Income Tax Act 2007

[F1 CHAPTER 9 U.K. Miscellaneous and supplementary provisions

Textual Amendments

F1 Pt. 5B inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 11 para. 1

257T Transfers between spouses or civil partners U.K.

(1) This section applies if—

(a) the investor transfers the whole or part of the investment to another individual (“B”) during their lives,

(b) the investor was married to, or was the civil partner of, B at the time of the transfer, and

(c) section 257R does not apply to the transfer.

(2) This Part (including subsection (1)) has effect, in relation to any subsequent disposal or other event, as if—

(a) B were the investor as respects the transferred stake,

(b) B's liability to income tax had been reduced in respect of the transferred stake for the same tax year as that for which the investor's was so reduced,

(c) the amount by which B's liability to income tax had been reduced in respect of the transferred stake were the same as that by which the investor's liability had been so reduced, and

(d) the same amount of SI relief had continued to be attributable to the transferred stake despite the transfer.

(3) If the amount of SI relief attributable to the transferred stake had been reduced before the relief was obtained by the investor—

(a) this Part has effect, in relation to any subsequent disposal or other event, as if the amount of SI relief attributable to the transferred stake had been correspondingly reduced before the relief was obtained by B, and

(b) section 257QD(2), 257QO(3) and 257RA(4) apply in relation to B as they would have applied in relation to the investor.

(4) If, because of any such disposal or other event, an assessment for reducing or withdrawing SI relief is to be made, the assessment is to be made on B.

257TA Identification of investments on a disposal U.K.

(1) The rules in subsections (2) and (3) are for determining which investments of any class are treated as disposed of for the purposes of—

(a) section 257R (disposal of the investment), or

(b) section 257T (spouses or civil partners),

if the investor disposes of some but not all of the investments of that class which the investor holds in the social enterprise.

(2) Investments made on an earlier day are treated as disposed of before investments made on a later day.

(3) Investments made on the same day are treated as disposed of in the following order—

(a) first, any to which neither SI relief nor hold-over relief is attributable,

(b) next, any to which hold-over relief, but not SI relief, is attributable,

(c) next, any to which SI relief, but not hold-over relief, is attributable, and

(d) finally, any to which both SI relief and hold-over relief are attributable.

(4) Any investments within paragraph (c) or (d) of subsection (3) which are treated by section 257N(7) as issued on an earlier day are treated as disposed of before any other investments falling within that paragraph of subsection (3).

(5) The following—

(a) any investments to which SI relief is attributable and which were transferred to an individual as mentioned in section 257T, and

(b) any investments to which hold-over relief, but not SI relief, is attributable and which were acquired by an individual on a disposal to which section 58 of TCGA 1992 applies,

are treated for the purposes of subsections (2) and (3) as acquired by the individual on the day on which they were made.

(6) In a case to which section 127 of TCGA 1992 applies (including the case where that section applies by virtue of an enactment relating to chargeable gains), shares included in the new holding are treated for the purposes of subsections (2) and (3) as acquired when the original shares were acquired.

(7) In this section—

• “hold-over relief” means relief under Schedule 8B to TCGA 1992;

• “new holding” and “original shares” have the same meaning as in section 127 of TCGA 1992 (or, as the case may be, that section as applied by the enactment concerned).

257TB Meaning of a company being “in administration” or “in receivership” U.K.

(1) References in this Part to a company being “in administration” or “in receivership” are to be read as follows.

(2) A company is “in administration” if—

(a) it is in administration within the meaning of Schedule B1 to the Insolvency Act 1986 or Schedule B1 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or

(b) there is in force in relation to it under the law of a country or territory outside the United Kingdom any appointment corresponding to an appointment of an administrator under either of those Schedules.

(3) A company is “in receivership” if there is in force in relation to it—

(a) an order for the appointment of an administrative receiver, a receiver and manager or a receiver under Chapter 1 or 2 of Part 3 of the Insolvency Act 1986 or Part 4 of the Insolvency (Northern Ireland) Order 1989, or

(b) any corresponding order under the law of a country or territory outside the United Kingdom.

257TC Meaning of “associate” U.K.

(1) In this Part “associate”, in relation to a person, means—

(a) any relative or partner of the person,

(b) the trustee or trustees of any settlement in relation to which the person, or any relative of the person (living or dead), is or was a settlor, and

(c) if the person has an interest in any shares or obligations of a company which are subject to any trust or are part of the estate of a deceased person—

(i) the trustee or trustees of the settlement concerned or, as the case may be, the personal representatives of the deceased, and

(ii) if the person is a company, any other company which has an interest in those shares or obligations.

(2) In this section “relative” means spouse, civil partner, ancestor or lineal descendant.

257TD Meaning of “control” U.K.

(1) In this Part “control” is to be read in accordance with sections 450 and 451 of CTA 2010 but as if “company” in those sections included a charity that is a trust.

(2) For the purposes of this Part, a charity that is a trust has “control” of another person if, as a result of the operation of subsection (1), the trustees (in their capacity as trustees of the trust) have, or any of them has, control of the person.

(3) A person has “control” of a charity that is a trust if—

(a) the person is a trustee of the charity and some or all of the powers of the trustees of the charity could be exercised by—

(i) the person acting alone, or

(ii) by the person acting together with any other persons who are trustees of the charity and who are connected with the person,

(b) the person, alone or together with other persons, has power to appoint or remove a trustee of the charity, or

(c) the person, alone or together with other persons, has any power of approval or direction in relation to the carrying-out by the trustees of any of their functions.

(4) Subsection (3) is in addition to, and does not limit, subsection (1); and both of those subsections are subject to subsection (5).

(5) For the purposes of this Part, a regulator is to be treated as not having control of any company regulated by the regulator.

(6) Section 995 of this Act (control) does not apply for the purposes of this Part.

257TE Minor definitions etc U.K.

(1) In this Part—

• “arrangements” (except as used, in sections 257LB and 257QK, in the expressions “issuing arrangements” and “repayment arrangements”) includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions,

• “bonus shares” means shares which are issued otherwise than for payment (whether in cash or otherwise),

• “compliance statement” has the meaning given by section 257PB,

• “director”—

  (a)

  is read in accordance with section 452 of CTA 2010 but as if “company” in that section included a charity that is a trust, and

  (b)

  in relation to a charity that is a trust (but subject to section 257LF(9)), includes (in particular) each trustee of the trust,

• “disposal”, in relation to any shares or other investments, includes disposal of an interest or right in or over them,

• “group” means a parent company and its qualifying subsidiaries,

• “group company”, in relation to a group, means the parent company or any of its qualifying subsidiaries,

• “ordinary shares” means shares forming part of a company's ordinary share capital,

• “parent company” means a company that has one or more qualifying subsidiaries,

• “qualifying subsidiary” has the meaning given by section 257MU, and

• “single company” means a company that does not have any qualifying subsidiaries.

(2) For the purposes of this Part, the market value at any time of any asset is the price which it might reasonably be expected to fetch on a sale at that time in the open market free from any interest or right which exists by way of security in or over it.]