Finance Act 1990

InternationalU.K.

F165. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

66 Dual resident companies: transfers of assets abroad.U.K.

(1)In sections 742(8) and 745(4) of the Taxes Act 1988, after the words “incorporated outside the United Kingdom” there shall be inserted the words “, or regarded for the purposes of any double taxation arrangements having effect by virtue of section 788 as resident in a territory outside the United Kingdom,”.

(2)Subject to subsection (3) below, this section shall apply in relation to transfers of assets and associated operations on or after 20th March 1990.

(3)In so far as the amendment of subsection (4) of section 745 relates to subsections (3)(b) and (5) of that section, it shall come into force on that date.

67 Dual resident companies: controlled foreign companies.U.K.

(1)In section 749 of the Taxes Act 1988, after subsection (4) there shall be inserted—

“(4A)For the purposes of this Chapter, any company which, though resident in the United Kingdom, is regarded for the purposes of any double taxation arrangements having effect by virtue of section 788 as resident in a territory outside the United Kingdom shall be treated as if it were resident outside the United Kingdom (and not resident in the United Kingdom).”

(2)In section 751(2) of that Act, after paragraph (b) there shall be inserted—

“(bb)the company becomes, or ceases to be, a company in relation to which section 749(4A) has effect; or”.

(3)In Schedule 25 to that Act—

(a)paragraphs 2(1)(c) and 4(1)(c) shall be omitted,

(b)after paragraph 2(1) there shall be inserted—

“(1A)A payment of dividend to a company shall not fall within sub-paragraph (1)(d) above unless it is taken into account in computing the company’s income for corporation tax.”, and

(c)after paragraph 4(1) there shall be inserted—

“(1A)A payment to a company shall not be a subsequent dividend within the meaning of sub-paragraph (1)(b) above unless it is taken into account in computing the company’s income for corporation tax.”

(4)Subsections (1) and (2) above shall apply on and after 20th March 1990 and subsection (3) above shall apply to dividends paid on or after that date.

68 Movements of capital between residents of member States.U.K.

(1)In section 765 of the Taxes Act 1988 (certain transactions unlawful unless carried out with Treasury consent), in subsection (1), after the words “Subject to the provisions of this section” there shall be inserted the words “ and section 765A ”.

(2)After that section there shall be inserted—

“765A Movements of capital between residents of member States.

(1)765(1) shall not apply to a transaction which is a movement of capital to which Article 1 of the Directive of the Council of the European Communities dated 24th June 1988 No. 88/361/EEC applies.

(2)Where if that Article did not apply to it a transaction would be unlawful under section 765(1), the body corporate in question (that is to say, the body corporate resident in the United Kingdom) shall—

(a)give to the Board within six months of the carrying out of the transaction such information relating to the transaction, or to persons connected with the transaction, as regulations made by the Board may require, and

(b)where notice is given to the body corporate by the Board, give to the Board within such period as is prescribed by regulations made by the Board (or such longer period as the Board may in the case allow) such further particulars relating to the transaction, to related transactions, or to persons connected with the transaction or related transactions, as the Board may require.”

(3)In section 98 of the M1Taxes Management Act 1970 (penalties for failure to furnish information and for false information)—

(a)in subsection (1), after the words “Subject to” there shall be inserted the words “ the provisions of this section and ”;

(b)after subsection (4) there shall be inserted—

“(5)In the case of a failure to comply with section 765A(2)(a) or (b) of the principal Act, subsection (1) above shall have effect as if for “£300” there were substituted “ £3,000 ” and as if for “£60” there were substituted “ £600 ”.”;

(c)in the first column of the Table, after “section 755” there shall be inserted “ section 765A(2)(b); ”; and

(d)in the second column of the Table, after “section 639” there shall be inserted “ section 765A(2)(a); ”.

(4)This section shall apply to transactions carried out on or after 1st July 1990.

69 European Economic Interest Groupings.U.K.

Schedule 11 to this Act (which makes provision about the taxation of income and gains in the case of European Economic Interest Groupings) shall have effect.

F270. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.