979 is amended as follows.

(2) In section 5 (rate of duty on spirits), for “£22.64” substitute “ £23.80 ” .

(3) In section 36(1AA)(a) (standard rate of duty on beer), for “£16.47” substitute “ £17.32 ” .

(4) In section 62(1A) (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for “£207.20” substitute “ £217.83 ” ,

(b) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£47.77” substitute “ £54.04 ” , and

(c) in paragraph (c) (rate of duty per hectolitre in any other case), for “£31.83” substitute “ £36.01 ” .

(5) In section 62(1A) (as amended by subsection (4))—

(a) in paragraph (b), for “£54.04” substitute “ £50.22 ” , and

(b) in paragraph (c), for “£36.01” substitute “ £33.46 ” .

(6) For the table in Schedule 1 substitute—

TABLE OF RATES OF DUTY ON WINE AND MADE-WINE

WINE OR MADE-WINE OF A STRENGTH NOT EXCEEDING 22 PER CENT

WINE OR MADE-WINE OF A STRENGTH EXCEEDING 22 PER CENT

(7) The amendments made by subsections (2) to (4) and (6) are treated as having come into force on 29 March 2010.

(8) The amendments made by subsection (5) come into force on 30 June 2010.

Section 10 Rates of tobacco products duty

(1) For the table in Schedule 1 to TPDA 1979 substitute—

TABLE

(2) The amendment made by subsection (1) is treated as having come into force at 6 pm on 24 March 2010.

Section 11 Rates for motorcycles

(1) In paragraph 2(1) of Schedule 1 to VERA 1994 (annual rates of duty: motorcycles)—

(a) in paragraph (c) (motorbicycle which has engine with cylinder capacity exceeding 400cc but not exceeding 600cc), for “£48” substitute “ £50 ” , and

(b) in paragraph (d) (motorcycle not within any of paragraphs (a) to (c)), for “£66” substitute “ £70 ” .

(2) The amendments made by subsection (1) have effect in relation to licences taken out on or after 1 April 2010.

Section 12 Fuel duties: rates and rebates from April 2010

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.5619” substitute “ £0.5719 ” ,

(b) in paragraph (aa) (aviation gasoline), for “£0.3457” substitute “ £0.3835 ” ,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.6591” substitute “ £0.6691 ” , and

(d) in paragraph (c) (heavy oil), for “£0.5619” substitute “ £0.5719 ” .

(3) In section 6AA(3) (rate of duty on biodiesel), for “shall be £0.3619 a litre” substitute “ is the same as that in the case of heavy oil ” .

(4) In section 6AB (rate of duty on bioblend)—

(a) in subsection (3), for the words after “is the” substitute “ same as that in the case of heavy oil. ” , and

(b) omit subsections (4) and (5).

(5) In section 6AD(3) (rate of duty on bioethanol), for “shall be £0.3619 a litre.” substitute “ is the same as that in the case of unleaded petrol. ”

(6) In section 6AE (rate of duty on blends of bioethanol and hydrocarbon oil)—

(a) in subsection (3), for the words after “bioethanol blend” substitute “ is the same as that in the case of unleaded petrol. ” , and

(b) omit subsections (4) and (5).

(7) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2216” substitute “ £0.2360 ” , and

(b) in paragraph (b) (other road fuel gas), for “£0.2767” substitute “ £0.3053 ” .

(8) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1037” substitute “ £0.1055 ” , and

(b) in paragraph (b) (gas oil), for “£0.1080” substitute “ £0.1099 ” .

(9) In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1037” substitute “ £0.1055 ” .

(10) In section 14A(2) (rebate on certain biodiesel), for “£0.1080” substitute “ £0.1099 ” .

(11) The following are revoked—

(a) the Hydrocarbon Oil Duties (Hydrogenation of Biomass) (Reliefs) Regulations 2006 ( S.I. 2006/3426),

(b) the Hydrocarbon Oil Duties (Sulphur-free Diesel) (Hydrogenation of Biomass) (Reliefs) (Amendment) Regulations 2007 (S.I. 2007/2406), and

(c) regulation 11 of the Hydrocarbon Oil, Biofuels and Other Fuel Substitutes (Determination of Composition of a Substance and Miscellaneous Amendments) Regulations 2008 (S.I. 2008/753).

(12) The amendments made by this section are treated as having come into force on 1 April 2010.

Section 13 Fuel duties: further changes in rates and rebates

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol)—

(i) on 1 October 2010, for “£0.5719” substitute “ £0.5819 ” , and

(ii) on 1 January 2011, for “£0.5819” substitute “ £0.5895 ” ,

(b) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline)—

(i) on 1 October 2010, for “£0.6691” substitute “ £0.6791 ” , and

(ii) on 1 January 2011, for “£0.6791” substitute “ £0.6867 ” , and

(c) in paragraph (c) (heavy oil)—

(i) on 1 October 2010, for “£0.5719” substitute “ £0.5819 ” , and

(ii) on 1 January 2011, for “£0.5819” substitute “ £0.5895 ” .

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas)—

(i) on 1 October 2010, for “£0.2360” substitute “ £0.2505 ” , and

(ii) on 1 January 2011, for “£0.2505” substitute “ £0.2615 ” , and

(b) in paragraph (b) (other road fuel gas)—

(i) on 1 October 2010, for “£0.3053” substitute “ £0.3195 ” , and

(ii) on 1 January 2011, for “£0.3195” substitute “ £0.3304 ” .

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil)—

(i) on 1 October 2010, for “£0.1055” substitute “ £0.1074 ” , and

(ii) on 1 January 2011, for “£0.1074” substitute “ £0.1088 ” , and

(b) in paragraph (b) (gas oil)—

(i) on 1 October 2010, for “£0.1099” substitute “ £0.1118 ” , and

(ii) on 1 January 2011, for “£0.1118” substitute “ £0.1133 ” .

(5) In section 14(1) (rebate on light oil for use as furnace fuel)

(a) on 1 October 2010, for “£0.1055” substitute “ £0.1074 ” , and

(b) on 1 January 2011, for “£0.1074” substitute “ £0.1088 ” .

(6) In section 14A(2) (rebate on certain biodiesel)—

(a) on 1 October 2010, for “£0.1099” substitute “ £0.1118 ” , and

(b) on 1 January 2011, for “£0.1118” substitute “ £0.1133 ” .

Section 14 Rates of air passenger duty

(1) In section 30 of FA 1994 (air passenger duty: rates)—

(a) in subsection (2) (journeys ending in UK or Part 1 territory), for “£11” substitute “ £12 ” and for “£22” substitute “ £24 ” ,

(b) in subsection (3) (journeys ending in Part 2 territory), for “£45” substitute “ £60 ” and for “£90” substitute “ £120 ” ,

(c) in subsection (4) (journeys ending in Part 3 territory), for “£50” substitute “ £75 ” and for “£100” substitute “ £150 ” , and

(d) in subsection (4A) (other journeys), for “£55” substitute “ £85 ” and for “£110” substitute “ £170 ” .

(2) The amendments made by subsection (1) have effect in relation to the carriage of passengers beginning on or after 1 November 2010.

Section 15 Standard rate of landfill tax

(1) In section 42(1) and (2) of FA 1996 (standard amount of landfill tax), for “£48” substitute “ £56 ” .

(2) The amendments made by subsection (1) have effect in relation to disposals made (or treated as made) on or after 1 April 2011.

Section 16 Rate of aggregates levy

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Section 17 Rates of climate change levy

(1) In Schedule 6 to FA 2000 (climate change levy), for the table in paragraph 42(1) substitute—

TABLE

(2) The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2011.

Section 18 Climate change levy: reduced-rate supplies

(1) In Schedule 6 to FA 2000 (climate change levy), in paragraph 42(1)(c) (reduced-rate supplies), for “20 per cent.” substitute “ 35 per cent. ” .

(2) The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2011.

Section 19 Rate of bingo duty

(1) In section 17(1)(b) of BGDA 1981 (bingo duty chargeable at 22 per cent of bingo promotion profits), for “22” substitute “ 20 ” .

(2) The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 29 March 2010.

Section 20 Rates of gaming duty

(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—

TABLE

(2) The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 1 April 2010.

Section 21 Amusement machine licence duty

(1) In section 23(2) of BGDA 1981 (amount of duty payable on amusement machine licence), for the table substitute—

TABLE

(2) The amendment made by subsection (1) has effect in relation to cases where the application for the amusement machine licence is received by the Commissioners for Her Majesty's Revenue and Customs after 4 pm on 26 March 2010.

Section 22 Bank payroll tax

Schedule 1 contains provision for and in connection with bank payroll tax.

Section 23 Pensions: high income excess relief charge

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Section 24 Sideways relief etc

Schedule 3 contains provision about sideways relief etc.

Section 25 Property loss relief

(1) Chapter 4 of Part 4 of ITA 2007 (losses from property businesses) is amended as follows.

(2) In section 117 (overview of Chapter), after subsection (2) insert—

(3) This Chapter also contains provision restricting relief under this Chapter (see section 127A).

(3) In section 120 (deduction of property losses from general income), after subsection (6) insert—

(7) See also section 127A (no relief for tax-generated losses attributable to annual investment allowance).

(4) After section 127 insert—

Restrictions on relief

No relief for tax-generated losses attributable to annual investment allowance

(127A)

(1) This section applies if—

(a) in a tax year a person makes a loss in a UK property business or overseas property business (whether carried on alone or in partnership),

(b) the loss has a capital allowances connection (see section 123(2)), and

(c) the loss arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements.

(2) No property loss relief against general income may be given to the person for so much of the applicable amount of the loss as is attributable to an annual investment allowance.

(3) For the purposes of subsection (2), the applicable amount of the loss is to be treated as attributable to capital allowances before anything else and to an annual investment allowance before any other capital allowance.

(4) In subsection (1) “ relevant tax avoidance arrangements ” means arrangements—

(a) to which the person is a party, and

(b) the main purpose, or one of the main purposes, of which is being in a position to make use of an annual investment allowance in the obtaining of a reduction in tax liability by means of property loss relief against general income.

(5) In subsection (4) “ arrangements ” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

(6) In this section “ the applicable amount of the loss ” has the meaning given by section 122.

(5) The amendments made by this section have effect in relation to a loss if it arises directly or indirectly in consequence of, or otherwise in connection with—

(a) arrangements which are entered into on or after 24 March 2010, or

(b) any transaction forming part of arrangements which is entered into on or after that date.

(6) But those amendments do not have effect where the arrangements are, or any such transaction is, entered into pursuant to an unconditional obligation in a contract made before that date.

(7) “ An unconditional obligation ” means an obligation which may not be varied or extinguished by the exercise of a right (whether or not under the contract).

Section 26 Capital allowance buying

Schedule 4 contains provisions about capital allowance buying.

Section 27 Leased assets

Schedule 5 contains provisions about leased assets.

Section 28 Cushion gas

(1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2) Section 70J (meaning of “funding lease”) is amended as follows.

(3) After subsection (1) insert—

(1A) A plant or machinery lease is also a “funding lease” if the plant or machinery is cushion gas.

(4) In subsection (2), for “Subsection (1) is” substitute “ Subsections (1) and (1A) are ” .

(5) After subsection (6) insert—

(7) In this section “ cushion gas ” means gas that functions or is intended to function as plant in a particular gas storage facility.

(6) In section 104A(1) (special rate expenditure)—

(a) omit the “and” at the end of paragraph (d), and

(b) after paragraph (e) insert

and

(f) expenditure incurred on or after 1 April 2010 on the provision of cushion gas (within the meaning given by section 70J(7)).

(7) After section 104F insert—

Disposal events in respect of cushion gas

(104G)

(1) This section applies if expenditure incurred by a person on the provision of cushion gas used in a particular gas storage facility includes both new expenditure and old expenditure.

(2) Any disposal event which concerns any of that cushion gas is to be treated for the purposes of this Part as relating to cushion gas which is the subject of the new expenditure before cushion gas which is the subject of the old expenditure.

(3) The result of subsection (2) (including any further application of that subsection) is that a disposal event may be treated as relating—

(a) only to cushion gas which is the subject of the new expenditure,

(b) both to—

(i) cushion gas which is the subject of the new expenditure, and

(ii) cushion gas which is the subject of the old expenditure, or

(c) only to cushion gas which is the subject of the old expenditure.

(4) If a disposal event is treated, as a result of subsection (2), as relating both to—

(a) cushion gas which is the subject of the new expenditure, and

(b) cushion gas which is the subject of the old expenditure,

it is to be treated for the purposes of this Part as two separate disposal events, the first relating to cushion gas within paragraph (a) and the second relating to cushion gas within paragraph (b).

(5) In this section—

“ cushion gas ” has the meaning given by section 70J(7),

“ new expenditure ” means expenditure incurred on or after 1 April 2010, and

“ old expenditure ” means expenditure incurred before that date.

(8) The amendments made by subsections (2) to (5) have effect in relation to leases whose inception (within the meaning given by section 70YI(1) of CAA 2001) is on or after 1 April 2010.

(9) The amendments made by subsection (6) have effect in relation to expenditure incurred on or after 1 April 2010.

(10) The amendment made by subsection (7) has effect in relation to disposal events on or after 1 April 2010.

Section 29 Sale of lessors: consortium relationships

(1) Chapters 3 and 4 of Part 9 of CTA 2010 (sales of lessors) are amended as follows.

(2) In section 393(7) (qualifying 75% subsidiaries), omit “or 90%”.

(3) In section 394 (consortium relationships)—

(a) in subsections (1)(b), (4) and (5)(b), for “90%” substitute “ 75% ” , and

(b) in subsection (9)(b), omit “or 90%”.

(4) In section 398 (qualifying 75% or 90% subsidiary), omit—

(a) subsections (5) and (6), and

(b) in subsection (7)(b), “and “90% subsidiary””,

and, in the heading, omit “ or 90% ”.

(5) In section 405(2)(b) and (6) (adjustments to basic amount), for “90%” substitute “ 75% ” .

(6) In sections 408(5)(b) and 430(4)(b) (associated company), for “90%” substitute “ 75% ” .

(7) In Schedule 4 to CTA 2010, omit the entry relating to “qualifying 90% subsidiary (in Chapters 3 to 6 of Part 9)”.

(8) The amendments made by this section have effect where the relevant day is on or after 9 December 2009.

(9) Corresponding amendments, having effect where the relevant day is on or after that date, are to be treated as having been made in Schedule 10 to FA 2006.

Section 30 Charities and community amateur sports clubs: definitions

Schedule 6 contains provision about the meaning of “charity” (and related expressions) and “community amateur sports club”.

Section 31 Gifts of shares etc to charities

Schedule 7 contains provision about schemes to obtain or increase relief in respect of certain gifts to charities.

Section 32 Miscellaneous amendments

Schedule 8 contains miscellaneous amendments of provisions relating to charities.

Section 33 “Relevant person”

(1) Section 809M of ITA 2007 (remittance basis: meaning of “relevant person”) is amended as follows.

(2) In subsection (2)(f), insert at the end “ or a company which is a 51% subsidiary of such a company, ” .

(3) In subsection (3)(ca), for “Act),” substitute “ Act) and, in relation to a company that would be a close company if it were resident in the United Kingdom, means a person who would be such a participator if it were a close company, ” .

(4) The amendments made by this section are treated as having come into force on 6 April 2010.

Section 34 Foreign currency bank accounts

Schedule 9 contains provision about foreign currency bank accounts.

Section 35 Penalties: offshore income etc

(1) Schedule 10 contains provision about penalties in respect of offshore income etc.

(2) Schedule 10 comes into force on such day as the Treasury may by order appoint.

(3) An order under subsection (2)—

(a) may make different provision for different purposes, and

(b) may include transitional provisions and savings.

(4) The Treasury may by order make any incidental, supplemental, consequential, transitional or transitory provision or saving that appears appropriate in consequence of, or otherwise in connection with, Schedule 10.

(5) An order under subsection (4) may—

(a) make different provision for different purposes, and

(b) make provision amending, repealing or revoking an enactment or instrument (whenever passed or made).

(6) An order under this section is to be made by statutory instrument.

(7) A statutory instrument containing an order under subsection (4) is subject to annulment in pursuance of a resolution of the House of Commons.

Section 36 Reliefs and reductions for foreign tax

Schedule 11 contains provision about activities designed to increase the amount allowed by way of credit or reduction in respect of foreign tax.

Section 37 Asset transfer to non-resident company: recovery of postponed charge

(1) In section 140 of TCGA 1992 (postponement of charge on transfer of assets to non-resident company)—

(a) in subsection (4), for “the consideration received by it on the disposal shall be treated as increased by” substitute “ there shall be deemed to accrue to the transferor company as a chargeable gain on that occasion ” , and

(b) after that subsection insert—

(4A) A chargeable gain which is deemed to accrue under subsection (4) is in addition to any gain or loss that actually accrues to the transferor company on the disposal of the securities.

(2) In Schedule 7AC to that Act (exemption for disposals by companies with substantial shareholding), omit paragraph 35 (recovery of charge postponed on transfer of asset to non-resident company).

(3) The amendments made by this section have effect in relation to disposals of securities on or after 6 January 2010.

Section 38 Transactions in securities

Schedule 12 contains provision about transactions in securities.

Section 39 Approved CSOP schemes: eligible shares

(1) In Part 4 of Schedule 4 to ITEPA 2003 (shares to which approved CSOP schemes can apply), omit paragraph 17(1)(c) (shares in a company which is under the control of a listed company).

(2) Accordingly, in that Schedule—

(a) in paragraph 17—

(i) after sub-paragraph (1)(a) insert “ or ” ,

(ii) omit “or” at the end of sub-paragraph (1)(b), and

(iii) omit sub-paragraph (2), and

(b) omit paragraph 20(3)(c) (and the “or” before it).

(3) The amendments made by this section—

(a) come into force on 24 September 2010, and

(b) have effect in relation to options granted on or after that day.

(4) If—

(a) during the period beginning with 24 March 2010 and ending with 23 September 2010 (“ the transitional period ”), a share option is granted to an individual in accordance with the provisions of an approved CSOP scheme, and

(b) the shares which may be acquired by the exercise of the option are shares in a company which is under the control of a listed company, other than shares of a class listed on a recognised stock exchange,

the share option is to be treated for the purposes of the CSOP code as not having been granted in accordance with the provisions of an approved CSOP scheme.

(5) An alteration made to a scheme during the transitional period in order to meet the amended paragraph 17 requirement is to be regarded as an alteration made in a key feature of the scheme for the purposes of paragraph 30 of Schedule 4 to ITEPA 2003 (withdrawal of approval).

(6) Where the amended paragraph 17 requirement is not met in respect of an approved CSOP scheme at the end of the transitional period, the requirement is to be treated for the purposes of paragraph 30(2)(a) of that Schedule (disqualifying events) as ceasing to be met immediately after that time.

(7) Where, by virtue of subsection (6), approval is withdrawn from a scheme under Part 7 of that Schedule, that withdrawal has effect (from the time determined in accordance with paragraph 30(1) of that Schedule) in relation to options granted on or after 24 September 2010 only.

(8) In subsections (3) to (7) references to options having been granted include new share options granted under the terms of a provision included in a scheme under paragraph 26 of Schedule 4 to ITEPA 2003 (exchange of shares on company reorganisation); but paragraph 27(5) of that Schedule (new share options treated as granted at same time as old share options) does not apply for the purposes of those subsections.

(9) In this section—

“ the amended paragraph 17 requirement ” means the requirement of paragraph 17 of Schedule 4 to ITEPA 2003 as amended by this section;

“approved” and “CSOP scheme” have the meaning given by section 521 of that Act;

“ control ” and “ listed company ” have the same meaning as in paragraph 17 of Schedule 4 to that Act.

Section 40 Unauthorised unit trusts

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Section 41 Index-linked gilt-edged securities

Schedule 14 contains provision about index-linked gilt-edged securities.

Section 42 Approved share incentive plans

(1) Paragraph 84(1) of Schedule 2 to ITEPA 2003 (approved share incentive plans) is amended as follows.

(2) For paragraph (d) substitute—

(d) an alteration being made—

(i) in the share capital of a company any of whose shares are subject to the plan trust, or

(ii) in the rights attaching to any shares of such a company,

that materially affects the value of shares that are subject to the plan trust;

(3) In paragraph (e), for “have been awarded to participants” substitute “ are subject to the plan trust ” .

(4) Section 989 of CTA 2009 (deduction for contribution to plan trust) is amended as follows.

(5) In subsection (1), after paragraph (a) insert—

(aa) the payment is not made pursuant to tax avoidance arrangements,

(6) After subsection (6) insert—

(6A) For the purposes of this section the payment mentioned in subsection (1)(a) is made pursuant to tax avoidance arrangements if—

(a) it is made pursuant to arrangements entered into by the paying company, and

(b) the main purpose, or one of the main purposes, of the paying company in entering into the arrangements was to obtain a deduction or an increased deduction.

(6B) In subsection (6A) “ arrangements ” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

(7) The amendments made by subsections (1) to (3) have effect in relation to events taking place on or after 24 March 2010.

(8) The amendments made by subsections (4) to (6) have effect in relation to payments made on or after that day.

Section 43 Close companies: release of loans to participators etc

(1) In CTA 2009, after section 321 insert—

Restriction on debits resulting from release of loans to participators etc

(321A)

(1) This section applies if—

(a) a loan gives rise to a charge to tax under section 455 of CTA 2010 (including a charge by virtue of section 459 or 460 of that Act), and

(b) the whole or a part of the debt in respect of the loan is released or written off.

(2) No debit is to be brought into account for the purposes of this Part in respect of the release or writing off.

(2) The amendment made by subsection (1) has effect in relation to debts (or parts of debts) released or written off on or after 24 March 2010.

Section 44 Connected companies: releases of debts

Schedule 15 contains provision about releases of debts in cases involving connected companies.

Section 45 Relationships treated as loan relationships etc: repos

(1) In paragraph 4 of Schedule 13 to FA 2007 (ignoring effect on borrower of sale of securities), in sub-paragraph (4) omit the “and” at the end of paragraph (a) and after that paragraph insert—

(aa) an amount representative of income payable in respect of the securities is not to be ignored as a result of sub-paragraph (3)(b) if it is, in accordance with generally accepted accounting practice, so recognised or taken into account, and

(2) In section 550 of CTA 2009 (ignoring effect on borrower of sale of securities)—

(a) in subsection (4), for “and (6)” substitute “ to (6) ” , and

(b) after subsection (5) insert—

(5A) For the purposes of the charge to corporation tax, an amount representative of income payable in respect of the securities is not to be ignored as a result of subsection (3)(b) if—

(a) it is, in accordance with generally accepted accounting practice, recognised in determining the borrower's profit or loss for that or any other period, or

(b) it is taken into account in calculating the amounts which are so recognised.

(3) The amendments made by this section are treated as always having had effect.

Section 46 Risk transfer schemes

Schedule 16 contains provision about risk transfer schemes.

Section 47 Apportionment of asset value increases

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 48 Extension of special annual allowance charge

(1) Schedule 35 to FA 2009 (special annual allowance charge) is amended as follows.

(2) In paragraph 1(2) (high-income individual)—

(a) in the first sentence, for “£150,000” substitute “ £130,000 ” , and

(b) insert at the end—

Paragraph 16A makes special provision about cases in which the individual's relevant income for the tax year 2009-10 is less than £150,000.

(3) In paragraph 2 (calculation of relevant income)—

(a) in the last sentence of sub-paragraph (1),

(b) in sub-paragraph (2) (in each place), and

(c) in sub-paragraph (3) (in both places),

for “£150,000” substitute “ £130,000 ” .

(4) After sub-paragraph (5) of that paragraph insert—

(5A) If—

(a) the individual's relevant income for the tax year (whether that is the tax year 2009-10 or a later tax year) would (apart from this sub-paragraph) be less than £130,000 if the reference in sub-paragraph (5) to a scheme made on or after 22 April 2009 were to a scheme made on or after 9 December 2009, and

(b) the individual's relevant income for the tax year 2009-10 is less than £150,000,

the individual's relevant income for the tax year is to be assumed to be less than £130,000.

(5) In paragraph 11(3)(b), after “22 April” insert “ 2009 ” .

(6) After paragraph 16 insert—

Individuals with relevant income below £150,000 in 2009-10

(16A)

(1) This paragraph has effect if the individual's relevant income for the tax year 2009-10 is less than £150,000.

(2) References in this Schedule to a pre-22 April 2009 pension input amount are to a pre-9 December 2009 pension input amount.

(3) References in this Schedule to noon on 22 April 2009 are to 9 December 2009.

(4) Other references in this Schedule to 22 April 2009 (except in paragraph 2) are to 9 December 2009.

(5) The reference in paragraph 16(2) to 21 April 2009 is to 8 December 2009.

(6) If the amount arrived at in the case of the individual under sub-paragraph (1) of paragraph 2 for the tax year 2009-10 is less than £150,000, take the steps in that sub-paragraph in relation to the tax year 2007-08 and the tax year 2008-09.

If the result is £150,000 or more for either or both of those earlier tax years the individual's relevant income for the tax year 2009-10 is to be assumed for the purposes of sub-paragraph (1) to be £150,000.

(7) If there is a scheme the main purpose, or one of the main purposes, of which is to secure that the individual's relevant income for the tax year 2009-10 is less than £150,000, it is to be assumed for the purposes of sub-paragraph (1) to be £150,000.

(7) The amendments made by this section have effect for the tax year 2009-10 and subsequent tax years (but see paragraph 21(2) of Schedule 35 to FA 2009).

Section 49 Information

In section 251(5) of FA 2004 (persons who can be required to provide information to scheme administrators etc), after paragraph (a) insert—

(aa) employers of members of a registered pension scheme,

Section 50 Extension of reverse charge provisions to supplies of services

(1) In section 55A of VATA 1994 (customers to account for tax on supplies of goods of a kind used in missing trader intra-community fraud), after “goods” (in each place, including the heading) insert “ or services ” .

(2) In paragraph 2(3B) of Schedule 11 to that Act (power to require notifications relating to supplies to which section 55A(6) applies), after “goods” insert “ or services ” .