Broadcasting Act 1996

Section 135.

SCHEDULE 7 U.K. Transfer schemes relating to BBC transmission network: taxation provisions

Interpretation U.K.

1 (1) In this Schedule, unless the context otherwise requires— U.K.

• F1 . . .

• “the BBC transmission network” has the meaning given by section 131(2);

• [F2 “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.]

• “direct disposal scheme” means a transfer scheme which is not a preparatory scheme;

• “direct disposal transfer” means a transfer in accordance with a direct disposal scheme;

• “the documents regulating the BBC” includes—

  (a)

  the M1 Royal Charter of 1st May 1996 for the continuance of the British Broadcasting Corporation; and

  (b)

  the M2 Agreement dated 25th January 1996 between Her Majesty’s Secretary of State for National Heritage and the British Broadcasting Corporation;

• “the Gains Act” means the M3 Taxation of Chargeable Gains Act 1992;

• “modification agreement” has the meaning given by paragraph 7(7) of Schedule 5;

• “preparatory scheme” means a transfer scheme whose main purpose is to provide for a transfer of property, rights or liabilities from the BBC to a wholly-owned subsidiary of the BBC;

• “preparatory transfer” means a transfer in accordance with a preparatory scheme;

• “relevant transfer” means a transfer in accordance with a transfer scheme;

• “successor company” means a company to which property, rights or liabilities are transferred in accordance with a preparatory scheme at a time when the company is a wholly-owned subsidiary of the BBC;

• “the Taxes Act 1988” means the M4 Income and Corporation Taxes Act 1988;

• “transfer”, except for the purposes of paragraphs 13 to 18, includes—

  (a)

  any transfer effected by or under an agreement or instrument entered into or executed in pursuance of an obligation imposed by a provision contained in a transfer scheme by virtue of paragraph 2(1)(g) of Schedule 5;

  (b)

  the creation of interests, rights or liabilities by or under any such agreement or instrument; and

  (c)

  the creation of interests, rights or liabilities by virtue of any provision contained in a transfer scheme by virtue of paragraph 2 of Schedule 5;

  and references to a transfer in accordance with a transfer scheme (or any description of transfer scheme) shall be construed accordingly;

• “transferee”—

  (a)

  in relation to a transfer scheme, means a person to whom property, rights or liabilities are transferred in accordance with the transfer scheme; and

  (b)

  in relation to a relevant transfer, means the person to whom the property, rights or liabilities in question are transferred in accordance with the transfer scheme in question;

• “wholly-owned subsidiary” has the meaning given by [F3 section 1159 of the Companies Act 2006] .

(2) In any provision of this Schedule “the prescribed amount”, in relation to any transferee under a transfer scheme, means such amount as may be specified by the Secretary of State by order for the purposes of that provision in its application to that transferee.

(3) This Schedule—

(a) so far as it relates to corporation tax, shall be construed as one with the Corporation Tax Acts, and

(b) so far as it relates to capital allowances, shall be construed as one with the [F4 the Capital Allowances Act].

Textual Amendments

F1 Sch. 7 para. 1(1): definition of “the Allowances Act” repealed (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), 580, Sch. 2 para. 97(1), Sch. 4

F2 Sch. 7 para. 1(1): definition of “the Capital Allowances Act” substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) for definition of “the capital Allowances Acts” by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(1)

F3 Words in Sch. 7 para. 1(1) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 1(2), Sch. 1 para. 162(d) (with art. 10)

F4 Words in Sch. 7 para. 1(3)(b) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(2)

Marginal Citations

M1 Cm. 3248.

M2 Cm. 3152.

M3 1992 c. 12.

M4 1988 c. 1.

Chargeable gains: preparatory transfers etc to be without gain or loss U.K.

2 (1) For the purposes of corporation tax on chargeable gains, the disposal of property, rights or liabilities which is constituted by a preparatory transfer shall, subject to the following provisions of this Schedule, be taken in relation to both— U.K.

(a) the person to whom the disposal is made, and

(b) the person making the disposal,

to be effected for a consideration such that no gain or loss accrues to the person making the disposal.

(2) Section 171(1) of the Gains Act (which makes provision in relation to the disposal of assets from one member of a group of companies to another member of the group) shall not apply where the disposal in question is a preparatory transfer.

Chargeable gains: amendment of section 35(3)(d) of the Gains Act U.K.

F5 3 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F5 Sch. 7 para. 3 omitted (with effect in accordance with Sch. 2 para. 71 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 70(d)

Chargeable gains: section 41 of the Gains Act U.K.

4 U.K. Subsection (1) of section 174 of the Gains Act (which applies section 41 of that Act to cases where assets have been acquired without gain or loss) shall have effect, without prejudice to paragraph 2, where there has been a preparatory transfer as if the asset to which the preparatory transfer relates had thereby been transferred and acquired in relevant circumstances, within the meaning of that subsection.

Chargeable gains: assets held before 6th April 1965 U.K.

5 U.K. Schedule 2 to the Gains Act (assets held on 6th April 1965) shall have effect in relation to any assets which are transferred to a successor company in accordance with a preparatory scheme as if—

(a) the BBC and the successor company were the same person; and

(b) those assets, to the extent that they were in fact acquired or provided by the BBC, were acquired or, as the case may be, provided by the successor company.

Chargeable gains: sale of successor company : group transactions U.K.

6 (1) For the purposes of section 179 of the Gains Act (company ceasing to be a member of a group), where any company (“the degrouped company”) ceases, by virtue of a qualifying transaction, to be a member of a group of companies, the degrouped company shall not, by virtue of that qualifying transaction, be treated under that section as having sold, and immediately reacquired, any asset acquired from a company which falls to be regarded for the purposes of subsection (1) of that section as having been at the time of acquisition a member of that group. U.K.

(2) Where, disregarding any preparatory transactions, a company would be regarded for the purposes of section 179 of the Gains Act (and, accordingly, of this paragraph) as ceasing to be a member of a group of companies by virtue of a qualifying transaction, it shall be regarded for those purposes as so doing by virtue of the qualifying transaction and not by virtue of any preparatory transactions.

(3) In this paragraph—

• “preparatory transaction”, in the case of any qualifying transaction, means anything done for the purpose of initiating, advancing or facilitating the qualifying transaction;

• “qualifying transaction” means the disposal by the BBC of any shares or securities of a successor company.

(4) Expressions used in this paragraph and in section 179 of the Gains Act have the same meaning in this paragraph as they have in that section.

Chargeable gains: sale or exchange of shares or securities of successor company U.K.

7 (1) Where a company issues shares or debentures to the BBC in exchange for shares in or debentures of a successor company which have not, before that exchange, been disposed of by the BBC— U.K.

(a) sections 127 to 131 of the Gains Act (reorganisation or reduction of share capital) shall not apply by virtue of subsection (3) of section 135 of that Act (exchange of securities) in relation to that exchange, and

(b) section 116 of that Act (reorganisations, conversions and reconstructions) accordingly does not have effect in relation to that transaction,

and the following provisions of this paragraph shall apply accordingly.

(2) The following provisions of this paragraph apply in any case where—

(a) there is a preparatory transfer to a successor company;

(b) the BBC disposes of any shares or securities of the successor company for a consideration in money or money’s worth; and

(c) those shares or securities are shares or securities which were—

(i) held by or on behalf of the BBC immediately before the preparatory transfer takes effect, or

(ii) issued to or for the BBC at a time when the successor company is a wholly-owned subsidiary of the BBC,

and which have not previously been disposed of by the BBC.

(3) For the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on the disposal mentioned in sub-paragraph (2)(b).

(4) If the consideration for the disposal mentioned in sub-paragraph (2)(b) consists of or includes a right to any variable deferred consideration, then, for the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on the disposal of the right to the variable deferred consideration.

(5) In this paragraph “variable deferred consideration” means any consideration—

(a) which is not to be given until after the disposal mentioned in sub-paragraph (2)(b); and

(b) whose amount or value, as at the time when it is to be given, is not ascertainable at the time of that disposal.

No chargeable gain or allowable loss to arise on any disposal constituted by a direct disposal transfer U.K.

8 (1) For the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on any disposal constituted by a direct disposal transfer. U.K.

(2) If the consideration for a direct disposal transfer consists of or includes a right to any variable deferred consideration, then, for the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on the disposal of the right to the variable deferred consideration.

(3) In this paragraph “variable deferred consideration”, in the case of any direct disposal transfer, means any consideration—

(a) which is not to be given until after the direct disposal transfer; and

(b) whose amount or value, as at the time when it is to be given, is not ascertainable at the time of the disposal constituted by that transfer.

Chargeable gains: value shifting U.K.

9 (1) Nothing in Part VI of this Act, and no instrument or agreement made, or other thing done, under or by virtue of that Part or for the purpose of initiating, advancing or facilitating the disposal by the BBC of— U.K.

(a) the whole or any part of the BBC transmission network, or

(b) any shares or securities of a successor company which are shares or securities which were—

(i) held by or on behalf of the BBC immediately before a preparatory transfer to the successor company takes effect, or

(ii) issued to or for the BBC at a time when the successor company is a wholly-owned subsidiary of the BBC,

and which have not previously been disposed of by the BBC,

shall be regarded as a scheme or arrangement for the purposes of section 30 of the Gains Act (value-shifting).

(2) In any case where—

(a) an asset which is the subject of a preparatory transfer has previously been the subject of a scheme or arrangements falling within subsection (1) of section 30 of the Gains Act,

(b) in consequence, subsection (5) of that section (consideration on disposal to be treated as increased for certain purposes) would, apart from sub-paragraph (3), have had effect in relation to the consideration for the preparatory transfer, and

(c) the consideration for the preparatory transfer falls to be determined, for the purposes of corporation tax on chargeable gains, under paragraph 2,

sub-paragraph (3) shall apply.

(3) Where this sub-paragraph applies—

(a) subsection (5) of section 30 of the Gains Act shall not have effect in relation to the consideration for the preparatory transfer; but

(b) on the first subsequent disposal of the asset which is neither a preparatory transfer nor a group disposal—

(i) that subsection shall have effect in relation to the consideration for that disposal (whether or not it would otherwise have done so); and

(ii) the increase that falls to be made under that subsection shall be so calculated as to include any increase which would, but for paragraph (a) above, have fallen to be made in relation to the preparatory transfer.

(4) In this paragraph “group disposal” means a disposal which falls to be treated by virtue of section 171(1) of the Gains Act as made for a consideration such that no gain or loss accrues to the person making the disposal.

Chargeable gains: receipt of compensation or insurance money U.K.

10 (1) Subsection (4) of section 23 of the Gains Act (adjustments where compensation or insurance money used for purchase of replacement asset) shall have effect in accordance with sub-paragraph (3) in any case where— U.K.

(a) there is a relevant transfer such that—

(i) a capital sum received by the BBC by way of compensation for the loss or destruction of an asset, or under a policy of insurance of the risk of the loss or destruction of an asset, becomes available to the transferee; or

(ii) a right of the BBC to receive such a sum is transferred to the transferee, and the transferee receives that sum; and

(b) the transferee acquires an asset in circumstances where—

(i) had there been no such relevant transfer, and

(ii) had the BBC acquired the asset by the application of that sum,

the BBC would be treated for the purposes of that subsection as having so acquired the asset in replacement for the asset lost or destroyed.

(2) Subsection (5) of that section (adjustments where a part of any compensation or insurance money is used for the purchase of a replacement asset) shall have effect in accordance with sub-paragraph (3) in any case where—

(a) there is a relevant transfer such that—

(i) a capital sum received by the BBC by way of compensation for the loss or destruction of an asset, or under a policy of insurance of the risk of the loss or destruction of an asset, becomes available to the transferee; or

(ii) a right of the BBC to receive such a sum is transferred to the transferee, and the transferee receives that sum; and

(b) the transferee acquires an asset in circumstances where—

(i) had there been no such relevant transfer, and

(ii) had the BBC acquired the asset by the application of all of that sum except for a part which was less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal of the asset lost or destroyed,

the BBC would be treated for the purposes of that subsection as having so acquired the asset in replacement for the asset lost or destroyed.

(3) In a case falling within sub-paragraph (1) or (2) of this paragraph, subsection (4) or, as the case may be, subsection (5) of section 23 of the Gains Act shall have effect as if the transferee and the BBC were the same person, except that—

(a) in a case falling within sub-paragraph (1)(a)(i) or (2)(a)(i)—

(i) any claim under the subsection in question must be made by the BBC and the transferee; and

(ii) any adjustment to be made in consequence of paragraph (a) of that subsection shall be made for the purposes only of the taxation of the BBC; and

(b) in a case falling within sub-paragraph (1)(a)(ii) or (2)(a)(ii)—

(i) any claim under the subsection in question must be made by the transferee; and

(ii) any adjustment to be made in consequence of paragraph (a) of that subsection shall be made for the purposes only of the taxation of the transferee.

Loan relationships: disposal of securities by BBC U.K.

11 (1) This paragraph applies in any case where— U.K.

(a) there is a preparatory transfer to a successor company;

(b) the BBC disposes of any securities of the successor company for a consideration in money or money’s worth; and

(c) those securities are securities issued to or for the BBC in consideration for the preparatory transfer.

(2) Where this paragraph applies, any debits or credits which, by reason of the disposal mentioned in sub-paragraph (1)(b), would, apart from this sub-paragraph, be given by [F6 Part 5 of the Corporation Tax Act 2009] in respect of a loan relationship for an accounting period of the BBC shall not be brought into account for the purposes of that Chapter as respects the BBC.

Textual Amendments

F6 Words in Sch. 7 para. 11(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 446(2) (with Sch. 2 Pts. 1, 2)

Transfer of trade: loss relief and capital allowances U.K.

12 (1) This paragraph applies in any case where, as a result of a relevant transfer,— U.K.

(a) the BBC ceases to carry on a trade; and

(b) the transferee begins to carry on that trade.

(2) Where this paragraph applies, [F7 Chapter 1 of Part 22 of the Corporation Tax Act 2010 (transfers of trade] without change of ownership) shall not have effect in relation to the event described in sub-paragraph (1).

(3) Where this paragraph applies, the trade mentioned in sub-paragraph (1) shall not be treated as permanently discontinued nor a new trade as set up and commenced for the purpose of the allowances and charges provided for by the [F8 the Capital Allowances Act]; but—

(a) there shall be made to or on the transferee in accordance with [F9 that Act] all such allowances and charges as would, if the BBC had continued to carry on the trade, have fallen to be made to or on it; and

(b) the amount of any such allowance or charge shall be computed as if—

(i) the transferee had been carrying on the trade since the BBC began to do so; and

(ii) everything done to or by the BBC had been done to or by the transferee (but so that no sale or transfer which on the transfer of the trade is made to the transferee by the BBC of any assets in use for the purpose of the trade shall be treated as giving rise to any such allowance or charge).

(4) For the purposes of this paragraph—

(a) where, on the BBC ceasing to carry on a trade, a company begins to carry on the activities of the trade as part of its trade, then that part of the trade carried on by the company shall be treated as a separate trade, if the effect of so treating it is that this paragraph applies by virtue of sub-paragraph (1) on that event in relation to that separate trade; and

(b) where, on the BBC ceasing to carry on part of a trade, a company begins to carry on the activities of that part as its trade or part of its trade, the BBC shall be treated as having carried on that part of its trade as a separate trade if the effect of so treating it is that this paragraph applies by virtue of sub-paragraph (1) on that event in relation to that separate trade.

Textual Amendments

F7 Words in Sch. 7 para. 12(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(2) (with Sch. 2)

F8 Words in Sch. 7 para. 12(3) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(3)(a)

F9 Words in Sch. 7 para. 12(3)(a) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(3)(b)

Capital allowances: industrial buildings F10 . . . U.K.

Textual Amendments

F10 Sch. 7 para. 13: words in the cross-heading repealed (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), 580, Sch. 2 para. 97(4)(a), Sch. 4

13 (1) This paragraph applies in any case where there is a relevant transfer of property which is, for the purposes of [F11 Part 3 of the Capital Allowances Act (industrial buildings allowances)], the relevant interest in relation to any expenditure incurred on the construction of a building or structure. U.K.

(2) Where this paragraph applies, the Secretary of State may by order make provision specifying, as respects the transferee,—

(a) the amount which is to be taken for the purposes of [F12 Part 3 of the Capital Allowances Act] to be the amount of the capital expenditure incurred on the construction of the building or structure; and

(b) the date which is to be taken for the purposes of that Part as the date on which the building or structure was first used.

(3) This paragraph shall not have effect in relation to any property if paragraph 12(3) has effect in relation to it.

Textual Amendments

F11 Words in Sch. 7 para. 13(1) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(4)(b)

F12 Words in Sch. 7 para. 13(2) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(5)

Capital allowances: [F13 plant and machinery] U.K.

Textual Amendments

F13 Sch. 7 para. 14: words in cross-heading substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(6)(a)

14 (1) For the purposes of [F14 Part 2 of the Capital Allowances Act (plant and machinery allowances)] property which is transferred to a successor company in accordance with a preparatory scheme shall be treated as if— U.K.

(a) it had been acquired by the successor company, for the purposes for which it is used by that company on and after the date on which the transfer of the property in accordance with the scheme takes effect, on that date; and

(b) capital expenditure of the prescribed amount had been incurred on that date by the successor company on the acquisition of the property for the purposes mentioned in paragraph (a).

(2) This paragraph shall not have effect in relation to any property if paragraph 12(3) has effect in relation to it.

Textual Amendments

F14 Words in Sch. 7 para. 14(1) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(6)(b)

Capital allowances: leased fixtures U.K.

15 (1) This paragraph applies to any lease which is granted in pursuance of an obligation imposed by a provision contained in a preparatory scheme by virtue of paragraph 2(1)(g) of Schedule 5. U.K.

(2) Where the conditions in [F15 section 183(1)(a) and (b) of the Capital Allowances Act (incoming lessee where lessor entitled to allowances)]are fulfilled in relation to a lease to which this paragraph applies—

(a) the lessee shall be deemed for the purposes of [F16 Part 2] of that Act to have given as consideration for the lease a capital sum which falls to be treated for the purposes of that Part as expenditure on the provision of the fixture concerned;

(b) the amount of that capital sum shall be the prescribed amount; and

(c) [F17 subsection (1)(d)] of that section shall be disregarded.

(3) Where the conditions in [F18 section 184(1)(a) to (c) of the Capital Allowances Act (incoming lessee where lessor not entitled to allowances)] are fulfilled in relation to a lease to which this paragraph applies—

(a) the lessee shall be deemed for the purposes of [F19 Part 2] of that Act to have given as consideration for the lease a capital sum which falls to be treated for the purposes of that Part as expenditure on the provision of the fixture concerned; and

(b) the amount of that capital sum shall be the prescribed amount.

Textual Amendments

F15 Words in Sch. 7 para. 15(2) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(7)(a)

F16 Words in Sch. 7 para. 15(2)(a) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(7)(b)

F17 Words in Sch. 7 para. 15(2)(c) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(7)(c)

F18 Words in Sch. 7 para. 15(3) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(8)(a)

F19 Words in Sch. 7 para. 15(3)(a) substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(8)(b)

Capital allowances: connected persons U.K.

16 U.K. In [F20 Part 2 of the Capital Allowances Act (plant and machinery allowances)] references to a transaction (however described) between connected persons within the meaning of [F21 section 1122 of the Corporation Tax Act 2010] shall not include references to a preparatory transfer.

Textual Amendments

F20 Words in Sch. 7 para. 16 substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(9)

F21 Words in Sch. 7 para. 16 substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(3) (with Sch. 2)

[F22 Capital allowances: agricultural buildings allowances] U.K.

Textual Amendments

F22 Sch. 7 para. 17 and preceding cross-heading substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(10)

[F23 17 (1) This paragraph applies where there is a relevant transfer of property which is the relevant interest in relation to any expenditure for which the BBC would be entitled to an allowance (other than a balancing allowance) under Part 4 of the Capital Allowances Act (agricultural buildings allowances). U.K.

(2) Where this paragraph applies, then, as respects the transferee—

(a) his acquisition of the relevant interest shall be treated for the purposes of Part 4 of the Capital Allowances Act as a balancing event within subsection (2)(a) of section 381 (regardless of the lack of any election); and

(b) section 376(2) shall apply as if—

(i) the value to be assigned to RQE (residue of qualifying expenditure immediately after event) were the prescribed amount; and

(ii) the value to be assigned to B (remaining writing-down period) were such as the Secretary of state may by order specify.

(3) This paragraph shall not have effect in relation to any property if paragraph 12(3) has effect in relation to it.]

Textual Amendments

F23 Sch. 7 para. 17 and preceding cross-heading substituted (22.3.2001 with effect as mentioned s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 97(10)

Corporation tax: BBC and successor company to be treated as one for certain purposes U.K.

18 (1) If any property, rights or liabilities are transferred to a successor company in accordance with a preparatory scheme, then, subject to sub-paragraph (2), the following provisions shall apply for the purposes of the Corporation Tax Acts in their application in respect of any accounting period ending on or after the date on which the transfer takes effect, namely— U.K.

(a) any trade or part of a trade carried on by the BBC which is transferred in accordance with the preparatory scheme to the successor company shall be treated as having been, at the time of its commencement and at all times since that time, a separate trade carried on by that company;

(b) the trade or trades carried on by the successor company on and after the date on which the transfer takes effect shall be treated as the same trade or trades as that which, by virtue of paragraph (a), is treated as carried on before that date;

(c) all property, rights and liabilities of the BBC which are transferred in accordance with the scheme to the successor company shall be treated as having been, at the time when they became vested in the BBC and at all times since that time, property, rights and liabilities of that company; and

(d) anything done by the BBC in relation to property, rights and liabilities which are transferred to the successor company in accordance with the preparatory scheme shall be treated as having been done by that company.

(2) Sub-paragraph (1) shall not apply for the purposes of—

(a) corporation tax on chargeable gains,

(b) capital allowances, or

(c) relief for losses incurred in carrying on a trade,

and no provision included in a scheme by virtue of paragraph 4(2)(a) of Schedule 5 shall have effect for those purposes.

Corporation tax: no profit or loss under [F24 Part 3 of the Corporation Tax Act 2009] by reason of a direct disposal transfer U.K.

Textual Amendments

F24 Words in Sch. 7 para. 19 cross-heading substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 294(4) (with Sch. 9 paras. 1-9, 22)

19 U.K. [F25 In determining for the purposes of Part 3 of the Corporation Tax Act 2009 the profits or losses of a trade or part of a trade carried on by the BBC wholly or partly in the United Kingdom, it is to be assumed that no profits or losses arise to the BBC] by reason of a direct disposal transfer of—

(a) any trading stock, within the meaning of [F26 section 163 of the Corporation Tax Act 2009], belonging to a trade carried on by the BBC;

(b) any right of the BBC to receive an amount which is for the purposes of corporation tax—

(i) an amount brought into account as a trading receipt of the BBC for any accounting period ending before the time when the transfer takes effect; or

(ii) an amount falling to be so brought into account if it is assumed, where it is not the case, that the accounting period of the BBC current on the day before the transfer takes effect ends immediately before that time; or

(c) the whole or any part of the amount of a liability which falls for the purposes of corporation tax—

(i) to be brought into account as deductible in computing the profits of any trade carried on by the BBC for any accounting period ending before the time when the transfer takes effect; or

(ii) to be so brought into account if it is assumed, where it is not the case, that the accounting period of the BBC current on the day before the transfer takes effect ends immediately before that time.

Textual Amendments

F25 Words in Sch. 7 para. 19 substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 294(2) (with Sch. 9 paras. 1-9, 22)

F26 Words in Sch. 7 para. 19(a) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 294(3) (with Sch. 9 paras. 1-9, 22)

Corporation tax: group relief U.K.

20 (1) None of the following, namely— U.K.

(a) the existence of the powers of any Minister of the Crown or the BBC under Part VI of this Act or under the documents regulating the BBC,

(b) any direction given by a Minister of the Crown under that Part or those documents, so far as that direction relates to a transfer scheme or (in a case where there is a preparatory scheme) to the sale of shares or securities issued by the successor company, or

(c) any arrangements (of any kind, whether in writing or not) so far as relating to a transfer scheme or any such sale,

shall be regarded as constituting arrangements falling within [F27 section 154(3) or 155(3) of the Corporation Tax Act 2010] .

(2) Neither—

(a) the existence of the powers of any Minister of the Crown or the BBC under Part VI of this Act or under the documents regulating the BBC, nor

(b) any direction given as mentioned in sub-paragraph (1)(b),

shall be regarded as constituting option arrangements [F28 within the meaning given by section 173 of the Corporation Tax Act 2010] .

(3) Any reference in sub-paragraph (1) or (2) to the documents regulating the BBC is a reference to those documents only so far as they have effect in relation to a disposal by the BBC of—

(a) the whole or any part of the BBC transmission network, or

(b) any shares or securities of a successor company,

or the initiating, advancing or facilitating of any such disposal.

(4) In this paragraph “Minister of the Crown” has the same meaning as in the Ministers of the M5 Crown Act 1975.

Textual Amendments

F27 Words in Sch. 7 para. 20(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(4) (with Sch. 2)

F28 Words in Sch. 7 para. 20(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(5) (with Sch. 2)

Marginal Citations

M5 1975 c. 26.

Corporation tax: leases at an undervalue U.K.

21 (1) [F29 Section 222 of the Corporation Tax Act 2009 (lease] granted at an undervalue) shall not apply in the case of any lease which, in accordance with a transfer scheme, is granted— U.K.

(a) to a company which is a transferee under that or any other transfer scheme, or

(b) by such a company to the BBC.

(2) [F30 Sections 62 to 67 of the Corporation Tax Act 2009 (tenants occupying land for purposes of trade treated as incurring expenses)] shall not apply where there is an amount which would have become chargeable in relation to any land but for sub-paragraph (1); and, accordingly, references to any such amount shall not be included in references in [F30 those sections to the taxed receipt] .

(3) In this paragraph “lease” has the same meaning as in [F31 Part 4 of the Corporation Tax Act 2009 (see section 291 of that Act)] .

Textual Amendments

F29 Words in Sch. 7 para. 21(1) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 446(3)(a) (with Sch. 2 Pts. 1, 2)

F30 Words in Sch. 7 para. 21(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 446(3)(b) (with Sch. 2 Pts. 1, 2)

F31 Words in Sch. 7 para. 21(3) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 446(3)(c) (with Sch. 2 Pts. 1, 2)

Corporation tax: sale and lease-back U.K.

22 (1) [F32 Sections 838 and 839 of the Corporation Tax Act 2010] (sale and lease-back: limitation on tax reliefs) [F33 , and sections 681AD and 681AE of the Income Tax Act 2007 (which make corresponding provision),] shall not apply where the liability of the transferor or of the person associated with that transferor is as a result of— U.K.

(a) the creation, in accordance with a transfer scheme, of any interest or right in favour of a transferee or the BBC;

(b) any other transaction for which a transfer scheme provides; or

(c) the grant by a company which is a transferee under a transfer scheme (“the relevant company”) to the BBC or to another company which is a transferee (whether under that or any other transfer scheme) of any interest or right, at a time when the relevant company remains a wholly-owned subsidiary of the BBC, in a case where the ability of the relevant company to grant that interest or right derives from the transfer to the company in accordance with a transfer scheme of an estate or interest in land.

(2) In this paragraph “transferor” has the same meaning as in [F34 section 835 or 836 of the Corporation Tax Act 2010] [F35 or section 681AA or 681AB of the Income Tax Act 2007] and “associated” shall be construed in accordance with [F36 section 847 of the Corporation Tax Act 2010] [F37 or section 681AM of the Income Tax Act 2007].

Textual Amendments

F32 Words in Sch. 7 para. 22(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(6) (with Sch. 2)

F33 Words in Sch. 7 para. 22(1) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(2) (with Sch. 9 paras. 1-9, 22)

F34 Words in Sch. 7 para. 22(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(7)(a) (with Sch. 2)

F35 Words in Sch. 7 para. 22(2) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(3)(a) (with Sch. 9 paras. 1-9, 22)

F36 Words in Sch. 7 para. 22(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(7)(b) (with Sch. 2)

F37 Words in Sch. 7 para. 22(2) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(3)(b) (with Sch. 9 paras. 1-9, 22)

Corporation tax: sale of lease of land U.K.

23 (1) [F38 Chapter 2 of Part 19 of the Corporation Tax Act 2010] (sale and lease-back: taxation of consideration) [F39 , and Chapter 2 of Part 12A of the Income Tax Act 2007 (which makes corresponding provision),] shall not apply where— U.K.

(a) the assignment of the original lease, and

(b) the grant or assignment of the new lease,

each fall within sub-paragraph (2).

(2) The assignment of the original lease, or the grant or assignment of the new lease, falls within this sub-paragraph if—

(a) it is a relevant transfer; or

(b) it takes place between the BBC and a successor company at a time when the successor company remains a wholly-owned subsidiary of the BBC; or

(c) it takes place between two successor companies at a time when both remain wholly-owned subsidiaries of the BBC.

(3) The reference in sub-paragraph (1) to the assignment of the original lease and the grant or assignment of the new lease shall be construed in accordance with [F40 Chapter 2 of Part 19 of the Corporation Tax Act 2010] [F41 , or section 681BA of the Income Tax Act 2007,] and sub-paragraph (2) shall be construed accordingly.

Textual Amendments

F38 Words in Sch. 7 para. 23(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(8) (with Sch. 2)

F39 Words in Sch. 7 para. 23(1) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(4) (with Sch. 9 paras. 1-9, 22)

F40 Words in Sch. 7 para. 23(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(9) (with Sch. 2)

F41 Words in Sch. 7 para. 23(3) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(5) (with Sch. 9 paras. 1-9, 22)

Corporation tax: leased assets U.K.

24 (1) For the purposes of [F42 Chapter 4 of Part 19 of the Corporation Tax Act 2010] (assets leased to traders and others) [F43 and Chapter 4 of Part 12A of the Income Tax Act 2007 (which makes corresponding provision),] where the interest of the lessor or the lessee under a lease, or any other interest in [F44 a relevant asset], is transferred in accordance with a transfer scheme to the BBC or a transferee, the transfer shall be treated as being effected without any capital sum having been obtained in respect of that interest by the BBC or the transferee. U.K.

(2) [F45 Section 865 of the Corporation Tax Act 2010] (deduction of payment under [F46 lease of trading asset), and section 681CC of the Income Tax Act 2007 (which makes corresponding provision),] shall not apply to any payments made by the BBC or a company which is a transferee under a transfer scheme if the payments are made—

(a) under any lease created in favour of the BBC or such a company by virtue of, or in pursuance of an obligation imposed by, a provision contained in a transfer scheme by virtue of paragraph 2 of Schedule 5; or

(b) under any lease—

(i) which is granted to or by a successor company at a time when it remains a wholly-owned subsidiary of the BBC; and

(ii) which is a lease of [F47 a relevant asset] which at any time before the creation of the lease was used by the BBC for the purposes of a trade carried on by the BBC and which was, when so used, owned by the BBC.

[F48 (3) In sub-paragraph (1)—

• “lease” has the meaning given by section 884 of the Corporation Tax Act 2010 or section 681DN of the Income Tax Act 2007, and

• “relevant asset” has the meaning given by section 885 of the Corporation Tax Act 2010 or section 681DO of the Income Tax Act 2007.]

Textual Amendments

F42 Words in Sch. 7 para. 24(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(10)(a) (with Sch. 2)

F43 Words in Sch. 7 para. 24(1) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(6) (with Sch. 9 paras. 1-9, 22)

F44 Words in Sch. 7 para. 24(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(10)(b) (with Sch. 2)

F45 Words in Sch. 7 para. 24(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(11)(a) (with Sch. 2)

F46 Words in Sch. 7 para. 24(2) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(7) (with Sch. 9 paras. 1-9, 22)

F47 Words in Sch. 7 para. 24(2)(b)(ii) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 294(11)(b) (with Sch. 2)

F48 Sch. 7 para. 24(3) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 246(8) (with Sch. 9 paras. 1-9, 22)

[F49 Stamp duty and stamp duty land tax] U.K.

Textual Amendments

F49 Sch. 7 para. 25 heading substituted (1.12.2003) by The Stamp Duty Land Tax (Consequential Amendment of Enactments) Regulations 2003 (S.I. 2003/2867), reg. 1, Sch. para. 25(2)

25 (1) Stamp duty shall not be chargeable on any agreement or instrument to the extent that it is certified by the Secretary of State to the Commissioners of Inland Revenue as being— U.K.

(a) a restructuring scheme,

(b) a restructuring scheme modification agreement, or

(c) an instrument giving effect to a restructuring scheme modification agreement,

or as having been made in accordance with, or in pursuance of an obligation imposed by, a restructuring scheme.

[F50 (1A) A land transaction which is effected by a restructuring scheme, or effected in accordance with, or in pursuance of an obligation imposed by a restructuring scheme is exempt from charge for the purposes of stamp duty land tax.

(1B) Relief under sub-paragraph (1A) must be claimed in a land transaction return or an amendment of such a return.]

(2) No agreement or instrument which is certified as mentioned in sub-paragraph (1) shall be taken to be duly stamped unless—

(a) it is stamped with the duty to which it would be liable, apart from that sub-paragraph; or

(b) it has, in accordance with section 12 of the M6 Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with that duty or that it is duly stamped.

(3) Section 12 of the M7 Finance Act 1895 (collection of stamp duty in cases of property vested by Act or purchased under statutory power) shall not operate to require—

(a) the delivery to the Commissioners of Inland Revenue of a copy of this Act, or

(b) the payment of stamp duty under that section on any copy of this Act,

and shall not apply in relation to any instrument on which, by virtue of the preceding provisions of this paragraph, stamp duty is not chargeable.

(4) In this paragraph—

• [F51 “land transaction” has the meaning given in section 43(1) of the Finance Act 2003;

• “land transaction return” has the meaning given by section 76(1) of that Act;]

• “restructuring scheme modification agreement” means a modification agreement, so far as relating to a restructuring scheme;

• “restructuring scheme” means a preparatory scheme, so far as it provides for the transfer of property, rights or liabilities in accordance with the scheme—

  (a)

  from the BBC to a wholly-owned subsidiary of the BBC;

  (b)

  to the BBC from a wholly-owned subsidiary of the BBC; or

  (c)

  from one wholly-owned subsidiary of the BBC to another.

Textual Amendments

F50 Sch. 7 para. 25(1A)(1B) inserted (1.12.2003) by The Stamp Duty Land Tax (Consequential Amendment of Enactments) Regulations 2003 (S.I. 2003/2867), reg. 1, Sch. para. 25(3)

F51 Words in Sch. 7 para. 25(4) inserted (1.12.2003) by The Stamp Duty Land Tax (Consequential Amendment of Enactments) Regulations 2003 (S.I. 2003/2867), reg. 1, Sch. para. 25(4)

Marginal Citations

M6 1891 c. 39.

M7 1895 c. 16.

Stamp duty reserve tax U.K.

26 (1) An agreement to transfer chargeable securities, as defined in section 99 of the M8 Finance Act 1986, from the BBC to a wholly-owned subsidiary of the BBC shall not give rise to a charge to stamp duty reserve tax if the agreement is made for the purposes of, or for purposes connected with, a restructuring scheme. U.K.

(2) An agreement shall not give rise to a charge to stamp duty reserve tax if the agreement is a restructuring scheme modification agreement.

(3) In this paragraph “restructuring scheme” and “restructuring scheme modification agreement” have the same meaning as in paragraph 25.

Marginal Citations

M8 1986 c. 41.

Modifications of transfer schemes U.K.

27 (1) If the effect of any transfer scheme is modified in pursuance of a modification agreement, then the Corporation Tax Acts and this Schedule, other than paragraphs 25 and 26, shall have effect as if— U.K.

(a) the scheme originally made had been the scheme as modified; and

(b) anything done by or in relation to the person who without the modification became entitled or subject in accordance with the scheme to any property, rights or liabilities had, so far as relating to the property, rights or liabilities to which another person becomes entitled or subject in consequence of the modification, been done by or in relation to that other person.

(2) If, in a case falling within sub-paragraph (1), the transfer scheme, as originally made, was a preparatory scheme, the scheme as modified shall be taken to be a preparatory scheme, whether or not any company which was a wholly-owned subsidiary of the BBC at the time when the preparatory scheme took effect remains a wholly-owned subsidiary of the BBC at the time when the modification takes effect.

Orders U.K.

28 (1) The Secretary of State shall not make an order under this Schedule in relation to any transferee under a transfer scheme except— U.K.

(a) with the consent of the Treasury;

(b) after consultation with the BBC; and

(c) if the transferee is not a wholly-owned subsidiary of the BBC, after consultation with the transferee.

(2) Any power of the Secretary of State to make an order under this Part of this Schedule—

(a) shall be exercisable by statutory instrument; and

(b) shall include power to make different provision for different cases, including different provision in relation to different assets or descriptions of assets.