Finance Act 2007 - Legislation.gov.uk

1 Finance Act 2007 CHAPTER 11 32 50 Finance Act 2007 CHAPTER 11 CONTENTSPART 1 CHARGES, RATES, THRESHOLDS ETCI ncome tax1 Charge and rates for 2007 -08 Corporation tax2 Charge and main rates for financial year 20083 Small companies rates and fractions for financial year 2007 Inheritance tax4 Rates and rate bands for 2010-11 Alcohol and tobacco5 Rates of duty on alcoholic liquor6 Rates of tobacco products dutyGambling7 Rates of gaming duty8 Remote gaming duty9 Amusement machine licence dutyEnvironment10 Fuel duty rates and rebates11 Rates of vehicle excise duty12 Rates of air passenger dutyFinance Act 2007 (c. 11)ii13 Rates of climate change levy14 Rate of aggregates levy15 Rates of landfill tax16 Emissions trading: charges for allocationsPART 2 ENVIRONMENTE nergy-saving: houses17 Corporation tax deduction for expenditure on energy-saving items18 Extension of income tax deduction for expenditure on energy-saving items19 SDLT relief for new zero-carbon homesDomestic microgeneration20 Income tax exemption for domestic microgeneration21 Renewables obligation certificates for domestic microgenerationOther measures22 Aggregates levy: exemption for aggregate removed from railways etc23 Climate change levy: reduced-rate supplies etc24 Landfill tax.

2 Bodies concerned with the environmentPART 3 INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAXAnti-avoidance25 Managed service companies26 Restrictions on trade loss relief for partners27 Extension of restrictions on allowable capital losses28 Restriction on expenses of management29 Life policies etc: effect of rebated or reinvested commission30 Avoidance involving financial arrangements31 companies carrying on business of leasing plant or machinery32 Restrictions on companies buying losses or gains: tax avoidance schemes33 Lloyd s corporate members: restriction of group relief34 Employee benefit contributions35 Schemes etc designed to increase double taxation reliefCapital allowances36 Industrial and agricultural buildings allowances37 Temporary increase in first-year capital allowances for small enterprisesInsurance and friendly societies38 Insurance companies : gross roll-up business etc39 Insurance companies : basis of taxation etc40 Insurance companies : transfers etcFinance Act 2007 (c.)

3 11)iii41 Insurance companies : miscellaneous42 Technical provisions made by general insurers43 Lloyd s: cessation of business by corporate members44 Transfers of business by friendly societies to insurance companies etc45 Tax exempt business of friendly societies46 Purchased life annuities: self-assessmentRepos47 Sale and repurchase of securitiesCFCs48 Controlled foreign companiesR&D49 Vaccine research relief: amount of deduction for SMEs50 Research and development tax relief: definition of SME etcVenture capital schemes etc51 Venture capital schemes etcREITs52 Real Estate Investment TrustsAlternative finance53 Alternative Finance investment bond54 Profit share agencyTrusts55 Trust income56 Trust gains on contracts for life insuranceOther corporation tax measures57 Offshore funds58 Election out of special film rules for film production companies59 Securitisation companiesOther income tax measures60 Gift aid: limits61 Enterprise management incentives: excluded activities62 Benefits code: whether employment is lower-paid employment 63 Armed forces redundancy schemes64 Armed forces: the Operational Allowance65 Service charge income66 Charge on benefits received by former owner of property.

4 Late elections67 Unpaid remuneration and employee benefit contributionsFinance Act 2007 (c. 11)ivPART 4 PENSIONS68 Abolition of contributions relief for life assurance premium contributions69 Alternatively secured pensions etc70 MiscellaneousPART 5 SDLT, STAMP DUTY AND SDRTSDLT: anti-avoidance provisions71 Anti-avoidance72 PartnershipsReliefs in relation to shares etc73 Exemptions: intermediaries, repurchases etc74 Acquisition relief: disregard of company holding own sharesOther reliefs etc75 SDLT: alternative Finance arrangements76 SDLT: exchanges77 SDLT: shared ownership trusts78 SDLT: shared ownership lease79 Certain transfers of school landSDLT: administration80 Payment of tax81 Self-certificate declarationsPART 6 INVESTIGATION, ADMINISTRATION ETCI nvestigation etc82 Criminal investigations.

5 Powers of Revenue and Customs83 Northern Ireland criminal investigations84 Sections 82 and 83: supplementary85 Criminal investigations: Scotland86 Search warrants87 Cross-border exercise of powersFiling dates88 Personal tax returns89 Trustee s tax return90 Partnership tax returns91 Consequential amendmentsFinance Act 2007 (c. 11)v92 CommencementOther administration93 Mandatory electronic filing of returns94 Mandatory electronic payment95 Payment by cheque96 Enquiry into returns97 Penalties for errorsPART 7 MISCELLANEOUSV alue added tax and insurance premium tax98 VAT: joint and several liability of traders in supply chain where tax unpaid99 VAT: non-business use etc of business goods100 VAT: transfers of going concerns101 IPT: meaning of premium Petroleum revenue tax102 Abolition of PRT for fields recommissioned after earlier decommissioning103 Tax-exempt tariffing receipts104 Allowance of unrelievable loss from abandoned fieldOther miscellaneous measures105 Amendments connected with Gambling Act 2005106 VED.

6 Exempt vehicles107 Limitation period in old actions for mistake of law relating to direct tax108 Disclosure of tax avoidance schemes109 Meaning of recognised stock exchange etc110 Mergers Directive: regulations111 Excise duties: small consignment relief112 Updating references to Standing CommitteesPART 8 FINAL PROVISIONS113 Interpretation114 Repeals115 Short titleSchedule 1 Remote gaming dutyPart 1 Imposition of dutyPart 2 Consequential amendmentsSchedule 2 Climate change levy: reduced-rate supplies etcSchedule 3 Managed service companiesFinance Act 2007 (c. 11)viPart 1 Amendments of ITEPA 2003 Part 2 Calculation of profits of MSCs: deduction for deemedemployment paymentsSchedule 4 Restrictions on trade loss relief for partnersSchedule 5 Avoidance involving financial arrangementsSchedule 6 companies carrying on business of leasing plant or machinerySchedule 7 Insurance business: gross roll-up business etcPart 1 AmendmentsPart 2 Transitional provisionsSchedule 8 Insurance companies : basis of taxation etcPart 1 AmendmentsPart 2 Transitional provisionsSchedule 9 Insurance companies : transfers etcSchedule 10 Insurance companies : miscellaneousSchedule 11 Technical provisions made by general insurersSchedule 12 Friendly societies.

7 Transfers to insurance companies etcSchedule 13 Sale and repurchase of securitiesSchedule 14 Sale and repurchase of securities: minor and consequentialamendmentsSchedule 15 Controlled foreign companiesSchedule 16 Venture capital schemes etcPart 1 Limit on number of employees of company in whichinvestment is madePart 2 Limit on amount raised annually by company through riskcapital schemesPart 3 Excluded activities: receipt of royalties and licence feesPart 4 Meaning of qualifying 90% subsidiary Part 5 Other amendmentsSchedule 17 Real Estate Investment TrustsSchedule 18 Pensions schemes: abolition of relief for life assurancepremium contributions etcSchedule 19 Alternatively secured pensions and transfer lump sum deathbenefit etcSchedule 20 Pension schemes etc: miscellaneousSchedule 21 Exemptions from stamp duty and SDRT: intermediaries,repurchases etcSchedule 22 Amendments and repeals consequential on extension ofHMRC powersPart 1 AmendmentsPart 2 RepealsSchedule 23 Extension of HMRC powers.

8 ScotlandSchedule 24 Penalties for errorsPart 1 Liability for penaltyPart 2 Amount of penaltyPart 3 ProcedurePart 4 MiscellaneousPart 5 GeneralSchedule 25 Amendments connected with Gambling Act 2005 Part 1 Amendments of the Tax ActsPart 2 Amendments of BGDA 1981 Part 3 Amendments of FA 1993 relating to lottery dutyPart 4 Amendments of FA 1997 relating to gaming dutyPart 5 Miscellaneous amendmentsPart 6 CommencementFinance Act 2007 (c. 11)viiSchedule 26 Meaning of recognised stock exchange etcSchedule 27 RepealsPart 1 EnvironmentPart 2 Income tax, corporation tax and capital gains taxPart 3 PensionsPart 4 SDLT, stamp duty and SDRTPart 5 Investigation, administration etcPart 6 MiscellaneousELIZABETH IIc. 11 Finance Act 20072007 CHAPTER 11An Act to grant certain duties, to alter other duties, and to amend the lawrelating to the National Debt and the Public Revenue, and to make furtherprovision in connection with Finance .

9 [19th July 2007 ]Most Gracious SovereignE, Your Majesty s most dutiful and loyal subjects, the Commons of theUnited Kingdom in Parliament assembled, towards raising the necessarysupplies to defray Your Majesty s public expenses, and making an addition to thepublic revenue, have freely and voluntarily resolved to give and to grant unto YourMajesty the several duties hereinafter mentioned; and do therefore most humblybeseech Your Majesty that it may be enacted, and be it enacted by the Queen s mostExcellent Majesty, by and with the advice and consent of the Lords Spiritual andTemporal, and Commons, in this present Parliament assembled, and by the authorityof the same, as follows: PART 1 CHARGES, RATES, THRESHOLDS ETCI ncome tax1 Charge and rates for 2007 -08 Income tax is charged for the tax year 2007 -08; and for that tax year (a)the starting rate is 10%,(b)the basic rate is 22%, and(c)the higher rate is 40%.

10 WFinance Act 2007 (c. 11)Part 1 Charges, rates, thresholds etc2 Corporation tax2 Charge and main rates for financial year 2008(1)Corporation tax is charged for the financial year 2008; and for that year the rateof corporation tax is (a)28% on profits of companies other than ring fence profits, and(b)30% on ring fence profits of companies .(2)In this section ring fence profits has the same meaning as in Chapter 5 of Part12 of ICTA (see section 502(1) and (1A)).3 Small companies rates and fractions for financial year 2007 (1)For the financial year 2007 the small companies rate is (a)20% on profits of companies other than ring fence profits, and(b)19% on ring fence profits of companies .(2)For the financial year 2007 the fraction mentioned in section 13(2) of ICTA is (a)1/40th in relation to profits of companies other than ring fence profits( the standard fraction ), and(b)11/400ths in relation to ring fence profits of companies ( the ring fencefraction ).