At the time of writing, Finance (No.2) Bill 2010 (the third Finance Bill of this year) is due to be published. It is expected that the Bill will be available on the Parliament website and the accompanying Explanatory Notes will be on the HM Treasury website.

Draft legislation was previously published on 12 July 2010 on technical tax measures inherited from the previous government that are to be legislated in this third Finance Bill. Each piece of draft legislation can be accessed at http://www.hm-treasury.gov.uk/finance_bill_autumn_consult.htm, and is accompanied in the same document by a draft explanatory note.

Specific items of note to be dealt with in the forthcoming Bill are as follows:-

• Company distributions – amendments to prevent certain distributions received by UK companies from being excluded from the distribution exemption regime in CTA 2009 and clarification on the definition of distribution;
• Changes to the consortium claims for group relief legislation to allow claims to be made where a “link company” is established in the EU/EEA and is not “UK related” and adding a further condition to the rules which determine the proportion of losses that may be claimed from or surrendered to;
• Changes to the Enterprise Management Incentives (EMI) rules to ensure that EMI complies with EU State aid guidelines;
• Changes to the worldwide debt cap rules effective 1 January 2010;
• First-year allowances for zero-emission goods vehicles;
• Amendments to VAT rules to implement the basic requirements of the EU VAT Technical Directive which remove the ability to reclaim VAT paid on expenditure on land and property used for private purposes;
• Extension of penalties for failure to make returns etc. and payments to VAT and other miscellaneous taxes and duties not already included in the regime;
• R&D relief for SMEs - removal of intellectual property condition;
• Changes to the rules for Enterprise Investment Schemes and Venture capital schemes (generally to bring EU/EEA investments into these reliefs