|
|
Amendment of section 110 (securitisation) of Principal Act.
|
40.— (1) Section 110(1) of the Principal Act is amended—
|
|
| |
(a) by inserting the following definitions after the definition of “authorised officer”:
|
|
| |
“ ‘carbon offsets’ means—
|
|
| |
(a) an allowance, permit, licence or right to emit during a specified period, a specified amount of carbon dioxide or any other greenhouse gas as defined in Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 1
establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC of 24 September 1996 2
, where such allowance, permit, licence or right is issued by a State or by an inter-governmental or supra-national institution pursuant to a scheme which—
|
|
| |
(i) imposes limitations on the emission of such greenhouse gases, and
|
|
| |
(ii) allows the transfer for value of such allowances, permits, licences or rights,
|
|
| |
(b) an allowance, permit, licence or right to emit during a specified period, a specified amount of carbon dioxide or any other recognised greenhouse gas under a voluntary scheme sponsored by a State or by an inter-governmental institution, or regulated commercial enterprise, where such allowance, permit, licence or right is subject to recognised independent periodic verification, monitoring and reporting, or
|
|
| |
(c) any right that is directly attributable to an allowance, permit, licence or right to emit within paragraph (a) or (b);
|
|
| |
‘commodities’ means tangible assets (other than currency, securities, debts or other assets of a financial nature) which are dealt in on a recognised commodity exchange;”,
|
|
| |
(b) by substituting the following for the definition of “qualifying asset”:
|
|
| |
“ ‘qualifying asset’ means an asset which consists of, or of an interest (including a partnership interest) in—
|
|
| |
(a) a financial asset,
|
|
| |
(b) commodities, or
|
|
| |
(c) plant and machinery;”,
|
|
| |
(c) in the definition of “financial asset” by substituting the following for paragraph (i):
|
|
| |
“(i) carbon offsets, and”,
|
|
| |
(d) by deleting the definition of “greenhouse gas emissions allowance”,
|
|
| |
(e) in the definition of “qualifying company” by substituting the following for paragraph (c):
|
|
| |
“(c) which carries on in the State a business of holding, managing or both the holding and managing of qualifying assets, including, in the case of plant and machinery acquired by the qualifying company, a business of leasing that plant and machinery,”,
|
|
| |
(f) in the definition of “qualifying company” by substituting “by virtue of subsections (4A) and (5);” for “by virtue of subsection (5).”, and
|
|
| |
(g) by inserting the following definitions after the definition of “qualifying company”:
|
|
| |
“ ‘quoted Eurobond’ has the same meaning as in section 64;
|
|
| |
‘return agreement’, in relation to a qualifying company, means a specified agreement whereby payments due under the specified agreement are dependent on the results of the company’s business or any part of the company’s business;
|
|
| |
‘specified instrument’ means a quoted Eurobond or wholesale debt instrument;
|
|
| |
‘specified person’, in relation to a qualifying company, means—
|
|
| |
(a) a company which directly or indirectly—
|
|
| |
(i) controls the qualifying company,
|
|
| |
(ii) is controlled by the qualifying company, or
|
|
| |
(iii) is controlled by a third company which also directly or indirectly controls the qualifying company,
|
|
| |
where ‘controls’ and ‘controlled’ have the same meanings as they would have by the application of section 11 to this paragraph, or
|
|
| |
(b) a person, or persons who are connected with each other—
|
|
| |
(i) from whom assets were acquired, or
|
|
| |
(ii) to whom the qualifying company has made loans or advances, or
|
|
| |
(iii) with whom the qualifying company has entered into specified agreements,
|
|
| |
where the aggregate value of such assets, loans, advances or agreements represents not less than 75 per cent of the aggregate value of the qualifying assets of the qualifying company;
|
|
| |
‘specified agreement’ means any agreement, arrangement or understanding that—
|
|
| |
(a) provides for the exchange, on a fixed or contingent basis, of one or more payments based on the value, rate or amount of one or more interest or other rates, currencies, commodities, securities, instruments of indebtedness, indices, quantitative measures, or other financial or economic interests or property of any kind, or any interest therein or based on the value thereof, and
|
|
| |
(b) transfers to a person who is a party to the agreement, arrangement or understanding or to a person connected with that person, in whole or in part, the financial risk associated with a future change in any such value, rate or amount without also conveying a current or future direct or indirect ownership interest in an asset (including any enterprise or investment pool) or liability that incorporates the financial risk so transferred;
|
|
| |
‘wholesale debt instrument’ has the same meaning as in section 246A.”.
|
|
| |
(2) Section 110 of the Principal Act is amended by substituting the following for subsection (4):
|
|
| |
“(4) Subject to subsections (4A) and (5), any interest or other distribution which is paid out of the assets of a qualifying company to another person and is so paid in respect of a security referred to in section 130(2)(d)(iii), shall not be a distribution by virtue only of the provisions of that section.”.
|
|
| |
(3) Section 110 of the Principal Act is amended by inserting the following after subsection (4):
|
|
| |
“(4A) (a) For the purposes of this subsection ‘relevant territory’ and ‘tax’ have the same meanings as in section 246.
|
|
| |
(b) Subject to paragraph (c), as respects any interest or other distribution paid by a qualifying company to a person, other than—
|
|
| |
(i) a person who is resident in the State, or
|
|
| |
(ii) a person, (not being a specified person) who is a pension fund, government body or other person resident in a relevant territory who, under the laws of that territory, is exempted from tax which generally applies to profits, income or gains in that territory,
|
|
| |
subsection (4) shall only apply to so much of such interest or other distribution—
|
|
| |
(I) as under the laws of a relevant territory, is subject, without any reduction computed by reference to the amount of such interest or other distribution, to a tax which generally applies to profits, income or gains received in that territory, by persons, from sources outside that territory, or
|
|
| |
(II) as is a payment from which tax has been deducted at the standard rate in force at the time of the payment in accordance with section 246(2).
|
|
| |
(c) Notwithstanding paragraph (b), subsection (4) shall apply to any interest or other distribution paid by a qualifying company in respect of a specified instrument other than so much of such interest or other distribution as is paid to a specified person in respect of a specified instrument where, at the time the instrument was issued, the qualifying company was in possession, or aware, of information, including information about any arrangement or understanding in relation to ownership of the instrument after that time, which could reasonably be taken to indicate that interest or other distributions which would be payable in respect of that instrument would not be subject, without any reduction computed by reference to the amount of such interest or other distribution, to a tax in a relevant territory which generally applies to profits, income or gains received in that territory, by persons, from sources outside that territory.
|
|
| |
(4B) Where any amount, paid out of the assets of a qualifying company under a return agreement, that is dependent on the results of that company’s business or any part of that business, would not be deducted in computing profits or gains of that company if that amount were to be treated, for all the purposes of the Tax Acts, other than subsection (2) of section 246, as a payment of interest, in respect of securities of the company other than specified instruments, that was dependent on the results of the company’s business, then that amount shall not be so deducted.”.
|
|
| |
(4) Section 110 of the Principal Act is amended by substituting the following for subsection (5):
|
|
| |
“(5) Subsection (4) shall not apply in respect of any interest or other distribution as is paid by a qualifying company where the qualifying company concerned is, at the time of the payment, in possession, or aware, of information that can reasonably be taken to indicate that the payment is part of a scheme or arrangement the main benefit or one of the main benefits of which is the obtaining of a tax relief or the reduction of a tax liability the benefit of which would be expected to accrue to a person who, in relation to the qualifying company, is a specified person.”.
|
|
| |
(5) (a) This section shall be construed together with section 110 of the Principal Act.
|
|
| |
(b) Subsection (1) applies as respects qualifying assets—
|
|
| |
(i) acquired or, as a result of an arrangement with another person, held or managed, by a qualifying company, or
|
|
| |
(ii) in relation to which a qualifying company has entered into a legally enforceable arrangement referred to in subparagraphs (ii) or (iii) of paragraph (b) of the definition of qualifying company with another person,
|
|
| |
on or after 21 January 2011.
|
|
| |
(c) Subsections (2) to (4) apply—
|
|
| |
(i) as respects any interest or other distribution paid on or after 21 January 2011 out of assets of a qualifying company in respect of securities of the company other than securities—
|
|
| |
(I) which were issued, or were deemed to have been issued, by the qualifying company, or
|
|
| |
(II) which the qualifying company issued under a binding written agreement made,
|
|
| |
before 21 January 2011,
|
|
| |
and
|
|
| |
(ii) as respects an amount paid on or after 21 January 2011 out of the assets of a qualifying company under a return agreement other than such an amount paid under a binding written return agreement made before 21 January 2011.
|
|
| |
(d) For the purposes of paragraph (c) securities shall be deemed to have been issued by the qualifying company on or before 21 January 2011 where—
|
|
| |
(i) as a result of any change in the terms and conditions under which the securities were issued, those securities would represent a new holding within the meaning of section 584 if references in that section to “shares” and “original shares” were deemed to be references to “securities” and “original securities” respectively, and
|
|
| |
(ii) as a result of the change in the terms and conditions referred to in subparagraph (i)—
|
|
| |
(I) the beneficial ownership of the securities does not change, and
|
|
| |
(II) no new consideration is received by the qualifying company or a specified person in respect of those securities.
|
| |
1 OJ No. L275 of 25.10.2003, p.32
2 OJ No. L257 of 10.10.1996, p.26 |
