Finance (No. 2) Act 2023

301 Effect of company being transparent

(1) This section applies where a company (“C”) is treated as transparent as a result of an election under section 300.

(2) C is to be treated for the purposes of this Part as if it were a partnership.

(3) Its shareholders are to be regarded for those purposes as its partners.

(4) Each shareholder’s share of the profits of the partnership is equal to its interest in C.

(5) Where C is a generating undertaking, all generation, generation receipts and allowable costs that would (ignoring this section) be attributed to C in accordance with this Part are to be treated instead as if they resulted from the operation of a generating station operated in partnership by C’s partners.

(6) Where C is a member of a group that is a generating undertaking, the generation, generation receipts and allowable costs that—

(a) would (ignoring this section) be attributed to the group in accordance with this Part, and

(b) are attributable on a fair and reasonable basis to the activities of C,

are to be treated instead as if they resulted from the operation of a generating station operated in partnership by C’s partners.

(7) Where C is, or is treated as, the only shareholder in another company (“D”), the generation, generation receipts and allowable costs that—

(a) would (ignoring this section) be attributed, in accordance with this Part, to the group of which D is a member, and

(b) are attributable on a fair and reasonable basis to the activities of D,

are to be treated instead as if they resulted from the operation of a generating station operated in partnership by C’s partners.

(8) C is to be treated as the only shareholder in another company if—

(a) the other company’s only shareholder is—

(i) a company in which C is the only shareholder,

(ii) a company in which the only shareholder is a company in which C is the only shareholder, and so on, or

(b) the other company has more than one shareholder, but each of its shareholders is one of the following—

(i) C;

(ii) a company whose only shareholder falls within paragraph (a)(i) or (ii);

(iii) a company that has more than one shareholder each of which is a company falling with sub-paragraph (i) or (ii) or this sub-paragraph.

(9) Where a shareholder of a company, or a generating undertaking of which such a shareholder is a member, is liable to an amount of electricity generator levy as a result of this section—

(a) where the company is a generating undertaking, it is jointly and severally liable to that amount (to the extent it arises as a result of this section), or

(b) where the company is a member of a generating undertaking that is a group, that undertaking is jointly and severally liable to that amount (to the extent it arises as a result of this section).

(10) Where—

(a) a generating undertaking is liable to an amount of electricity generator levy as a result of subsection (9)(a) or (b), and

(b) the qualifying period (“the chargeable period”) by reference to which that amount was determined does not wholly correspond to a qualifying period of the undertaking,

the amount is to be apportioned, on a fair and reasonable basis, between the qualifying periods of the undertaking in which the chargeable period falls.