The Chancellor of the Exchequer delivered his Autumn Statement to Parliament on 25 November 2015. The measures with immediate effect from 25 November 2015 are as follows:

Loans to participators, trustees of charitable trusts:

This measure affects some close companies (broadly companies controlled by 5 or fewer participators) which are part of an ownership structure including companies, trustees and a charity making loans or advances to their participators (broadly their shareholders). The measure exempts loans or advances made by close companies to trustees of charities for charitable purposes from the tax charge applied under the loans to participators rules. The measure will apply to loans or advances made on or after 25 November 2015. Charities may refrain from accounting for any section 455 charge which could arise between this date and Royal Assent to Finance Bill 2016. However if the exemption is not ultimately approved by Parliament then charities will be liable to the section 455 charge according to the current law.

Section 455 provides that a tax charge arises when a close company makes a loan or advances money to an individual who is a participator (or an associate of a participator) in the close company in the relevant accounting period. The tax charge is equivalent to 25% of the amount loaned to the participator.

Legislation will be introduced in Finance Bill 2016 to create an exception from the section 455 charge. This will apply to some loans or advances made by close companies to trustees (corporate or individual) of charitable trusts which are currently liable to pay the tax charge because those trustees are participators or associates of participators in the close company. The exemption will apply where such a trustee receives a loan or advance, and it is applied wholly to the purposes of the charitable trust. Section 455 will continue to apply to charities where loans or advances are made in any other relevant circumstances as will the charge to tax: other arrangements in section 464A.

Corporation Tax: related party rules, partnerships and transfers of intangible assets:

Legislation will be introduced in Finance Bill 2016 to amend Part 8 of CTA 2009. These revisions will include specific provisions that apply the commencement rules to partnerships. This will confirm how these commencement rules in Part 8 have effect with regard to intangible fixed assets that are acquired or disposed of by a partnership. The changes therefore make it clear that transfers of intangible assets to a partnership with companies as members will not circumvent the Intangible Fixed Asset commencement rules that would otherwise apply to those corporate members.

Part 8 will be amended to apply these rules to transactions that occur on or after 25 November 2015. Part 8 will also be amended to allow an apportionment of the accounting debits and credits in any period that straddles 25 November 2015 where they relate to transactions that occurred prior to that date.

Corporation Tax and Income Tax: capital allowances and leasing – anti-avoidance:

Legislation will be introduced in Finance Bill 2016 to amend Part 2 Chapter 17 CAA (Other Anti-Avoidance) so that it is capable of adjusting the disposal value of the person making the disposal of the plant or machinery as well as qualifying expenditure of the person acquiring it. Section 215 CAA will be amended so that it applies where the main purpose, or one of the main purposes, of the relevant transaction, or a scheme or an arrangement of which it is part, is to enable a person to obtain a tax advantage in the form of a reduced or no balancing charge or an increased allowance. Where the relevant conditions are met the disposal value is to be adjusted in a just and reasonable manner by reference to payment received attributable to the arrangements not otherwise taken into account in disposal value. Payment will be widely defined so as include any form of value receivable.

Secondly, for Corporation Tax purposes new Chapter 3 (‘Consideration for taking over payment obligations as a lessee taxed as income’) will be inserted into Part 20 CTA 2010. Chapter 3 will provide that where a company becomes entitled to tax deductions as a result of taking over obligations under a lease of another person, then the company will always be chargeable to tax on any consideration received. The legislation will apply to any situation and by whatever method the company takes over those lease obligations. Consideration will be defined widely to include any payment or valuable benefit referable, directly or indirectly, to the agreement. There will be parallel provisions for income tax purposes, where the person taking over the lease obligations is not a company, in Part 13 ITA 2007.