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Chapter 5
Corporation Tax
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Amendment of section 110 of Principal Act (securitisation)
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28. Section 110 of the Principal Act is amended—
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(a) in subsection (1) —
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(i) in the definition of “specified person” in subsection (1) —
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(I) in paragraph (a), by deleting—
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“where ‘controls’ and ‘controlled’ have the same meanings as they would have by the application of section 11 to this paragraph,”,
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and
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(II) in paragraph (b), by inserting after subparagraph (ii) the following:
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“(iia) to whom loans or advances held by the qualifying company were made, or”,
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and
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(ii) by inserting the following definition:
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“‘significant influence’ means a person with the ability to participate in the financial and operating decisions of a company;”,
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(b) in subsection (2) —
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(i) in paragraph (b), by substituting “bad,” for “bad, and”,
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(ii) in paragraph (c), by substituting “time, and” for “time.”, and
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(iii) by inserting after paragraph (c) the following:
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“(d) in computing the profits or gains of a qualifying company, section 835C shall not apply to any amount deducted by a qualifying company for any interest or other distribution paid in respect of a security referred to in subsection (4).”,
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(c) by substituting for subsection (5) the following:
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“(5) Subsection (4) shall apply only in respect of any interest or other distribution as is paid by a qualifying company where it would be reasonable to consider that the payment is made, or the security to which the payment relates was entered into, for bona fide commercial purposes and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is the avoidance of tax.”,
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and
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(d) by inserting after subsection (6) the following:
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“(7) For the purposes of this section, a person has control of a company where that person has—
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(a) the power to secure—
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(i) by means of the holding of shares or the possession of voting power in or in relation to that or any other company, or
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(ii) by virtue of any powers conferred by the constitution, articles of association or other document regulating that or any other company,
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that the affairs of the first-mentioned company are conducted in accordance with the wishes of that person, or
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(b) significant influence over the first-mentioned company and holds, directly or indirectly, more than—
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(i) 20 per cent of the issued share capital of the company,
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(ii) 20 per cent of the principal value of any securities referred to in subsection (4) issued by that company, or any such securities where those securities have no principal value, or
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(iii) the right to 20 per cent of the interest or other distribution payable in respect of any securities referred to in subsection (4) issued by that company.”.
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