Income Tax Act 2007

[F1 198A Excluded activities: subsidised generation or export of electricity U.K.

(1) This section supplements section 192(1)(ka).

(2) Electricity is exported if it is exported onto a distribution system or transmission system (within the meaning of section 4 of the Electricity Act 1989).

[F2 (3) The generation of electricity is “subsidised” if—

(a) a person receives a FIT subsidy in respect of the electricity generated,

(b) a renewables obligation certificate is issued in connection with the generation of the electricity, or

(c) a scheme established in a territory outside the United Kingdom, and corresponding to that set out in a renewables obligation order under section 32 of the Electricity Act 1989, operates to incentivise the generation of the electricity.]

(4) The export of electricity is “subsidised” if a person receives a FIT subsidy in respect of the electricity exported.

(5) But the generation or export of electricity is not to be taken to fall within section 192(1)(ka) if Condition A, B or C is met.

(6) Condition A is that the generation or export is carried on by—

(a) a community interest company,

(b) a co-operative society,

(c) a community benefit society, F3 ...

(d) a NI industrial and provident society [F4 , or

(e) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.]

(7) Condition B is that the plant used for the generation of the electricity relies wholly or mainly on anaerobic digestion.

(8) Condition C is that the electricity is hydroelectric power.

(9) For the purposes of this section—

• “anaerobic digestion” means the bacterial fermentation of organic material in the absence of free oxygen (excluding anaerobic digestion of sewage or material in a landfill);

• “community benefit society” means—

  (a)

  a society registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965 as a community benefit society, or

  (b)

  a pre-2010 Act society (as defined at section 4A(1) of that Act) which meets the condition in section 1(3) of that Act;

• “co-operative society” means—

  (a)

  a society registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965 as a co-operative society, or

  (b)

  a pre-2010 Act society (as defined at section 4A(1) of that Act) which meets the condition in section 1(2) of that Act;

• “FIT subsidy” means—

  (a)

  a financial incentive under a scheme established by virtue of section 41 of the Energy Act 2008 (powers to amend licence conditions etc: feed-in tariffs) to encourage small-scale low-carbon generation of electricity, or

  (b)

  a financial incentive under a similar scheme established in a territory outside the United Kingdom to encourage small-scale low-carbon generation of electricity;

• “NI industrial and provident society” means a society registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 (c. 24 (N.I.));

• “small-scale low-carbon generation” has the meaning given by section 41(4) of the Energy Act 2008.

• [F5 “renewables obligation certificate” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.]]

Textual Amendments

F1 S. 198A inserted (17.7.2012) (with effect in accordance with Sch. 7 para. 24 of the amending Act) by Finance Act 2012 (c. 14), Sch. 7 para. 14

F2 S. 198A(3) substituted (with effect in accordance with s. 56(8) of the amending Act) by Finance Act 2014 (c. 26), s. 56(3)(a)

F3 Word in s. 198A(6) omitted (with effect in accordance with s. 56(8) of the amending Act) by virtue of Finance Act 2014 (c. 26), s. 56(3)(b)

F4 S. 198A(6)(e) and word inserted (with effect in accordance with s. 56(8) of the amending Act) by Finance Act 2014 (c. 26), s. 56(3)(b)

F5 Words in s. 198A(9) inserted (with effect in accordance with s. 56(8) of the amending Act) by Finance Act 2014 (c. 26), s. 56(3)(c)