INN identifiers for biological products
Income tax is charged for the tax year 2016-17.
For that tax year—
the basic rate is 20%,
the higher rate is 40%, and
the additional rate is 45%.
In section 4(1)(b) of FA 2015 (basic rate limit for 2017-18) for “£32,400” substitute “ £33,500 ”.
Accordingly, omit section 6(b) of F(No.2)A 2015 (basic rate limit for 2017-18).
In section 5(1)(b) of FA 2015 (personal allowance for 2017-18) for “£11,200” substitute “ £11,500 ”.
Accordingly, omit section 5(b) of F(No.2)A 2015 (personal allowance for 2017-18).
ITA 2007 is amended in accordance with subsections (2) to (12).
In section 6(3)(a) (other rates: savings), after “starting rate for savings” insert “ and savings nil rate ”.
In section 7 (starting rate for savings)—
the existing text becomes subsection (1),
after that subsection insert—, and
in the heading, after “starting rate for savings” insert “ and savings nil rate ”.
In section 10(4) (provisions displacing charge at basic, higher and additional rates), before the entry relating to section 13 insert— “ section 12A (savings income charged at the savings nil rate), ”.
After section 12 insert—
In section 16(1) (purposes of rules about highest part of income), before the “and” at the end of paragraph (a) insert—.
In section 17 (repayment where tax paid at basic rate instead of starting rate for savings)—
after subsection (1) insert—, and
in the heading—
for “basic” substitute “ greater ”, and
after “savings” insert “ or savings nil rate ”.
In sections 55B(2)(b) and 55C(1)(c) (individual liable to tax only at certain rates), after “dividend ordinary rate” insert “ , the savings nil rate ”.
In section 745(1) (transfer of assets abroad: same rate of tax not to be charged twice), after “the starting rate for savings” insert “ when that rate is more than 0%, ”.
In section 828B(5) (individual liable to tax only at certain rates), after “basic rate” insert “ , the savings nil rate ”.
In section 989 (definitions for the purposes of the Income Tax Acts)—
“savings allowance” has the meaning given by section 12B, “savings nil rate” means the rate of income tax specified in section 7(2),
in the entry for “starting rate of savings”, for “has the meaning given by section 7” substitute “ means the rate of income tax specified in section 7(1) ”.
savings allowance section 12B savings nil rate section 7
In section 669(3) of ITTOIA 2005 (preventing charge to both income and inheritance tax: meaning of “extra liability”), for paragraphs (a) and (b) substitute—
In consequence of the amendment made by subsection (13)—
in Schedule 1 to ITA 2007 omit paragraph 561,
in Schedule 1 to FA 2008 omit paragraph 59, and
in Schedule 2 to FA 2009 omit paragraph 21.
In section 7(6) of TMA 1970 (cases where person not required to give notice of being chargeable to income tax), after “dividend ordinary rate” insert “ , the savings nil rate ”.
In section 91(3)(c) of TMA 1970 (interest adjustments where reliefs given: when to ignore relief from higher rates on income paid subject to deduction of tax) after “basic rate” insert “ , the savings nil rate ”.
Subject to subsection (18), the amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
The amendments in section 669 of ITTOIA 2005, and the repeals made by subsection (14), have effect where the tax year mentioned in section 669(1)(b) of ITTOIA 2005 is the tax year 2016-17 or a later tax year.
The Treasury may, by regulations made by statutory instrument, make such provision amending, repealing or revoking any provision made by or under the Taxes Acts as the Treasury considers appropriate in consequence of the amendments made by this section; and regulations under this subsection that have effect for the tax year 2016-17 may be made at any time before the end of that tax year.
In subsection (19) “the Taxes Acts” means—
the Tax Acts,
TMA 1970, and
TCGA 1992 and all other enactments relating to capital gains tax.
A statutory instrument containing regulations under subsection (19) is subject to annulment in pursuance of a resolution of the House of Commons.
ITA 2007 is amended in accordance with subsections (2) to (8).
In section 6(3)(b) (other rates: dividends), before “dividend ordinary rate,” insert “ dividend nil rate, ”.
In section 8 (dividend ordinary, upper and additional rates)—
in the heading, after “The” insert “ dividend nil rate, ”,
before subsection (1) insert—,
in subsection (1) (dividend ordinary rate), for “10%” substitute “ 7.5% ”, and
in subsection (3) (dividend additional rate), for “37.5%” substitute “ 38.1% ”.
In section 9(2) (dividend trust rate), for “37.5%” substitute “ 38.1% ”.
After section 13 insert—
In section 55B(2) (transferable allowance: conditions for entitlement to tax reduction)—
in paragraph (b) (individual liable to tax only at certain rates), after “the basic rate,” insert “ the dividend nil rate, ”, and
after paragraph (b) insert—.
In section 55C(1) (transferable allowance: conditions for entitlement to elect for reduced personal allowance)—
in paragraph (c) (individual would be liable to tax only at certain rates), after “the basic rate,” insert “ the dividend nil rate, ”, and
before the “and” at the end of paragraph (c) insert—.
“dividend nil rate” means the rate of income tax specified in section 8(A1),
In section 7 of TMA 1970 (duty to notify HMRC of liability to tax)—
in subsection (6) (exception for net payments etc)—
after paragraph (a) insert “ or ”,
at the end of paragraph (b), for “; or” substitute a comma,
omit paragraph (c), and
in the words after paragraph (c), after “the basic rate” insert “ , the dividend nil rate ”, and
after subsection (6) insert—
The amendments made by the preceding provisions of this section have effect for the tax year 2016-17 and subsequent tax years.
Schedule 1 contains provision for, and connected with, the abolition of dividend tax credits etc.
ITA 2007 is amended in accordance with subsections (2) to (22).
Before section 10 insert—
Before section 7 insert—
After section 7 insert—
In section 6(3) (other rates)—
before paragraph (a) insert—, and
after paragraph (a) insert—.
In section 10(2) (income charged at basic rate) omit the words after “at the basic rate”.
section 11C (income charged at the default basic, higher and additional rates: non-UK resident individuals), section 11D (savings income charged at the savings basic, higher and additional rates: individuals), section 12 (savings income charged at the starting rate for savings),
In section 11 (income charged at the basic rate: other persons)—
in the heading, for “basic rate: other persons” substitute “ default basic rate: non-individuals ”, and
in subsection (1), before “basic” insert “ default ”.
After section 11B insert—
In section 12(1) (income charged at the starting rate for savings)—
omit “(rather than the basic rate)”, and
for “as is savings income” substituteas— .
In section 12A (inserted by this Act)—
in each of subsections (3) and (4), after “rather than the basic, higher or additional rate” insert “ or the default basic, default higher or default additional rate ”, and
in subsection (5), for “section 10” substitute “ sections 10 and 11C ”.
In section 12B (inserted by this Act), in subsection (8) (income charged at savings nil-rate: meaning of “additional-rate income” and “higher-rate income”)—
in paragraph (a)(i), after “at the additional rate” insert “ , default additional rate ”,
in paragraph (a)(ii), after “additional rate” insert “ , or default additional rate, ”,
in paragraph (a)(iv), after “additional rate” insert “ or default additional rate ”,
in paragraph (b)(i), after “at the higher rate” insert “ , default higher rate ”,
in paragraph (b)(ii), after “higher rate” insert “ , or default higher rate, ”, and
in paragraph (b)(iv), after “higher rate” insert “ or default higher rate ”.
In section 16(1) (purposes of rules about highest part of income), before the “and” at the end of the paragraph (aa) (inserted by this Act) insert—.
In section 17(1) (repayment where tax paid at basic rate instead of starting rate for savings), for “at the basic rate” substitute “ at a rate greater than the starting rate for savings ”.
In section 55B (entitlement to transferable tax allowances for married couples and civil partners)—
in subsection (2)(b) as amended by section 5 of this Act, after “other than the basic rate,” insert “ the default basic rate, the savings basic rate, ”, and
in subsection (3), after “is the basic rate” insert “ or default basic rate ”.
In section 55C(1)(c) (election to reduce personal allowance conditional on not becoming subject to higher rates) as amended by section 5 of this Act, after “other than the basic rate,” insert “ the default basic rate, the savings basic rate, ”.
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In section 828B(5) (exemption for non-domiciled UK residents conditional on not being subject to higher rates) as amended by section 4 of this Act, after “other than the basic rate” insert “ , the savings basic rate ”.
“default additional rate” means the rate of income tax of that name determined pursuant to section 6C, “default basic rate” means the rate of income tax of that name determined pursuant to section 6C, “default higher rate” means the rate of income tax of that name determined pursuant to section 6C, “savings additional rate” means the rate of income tax of that name determined pursuant to section 7A, “savings basic rate” means the rate of income tax of that name determined pursuant to section 7A, “savings higher rate” means the rate of income tax of that name determined pursuant to section 7A,
default additional rate section 6C (as applied by section 989) default basic rate section 6C (as applied by section 989) default higher rate section 6C (as applied by section 989) savings additional rate section 7A (as applied by section 989) savings basic rate section 7A (as applied by section 989) savings higher rate section 7A (as applied by section 989)
In sections 4(4) and (5) and 4BA(1) of TCGA 1992 (rate of capital gains tax depends on individual's liability to higher rates of income tax), after “at the higher rate” insert “ , the default higher rate, the savings higher rate ”.
Subject to any provision made by virtue of subsection (25)(b), the amendments made by this section come into force on the day appointed by the Treasury under section 13(14) of the Scotland Act 2016 and have effect—
for the tax year appointed by the Treasury under section 13(15) of the Scotland Act 2016, and
for subsequent tax years.
The Treasury may by regulations make—
such consequential provision as they consider appropriate in connection with any preceding provision of this section;
such transitional or saving provision as they consider appropriate in connection with the coming into force of any provision of the preceding subsections of this section.
Regulations under this section may amend, repeal or revoke an enactment, whenever passed or made (including this Act).
Regulations under this section must be made by statutory instrument.
A statutory instrument containing regulations under this section which includes provision amending or repealing a provision of an Act may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.
Any other statutory instrument containing regulations under this section, if made without a draft having been approved by a resolution of the House of Commons, is subject to annulment in pursuance of a resolution of the House of Commons.
In subsection (26) “enactment” includes an enactment contained in subordinate legislation (within the meaning of the Interpretation Act 1978).
Part 3 of ITEPA 2003 (employment income: earnings and benefits etc treated as earnings) is amended as follows.
In section 97 (living accommodation to which Chapter 5 applies), after subsection (1) insert—
In section 109 (priority of Chapter 5 over Chapter 1), after subsection (3) insert—
In section 114 (cars, vans and related benefits to which Chapter 6 applies), after subsection (1) insert—
For section 117 substitute—
In section 120 (benefit of car treated as earnings)—
in subsection (2) after “case” insert “ (including a case where the cash equivalent of the benefit of the car is nil) ”, and
after subsection (2) insert—
In section 154 (benefit of van treated as earnings)—
the existing text becomes subsection (1) of that section, and
after that subsection insert—
In section 173 (loans to which Chapter 7 applies), after subsection (1) insert—
The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
ITEPA 2003 is amended as follows.
Section 139 (car with a CO2 figure: the appropriate percentage) is amended as set out in subsections (3) and (4).
In subsection (2)—
in paragraph (a), for “13%” substitute “ 16% ”,
in paragraph (aa), for “16%” substitute “ 19% ”, and
in paragraph (b), for “19%” substitute “ 22% ”.
In subsection (3), for “20%” substitute “ 23% ”.
Section 140 (car without a CO2 figure: the appropriate percentage) is amended as set out in subsections (6) and (7).
In subsection (2), in the Table—
for “20%” substitute “ 23% ”, and
for “31%” substitute “ 34% ”.
In subsection (3)(a), for “13%” (as substituted by section 9(3)) substitute “ 16% ”.
In section 142(2) (car first registered before 1 January 1998: the appropriate percentage), in the Table—
for “20%” substitute “ 23% ”, and
for “31%” substitute “ 34% ”.
The amendments made by this section have effect for the tax year 2019-20 and subsequent tax years.
In section 140(3)(a) of ITEPA 2003 (car which cannot emit CO2: the appropriate percentage), for “7%” substitute “ 9% ”.
The amendment made by subsection (1) has effect for the tax year 2017-18.
In section 140(3)(a) of ITEPA 2003, for “9%” substitute “ 13% ”.
The amendment made by subsection (3) has effect for the tax year 2018-19.
In section 24 of FA 2014 (cars: the appropriate percentage), omit the following (“the repealing provisions”)—
subsection (2),
subsection (6),
subsection (10),
subsection (11), and
subsection (15).
Any provision of ITEPA 2003 amended or omitted by the repealing provisions has effect for the tax year 2016-17 and subsequent tax years as if the repealing provisions had not been enacted.
Section 155 of ITEPA 2003 (cash equivalent of the benefit of a van) is amended as follows.
In subsection (1B)(a), for “2019-20” substitute “ 2021-22 ”.
In subsection (1C), for paragraphs (b) to (e) substitute—
The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
Schedule 2 contains provision about the tax treatment of payments from sporting testimonials.
ITEPA 2003 is amended as follows.
After section 323 insert—
In section 716 (alteration of amounts by Treasury order) in subsection (2), after paragraph (f) insert—.
In section 717(4) (negative procedure not to apply to certain statutory instruments) after “other care: meaning of “eligible employee”),” insert “ section 323C(1) (trivial benefits provided by employers), ”.
The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
In Chapter 2 of Part 5 of ITEPA 2003 (deductions for employee's expenses), after section 339 insert—
In section 688A of ITEPA 2003 (managed service companies: recovery from other persons), in subsection (5), in the definition of “managed service company”, after “section 61B” insert “ but for the purposes of section 339A has the meaning given by subsection (11) of that section ”.
After section 688A of ITEPA 2003 insert—
In Part 4 of the Income Tax (Pay As You Earn) Regulations 2003 (S.I. 2003/2682) (payments, returns and information), after Chapter 3A insert—
The amendment made by subsection (4) is to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs in exercise of the power conferred by section 688B of ITEPA 2003 (inserted by subsection (3)).
The amendment made by subsection (1) has effect in relation to the tax year 2016-17 and subsequent tax years.
The amendment made by subsection (4) has effect in relation to relevant PAYE debts that are to be deducted, accounted for or paid on or after 6 April 2016.
In section 684 of ITEPA 2003 (PAYE regulations), in subsection (2), in item 1ZA(a), for “Chapters 3 and 5 to 10” substitute “ Chapters 3 to 10 ”.
Schedule 3 contains miscellaneous minor amendments relating to employee share schemes.
In section 418 of ITEPA 2003 (provisions related to Part 7 of ITEPA 2003), in subsection (1), omit “(but not securities options)”.
In that section, after subsection (1) insert—
In section 227 of that Act (scope of Part 4), in subsection (4), before paragraph (a) insert—.
The amendments made by this section come into force on 6 April 2016.
Part 7A of ITEPA 2003 (employment income provided through third parties) is amended in accordance with subsections (2) and (3).
In section 554Z2 (value of relevant step to count as employment income) after subsection (1) insert—
In section 554Z8 (cases where consideration given for relevant step) in subsection (5), omit “and” at the end of paragraph (b) and after paragraph (c) insert, and
Paragraph 59 of Schedule 2 to FA 2011 (transitional provision relating to Part 7A of ITEPA 2003) is amended in accordance with subsections (5) to (7).
In sub-paragraph (2) for the words from “the earnings” to the end substitute—
After sub-paragraph (2) insert—
At the end insert—
In Schedule 2 to FA 2011, omit paragraph 64 (power to make provision dealing with interactions etc.).
The amendment made by subsection (3) has effect in relation to payments made on or after 16 March 2016 by way of consideration for a relevant step (as defined in section 554A(2) of ITEPA 2003) taken on or after that date.
The amendment made by subsection (7) has effect in relation to chargeable steps (as defined in paragraph 59(1)(a) of Schedule 2 to FA 2011) taken on or after 16 March 2016.
Section 218 of FA 2004 (pension schemes etc: lifetime allowance) is amended in accordance with subsections (2) to (5).
For subsections (2) and (3) (standard lifetime allowance is £1,250,000 but may be increased by Treasury order) substitute—
After subsection (5BB) insert—
After subsection (5D) insert—
After subsection (5E) insert—
In section 280 of FA 2004 (abbreviations and general index for Part 4), in the entry for “standard lifetime allowance” for “and (3)” substitute “ to (2C) ”.
In section 282 of FA 2004 (orders and regulations under Part 4), after subsection (2) (negative procedure applies to instruments not approved in draft) insert—
The amendments made by subsections (2) to (4) have effect for the tax year 2016-17 and subsequent tax years.
The amendment made by subsection (5)—
so far as it consists of the insertion of new subsections (5F) and (5G)—
is to be treated as having come into force on 6 April 2015, and
has effect in relation to benefit crystallisation events occurring on or after that date, and
so far as it consists of the insertion of new subsections (5H) and (5I)—
is to be treated as having come into force on 6 April 2016, and
has effect in relation to benefit crystallisation events occurring on or after that date.
Schedule 4 contains transitional and connected provision (including provision for “fixed protection 2016” and “individual protection 2016”).
In Part 1 of Schedule 28 to FA 2004 (registered pension schemes: the pension rules), paragraph 2 (meaning of “scheme pension”) is amended in accordance with subsections (2) to (4).
In sub-paragraph (4) (which specifies circumstances in which amount of scheme pension may go down and gives power to specify additional circumstances) omit paragraph (c) (reduction by reference to state retirement pensions for persons reaching pensionable age before 6 April 2016).
Omit sub-paragraphs (4B), (5) and (5A) (interpretation of sub-paragraph (4)(c)).
In sub-paragraph (8) (regulations under certain sub-paragraphs may make back-dated provision) omit “or (5)”.
In consequence of the amendments made by subsections (2) and (3)—
in FA 2006, in Schedule 23 omit paragraph 20(2) and (3), and
in FA 2013, omit section 51(2).
Regulations under paragraph 2(4)(h) of Schedule 28 to FA 2004 (power to prescribe permitted reductions of scheme pensions, and to do so with back-dated effect) may provide for the coming into force of the amendments made by subsections (2) to (5), and—
those amendments have effect in accordance with regulations under paragraph 2(4)(h) of that Schedule, and
paragraph 2(8) of that Schedule (back-dating) applies for the purposes of regulations bringing the amendments into force only so as to permit the amendments to be given effect in relation to times not earlier than 6 April 2016.
Part 2 of Schedule 28 to Part 4 of FA 2004 (pension death benefit rules) is amended as follows.
In paragraph 16A (dependants' scheme pension: when limits in paragraphs 16B and 16C apply), after sub-paragraph (1) insert—
After paragraph 16A insert—
In paragraph 16B (limit in post-death year)—
in sub-paragraph (3)(c), for “amounts” substitute “ uprated amounts (see sub-paragraph (6)) ”, and
after sub-paragraph (5) insert—
In paragraph 16C (limit in subsequent years)—
in sub-paragraph (3)(a), omit “period of”,
in sub-paragraph (3)(b), for “subsection” substitute “ sub-paragraph ”,
for sub-paragraphs (4) and (5) substitute—,
in sub-paragraph (6)—
for “month period” substitute “ months ”, and
for the words after “increased by” substitute “ the permitted margin. ”,
in sub-paragraph (8)(a), for “end of the post-death year” substitute “ member's death ”,
in sub-paragraph (8)(b), after “first month” insert “ ending after the start ”,
in sub-paragraph (11), for “opening month” substitute “ month in which the member died ”, and
omit sub-paragraphs (13) and (14).
The amendments made by this section are treated as having come into force on 6 April 2016.
The amendments made by subsections (2) to (4), so far as they relate to paragraph 16B of Schedule 28 to FA 2004, have effect where the last day of “the post-death year” (see sub-paragraph (1) of that paragraph) is 6 April 2016 or any later day.
The following amendments— have effect where the last day of “the 12 months in question” (see sub-paragraph (1) of that paragraph) is 6 April 2016 or any later day.
the amendments made by subsections (2) to (4), so far as they relate to paragraph 16C of Schedule 28 to FA 2004, and
the amendments made by subsection (5),
Schedule 5 makes amendments in connection with pension flexibility.
After section 642 of ITEPA 2003 insert—
The amendment made by this section has effect for the tax year 2016-17 and subsequent tax years.
In Part 2 of ITTOIA 2005 (trading income), Chapter 5A (trade profits: deductions allowable at a fixed rate) is amended as follows.
Section 94H (use of home for business purposes) is amended as follows.
In subsection (1), for the words from “in respect of” to the end substitutein respect of—
In subsection (4), for the words from “work done” to the end substitute “ qualifying work ”.
After subsection (4) insert—
In subsection (5), after “person” insert “ , or, where the person is a firm, a partner of the firm, ”.
After subsection (5) insert—
Section 94I (premises used both as a home and as business premises) is amended as follows.
In subsection (1)(b), for “used by the person as a home,” substituteused as a home by— .
After subsection (6) insert—
The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
Chapter 16 of Part 2 of ITTOIA 2005 (averaging profits of farmers and creative artists) is amended as specified in subsections (2) to (7).
In section 221 (claim for averaging of fluctuating profits)—
in subsection (2), at the beginning insert “ For the purposes of section 222 (two-year averaging) ”;
after that subsection insert—;
in subsection (3), for “this purpose” substitute “ the purpose of subsection (2) ”.
After section 222 insert—
In section 222 (circumstances in which claim may be made)—
in the heading, after “claim” insert “ for two-year averaging ”;
in subsection (1), after “made” insert “ under this section ”;
for subsection (2) substitute—;
in subsection (3)—
after “made”, in the first place, insert “ under this section ”;
after “made”, in the second place, insert “ under this section or section 222A ”;
in subsection (4), after “made” insert “ under this section ”;
in subsection (5), after “averaging claim” insert “ under this section ”.
In section 223 (adjustment of profits)—
in subsection (2), for “second of the two tax years” substitute “ last of the two or five tax years ”;
for subsection (3) substitute—;
omit subsection (4).
In section 224 (effect of adjustment)—
in subsection (4), for “either” substitute “ any ”;
in subsection (6), for “second of the two tax years” substitute “ last of the two or five tax years ”.
In section 225 (effect of later adjustment of profits), in subsection (1), for “either or both” substitute “ any one or more ”.
In section 31C of ITTOIA 2005 (excluded provisions), in subsection (6), for “section 221” substitute “ Chapter 16 ”.
In section 1025 of ITA 2007 (meaning of “modified net income”), in subsection (2)(d), for “the earlier of the tax years” substitute “ any earlier tax year ”.
In paragraph 3 of Schedule 1B to TMA 1970 (relief for fluctuating profits of farmers etc)—
in sub-paragraph (1), for the words from “for two” to the end substitute—;
in sub-paragraph (2), for “the later year” substitute “ the last of the two or five years ”;
in sub-paragraph (3), for “the earlier year”, where it occurs first, substitute “ an earlier year ”;
in sub-paragraph (5)—
for “the earlier year” substitute “ an earlier year ”;
for “the later year” substitute “ the last of the two or five years ”;
after sub-paragraph (6) insert—
In paragraph 4 of Schedule 1B to TMA 1970 (relief claimed by virtue of section 224(4) of ITTOIA 2005)—
in sub-paragraph (1)—
after “for two” insert “ or five ”;
omit “(“the earlier year” and “the later year”)”;
for “either” substitute “ any ”;
in sub-paragraph (2), for “the later year” substitute “ the last of the two or five years ”;
in sub-paragraph (3), for “the earlier year”, where it occurs first, substitute “ an earlier year ”;
in sub-paragraph (5)—
for “the earlier year” substitute “ an earlier year ”;
for “the later year” substitute “ the last of the two or five years ”.
The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
In ITTOIA 2005, for sections 274A and 274B and the preceding italic heading (tax reductions for non-deductible costs of dwelling-related loans: individuals, and accumulated or discretionary trust income) substitute—
In consequence of the amendment made by subsection (1), in F(No.2)A 2015 omit section 24(5).
In Chapter 3 of Part 6 of ITTOIA 2005 (power to exempt income from individual investment plans from income tax), after section 694 insert—
In section 151(2) of TCGA 1992 (Chapter 3 of Part 6 of ITTOIA 2005 applies with modifications in relation to regulations giving relief from capital gains tax in respect of investments under plans)—
in the words before paragraph (a), for “section 694(1) to (2)” substitute “ sections 694(1) to (2) and 694A(1) ”, and
after paragraph (a) insert—.
In section 62 of TCGA 1992 (death: general provisions), after subsection (4) (acquisition of asset as legatee) insert—
In consequence of subsection (2)(a), in FA 2011 omit section 40(6)(a).
In section 192(1) of ITA 2007 (meaning of “excluded activities”: EIS and SEIS), for paragraphs (ka) to (kc) substitute—.
In section 303(1) of ITA 2007 (meaning of “excluded activities”: VCTs), for paragraphs (ka) to (kc) substitute—.
In consequence of subsection (1), ITA 2007 is amended as follows—
in section 192(2)—
for paragraph (g) substituteand ;
omit paragraph (h);
in section 198A—
in the heading, omit “subsidised generation or”;
omit subsections (3) to (9);
omit section 198B.
In consequence of subsection (2), ITA 2007 is amended as follows—
in section 303(2)—
for paragraph (g) substituteand ;
omit paragraph (h);
in section 309A—
in the heading, omit “subsidised generation or”;
omit subsections (3) to (9);
omit section 309B.
The amendments made by subsections (1) and (3) have effect in relation to shares issued on or after 6 April 2016.
The amendments made by subsections (2) and (4) have effect in relation to relevant holdings issued on or after 6 April 2016.
In section 175A of ITA 2007 (EIS: the permitted maximum age requirement)—
in subsection (7) for the words from “five” to the end substitute “ relevant five year period. ”;
after that subsection insert—
In section 252A of ITA 2007 (EIS: meaning of “knowledge-intensive company”)—
in subsection (4), in the definition of “the relevant three preceding years”, for the words from “means” to the end substitute “ means, subject to subsection (4A), the three consecutive years the last of which ends immediately before the beginning of the last accounts filing period. ”;
after that subsection insert—
In section 280C of ITA 2007 (VCTs: the permitted maximum age condition)—
in subsection (8) for the words from “five” to the end substitute “ relevant five year period. ”;
after that subsection insert—
In section 294A of ITA 2007 (VCTs: the permitted company age requirement)—
in subsection (7) for the words from “five” to the end substitute “ relevant five year period. ”;
after that subsection insert—
In section 331A of ITA 2007 (VCTs: meaning of “knowledge-intensive company”)—
in subsection (5), in the definition of “the relevant three preceding years”, for the words from “means” to the end substitute “ means, subject to subsection (5A), the three consecutive years the last of which ends immediately before the beginning of the last accounts filing period. ”;
after that subsection insert—
The amendments made by this section are to be treated as always having had effect; but this is subject to section 30.
If a company (“the relevant company”) makes an election for this section to apply, then—
the amendments made by subsection (1) of section 29 do not apply in relation to shares issued by the relevant company in the material period,
the amendments made by subsection (2) of that section do not apply for the purposes of determining whether, at the date of issue of any shares issued by the company in the material period, the company is a knowledge-intensive company for the purposes of Part 5 of ITA 2007,
the amendments made by subsection (3) of that section do not apply in relation to investments made in the relevant company in the material period,
the amendments made by subsection (4) of that section do not apply for the purposes of determining whether the requirement of section 294A of ITA 2007 is met in relation to any holding of shares or securities issued by the relevant company in the material period, and
the amendments made by subsection (5) of that section do not apply for the purposes of determining whether, at any time in the material period which is the applicable time within the meaning given by section 331A of ITA 2007, the relevant company is a knowledge-intensive company for the purposes of Part 6 of ITA 2007.
Amendments that by reason of an election under this section do not apply in relation to particular shares or investments or for particular purposes are also to be treated as never having applied in relation to those shares or investments or for those purposes.
Any election under this section must be made in writing and signed by a director of the relevant company.
Where a company has made an election under this section—
it must include a statement that the election has been made in any compliance statement subsequently provided by it under section 204(2) of ITA 2007 in respect of an issue of shares made by it in the material period, and
it must provide a copy of the election to each company to which it has issued shares or securities in the material period.
An election under this section is irrevocable.
In this section “the material period” means the period beginning with 18 November 2015 (the date when F(No. 2)A 2015 was passed) and ending with 5 April 2016.
Section 274 of ITA 2007 (requirements for the giving of approval) is amended as follows.
The non-qualifying investments condition The company has not made and will not make, in the relevant period, an investment which is neither of the following— an investment that on the date it is made is included in the company's qualifying holdings; an investment falling within subsection (3A).
In subsection (3), in each of paragraphs (f), (g) and (h), for “(3A)” substitute “ (3ZA) ”.
After subsection (3) insert—
In subsection (3A)—
for the words from “In the second” to “does not include” substitute “ An investment made by a company (“the investor”) falls within this subsection if it is ”;
in paragraph (c) for “the company” substitute “ the investor ”;
after paragraph (c) insert—
After subsection (3A) insert—
In subsection (5)—
after paragraph (b) insert—;
in paragraph (c) for the words from “made by” to “(3A)” substitute “ falling within subsection (3A) may be held by the company ”.
The amendments made by this section have effect in relation to investments made on or after 6 April 2016.
ITA 2007 is amended as follows.
After section 412 insert—
In section 24(1) (list of reliefs deductible at Step 2 of the calculation of income tax liability), in paragraph (b), at the appropriate place insert— “ Chapter 1A of Part 8 (irrecoverable peer-to-peer loans), ”.
In section 25(3) (list of provisions requiring reliefs to be deducted from particular components of income etc) at the appropriate place insert— “ sections 412A(4), 412B(3) and 412C(3) (relief for irrecoverable peer-to-peer loans only against interest on certain loans), ”.
Chapter 1 of Part 13 of ITA 2007 (transactions in securities) is amended as follows.
In section 684 (person liable to counteraction), in subsection (1)—
in the opening words, after “a person” insert “ (“the party”) ”;
in paragraph (c), omit “the person in being a party to”;
in paragraph (d), for “the person” substitute “ the party or any other person ”.
In that section, in subsection (2)—
in paragraph (c), omit the final “and”;
after paragraph (d) insert—
In section 685 (receipt of consideration in connection with distribution by or assets of close company)—
in subsection (2)—
in the opening words, for “the person” substitute “ a relevant person ”;
in the words after paragraph (c), after “and” insert “ the relevant person ”;
in subsection (3)—
in paragraph (a), for “the person” substitute “ a relevant person ”;
in paragraph (c), for “the person” substitute “ the relevant person ”;
after subsection (3) insert—
omit subsection (6);
after subsection (7) insert—
In section 686 (excluded circumstances: fundamental change of ownership)—
in subsection (1)(a), for the words from “the person” to “party”)” substitute “ the party ”;
for subsections (2) to (5) substitute—
In section 687 (income tax advantage)—
in subsection (1), in the opening words, for “the person” substitute “ a person ”;
in subsection (2)—
after “to the person” insert “ or an associate of the person ”;
for “the relevant consideration is received” substitute “ Condition A or B in section 685 is met ”.
“associate” is to be construed in accordance with section 681DL, but as if subsection (4) of that section also included, as persons associated with each other, a person as trustee of a settlement and an individual, where one or more beneficiaries of the settlement are connected or associated with the individual;
The amendments made by this section have effect in relation to—
a transaction occurring on or after 6 April 2016, or
a series of transactions any one or more of which occurs on or after that date.
Accordingly, Chapter 1 of Part 13 of ITA 2007 has effect without the amendments made by this section in relation to a tax advantage obtained on or after 6 April 2016 in consequence of—
a transaction occurring before that date, or
a series of transactions all of which occur before that date.
Where— the notification is void and section 702(2) of ITA 2007 does not apply in relation to the transaction or transactions.
before 6 April 2016 a person provides particulars to the Commissioners for Her Majesty's Revenue and Customs under section 701 of ITA 2007 in respect of a transaction or transactions,
on the basis of Chapter 1 of Part 13 of ITA 2007 as it has effect apart from this section, notification is given under section 701 of that Act that no counteraction notice ought to be served about the transaction or transactions,
the transaction, or any one or more of the transactions, occurs on or after 6 April 2016, and
the person would, but for the notification, be liable for counteraction of an income tax advantage from the transaction or transactions under Chapter 1 of Part 13 of ITA 2007 as amended by this section,
Chapter 1 of Part 13 of ITA 2007 (transactions in securities) is amended as follows.
For section 695 (preliminary notification) substitute—
Omit sections 696 and 697 (opposed notifications).
In section 698 (counteraction notices), for subsection (1) substitute—
In that section, for subsection (5) substitute—
After that section insert—
In section 684 (person liable to counteraction), for subsection (4) substitute—
The amendments made by this section have effect in relation to—
a transaction occurring on or after 6 April 2016, or
a series of transactions any one or more of which occurs on or after that date.
Accordingly, Chapter 1 of Part 13 of ITA 2007 has effect without the amendments made by this section in relation to a tax advantage obtained on or after 6 April 2016 in consequence of—
a transaction occurring before that date, or
a series of transactions all of which occur before that date.
In Chapter 3 of Part 4 of ITTOIA 2005 (dividends and other distributions from UK resident companies), after section 396A insert—
In Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies), after section 404 insert—
The amendments made by this section have effect in relation to distributions made on or after 6 April 2016.
Section 809EZA of ITA 2007 (disguised investment management fees: charge to income tax) is amended as specified in subsections (2) and (3).
In subsection (3)—
in paragraph (a), for “performs” substitute “ at any time performs or is to perform ”;
omit paragraph (b);
in paragraph (c), for “the scheme” substitute “ an investment scheme ”.
After subsection (6) insert—
In section 809EZE of that Act (interpretation), in subsection (1), in paragraph (a) of the definition of “external investor”, for “performs” substitute “ at any time performs or is to perform ”.
The amendments made by this section have effect in relation to sums arising on or after 6 April 2016 (whenever the arrangements under which the sums arise were made).
In Chapter 5E of Part 13 of ITA 2007 (tax avoidance: disguised investment management fees), in section 809EZB(1) (meaning of “management fee”), for paragraph (c) substitute—
After Chapter 5E of Part 13 of ITA 2007 insert—
In section 2 of ITA 2007 (overview), in subsection (13), after paragraph (hb) insert—.
The amendments made by this section have effect in relation to sums of carried interest arising on or after 6 April 2016 (whenever the arrangements under which the sums arise were made).
In section 809EZA of ITA 2007 (disguised investment management fees: charge to income tax), after subsection (2) insert—
The amendment made by this section has effect in relation to sums of carried interest arising on or after 6 April 2016 (whenever the arrangements under which the sums arise were made).
Schedule 6 contains provisions about deduction of income tax at source.
Part 15 of ITA 2007 (deduction from other payments connected with intellectual property) is amended as specified in subsections (2) and (3).
In section 906 (certain royalties etc where usual place of abode of owner is abroad), for subsections (1) to (3) substitute—
For section 907 substitute—
The amendments made by subsections (2) and (3) have effect in respect of payments made on or after 28 June 2016.
In determining whether section 906 of ITA 2007 applies to a payment, no regard is to be had to any arrangements the main purpose of which, or one of the main purposes of which, is to avoid the effect of the amendments made by this section.
Where arrangements are disregarded under subsection (5) in relation to a payment which— the payment is to be regarded for the purposes of section 906 of ITA 2007 as made on the date on which it is due.
is made before 28 June 2016, and
is due on or after that day,
In determining the date on which a payment is due for the purposes of subsection (6), disregard the arrangements referred to in that subsection.
In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable and whether entered into before, or on or after, 28 June 2016).
In Part 15 of ITA 2007 (deduction of income tax at source), after section 917 insert—
The amendment made by this section has effect in respect of a payment made on or after 17 March 2016 under arrangements entered into at any time (including arrangements entered into before that date).
“intellectual property royalty payment” means—
In relation to payments made (under any such arrangements) on or after 28 June 2016 and on or before the day on which this Act is passed, section 917A of ITA 2007 as inserted by subsection (1) has effect as if “intellectual property royalty payment” also included (so far as it would not otherwise do so) any payments referred to in section 906(2)(a) or (3)(a) of ITA 2007 as substituted by section 40.
In section 577 of ITTOIA 2005 (territorial scope of Part 5 charges), at the end insert—
After that section insert—
The amendments made by subsections (1) and (2) have effect in relation to royalties or other sums paid in respect of intellectual property on or after 28 June 2016.
It does not matter for the purposes of subsection (4) of section 577A of ITTOIA 2005 (as inserted by this section) whether the arrangements referred to in that subsection are entered into before, or on or after, 28 June 2016.
Where arrangements are disregarded under subsection (4) of section 577A of ITTOIA 2005 (as inserted by this section) in relation to a payment of a royalty or other sum which— the payment is to be regarded for the purposes of subsection (1) of that section as made on the date on which it is due.
is made before 28 June 2016, but
is due on or after that day,
In determining the date on which a payment is due for the purposes of subsection (5), disregard the arrangements referred to in that subsection.
Where— the arrangements are to be regarded as DTA tax avoidance arrangements for the purposes of section 917A of ITA 2007 in relation to the payment.
an intellectual property royalty payment within the meaning of section 917A of ITA 2007 is made on or after 28 June 2016,
the payment is made under arrangements (within the meaning of that section) entered into before that day,
the arrangements are not DTA tax avoidance arrangements for the purposes of that section,
it is reasonable to conclude that the main purpose, or one of the main purposes, of the arrangements was to obtain a tax advantage by virtue of any provisions of a foreign double taxation arrangement, and
obtaining that tax advantage is contrary to the object and purpose of those provisions,
In subsection (7)—
“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.
Section 5
Section 12
Section 16
Section 19
In Part 1 of Schedule 29 to FA 2004 (pension schemes: interpretation of the lump sum rule), in paragraph 2 (permitted maximum amount of pension commencement lump sums, calculated in certain cases by deducting adjusted value of previously crystallised amounts from current standard lifetime allowance), in sub-paragraph (10) (modified adjustments where member has protection under paragraph 7 or 12 of Schedule 36 by reference to pre-6 April 2006 rights), after “have effect” insert —. In paragraph 28(3) of Schedule 36 to FA 2004 (transitional provision for pre-6 April 2006 rights: modified version of paragraph 2 of Schedule 29 that applies in certain cases), in the sub-paragraph (7) treated as substituted in paragraph 2 of Schedule 29 to FA 2004, in the definition of “PSLA”, after “became entitled to the lump sum” insert “if that occurred before 6 April 2012 but, if that occurred on or after 6 April 2012, PSLA is the greater of £1,800,000 and the standard lifetime allowance at the time the individual became entitled to the lump sum”. The amendment made by sub-paragraph (1) is treated as having come into force on 6 April 2014. The amendment made by sub-paragraph (2) is treated as having come into force on 6 April 2012.
Section 22
Part 2 of Schedule 28 to FA 2004 (interpretation of pension death benefit rules) is amended as follows. A child of the member is a dependant of the member if the child— But this paragraph, so far as it has effect for the purpose of determining the meaning of “dependant”— has effect with the omission of sub-paragraph (2A). In paragraph 22 (meaning of “dependant’s drawdown pension fund”)— The amendments made by this paragraph come into force on the day after the day on which this Act is passed. The sub-paragraphs inserted by sub-paragraph (2)— In sub-paragraph (5) “dependants’ short-term annuity” and “dependants’ income withdrawal” have the same meaning as in Part 4 of FA 2004.
In section 152 of the Inheritance Tax Act 1984 (where annuity payable on person’ death to dependant etc, person treated as not beneficially entitled to sum that could have been paid to personal representatives instead of being used for annuity), for “or dependant” substitute “, dependant or nominee”. The amendment made by sub-paragraph (1)—
In section 447 (exchange gains and losses on debtor relationships: loans disregarded under Part 4 of TIOPA 2010), after subsection (4) insert—
CTA 2010 is amended as follows.
HODA 1979 is amended as follows.
In section 448 (exchange gains and losses on debtor relationships: equity notes where holder associated with issuer), after subsection (2) insert—
In section 938N (group mismatch schemes: priority)—
omit paragraph (d), and
after that paragraph insert—.
In section 449 (exchange gains and losses on creditor relationships: no corresponding debtor relationship), after subsection (4) insert—
In section 938V (tax mismatch schemes: priority)—
omit paragraph (c), and
after that paragraph insert—.
In section 451 (exception to section 449 where loan exceeds arm’s length amount), after subsection (4) insert—
Section 452 (exchange gains and losses where loan not on arm’s length terms) is amended as follows. For subsection (3) substitute— In subsection (4)— In subsection (5)— After subsection (5) insert—
After section 475A insert—
Section 694 (derivative contracts: exchange gains and losses) is amended as follows. After subsection (3) insert— After subsection (7) insert— After subsection (10) insert—
Section 39
In Chapter 2 of Part 15 of ITA 2007 (deduction of income tax at source by deposit-takers and building societies) omit—
section 851 (duty to deduct when making payment of interest on relevant investment), and
the italic heading preceding it.
In section 876 of ITA 2007 (interest paid by deposit-takers), for subsections (1) and (2) substitute—
Chapter 2 of Part 15 of ITA 2007 (deduction of income tax at source by deposit-takers and building societies) is amended in accordance with paragraphs 4 to 18.
For the Chapter heading substitute “Meaning of “relevant investment” for purposes of section 876”.
Section 850 (overview of Chapter) is amended as follows. For subsection (1) substitute— Omit subsection (2) (which introduces sections 851 and 852). In subsection (4)(b) (which introduces sections 858 to 870), for “858” substitute “863”. In subsection (5) (which introduces sections 871 to 873), for “871 to” substitute “872 and”. In subsection (6) (interpretation), for the words from “Chapter—” to “crediting” substitute “Chapter, crediting”.
Omit section 852 (power to disapply section 851).
In section 853(1) (meaning of “deposit-taker”), after “In this Chapter” insert “and section 876”.
In section 854(3) (meaning of “relevant investment” in section 851(1)(b)), for “851(1)(b)” substitute “876(1)(b)”.
For section 855(1) (meaning of “investment”) substitute—
Section 856 (meaning of “relevant investment”) is amended as follows. In subsection (1), for “this Chapter” substitute “section 876”. In subsection (2) (exceptions), for “858” substitute “863”.
In section 857 (treating investments as being or not being relevant investments) omit “or building society” in each place.
Omit—
sections 858 to 861 (investments which are not relevant investments and in relation to which duty under section 874 does not apply), and
the italic heading preceding section 858.
In the italic heading preceding section 863, for “Other investments” substitute “Investments”.
In sections 863, 864, 865 and 868(4) (investments with deposit-takers or building societies) omit “or building society” in each place.
Omit sections 868(3), 869 and 870(2) (investments with building societies).
Omit section 871 (power to make regulations to give effect to Chapter).
In section 872 (power to amend Chapter)—
in subsection (2) (different provision for different deposit-takers)—
for “which amends this Chapter in its application to deposit-takers may do so” substitute “may amend this Chapter”, and
in each of paragraphs (a) and (b), for “relation” substitute “its application”, and
omit subsections (4) and (5) (which refer to provisions repealed by this Act).
Omit section 873(3) to (6) (interpretation of section 861).
In section 877 of ITA 2007 (duty to deduct under section 874: exception relating to UK public revenue dividends)—
for “in respect of” substitute “that is”, and
after “dividend” insert “(as defined by section 891)”.
Chapter 5 of Part 15 of ITA 2007 (deduction from payments of UK public revenue dividends) is amended as follows. In section 893(2) (securities which are gross-paying government securities)— In section 894 (power to direct that securities are gross-paying government securities)—
The amendments made by Parts 1 and 3 of this Schedule have effect in relation to— Sub-paragraph (1) does not apply to— The repeals mentioned in sub-paragraph (2)(a) and (c) have effect in relation to benefits conferred on or after 6 April 2016. The amendments mentioned in sub-paragraph (2)(b) have effect in relation to alternative finance return paid on or after 6 April 2016. The amendments made by Part 2 of this Schedule, and the amendments made by this Schedule in sections 893 and 894 of ITA 2007, have effect in relation to interest paid on or after 6 April 2016.
Section 49
In Chapter 15 of Part 5 (loan relationships: tax avoidance), after section 446 insert—
The amendments made by this Schedule have effect in relation to accounting periods beginning on or after 1 April 2016. For the purposes of sub-paragraph (1), where the accounting period of a company begins before 1 April 2016 and ends on or after that date (the “straddling period”), so much of the straddling period as falls before that date, and so much of the straddling period as falls on or after that date, are to be treated as separate accounting periods.
A penalty is payable by a person (P) who has enabled another person (Q) to carry out offshore tax evasion or non-compliance, where conditions A and B are met. For the purposes of this Schedule— The relevant offences are- The relevant civil penalties are— Condition A is that P knew when P’s actions were carried out that they enabled, or were likely to enable, Q to carry out offshore tax evasion or non-compliance. Condition B is that— For the purposes of sub-paragraph (6)(a)— For the purposes of sub-paragraph (6)(b)(i) a penalty becomes final when the time allowed for any appeal or further appeal relating to it expires or, if later, any appeal or final appeal relating to it is determined. It is immaterial for the purposes of condition B that— relates also to other tax evasion or non-compliance by Q. In this Schedule “other tax evasion or non-compliance by Q” means conduct by Q that— but does not constitute offshore tax evasion or non-compliance. Nothing in condition B affects the law of evidence as to the relevance if any of a conviction, assessment of a penalty or contract mentioned in sub-paragraph (6) for the purpose of proving that condition A is met in relation to P. In this Schedule “conduct” includes a failure to act.
The potential lost revenue in a case where P is liable to a penalty under paragraph 1 for enabling Q to commit a relevant offence is the same amount as the potential lost revenue applicable for the purposes of the corresponding relevant civil penalty (determined in accordance with the relevant sub-paragraph of paragraph 5). Where Q’s offending conduct is— the corresponding relevant civil penalty is the penalty which Q is liable for as a result of that offending conduct. Where Q’s offending conduct is an offence under section 106B, 106C or 106D of TMA 1970, the corresponding relevant civil penalty is— In determining any amount of potential lost revenue for the purposes of this paragraph, the fact Q has been prosecuted for the offending conduct is to be disregarded.
If P (who would otherwise be liable to a penalty under paragraph 1)— HMRC must reduce the penalty to one that reflects the quality of the disclosure or assistance. But the penalty may not be reduced—
This paragraph applies for the purposes of paragraph 7. P discloses a matter by— P assists HMRC in relation to an investigation leading to Q being charged with a relevant offence or found liable to a relevant penalty by— Disclosure or assistance by P— In relation to disclosure or assistance, “quality” includes timing, nature and extent.
If they think it right because of special circumstances, HMRC may reduce a penalty under paragraph 1. In sub-paragraph 1 “special circumstances” does not include— In sub-paragraph (1) the reference to reducing a penalty includes a reference to—
Section 54
After Part 15C of CTA 2009 insert—
Any power to make regulations conferred on the Treasury by virtue of this Schedule comes into force on the day on which this Act is passed.
The amendments made by the following provisions of this Schedule have effect in relation to accounting periods beginning on or after 1 April 2016— Sub-paragraph (3) applies where a company has an accounting period beginning before 1 April 2016 and ending on or after that date (“the straddling period”). For the purposes of Part 15D of CTA 2009—
The amendments made by paragraphs 13 to 15 of this Schedule have effect in relation to accounting periods beginning on or after the first day of the financial year appointed by the Treasury by regulations under section 5(3) of the Corporation Tax (Northern Ireland) Act 2015 (“the commencement day”). Sub-paragraph (3) applies where a company has an accounting period beginning before the commencement day and ending on or after that day (“the straddling period”). For the purposes of Chapter 14A of Part 8B of CTA 2010—
Section 64
CTA 2010 is amended in accordance with this Schedule.
In section 357B (meaning of “qualifying company”), in subsection (3)(b)(ii), for “section 357A” substitute “section 357A(1)”.
In the heading of Chapter 3 of Part 8A, after “profits” insert “: cases mentioned in section 357A(7): no income from new IP”.
Section 357C (relevant IP profits) is amended as follows. Before subsection (1) insert— In subsection (1)—
In section 357CA (total gross income of a trade), in subsection (2), for “section 357CB” substitute “section 357BG”.
Omit sections 357CB to 357CF.
Section 357CG (adjustments in calculating profits of trade) is amended as follows. In subsection (1) after “determining” insert “under section 357C”. In subsection (4), in the words after paragraph (b), for “section 357CB” substitute “section 357BG”. In subsection (6), in paragraph (a)(ii) of the definition of “relevant accounting period”, for “section 357A” substitute “section 357A(1)”.
In section 357CI (routine return figure), in Step 1 in subsection (1), for “sections 357CJ and 357CK” substitute “sections 357BJA and 357BJB”.
Omit sections 357CJ and 357CK.
Section 357CL (companies eligible to elect for small claims treatment) is amended as follows. In subsection (1) for “elect” substitute “make an election under this section”. In subsection (6) for “section 357A” substitute “section 357A(1)”.
In section 357CM (small claims amount), in subsection (1), for “elects” substitute “makes an election under section 357CL”.
Section 357D (alternative method of calculating relevant IP profits: “streaming”) is amended as follows. In subsection (1) at the end insert in a case where— For subsection (4) substitute—
Section 357DA (relevant IP profits) is amended as follows. In subsection (1)— In subsection (4), in the words after paragraph (b), for “sections 357CJ and 357CK” substitute “sections 357BJA and 357BJB”.
Section 357DC (the mandatory streaming conditions) is amended as follows. In subsection (8)(a) for “section 357CC” substitute “section 357BH”. In subsection (9)(a) for “section 357CC(6)” substitute “section 357BH(6)”.
In section 357EB (allocation of set-off amount within a group) in subsection (3)(a) for “section 357A” substitute “section 357A(1)”.
In section 357ED (company ceasing to carry on trade etc) in subsection (2)(c) for “section 357A” substitute “section 357A(1)”.
In section 357FA (incorporation of qualifying items), in subsection (2), for “357CC(2)” substitute “357BH(2)”.
In section 357FB (tax advantage schemes) in subsection (4)(b) for “section 357A” substitute “section 357A(1)”.
Section 357G (making an election under section 357A) is amended as follows. In the heading, for “section 357A” substitute “section 357A(1) or (11)(b)”. In subsection (1) for “section 357A” substitute “section 357A(1) or (11)(b)”.
Section 357GA (revocation of election made under section 357A) is amended as follows. In the heading, for “section 357A” substitute “section 357A(1)”. In subsection (1) for “section 357A” substitute “section 357A(1)”. In subsection (5) for “section 357A” substitute “section 357A(1)”.
Section 357GB (application of Part 8A in relation to partnerships) is amended as follows. In subsection (11)— In subsection (12) for “section 357CB(1)(c)” substitute “section 357BG(1)(c)”.
In section 357GC (application of Part 8A in relation to cost-sharing arrangements), in subsection (3), for “section 357CB(1)(c)” substitute “section 357BG(1)(c)”.
Section 357GE (other interpretation) is amended as follows. In subsection (1)— After subsection (1) insert—
In Schedule 4 (index of defined expressions)—
finance income (in Part 8A) section 357BG
new entrant (in Part 8A) section 357A(11)
in the entry for “qualifying residual profit of a trade (in Part 8A)”, in the left hand column, after “in” insert “Chapters 3 and 4 of”, and
relevant IP income (in Part 8A) section 357BH
Section 66
In TIOPA 2010, after Part 6 insert—
“tax year” means the 12 months beginning with 6 April in 2017 or any subsequent year;
TIOPA 2010 is amended as follows.
A person is liable to pay a penalty if the person incurs a relevant defeat in relation to any arrangements which the person has used in a warning period. The penalty is 20% of the value of the counteracted advantage if neither sub-paragraph (3) nor sub-paragraph (4) applies. The penalty is 40% of the value of the counteracted advantage if before the relevant defeat is incurred the person has been given, or become liable to be given, one (but not more than one) relevant prior warning notice. The penalty is 60% of the value of the counteracted advantage if before the current defeat is incurred the person has been given, or become liable to be given, two or more relevant prior warning notices. In this paragraph “relevant prior warning notice” means a warning notice in relation to the defeat of arrangements which the person has used in the warning period mentioned in sub-paragraph (1). For the meaning of “the value of the counteracted advantage” see paragraphs 32 to 37.
This paragraph has effect in relation to relevant defeats incurred by virtue of Condition A, B or C. To the extent that the counteracted advantage (see paragraph 35) has the result that a loss is wrongly recorded for the purposes of direct tax and the loss has been wholly used to reduce the amount due or payable in respect of tax, the value of the counteracted advantage is determined in accordance with paragraph 32. To the extent that the counteracted advantage has the result that a loss is wrongly recorded for purposes of direct tax and the loss has not been wholly used to reduce the amount due or payable in respect of tax, the value of the counteracted advantage is— Sub-paragraphs (2) and (3) apply both— To the extent that a counteracted advantage creates or increases an aggregate loss recorded for a group of companies— To the extent that the counteracted advantage results in a loss, the value of it is nil where, because of the nature of the loss or the person’s circumstances, there is no reasonable prospect of the loss being used to support a claim to reduce a tax liability (of any person).
In relation to a relevant defeat incurred by a person by virtue of Condition D or E, the “value of the counteracted advantage” is equal to the sum of any counteracted tax advantages determined under sub-paragraphs (3) to (6). In this paragraph “the counteraction” means the counteraction mentioned in paragraph 15(1) or 16(1) (as the case may be). If the amount of VAT due or payable by the person in respect of any prescribed accounting period (X) exceeds the amount (Y) that would have been so payable but for the counteraction, the amount by which X exceeds Y is a counteracted tax advantage. If the person obtains no VAT credit for a particular prescribed accounting period, the amount of any VAT credit which the person would have obtained for that period but for the counteraction is a counteracted tax advantage. If for a prescribed accounting period the person obtains a VAT credit of an amount (Y) which is less than the amount (X) of the VAT credit which the person would have obtained but for the counteraction, the amount by which X exceeds Y is a counteracted tax advantage. If the amount (X) of the person’s non-deductible tax for any prescribed accounting period is greater than Y, where Y is what would be the amount of the person’s non-deductible tax for that period but for the counteraction, then the amount by which X exceeds Y is a counteracted tax advantage, but only to the extent that amount is not represented by a corresponding amount which is the whole or part of a counteracted tax advantage by virtue of sub-paragraphs (3) to(5). In this paragraph “non-deductible tax”, in relation to the person who incurred the relevant defeat, means— For the purposes of sub-paragraph (7)(b) the VAT “incurred” by a taxable person is— References in sub-paragraph (3) to amounts due and payable by the person in respect of a prescribed accounting period include references to—
After notification of an assessment has been given to a person under paragraph 38(2), the assessment may not be altered except in accordance with this paragraph or on appeal. A supplementary assessment may be made in respect of a penalty if an earlier assessment operated by reference to an underestimate of the value of the counteracted advantage. An assessment may be revised as necessary if operated by reference to an overestimate of the value of the counteracted advantage.
A person is not liable to a penalty under paragraph 30 in respect of a relevant defeat if the person satisfies HMRC or (on appeal) the First-tier Tribunal or Upper Tribunal that the person had a reasonable excuse for the relevant failure to which that relevant defeat relates (see paragraph 43). Sub-paragraph (3) applies if— The person is treated for the purposes of sub-paragraphs (2) to (4) of paragraph 30 (rate of penalty) as not having been given, and not having become liable to be given, the excepted notice (so far as it relates to the relevant defeat in respect of which the person had a reasonable excuse). A warning notice is “excepted” for the purposes of this paragraph if the person was not liable to a penalty in respect of the defeat specified in it because the person had a reasonable excuse for the relevant failure in question. For the purposes of this paragraph, in the case of a person (“P”)— In determining for the purposes of this paragraph whether or not a person (“P”) had a reasonable excuse for any action, failure or inaccuracy, reliance on advice is to be taken automatically not to constitute a reasonable excuse if the advice is addressed to, or was given to, a person other than P or takes no account of P’s individual circumstances.
Sub-paragraph (2) applies if a person (“P”) incurs a relevant defeat in relation to any arrangements (otherwise than by virtue of this paragraph). Any person (“S”) who is associated with P at the relevant time is also treated for the purposes of paragraphs 2 (duty to give warning notice) and 3(2) (warning period) as having incurred that relevant defeat in relation to those arrangements (but see sub-paragraph (3)). For the meaning of “associated” see paragraph 48. Sub-paragraph (2) does not apply if P and S are members of the same group of companies (as defined in paragraph 46(9)). In relation to a warning notice given to S by virtue of sub-paragraph (2), paragraph 2(4)(c) (certain information to be included in warning notice) is to be read as referring only to paragraphs 3, 17 and 18. A warning notice which is given to a person by virtue of sub-paragraph (2) is treated for the purposes of paragraphs 19(1) (duty to give relief restriction notice) and 30 (penalty) as not having been given to that person. In sub-paragraph (2) “the relevant time” means the time when P is given a warning notice in respect of the relevant defeat.
This paragraph applies in relation to a partnership return if— Where a person has incurred a relevant defeat by virtue of sub-paragraph (2) of paragraph 13 (Condition B: case involving partnership follower notice) this paragraph applies in relation to the partnership return mentioned in that sub-paragraph. This paragraph applies in relation to a partnership return if— The references in this paragraph to a relevant defeat do not include a relevant defeat incurred by virtue of paragraph 47(2).
In paragraphs 49 to 52 and this paragraph— For the purposes of this Part of this Schedule a partnership is treated as the same partnership notwithstanding a change in membership if any person who was a member before the change remains a member after the change.
Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended as follows
The OTS is to consist of not more than eight members. The members of the OTS must include— The additional members, if any, are to be nominated by the chair. The members of the OTS are to be appointed by the Chancellor of the Exchequer. A person may be appointed as a tax director of the OTS only if the Chancellor of the Exchequer is satisfied that the person has the necessary qualifications and experience to direct the manner in which the OTS discharges its functions. The Chancellor of the Exchequer must consult the chair of the OTS before appointing a person as a tax director (subject to paragraph 3(3)).
A member of the OTS may at any time resign by giving written notice to the Chancellor of the Exchequer.
The OTS may regulate its own procedure.
The Office of Tax Simplification.
In section 1 (overview of Act), in subsection (1)—
omit paragraph (c), and
after that paragraph insert—.
Paragraph 14 (reductions for disclosure) is amended as follows. In this paragraph, “relevant information” means information which has been withheld by a failure to make a return. In sub-paragraph (1)— Paragraph 15A provides for reductions in the penalty under paragraph 6(3) or (4) where P discloses relevant information that involves an offshore matter or an offshore transfer. Sub-paragraph (2) applies where— Sub-paragraph (2B) applies where P is liable to a penalty under paragraph 6(3) or (4) and P discloses relevant information that involves an offshore matter or an offshore transfer. P discloses relevant information by— The Treasury must make regulations setting out what is meant by “additional information” for the purposes of sub-paragraph (2B)(d). Regulations under sub-paragraph (2C) are to be made by statutory instrument. An instrument containing regulations under sub-paragraph (2C) is subject to annulment in pursuance of a resolution of the House of Commons. Paragraph 6A(4) to (5) applies to determine whether relevant information involves an offshore matter, an offshore transfer or a domestic matter for the purposes of this paragraph.
The Chancellor of the Exchequer may terminate the appointment of a member of the OTS by giving the member written notice. In the case of a member appointed for the purposes of paragraph 1(2)(a) or (b) or (3), the Chancellor of the Exchequer may only terminate the appointment if— A member becomes bankrupt if—
The validity of anything done by the OTS is not affected by—
any vacancy in the membership of the OTS, or
any defect in the appointment of a member of the OTS.
The Office of Tax Simplification.
In section 157 (direct participation), in subsection (1)—
omit the “and” at the end of paragraph (b), and
after paragraph (c) insert , and
Standard % Minimum % for prompted disclosure Minimum % for unprompted disclosure 70% 35% 20% 100% 50% 30%
In section 158 (indirect participation: defined by sections 159 to 162), in subsection (4)—
omit the “and” at the end of paragraph (b), and
after paragraph (c) insert , and.
After paragraph 15 insert—
In section 159 (indirect participation: potential direct participant), in subsection (1)—
omit the “and” at the end of paragraph (b), and
after paragraph (c) insert , and
In section 160 (indirect participation: one of several major participants), in subsection (1)—
omit the “and” at the end of paragraph (b), and
after paragraph (c) insert , and
Omit Part 6 (tax arbitrage).
Omit Part 4 of Schedule 11 (tax arbitrage: index of defined expressions used in Part 6).
After that Part of that Schedule insert—
Chapters 3 to 5 and 7 and 8 of Part 6A of TIOPA 2010 (counteraction of deduction/non-inclusion mismatches arising from payments and quasi-payments) have effect in relation to—
payments made on or after the commencement date, and
quasi-payments in relation to which the payment period begins on or after the commencement date.
Chapter 6 of Part 6A of TIOPA 2010 (counteraction of deduction/non-inclusion mismatches relating to intra-company transfers from permanent establishments) has effect in relation to excessive PE deductions in relation to which the relevant PE period begins on or after the commencement date.
Chapters 9 and 10 of Part 6A of TIOPA 2010 (counteraction of double deduction mismatches) have effect for accounting periods beginning on or after the commencement date.
Chapter 11 of Part 6A of TIOPA 2010 (imported mismatch payments) has effect in relation to imported mismatch payments that are—
payments made on or after the commencement date, or
quasi-payments in relation to which the payment period begins on or after the commencement date.
The following provisions of this Schedule have effect in relation to accounting periods beginning on or after the commencement date—
paragraphs 2 to 4, and
paragraphs 5(a), 7(a), 8(a), 10(a), 15 and 16.
For the purposes of paragraph 18 and 21, where a payment period begins before the commencement date and ends on or after that date (“the straddling period”)—
so much of the straddling period as falls before the commencement date, and so much of that period as falls on or after that date, are to be treated as separate taxable periods, and
where it is necessary to apportion an amount for the straddling period to the two separate taxable periods, it is to be apportioned—
on a time basis according to the respective length of the separate taxable periods, or
if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis.
For the purposes of paragraphs 19, 20 and 22(b), where a company has an accounting period beginning before the commencement date and ending on or after that date (“the straddling period”)—
so much of the straddling period as falls before the commencement date, and so much of the straddling period as falls on or after that date, are to be treated as separate accounting periods, and
where it is necessary to apportion an amount for the straddling period to the two separate accounting periods, it is to be apportioned—
in accordance with section 1172 of CTA 2010 (time basis), or
if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis.
In this Part of this Schedule “the commencement date” means 1 January 2017.
Section 83
TCGA 1992 is amended in accordance with this Schedule.
In section 14B(1) (meaning of “non-resident CGT disposal”), in paragraph (a) after “disposal of a UK residential property interest” insert “(within the meaning given by Schedule B1)”.
Omit section 14C (which introduces Schedule B1 and is superseded by the section 4BB inserted by section 83 of this Act).
In Schedule B1 (disposals of UK residential property interests), in paragraph 1—
in sub-paragraph (4) for “6 April 2015” substitute “the relevant date”;
In sub-paragraph (4) “the relevant date” means—
After Schedule B1 insert—
Section 83
TCGA 1992 is amended in accordance with this Schedule.
In section 57A(3) (gains and losses on relevant high value disposals: interaction with other provisions)—
the words from “Part 4” to the end become paragraph (a), and
after that paragraph insert or,
After section 57B insert—
In Schedule B1 (disposals of UK residential property interests), in paragraph 1(7) after “Schedule 4ZZB” insert “and paragraphs 6 and 20 of Schedule 4ZZC”.
After Schedule 4ZZB insert—
Section 86
TCGA 1992 is amended as follows.
In section 169H(7) (introduction), for “Section 169S contains” substitute “Sections 169S and 169SA contain”.
In section 169S (interpretation of Chapter), subsection (4A) is treated as never having had effect, and is omitted accordingly.
After section 169S insert—
After Schedule 7 insert—
The amendments made by this Schedule (except paragraph 3) have effect in relation to disposals made on or after 18 March 2015, but only for the purposes of determining what is a trading company or trading group at times on or after that date. In conditions B and D in section 169I of TCGA 1992 (material disposal of business assets)— Sub-paragraph (2) is without prejudice to the operation of section 43(4) of FA 2015.
Section 87
In the heading to Part 5 of TGCA 1992, after “ASSETS” insert “, ENTREPRENEURS’ RELIEF AND INVESTORS’ RELIEF”. In the heading to Chapter 1 of that Part, before “GENERAL PROVISIONS” insert “TRANSFER OF BUSINESS ASSETS:”
In Part 5 of TCGA 1992, after section 169V insert—
After Schedule 7ZA of TCGA 1992 (inserted by Schedule 13) insert—
Section 93
IHTA 1984 is amended as follows.
Section 8D (extra nil-rate band on death if interest in home goes to descendants etc) is amended as follows. In subsection (4), after “8G” insert “(and see also section 8M)”. In subsection (9), before the definition of “tax year” insert—.
Section 8E (residence nil-rate amount: interest in home goes to descendants etc) is amended as follows. In subsection (6), after “(7)” insert “and sections 8FC and 8M(2B) to (2E)”. In subsection (7), for paragraphs (a) and (b) substitute— In subsection (8)—
In section 8F(4) (list of other relevant sections)—
section 8FD (which applies instead of this section where there is entitlement to a downsizing addition),
in the entry for section 8H, after ““qualifying residential interest”” insert “, “qualifying former residential interest” and “residential property interest””.
After section 8F insert—
In section 8G (meaning of “brought-forward allowance”), in subsection (3)(a), for “and 8F” substitute “, 8F and 8FD”.
Section 8H (meaning of “qualifying residential interest”) is amended as follows. In the heading, at the end insert “, “qualifying former residential interest” and “residential property interest””. In subsection (1), for “and 8F” substitute “to 8FE and section 8M”. In subsection (2), for “In this section” substitute “A”. After subsection (4) insert—
After section 8H insert—
In section 8J (meaning of “inherited”), in subsection (1), for “and 8F” substitute “, 8F, 8FA, 8FB and 8M”.
In section 8K (meaning of “closely inherited”), in subsection (1), for “and 8F” substitute “, 8F, 8FA, 8FB and 8M”.
In section 8L (claims for brought-forward allowance)—
in the heading, at the end insert “and downsizing addition”, and
in subsection (1), after “(see section 8G)” insert “or for a downsizing addition for a person (see sections 8FA to 8FD)”.
Section 8M (residence nil-rate amount: cases involving conditional exemption) is amended as follows. For subsections (1) and (2) substitute— In subsection (3), for the words before paragraph (b) substitute—. In subsection (3)— In subsection (5), for “the qualifying residential interest which” substitute “property which forms the subject-matter of the conditionally exempt transfer where the chargeable event”. In subsection (6), for “the qualifying residential interest which” substitute “property which forms the subject-matter of the conditionally exempt transfer and the chargeable event”. In subsection (7), for “the qualifying residential interest” substitute “property which forms the subject-matter of the conditionally exempt transfer”.
Section 133
In FA 2003, after section 102 insert—
FA 2003 is amended in accordance with this Part.
After section 65 insert—
After Schedule 7 insert—
FA 2003 is amended in accordance with this Part.
In section 75C (anti-avoidance: supplemental), in subsection (4), after “Schedule 6A” insert “, 7A”.
Section 81 (further return where relief withdrawn) is amended as follows. In subsection (1)— In subsection (1A), after “transactions)” insert “, or under paragraph 6 of Schedule 7A (PAIF seeding relief) or paragraph 14 or 16 of Schedule 7A (COACS seeding relief),”. In subsection (1B), after paragraph (e) insert— In subsection (4), after paragraph (b) insert—.
In section 86 (payment of tax), in subsection (2)—
omit “or” at the end of paragraph (b), and
after paragraph (b) insert—.
Section 87 (interest on unpaid tax) is amended as follows. In subsection (3)— In subsection (4), for “means—” to the end substitute “has the same meaning as in section 81(4).”
In section 118 (market value)—
the existing text becomes subsection (1), and
after subsection (1) insert—
COACS seeding relief Schedule 7A, paragraph 10(1) co-ownership authorised contractual scheme section 102A operator (in relation to a co-ownership authorised contractual scheme) section 102A PAIF seeding relief Schedule 7A, paragraph 1(1)
In Schedule 4A (SDLT: higher rate for certain transactions), in paragraph 2(6)—
omit “and” at the end of paragraph (d),
after paragraph (d) insert—, and
in paragraph (e), for “(d)” substitute “(da)”.
In Schedule 6B (transfers involving multiple dwellings), in paragraph 2(4)(b), after “Schedule 7” insert “, Schedule 7A”.
In Schedule 17A (further provisions relating to leases), paragraph 11 (cases where assignment of lease treated as grant of lease) is amended as follows. In sub-paragraph (3), after paragraph (b) insert—. In sub-paragraph (4), after “acquisition relief” insert “, PAIF seeding relief, COACS seeding relief”. In sub-paragraph (5), after paragraph (b) insert—. This paragraph also does not apply where the relief in question is PAIF seeding relief or COACS seeding relief and is withdrawn as a result of a requirement not being met at a time which is before the effective date of the assignment of the lease. For the purposes of sub-paragraph (6), the reference to a requirement not being met is a reference to—
The amendments made by Parts 2 and 3 of this Schedule have effect in relation to any land transaction of which the effective date is, or is after, the date on which this Act is passed. But those amendments do not have effect in relation to a transaction if— A transaction effected in pursuance of a contract entered into before the date on which this Act is passed is excluded by this sub-paragraph if— In this paragraph—
Section 153
The amendments made by this Schedule come into force—
so far as they confer a power to make regulations or an order, on the day on which this Act is passed, and
for all other purposes, on 14 November 2016.
Section 159
In this Schedule—
Part 2 provides for HMRC to give warning notices to persons who incur relevant defeats and includes—
provision about the duration of warning periods under warning notices (see paragraph 3), and
definitions of “relevant defeat” and other key terms;
Part 3 contains provisions about persons to whom a warning notice has been given, and in particular—
imposes a duty to give information notices, and
allows the Commissioners to publish information about such persons in certain cases involving repeated relevant defeats;
Part 4 contains provision about the restriction of reliefs;
Part 5 imposes liability to penalties on persons who incur relevant defeats in relation to arrangements used in warning periods;
Part 6 contains provisions about corporate groups, associated persons and partnerships;
Part 7 contains definitions and other supplementary provisions.
If a person is given a warning notice with respect to a relevant defeat (and sub-paragraph (2) does not apply) the period of 5 years beginning with the day after the day on which the notice is given is a “warning period” in relation to that person. If a person incurs a relevant defeat in relation to arrangements during a period which is a warning period in relation to that person, the warning period is extended to the end of the 5 years beginning with the day after the day on which the relevant defeat occurs. In relation to a warning period which has been extended under this Schedule, references in this Schedule (including this paragraph) to the warning period are to be read as references to the warning period as extended.
In this Schedule “non-deductible tax”, in relation to a taxable person, means— For the purposes of sub-paragraph (1)(b), the VAT “incurred” by a taxable person is—
For the purposes of this Schedule arrangements are “disclosable VAT arrangements” at any time if at that time—
a person has complied with paragraph 6 of Schedule 11A to VATA 1994 in relation to the arrangements (duty to notify Commissioners),
a person under a duty to comply with that paragraph in relation to the arrangements has failed to do so, or
a reference number has been allocated to the scheme under paragraph 9 of that Schedule (voluntary notification of avoidance scheme which is not a designated scheme).
Condition A is that— For the purposes of this paragraph the counteraction of a tax advantage is “final” when the adjustments made to effect the counteraction, and any amounts arising as a result of those adjustments, can no longer be varied, on appeal or otherwise.
Condition D is that— For the purposes of sub-paragraph (1) P “relies on the arrangements” if— For the purposes of sub-paragraph (2) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable P to obtain. For the purposes of sub-paragraph (2) an obligation is a “relevant obligation” if the arrangements might be expected to have the result that the obligation does not arise. For the purposes of this paragraph the arrangements are “counteracted” if— For the purposes of this paragraph a counteraction is “final” when the assessment, adjustments or action in question, and any amounts arising from the assessment, adjustments or action, can no longer be varied, on appeal or otherwise. For the purposes of sub-paragraph (1) the time at which it falls to be determined whether or not the arrangements are disclosable VAT arrangements is when the counteraction becomes final. The following are “taxpayer emendations” for the purposes of sub-paragraph (5)— The conditions are that the disclosure—
An asset-based penalty is payable by a person (P) where— But this is subject to paragraph 6 (restriction on imposition of multiple asset-based penalties in relation to the same asset).
The potential lost revenue threshold is reached where the offshore PLR in relation to a tax year exceeds £25,000. The Treasury may by regulations change the figure for the time being specified in sub-paragraph (1). Regulations under sub-paragraph (2) are to be made by statutory instrument. A statutory instrument containing regulations under sub-paragraph (2) is subject to annulment in pursuance of a resolution of the House of Commons. Regulations under sub-paragraph (2)—
If HMRC think it right because of special circumstances, they may reduce the standard amount of the asset-based penalty. In sub-paragraph (1) “special circumstances” does not include— In sub-paragraph (1) the reference to reducing a penalty includes a reference to—
The Treasury may pay a member of the OTS such remuneration and allowances as the Treasury may determine.
“working day” means any day other than a non-business day as defined in section 92 of the Bills of Exchange Act 1882.
Subject to paragraphs 64 and 65, paragraphs 1 to 62 of this Schedule have effect in relation to relevant defeats incurred after the day on which this Act is passed.
“Relevant body” means a UK company or any other body corporate (wherever incorporated), but does not include a limited liability partnership. A relevant body is a “foreign” relevant body (or member of a group or sub-group) if it is incorporated outside the United Kingdom.
A UK company is a “qualifying company” in any financial year (subject to any regulations under sub-paragraph (5)) if sub-paragraph (2) or (3) applies to it. This sub-paragraph applies to the company if, at the end of the previous financial year— This sub-paragraph applies to the company if, at the end of the previous financial year— The qualification test for a UK company is that the company satisfied either or both of the following conditions (by reference to the previous financial year)— 1. The company’s turnover More than £200 million 2. The company’s balance sheet total More than £2 billion. The Treasury may by regulations provide that a company of a description specified in the regulations is not a qualifying company for the purposes of this Schedule (or any such purpose specified in the regulations). For the purposes of this paragraph a UK permanent establishment of a foreign relevant body is to be treated as if it were—
A “UK sub-group” consists of two or more relevant bodies that would be a UK group, but for the fact that they are members of a larger group headed by a relevant body incorporated outside the United Kingdom. A UK sub-group is headed by the company or other relevant body incorporated in the United Kingdom that is not a 51% subsidiary of another member of the UK sub-group (and “head”, in relation to the sub-group, means that company or body).
“Turnover”— “Balance sheet total”, in relation to a UK company, UK partnership or UK permanent establishment and a financial year, means the aggregate of the amounts shown as assets in its balance sheet at the end of the financial year.
A group tax strategy required to be published on behalf of a UK group by paragraph 16 must set out— The group tax strategy may— The information required by sub-paragraph (1) to be included in the group tax strategy does not include any information about activities of any member of the group that consists of the provision of tax advice or related professional services to persons who are not members of the group. The publication of information as the group tax strategy does not constitute publication of the strategy for the purposes of paragraph 16 unless the UK company publishing it makes clear (in a way that will be readily apparent to anyone accessing the information online) that the company regards its publication as complying with the duty under paragraph 16(2) in the current financial year. For the purposes of this paragraph a UK permanent establishment of a foreign member of the group is to be treated as if it were a member of the group. The Treasury may by regulations require the group tax strategy to include a country-by-country report. In this paragraph “country-by-country report” has the meaning given by the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016.
Paragraph 17 applies in relation to a sub-group tax strategy required to be published on behalf of a UK sub-group by paragraph 19 as it applies to a group tax strategy required to be published by a qualifying UK group. In the application of paragraph 17 to a sub-group tax strategy, references to the group or members of the group are to be read as references to the UK sub-group or members of the UK sub-group. In the application of paragraph 17 as modified by this paragraph to a sub-group tax strategy, a UK permanent establishment of a foreign member of the UK sub-group is to be treated as if it were a member of the sub-group.
The company tax strategy must set out— The company tax strategy may include other information relating to taxation (whether UK taxation or otherwise). The information required by sub-paragraph (1) to be included in a company tax strategy does not include any information about activities of the company that consist of the provision of tax advice or related professional services to other persons. The publication of information as a company tax strategy does not constitute publication of the strategy for the purposes of paragraph 22 unless the company makes clear (in a way that will be readily apparent to anyone accessing the information online) that the company regards its publication as complying with the duty under paragraph 22(2) in the current financial year.
Paragraphs 27 to 33 apply in relation to the liability of any person to a penalty under this Part and, accordingly, in those paragraphs— In those paragraphs “tribunal” means the First-tier Tribunal or, where determined by or under the Tribunal Procedure Rules, the Upper Tribunal.
Where a person becomes liable to a penalty— An assessment of a penalty may not be made—
If it appears to the Treasury that there has been a change in the value of money since the last relevant date, they may by regulations substitute for any sums for the time being specified in paragraph 18, 21 or 24 such other sum as appear to them to be justified by the change. In sub-paragraph (1) “relevant date” means— Regulations under this paragraph do not apply to a failure that occurs in respect of a financial year (of the body or partnership responsible for the failure) that begins before the date on which they come into force.
This paragraph applies to a UK group if— If a designated HMRC officer considers that the group falls within this Part, the officer may give the head of the group a notice under this paragraph (a “special measures notice”). When considering whether the group falls within this Part, the officer may take into account any relevant behaviour, whether or not it is mentioned in the warning notice. When deciding whether to give a special measures notice, the designated HMRC officer must consider any representations made by a member of the group before the end of the period of 12 months beginning with the day on which the warning notice was given. The special measures notice must set out the reasons why the officer considers that the group falls within this Part. Paragraph 45 deals with other circumstances in which a UK group may be given a special measures notice.
Where a standard offshore tax penalty is imposed under paragraph 1 of Schedule 24 to FA 2007, the tax year to which that penalty relates is— Where a standard offshore tax penalty is imposed under paragraph 1 of Schedule 41 to FA 2008 for a failure to comply with an obligation specified in the table in that paragraph, the tax year to which that penalty relates is the tax year to which the obligation relates. Where a standard offshore tax penalty is imposed under paragraph 6 of Schedule 55 to FA 2009 for a failure to make a return or deliver a document specified in the table of paragraph 1 of that Schedule, the tax year to which that penalty relates is—
Sub-paragraphs (2) and (3) apply where— in relation to more than one tax year falling within the same investigation period. Only one asset-based penalty is payable by P in the investigation period in relation to any given asset. The asset-based penalty is to be charged by reference to the tax year in the investigation period with the highest offshore PLR. An “investigation period” is— and different investigation periods may apply in relation to different assets.
Sub-paragraphs (2) and (3) apply where a person (“P”) appointed under paragraph 1(2)(a) or (b) was, immediately before the appointment, the chair or tax director (as the case may be) of the non-statutory Office of Tax Simplification. P’s period of appointment is to be taken to have begun with the appointment of P as the chair or tax director (as the case may be) of the non-statutory Office of Tax Simplification. The requirement in paragraph 1(6) does not apply where P was, immediately before P’s appointment under paragraph 1(2)(b), the tax director of the non-statutory Office of Tax Simplification.
The Treasury may provide the OTS with such staff, accommodation, services and other facilities as appear to the Treasury to be necessary or expedient for the proper performance by the OTS of its functions.
The Treasury may make to the OTS such payments out of money provided by Parliament as the Treasury considers appropriate for the purpose of enabling the Office to meet its expenses. Payments are to be made at such times, and subject to such conditions, as the Treasury may determine.
The Office of Tax Simplification.
A special measures notice— “The relevant day” means the later of—
This paragraph applies to a UK group if— If a designated HMRC officer considers that the group falls within this Part, the officer may give the head of the group a notice under this paragraph (a “confirmation notice”) confirming the special measures notice given in relation to the group. When considering whether the group falls within this Part, the officer may take into account any relevant behaviour, whether or not it is mentioned in the special measures notice which is to be confirmed, in any previous confirmation notice or in the warning notice. “The relevant day” has the same meaning as in paragraph 43(2). The confirmation notice must set out the reasons why the officer considers that the group falls within this Part. When deciding whether to give a confirmation notice, a designated HMRC officer must consider any representations made by a member of the group before the end of the period of 24 months beginning with the relevant day. A confirmation notice—
This paragraph applies in relation to a UK group where— A designated HMRC officer may give the head of a UK group a special measures notice if— When deciding whether to give a special measures notice under this paragraph, the officer must consider any representations made by a member of the group before the end of the period of 8 months beginning with the expiry day.
A relevant defeat is to be disregarded for the purposes of this Schedule if it is incurred before 6 April 2017 in relation to arrangements which the person has entered into before the day on which this Act is passed. A relevant defeat incurred on or after 6 April 2017 is to be disregarded for the purposes of this Schedule if— In sub-paragraph (2) “the relevant counteraction” means— In sub-paragraph (3)— See paragraph 11(2) for provision about when a relevant defeat is incurred.
A warning notice given to a person is to be disregarded for the purposes of— if the relevant defeat specified in the notice relates to arrangements which the person has entered into before the day on which this Act is passed. Where a person has entered into any arrangements before the day on which this Act is passed— is to be disregarded for the purposes of paragraph 30 (penalty).
Section 161
Section 162
Section 163
Section 165
Section 167
TMA 1970 is amended in accordance with paragraphs 2 to 8 of this Schedule.
In section 7 (notice of liability to income tax and capital gains tax), after subsection (2) insert—
After section 28G (determination of amount notionally chargeable where no NRCGT return delivered) insert—
In section 31 (appeals: right to appeal), before subsection (4) insert—
Section 31A (appeals: notice of appeal) is amended as follows. In subsection (4), after “this Act” insert “(other than an appeal against a simple assessment)”. After subsection (4) insert—
After section 31A (notice of appeal) insert—.
Section 59B (payment of income tax and capital gains tax) is amended as follows. In the heading, at end insert “: assessments other than simple assessments”. In subsection (6), after “9” insert “, 28H or 28I”.
After section 59B insert—
Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended as follows. 1A Income tax or capital gains tax Amount payable under section 59BA(4) or (5) of TMA 1970 The date falling 30 days after the date specified in section 59BA(4) or (5) of TMA 1970 as the date by which the amount must be paid. In paragraph 3(1)(a), after “items 1,” insert “1A,”.
Section 180(2) and (5)
Tax advantage Provision under which tax advantage is given Business premises renovation allowances Part 3A of CAA 2001 Zero-emission goods vehicle allowances Section 45DA, 45DB and 212T of CAA 2001 Expenditure on plant and machinery for use in designated assisted areas (enhanced capital allowances for enterprise zones) Sections 45K to 45N and 212U of CAA 2001
Tax advantage Provision under which tax advantage is given Film tax relief Part 15 of CTA 2009 Television tax reliefs Part 15A of CTA 2009 Theatre relief Part 15C of CTA 2009 Orchestra tax relief Part 15D of CTA 2009
Tax advantage Provision under which tax advantage is given Relief for SMEs: cost of research and development incurred by SME Chapter 2 of Part 13 of CTA 2009 Vaccine research relief Chapter 7 of Part 13 of CTA 2009
Tax advantage Provision under which tax advantage is given to beneficiary Person liable to receive request under section 180(5) Reduced rate of climate change levy payable in respect of a reduced rate supply (for supplies covered by climate change agreement) Paragraphs 42 and 44 of Schedule 6 to FA 2000 The person to whom the reduced rate taxable supply is supplied Relief granted to investors in a company under the enterprise investment scheme Part 5 of ITA 2007 The company whose shares are acquired by investors Relief granted to investors in a venture capital trust under the venture capital trust scheme Part 6 of ITA 2007 The venture capital trust
Section 184
“client”, in relation to a relevant service provider, means a person to whom that relevant service provider provides or is to provide a service with respect to a payment of apprenticeship levy;
Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended as follows.
In Part 8 of CTA 2009 (intangible fixed assets), in Chapter 10 (excluded assets), after section 808C insert—
In paragraphs 19 and 20 (and this paragraph) “the restricted period” means the period of 3 years beginning with the day on which the relief restriction notice is given. If during the restricted period (or the restricted period as extended under this sub-paragraph) the person to whom a relief restriction notice has been given incurs a further relevant defeat meeting the conditions in sub-paragraph (4), HMRC must give the person a written notice (a “restricted period extension notice”). A restricted period extension notice extends the restricted period to the end of the period of 3 years beginning with the day on which the further relevant defeat occurs. The conditions mentioned in sub-paragraph (2) are that— If the person to whom a relief restriction notice has been given incurs a relevant defeat which meets the conditions in sub-paragraph (4) after the restricted period has expired but before the end of a concurrent warning period, HMRC must give the person a restriction of relief notice. In sub-paragraph (5) “concurrent warning period” means a warning period which at some time ran concurrently with the restricted period.
A person may appeal against— An appeal under this paragraph must be made within the period of 30 days beginning with the day on which the notice is given. An appeal under this paragraph is to be treated in the same way as an appeal against an assessment to income tax (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC’s review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal). On an appeal the tribunal may— On an appeal the tribunal may rely on paragraph 23 (mitigation of restriction of relief)— In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of sub-paragraph (3)).
In this Part of this Schedule “claim for relief” includes any election or other similar action which is in substance a claim for relief.
In relation to a relevant defeat incurred by virtue of Condition A, B or C, the “value of the counteracted advantage” is— The reference in sub-paragraph (1) to the additional amount due and payable includes a reference to— The following are ignored in calculating the value of the counteracted advantage— This paragraph is subject to paragraphs 33 and 34.
In paragraphs 33 and 34 “the counteracted advantage” means— In sub-paragraph (1)(c) “counteraction” is to be interpreted in accordance with paragraph 14(5).
Where a person is liable for a penalty under paragraph 30, HMRC must assess the penalty. Where HMRC assess the penalty, HMRC must— A penalty under this paragraph must be paid before the end of the period of 30 days beginning with the day on which the person is notified of the penalty under sub-paragraph (2). An assessment— An assessment of a penalty under this paragraph must be made before the end of the period of 12 months beginning with the date of the defeat mentioned in paragraph 30(1).
A person may appeal against a decision of HMRC that a penalty is payable under paragraph 30. A person may appeal against a decision of HMRC as to the amount of a penalty payable by P under paragraph 30. An appeal under this paragraph must be made within the period of 30 days beginning with the day on which notification of the penalty is given under paragraph 38. An appeal under this paragraph is to be treated in the same way as an appeal against an assessment to the tax concerned (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC’s review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal). Sub-paragraph (4) does not apply— On an appeal under sub-paragraph (1) or (2) the tribunal may— In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of sub-paragraph (4)).
The Commissioners may in their discretion mitigate a penalty under paragraph 30, or stay or compound any proceedings for such a penalty. They may also, after judgment, further mitigate or entirely remit the penalty.
In paragraph 10 (other claims and elections to be included in return), in sub-paragraph (4), for “or 15C” substitute “, 15C or 15D”.
In section 1310 of CTA 2009 (orders and regulations), in subsection (4), after paragraph (em) insert—.
Paragraph 52 (recovery of excessive repayments etc) is amended as follows. In sub-paragraph (2), after paragraph (bg) insert—. In sub-paragraph (5)—
company tax return (in Part 15D) section 1217U core expenditure (in Part 15D) section 1217RC costs, in relation to a concert or concert series (in Part 15D) section 1217QD EEA expenditure (in Part 15D) section 1217RB(2) EEA expenditure condition (in Part 15D) section 1217RB income, in relation to a concert or concert series (in Part 15D) section 1217QC orchestra tax relief (in Part 15D) section 1217R(1) orchestral concert (in Part 15D) section 1217PA production company (in Part 15D) section 1217PB qualifying expenditure (in Part 15D) section 1217RF qualifying orchestral concert (in Part 15D) section 1217RA(3) qualifying orchestral concert series (in Part 15D) section 1217RA(5) separate orchestral trade (in Part 15D) section 1217Q
In Part 9D (certain claims for tax relief)—
in the heading, for “or 15C” substitute “, 15C or 15D”, and
in paragraph 83S (introduction), after sub-paragraph (e) insert—
Where— the arrangements are to be regarded as DTA tax avoidance arrangements for the purposes of section 917A of ITA 2007.
a royalty is paid on or after 28 June 2016,
the right in respect of which the royalty is paid was created or assigned before that day under arrangements (within the meaning of section 917A of ITA 2007) entered into before that day,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and
it is reasonable to conclude that the main purpose, or one of the main purposes, of any person connected with the creation or assignment of the right was to take advantage, by means of that creation or assignment, of the law of any territory giving effect to Council Directive 2003/49/EC of 3rd June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different member States,
Part 3 of FA 2015 (diverted profits tax) is amended as follows.
In section 79 (charge to tax), at the end insert—
In section 88 (which relates to the calculation of taxable diverted profits), for subsection (5) substitute—
In section 100 (credit for UK or foreign tax on same profits), for the heading substitute “ Credits for tax on the same profits ”.
In section 100, after subsection (2) insert—
In section 100, after subsection (4) insert—
The amendments made by this section have effect in relation to accounting periods ending on or after 28 June 2016.
For the purposes of section 88(5)(b) of FA 2015 as substituted by this section, a royalty or other sum which would not otherwise be regarded as paid during an accounting period ending on or after 28 June 2016 is to be regarded as so paid if—
for the purposes of section 906 of ITA 2007 it is regarded as paid on a date during that period by virtue of section 40(6), or
for the purposes of section 577A(1) of ITTOIA 2005 it is regarded as paid on a date during that period by virtue of section 42(5).
In this section “supplementary welfare payment” means a payment made under regulations under—
Article 135(1)(a) of the Welfare Reform (Northern Ireland) Order 2015 (S.I. 2015/2006 (N.I. 1)) (“the Order”) (discretionary support),
Article 137 of the Order (payments to persons suffering financial disadvantage), or
any provision (including future provision) of the Order which enables provision to be made for payments to persons who suffer financial disadvantage as a result of relevant housing benefit changes.
In subsection (1)(c) “relevant housing benefit changes” means changes to social security benefits consisting of or including changes contained in the Housing Benefit (Amendment No. 2) Regulations (Northern Ireland) 2016 (S.R. (N.I.) 2016 No. 326).
The Treasury may by regulations amend any provision of Chapters 1 to 5 of Part 10 of ITEPA 2003 so as to—
provide that no liability to income tax arises on supplementary welfare payments of a specified description;
impose a charge to income tax under Part 10 of ITEPA 2003 on payments of a specified description made under regulations under Article 137 of the Order (payments to persons suffering financial disadvantage).
The regulations may make—
different provision for different cases;
incidental or supplementary provision;
consequential provision (which may include provision amending any provision made by or under the Income Tax Acts).
Regulations made before 6 April 2017 may, so far as relating to the tax year 2016-17, have effect in relation to times before they are made.
Regulations under this section are to be made by statutory instrument.
A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.
section 44 of FA 2016 (tax treatment of supplementary welfare payments: Northern Ireland).
Corporation tax is charged for the financial year 2017.
In section 7(2) of F(No.2)A 2015 (main rate of corporation tax for the financial year 2020) for “18%” substitute “ 17% ”.
CTA 2009 is amended in accordance with subsections (2) to (9).
Omit Chapter 7 of Part 13 (vaccine research relief).
In section 1039 (overview of Part 13) omit—
subsection (6), and
in subsection (8) “or 7”.
In section 1042 (meaning of “relevant research and development”) omit subsection (3).
In section 1113 (cap on aid under Chapters 2 and 7)—
in the heading omit “or 7”, and
in subsection (4) omit—
the “or” at the end of paragraph (a), and
paragraph (b).
In section 1118(2) (meaning of “qualifying expenditure”) omit—
the “or” at the end of paragraph (a), and
paragraph (b).
In section 1133(3) (sub-contractor payments) omit “and section 1102(2).”
In section 1137(1)(b) (accounting periods) omit “or qualifying Chapter 7 expenditure”.
In Schedule 4 (index of defined expressions) omit the entries for—
qualifying Chapter 7 expenditure (in Part 13), and
qualifying R&D activity (in Chapter 7 of Part 13).
CTA 2010 is amended in accordance with subsections (11) to (13).
In section 357P (research and development expenditure: introduction and interpretation)—
in subsection (1) omit—
the “and” at the end of paragraph (b), and
paragraph (c), and
omit subsection (2)(d) and (e).
Omit section 357PF (additional deduction under section 1087 CTA 2009).
In Schedule 4 (index of defined expressions) omit the entries for—
Northern Ireland qualifying Chapter 7 expenditure (in Chapter 9 of Part 8B), and
qualifying Chapter 7 expenditure (in Chapter 9 of Part 8B).
In consequence of the amendments made by subsections (1) to (13)—
in Schedule 3 to FA 2012 omit paragraphs 7, 12 to 14, 16(2), 17, 20 to 30, and 31(2), and
in FA 2015 omit section 28(4)(o) and (p).
The amendments made by this section have effect in relation to expenditure incurred on or after 1 April 2017.
CTA 2009 is amended as follows.
In section 1114 (calculation of total R&D aid)—
in the formula for “(N x CT)” substitute “ N ”, and
in the definition of “N” for “relief” substitute “ R&D expenditure credit ”.
In section 1118(1) (meaning of “notional relief”)—
for “relief” in the first two places it occurs substitute “ R&D expenditure credit ”,
for “Chapter 5 (relief for large companies)” substitute “ Chapter 6A of Part 3 (trade profits: R&D expenditure credits) ”, and
in the heading for “relief” substitute “ R&D expenditure credit ”.
The amendments made by this section have effect in relation to expenditure incurred on or after 1 April 2016.
Schedule 7 contains amendments relating to loan relationships and derivative contracts.
In section 455 of CTA 2010 (charge to tax in case of loan to participator), in subsection (2), for “25% of the amount of the loan or advance” substitute “ such percentage of the amount of the loan or advance as corresponds to the dividend upper rate specified in section 8(2) of ITA 2007 for the tax year in which the loan or advance is made ”.
The amendment made by subsection (1) has effect in relation to a loan or advance made on or after 6 April 2016.
In section 464A of CTA 2010 (charge to tax: arrangements conferring benefit on participator), in subsection (3), for “25% of the value of the benefit conferred” substitute “ such percentage of the value of the benefit conferred as corresponds to the dividend upper rate specified in section 8(2) of ITA 2007 for the tax year in which the benefit is conferred ”.
The amendment made by subsection (3) has effect in relation to a benefit conferred on or after 6 April 2016.
In section 456 of CTA 2010 (exceptions to the charge to tax in case of loan to participator), after subsection (2) insert—
The amendment made by subsection (1) has effect in relation to a loan or advance made on or after 25 November 2015.
Chapter 16 of Part 8 of CTA 2009 (pre-FA 2002 assets) is amended as follows.
In section 882 (application of Part 8 to assets created or acquired on or after 1 April 2002), after subsection (5) insert—
In section 894 (preserved status condition etc), after subsection (6) insert—
In section 895 (assets acquired in connection with disposals of pre-FA 2002 assets), at the end insert—
The amendments made by this section have effect in relation to accounting periods beginning on or after 25 November 2015.
For the purposes of subsection (5), an accounting period beginning before and ending on or after 25 November 2015 is to be treated as if so much of the accounting period as falls before that date, and so much of the accounting period as falls on or after that date, were separate accounting periods.
An apportionment for the purposes of subsection (6) must be made—
in accordance with section 1172 of CTA 2010 (time basis), or
if that method produces a result that is unjust or unreasonable, on a just and reasonable basis.
In section 845 of CTA 2009 (transfer between company and related party treated as at market value), after subsection (4) insert—
The amendment made by this section applies in relation to a transfer which takes place on or after 25 November 2015, unless it takes place pursuant to an obligation, under a contract, that was unconditional before that date.
For the purposes of subsection (2), an obligation is “unconditional” if it may not be varied or extinguished by the exercise of a right (whether under the contract or otherwise).
Schedule 8 contains provision about relief in respect of the production of orchestral concerts.
In the following provisions, for “section 1218” substitute “ section 1218B ”
paragraph 8(2)(c) of Schedule 7A to TCGA 1992,
section 63(1) of CTA 2010, and
section 729 of CTA 2010.
Section 133F of CTA 2009 (“excluded company”) has effect, and is to be deemed always to have had effect, with the amendments set out in subsections (2) to (4).
After subsection (2) insert—
“730k firm”—
“BIPRU 730k firm” and “full scope BIPRU investment firm” have the same meaning as in subsections (2) to (4) of section 133H; “IFPRU 730k firm” and full scope IFPRU investment firm” have the meaning given by the FCA Handbook at the time in question; “full scope investment firm”—
Section 133M of CTA 2009 has effect, and is to be deemed always to have had effect, with the amendment set out in subsection (6).
For subsection (5)(b)(ii) substitute—
Part 7A of CTA 2010 has effect, and is to be deemed always to have had effect, with the amendments set out in subsections (8) and (9).
In section 269BA (excluded entities), after subsection (1) insert—
In section 269DO (interpretation)—
after subsection (5) insert—;
in subsection (6) for “subsection (5)” substitute “ subsections (5) and (5A) ”.
In Schedule 19 to FA 2011 (the bank levy), paragraph 73 is amended in accordance with subsections (11) and (12).
In sub-paragraph (1), omit “or” at the end of paragraph (j) and after paragraph (k) insert, or
After sub-paragraph (1) insert—
Subsections (10) to (12) have effect in relation to chargeable periods beginning on or after the day on which this Act is passed.
But for the purposes of determining what groups and entities must be listed under subsection (4) of section 285 of FA 2014 (Code of Practice on Taxation for Banks: HMRC reports) in any relevant report under that section—
subsection (13) is to be disregarded, and
Schedule 19 to FA 2011 is to be deemed to have effect, and always to have had effect, with the amendments set out in subsections (10) to (12).
In subsection (14) “relevant report” means a report for the reporting period beginning with 1 April 2015 or any subsequent reporting period.
Chapter 3 of Part 7A of CTA 2010 (restrictions on banking companies obtaining certain deductions) is amended as follows.
In section 269CA (restriction on deductions for trading losses), in subsection (2), for “50%” substitute “ 25% ”.
In section 269CB (restriction on deductions for non-trading deficits from loan relationships), in subsection (2), for “50%” substitute “ 25% ”.
In section 269CC (restriction on deductions for management expenses etc), in step 1 in subsection (7), for “50%” substitute “ 25% ”.
The amendments made by this section have effect for the purposes of determining the taxable total profits of companies for accounting periods beginning on or after 1 April 2016.
For the purposes of subsection (5), where a company has an accounting period beginning before 1 April 2016 and ending on or after that date (“the straddling period”)—
so much of the straddling period as falls before 1 April 2016, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
profits or losses of the company for the straddling period are apportioned to the two separate accounting periods—
in accordance with section 1172 of CTA 2010 (time basis), or
if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis.
In section 330 of CTA 2010 (supplementary charge in respect of ring fence trades), in subsection (1), for “20%” substitute “ 10% ”.
The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 1 January 2016 (but see also subsection (3)).
Subsections (4) and (5) apply where a company has an accounting period beginning before 1 January 2016 and ending on or after that date (“the straddling period”).
For the purpose of calculating the amount of the supplementary charge on the company for the straddling period—
so much of that period as falls before 1 January 2016, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
the company's adjusted ring fence profits for the straddling period are apportioned to the two separate accounting periods in proportion to the number of days in those periods.
The amount of the supplementary charge on the company for the straddling period is the sum of the amounts of supplementary charge that would, in accordance with subsection (4), be chargeable on the company for those separate accounting periods.
In this section—
“taxation matter” means anything the collection and management of which is the responsibility of the Commissioners (or was the responsibility of the Commissioners of Inland Revenue or Commissioners of Customs and Excise);
In Schedule 12 to FA 1988 (transfer of building society’s business to a company), in paragraph 6(1) (treatment for tax purposes of benefits conferred in connection with a transfer) omit—
“either”, and
paragraph (b) (benefit not to be subject to deduction of tax under Chapter 2 of Part 15 of ITA 2007), and the “or” preceding it.
In section 446 (loan relationships: bringing transfer-pricing adjustments into account), after subsection (7) insert—
Section 826 of ICTA (interest on tax overpaid) is amended as follows. In subsection (1), after paragraph (fc) insert—. In subsection (3C), for “or theatre tax credit” substitute “, theatre tax credit or orchestra tax credit”. In subsection (8A)— In subsection (8BA), after “theatre tax credit” (in both places) insert “or orchestra tax credit”.
In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa) (meaning of “corporation tax credit”), omit the “or” at the end of paragraph (ivc) and after that paragraph insert—.
In Part 8B of CTA 2010 (trading profits taxable at Northern Ireland rate), in section 357H(7) (introduction), after “Chapter 14 for provision about theatrical productions;” insert “Chapter 14A for provision about orchestra tax relief;”.
After section 6AF insert—
In section 23C (warehousing), in subsection (4), after paragraph (d) insert—.
Schedule 24 to FA 2007 (penalties for errors) is amended as follows.
The OTS may do anything that appears to it to be necessary or appropriate for the purpose of, or in connection with, the performance of its functions.
In section 564Q(1) of ITA 2007 (alternative finance return: deduction of income tax at source under Chapter 2 of Part 15)— In section 564Q(5) of ITA 2007 (alternative finance return: deduction of income tax at source under Chapters 3 to 5 of Part 15)—
In section 693 (derivative contracts: bringing transfer-pricing adjustments into account), after subsection (5) insert—
In Part 8B of CTA 2010, after section 357UI insert—
In section 6A (fuel substitutes), in subsection (1)—
omit the “or” after paragraph (d), and
after paragraph (e) insert , or
In section 27(1) (interpretation), before the definition of “aviation gasoline” insert—.
Paragraph 9 (reductions for disclosure) is amended as follows. Paragraph 10 provides for reductions in penalties— Paragraph 10A provides for reductions in penalties under paragraph 1 where a person discloses an inaccuracy that involves an offshore matter or an offshore transfer. Sub-paragraph (1) applies where a person discloses— In sub-paragraph (1), in the words before paragraph (a), for the words from “an inaccuracy” to “under-assessment” substitute “the matter”. Sub-paragraph (1B) applies where a person discloses— A person discloses the inaccuracy by— The Treasury must make regulations setting out what is meant by “additional information” for the purposes of sub-paragraph (1B)(d). Regulations under sub-paragraph (1C) are to be made by statutory instrument. An instrument containing regulations under sub-paragraph (1C) is subject to annulment in pursuance of a resolution of the House of Commons. Paragraph 4A(4) to (5) applies to determine whether an inaccuracy involves an offshore matter, an offshore transfer or a domestic matter for the purposes of this paragraph.
In section 847 of ITA 2007 (overview of Part 15)—
in subsection (2) omit paragraph (a) (which introduces Chapter 2), and
in subsection (5) (which introduces Chapters containing provision connected with the duties to deduct), before paragraph (a) insert—.
Schedule 4 to CTA 2010 (index of defined expressions) is amended as follows. In the entry for “Northern Ireland expenditure”— qualifying expenditure (in Chapter 14A of Part 8B) section 357UJ(2) the separate orchestral trade (in Chapter 14A of Part 8B) section 357UJ(2)
In section 16 of FA 1994 (appeals to a tribunal), in subsection (6)(c), before “section 23(1)” insert “or (1AC)”.
Standard % Minimum % for prompted disclosure Minimum % for unprompted disclosure 30% 15% 0% 70% 35% 20% 100% 50% 30%
In section 946 of ITA 2007 (collection of tax deducted at source: payments to which Chapter applies) omit paragraph (a) (payments from which deductions required to be made under section 851).
HODA 1979 section 20AAD(5) Mixtures containing aqua methanol.
After paragraph 10 insert—
In Schedule 2 to ITA 2007 omit paragraphs 154 to 156 (transitional provisions related to Chapter 2 of Part 15 of ITA 2007).
In Schedule 4 to ITA 2007 (index of defined expressions)—
omit the entry for “beneficiary under a discretionary or accumulation settlement (in Chapter 2 of Part 15)”,
in the entry for “deposit-taker (in Chapter 2 of Part 15)”, after “Part 15” insert “and section 876”,
omit the entry for “dividend (in Chapter 2 of Part 15)”,
in the entry for “investment (in Chapter 2 of Part 15)”, after “Part 15” insert “and section 876”, and
omit the entry for “relevant investment (in Chapter 2 of Part 15)”.
In consequence of the amendments made by Part 1 of this Schedule and the preceding provisions of this Part of this Schedule—
in Schedule 1 to ITA 2007 omit paragraph 277,
in Schedule 1 to FA 2008 omit paragraph 25,
in Schedule 46 to FA 2013—
in paragraph 68(1) omit paragraph (a) including the “and” at the end,
in paragraph 69(1) omit paragraph (a) including the “and” at the end,
omit paragraph 70(1), and
in paragraph 71(3) omit paragraph (b) and the “and” preceding it, and
in FA 2014 omit section 3(4).
Section 332D of CTA 2010 (expenditure on acquisition of asset: disqualifying conditions) is amended as follows.
In subsection (1) after “an asset” insert “ (“the acquisition concerned”) ”.
In subsection (2)—
for “acquisition,” substitute “ acquisition concerned, ” and
after “acquiring,” insert “ leasing, ”.
In subsection (3)(b)—
for “acquisition,” substitute “ acquisition concerned, ”, and
after “acquiring,” insert “ leasing, ”.
After subsection (4) insert—
The amendments made by this section have effect for the purposes of determining whether any expenditure— is relievable expenditure for the purposes of section 332C of CTA 2010.
incurred by a company on or after 16 March 2016 on the acquisition of an asset, or
treated under section 332CA of CTA 2010 as so incurred,
Section 332F of CTA 2010 (activation of investment allowance) is amended as follows.
In subsection (2)(b) before “the company's relevant income” insert “ the total amount of ”.
For subsection (3) substitute—
CTA 2010 is amended as follows.
In section 356C after subsection (4) insert—
After section 356CA insert—
The amendments made by this section have effect for the purposes of determining whether any expenditure— is relievable expenditure for the purposes of section 356C of CTA 2010.
incurred by a company on or after 16 March 2016 on the acquisition of an asset, or
treated by reason of an election under section 356CB as so incurred,
Section 356JFA of CTA 2010 (expenditure on acquisition of asset: disqualifying conditions) is amended as follows.
In subsection (2) after “acquiring,” insert “ leasing, ”.
In subsection (3)(b) after “acquiring,” insert “ leasing, ”.
After subsection (4) insert—
The amendments made by this section have effect for the purposes of determining whether any expenditure incurred by a company on or after 16 March 2016 on the acquisition of an asset is relievable expenditure for the purposes of section 356JF of CTA 2010.
Section 356JH of CTA 2010 (activation of cluster area allowance) is amended as follows.
In subsection (2)(b) before “the company's relevant income” insert “ the total amount of ”.
For subsection (3) substitute—
Part 8A of CTA 2010 (profits arising from the exploitation of patents etc) is amended as follows.
In section 357A (election for special treatment of profits from patents etc)—
for subsections (6) and (7) substitute—, and
after subsection (10) insert—
After section 357BE insert—
In section 357FB (tax advantage schemes)—
in subsection (2)(b) (list of ways by which deductions can be inflated)—
omit “or” at the end of sub-paragraph (ii), and
after sub-paragraph (iii) insert, or , and
after subsection (4) insert—
After section 357GC insert—
Schedule 9 contains amendments consequential on this section.
The amendments made by this section have effect in relation to accounting periods beginning on or after 1 July 2016.
Subsection (9) applies where a company has an accounting period (“the straddling period”) which begins before, and ends on or after, 1 July 2016 or 1 July 2021 (“the relevant date”).
For the purposes of this section and Part 8A of CTA 2010—
so much of the straddling period as falls before the relevant date, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
any amounts brought into account for the purposes of calculating for corporation tax purposes the profits of any trade of the company for the straddling period are apportioned to the two separate accounting periods on such basis as is just and reasonable.
Subsection (11) applies if—
an election is made by a company under section 357A(1) of CTA 2010, and
the notice under section 357G of that Act specifies the accounting period of the company which ends on 30 June 2016, or any earlier accounting period, as being the first accounting period for which the election is to have effect.
Nothing in section 357GA(5) prevents the election having effect in relation to the accounting period of the company which ends on 30 June 2016 or any subsequent accounting period.
Subsection (13) applies to an amount of relevant IP income of a company if—
the company is not a new entrant,
the income is properly attributable to a new qualifying IP right which was assigned to the company, or in respect of which an exclusive licence was granted to the company, during the period beginning on 2 January 2016 and ending on 1 July 2016, and
the income accrued to the company during the period beginning on 1 July 2016 and ending on 1 January 2017.
The income is to be treated for the purposes of Part 8A of CTA 2010 as being properly attributable to an old qualifying IP right.
Expressions used in subsections (12) and (13) and in Part 8A of CTA 2010 have the meaning they have in that Part.
Section 624 of CTA 2010 (power to make regulations about the application of the Corporation Tax Acts in relation to securitisation companies) is amended in accordance with subsections (2) to (4).
In subsection (1), for “Corporation Tax Acts” substitute “ Taxes Acts ”.
In subsection (2), for “Corporation Tax Acts” substitute “ Taxes Acts ”.
the Taxes Acts” has the meaning given by section 118(1) of TMA 1970, and
In section 625 of CTA 2010 (regulations: supplementary provision) in subsection (3) (power to include retrospective provision) after “may” insert “ , insofar as they concern the application of the Corporation Tax Acts in relation to a securitisation company, ”.
Schedule 10 contains provision that counteracts, for corporation tax purposes, hybrid and other mismatches that would otherwise arise.
Part 2 of FA 2012 (insurance companies carrying on long-term business) is amended as follows.
In section 73 (the I-E basis), in step 4—
for “(but not below nil) by the” substitute “ by the relievable ”, and
at the end of the step insert—In this step, “the relievable amount” of a non-trading deficit means so much of the deficit as does not exceed the total of—
In section 88 (loan relationships, derivative contracts and intangible fixed assets), in subsection (6), for “excess—” and paragraphs (a) and (b), substitute “ excess is treated for the purposes of section 76 as a deemed BLAGAB management expense for that period. ”
In section 126 (restrictions in respect of non-trading deficit), in subsection (2), for “would have under section 388” to the end substitute “has, calculated by reference only to credits and debits—
arising in respect of such of the company's loan relationships as are debtor relationships (see section 302(6) of CTA 2009), and
referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business.”
The amendments made by this section have effect in relation to accounting periods beginning on or after the day on which this Act is passed.
In Part 20 of CTA 2010 (tax avoidance involving leasing plant or machinery), after section 894 insert—
In Chapter 6 of Part 13 of ITA 2007 (avoidance involving leases of plant or machinery), after section 809ZF insert—
This section applies to agreements of the kind mentioned in section 894A(1)(a) of CTA 2010 or section 809ZFA of ITA 2007 that are made on or after 25 November 2015.
In section 45K of CAA 2001 (expenditure on plant and machinery for use in designated assisted area), in subsection (1)(b) (condition that expenditure is incurred in the period of 8 years beginning with 1 April 2012), for “1 April 2012” substitute “ the date on which the area is (or is treated as) designated under subsection (2)(a) ”.
Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.
Section 213 (relevant transactions: sale, hire purchase etc. and assignment) is amended in accordance with subsections (3) and (4).
In subsection (1) for the words from “enters” to “(“S”)” substitute “ and another person (“S”) enter into a relevant transaction ”.
After subsection (3) insert—
Section 215 (transactions to obtain tax advantages) is amended in accordance with subsections (6) to (8).
In subsection (1)—
after “restricted” insert “ , and balancing charges are imposed or increased, ”, and
for the words from “B” to “S” substitute “ B and S enter into a relevant transaction ”.
In subsection (4)—
after “includes” insert— , and
at end insert, and
After subsection (4) insert—
After section 218ZA (restrictions on writing down allowances: section 215) insert—
section 218ZB disposal of plant or machinery in avoidance cases
The amendments made by this section have effect in relation to transactions mentioned in section 213(1)(a), (b) or (c) of CAA 2001 that take place on or after 25 November 2015.
ITTOIA 2005 is amended in accordance with subsections (2) and (3).
In Chapter 3 of Part 2 (trade profits: basic rules), after section 28 insert—
section 28A money's worth
CTA 2009 is amended in accordance with subsections (5) and (6).
In Chapter 3 of Part 3 (trade profits: basic rules), after section 49 insert—
section 49A money's worth
The amendments made by this section have effect in relation to transactions entered into on or after 16 March 2016.
Omit the following provisions (replacement and alteration of trade tools)—
section 68 of ITTOIA 2005 and the italic heading before that section, and
section 68 of CTA 2009 and the italic heading before that section.
In consequence of subsection (1)(a), in ITTOIA 2005—
in subsection (1) of section 56A (cash basis accounting), omit the entry relating to section 68, and
in section 272 (profits of a property business: application of trading income rules), in subsection (2), omit the entry in the table relating to section 68.
In consequence of subsection (1)(b), in section 210 of CTA 2009 (profits of a property business: application of trading income rules), in subsection (2), omit the entry in the table relating to section 68.
The amendments made by this section have effect in relation to expenditure incurred on or after the date in subsection (5).
The date is—
for corporation tax purposes, 1 April 2016, and
for income tax purposes, 6 April 2016.
In Chapter 5 of Part 3 of ITTOIA 2005 (property income), after section 311 insert—
In Chapter 5 of Part 4 of CTA 2009 (property income), after section 250 insert—
In section 41 of TCGA 1992 (restriction of losses by reference to capital allowances and renewals allowances), in subsection (4), after paragraph (a) insert—.
In section 308 of ITTOIA 2005 (furnished lettings), in subsection (1)(b), after “expenses” insert “ of a revenue nature ”.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In section 248 of CTA 2009 (furnished lettings), in subsection (1)(b), after “expenses” insert “ of a revenue nature ”.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The amendments made by this section have effect in relation to expenditure incurred on or after the date in subsection (9).
The date is—
for corporation tax purposes, 1 April 2016, and
for income tax purposes, 6 April 2016.
In Part 3 of ITTOIA 2005 (property income)—
omit sections 308A to 308C and the italic heading before section 308A (wear and tear allowance), and
in section 327 (capital allowances and loss relief: UK property business), in subsection (2), omit paragraph (c) and the “or” before that paragraph.
The amendments made by subsection (1) have effect for the tax year 2016-17 and subsequent tax years.
In Part 4 of CTA 2009 (property income)—
omit sections 248A to 248C of CTA 2009 and the italic heading before section 248A (wear and tear allowance), and
in section 269 (capital allowances and loss relief: UK property business), in subsection (2), omit paragraph (c) and the “or” before that paragraph.
The amendments made by subsection (3) have effect in relation to accounting periods beginning on or after 1 April 2016.
For the purposes of subsection (3), where a company has an accounting period beginning before 1 April 2016 and ending on or after that date (“the straddling period”)—
so much of the straddling period as falls before 1 April 2016, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
any amounts brought into account for the purposes of calculating for corporation tax purposes the profits of a property business for the straddling period are apportioned to the two separate accounting periods in accordance with section 1172 of CTA 2010 (time basis) or, if that method produces a result that is unjust or unreasonable, on a just and reasonable basis.
In section 164(4) of TIOPA 2010 (Part to be interpreted in accordance with OECD principles)—
in paragraph (a) after “2010” insert “ as revised by the report, Aligning Transfer Pricing Outcomes with Value Creation, Actions 8-10 - 2015 Final Reports, published by the OECD on 5 October 2015 ”, and
in the words after paragraph (b)—
for “such material” substitute “ material which is ”, and
for “as may be so designated” substitute “ and which is designated for the time being by order made by the Treasury ”.
In section 357GE(1) of CTA 2010 (other interpretation), in the definition of “the OECD transfer pricing guidelines”, for the words from “means” to the end substitute “ has the same meaning as “the transfer pricing guidelines” in section 164 of TIOPA 2010 ”.
The amendments made by subsection (1) have effect (in relation to provision made or imposed at any time)—
for corporation tax purposes, in relation to accounting periods beginning on or after 1 April 2016, and
for income tax purposes, in relation to the tax year 2016-17 and subsequent tax years.
The amendment made by subsection (2) has effect in relation to accounting periods beginning on or after 1 April 2016.
Section 5 of CTA 2009 (territorial scope of charge) is amended in accordance with subsections (2) to (4).
For subsection (2) substitute—
After subsection (2) insert—
In subsection (4), after “(1)” insert “ , (2A) ”.
After section 5 of CTA 2009 insert—
In section 3 of CTA 2009 (exclusion of charge to income tax), in subsection (1), for paragraph (b) substitute—
In section 18A of CTA 2009 (exemption for profits or losses of foreign permanent establishments), after subsection (2) insert—
In section 19 of CTA 2009 (chargeable profits)—
in subsection (2) for “company's chargeable profits” substitute “ company's “chargeable profits” ”;
after subsection (2) insert—
In section 189 of CTA 2009 (post-cessation receipts: extent of charge to tax), in subsection (4), at the end insert “ other than a company's trade of dealing in or developing UK land ”.
In section 107 of CTA 2010 (restrictions on losses etc surrenderable by non-UK resident), in subsection (1), for the words from “non-UK resident” to the end substitutenon-UK resident company—
“trade of dealing in or developing UK land”, in relation to a non-UK resident company, has the meaning given by section 5B of CTA 2009,
In CTA 2010, after Part 8ZA insert—
In section 1 of CTA 2010 (overview), in subsection (4), omit paragraph (e).
In section 481 of CTA 2010 (exemption from charges under provisions to which section 1173 applies), in subsection (2) omit paragraph (a).
In CTA 2010 omit Part 18 (transactions in land).
In section 1173 of CTA 2010 (miscellaneous charges), in Part 2 of the table in subsection (2), omit the entry relating to section 818(1) of CTA 2010.
In section 14B of TCGA 1992 (meaning of “non-resident CGT disposal”)—
in subsection (1) for “subsection (5)” substitute “ subsections (5) and (6) ”;
after subsection (5) insert—
In section 37 of TCGA 1992 (consideration chargeable to tax on income), in subsection (5A)(a), for the words from “821(3)” to “not” substitute “ 356OG(4) or (6) of CTA 2010 (transactions in land: the chargeable company) applies, an amount is charged to corporation tax as profits of a person other than ”.
In section 39 of TCGA 1992 (exclusion of expenditure by reference to tax on income), in subsection (5)(a), for the words from “821(3)” to “not” substitute “ 356OG(4) or (6) of CTA 2010 (transactions in land: the chargeable company) applies, an amount is charged to corporation tax as profits of a person other than ”.
In section 161 of TCGA 1992 (appropriations to and from stock), in subsection (6), for paragraph (a) substitute—.
In section 188A of TCGA 1992 (election for pooling), in subsection (4), at the end insert “ or section 14B(6) (gains on certain disposals treated as trading profits) ”.
In section 6 of ITTOIA 2005 (territorial scope of charge to tax)—
after subsection (1) insert—;
in subsection (2), after “Profits of a trade” insert “ other than a trade of dealing in or developing UK land ”.
After section 6 of ITTOIA 2005 insert—
In section 3 of ITTOIA 2005 (overview of Part 2), in subsection (4) for “6(2)” substitute “ 6(1A), (2) ”.
In section 243 of ITTOIA 2005 (post-cessation receipts: extent of charge to tax), in subsection (4), at the end insert “ , other than a person's trade of dealing in or developing UK land ”.
“trade of dealing in or developing UK land”, in relation to a non-UK resident person, has the meaning given by section 6B of ITTOIA 2005,
In ITA 2007, after Part 9 insert—
In section 2 of ITA 2007 (overview of Act)—
after subsection (9) insert—, and
in subsection (13), omit paragraph (c).
In section 482 of ITA 2007 (types of amount to be charged at special rates for trustees), in the words relating to Type 11, for “Chapter 3 of Part 13 of this Act (tax avoidance: transactions in land)” substitute “ Part 9A of this Act (transactions in land) ”.
In section 527 of ITA 2007 (exemption from charges under provisions to which section 1016 applies), in subsection (2)—
insert “ and ” at the end of paragraph (d), and
omit paragraph (e).
In Part 13 of ITA 2007, omit Chapter 3 (transactions in land).
In section 944 of ITA 2007 (tax avoidance: directions for duty to deduct to apply), in subsection (1)—
omit paragraph (a), and
in paragraph (b) for “that Part” substitute “ Part 13 ”.
In section 1016 of ITA 2007 (table of provisions to which that section applies), in Part 2 of the table in subsection (2), omit the entry relating to Chapter 3 of Part 13 of that Act.
In section 37 of TCGA 1992 (consideration chargeable to tax on income), in subsection (5)(a), for the words from “759(4)” to “is” substitute “ 517G(4) or (6) of ITA 2007 (transactions in land: the chargeable person) applies, an amount is charged to income tax as income of ”
In section 39 of TCGA 1992 (exclusion of expenditure by reference to tax on income), in subsection (4)(a), for the words from “759(4)” to “is” substitute “ 517G(4) or (6) of ITA 2007 (transactions in land: the chargeable person) applies, an amount is charged to income tax as income of ”.
In section 161 of TCGA 1992 (appropriations to and from stock), in subsection (5), for paragraph (a) substitute—.
In section 830 of ITTOIA 2005, in subsection (3), for the words from “of” to the end substituteof—
Subsection (2) has effect if— “The relevant trade” means the trade of dealing in or developing UK land mentioned in subsection (2)(a) of section 5 of CTA 2009.
a particular time (“T”) is the time when a company (“C”) is first within the charge to corporation tax by virtue of subsection (2)(a) of section 5 of CTA 2009 (territorial scope of charge),
immediately before time T, C was within the charge to corporation tax as a result of carrying on the relevant trade in the United Kingdom through a permanent establishment in the United Kingdom, and
expenses which the company has incurred for the purposes of the trade meet the conditions in subsection (3) and (4).
Section 61 of CTA 2009 (pre-trading expenses) has effect in relation to those expenses as if the company had started to carry on the relevant trade at time T.
The condition in this subsection is that—
no deduction would be allowed for the expenses in calculating the profits of the relevant trade for corporation tax purposes (ignoring subsection (2)), but
a deduction would be allowed for them (in accordance with sections 41 and section 61 of CTA 2009) if the company had not been within the charge to corporation tax in respect of the relevant trade immediately before time T.
The condition in this subsection is that no relief has been obtained for the expenses under the law of any country or territory outside the United Kingdom.
The amendments made by sections 76, 77 and 80 have effect in relation to disposals on or after 5 July 2016.
In subsection (1) of section 5A of CTA 2009 (tax avoidance in relation to section 5(2A) of that Act) “arrangement” does not include an arrangement (as defined in section 5A(6) of that Act) entered into before 16 March 2016.
In subsection (1) of section 356OK of CTA 2010 (tax avoidance in relation to Part 8ZB of CTA 2010) “arrangement” does not include an arrangement (as defined in section 356OP of that Act) entered into before 16 March 2016.
Subsection (6) applies if—
a person disposes of a relevant asset to a person who is associated with that person at the relevant time,
the disposal is made on or after 16 March 2016 and before 5 July 2016, and
a company obtains a relevant tax advantage as a result of the disposal.
In subsection (4) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (6) has effect accordingly, regardless of anything in section 6(1) of TIOPA 2010).
The tax advantage is to be counteracted by means of adjustments.
Adjustments for the purposes of subsection (6) may be made (whether by an officer of Revenue and Customs or by the company) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.
In subsection (4)(c) “relevant tax advantage” means a tax advantage in relation to tax to which the company in question is charged or chargeable (or would, if the tax advantage were not obtained, be charged or chargeable)—
by virtue of section 5(2A) of CTA 2009, or
in respect of amounts treated as profits of a trade by virtue of Part 8ZB of CTA 2010.
For the purposes of this section, where any property is disposed of under a contract, the time at which the disposal is made is the time the contract is made (and not, if different, the time at which the property is conveyed or transferred).
In subsection (9) “contract” includes a conditional contract.
In this section—
obligations under the General Block Exemption Regulation that relate to the grant of state aid through the provision of a tax advantage, or
After section 226D of ITEPA 2003 (shareholder or connected person having material interest in company) insert—
The amendments made by this Schedule have effect in relation to a sporting testimonial payment made out of money raised by a sporting testimonial if— Terms used in sub-paragraph (1) and section 226E of ITEPA 2003 (as inserted by paragraph 1) have the same meaning as in that section.
This paragraph applies where a person incurs a relevant defeat in relation to any arrangements. HMRC must give the person a written notice (a “warning notice”). The notice must be given within the period of 90 days beginning with the day on which the relevant defeat is incurred. The notice must— A warning notice given by virtue of paragraph 49 must also explain the effect of paragraph 51 (information in certain cases involving partnerships). In this Schedule “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). For the meaning of “relevant defeat” and provision about when a relevant defeat is incurred see paragraph 11.
In this Schedule “adjustments” means any adjustments, whether by way of an assessment, the modification of an assessment or return, amendment or disallowance of a claim, a payment, the entering into of a contract settlement, or otherwise (and references to “making” adjustments accordingly include securing that adjustments are made by entering into a contract settlement). “Adjustments” also includes a payment in respect of a liability to pay national insurance contributions.
In this Schedule references to an assessment to tax include a NICs decision relating to a person’s liability for relevant contributions. In this Schedule a reference to a provision of Part 7 of FA 2004 (disclosure of tax avoidance schemes) (a “DOTAS provision”) includes a reference to— whenever the regulations are made. Regulations under section 132A of that Act may disapply, or modify the effect of, sub-paragraph (2). In this paragraph “NICs decision” means a decision under section 8 of the Social Security Contributions (Transfer of Functions, etc) Act 1999 or Article 7 of the Social Security Contributions (Transfer of Functions, etc) (Northern Ireland) Order 1999 (S.I. 1999/671).
If a group is subject to a confirmed special measures notice, the Commissioners for Her Majesty’s Revenue and Customs (“the Commissioners”) may publish the following information— A group is “subject to a confirmed special measures notice” if sub-paragraph (3) or (4) is satisfied. This sub-paragraph is satisfied if— This sub-paragraph is satisfied if— Before publishing the information, the Commissioners must— If, after information about a group is published under this paragraph, the group ceases to be subject to a confirmed special measures notice, the Commissioners must publish a notice stating that the group is no longer subject to a confirmed special measures notice. A notice under sub-paragraph (6) must be published before the end of the period of 30 days beginning with the day on which the special measures notice is withdrawn or has expired. The Commissioners may publish information and notices under this paragraph in any manner they consider appropriate.
A UK partnership falls within this Part if— Paragraphs 36 to 39 of this Schedule apply in relation to a UK partnership as they apply in relation to a UK group. Paragraphs 41 to 45 of this Schedule apply in relation to the representative partner of a UK partnership as they apply in relation to the head of a UK group. As applied by this paragraph, paragraphs 36 to 39 and 41 to 45 have effect as if— The Treasury may by regulations make provision for warning notices, special measures notices and confirmation notices to be treated as having been given to the representative partner of a UK partnership in circumstances described in the regulations. Paragraph 46(12) applies to regulations under this paragraph. Paragraph 47 applies in relation to an inaccuracy in a document given to HMRC by a partner of a UK partnership, acting in the person’s capacity as such, as if— Paragraph 47 applies in relation to an inaccuracy in any other document given to HMRC on behalf of a UK partnership as if— Paragraph 49 applies in relation to a UK partnership as it applies in relation to a group. As applied by this paragraph, paragraph 49 has effect as if—
Regulations under this Schedule are to be made by statutory instrument. A statutory instrument containing regulations under this Schedule is subject to annulment in pursuance of a resolution of the House of Commons. Term Paragraph balance sheet total paragraph 14(2) confirmation notice (in Part 3) paragraph 44 designated HMRC officer (in Part 3) paragraph 53 engaged in unco-operative behaviour (in Part 3) paragraph 36 failure (in paragraphs 27 to 33) paragraph 26(1) financial year (in relation to a UK group) (in paragraphs 16 and 17) paragraph 16(7) foreign (in relation to a relevant body) paragraph 2(2) foreign (in relation to a group) paragraph 6(3) group paragraph 6(1) group other than an MNE Group paragraph 8 head (in relation to a group) paragraph 9 head (in relation to a UK sub-group) paragraph 11(2) “liability to a penalty” (in paragraphs 27 to 33) paragraph 26(1) MNE Group paragraph 7(1) member (in relation to a group) paragraph 8(2) and (3) penalty (in paragraphs 27 to 33) paragraph 26(1) qualifying company paragraph 5 qualifying group paragraph 10 qualifying UK partnership paragraph 12(2) relevant body paragraph 2(1) representative partner paragraph 12(5) satisfied the arrangements condition (in Part 3) paragraph 38 satisfied the behaviour condition (in Part 3) paragraph 37 special measures notice paragraphs 42 and 45 tax strategy (in Part 2) paragraph 34 tribunal (in paragraphs 27 to 33) paragraph 26(2) turnover paragraph 14(1) UK company paragraph 3 UK group paragraph 6(2) UK partnership paragraph 12(1) UK permanent establishment paragraph 4(1) UK sub-group paragraph 11(1) UK taxation paragraph 15 warning notice paragraph 41.
The Commissioners for Her Majesty’s Revenue and Customs (“the Commissioners”) may publish information about a person if— The Commissioners may also publish information about a person if the person has been found to have incurred 5 or more penalties under paragraph 1 in any 5 year period. The information that may be published is— The information may be published in any manner that the Commissioners consider appropriate. Before publishing any information the Commissioners must— No information may be published before the day on which the penalty becomes final or, where more than one penalty is involved, the latest day on which any of the penalties becomes final. No information may be published for the first time after the end of the period of one year beginning with that day. No information may be published if the amount of the penalty— For the purposes of this paragraph a penalty becomes final— In this paragraph “contract settlement”, in relation to a penalty, means a contract between the Commissioners and the person under which the Commissioners undertake not to assess the penalty or (if it has been assessed) not to take proceedings to recover it.
This Part makes provision about the identification and valuation of the asset for the purposes of calculating the amount of the asset-based penalty. An asset-based penalty may relate to more than one asset. The identification and valuation of the asset is to be determined— See also paragraph 14 (jointly held assets). The principal tax at stake— The offshore PLR value, in relation to a type of tax, is the potential lost revenue or liability to tax by reference to which the part of the penalty relating to that type of tax was assessed. The rules in paragraph 5(2) to (7) apply for the purposes of calculating the offshore PLR value, in relation to a type of tax, as they apply for the purposes of calculating the offshore PLR.
This paragraph applies where the principal tax at stake is asset-based income tax. Where the standard offshore tax penalty relates to income tax charged under a provision shown in column 1 of the Table, the asset is the asset mentioned in column 2 of the Table. Provision under which income tax is charged Asset Chapters 3, 7 and 10 of Part 3 of ITTOIA 2005 (property businesses) The estate, interest or right in or over the land that generates the income for the business (see sections 264 to 266 of ITTOIA 2005) Chapter 8 of Part 3 of ITTOIA 2005 (rent receivable in connection with a s.12(4) concern) The estate, interest or right in or over the land that generates the rent receivable in connection with a UK section 12(4) concern (see sections 335 and 336 of ITTOIA 2005) Chapters 2 and 2A of Part 4 of ITTOIA 2005 (interest and disguised interest) The asset that generates the interest Chapters 3 to 5 of Part 4 of ITTOIA 2005 (dividends etc) The shares or other securities in relation to which the dividend or distribution is paid Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments) The annuity that gives rise to the payments Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) The deeply discounted securities that are disposed of (see sections 427 to 430 of ITTOIA 2005) Chapter 9 of Part 4 of ITTOIA 2005 (gains from contracts for life insurance etc) The policy or contract from which the gain is treated as arising Chapter 11 of Part 4 of ITTOIA 2005 (transactions in deposits) The deposit right which is disposed of (see sections 551 and 552 of ITTOIA 2005) Chapter 2 of Part 5 of ITTOIA 2005 (receipts from intellectual property) The intellectual property, know-how or patent rights which generate the income (see sections 579, 583 and 587 of ITTOIA 2005) Chapter 4 of Part 5 of ITTOIA 2005 (certain telecommunication rights: non-trading income) The relevant telecommunication right from which the income derives (see section 614 of ITTOIA 2005) Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor) The settlement which gives rise to the income or capital sums treated as income of a settlor For the purposes of calculating the amount of the asset-based penalty, the asset is to be valued as follows. In a case where the charge to income tax was triggered by a disposal of the asset, the value of the asset is to be taken as its market value on the date of disposal (and in the case of a part disposal, the value of the asset is to be taken as its full market value immediately before the part disposal took place). In any other case— But if the value of the asset, as determined in accordance with sub-paragraphs (4) and (5), does not appear to HMRC to be a fair and reasonable value, then HMRC may value the asset for the purposes of this Schedule in any other way which appears to them to be fair and reasonable. For the purposes of sub-paragraph (5)— In this paragraph “market value” has the same meaning as in TCGA 1992 (see section 272 of that Act). Other terms used in this paragraph have the same meaning as in ITTOIA 2005.
P may appeal against a decision of HMRC that a penalty is payable by P. P may appeal against a decision of HMRC as to the amount of a penalty payable by P.
A person holds and vacates office as a member of the OTS in accordance with the terms of the appointment, subject to the following provisions. A period of appointment may not exceed 5 years. A person who ceases to be a member of the OTS is eligible for re-appointment.
The Treasury may by regulations amend paragraph 22(1) to vary the amount for the time being specified in paragraph (b). Regulations under this paragraph are to be made by statutory instrument. A statutory instrument under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.
An appeal is to be treated in the same way as an appeal against an assessment to the tax concerned (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC review of the decision or about determination of the appeal by the First-tier Tribunal or the Upper Tribunal). Sub-paragraph (1) does not apply—
On an appeal under paragraph 16(1), the tribunal may affirm or cancel HMRC’s decision. On an appeal under paragraph 16(2), the tribunal may— If the tribunal substitutes its decision for HMRC’s, the tribunal may rely on paragraph 9— In sub-paragraph (3), “flawed” means flawed when considered in the light of the principles applied in proceedings for judicial review. In this paragraph “tribunal” means the First-tier Tribunal or the Upper Tribunal (as appropriate by virtue of paragraph 17(1)).
An individual has a reference number for the purposes of paragraph 1(2), or for the purposes of paragraph 9(2), if a reference number— Such a reference number— A valid application is an application— Where an application for a reference number for the purposes of paragraph 1(2) or 9(2) is unsuccessful, or is successful on a dormant basis, that must be notified to the applicant by or on behalf of the Commissioners. In sub-paragraph (3)(f)(iii) and this sub-paragraph— Sub-paragraph (3)(c) is not to be read as requiring a digital service to be provided and available for the purpose referred to. For the purposes of this Part of this Schedule, an application for a reference number for the purposes of paragraph 1(2) is successful on a dormant basis if the decision on the application is that— For the purposes of this Part of this Schedule, an application for a reference number for the purposes of paragraph 9(2) is successful on a dormant basis if the decision on the application is that— For the purposes of sub-paragraph (8), the prior provisions are—
Sub-paragraph (2) applies if, in the case of an individual, there is a protection-cessation event (see paragraphs 3 to 8) at a time when— The individual— For the purposes of this paragraph—
paragraph 17 or 18 of Schedule 4 to FA 2016;
Schedule 18 to FA 1998 (company tax returns) is amended as follows.
A person (“P”) who has been given a warning notice under this Schedule must give HMRC a written notice (an “information notice”) in respect of each reporting period in the warning period (see sub-paragraph (11)). An information notice must be given not later than the 30th day after the end of the reporting period to which it relates. An information notice must state whether or not P— In this paragraph “relevant tax advantage” means a tax advantage which particular DOTAS arrangements or disclosable VAT arrangements enable, or might be expected to enable, P to obtain. If P has, in the reporting period concerned, made a return, claim or election on the basis mentioned in sub-paragraph (3)(a) or failed to take action as mentioned in sub-paragraph (3)(b) the information notice must— If P has, in the reporting period, become a party to arrangements such as are mentioned in sub-paragraph (3)(c), the information notice— If the time by which P must deliver a return falls within a reporting period and P fails to deliver the return by that time, HMRC may require P to give HMRC a written notice (a “supplementary information notice”) setting out any matters which P would have been required to set out in an information notice had P delivered the return in that reporting period. A requirement under sub-paragraph (7) must be made by a written notice which states the period within which P must comply with the notice. If P fails to comply with a requirement of (or imposed under) this paragraph HMRC may by written notice extend the warning period to the end of the period of 5 years beginning with— or, if earlier, the time when the warning period would have expired but for the extension. HMRC may permit information notices given by members of the same group of companies (as defined in paragraph 46(9)) to be combined. For the purposes of this paragraph—
Sub-paragraphs (2) to (15) have effect in relation to a person to whom a relief restriction notice has been given. The person may not, in the restricted period, make any claim for relief. Sub-paragraph (2) does not have effect in relation to— Claims under the following provisions in Part 4 of FA 2004 (registered pension schemes: tax reliefs etc) do not count as claims for relief for the purposes of this paragraph— section 192(4) (increase of basic rate limit and higher rate limit); section 193(4) (net pay arrangements: excess relief); section 194(1) (relief on making of a claim). The person may not, in the restricted period, surrender group relief under Part 5 of CTA 2010. No deduction is to be made under section 83 of ITA 2007 (carry forward against subsequent trade profits) in calculating the person’s net income for a relevant tax year. No deduction is to be made under section 118 of ITA 2007 (carry-forward property loss relief) in calculating the person’s net income for a relevant tax year. The person is not entitled to relief under section 448 (annual payments: relief for individuals) or 449 (annual payments: relief for other persons) of ITA 2007 for any payment made in the restricted period. No deduction of expenses referable to a relevant accounting period is to be made under section 1219(1) of CTA 2009 (expenses of management of a company’s investment business). No reduction is to be made under section 45(4) of CTA 2010 (carry-forward of trade loss relief) in calculating the profits for a relevant accounting period of a trade carried on by the person. In calculating the total amount of chargeable gains accruing to a person in a relevant tax year (or part of a relevant tax year), no losses are to be deducted under subsections (2) to (2B) of section 2 of TCGA 1992 (persons and gains chargeable to capital gains tax, and allowable losses). In calculating the total amount of ATED-related chargeable gains accruing to a person in a relevant tax year, no losses are to be deducted under subsection (3) of section 2B of TCGA 1992 (persons chargeable to capital gains tax on ATED-related gains). In calculating the total amount of chargeable NRCGT gains accruing to a person in a relevant tax year on relevant high value disposals, no losses are to be deducted under subsection (2) of section 14D of TCGA 1992 (persons chargeable to capital gains tax on NRCGT gains). If the person is a company, no deduction is to be made under section 62 of CTA 2010 (relief for losses made in UK property business) from the company’s total profits of a relevant accounting period. No deduction is to be made under regulation 18 of the Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819) (relief for deemed payments by trustees of an exempt unauthorised unit trust) in calculating the person’s net income for a relevant tax year. In this paragraph “relevant tax year” means any tax year the first day of which is in the restricted period. In this paragraph “relevant accounting period” means an accounting period the first day of which is in the restricted period. In this paragraph “double taxation arrangements” means arrangements which have effect under section 2(1) of TIOPA 2010 (double taxation relief by agreement with territories outside the UK).
The Commissioners may mitigate the effects of paragraph 20 in relation to a person (“P”) so far as it appears to them that there are exceptional circumstances such that the operation of that paragraph would otherwise have an unduly serious impact with respect to the tax affairs of P or another person. For the purposes of sub-paragraph (1) the Commissioners may modify the effects of paragraph 20 in any way they think appropriate, including by allowing P access to the whole or part of a relief to which P would otherwise not be entitled as a result of paragraph 20.
The following are “reliefs” for the purposes of this Part of this Schedule—
any relief from tax (however described) which must be claimed, or which is not available without making an election,
relief under section 1219 of CTA 2009 (expenses of management of a company’s investment business),
any relief (not falling within paragraph (a)) under Part 4 of ITA 2007 (loss relief) or Part 4 or 5 of CTA 2010 (loss relief and group relief), and
any relief (not falling within paragraph (a) or (b)) under a provision listed in section 24 of ITA 2007 (reliefs deductible at Step 2 of the calculation of income tax liability).
The Treasury may by regulations— Regulations under sub-paragraph (1)(a) may, in particular, alter the application of paragraph 20 in relation to any relief, exclude any relief from its application or extend its application to further reliefs. Regulations under sub-paragraph (1)(b) may amend the meaning of “relief” in any way (including by extending or limiting the meaning). Regulations under this paragraph may— Regulations under this paragraph are to be made by statutory instrument. A statutory instrument containing regulations under this paragraph may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.
This Part defines terms for the purposes of this Schedule.
“UK permanent establishment” means a permanent establishment in the United Kingdom of a foreign relevant body. In sub-paragraph (1) “permanent establishment” has the same meaning as it has for the purposes of the Corporation Tax Acts (see section 1141 to 1144 of CTA 2010).
In paragraph 25(3)—
insert “or” at the end of paragraph (b), and
omit paragraph (d) and the “or” preceding it.
In paragraph 42(4)—
insert “or” at the end of paragraph (a), and
omit paragraph (c) and the “or” preceding it.
“HMRC” means Her Majesty’s Revenue and Customs;
In Parts 3 and 4, and this Part, of this Schedule “the Commissioners” means the Commissioners for Her Majesty’s Revenue and Customs.
In paragraph 18(1A) of Schedule 29 to FA 2004 (when lump sum paid out of uncrystallised funds is charity lump sum death benefit), omit paragraph (a) (member must have died after reaching 75). The amendment made by sub-paragraph (1) has effect in relation to lump sums paid after the day on which this Act is passed.
For the purposes of this section a person (“A”) is “associated” with another person (“B”) if—
A is connected with B by virtue of any of subsections (5) to (7) of section 1122 of CTA 2010 (read in accordance with section 1123 of that Act), or
A is related to B.
In subsection (12) “related to” is to be interpreted in accordance with section 356OT of CTA 2010.
In subsection (4) “the relevant time”—
in a case within subsection (8)(a), means the time of the disposal mentioned in subsection (4)(a).
in a case within subsection (8)(b), means any time in the period beginning when the activities of the project began and ending 6 months after the disposal mentioned in section 356OB(1) or 356OD(1) of CTA 2010.
In subsection (14) “the project” means (as the case requires) the project described in section 356OB(9) of CTA 2010 or the activities mentioned in section 356OD(2)(a) of that Act.
The amendments made by sections 78 and 79 have effect in relation to disposals on or after 5 July 2016.
In subsection (1) of section 6A of ITA 2007 (tax avoidance arrangements in relation to section 6(1A) of that Act) “arrangement” does not include an arrangement (as defined in section 6A(7) of that Act) entered into before 16 March 2016.
In subsection (1) of section 517K of ITA 2007 (tax avoidance in relation to Part 9A of that Act) “arrangement” does not include an arrangement (as defined in section 517Q of that Act) entered into before 16 March 2016.
Subsection (6) applies if—
a person disposes of a relevant asset to a person who is associated with that person at the relevant time,
the disposal is made on or after 16 March 2016 and before 5 July 2016, and
a person obtains a relevant tax advantage as a result of the disposal.
In subsection (4) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (6) has effect accordingly, regardless of anything in section 6(1) of TIOPA 2010).
The tax advantage is to be counteracted by means of adjustments.
Adjustments for the purposes of subsection (6) may be made (whether by an officer of Revenue and Customs or by the person) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.
In subsection (4)(c) “relevant tax advantage” means a tax advantage in relation to tax to which the person in question is charged or chargeable (or would, if the tax advantage were not obtained, be charged or chargeable)—
by virtue of section 6(1A) of ITTOIA 2005, or
in respect of amounts treated as profits of a trade by virtue of Part 9A of ITA 2007.
For the purposes of this section, where any property is disposed of under a contract, the time at which the disposal is made is the time the contract is made (and not, if different, the time at which the property is conveyed or transferred).
In subsection (9) “contract” includes a conditional contract.
In this section—
“relevant asset” means land, or property deriving the whole or part of its value from land;
“tax advantage” has the same meaning as in section 6A of ITTOIA 2005.
For the purposes of this section a person (“A”) is “associated” with another person (“B”) if—
A is connected with B by virtue of any of subsections (2) to (4) of section 993 of ITA 2007 (read in accordance with section 994 of that Act), or
A is related to B.
In subsection (12) “related to” is to be interpreted in accordance with section 517U of ITA 2007.
In subsection (4), “the relevant time”—
in a case within subsection (8)(a), means the time when the disposal was made,
in a case within subsection (8)(b), means any time in the period beginning when the activities of the project began and ending 6 months after the disposal mentioned in section 517B(1) or 517D(1) of ITA 2007.
In subsection (14) “the project” means (as the case requires) the project described in section 517B(9) of ITA 2007 or the activities mentioned in section 517D(2)(a) of that Act.
Section 4 of TCGA 1992 (rates of capital gains tax) is amended as set out in subsections (2) to (12).
In subsection (1) after “entrepreneurs' relief)” insert “and section 169VC (rate in case of claim for investors' relief)”.
In subsection (2)—
after “section” insert “ and section 4BA ”, and
for the words from “in respect” to the end substitute—
After subsection (2) insert—
For subsection (3) substitute—
In subsection (4), for the words from the second “in respect” to the end substitute—
In subsection (5) for “28%” substitute “ (subject to section 4BA) 20% ”.
For subsection (6) substitute—
In subsection (7) for “The reference in subsection (5)” substitute “ Any reference in this section ”.
In subsection (9) after “this section” insert “ and section 4BA ”.
In subsection (10) after “and (5)” insert “ and section 4BA(1) ”.
After subsection (11) insert—
In section 4A of TCGA 1992 (special cases), in subsection (5) after “and (5)” insert “ and section 4BA(1) ”.
After section 4B of TCGA 1992 insert—
Schedule 11 inserts Schedule BA1 in TCGA 1992 and makes related amendments.
Schedule 12 inserts section 57C and Schedule 4ZZC in TCGA 1992 and makes related amendments.
The amendments made by this section and Schedules 11 and 12 have effect in relation to gains accruing on or after 6 April 2016.
In relation to a time before the tax year appointed under section 14(3)(b) of the Wales Act 2014 in relation to the provision inserted by section 9(14) of that Act, subsection (1) of section 4BA of TCGA 1992 (inserted by subsection (14) of this section) has effect as if the words “, the Welsh higher rate” were omitted.
In relation to a time before the tax year appointed under section 13(15) of the Scotland Act 2016, subsection (1) of section 4BA of TCGA 1992 (inserted by subsection (14) of this section) has effect as if before “or the dividend upper rate” there were inserted “ , the Scottish higher rate ”.
Section 169K of TCGA 1992 (disposal associated with relevant material disposal) is amended as follows.
In subsection (1)—
in paragraph (a), after “A1,” insert “ A1A, ”, and
in paragraph (b), for “and C” substitute “ , C and D ”.
After subsection (1A) insert—
In subsection (1E), in the words before paragraph (a)—
at the beginning insert “ Subject to subsection (6A), ”, and
after “means arrangements” insert “ (other than the material disposal itself) ”.
After subsection (3A) insert—
In subsection (3B), for “arrangements” to the end substitute “ share purchase arrangements ”.
After subsection (3B) insert—
In subsection (3C), for “(3B)” substitute “ (3BA) ”.
After subsection (4) insert—
Omit subsection (6).
Before subsection (7) insert—
In subsection (9), after “entitled to share in the” insert “ capital ”.
The amendments made by subsections (2)(a), (3) to (8) and (10) to (12) have effect in relation to disposals made on or after 18 March 2015.
The amendments made by subsections (2)(b) and (9) have effect in relation to disposals of assets which are acquired on or after 13 June 2016.
Section 169LA of TCGA 1992 (relevant business assets: goodwill transferred to a related party etc) is amended as follows.
In subsection (1)—
at the beginning insert “ Subject to subsection (1A), ”,
at the end of paragraph (a) insert “ and ”,
after paragraph (a) insert—, and
omit paragraphs (b) and (c).
After subsection (1) insert—
Omit subsections (2) and (3).
In subsection (5), omit the words from “(including” to the end.
In subsection (7), omit paragraph (b) and the “or” at the end of paragraph (a).
In subsection (8)—
“group” is to be construed in accordance with section 170;
“relevant connected person” means—
In the heading, for “related party etc” substitute “ close company ”.
The amendments made by this section have effect in relation to disposals made on or after 3 December 2014.
Schedule 13 contains provision about the meaning of “trading company” and “trading group” for the purposes of Chapter 3 of Part 5 of TCGA 1992 (entrepreneurs' relief).
Schedule 14 contains provision relating to investors' relief.
Section 236B of TCGA 1992 (exemption for employee shareholder shares) is amended in accordance with subsections (2) and (3).
After subsection (1) insert—
After subsection (3) insert—
Section 236F of TCGA 1992 (reorganisation of share capital involving employee shareholder shares) is amended in accordance with subsections (5) and (6).
After subsection (1) insert—
In subsection (2) for “reference in subsection (1) to section 127 includes” substitute “ references in this section to section 127 include ”.
Section 58 of TCGA 1992 (spouses and civil partners) is amended in accordance with subsections (8) and (9).
In subsection (2)(c) after “disposal is” insert “ a relevant disposal ”.
After subsection (2) insert—
The amendments made by this section have effect in relation to disposals made after 16 March 2016.
In section 236B of TCGA 1992 (exemption for employee shareholder shares), after subsection (2) insert—
The amendment made by this section has effect in relation to gains accruing on or after 6 April 2016.
In Schedule 4ZZA to TCGA 1992 (relevant high value disposals: gains and losses), in paragraph 2(1), for “paragraph 6” substitute “ paragraph 6A ”.
In Schedule 4ZZB to TCGA 1992 (non-resident CGT disposals: gains and losses), in paragraph 17—
omit sub-paragraph (2), and
in sub-paragraph (3), omit the words from “If” to “applies”.
The amendment made by subsection (1) has effect in relation to disposals made on or after 6 April 2015.
The amendment made by subsection (2) has effect in relation to disposals made on or after 26 November 2015.
In TMA 1970, after section 12ZB (NRCGT return) insert—
In section 1 of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions affecting income tax etc), in subsection (1), after “income tax,” insert “ capital gains tax, ”.
Schedule 15 contains provision in connection with the increased nil-rate band provided for by section 8D of IHTA 1984 (extra nil-rate band on death if interest in home goes to descendants etc).
IHTA 1984 is amended as follows.
In the italic heading before section 10, at the end insert “ (and omissions that do not give rise to deemed dispositions) ”.
In section 12(2G) (interpretation of section 12(2ZA)), in the definition of “entitled”, for “166(2)” substitute “ 167(1A), or section 166(2), ”.
After section 12 insert—
The amendment made by subsection (4)—
so far as relating to a fund within the new section 12A(2)(a) or (c) (drawdown pension funds), or to a fund within the new section 12A(3) that corresponds to a fund within the new section 12A(2)(a) or (c)—
has effect where the person who has the fund dies on or after 6 April 2011, and
is to be treated as having come into force on 6 April 2011, and
so far as relating to a fund mentioned in the new section 12A(2)(b), (d), (e) or (f) (flexi-access drawdown funds), or to a fund within the new section 12A(3) that corresponds to a fund within the new section 12A(2)(b), (d), (e) or (f)—
has effect where the person who has the fund dies on or after 6 April 2015, and
is to be treated as having come into force on 6 April 2015.
Where an amount paid by way of— is repayable as a result of the amendment made by subsection (4), section 241(1) of IHTA 1984 applies as if the last date for making a claim for repayment of the amount were 5 April 2020 if that is later than what would otherwise be the last date for that purpose.
inheritance tax, or
interest on inheritance tax,
After section 153 of IHTA 1984 insert—
After Schedule 5 to IHTA 1984 insert—
The amendments made by this section have effect in relation to deaths occurring on or after 1 January 2015.
The Schedule 3 IHTA approval function is transferred to the Treasury.
The “Schedule 3 IHTA approval function” is the function of approval conferred by Schedule 3 to IHTA 1984 in the entry beginning “Any other similar national institution” (and which was initially conferred on the Treasury but, along with other functions, transferred to the Commissioners of Inland Revenue under section 95 of FA 1985).
Subsection (1) does not affect any approval given under Schedule 3 to IHTA 1984 before this Act is passed.
In Schedule 3 to IHTA 1984 (gifts for national purposes, etc), in the entry beginning “Any museum”, after “and is” insert “ or has been ”.
Section 40 of FA 1930 and section 2 of the Finance Act (Northern Ireland) 1931 (exemption from death duties of objects of national etc interest), so far as continuing to have effect, have effect as if after subsection (2) there were inserted—
Section 48 of FA 1950, so far as continuing to have effect, has effect as if—
after subsection (3) there were inserted—;
after subsection (4) there were inserted—
Section 39 of FA 1969, so far as continuing to have effect, has effect as if—
in subsection (1)—
after “subsection (2)” there were inserted “ or (2A) ”;
after “other disposal” there were inserted “ or loss ”;
in subsection (2), after “subsection (2)” there were inserted “ , (2A) ”;
in subsection (3)—
after “subsection (2)” there were inserted “ , (2A) ”;
for the words from “the amount” to the end there were substituted “ the amount in respect of which estate duty is chargeable under the said subsection ”.
Section 6 of the Finance Act (Northern Ireland) 1969, so far as continuing to have effect as originally enacted, has effect as if—
in subsection (1)—
after “subsection (2)” there were inserted “ or (2A) ”;
after “sale” there were inserted “ or loss ”;
in subsection (2)—
for “sale” there were substituted “ event ”;
after “subsection (2)” there were inserted “ or (2A) ”;
in subsection (3)—
for “sale” there were substituted “ event ”;
after “subsection (2)” there were inserted “ or (2A) ”;
for “the amount of the proceeds of sale” there were substituted “ the amount in respect of which estate duty is chargeable under the said subsection ”.
Section 6 of the Finance Act (Northern Ireland) 1969, so far as continuing to have effect as amended by Article 7 of the Finance (Northern Ireland) Order 1972 (S.I. 1972/1100 (N.I.11)) (deaths occurring after the making of that Order), has effect as if—
in subsection (1)—
after “subsection (2)” there were inserted “ or (2A) ”;
after “sale” there were inserted “ or loss ”;
in subsection (2), after “subsection (2)” there were inserted “ or (2A) ”;
in subsection (3)—
in the opening words, after “subsection (2)” there were inserted “ or (2A) ”;
in paragraphs (a) and (b), after “otherwise than on sale” there were inserted “ or at the time of the loss ”.
In section 35 of IHTA 1984 (conditional exemption on death before 7th April 1976), in subsection (2), for paragraphs (a) and (b) substitute—.
In Schedule 6 to IHTA 1984 (transition from estate duty), in paragraph 4 (objects of national etc interest left out of account on death)—
as the Board may elect,
in sub-paragraph (4), after “40(2)” insert “ or (2A) ”.
Subsections (6) and (7) have effect in relation to a chargeable event where the conditionally exempt transfer referred to in section 35(2) of or paragraph 4(2) of Schedule 6 to IHTA 1984 occurred after 16 March 2016.
A tax called apprenticeship levy is to be charged in accordance with this Part.
The Commissioners are responsible for the collection and management of apprenticeship levy.
Apprenticeship levy is charged if—
a person has a pay bill for a tax year, and
the relevant percentage of that pay bill exceeds the amount of the person's levy allowance (if any) for that tax year.
The amount charged for the tax year is equal to— where— N is the relevant percentage of the pay bill for the tax year, and A is the amount of the levy allowance (if any) to which the person is entitled for the tax year.
The person mentioned in subsection (1) is liable to pay the amount charged.
Except so far as section 103 provides otherwise, a person who has a pay bill for a tax year is entitled to a levy allowance for the tax year.
The amount of the levy allowance is £15,000 (except where section 101 or 102 provides otherwise).
For the purposes of this section the “relevant percentage” is 0.5%.
A person has a pay bill for a tax year if, in the tax year—
the person is the secondary contributor in relation to payments of earnings to, or for the benefit of, one or more employed earners, and
in consequence, the person incurs liabilities to pay secondary Class 1 contributions.
The amount of the person's pay bill for the tax year is equal to the total amount of the earnings in respect of which the liabilities mentioned in subsection (1)(b) are incurred.
For the purposes of this section a person is treated as incurring, in respect of any earnings, any liabilities which the person would incur but for the condition in section 6(1)(b) of the Contributions and Benefits Act.
The Treasury may by regulations provide for persons specified in certificates in force under section 120(4) of the Social Security Contributions and Benefits Act 1992 (employment at sea: continental shelf operations) to be treated for the purposes of this section as the secondary contributor in relation to payments of earnings to which the certificate relates and as liable to pay secondary Class 1 contributions to which the certificate relates.
For the purposes of this section—
references to “payments of earnings” are to be interpreted as they would be interpreted for the purposes of determining liability to pay secondary Class 1 contributions under the Contributions and Benefits Act;
the amount of any earnings is to be calculated in the same manner and on the same basis as for the purpose of calculating the liabilities mentioned in subsection (1)(b).
In this section references to liability to pay secondary Class 1 contributions are to liability to pay secondary Class 1 contributions under Part 1 of the Contributions and Benefits Act (including a case where the amount of a liability to pay a secondary Class 1 contribution is £0).
Two or more companies which are not charities form a “company unit” for a tax year (and are the “members” of that unit) if—
they are connected with one another at the beginning of the tax year, and
each of them is entitled to a levy allowance for the tax year.
The members of a company unit must determine what amount of levy allowance each of them is to be entitled to for the tax year (and the determination must comply with subsections (3) and (4)). But see subsections (6) and (11).
A member's levy allowance for a tax year may be zero (but not a negative amount).
The total amount of the levy allowances to which the members of a company unit are entitled for a tax year must equal £15,000.
A determination made under subsection (2) (with respect to a tax year) cannot afterwards be altered by the members concerned (but this does not prevent the correction of a failure to comply with subsection (4)).
If subsection (8) applies—
HMRC must determine in accordance with subsection (7) what amount of levy allowance each of the relevant members (see subsection (8)(a)) of the unit concerned is to be entitled to for the tax year, and
accordingly subsection (2) is treated as never having applied in relation to that company unit and that tax year.
The determination is to be made by multiplying the amount of levy allowance set out in each relevant return (see subsection (8)(a)) by— where T is the total of the amounts of levy allowance set out in the relevant returns. The result is, in each case, the amount of the levy allowance to which the relevant member in question is entitled for the tax year (but amounts may be rounded up or down where appropriate provided that subsection (4) is complied with).
This subsection applies if—
HMRC is aware—
that two or more members of a company unit (“the relevant members”) have made apprenticeship levy returns (“the relevant returns”) on the basis mentioned in subsection (9), and
that those returns, together, imply that the total mentioned in subsection (4) is greater than £15,000,
HMRC has notified the relevant members in writing that HMRC is considering taking action under subsection (6), and
the remedial action specified in the notice has not been taken within the period specified in the notice.
The basis in question is that the member making the return is entitled to a levy allowance (whether or not of zero) for the tax year concerned.
If any member of the company unit mentioned in subsection (8)(a) is not a relevant member, that member is entitled to a levy allowance of zero for the tax year.
If subsection (13) applies—
HMRC must determine in accordance with subsection (12) what amount of levy allowance each of the members of the unit concerned is to be entitled to for the tax year, and
accordingly subsection (2) is treated as never having applied in relation to that company unit and that tax year.
Each member of the unit is to be entitled to a levy allowance for the tax year equal to— where N is the number of the members of the company unit for the tax year. Amounts determined in accordance with the formula in this subsection may be rounded up or down where appropriate provided that subsection (4) is complied with.
This subsection applies if—
the total amount paid by the members of a company unit in respect of apprenticeship levy for a tax year or any period in a tax year is less than the total of the amounts due and payable by them for the tax year or other period concerned,
either the members of the unit have made no apprenticeship levy returns for any period in the tax year concerned or the returns that have been made do not contain sufficient information to enable HMRC to determine how the whole of the £15,000 mentioned in subsection (4) is to be used by the members of the unit for the tax year,
HMRC has notified all the members of the unit in writing that HMRC is considering taking action under subsection (11), and
the remedial action specified in the notice has not been taken within the period specified in the notice.
Subsection (4) is to be taken into account in calculating the total of the amounts due and payable as mentioned in subsection (13)(a).
The Commissioners may by regulations provide that in circumstances specified in the regulations the members of a company unit may alter a determination made under subsection (2) (despite subsection (5)).
In this section “apprenticeship levy return” means a return under regulations under section 105(4).
Part 1 of Schedule 1 to the National Insurance Contributions Act 2014 (rules for determining whether companies are “connected” with one another) applies for the purposes of subsection (1) as it applies for the purposes of section 3(1) of that Act.
In this Part “company” has the meaning given by section 1121(1) of CTA 2010 and includes a limited liability partnership.
See section 102 for the meaning of “charity”.
Two or more charities form a “charities unit” for a tax year (and are the “members” of that unit) if—
they are connected with one another at the beginning of the tax year, and
each of them is entitled to a levy allowance for the tax year.
The members of a charities unit must determine what amount of levy allowance each of them is to be entitled to for the tax year (and the determination must comply with subsections (3) and (4)). But see subsections (6) and (11).
A member's levy allowance for a tax year may be zero (but not a negative amount).
The total amount of the levy allowances to which the members of a charities unit are entitled for a tax year must equal £15,000.
A determination made under subsection (2) (with respect to a tax year) cannot afterwards be altered by the members concerned (but this does not prevent the correction of a failure to comply with subsection (4)).
If subsection (8) applies—
HMRC must determine in accordance with subsection (7) what amount of levy allowance each of the relevant members (see subsection (8)(a)) of the unit concerned is to be entitled to for the tax year, and
accordingly subsection (2) is treated as never having applied in relation to that charities unit and that tax year.
The determination is to be made by multiplying the amount of levy allowance set out in each relevant return (see subsection (8)(a)) by— where T is the total of the amounts of levy allowance set out in the relevant returns. The result is, in each case, the amount of the levy allowance to which the relevant member in question is entitled for the tax year (but amounts may be rounded up or down where appropriate provided that subsection (4) is complied with).
This subsection applies if—
HMRC is aware—
that two or more members of a charities unit (“the relevant members”) have made apprenticeship levy returns (“the relevant returns”) on the basis mentioned in subsection (9), and
that those returns, together, imply that the total mentioned in subsection (4) is greater than £15,000,
HMRC has notified the relevant members in writing that HMRC is considering taking action under subsection (6), and
the remedial action specified in the notice has not been taken within the period specified in the notice.
The basis in question is that the member making the return is entitled to a levy allowance (whether or not of zero) for the tax year concerned.
If any member of the charities unit mentioned in subsection (8)(a) is not a relevant member, that member is entitled to a levy allowance of zero for the tax year.
If subsection (13) applies—
HMRC must determine in accordance with subsection (12) what amount of levy allowance each of the members of the unit concerned is to be entitled to for the tax year, and
accordingly subsection (2) is treated as never having applied in relation to that charities unit and that tax year.
Each member of the unit is to be entitled to a levy allowance for the tax year equal to— where N is the number of the members of the charities unit for the tax year. Amounts determined in accordance with the formula in this subsection may be rounded up or down where appropriate provided that subsection (4) is complied with.
This subsection applies if—
the total amount paid by the members of a charities unit in respect of apprenticeship levy for a tax year or any period in a tax year is less than the total of the amounts due and payable by them for the tax year or other period concerned,
either the members of the unit have made no apprenticeship levy returns for any period in the tax year concerned or the returns that have been made do not contain sufficient information to enable HMRC to determine how the whole of the £15,000 mentioned in subsection (4) is to be used by the members of the unit for the tax year,
HMRC has notified all the members of the unit in writing that HMRC is considering taking action under subsection (11), and
the remedial action specified in the notice has not been taken within the period specified in the notice.
Subsection (4) is to be taken into account in calculating the total of the amounts due and payable as mentioned in subsection (13)(a).
The Commissioners may by regulations provide that in circumstances specified in the regulations the members of a charities unit may alter a determination made under subsection (2) (despite subsection (5)).
In this section “apprenticeship levy return” means a return under regulations under section 105(4).
In this Part “charity” means—
a charity within the meaning of Part 1 of Schedule 6 to FA 2010;
the Trustees of the National Heritage Memorial Fund;
the Historic Buildings and Monuments Commission for England;
a registered club within the meaning of Chapter 9 of Part 13 of CTA 2010 (community amateur sports clubs).
Subsection (17) is subject to section 118(5).
See sections 118 and 119 for provision about the meaning of “connected” in subsection (1).
For the purposes of this section “avoidance arrangements” are arrangements the main purpose, or one of the main purposes, of which is to secure that a person—
benefits, or further benefits, from an entitlement to a levy allowance for a tax year, or
otherwise obtains an advantage in relation to apprenticeship levy.
Subsection (3) applies where, in consequence of avoidance arrangements within subsection (1)(a) or (b), a person incurs a liability to pay secondary Class 1 contributions in a particular tax year (as opposed to another tax year).
If the person would (apart from this subsection) obtain an advantage in relation to apprenticeship levy as a result of incurring the liability at the time mentioned in subsection (2), section 100 has effect as if the liability had been incurred when it would have been incurred but for the avoidance arrangements.
Subsection (6) applies where (apart from this section) a person (“P”)—
would be in a position to use or make greater use of a levy allowance for a tax year, in consequence of avoidance arrangements within subsection (1)(a), or
would otherwise obtain an advantage in relation to apprenticeship levy in consequence of avoidance arrangements within subsection (1)(a).
But subsection (6) only applies so far as the advantage in relation to apprenticeship levy cannot be counteracted under subsection (3).
P is not entitled to a levy allowance for the tax year.
In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
In this section a reference to “an advantage in relation to apprenticeship levy” includes a reference to—
repayment or increased repayment of apprenticeship levy,
avoidance or reduction of a charge, or an assessment, to the levy,
avoidance of a possible assessment to the levy,
deferral of a payment of, or advancement of a repayment of, the levy, and
avoidance of an obligation to account for the levy.
Sections 101 and 102 are to be ignored for the purpose of determining under subsection (4) what the position would be apart from this section.
In subsection (2) the reference to “a particular tax year” is to be read as including a reference to the period of 12 months beginning with 6 April 2016.
In section 318(1) of FA 2004 (disclosure of tax avoidance schemes: interpretation), in the definition of “tax”, after paragraph (d) insert—.
In section 206(3) of FA 2013 (taxes to which the general anti-abuse rule applies), after paragraph (da) insert—.
Part 4 of FA 2014 (follower notices and accelerated payments) is amended in accordance with subsections (4) and (5).
In section 200 (meaning of “relevant tax”), after paragraph (c) insert—.
In section 203 (meaning of “tax appeal”), after paragraph (e) insert—.
Part 5 of FA 2014 (promoters of tax avoidance schemes) is amended in accordance with subsections (7) and (8).
In section 253(6) (duty to notify the Commissioners: meaning of “tax return”), after paragraph (d) insert—.
In section 283(1) (interpretation), in the definition of “tax”, after paragraph (d) insert—.
The Commissioners may by regulations make provision about the assessment, payment, collection and recovery of apprenticeship levy.
Regulations under subsection (1) may include—
provision which applies, with or without modifications, provisions of PAYE regulations;
provision for combining any arrangements under the regulations with arrangements under PAYE regulations.
Regulations under subsection (1) may—
require payments to be made on account of apprenticeship levy;
determine periods (“tax periods”) by reference to which payments are to be made;
make provision about the times at which payments are to be made and methods of payment;
require the amounts payable by reference to tax periods to be calculated (and levy allowance to be taken into account) in the manner and on the basis determined by or under the regulations;
make provision for dealing with cases where such calculations lead to overpayment of levy (by repayment or otherwise);
make other provision about the recovery of overpayments of levy.
Regulations under subsection (1) may make provision requiring persons to make returns, including provision about—
the periods by reference to which returns are to be made,
the information to be included in returns,
timing, and
the form of, and method of making, returns.
Regulations under subsection (1) may—
authorise HMRC to assess to the best of their judgement amounts payable by a person in respect of apprenticeship levy;
make provision about the treatment of amounts so assessed, including provision for treating such amounts as apprenticeship levy payable by the person;
make provision about the process of assessments.
Regulations under subsection (1) may make, in relation to amounts of apprenticeship levy which have been repaid to a person and ought not to have been repaid, any provision which may be made in relation to apprenticeship levy payable by a person.
Where— any amount by which the repayment paid to the person ought not to have been increased is to be treated for the purposes of regulations made by virtue of subsection (6) as if it were an amount of apprenticeship levy repaid to the person which ought not to have been repaid.
a repayment of apprenticeship levy has been increased in accordance with section 102 of FA 2009 (repayment interest), and
the whole or part of the repayment has been paid to any person but ought not to have been paid to the person,
Regulations under subsection (1) may make provision for enabling the repayment or remission of interest under section 101 of FA 2009.
The provision that may be made under subsection (1) includes—
provision for the making of decisions (other than relevant assessments) by HMRC as to any matter required to be decided for the purposes of the regulations and for appeals against such decisions;
provision for appeals with respect to matters arising under the regulations which would otherwise not be the subject of an appeal;
provision for the way in which any matters provided for by the regulations are to be proved.
In subsection (9) “relevant assessment” means an assessment of amounts payable by a person in respect of apprenticeship levy.
Regulations under subsection (1) must not affect any right of appeal to the tribunal which a person would have apart from the regulations.
In this section (except where the context requires otherwise) references to payments are to payments of, or on account of, apprenticeship levy.
Regulations under section 105(1) may make corresponding provision for the recovery of amounts in respect of apprenticeship levy from persons other than the person liable to pay the amounts by virtue of section 99(3).
In subsection (1) “corresponding provision” means provision which corresponds to provision made by regulations under the Contributions and Benefits Act for secondary Class 1 contributions in respect of any earnings to be recovered from a person other than the secondary contributor.
Regulations under section 105(1) may make provision—
for authorising or requiring relevant service providers to supply to HMRC information about payments of apprenticeship levy with respect to which their service is provided, or any information the Commissioners may request about features of the service provided or to be provided with respect to particular payments of apprenticeship levy;
for requiring clients to provide relevant service providers with information about payments of apprenticeship levy;
for prohibiting or restricting the disclosure, otherwise than to HMRC, of information by a person to whom it was supplied pursuant to a requirement imposed under paragraph (b);
for conferring power on the Commissioners to specify by directions circumstances in which provision made by virtue of paragraph (a) or (b) is not to apply in relation to a payment;
for requiring relevant service providers to take steps for facilitating the meeting by clients of obligations imposed under paragraph (b);
for requiring compliance with any directions the Commissioners may give—
specifying, or further specifying, steps for the purposes of paragraph (e), or
specifying information that a person making payments of apprenticeship levy must provide about the method by which the payments are made.
Directions made under the regulations may make different provision for different cases or different classes of case.
In this section—
“investors” in relation to a qualifying transformer vehicle means holders of investments issued by the qualifying transformer vehicle; and for this purpose “investment” includes any asset, right or interest;
Sub-paragraph (2) applies at any particular time on or after 6 April 2016 in the case of an individual if— Part 4 of FA 2004 has effect in relation to the individual as if the standard lifetime allowance were the greater of the standard lifetime allowance and £1,250,000.
For the purposes of paragraph 3(a) there is benefit accrual in relation to the individual under an arrangement— For the purposes of sub-paragraphs (1)(b) and (c)(ii) and (5) whether there is an increase in the value of the individual’s rights under an arrangement (and its amount if there is) is to be determined— For the purposes of sub-paragraph (2)(b) “the benefits amount” is— where— LS is the lump sum to which the individual would, on the valuation assumptions, be entitled under the arrangement (otherwise than by commutation of pension), P is the annual rate of the pension which would, on the valuation assumptions, be payable to the individual under the arrangement, and RVF is the relevant valuation factor. Paragraph 14 of Schedule 36 to FA 2004 (when a relevant contribution is paid under an arrangement) applies for the purposes of sub-paragraph (1)(a) and (c)(i). Increases in the value of the individual’s rights under an arrangement are to be ignored for the purposes of sub-paragraph (1)(b) or (c)(ii) if in no tax year do they exceed the relevant percentage. The relevant percentage, in relation to a tax year, means— In sub-paragraph (6)(a)— In sub-paragraph (6) “the relevant statutory increase percentage”, in relation to a tax year, means the percentage increase in the value of the individual’s rights under the arrangement during the tax year so far as it is attributable solely to one or more of the following— Sub-paragraph (10) applies in relation to a tax year if— Sub-paragraph (6)(b)(i) applies as if it referred instead to the annual rate of the increase in the value of the rights during the tax year. For the purposes of sub-paragraph (9)(c) the 12 month period must end during the 12 month period preceding the month in which the increase in the value of the rights occurs.
Sub-paragraphs (2A) to (2C) of paragraph 12 of Schedule 36 to FA 2004 (“permitted circumstances”) apply for the purposes of paragraph 3(d).
To determine amount A— If this sub-paragraph is to be applied, amount A is— where— ARP is (subject to sub-paragraph (3)) an amount equal to— the annual rate at which any relevant existing pension was payable to the individual at the time immediately before the benefit crystallisation event occurred, or if more than one relevant existing pension was payable to the individual at that time, the sum of the annual rates at which each of the relevant existing pensions was so payable, and SLT is an amount equal to what the standard lifetime allowance was at the time the benefit crystallisation event occurred. Paragraph 20(4) of Schedule 36 to FA 2004 applies for the purposes of the definition of “ARP” in sub-paragraph (2) (and, for this purpose, in paragraph 20(4) any reference to “the time” is to be read as a reference to the time immediately before the benefit crystallisation event occurred). If the time immediately before the benefit crystallisation event occurred falls before 6 April 2015, in sub-paragraph (3) references to paragraph 20(4) are to be read as references to that provision as it had effect in relation to benefit crystallisation events occurring at the time immediately before the benefit crystallisation event occurred. If more than one benefit crystallisation event has occurred, in sub-paragraphs (2) to (4) references to the benefit crystallisation event are to be read as references to the first benefit crystallisation event. If this sub-paragraph is to be applied, amount A is— where ARP is (subject to sub-paragraph (7)) an amount equal to— the annual rate at which any relevant existing pension is payable to the individual at the end of 5 April 2016, or if more than one relevant existing pension is payable to the individual at the end of 5 April 2016, the sum of the annual rates at which each of the relevant existing pensions is so payable. Paragraph 20(4) of Schedule 36 to FA 2004 applies for the purposes of the definition of “ARP” in sub-paragraph (6) (and, for this purpose, in paragraph 20(4) any reference to “the time” is to be read as a reference to 5 April 2016). In this paragraph “relevant existing pension” means (subject to sub-paragraph (9)) a pension, annuity or right— If— the new scheme pension is also to be a “relevant existing pension” (including for the purposes of this sub-paragraph).
To determine amount D— Amount D is the sum of the untested portions determined under sub-paragraph (1)(b)(ii).
Expressions used in Part 1, 2 or 3 of this Schedule, and in Part 4 of FA 2004 (pension schemes), have the same meaning in that Part of this Schedule as in that Part of that Act. In particular, references to a relieved non-UK pension scheme or a relieved member of such a scheme are to be read in accordance with paragraphs 13(3) and (4) and 18 of Schedule 34 to FA 2004 (application of lifetime allowance charge provisions to members of overseas pension schemes).
A person is not liable to a penalty under paragraph 1 in respect of conduct for which the person—
has been convicted of an offence, or
has been assessed to a penalty under any provision other than paragraph 1.
The following provisions are excluded from the application of Schedule 36 to FA 2008 for the purpose mentioned in paragraph 18(1)—
paragraph 24 (exception for auditors),
paragraph 25 (exception for tax advisers),
paragraphs 26 and 27 (provisions supplementary to paragraphs 24 and 25),
paragraphs 50 and 51 (tax-related penalty).
In this Schedule— Terms used in relation to a penalty imposed under Schedule 24 to FA 2007, Schedule 41 to FA 2008 or Schedule 55 to FA 2009 have the same meaning as in the Schedule under which the penalty was imposed. References in this Schedule to capital gains tax do not include capital gains tax payable by companies in respect of chargeable gains accruing to them to the extent that those gains are NRCGT gains in respect of which the companies are chargeable to capital gains tax under section 14D or 188D of TCGA 1992 (see section 1(2A)(b) of that Act).
In the application of Schedule 36 to FA 2008 for the purpose mentioned in paragraph 18(1), paragraph 10A (power to inspect business premises of involved third parties) has effect as if the reference in sub-paragraph (1) to the position of any person or class of persons as regards a relevant tax were a reference to the position of a relevant person as regards liability for a penalty under paragraph 1.
“payment of apprenticeship levy” includes a payment on account of apprenticeship levy;
The general rule is that no assessment under regulations under section 105 may be made more than 4 years after the end of the tax year to which it relates.
An assessment on a person in a case of loss of apprenticeship levy brought about carelessly by the person may be made at any time not more than 6 years after the end of the tax year to which it relates.
An assessment on a person in a case falling within subsection (4) may be made at any time not more than 20 years after the end of the tax year to which it relates.
A case falls within this subsection if it involves a loss of apprenticeship levy—
brought about deliberately by the person,
attributable to arrangements in respect of which the person has failed to comply with an obligation under section 309, 310 or 313 of FA 2004 (obligation of parties to tax avoidance schemes to provide information to HMRC), or
attributable to arrangements which were expected to give rise to a tax advantage in respect of which the person was under an obligation to notify the Commissioners under section 253 of FA 2014 (duty to notify Commissioners of promoter reference number) but failed to do so.
An assessment made by virtue of section 105(6) (amounts of levy repaid which ought not to have been repaid etc) is not out of time as a result of subsection (1) if it is made before the end of the tax year following that in which the amount assessed was repaid or paid (as the case may be).
Subsections (2), (3) and (5) do not limit one another's application.
An objection to the making of an assessment on the ground that the time limit for making it has expired may only be made on an appeal against the assessment.
In subsections (2) and (4) references to a loss brought about by a person include a loss brought about by another person acting on behalf of that person.
A person (“P”) must not—
make from any payment of earnings any deduction in respect of apprenticeship levy for which P (or any other person) is liable,
otherwise recover the cost, or any part of the cost, of P's (or any other person's) liability to apprenticeship levy from any person who is or has been a relevant earner, or
enter into any agreement with any person to do anything prohibited by paragraph (a) or (b).
In this section “relevant earner” means an earner in respect of whom P is or has been liable to pay any secondary Class 1 contributions under Part 1 of the Contributions and Benefits Act.
The following provisions of Part 6 of TMA 1970 apply in relation to apprenticeship levy as they apply in relation to income tax—
section 60 (issue of demand notes and receipts);
section 61 (distraint by collectors: Northern Ireland);
sections 65 to 68 (court proceedings).
See also Chapter 5 of Part 7 of FA 2008 (which makes general provision about payment and enforcement).
The Commissioners may by regulations require persons—
to keep for purposes connected with apprenticeship levy records of specified matters, and
to preserve the records for a specified period.
A duty under regulations under this section to preserve records may be discharged—
by preserving them in any form and by any means, or
by preserving the information contained in them in any form and by any means, subject to any conditions or exceptions specified in writing by the Commissioners.
In this section “specified” means specified or described in the regulations.
In Schedule 36 to FA 2008 (information and inspection powers), in paragraph 63(1), after paragraph (ca) insert—.
Schedule 24 to FA 2007 (penalties for errors) is amended in accordance with subsections (2) to (4).
Apprenticeship levy Return under regulations under section 105 of FA 2016.
In paragraph 13—
in sub-paragraph (1ZA), after “CIS returns,” insert “ or for two or more penalties relating to apprenticeship levy returns, ”;
“an apprenticeship levy return” means a return under regulations under section 105 of FA 2016;
In paragraph 21C, after “capital gains tax)” insert “ and amounts payable on account of apprenticeship levy ”.
Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended in accordance with subsections (6) to (8).
4A Apprenticeship levy Return under regulations under section 105 of FA 2016
In paragraph 6B, after “item 4” insert “ or 4A ”.
In the italic heading before paragraph 6B, at the end insert “ and apprenticeship levy ”.
Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended in accordance with subsections (10) to (15).
4A Apprenticeship levy Amount payable under regulations under section 105 of FA 2016 The date determined by or under regulations under section 105 of FA 2016
In paragraph 3(1)—
in paragraph (b) after “within” insert “ item 4A or ”;
after paragraph (c) insert—
In paragraph 5(1), for “or 4” substitute “ , 4 or 4A ”.
In paragraph 5(2), for “or (c)” substitute “ , (c) or (ca). ”
In paragraph 6(2), after paragraph (b) insert—.
In the italic heading before paragraph 5, at the end insert “ etc. ”.
The amendments made by subsections (1) to (4) of this section come into force in accordance with provision made by the Treasury by regulations.
In subsections (2) and (4) of section 106 of FA 2009 (penalties for failure to make returns: commencement etc) references to Schedule 55 to that Act have effect as references to that Schedule as amended by subsections (5) to (8) of this section.
Schedule 56 to FA 2009, as amended by this section, is taken to come into force for the purposes of apprenticeship levy on the date on which this Act is passed.
An appeal may be brought against an assessment of apprenticeship levy or other amounts under regulations under section 105.
Notice of appeal must be given—
in writing,
within the period of 30 days beginning with the date on which notice of the assessment was given,
to the officer of Revenue and Customs by whom notice of the assessment was given.
Part 5 of TMA 1970 (appeals and other proceedings) applies in relation to an appeal under this section as it applies in relation to an appeal against an assessment to income tax.
In Schedule 38 to FA 2012 (tax agents: dishonest conduct), in paragraph 37(1), after paragraph (l) insert—.
In section 1 of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions), in subsection (1), after “diverted profits tax,” insert “ the apprenticeship levy, ”.
This Part binds the Crown.
Two charities are connected with one another for the purposes of section 102(1) if—
they are connected with one another in accordance with section 993 of ITA 2007 (meaning of “connected persons”), and
their purposes and activities are the same or substantially similar.
In the application of section 993 of ITA 2007 for the purposes of subsection (1)(a)—
a charity which is a trust is to be treated as if it were a company (and accordingly a person), including in this subsection;
a charity which is a trust has “control” of another person if the trustees (in their capacity as trustees of the charity) have, or any of them has, control of the person;
a person (other than a charity regulator) has “control” of a charity which is a trust if—
the person is a trustee of the charity and some or all of the powers of the trustees of the charity could be exercised by the person acting alone or by the person acting together with any other persons who are trustees of the charity and who are connected with the person,
the person, alone or together with other persons, has power to appoint or remove a trustee of the charity, or
the person, alone or together with other persons, has any power of approval or direction in relation to the carrying out by the trustees of any of their functions.
For the purposes of section 102(1) a charity which is a trust is also connected with another charity which is a trust if at least half of the trustees of one of the charities are— and the charities' purposes and activities are the same or substantially similar.
trustees of the other charity,
persons who are connected with persons who are trustees of the other charity, or
a combination of both,
In determining if a person is connected with another person for the purposes of subsection (2)(c)(i) or (3)(b), apply section 993 of ITA 2007 with the omission of subsection (3) of that section (and without the modifications in subsection (2) above).
If a charity (“A”) controls a company (“B”) which, apart from this subsection, would not be a charity—
B is to be treated as if it were a charity for the purposes of this Part, and
A and B are connected with one another for the purposes of section 102(1).
In subsection (5) “control” has the same meaning as in Part 10 of CTA 2010 (see sections 450 and 451 of that Act) (and a limited liability partnership is to be treated as a company for the purposes of that Part as applied by this subsection).
For this purpose, where under section 450 of that Act “C” is a limited liability partnership, subsection (3) of that section has effect as if before (a) there were inserted—.
This section applies if—
a charity (“A”) is connected with another charity (“B”) for the purposes of section 102(1), and
B is connected with another charity (“C”) for the purposes of section 102(1).
A and C are also connected with one another for the purposes of section 102(1) (if that would not otherwise be the case).
In subsection (1)—
in paragraph (a) the reference to a charity being connected with another charity for the purposes of section 102(1) is to that charity being so connected by virtue of section 118 or this section, and
in paragraph (b) the reference to a charity being connected with another charity for the purposes of section 102(1) is to that charity being so connected by virtue of section 118.
In this Part (except where the contrary is indicated, expressly or by implication), expressions which are also used in Part 1 of the Contributions and Benefits Act have the same meaning as in that Part.
In this Part—
“purchaser” has the same meaning as in Part 4 of that Act (see section 43(4) of that Act);
CTA 2010 is further amended as follows.
After section 996 of CTA 2010 (miscellaneous provisions: use of different accounting periods within a group of companies) insert—
Schedule 2 to ITEPA 2003 (share incentive plans) is amended as follows. Sub-paragraph (A1) is also subject to Part 10A of this Schedule (disqualifying events). After Part 10 insert— The amendments made by this paragraph have effect in relation to disqualifying events occurring on or after the day on which this Act is passed.
There is a protection-cessation event if—
there is benefit accrual in relation to the individual under an arrangement under a registered pension scheme,
there is an impermissible transfer into any arrangement under a registered pension scheme relating to the individual,
a transfer of sums or assets held for the purposes of, or representing accrued rights under, any such arrangement is made that is not a permitted transfer, or
an arrangement relating to the individual is made under a registered pension scheme otherwise than in permitted circumstances.
Sub-paragraphs (7) to (8B) of paragraph 12 of Schedule 36 to FA 2004 (when there is a permitted transfer) apply for the purposes of paragraph 3(c).
To determine amount B— Amount B is the sum of the crystallised amounts determined under sub-paragraph (1)(b) as adjusted under sub-paragraph (1)(c).
Where— the individual may appeal against the decision on the application. Where a reference number issued in respect of an individual for the purposes of paragraph 1(2) or 9(2) is withdrawn, the individual may appeal against the withdrawal. Where a reference number issued in respect of an individual for the purposes of paragraph 1(2) or 9(2) is withdrawn in reliance on paragraph 15(3)(d), the individual may appeal against the time specified (in the notice of the withdrawal) as the effective time of the withdrawal. Where an appeal under sub-paragraph (1) is notified to the tribunal, the tribunal— Where an appeal under sub-paragraph (2) is notified to the tribunal, the tribunal— Where an appeal under sub-paragraph (3) is notified to the tribunal, the tribunal must decide whether it was just and reasonable to specify the particular time specified and— Notice of an appeal under this paragraph must be given to Her Majesty’s Revenue and Customs before the end of 30 days beginning with the date on which notice under paragraph 14(4) or 15(4) (as the case may be) is given. In this paragraph “the tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal. The references in sub-paragraph (1) and paragraph 17(3)(b)(ii) to an application being unsuccessful do not include a case where an application for a reference number for the purposes of paragraph 1(2) or 9(2) is successful on a dormant basis (see paragraph 14(7) and (8)).
If an individual dies—
anything which could have been done under or by virtue of this Part of this Schedule by the individual may be done by the individual’s personal representatives,
paragraph 14(3)(d)(ii) has effect in relation to an application made in respect of the individual after the individual’s death as if it also required a valid application to contain the individual’s date of death, and
any notice or reasons given under paragraph 15(4) after the individual’s death are to be given to the individual’s personal representatives.
The Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567) are amended in accordance with paragraphs 23 to 26. The amendments made by those paragraphs are to be treated as having been made by the Commissioners under such of the powers cited in the instrument containing the Regulations as are applicable.
A standard offshore tax penalty is a penalty that falls within sub-paragraph (2), (3) or (4). A penalty falls within this sub-paragraph if— A penalty falls within this sub-paragraph if— A penalty falls within this sub-paragraph if— In a case where the inaccuracy, failure or withholding of information for which a penalty is imposed involves both an offshore matter or an offshore transfer and a domestic matter, the standard offshore tax penalty is only that part of the penalty that involves the offshore matter or offshore transfer. In a case where the tax at stake in relation to a penalty includes a tax other than capital gains tax, inheritance tax or asset-based income tax, the standard offshore tax penalty is only that part of the penalty which relates to capital gains tax, inheritance tax or asset-based income tax. “Asset-based income tax” means income tax that is charged under any of the provisions mentioned in column 1 of the table in paragraph 13(2).
The offshore PLR, in relation to a tax year, is the total of— by reference to which all of the standard offshore tax penalties imposed on P in relation to the tax year are assessed. Sub-paragraphs (3) to (5) apply where— In this paragraph, such a penalty is referred to as a “combined penalty”. Only the potential lost revenue or liability to tax relating to the standard offshore tax penalty is to be taken into account in calculating the offshore PLR. Where the calculation of the potential lost revenue or liability to tax by reference to which a combined penalty is assessed depends on the order in which income or gains are treated as having been taxed, for the purposes of calculating the offshore PLR— In a case where it cannot be determined— for the purposes of calculating the offshore PLR, the potential lost revenue or liability to tax relating to the standard offshore tax penalty is to be taken to be such share of the total potential lost revenue or liability to tax by reference to which the combined penalty was calculated as is just and reasonable. Sub-paragraph (7) applies where— Where the calculation of the potential lost revenue or liability to tax by reference to which the penalty is assessed depends on the order in which income or gains are treated as having been taxed, for the purposes of calculating the offshore PLR, income and gains relating to asset-based income tax are to be taken to have been taxed before income and gains relating to capital gains tax.
HMRC must reduce the standard amount of the asset-based penalty where P does all of the following things— A reduction under sub-paragraph (1) must reflect the quality of the disclosure, valuation and information provided (and for these purposes “quality” includes timing, nature and extent). The Treasury must make regulations setting out the maximum amount of the penalty reduction under sub-paragraph (1). The maximum amount may differ according to whether the case involves only unprompted disclosures or involves prompted disclosures. A case involves only unprompted disclosures where— A case involves prompted disclosures where any of the standard offshore tax penalties to which the asset-based penalty relates was reduced on the basis of a prompted disclosure. Regulations under sub-paragraph (3) are to be made by statutory instrument. A statutory instrument containing regulations under sub-paragraph (3) is subject to annulment in pursuance of a resolution of the House of Commons. Regulations under sub-paragraph (3)—
This paragraph applies where the principal tax at stake is capital gains tax. The asset is the asset that is the subject of the disposal (or deemed disposal) on or by reference to which the capital gains tax to which the standard offshore penalty relates is charged. For the purposes of calculating the amount of the asset-based penalty, the value of the asset is to be taken to be the consideration for the disposal of the asset that would be used in the computation of the gain under TCGA 1992 (other than in a case where sub-paragraph (4) applies). In a case where the disposal on or by reference to which the capital gains tax is charged is a part disposal of an asset, the asset-based penalty is to be calculated by reference to the full market value of the asset immediately before the part disposal took place. Terms used in this paragraph have the same meaning as in TCGA 1992.
This paragraph applies where an asset-based penalty is chargeable in relation to an asset that is jointly held by P and another person (A). The value of the asset is to be taken to be the value of P’s share of the asset. In a case where P and A— the asset is to be taken to be jointly owned by P and A in equal shares, unless it appears to HMRC that this is not the case.
Section 279F (ring fence profits: related 51% group company) is amended as follows. In subsection (7)(c) (conditions to be met by a company's dividend income in order for company to be a passive company), in sub-paragraph (ii) (dividends must be franked investment income) for “franked investment income” substitute “ exempt ABGH distributions ”. After subsection (9) insert—
In regulation 2(1) (interpretation)—
after the entry for “fixed protection 2014” insert—, and
after the entry for “individual protection 2014” insert—.
Section 279G (ring fence profits: meaning of “augmented profits”) is amended as follows. In subsection (1)(b) (franked investment income is part of augmented profits unless excluded)— In subsection (3) (exclusion of franked investment income received from certain subsidiaries etc), for “franked investment income” substitute “ exempt ABGH distribution ”. After subsection (4) insert—
In the table in regulation 3(1) (provision of event reports by scheme administrators to HM Revenue and Customs), the entry for reportable event 6 (report where benefit crystallisation event occurs in relation to member of scheme) is amended as follows. In column 1 of the entry, in paragraph (b)— In column 2 of the entry— In the heading of the entry, for the words after “Benefit crystallisation events and” substitute “non-standard lifetime allowances”.
For section 463(7) (loan to trustees of settlement which has ended: amount on which debtor taxed when all or part of loan released or written off) substitute—
Regulation 11 (information provided to scheme administrator by member intending to rely on transitional protection in connection with lifetime allowance) is amended as follows. In paragraph (1)— After paragraph (2) insert— In the heading—
Section 549 (distributions: supplementary) is amended as follows. Omit subsection (2) (which excludes entitlement to tax credits). In subsection (2A) (which disapplies sections 409 to 414 of ITTOIA 2005), for “414” substitute “ 413A ”.
After regulation 14B insert—
Section 751 (interpretation of Part 15 (transactions in securities)) is amended as follows. The existing text becomes subsection (1). In that subsection, in the definition of “dividends”, omit “qualifying”. After that subsection insert—
In consequence of paragraph 24(4), in each of— omit regulation 4(2)(a).
the Registered Pension Schemes (Provision of Information) (Amendment) Regulations 2013 (S.I. 2013/1742), and
the Registered Pension Schemes (Provision of Information) (Amendment) Regulations 2014 (S.I. 2014/1843),
Omit section 814D(8) (which excludes entitlement to tax credits).
Omit section 997(5) (which introduces sections 1109 to 1111).
In sections 1026(1)(b) and 1027(2)(b) (cases where amount paid up in respect of bonus shares does not fall to be treated as a qualifying distribution) omit “qualifying”.
Section 1070 (distributions by company carrying on mutual business) is amended as follows. In subsection (2) (provisions about distributions apply to company's distributions only where made out of taxed profits or franked investment income), for paragraph (b) (franked investment income) substitute— After subsection (5) insert—
Section 1071 (company not carrying on business) is amended as follows. In subsection (5) (provisions about distributions apply to company's distributions only where made out of taxed profits or franked investment income), for paragraph (b) (franked investment income) substitute— After subsection (5) insert—
Section 1100 (qualifying distribution: right to request a statement) is amended as follows. In subsection (1) (requests for statement)— After subsection (4) insert— Omit subsections (2) and (5) (interpretation of subsection (1)(b)). In subsection (7) (section to be read with section 396A(2) of ITTOIA 2005)— In the heading, for “Qualifying” substitute “ Certain ”.
Section 1101 (non-qualifying distributions etc: returns and information) is amended as follows. In subsection (1) (duty to make return), for “which is not a qualifying distribution” substitute “ to which section 1100 does not apply ”. In subsection (4) (duty to make return where not clear whether distribution is non-qualifying), for “which is not a qualifying distribution” substitute “ to which section 1100 does not apply ”. In the heading, and in the heading of section 1102, for “Non-qualifying” substitute “ Other ”.
In section 1103 (regulations about information about non-qualifying distributions)—
in subsection (2) (purpose for which sections 1101 and 1102 may be rewritten), for “which are not qualifying distributions” substitute “ to which section 1100 does not apply ”,
in subsection (4) (special arrangements about matters specified in subsection (5)), for “matters” substitute “ matter ”, and
in subsection (5)—
for “Those matters are” substitute “ That matter is ”, and
omit paragraph (b) (tax credits), and the “and” preceding it.
Section 1106 (interpretation of sections 1104 and 1105) is amended as follows. In subsection (4) (meaning of “tax certificate”)— Omit subsections (5) and (6) (interpretation of subsection (4)(c)).
Omit sections 1110 and 1111 (recovery of overpaid tax credits etc).
Section 1115 (meaning of “new consideration” in Part 23) is amended as follows. In subsections (5)(a) and (6)(b) for “qualifying” substitute “ non-CD ”. After subsection (6) insert—
In section 1119 (definitions for the purposes of the Corporation Tax Acts) omit the entries for “franked investment income”, “qualifying distribution” and “tax credit”.
Omit section 1126 (meaning of “franked investment income”).
Omit section 1136 (meaning of “qualifying distribution”).
Omit section 1139(4) (“relief” includes tax credit).
In Schedule 2 (transitionals and savings etc) omit paragraph 106(1) (operation of sections 1026 and 1027 in relation to share capital issued before 7 April 1973).
In Schedule 4 (index of defined expressions) omit the entries for “franked investment income”, “qualifying distribution” and “tax credit”.
“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.
In Schedule 54A to FA 2009 (which is prospectively inserted by F(No. 3)A 2010 and contains provision about the recovery of certain amounts of interest paid by HMRC), in paragraph 2—
in sub-paragraph (2), omit the “or” at the end of paragraph (g) and after paragraph (h) insert , or;
in sub-paragraph (4), for “(h)” substitute “(i)”.
Sub-paragraphs (2) and (3) apply where— H1 is to be treated as having been given a warning notice on the day on which the warning notice was given to B1. A warning notice treated as given under sub-paragraph (2) is valid whether or not, on the day mentioned in that sub-paragraph, H1 was the head of a qualifying UK group that fell within this Part. Sub-paragraphs (5) to (7) apply where— H2 is to be treated as having been given a special measures notice on the day on which the special measures notice was given to B2. A special measures notice treated as given under sub-paragraph (5) is valid whether or not, on the day mentioned in that sub-paragraph, H2 was the head of a qualifying UK group that fell within this Part. Paragraph 47(1) does not by virtue of sub-paragraphs (5) and (6) of this paragraph apply to an inaccuracy in a document given to HMRC by or on behalf of a person— Sub-paragraphs (9) and (10) apply where— H3 is to be treated as having been given a confirmation notice on the day on which the confirmation notice was given to B3. A confirmation notice treated as given under sub-paragraph (9) is valid whether or not, on the day mentioned in that sub-paragraph, H3 was the head of a qualifying UK group that fell within this Part. The Treasury may by regulations make provision for warning notices, special measures notices and confirmation notices to be treated as having been given to relevant bodies in other circumstances described in the regulations. Regulations under this paragraph may, in particular—
A UK sub-group of a foreign group falls within this Part if— Paragraphs 36 to 40 apply in relation to a UK sub-group as they apply in relation to a UK group. Paragraphs 41 to 45 apply in relation to the head of a UK sub-group of a foreign group that is a qualifying group at the material time as they apply in relation to the head of a UK group. In the application of paragraph 41 in the case of a UK sub-group, sub-paragraph (4) has effect in relation to a UK sub-group as if for paragraphs (b) and (c) there were substituted— As applied by this paragraph, paragraphs 36 to 45 have effect as if references to a UK group (including in references to the head of a UK group or members of a UK group) were references to a UK sub-group. In paragraphs 40, 41, 46, 47 and 49, references to a group (including in references to the head of a group or members of a group) include a UK sub-group. In paragraph 46, references to the head of a UK group include the head of a UK sub-group.
In this Part “designated HMRC officer” means an officer of Revenue and Customs who has been designated by the Commissioners for Her Majesty’s Revenue and Customs for the purposes of this Part.
Regulations under this Part—
may make different provision for different purposes;
may include incidental, consequential, supplementary or transitional provision.
Regulations under this Part are to be made by statutory instrument.
A statutory instrument containing regulations under this Part is subject to annulment in pursuance of a resolution of the House of Commons.
Subsection (3) does not apply to a statutory instrument containing only regulations under section 113(16).
In Part 2 of VATA 1994 (reliefs, exemptions and repayments), after section 33D insert—
Section 48 of VATA 1994 (VAT representatives) is amended in accordance with subsections (2) to (11).
In the heading, at the end insert “ and security ”.
In subsection (1)—
for “Where” substitute “ Subsection (1ZA) applies where ”,
in paragraph (c) after “residence” insert “ or permanent address ”, and
omit the words after paragraph (c).
After subsection (1) insert—
In subsection (1B) for paragraphs (a) and (b) substitute—.
In subsection (2)—
in paragraph (a), for the words from “required” to “VAT” substitute “ given a direction under subsection (1ZA) ”,
in paragraph (b) for “that subsection” substitute “ subsection (1) ”, and
in the words after paragraph (b), for “another” substitute “ a UK-established ”.
In subsection (2A) for “(1)” substitute “ (1ZA) ”.
In subsection (4)—
omit the “and” at the end of paragraph (a), and
after paragraph (b) insert—
In subsection (7) for the words from the beginning to the first “him” substitute “ The Commissioners may require a person in relation to whom the conditions specified in paragraphs (a), (b) and (c) of subsection (1) are satisfied ”.
After subsection (7A) insert—
After subsection (8) insert—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VATA 1994 is amended in accordance with subsections (2) to (4).
After section 77A insert—
In section 83(1) (appeals) after paragraph (ra) insert—.
In section 84 (further provision relating to appeals)—
in subsection (3) after “(ra)” insert “ , (rb) ”, and
in subsection (5) after “83(1)(p)” insert “ or (rb) ”.
In Schedule 6 to FA 2010 (charities etc), in paragraph 2(2) (jurisdiction condition: meaning of “a relevant UK court”), after paragraph (c) (and on a new line) insert “ (and, for enactments relating to value added tax, includes the High Court of the Isle of Man). ”
VATA 1994 is amended as follows.
In Schedule 7A (reduced rate)—
in Part 1 (index), omit the entry relating to women's sanitary products;
in Part 2 (the Groups), omit Group 4 (women's sanitary products).
Women's sanitary products Group 19
In Schedule 8, in Part 2 (the Groups), after Group 18 insert—
The amendments made by this section have effect in relation to supplies made, and acquisitions and importations taking place, on or after such day as the Treasury may by regulations made by statutory instrument appoint.
The date appointed under subsection (5) must not be after the later of—
1 April 2017, and
the earliest date that may be appointed consistently with the United Kingdom's EU obligations.
Section 55 of FA 2003 (general rules on calculating the amount of stamp duty land tax chargeable) is amended in accordance with subsections (2) to (7).
In subsection (1) for “, (1C) and (2)” substitute “ and (1C) ”.
In subsection (1B)—
omit the words from “the relevant land” to “and”,
in Step 1—
for “Table A” substitute “ the appropriate table ”,
for “that Table” substitute “ the appropriate table ”,
at the end insert—“The “appropriate table” is— , and
Relevant consideration Percentage So much as does not exceed £150,000 0% So much as exceeds £150,000 but does not exceed £250,000 2% The remainder (if any) 5%
In subsection (1C)—
omit the words from “the relevant land” to “and” (in the first place it occurs),
in Step 1—
for “Table A” substitute “ the appropriate table ”,
for “that Table” substitute “ the appropriate table ”,
at the end insert—“The “appropriate table” is—
Omit subsection (2).
In subsection (3)—
in the words before paragraph (a), for “subsections (1B) and (2)” substitute “ subsection (1B) ”, and
in paragraph (b) omit “, subject as follows”.
In subsection (4)—
in the words before paragraph (a), for the words from “subsections (1C)” to “linked transactions” substitute “ subsection (1C) ”, and
in paragraph (a) for “those” substitute “ the linked ”.
Schedule 5 to FA 2003 (rules on calculating the amount of stamp duty land tax chargeable in respect of transactions for which the consideration consists of or includes rent) is amended in accordance with subsections (9) to (11).
Over £150,000 but not over £5 million 1% Over £5 million 2%
In paragraph 9 (tax chargeable in respect of consideration other than rent: general), in sub-paragraph (1), omit “(but see paragraph 9A)”.
Omit paragraph 9A (calculation of tax chargeable in respect of consideration other than rent: 0% band) and the cross-heading preceding it.
The amendments made by this section have effect in relation to any land transaction of which the effective date is, or is after, 17 March 2016.
But those amendments do not have effect in relation to a transaction if the purchaser so elects and either—
the transaction is effected in pursuance of a contract entered into and substantially performed before 17 March 2016, or
the transaction is effected in pursuance of a contract entered into before that date and is not excluded by subsection (15).
An election under subsection (13)—
must be included in the land transaction return made in respect of the transaction or in an amendment of that return, and
must comply with any requirements specified by the Commissioners for Her Majesty's Revenue and Customs as to its form or the manner of its inclusion.
A transaction effected in pursuance of a contract entered into before 17 March 2016 is excluded by this subsection if—
there is any variation of the contract, or assignment of rights under the contract, on or after 17 March 2016,
the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
on or after that date there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
In this section—
“charity” has the meaning given by section 102(17) and (18);
TMA 1970 is amended as follows. In section 8(1AA)(b) (payable income tax is chargeable amount less tax deducted at source and tax credits) omit the words after “source”. In section 8A(1AA)(b) (payable income tax is chargeable amount less tax deducted at source and tax credits) omit the words after “source”. In section 9(1) (self-assessment)— In section 12AA(1A)(b) (partner's payable income tax is chargeable amount less tax deducted at source and tax credits) omit the words after “source”. In section 12AB (partnership statement in partnership return)— In section 12B(4A)(a)(i) (statements themselves must be preserved if of amount of qualifying distribution and tax credit), after “amount” insert “ of distribution, formerly amount ”. In section 59A(8)(b) (amounts included in annual total of deductions at source) omit “or are tax credits to which section 397(1) or 397A(1) of ITTOIA 2005 applies,”. In section 59B (payment of income tax and capital gains tax)— Omit section 87A(5) (interest on assessments under section 1110 of CTA 2010 on overpaid tax credits etc). In section 98 (special returns), in the first column of the table omit the entry for section 1109 of CTA 2010.
After section 306A of ITEPA 2003 (exemption for carers) insert—
In Schedule 2 to ITEPA 2003 (share incentive plans), Part 10 (notification of plans etc) is amended as follows. Sub-paragraph (5) does not apply if the company satisfies HMRC (or, on an appeal under paragraph 81K, the tribunal) that there is a reasonable excuse for failing to give notice on or before the initial notification deadline. Paragraph 81C(9) (what constitutes a reasonable excuse) applies for the purposes of sub-paragraph (5A). Where HMRC are required under sub-paragraph (5A) to consider whether there was a reasonable excuse, HMRC must notify the company of their decision within the period of 45 days beginning with the day on which HMRC received the company’s request to consider the excuse. Where HMRC are required to notify the company as specified in sub-paragraph (5C) but do not do so— In paragraph 81K (appeals)— The amendments made by this paragraph have effect in relation to notices given under paragraph 81A of Schedule 2 to ITEPA 2003 on or after 6 April 2016.
In section 238A of TCGA 1992 (share schemes and share incentives), in subsection (2), omit paragraph (d) and the preceding “and”. In Schedule 7D to TCGA 1992 (share schemes and share incentives), omit Part 4. In section 527 of ITEPA 2003 (enterprise management incentives: qualifying options), in subsection (3)— The amendments made by this paragraph do not affect—
CTA 2009 is amended as follows.
In section 20AAA of HODA 1979 (mixing of rebated oil), in subsection (4)(a), for “section 6A(1A)(c)” substitute “section 6(1A)(c)”.
In this Schedule “tax” includes any of the following taxes—
income tax,
corporation tax, including any amount chargeable as if it were corporation tax or treated as if it were corporation tax,
capital gains tax,
petroleum revenue tax,
diverted profits tax,
apprenticeship levy,
inheritance tax,
stamp duty land tax,
annual tax on enveloped dwellings,
VAT, and
national insurance contributions.
In relation to taxes other than VAT, “tax advantage” includes—
relief or increased relief from tax,
repayment or increased repayment of tax,
receipt, or advancement of a receipt, of a tax credit,
avoidance or reduction of a charge to tax, an assessment of tax or a liability to pay tax,
avoidance of a possible assessment to tax or liability to pay tax,
deferral of a payment of tax or advancement of a repayment of tax, and
avoidance of an obligation to deduct or account for tax.
A person “fails to comply” with any provision mentioned in paragraph 8(1) or 9(a) if and only if any of the conditions in sub-paragraphs (2) to (4) is met. The condition in this sub-paragraph is that— The condition in this sub-paragraph is that— The condition in this sub-paragraph is that the person admitted in writing to HMRC that the person has failed to comply with the provision concerned. In this paragraph “the appeal period” means— In this paragraph “the tribunal” means the First-tier tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.
Condition B is that (in a case not falling within Condition A above) a follower notice has been given to P by reference to the arrangements (and not withdrawn) and— In sub-paragraph (1) the reference to giving a follower notice to P includes a reference to giving a partnership follower notice in respect of a partnership return in relation to which P is a relevant partner (as defined in paragraph 2(5) of Schedule 31 to FA 2014). For the purposes of this paragraph it does not matter whether the denied advantage has been dealt with— In this paragraph “the denied advantage” has the same meaning as in Chapter 2 of Part 4 of FA 2014 (see section 208(3) of and paragraph 4(3) of Schedule 31 to that Act). For the purposes of this paragraph the counteraction of a tax advantage is “final” when the adjustments made to effect the counteraction, and any amounts arising as a result of those adjustments, can no longer be varied, on appeal or otherwise. In this Schedule “follower notice” means a follower notice under Chapter 2 of Part 4 of FA 2014. For the purposes of this paragraph a partnership follower notice is given “in respect of” the partnership return mentioned in paragraph (a) or (b) of paragraph 2(2) of Schedule 31 to FA 2014.
Condition E is that the arrangements are disclosable VAT arrangements to which P is a party and— For the purposes of this paragraph the arrangements are “counteracted” if— For the purposes of this paragraph a counteraction is “final” when the assessment, adjustments or action in question, and any amounts arising from the assessment, adjustments or action, can no longer be varied, on appeal or otherwise. For the purposes of sub-paragraph (1) the time when it falls to be determined whether or not the arrangements are disclosable VAT arrangements is when the counteraction becomes final. The following are “taxpayer emendations” for the purposes of sub-paragraph (2)— The conditions are that the disclosure—
HMRC must give a person a written notice (a “restriction of relief notice”) if— The conditions are— In sub-paragraph (2)(c)— A restriction of relief notice must— For the purposes of this Part of this Schedule, a relevant defeat by virtue of Condition A, B or C “relates to the misuse of a relief” if— In sub-paragraph (5) “the tax advantage in question” means— In this paragraph “the relevant counteraction”, in relation to a relevant defeat means— If a person has been given a single warning notice in relation to two or more relevant defeats, the person is treated for the purposes of this paragraph as having been given a separate warning notice in relation to each of those relevant defeats.
If a person who has incurred a relevant defeat satisfies HMRC or, on an appeal under paragraph 24, the First-tier Tribunal or Upper Tribunal that the person had a reasonable excuse for the matters to which that relevant defeat relates, then— For the purposes of this paragraph, in the case of a person (“P”)— In determining for the purposes of this paragraph whether or not a person (“P”) had a reasonable excuse for any action, failure or inaccuracy, reliance on advice is to be taken automatically not to constitute a reasonable excuse if the advice is addressed to, or was given to, a person other than P or takes no account of P’s individual circumstances. In this paragraph “relevant failure”, in relation to a relevant defeat, is to be interpreted in accordance with sub-paragraphs (2) to (7) of paragraph 43.
In this Part of this Schedule “avoidance-related rule” means a rule in Category 1 or 2. A rule is in Category 1 if it refers (in whatever terms)— A rule is also in Category 1 if it refers (in whatever terms) to— For the purposes of paragraph (b) it does not matter whether the reference is (for instance) to the “sole or main benefit” or “one of the main benefits” or any other reference to a benefit. A rule falls within Category 2 if as a result of the rule a person may be treated differently for tax purposes depending on whether or not purposes referred to in the rule (for instance the purposes of an actual or contemplated action or enterprise) are (or are shown to be) commercial purposes. For example, a rule in the following form would fall within Category 1 and within Category 2—
In this Part of this Schedule “tax” does not include VAT.
If a person incurs simultaneously two or more relevant defeats in relation to different arrangements, sub-paragraphs (2) to (4) of paragraph 30 have effect as if the relevant defeat with the lowest value was incurred last, the relevant defeat with the next lowest value immediately before it, and so on. For this purpose the “value” of a relevant defeat is taken to be equal to the value of the counteracted advantage. If a person has been given a single warning notice in relation to two or more relevant defeats, the person is treated for the purposes of paragraph 30 as having been given a separate warning notice in relation to each of those relevant defeats.
To the extent that the counteracted advantage (see paragraph 35) is a deferral of tax (other than VAT), the value of that advantage is— or, if less, 100% of the amount of the deferred tax. This paragraph does not apply to a case to the extent that paragraph 33 applies.
Sub-paragraph (3) of paragraph 36 has effect as follows so far as the tax advantage which is counteracted as mentioned in that sub-paragraph is in the nature of a delay in relation to the person’s obligations with respect to VAT. or, if less, 100% of the amount of the delayed VAT
The amount of a penalty for which a person is liable under paragraph 30 is to be reduced by the amount of any other penalty incurred by the person, or any surcharge for late payment of tax imposed on the person, if the amount of the penalty or surcharge is determined by reference to the same tax liability. In sub-paragraph (1) “any other penalty” does not include a penalty under section 212A of FA 2013 (GAAR penalty) or Part 4 of FA 2014 (penalty where corrective action not taken after follower notice etc). In the application of section 97A of TMA 1970 (multiple penalties) no account shall be taken of a penalty under paragraph 30.
In paragraph 42 “the relevant failure”, in relation to a relevant defeat, is to be interpreted in accordance with sub-paragraphs (2) to (7). In relation to a relevant defeat incurred by virtue of Condition A, “the relevant failure” means the failures or inaccuracies as a result of which the counteraction under section 209 of FA 2013 was necessary In relation to a relevant defeat incurred by virtue of Condition B, “the relevant failure” means the failures or inaccuracies in respect of which the action mentioned in paragraph 13(1) was taken. In relation to a relevant defeat incurred by virtue of Condition C, “the relevant failure” means the failures of inaccuracies as a result of which the adjustments, assessments, or other action mentioned in paragraph 14(5) are required. In relation to a relevant defeat incurred by virtue of Condition D, “the relevant failure” means the failures or inaccuracies as a result of which the adjustments, assessments or other action mentioned in paragraph 15(5) are required. In relation to a relevant defeat incurred by virtue of Condition E, “the relevant failure” means P’s actions (and failures to act), so far as they are connected with matters in respect of which the counteraction mentioned in paragraph 16(1) is required. In sub-paragraph (6) “counteraction” is to be interpreted in accordance with paragraph 16(2).
Sub-paragraphs (2) and (3) apply if HMRC has a duty under paragraph 2 to give a warning notice to a company (“C”) which is a member of a group. That duty has effect as a duty to give a warning notice to each current group member (see sub-paragraph (8)). Any warning notice which has been given (or is treated as having been given) previously to any current group member is treated as having been given to each current group member (and any provision in this Schedule which refers to a “warning period” in relation to a person is to be interpreted accordingly). In relation to a company which incurs a relevant defeat, paragraph 19(1) (duty to give relief restriction notice) does not have effect unless the warning period mentioned in that sub-paragraph would be a warning period in relation to the company regardless of sub-paragraph (3). A company which incurs a relevant defeat is not liable to pay a penalty under paragraph 30 unless the warning period mentioned in sub-paragraph (1) of that paragraph would be a warning period in relation to the company regardless of sub-paragraph (3). HMRC may discharge any duty to give a warning notice to a current group member in accordance with sub-paragraph (2) by delivering the notice to C (and if it does so may combine one or more warning notices in a single notice). If a company ceases to be a member of a group, and— that warning period ceases to have effect in relation to the company when it ceases to be a member of that group. In this paragraph “current group member” means a company which is a member of the group concerned at the time when the warning notice mentioned in sub-paragraph (1) is given. For the purposes of this paragraph two companies are members of the same group of companies if— In this paragraph “75% subsidiary” has the meaning given by section 1154 of CTA 2010. In this paragraph “company” has the same meaning as in the Corporation Tax Acts (see section 1121 of CTA 2010).
Where paragraph 50 applies in relation to a partnership return, each relevant partner is treated for the purposes of this Schedule as having incurred the relevant defeat mentioned in paragraph 50(1)(b), (2) or (3)(b) (as the case may be). In this paragraph “relevant partner” means any person who was a partner in the partnership at any time during the relevant reporting period (but see sub-paragraph (3)). The “relevant partners” do not include— In this paragraph the “relevant reporting period” means the period in respect of which the partnership return mentioned in sub-paragraph (1), (2) or (3) of paragraph 50 was required.
Sub-paragraph (2) applies if a partnership return is amended at any time under section 12ABA of TMA 1970 (amendment of partnership return by representative partner etc) on a basis that— any amount stated under subsection (1)(b) of section 12AB of that Act (partnership statement) as a partner’s share of any income, loss, consideration, tax or credit for any period. For the purposes of paragraph 14 (Condition C: counteraction of DOTAS arrangements), the partner is treated as having at that time amended— so as to give effect to the amendments of the partnership return. Sub-paragraph (4) applies if a partnership return is amended at any time by HMRC as a result of a disclosure made by the representative partner or that person’s successor on a basis that— any amount stated under subsection (1)(b) of section 12AB of TMA 1970 (partnership statement) as the share of a particular partner (P) of any income, loss, consideration, tax or credit for any period. If the conditions in sub-paragraph (5) are met, P is treated for the purposes of paragraph 14 as having at that time amended— so as to give effect to the amendments of the partnership return. The conditions are that the disclosure—
With reference to a particular relevant defeat incurred by a person in relation to arrangements, the person is treated as having “used” the arrangements on the dates set out in this paragraph. If the person incurs the relevant defeat by virtue of Condition A, the person is treated as having “used” the arrangements on the following dates— For the purposes of sub-paragraph (2) a failure to comply with an obligation is a “relevant failure” if the whole or part of the tax advantage mentioned in paragraph 12(1)(b) arose as a result of, or in connection with, that failure. If the person incurs the relevant defeat by virtue of Condition B, the person is treated as having “used” the arrangements on the following dates— In this sub-paragraph “relevant obligation” means an obligation which would not have fallen on the person (or might have been expected not to do so), had the denied advantage arisen (see section 208(3) of FA 2014). If the person incurs the relevant defeat by virtue of Condition C, the person is treated as having “used” the arrangements on the following dates— If the person incurs the relevant defeat by virtue of Condition D, the person is treated as having “used” the arrangements on the following dates— If the person incurs the relevant defeat by virtue of Condition E, the person is treated as having “used” the arrangements on the following dates— In sub-paragraph (7) “relevant failure” means a failure to comply with an obligation relating to VAT. In this paragraph “filing date”, in relation to a return, means the earlier of— References in this paragraph to the date on which a person fails to comply with an obligation are to the date on which the person is first in breach of the obligation.
In this Schedule— In this Schedule an expression used in relation to VAT has the same meaning as in VATA 1994. In this Schedule (except where the context requires otherwise) references, however expressed, to a person’s affairs in relation to tax include the person’s position as regards deductions or repayments of, or of sums representing, tax that the person is required to make by or under an enactment. For the purposes of this Schedule a partnership return is regarded as made on the basis that a particular tax advantage arises to a person from particular arrangements if—
This paragraph applies in relation to a UK group which is a qualifying group in any financial year (“the current financial year”). The head of the group must ensure that a group tax strategy for the group, containing the information required by paragraph 17, is prepared and published on behalf of the group in accordance with this paragraph. The group tax strategy— The group tax strategy— The head of the group must ensure that the group tax strategy published on the internet remains accessible to the public free of charge— For the purposes of this paragraph— In this paragraph and paragraph 17 “financial year”, in relation to a UK group, means a financial year of the head of the group.
This paragraph applies to a UK sub-group of a foreign group if in any financial year (“the current financial year”) the foreign group is a qualifying group. The head of the sub-group must ensure that a sub-group tax strategy for the sub-group, giving the information required by paragraph 20, is prepared and published in accordance with this paragraph. The sub-group tax strategy— The sub-group tax strategy— The head of the sub-group must ensure that the sub-group tax strategy published on the internet remains accessible to the public free of charge— For the purposes of this paragraph— In this paragraph “financial year”, in relation to a UK sub-group, means a financial year of the head of the group of which it is a sub-group.
This paragraph applies in relation to a UK company which in any financial year (“the current financial year”) is a qualifying company. The company must prepare and publish a company tax strategy, containing the information required by paragraph 23, in accordance with this paragraph. The duty under sub-paragraph (2) applies even if the company becomes a member of a UK group or a UK sub-group during the current financial year. The company tax strategy— The company tax strategy— The company must ensure that the company tax strategy published on the internet remains accessible to the public free of charge— For the purposes of this paragraph a company tax strategy is published when it is first published as mentioned in sub-paragraph (5)(a). A UK permanent establishment which in any financial year is by virtue of paragraph 5(6) to be treated as a qualifying company is to be treated for the purposes of this paragraph and paragraphs 23 and 24 as if it were a UK company which in that financial year is a qualifying company.
Paragraphs 22 to 24 apply in relation to a UK partnership which is (in any financial year of the partnership) a qualifying partnership as they apply to a UK company which is (in any financial year of the company) a qualifying company. Those paragraphs have effect in their application to a qualifying partnership—
Liability to a penalty for a failure does not arise if the person who would otherwise be liable to that penalty satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that the person had a reasonable excuse for that failure. For the purposes of this paragraph—
A penalty must be paid— A penalty may be enforced as if it were corporation tax charged in an assessment and due and payable.
In this Part “tax strategy” means—
a group tax strategy (see paragraphs 16 to 18),
a sub-group tax strategy (see paragraphs 19 to 21),
a company tax strategy (see paragraphs 22 to 24), or
a partnership tax strategy (see paragraph 25).
The Office of Tax Simplification.
ICTA is amended as follows. Omit section 231B (arrangements to pass on value of tax credit). Omit section 824(2) (repayment supplements: tax credits). In section 824(4A) omit paragraph (b) (repayment supplements: tax credit treated as income tax deducted at source), and the “and” preceding it. In section 825(1) (repayment supplements: companies) omit paragraph (c) (tax credits comprised in franked investment income), and the “or” preceding it. In section 826 (interest on tax overpaid by companies)—
In Schedule 3 to ITEPA 2003 (SAYE option schemes), Part 8 (notification of schemes etc) is amended as follows. Sub-paragraph (5) does not apply if the scheme organiser satisfies HMRC (or, on an appeal under paragraph 40K, the tribunal) that there is a reasonable excuse for the failure to give notice on or before the initial notification deadline. Paragraph 40C(9) (what constitutes a reasonable excuse) applies for the purposes of sub-paragraph (5A). Where HMRC are required under sub-paragraph (5A) to consider whether there was a reasonable excuse, HMRC must notify the scheme organiser of their decision within the period of 45 days beginning with the day on which HMRC received the scheme organiser’s request to consider the excuse. Where HMRC are required to notify the scheme organiser as specified in sub-paragraph (5C) but do not do so— In paragraph 40K (appeals)— The amendments made by this paragraph have effect in relation to notices given under paragraph 40A of Schedule 3 to ITEPA 2003 on or after 6 April 2016.
In FA 1988, in Schedule 13 omit paragraph 7(c) (post-consolidation amendment of section 824(2) of ICTA).
In Schedule 4 to ITEPA 2003 (CSOP schemes), Part 7 (notification of schemes etc) is amended as follows. Sub-paragraph (5) does not apply if the scheme organiser satisfies HMRC (or, on an appeal under paragraph 28K, the tribunal) that there is a reasonable excuse for the failure to give notice on or before the initial notification deadline. Paragraph 28C(9) (what constitutes a reasonable excuse) applies for the purposes of sub-paragraph (5A). Where HMRC are required under sub-paragraph (5A) to consider whether there was a reasonable excuse, HMRC must notify the scheme organiser of their decision within the period of 45 days beginning with the day on which HMRC received the scheme organiser’s request to consider the excuse. Where HMRC are required to notify the scheme organiser as specified in sub-paragraph (5C) but do not do so— In paragraph 28K (appeals)— The amendments made by this paragraph have effect in relation to notices given under paragraph 28A of Schedule 4 to ITEPA 2003 on or after 6 April 2016.
In FA 1989—
omit section 115 (double taxation: tax credits), and
in section 179(1)(b)(i) (amendments of provisions of TMA 1970 including section 87A(1) and (5)) omit “and (5)”.
In FA 1993 omit section 171(2B) (which excludes entitlement to tax credits).
In FA 1994 omit section 219(4B) (which excludes entitlement to tax credits).
F(No.2)A 1997 is amended as follows. Omit section 22(1) (which inserted section 171(2B) of FA 1993). Omit section 28 (which inserted section 231B of ICTA). Omit section 30(9) and (10) (effect of double taxation arrangements in relation to tax credits). In Schedule 6 (repeal of provisions relating to foreign income dividends), in paragraph 23 (transitional provision for certain foreign income dividends paid before 6 April 1999 but received on or after that date) omit—
FA 1998 is amended as follows. Omit section 76(3) (regulations about tax credits where non-UK residents have invested in individual savings accounts). In Schedule 18 (company tax returns etc)—
In the Commonwealth Development Corporation Act 1999, in Schedule 3 omit paragraph 6(2)(b) (provisions about tax credits do not apply in relation to distributions by the Corporation).
In the Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)—
omit article 82(a), and
in article 87(a) omit “and (4B)”.
ITEPA 2003 is amended as follows. Omit sections 58(6) and 61H(6) (tax credits to be reduced in line with reductions in distributions). In Part 2 of Schedule 1 (index of defined expressions) omit the entry for “tax credit”.
In ITTOIA 2005, in Schedule 1 (minor and consequential amendments) omit paragraphs 116, 331(2), 359, 360, 361(a), 363, 364, 376, 377(3), 464(3), 496, 503 and 510(2).
ITA 2007 is amended as follows. In section 26(1)(b) (list of provisions giving tax reductions), in the entry for section 401 of ITTOIA 2005, for “qualifying distribution after linked non-qualifying distribution” substitute “ distribution repaying shares or security issued in earlier distribution ”. In section 31 (calculation of total income)— In section 425(5) (deductions in calculating total amount of income tax for gift aid purposes)— In section 482 (types of amount charged at special rates for trustees), in the entry for Type 1 amounts, omit “qualifying”. In section 487(6) (non-UK resident trustees: disregarded income which is not included in untaxed income)— In section 498 (discretionary payments by trustees: types of tax to be included in trustees' tax pool)— In section 502(3) (non-UK resident beneficiaries: disregarded income which is not included in untaxed income)— In section 614ZD (treatment of recipient of manufactured payment)— In section 687 (transactions in securities: meaning of “income tax advantage”)— In section 713 (interpretation of Chapter 1 (transactions in securities))— In section 745(1) (transfer of assets abroad: same rate of tax not to be charged twice)— In section 809S(4) (meaning of “income tax advantage”) omit the words after paragraph (d). In section 811(4) (limit on liability to income tax of non-UK residents)— In section 815(3) (limit on liability to income tax of non-UK resident companies)— In section 989 (definitions for the purposes of the Income Tax Acts) omit the entries for “qualifying distribution” and “tax credit”. In section 1026 (“non-qualifying income” includes income on which tax treated as paid)— In Schedule 1 (minor and consequential amendments) omit paragraphs 26, 245(2)(a) and (3), 446(27), 515(3), 516, 517(2), 520 and 522. In Schedule 4 (index of defined expressions) omit the entries for “qualifying distribution” and “tax credit”.
In FA 2008, in Schedule 12 (amendments relating to tax credits) omit paragraphs 3, 5, 6, 8 to 16, 19, 20, 24(b) and 31.
CTA 2009 is amended as follows. In section 1222 (company with investment business: amount deductible for management expenses to be reduced by income from sources not charged to tax)— Omit section 1266(3) (partnerships with foreign element: entitlement to tax credit). In Schedule 4 (index of defined expressions) omit the entry for “qualifying distribution”.
FA 2009 is amended as follows. In Schedule 19 (amendments relating to tax credits) omit paragraphs 2(2) and (3), 3, 5, 6(2)(a), (3) and (4), 7, 9, 10(a), 11, 12 and 13(c). Section 873(4) of ITTOIA 2005 (inserted by paragraph 8), so far as relating to any order or regulations made after the passing of FA 2016 under any provision of ITTOIA 2005 other than section 397BA of that Act, has effect as if sub-paragraph (1) did not apply in relation to it. In Schedule 53 (late payment interest) omit— In paragraph 9B of Schedule 54 (repayment interest start date: companies: income tax and certain tax credits)— In paragraph 14 of Schedule 54 (interpretation) omit paragraph (b) (tax deducted at source treated as including tax credits), and the “and” preceding it.
In Schedule 1 to CTA 2010 (minor and consequential amendments) omit paragraphs 19, 153, 156(3), 282, 303(2), 456, 562(7), 704(27) and 722.
TIOPA 2010 is amended as follows. In section 6(2) (effect of double taxation arrangements)— In section 187A (excess interest treated as a qualifying distribution), in subsection (2), and the heading, omit “qualifying”. Omit section 234(2) (“relief” includes tax credit). In Schedule 8 (minor and consequential amendments) omit paragraphs 38, 51, 52, 66 and 67.
In FA 2011—
in Part 6 of Schedule 23 (consequential provisions) omit paragraph 64(3), and
in Schedule 26 omit paragraph 1(2)(a)(i) (which amended section 231B of ICTA), including the “and” at the end.
In FA 2012, in section 169(2) (payments by certain friendly societies treated as qualifying distributions) omit “qualifying”.
In FA 2013—
in paragraph 6(2) of Schedule 19 (which amends section 549 of CTA 2010), for “subsections (2) and” substitute “ subsection ”, and
in Part 3 of Schedule 29 (manufactured dividends: consequential etc amendments) omit paragraphs 13, 14(a) and 44(3).
In FA 2015, in section 19—
in subsection (1), for “credits etc” substitute “ treated as paid ”, and
omit subsections (5) and (6) (which insert sections 397(5A) and 399(5A) of ITTOIA 2005).
“enactment” includes subordinate legislation (as defined in section 21 of the Interpretation Act 1978);
In ITTOIA 2005 omit sections 397 to 398, 400, 414 and 421 (distributions: tax credits, and tax treated as paid). In CTA 2010 omit section 1109 (tax credits for certain distributions).
In Schedule 5 to ITEPA 2003 (enterprise management incentives), in paragraph 39 (company reorganisations: introduction), in sub-paragraph (2)(c), after “982” insert “or 983 to 985”. The amendment made by this paragraph is treated as having come into force on 17 July 2013.
Sub-paragraph (2) applies at any particular time on or after 6 April 2016 in the case of an individual if— Part 4 of FA 2004 has effect in relation to the individual as if the standard lifetime allowance were— “Relevant arrangement”, in relation to an individual, means an arrangement relating to the individual under— An individual’s “relevant amount” is the sum of amounts A, B, C and D (see paragraphs 10 to 13, but see also sub-paragraph (7)). The provisions mentioned in sub-paragraph (1)(d) are— Sub-paragraph (7) applies if rights of an individual under a relevant arrangement become subject to a pension debit where the transfer day falls on or after 6 April 2016. For the purpose of applying sub-paragraph (2) in the case of the individual on and after the transfer day, the individual’s relevant amount is reduced (or further reduced) by the following amount— where— X is the appropriate amount, Y is 5% of X, and Z is the number of tax years beginning after 5 April 2016 and ending on or before the transfer day. (If the formula gives a negative amount, it is to be taken to be nil.) In sub-paragraphs (6) and (7) “appropriate amount” and “transfer day”, in relation to a pension debit, have the same meaning as in section 29 of WRPA 1999 or Article 26 of WRP(NI)O 1999 (as the case may be).
Amount C is the total value of the individual’s uncrystallised rights at the end of 5 April 2016 under arrangements relating to the individual under registered pension schemes of which the individual is a member as determined in accordance with section 212 of FA 2004.
This paragraph applies where a reference number for the purposes of paragraph 1(2) or 9(2) has been issued by or on behalf of the Commissioners in respect of an individual. The number may be withdrawn by an officer of Revenue and Customs. The number may be withdrawn only if— Where the number is withdrawn— are to be given by an officer of Revenue and Customs to the individual. Where the number is withdrawn, the effect of the withdrawal is as follows—
Sub-paragraph (2) applies if an individual receives a discharge notice related to a pension debit at a time when— The individual— For the purposes of this paragraph—
The Commissioners may publish information about a person if the person— Information published for the first time under sub-paragraph (1) must be published within the 12 months beginning with the day on which the most recent of the warning notices falling within that sub-paragraph has been given to the person. No information may be published (or continue to be published) after the end of the period of 12 months beginning with the day on which it is first published. The information that may be published is— If the person mentioned in sub-paragraph (1) is a member of a group of companies (as defined in paragraph 46(9)), the information which may be published also includes— If the person mentioned in sub-paragraph (1) is a person carrying on a trade or business in partnership, the information which may be published also includes— The information may be published in any manner the Commissioners may consider appropriate. Before publishing any information the Commissioners— Arrangements are “defeated arrangements” for the purposes of sub-paragraph (4) if the person used them in the warning period mentioned in sub-paragraph (1) and a warning notice specifying the defeat of those arrangements has been given to the person before the information is published. If a person has been given a single warning notice in relation to two or more relevant defeats, the person is treated for the purposes of this paragraph as having been given a separate warning notice in relation to each of those relevant defeats. Nothing in this paragraph prevents the power under sub-paragraph (1) from being exercised on a subsequent occasion in relation to arrangements used by the person in a different warning period.
“UK company” means a company which is (or is treated as if it is) formed and registered under the Companies Act 2006, unless it falls within sub-paragraph (2). The term “UK company” does not include a company which is—
“Group” means two or more relevant bodies which together constitute— “UK group” means a group whose head is a relevant body incorporated in the United Kingdom. “Foreign group” means a group whose head is a foreign relevant body. For the purposes of sub-paragraphs (2) and (3) it is immaterial where other members of the group are incorporated.
“UK partnership” means a body of any of the following descriptions which is carrying on a trade, business or profession with a view to profit— A UK partnership is a “qualifying partnership” in a financial year, if it satisfied the qualification test for a UK partnership at the end of the previous financial year (subject to any regulations under sub-paragraph (4)). The qualification test for a UK partnership is that the partnership satisfied either or both of the following conditions (by reference to the previous financial year)— 1. The partnership’s turnover More than £200 million 2. The partnership’s balance sheet total More than £2 billion. The Treasury may by regulations provide that a UK partnership of a description specified in the regulations is not a qualifying partnership for the purposes of this Schedule (or any such purpose specified in the regulations). “Representative partner”, in relation to a UK partnership, means the partner who is required by a notice served under or by virtue of section 12AA(2) or (3) of TMA 1970 to make and deliver returns to an officer of HMRC.
“UK taxation” means — In relation to a tax strategy required to be published by Part 2, “UK taxation” refers to the taxes or duties mentioned above so far as relating to or affecting the bodies or body to which the required tax strategy relates.
Schedule 36 to FA 2008 (information and inspection powers) applies for the purpose of checking a relevant person’s position as regards liability for a penalty under paragraph 1 as it applies for checking a person’s tax position, subject to the modifications in paragraphs 19 to 21. In this Part of this Schedule “relevant person” means a person an officer of Revenue and Customs has reason to suspect has or may have enabled offshore tax evasion or non-compliance by another person so as to be liable to a penalty under paragraph 1.
“MNE Group” has the same meaning (subject to sub-paragraph (2) below) as in the OECD Model Legislation in the OECD Country-by-Country Reporting Implementation Package as contained in the OECD’s Guidance on Transfer Pricing Documentation and Country-by-Country Reporting published in 2014. Paragraph (ii) (excluded MNE Group) of the Implementation Package is not part of the definition applied by sub-paragraph (1) above for the purposes of this Schedule. In sub-paragraph (1) “OECD” means the Organisation for Economic Co-operation and Development.
A “group other than an MNE group” means a group consisting of two or more relevant bodies— which is not an MNE Group. For the purposes of the condition in sub-paragraph (1)(b) a UK permanent establishment of a foreign member of a group is to be treated as if it were a UK company and a member of the group. A relevant body is a member of a group if— Two relevant bodies are members of the same group if— Chapter 3 of Part 24 of CTA 2010 (meaning of 51% subsidiary) applies for the purposes of this Schedule as it applies for the purposes of the Corporation Tax Acts (but with the modification in sub-paragraph (6)). It applies as if references to a body corporate were references to a relevant body.
A group is headed by whichever relevant body within the group is not a 51% subsidiary of another relevant body within the group (and “head”, in relation to the group, means that body).
“relevant EU obligations” means—
Where— the sums and assets held for the purposes of the arrangement that represent the contribution are to be treated as “relevant uncrystallised funds” for the purposes of this paragraph. The amendment made by sub-paragraph (1) has effect in relation to contributions paid after the day on which this Act is passed.
For the italic heading before section 20A substitute “Mixing”. After section 20AAB insert—.
any corresponding post-withdrawal obligations that apply to the grant of a notified state aid through the provision of a tax advantage.
FA 2003 is amended in accordance with subsections (2) to (4).
In section 55 (amount of tax chargeable: general) after subsection (4) insert—
After Schedule 4 insert—
In the application of sub-paragraph (1), account is to be taken of paragraph 1 of Schedule 4ZA if the relevant transaction is a higher rates transaction for the purposes of that paragraph.
The amendments made by this section have effect in relation to any land transaction of which the effective date is, or is after, 1 April 2016.
But those amendments do not have effect in relation to a transaction—
effected in pursuance of a contract entered into and substantially performed before 26 November 2015, or
effected in pursuance of a contract entered into before that date and not excluded by subsection (7).
A transaction effected in pursuance of a contract entered into before 26 November 2015 is excluded by this subsection if—
there is any variation of the contract, or assignment of rights under the contract, on or after 26 November 2015,
the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
on or after that date there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
Subsection (9) applies in relation to a land transaction of which the effective date is or is before 26 November 2018.
In its application for the purpose of determining whether a land transaction to which this subsection applies is a higher rates transaction, paragraph 3(6) of Schedule 4ZA to FA 2003 has effect with the following modifications—
in paragraph (b) for “during the period of three years ending with” substitute “ the same as or before ”,
in paragraph (c) for the words from “during” to “paragraph (b)” substitute “ before the effective date of the transaction concerned ”.
Paragraph 15 of Schedule 4ZA to FA 2003 does not apply in relation to a land transaction of which the effective date is, or is before, the date on which this Act is passed if the effect of its application would be that the transaction is a higher rates transaction for the purposes of paragraph 1 of that Schedule.
Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended in accordance with subsections (2) to (4).
In paragraph 5—
in sub-paragraph (1)—
after paragraph (a) insert—;
for paragraph (b) substitute—;
in sub-paragraph (2), for “the dwelling” substitute “ a dwelling on the land ”;
“relievable trade” means a trade that is run on a commercial basis and with a view to profit.
In paragraph 5G, in sub-paragraph (3)(c) for “the dwelling” substitute “ any dwelling on the land ”.
In paragraph 6D(3)(b), for “the dwelling” substitute “ any dwelling on the land concerned ”.
The amendments made by this section have effect in relation to any land transaction of which the effective date is on or after 1 April 2016.
Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended as follows.
After paragraph 5C insert—
After paragraph 5I insert—
The amendments made by this section have effect in relation to any land transaction of which the effective date is on or after 1 April 2016.
Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended as follows.
In paragraph 5D (dwellings for occupation by certain employees etc)—
in sub-paragraph (1), for “trade” substitute “ business ”;
in sub-paragraph (2)(b) for “trade” substitute “ business ”;
for sub-paragraph (4) substitute—
The heading before paragraph 5D becomes “ Dwellings for occupation by certain employees etc of a relievable business ”.
After paragraph 5E insert—
After paragraph 5J insert—
In paragraph 5E (meaning of “qualifying partner”, “qualifying employee” etc)—
in sub-paragraph (1) for “trade” substitute “ business ”;
in sub-paragraph (2) for “qualifying trade” substitute “ relievable business ”;
in sub-paragraph (4)—
in the words before paragraph (a), for “trade” substitute “ relievable business ”;
in paragraph (a)(i), for “trade” substitute “ relievable business ”.
In paragraph 5J (withdrawal of relief under paragraph 5D), in sub-paragraph (3)—
in paragraph (a), for the words from “trade” to the end substitute “ relievable business ”;
in paragraph (c), for the words from “trade” to the end substitute “ relievable business ”.
In paragraph 6G (withdrawal of relief under paragraph 5D in cases involving alternative finance arrangements), in sub-paragraph (4)—
in paragraph (a), for “qualifying trade” substitute “ relievable business ”;
in paragraph (c) for “trade” substitute “ relievable business ”.
“relievable business” has the meaning given by paragraph 5D(4).
The amendments made by this section have effect in relation to any land transaction of which the effective date is on or after 1 April 2016.
In section 55 of FA 2003 (general rules on calculating the amount of stamp duty land tax chargeable), in subsection (5)—
for “74(2) and (3)” substitute “ 74(1B) ”, and
for “rate” substitute “ amount ”.
Schedule 16 contains provision about—
the stamp duty land tax treatment of co-ownership authorised contractual schemes, and
relief from stamp duty land tax for certain acquisitions by such schemes and by property authorised investment funds.
Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.
After section 144 insert—
In section 116 (dwelling in grounds of another dwelling), in the list in subsection (6), at the appropriate place insert— “ section 144A (regulated home reversion plans); ”.
In section 117 (dwellings in the same building), in the list in subsection (5), at the appropriate place insert— “ section 144A (regulated home reversion plans); ”.
In section 132 (effect of reliefs under sections 133 to 150), in the list in subsection (3), at the appropriate place insert— “ section 144A (regulated home reversion plans); ”.
144A (regulated home reversion plans) 5A
The amendments made by this section have effect for chargeable periods beginning on or after 1 April 2016.
Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.
Section 145 (occupation by certain employees or partners) is amended in accordance with subsections (3) to (5).
In subsection (1)—
in paragraph (b), after “qualifying trade” insert “ or qualifying property rental business ”;
in paragraph (d) for “trade” substitute “ qualifying trade or qualifying property rental business ”.
After subsection (4) insert—
The heading of that section becomes “ Occupation by employees or partners of a qualifying trade or property rental business ”.
In section 146 (meaning of “qualifying employee” and “qualifying partner” in section 145)—
in subsection (1), after “trade” insert “ or property rental business ”;
in subsection (2)—
in the words before paragraph (a), after “qualifying trade” insert “ or qualifying property rental business ”, and
in paragraph (a)(i), after “trade” insert “ or (as the case may be) property rental business ”.
After section 147 insert—
In section 116 (dwelling in grounds of another dwelling), in the list in subsection (6)—
in the entry relating to section 145, for “certain employees or partners” substitute “ employees or partners of a qualifying trade or property rental business ”;
at the appropriate place insert— “ section 147A (caretaker flat owned by management company); ”.
In section 117 (dwellings in the same building), in the list in subsection (5)—
in the entry relating to section 145, for “certain employees or partners” substitute “ employees or partners of a qualifying trade or property rental business ”;
at the appropriate place insert— “ section 147A (caretaker flat owned by management company); ”.
In section 132 (effect of reliefs under sections 133 to 150), in the list in subsection (3)—
in the entry relating to section 145, for “certain employees or partners” substitute “ employees or partners of a qualifying trade or property rental business ”;
at the appropriate place insert— “ section 147A (caretaker flat owned by management company); ”.
In section 159A (relief declaration returns), in the table in subsection (9), in the entry relating to section 145, for “(dwellings used for trade purposes: occupation by certain employees or partners)” substitute “ or 147A (occupation by certain employees etc) ”.
The amendments made by this section have effect for chargeable periods beginning on or after 1 April 2016.
Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.
Section 157 (land sold to financial institution and leased to person) is amended in accordance with subsections (3) to (6).
In subsection (1)—
in paragraph (a), omit “or section 72 of that Act (land in Scotland sold to financial institution and leased to person)”;
in paragraph (b), after “transaction” insert “ is in England, Wales or Northern Ireland and ”.
In subsection (7)—
in the definition of “the first transaction” omit “or (as the case requires) 72”;
in the definition of “the second transaction” omit “or (as the case requires) 72”.
Omit subsection (10).
The heading of that section becomes “ Land in England, Wales or Northern Ireland sold to financial institution and leased to person ”.
After section 157 insert—
The amendments made by this section have effect for chargeable periods beginning on or after 1 April 2016.
Section 77 of FA 1986 (acquisition of target company's share capital) is amended as follows.
In subsection (3), omit the “and” at the end of paragraph (g) and after paragraph (h) insert, and
In subsection (3A) for “(3)” substitute “ (3)(b) to (h) ”.
In subsection (4) after “this section” insert “ and section 77A ”.
After section 77 of FA 1986 insert—
The amendments made by this section have effect in relation to any instrument executed on or after 29 June 2016 (and references to arrangements in any provision inserted by this section include arrangements entered into before that date).
Part 3 of FA 1986 (stamp duty) is amended as follows.
In section 67 (depositary receipts)—
in subsection (2), for the words from “1.5% of” to the end substitute1.5% of— ,
after subsection (2) insert—, and
in subsection (3), for “In any other case” substitute “ If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) ”.
In section 69 (depositary receipts: supplementary), in subsection (4), for “section 67(3)” substitute “ section 67(2)(b)(ii) and (3) ”.
In section 70 (clearance services)—
in subsection (2), for the words from “1.5% of” to the end substitute1.5% of— ,
after subsection (2) insert—, and
in subsection (3), for “In any other case” substitute “ If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) ”.
In section 72 (clearance services: supplementary), in subsection (2), for “section 70(3)” substitute “ section 70(2)(b)(ii) and (3) ”.
The amendments made by this section have effect in relation to an instrument which transfers securities pursuant to the exercise of an option where—
the option was granted on or after 25 November 2015, and
the option was exercised on or after 23 March 2016.
Part 4 of FA 1986 (stamp duty reserve tax) is amended as follows.
In section 93 (depositary receipts)—
in subsection (4)(b), for the words from “worth,” to the end substituteworth— , and
after subsection (4) insert—
In section 94 (depositary receipts: supplementary), in subsection (4), for “section 93(4)(c)” substitute “ section 93(4)(b)(ii) and (c) ”.
In section 96 (clearance services)—
in subsection (2)(b), for the words from “worth,” to the end substituteworth— ,
after subsection (2) insert—, and
in subsection (10), for “subsection (2)(c)” substitute “ subsection (2)(b)(ii) and (c) ”.
The amendments made by this section have effect in relation to a transfer pursuant to the exercise of an option where—
the option was granted on or after 25 November 2015, and
the option was exercised on or after 23 March 2016.
In section 1(2) of OTA 1975 (rate of petroleum revenue tax) for “35” substitute “ 0 ”.
In paragraph 17 of Schedule 2 to that Act (cap on interest on repayments of tax), in sub-paragraph (5)(b) omit the words from “if that” to the end.
In sub-paragraph (1) the reference to any chargeable period for an oil field ending on or after 30th June 1983 does not include a chargeable period ending on 31st December 2015.
The amendment made by subsection (1) has effect with respect to chargeable periods ending after 31 December 2015.
In section 51(2)(b) of FA 1994 (standard rate of insurance premium tax), for “9.5 per cent” substitute “ 10 per cent ”.
The amendment made by subsection (1) has effect in relation to a premium falling to be regarded for the purposes of Part 3 of FA 1994 as received under a taxable insurance contract by an insurer on or after 1 October 2016.
The amendment made by subsection (1) does not have effect in relation to a premium which—
is in respect of a contract made before 1 October 2016, and
falls to be regarded for the purposes of Part 3 of FA 1994 as received under the contract by the insurer before 1 February 2017 by virtue of regulations under section 68 of that Act (special accounting schemes).
Subsection (3) does not apply in relation to a premium which—
is an additional premium under a contract,
falls to be regarded for the purposes of Part 3 of FA 1994 as received under the contract by the insurer on or after 1 October 2016 by virtue of regulations under section 68 of that Act, and
is in respect of a risk which was not covered by the contract before that date.
In the application of sections 67A to 67C of FA 1994 (announced increase in rate) in relation to the increase made by this section—
the announcement for the purposes of sections 67A(1) and 67B(1) is to be taken to have been made on 16 March 2016,
the date of the change is 1 October 2016, and
the concessionary date is 1 February 2017.
Section 42 of FA 1996 (amount of landfill tax) is amended as follows.
In subsection (1)(a) (standard rate), for “£84.40” substitute “ £86.10 ”.
In subsection (2) (reduced rate for certain disposals)—
for “£84.40” substitute “ £86.10 ”, and
for “£2.65” substitute “ £2.70 ”.
The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2017.
Section 42 of FA 1996 (amount of landfill tax) (as amended by section 142) is amended as follows.
In subsection (1)(a) (standard rate), for “£86.10” substitute “ £88.95 ”.
In subsection (2) (reduced rate for certain disposals)—
for “£86.10” substitute “ £88.95 ”, and
for “£2.70” substitute “ £2.80 ”.
The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2018.
In Schedule 6 to FA 2000 (climate change levy), in paragraph 19(1) (exemption for electricity from renewable sources)—
in paragraph (c), omit the final “and”;
after paragraph (d) insert, and
In that Schedule omit the following—
in paragraph 5(3), “20(6)(a),”;
paragraphs 19 and 20;
paragraph 24(2).
The repeals made by subsection (2) come into force on the day appointed by the Treasury by regulations made by statutory instrument.
Taxable commodity supplied Rate at which levy payable if supply is not a reduced-rate supply Electricity £0.00568 per kilowatt hour Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility £0.00198 per kilowatt hour Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state £0.01272 per kilogram Any other taxable commodity £0.01551 per kilogram
The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2017.
Taxable commodity supplied Rate at which levy payable if supply is not a reduced-rate supply Electricity £0.00583 per kilowatt hour Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility £0.00203 per kilowatt hour Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state £0.01304 per kilogram Any other taxable commodity £0.01591 per kilogram
The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2018.
Taxable commodity supplied Rate at which levy payable if supply is not a reduced-rate supply Electricity £0.00847 per kilowatt hour Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility £0.00339 per kilowatt hour Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state £0.02175 per kilogram Any other taxable commodity £0.02653 per kilogram
The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2019.
In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy)—
in paragraph (ba) (reduced-rate supplies of electricity), for “10” substitute “ 7 ”;
in paragraph (c) (other reduced-rate supplies), for “35” substitute “ 22 ”.
The amendments made by this section have effect in relation to supplies treated as taking place on or after 1 April 2019.
In section 30 of FA 1994 (air passenger duty: rates of duty) in subsection (4A) (long haul rates of duty)—
in paragraph (a), for “£71” substitute “ £73 ”, and
in paragraph (b), for “£142” substitute “ £146 ”.
The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2016.
Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.
In paragraph 1(2) (vehicle not covered elsewhere in Schedule with engine cylinder capacity exceeding 1,549cc), for “£230” substitute “ £235 ”.
In paragraph 1B (graduated rates of duty for light passenger vehicles)—
CO2 emissions figure Rate (1) (2) (3) (4) Exceeding Not exceeding Reduced rate Standard rate g/km g/km £ £ 130 140 120 130 140 150 135 145 150 165 175 185 165 175 290 300 175 185 345 355 185 200 490 500 200 225 640 650 225 255 875 885 255 1110 1120 CO2 emissions figure Rate (1) (2) (3) (4) Exceeding Not exceeding Reduced rate Standard rate g/km g/km £ £ 100 110 10 20 110 120 20 30 120 130 100 110 130 140 120 130 140 150 135 145 150 165 175 185 165 175 200 210 175 185 220 230 185 200 260 270 200 225 285 295 225 255 490 500 255 505 515”;
in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—
In paragraph 1J (VED rates for light goods vehicles), in paragraph (a), for “£225” substitute “ £230 ”.
In paragraph 2(1) (VED rates for motorcycles)—
in paragraph (b), for “£38” substitute “ £39 ”,
in paragraph (c), for “£59” substitute “ £60 ”, and
in paragraph (d), for “£81” substitute “ £82 ”.
The amendments made by this section have effect in relation to licences taken out on or after 1 April 2016.
Paragraph 1A of Schedule 2 to VERA 1994 (exemption for old vehicles) is amended as follows.
In sub-paragraph (1) for the words from “if” to the end substitute “ during the period of 12 months beginning with 1 April in any year if it was constructed more than 40 years before 1 January in that year. ”
After that sub-paragraph insert—
The amendments made by this section come into force on 1 April 2017.
Part of gross gaming yield Rate The first £2,370,500 15 per cent The next £1,634,000 20 per cent The next £2,861,500 30 per cent The next £6,040,000 40 per cent The remainder 50 per cent
The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2016.
Schedule 17 contains provision relating to fuel duties.
Part 1 of the Schedule provides for charging excise duty on aqua methanol.
Part 2 of the Schedule contains miscellaneous amendments.
Part 3 of the Schedule makes provision about commencement.
1. Cigarettes An amount equal to 16.5% of the retail price plus £196.42 per thousand cigarettes 2. Cigars £245.01 per kilogram 3. Hand-rolling tobacco £198.10 per kilogram 4. Other smoking tobacco and chewing tobacco £107.71 per kilogram
The amendment made by this section is treated as having come into force at 6pm on 16 March 2016.
ALDA 1979 is amended as follows.
In section 62(1A)(a) (rate of duty on sparkling cider of a strength exceeding 5.5%) for “£264.61” substitute “ £268.99 ”.
For Part 1 of the table in Schedule 1 substitute—.
The amendments made by this section are treated as having come into force on 21 March 2016.
In Part 5 of FA 2013 (general anti-abuse rule), after section 209 insert—
“notified adjustments”, in relation to a provisional counteraction notice, has the meaning given by section 209A(2); “provisional counteraction notice” has the meaning given by section 209A(2);
The amendments made by this section have effect in relation to tax arrangements (within the meaning of Part 5 of FA 2013) entered into at any time (whether before or on or after the day on which this Act is passed).
Part 5 of FA 2013 (general anti-abuse rule) is amended in accordance with subsections (2) to (11).
After Schedule 43 insert—
After Schedule 43A insert—
In section 209 (counteracting tax advantages), in subsection (6)(a), after “Schedule 43” insert “ , 43A or 43B ”.
In section 210 (consequential relieving adjustments), in subsection (1)(b), after “Schedule 43,” insert “ paragraph 8 or 9 of Schedule 43A or paragraph 8 of Schedule 43B, ”.
In section 211 (proceedings before a court or tribunal), in subsection (2)(b), for the words from “Panel” to the end substitutePanel given—
Section 214 (interpretation of Part 5) is amended in accordance with subsections (8) to (10).
Renumber section 214 as subsection (1) of section 214.
“designated HMRC officer” has the meaning given by paragraph 2 of Schedule 43;”. “notice of binding” has the meaning given by paragraph 2(2) of Schedule 43A; “pooling notice” has the meaning given by paragraph 1(4) of Schedule 43A; “tax appeal” has the meaning given by paragraph 1A of Schedule 43; “tax enquiry” has the meaning given by section 202(2) of FA 2014.
After subsection (1) insert—
The officer must, as soon as reasonably practicable after deciding whether or not the matter is to be referred to the GAAR Advisory Panel, give the taxpayer written notice of the decision.
Section 10 of the National Insurance Contributions Act 2014 (GAAR to apply to national insurance contributions) is amended in accordance with subsections (13) to (16).
In subsection (4), at the end insert “ , paragraph 8 or 9 of Schedule 43A to that Act (pooling of tax arrangements: notice of final decision) or paragraph 8 of Schedule 43B to that Act (generic referral of arrangements: notice of final decision) ”.
After subsection (6) insert—
In subsection (11)—
for “and HMRC” substitute “, “HMRC” and “tax advantage””;
after “2013” insert “ (as modified by this section) ”.
After subsection (11) insert—
After section 10 of the National Insurance Contributions Act 2014 insert—
Section 219 of FA 2014 (circumstances in which an accelerated payment notice may be given) is amended in accordance with subsections (19) and (20).
In subsection (4), after paragraph (c) insert—
After subsection (7) insert—
In section 220 of FA 2014 (content of notice given while a tax enquiry is in progress)—
in subsection (4)(c), after “219(4)(c)” insert “ , (d) or (e) ”;
in subsection (5)(c), after “219(4)(c)” insert “ , (d) or (e) ”;
as the case may be.
Section 287 of FA 2014 (Code of Practice on Taxation for Banks) is amended in accordance with subsections (23) to (25).
In subsection (4), after “(5)” insert “ or (5A) ”.
In subsection (5)(b), after “Schedule” insert “ or paragraph 8 or 9 of Schedule 43A to that Act ”.
After subsection (5) insert—
In Schedule 32 to FA 2014 (accelerated payments and partnerships), paragraph 3 is amended in accordance with subsections (27) and (28).
In sub-paragraph (5), after paragraph (c) insert—
After sub-paragraph (6) insert—
In Schedule 34 to FA 2014 (promoters of tax avoidance schemes: threshold conditions), in paragraph 7—
in paragraph (a), at the end insert “ (referrals of single schemes) or are in a pool in respect of which a referral has been made to that Panel under Schedule 43B to that Act (generic referrals), ”;
in paragraph (b)—
for “in relation to the arrangements” substitute “ in respect of the referral ”;
after “11(3)(b)” insert “ or (as the case may be) 6(4)(b) ”;
in paragraph (c)(i) omit “paragraph 10 of”.
The amendments made by this section have effect in relation to tax arrangements (within the meaning of Part 5 of FA 2013) entered into at any time (whether before or on or after the day on which this Act is passed).
Part 5 of FA 2013 (general anti-abuse rule) is amended as follows.
After section 212 insert—
After Schedule 43B insert—
In section 209 (counteracting the tax advantages), after subsection (7) insert—
Schedule 43 (general anti-abuse rule: procedural requirements) is amended in accordance with subsections (6) to (9).
After paragraph 1 insert—
In paragraph 3(2)(e), for “of paragraphs 5 and 6” substituteof—
After paragraph 4 insert—
Before paragraph 5 (but after the heading “Referral to GAAR Advisory Panel”) insert—
In section 103ZA of TMA 1970 (disapplication of sections 100 to 103 in the case of certain penalties)—
omit “or” at the end of paragraph (g), and
after paragraph (g) insert
In section 212 of FA 2014 (follower notices: aggregate penalties) (as amended by Schedule 18), in subsection (4)—
omit “or” at the end of paragraph (c), and
after paragraph (d) insert, or
FA 2015 is amended in accordance with subsections (13) and (14).
In section 120 (penalties in connection with offshore matters and offshore transfers), in subsection (1), omit “and” before paragraph (c) and after paragraph (c) insert—, and
In Schedule 20 to that Act, after paragraph 19 insert—.
The amendments made by this section have effect in relation to tax arrangements (within the meaning of Part 5 of FA 2013) entered into on or after the day on which this Act is passed.
Schedule 18 contains provision about the issue of warning notices to, and further sanctions for, persons who incur a relevant defeat in relation to arrangements.
Part 5 of FA 2014 (promoters of tax avoidance schemes) is amended as follows.
After section 237 insert—
After section 241 insert—
In section 242 (monitoring notices: duty to apply to tribunal), after subsection (5) insert—
After Schedule 34 insert—
In section 241 (duration of conduct notice), after subsection (4) insert—
After section 281 insert—
In section 282 (regulations), in subsection (3), after paragraph (b) insert—.
In section 283(1) (interpretation of Part 5)—
in the definition of “conduct notice”, after paragraph (a) insert—;
in the definition of “tax”, after “ “tax”” insert “ (except in provisions to which section 281A applies) ”;
in the definition of “ “tax advantage””, after “234(3)” insert “ (but see also section 281A) ”;
“contract settlement” means an agreement in connection with a person's liability to make a payment to the Commissioners under or by virtue of an enactment; “defeat”, in relation to arrangements, has the meaning given by paragraph 10 of Schedule 34A; “defeat notice” has the meaning given by section 241A(7); “double defeat notice” has the meaning given by section 241A(7); “final”, in relation to a judicial ruling, is to be interpreted in accordance with section 237D(6); “judicial ruling” means a ruling of a court or tribunal on one or more issues; “look-forward period, in relation to a defeat notice, has the meaning given by section 241A(10); “provisional”, in relation to a conduct notice given under section 237A(8), is to be interpreted in accordance with section 237C; “relevant defeat”, in relation to a person, is to be interpreted in accordance with Schedule 34A; “related”, in relation to arrangements, is to be interpreted in accordance with paragraph 2 of Schedule 34A; “relies on a Case 3 relevant defeat” is to be interpreted in accordance section 237B(5); “single defeat notice” has the meaning given by section 241A(7).
Schedule 36 (promoters of tax avoidance schemes: partnerships) is amended in accordance with subsections (11) to (16).
In Part 2, before paragraph 5 insert—.
In paragraph 7(1)(b) after “a” insert “ defeat notice, ”.
In paragraph 7(2) after “the” insert “ defeat notice, ”.
After paragraph 7 insert—
In paragraph 10—
in sub-paragraph (1)(b) for “conduct notice or a” substitute “ , defeat notice, conduct notice or ”;
in sub-paragraph (3), after “partner—” insert—.
in sub-paragraph (4), after “(“the new partnership”)—” insert—
after sub-paragraph (5) insert—
After paragraph 11 insert—
Part 2 of Schedule 2 to the National Insurance Contributions Act 2015 (application of Part 5 of FA 2014 to national insurance contributions) is amended in accordance with subsections (18) and (19).
After paragraph 30 insert—
In paragraph 31 (interpretation)—
before paragraph (a) insert—
in paragraph (b), for “are to sections of” substitute “ or Schedules are to sections of, or Schedules to ”.
For the purposes of sections 237A and 241A of FA 2014, a defeat (by virtue of any of Conditions A to F in Schedule 34A to that Act) of arrangements is treated as not having occurred if—
there has been a final judicial ruling on or before the day on which this Act is passed as a result of which the counteraction referred to in paragraph 11(d), 12(1)(b), 13(1)(d), 14(1)(d) or 15(1)(d) (as the case may be) is final for the purposes of Schedule 34A of that Act, or
(in the case of a defeat by virtue of Condition F in Schedule 34A) the judicial ruling mentioned in paragraph 16(1)(d) of that Schedule becomes final on or before the day on which this Act is passed.
Subsection (20) does not apply in relation to a person (who is carrying on a business as a promoter) if at any time after 17 July 2014 that person or an associated person takes action as a result of which the person taking the action—
becomes a promoter in relation to the arrangements, or arrangements related to those arrangements, or
would have become a promoter in relation to arrangements mentioned in paragraph (a) had the person not already been a promoter in relation to those arrangements.
For the purposes of sections 237A and 241A of FA 2014, a defeat of arrangements is treated as not having occurred if it would (ignoring this sub-paragraph) have occurred—
on or before the first anniversary of the day on which this Act is passed, and
by virtue of any of Conditions A to E in Schedule 34A to FA 2014, but otherwise than as a result of a final judicial ruling.
For the purposes of subsection (21) a person (“Q”) is an “associated person” in relation to another person (“P”) at any time when any of the following conditions is met—
P is a relevant body which is controlled by Q;
Q is a relevant body, P is not an individual and Q is controlled by P;
P and Q are relevant bodies and a third person controls P and Q.
In subsection (23) “relevant body” and “control” are to be interpreted in accordance with paragraph 19 of Schedule 34A to FA 2014.
In subsections (20) to (22) expressions used in Part 5 of FA 2014 (as amended by this section) have the same meaning as in that Part.
Schedule 19 contains provisions relating to—
the publication of tax strategies by bodies which are or are part of a large business,
the imposition of sanctions for such bodies where there has been persistent unco-operative behaviour.
That Schedule, so far as relating to the publication of a tax strategy for a financial year of a relevant body or other entity, has effect only where the financial year begins on or after the day on which this Act is passed.
An officer of HMRC may not give a warning notice under Part 3 of that Schedule to a relevant body or other entity before the beginning of its first financial year beginning on or after the day on which this Act is passed.
In this section and Schedule 19 “HMRC” means Her Majesty's Revenue and Customs.
Schedule 20 makes provision for penalties for persons who enable offshore tax evasion or non-compliance by other persons.
Subsection (1) and that Schedule come into force on such day as the Treasury may appoint by regulations made by statutory instrument.
Regulations under this section may—
commence a provision generally or only for specified purposes,
appoint different days for different purposes, and
make supplemental, incidental and transitional provision in connection with the coming into force of any provision of the Schedule.
Schedule 21 contains provisions amending—
Schedule 24 to FA 2007 (penalties for errors in tax returns etc),
Schedule 41 to FA 2008 (penalties for failure to notify etc), and
Schedule 55 to FA 2009 (penalties for failure to make return etc).
That Schedule comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.
Regulations under this section may—
commence a provision generally or only for specified purposes,
appoint different days for different provisions or for different purposes, and
make supplemental, incidental and transitional provision.
Section 94 of FA 2009 (publishing details of deliberate tax defaulters) is amended as follows.
After subsection (4), insert—
In subsection (6), after “information” insert “ about a person under subsection (1), ”.
After subsection (6), insert—
In subsection (10)—
omit the word “or” at the end of paragraph (a), and after that paragraph insert—;
after paragraph (b) insert, or
For subsection (16) substitute—
The amendments made by this section come into force on such day as the Treasury may by regulations made by statutory instrument appoint.
Schedule 22 contains provision imposing asset-based penalties on certain taxpayers who have been charged a penalty for deliberate offshore inaccuracies and failures.
That Schedule comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.
Regulations under subsection (2) may—
commence a provision generally or only for specified purposes,
appoint different days for different provisions or for different purposes, and
make supplemental, incidental and transitional provision.
After section 106A of TMA 1970 insert—
The amendment made by this section comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.
The regulations—
may appoint different days for different purposes, and
may include incidental, supplemental, consequential and transitional provision and savings.
The amendment made by this section does not have effect in relation to— if the notice or return relates to a tax year before that in which the amendment comes into force.
a failure to give a notice required by section 7 of TMA 1970,
a failure to make and deliver a return required by section 8 of TMA 1970, or
a return required by section 8 that contains an inaccuracy,
Schedule 23 contains provisions about simple assessments by HMRC.
Paragraphs 1 to 8 of that Schedule have effect in relation to the 2016-17 tax year and subsequent years.
Paragraph 9 of that Schedule comes into force on such day as the Treasury may appoint by regulations made by statutory instrument.
Regulations under subsection (3) may—
commence paragraph 9 generally or only for specified purposes, and
appoint different days for different purposes.
TMA 1970 is amended as follows.
In section 34 (ordinary time limit of 4 years for assessments), after subsection (2) insert—
After that section insert—
Section 8B of TMA 1970 (withdrawal of notice under section 8 or 8A) is amended as follows.
In subsection (2) for the words from “the person” to the end substitute “ HMRC may withdraw the notice (whether at the request of the person or otherwise) ”.
In subsection (3) for “no request may be made” substitute “ the notice may not be withdrawn ”.
In subsection (4) omit “, on receiving a request,”.
In subsection (6)(b) for “agree with the person” substitute “ determine ”.
In paragraph 17A of Schedule 55 to the Finance Act 2009 (penalty for failure to make returns etc), in sub-paragraph (1)(b) for the words from the beginning to “withdraw” substitute “ HMRC decide to give P a notice under section 8B withdrawing ”.
The amendments made by this section have effect in relation to any notice under section 8 or 8A of TMA 1970 given in relation to the 2014-15 tax year or any subsequent year (and it is immaterial whether the notice was given before or after the passing of this Act).
This section applies if—
a sum is payable to or by the Commissioners under a decree or extract issued in any court proceedings relating to a taxation matter (a “tax-related judgment debt”), and
interest in relation to the tax-related judgment debt is included in or payable under the decree or extract.
In a case where the rate of interest in relation to the tax-related judgment debt is stated in the decree or extract, the rate stated in relation to that debt may not exceed (and may not be capable of exceeding)—
in the case of a sum payable to the Commissioners, the late payment interest rate, and
in the case of a sum payable by the Commissioners, the special repayment rate.
In a case where the rate of interest in relation to the tax-related judgment debt is not stated in the decree or extract but provided for by an enactment or rule of court (whenever passed or made), that enactment or rule is to have effect in relation to the debt as if for the rate for which it provides there were substituted—
in the case of a sum payable to the Commissioners, the late payment interest rate, and
in the case of a sum payable by the Commissioners, the special repayment rate.
This section has effect in relation to interest for periods beginning on or after the day on which this Act is passed, regardless of—
the date of the decree or extract in question, and
whether interest begins to run on or after the day on which this Act is passed, or began to run before that date.
In this section—
“CAA 2001” means the Capital Allowances Act 2001;
ITTOIA 2005 is further amended as follows.
In Schedule 3 to ITEPA 2003 (SAYE option schemes), paragraph 28 (requirements as to price for acquisition of shares) is amended as follows. In sub-paragraph (1)— Omit sub-paragraph (2).
If an individual is issued with a reference number for the purposes of paragraph 9(2), the individual must preserve, for the period of 6 years beginning with the date the application for the reference number was made, all such records as were required for the purpose of enabling the individual’s relevant amount (see paragraph 9), and amounts A, B, C and D for the individual (see paragraphs 10 to 13), to be correctly calculated.
Paragraph 7 of Schedule 29 to FA 2004 (interpretation of lump sum rule: meaning of “trivial commutation lump sum”) is amended as follows. In sub-paragraph (1)(aa) (sum must be paid in respect of a defined benefits arrangement), after “arrangement,” insert “or in respect of a scheme pension payable by the scheme administrator to which the member has become entitled under a money purchase arrangement (an “in-payment money-purchase in-house scheme pension”), or partly in respect of the former and partly in respect of the latter,”. In sub-paragraph (1)(d) (sum must extinguish member’s entitlement to defined benefits under the scheme), after “defined benefits” insert “, and any entitlement to payments of in-payment money-purchase in-house scheme pensions,”.
After section 2AB insert—
Section 22 (prohibition on use of petrol substitutes on which duty has not been paid) is amended as follows. After subsection (1AB) insert— In subsection (1A), for “or (1AB)” substitute “, (1AB) or (1AC)”. For the heading substitute “Prohibition on use of fuel substitutes on which duty has not been paid”.
In section 16 of FA 1994 (appeals to a tribunal), in subsection (6)(c), after “section 22(1)” insert “(1AA), (1AB)”.
The power to make regulations under section 122(6)(c) of FA 2015 (country- by-country reporting: incidental etc provision that may be included in regulations) includes power to amend paragraph 7 above.
This paragraph has effect for the purposes of this Schedule. Conduct involves offshore activity if it involves— Conduct involves an offshore matter if it results in a potential loss of revenue that is charged on or by reference to— Where the tax at stake is inheritance tax, assets are treated for the purposes of sub-paragraph (3) as situated or held in a territory outside the United Kingdom if they are so held or situated immediately after the transfer of value by reason of which inheritance tax becomes chargeable. Conduct involves an offshore transfer if— Conduct involves a relevant offshore asset move if at a time when Q is the beneficial owner of an asset (“the qualifying time”)— and Q remains the beneficial owner of the asset, or any part of it, immediately after the qualifying time. Paragraphs 4(2) to (4) of Schedule 21 to FA 2015 apply for the purposes of sub-paragraph (6) above as they apply for purposes of paragraph 4 of that Schedule. In sub-paragraph (6) above, “specified territory” has the same meaning as in paragraph 4(5) of Schedule 21 to FA 2015.
The potential lost revenue in a case where P is liable to a penalty under paragraph 1 for enabling Q to engage in conduct that makes Q liable (if the applicable conditions are met) to a relevant civil penalty is to be determined as follows. In the case of a penalty under paragraph 1 of Schedule 24 to FA 2007 involving an offshore matter or an offshore transfer, the potential lost revenue is the amount that under that Schedule is the potential lost revenue in respect of Q’s conduct. In the case of a penalty under paragraph 1 of Schedule 41 to FA 2008 in relation to a failure to comply with section 7(1) of TMA 1970 involving offshore activity, the potential lost revenue is the amount that under that Schedule is the potential lost revenue in respect of Q’s conduct. In the case of a penalty under paragraph 6 of Schedule 55 to FA 2009 involving offshore activity, the potential lost revenue is the liability to tax which would have been shown in the return in question (within the meaning of that Schedule).
Schedule 41 to FA 2008 (penalties: failure to notify etc) is amended as follows.
The standard amount of the asset-based penalty is the lower of— See also—
This paragraph applies where the principal tax at stake is inheritance tax. The asset is the property the disposition of which gave rise to the transfer of value by reason of which the inheritance tax to which the standard offshore penalty relates became chargeable. For the purposes of calculating the amount of the asset-based penalty, the value of the property is to be the value of the property used by HMRC in assessing the liability to inheritance tax. Terms used in this paragraph have the same meaning as in IHTA 1984.
In the heading of Chapter 3 of Part 4, for “credits etc” substitute “ treated as paid ”.
In Schedule 4 to ITEPA 2003 (CSOP schemes), paragraph 22 (requirements as to price for acquisition of shares) is amended as follows. In sub-paragraph (1)— Omit sub-paragraph (2).
Section 636B of ITEPA 2003 (taxation of trivial commutation, and winding-up, lump sums) is amended as follows. In subsection (3) (taxation of lump sum where member has uncrystallised rights under the pension scheme)— After subsection (4) insert—
In section 2A (power to amend definitions), in subsection (1), after paragraph (b) insert—.
Paragraph 12 (reductions for disclosure) is amended as follows. Paragraph 13 provides for reductions in penalties— Paragraph 13A provides for reductions in penalties under paragraph 1 where P discloses a relevant failure that involves an offshore matter or an offshore transfer. Sub-paragraph (2) applies where P discloses— In sub-paragraph (2), for “a” substitute “the”. Sub-paragraph (2B) applies where P discloses— P discloses the failure by— The Treasury must make regulations setting out what is meant by “additional information” for the purposes of sub-paragraph (2B)(d). Regulations under sub-paragraph (2C) are to be made by statutory instrument. An instrument containing regulations under sub-paragraph (2C) is subject to annulment in pursuance of a resolution of the House of Commons. Paragraph 6A(4) to (5) applies to determine whether a failure involves an offshore matter, an offshore transfer or a domestic matter for the purposes of this paragraph. In this paragraph “relevant failure” means a failure to comply with a relevant obligation.
In section 382(2) (other contents of Chapter 3 of Part 4)—
omit “tax credits,”, and
for “397” substitute “ 399 ”.
The amendments made by paragraphs 7 and 8 have effect in relation to lump sums paid after the day on which this Act is passed.
Standard % Minimum % for prompted disclosure Minimum % for unprompted disclosure 30% case A: 10% case A: 0% case B: 20% case B: 10% 70% 35% 20% 100% 50% 30%
Omit section 384(3) (which refers to section 398).
After paragraph 13 insert—
Omit section 393(5) (determining entitlement to tax credit).
In section 394 (which deems a distribution to be made)—
omit subsection (5) (determining entitlement to tax credit), and
in subsection (6), for “But for” substitute “ For ”.
In section 395(3) (interpretation of section 395(2)) omit the words from “after” to the end.
For section 396A(2)(b) (alternative receipt treated as qualifying distribution for the purposes of sections 397 and 399 and for the purposes of section 1100 of CTA 2010) substitute—
In the italic heading before section 397, omit “Tax credits and”.
Section 399 (qualifying distribution received by person not entitled to tax credits) is amended as follows. For subsection (1) substitute— In subsection (2) omit “(but see subsection (7))”. Omit subsections (3) to (5) (amount of dividend received by non-UK resident to be treated as its grossed-up amount). Omit subsection (5A) (amounts treated as qualifying distributions for purposes of the section). Omit subsection (7) (which provides for subsection (2) to be subject to repealed provisions). For the heading substitute “ Tax treated as paid on distributions received by non-UK resident persons ”.
Section 401 (relief: qualifying distribution after linked non-qualifying distribution) is amended as follows. For subsections (1) to (6) substitute— “CD distribution” means a distribution which is a distribution for the purposes of the Corporation Tax Acts only because it falls within paragraph C or D in section 1000(1) of CTA 2010 (redeemable share capital or security issued as bonus in respect of shares in, or securities of, the company), “non-CD distribution” means a distribution which is not a CD distribution, and “security” In the heading, for “qualifying distribution after linked non-qualifying distribution” substitute “ distribution repaying shares or security issued in earlier distribution ”.
Omit section 401A (recovery of overpaid tax credit etc).
In section 401B (power to obtain information for the purposes of section 397), for “section 397”, in each place it occurs, substitute “ this Chapter ”.
Omit sections 406(4A) and 407(4A) (determining entitlement to tax credit).
In section 408(2A) (interpretation of section 408(2)) omit the words from “after” to the end.
In section 411(2) (stock dividends: amount on which tax charged) omit “, grossed up by reference to the dividend ordinary rate for the tax year”.
In section 416 (released debts: amount on which tax charged)—
in subsection (1) (tax charged on gross amount) omit “gross”, and
omit subsection (2) (meaning of “gross amount”).
In section 418(3) (release of loan: tax only on grossed-up amount of excess where part previously charged) omit “, grossed up by reference to the dividend ordinary rate”.
In section 651 (meaning of “UK estate” and “foreign estate”)—
in subsection (4), for “680(3) or (4) (sums” substitute “ 664(2)(c) or (d) or 680(4) (sums not liable to tax and sums ”, and
in subsection (5), for “680(3) or (4)” substitute “ 664(2)(c) or (d) or 680(4) ”.
In section 657 (tax charged on estate income from foreign estates), for “680(3) or (4)”, in both places, substitute “ 680(4) ”.
In section 663 (applicable rate for purposes of grossing-up under sections 656 and 657), after subsection (4) insert—
In section 670 (applicable rate for purposes of Step 2 in section 665(1)), after subsection (4) insert—
In section 680 (income of an estate that is treated as bearing income tax)—
in subsection (2) omit “(3) or”, and
omit subsection (3) (sums treated as bearing tax at the dividend ordinary rate).
In section 680A (estate income treated as dividend income), in each of subsections (1)(a) and (4)(a), after “at the dividend ordinary rate” insert “ or as bearing tax at 0% because of section 663(5) ”.
In section 854(6) (carrying on by partner of notional business: meaning of “untaxed income”)—
omit the “or” at the end of paragraph (b), and
after paragraph (c) insert—
Omit section 858(3) (partnerships with foreign element: entitlement to tax credit).
“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;
In section 534 of ITEPA 2003 (disqualifying events relating to relevant company), at the end insert— The amendment made by this paragraph is treated as having come into force on 1 October 2014.
The conditions mentioned in paragraph 1(1)(a) are—
that, on 6 April 2016, the individual has one or more arrangements under—
a registered pension scheme, or
a relieved non-UK pension scheme of which the individual is a relieved member,
that paragraph 7 of Schedule 36 to FA 2004 (primary protection) does not make provision for a lifetime allowance enhancement factor in relation to the individual,
that paragraph 12 of that Schedule (enhanced protection) does not apply in the individual’s case on 6 April 2016,
that paragraph 14 of Schedule 18 to FA 2011 (transitional provision relating to new standard lifetime allowance for the tax year 2012-13) does not apply in the individual’s case on 6 April 2016, and
that paragraph 1 of Schedule 22 to FA 2013 (“fixed protection 2014” relating to new standard lifetime allowance for the tax year 2014-15) does not apply in the individual’s case on 6 April 2016.
Paragraph 17A of Schedule 36 to FA 2004 (impermissible transfers) applies for the purposes of paragraph 3(b) but as if—
the references to a relevant existing arrangement were to the arrangement, and
the reference in sub-paragraph (2) to 5 April 2006 were to 5 April 2016.
Subject to sub-paragraphs (2) to (4), paragraph 3 applies in relation to an individual who is a relieved member of a relieved non-UK pension scheme as if the relieved non-UK pension scheme were a registered pension scheme; and the other paragraphs of this Part of this Schedule apply accordingly. Sub-paragraphs (3) and (4) apply for the purposes of paragraph 3(a) (instead of paragraph 4(1)) in determining if there is benefit accrual in relation to an individual under an arrangement under a relieved non-UK pension scheme of which the individual is a relieved member. There is benefit accrual in relation to the individual under the arrangement if there is a pension input amount under sections 230 to 237 of FA 2004 (as applied by Schedule 34 to that Act) greater than nil in respect of the arrangement for a tax year; and, in such a case, the benefit accrual is treated as occurring at the end of the tax year. There is also benefit accrual in relation to the individual under the arrangement if— and, in such a case, the benefit accrual is treated as occurring immediately before the benefit crystallisation event.
The Commissioners may by regulations amend Part 1, 2 or 3 of this Schedule. Regulations under this paragraph may (for example)— Regulations under this paragraph may include provision having effect in relation to a time before the regulations are made, but— Regulations under this paragraph may include— Power to make regulations under this paragraph is exercisable by statutory instrument. A statutory instrument containing regulations under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.
In Schedule A1 to CAA 2001 (first-year tax credits), in paragraph 11(4), omit the “and” at the end of paragraph (e) and after paragraph (f) insert , and
In section A1 of CTA 2009 (overview of the Corporation Tax Acts), in subsection (2)—
omit paragraph (h), and
after that paragraph insert—.
In this Schedule “tax advantage”, in relation to VAT, is to be read in accordance with sub-paragraphs (2) to (4). A taxable person obtains a tax advantage if— A person who is not a taxable person obtains a tax advantage if the person’s non-refundable tax is less than it otherwise would be. In sub-paragraph (3) “non-refundable tax”, in relation to a person who is not a taxable person, means— but excluding (in each case) any VAT in respect of which the person is entitled to a refund from the Commissioners by virtue of any provision of VATA 1994.
For the purposes of this Schedule arrangements are “DOTAS arrangements” at any time if they are notifiable arrangements at the time in question and a person— But for the purposes of this Schedule “DOTAS arrangements” does not include arrangements in respect of which HMRC has given notice under section 312(6) of FA 2004 (notice that promoters not under duty to notify client of reference number). For the purposes of sub-paragraph (1) a person who would be required to provide information under subsection (3) of section 308 of FA 2004— is treated as providing the information at the end of the period referred to in subsection (3) of that section. In this paragraph “notifiable arrangements” has the same meaning as in Part 7 of FA 2004.
A person (“P”) incurs a “relevant defeat” in relation to arrangements if any of Conditions A to E is met in relation to P and the arrangements. The relevant defeat is incurred when the condition in question is first met.
Condition C is that (in a case not falling within Condition A or B)— For the purposes of sub-paragraph (1), P “relies on the arrangements” if— For the purposes of sub-paragraph (2) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable P to obtain. For the purposes of sub-paragraph (2) an obligation is a “relevant obligation” if the arrangements might be expected to have the result that the obligation does not arise. For the purposes of this paragraph the arrangements are “counteracted” if— For the purposes of this paragraph a counteraction is “final” when the assessment, adjustments or action in question, and any amounts arising from the assessment, adjustments or action, can no longer be varied, on appeal or otherwise. For the purposes of sub-paragraph (1) the time at which it falls to be determined whether or not the arrangements are DOTAS arrangements is when the counteraction becomes final. The following are “taxpayer emendations” for the purposes of sub-paragraph (5)— For the purposes of paragraph (a) a payment in respect of a liability to pay national insurance contributions is not an adjustment unless it is a payment in full. The conditions are that the disclosure— For the purposes of this paragraph a contract settlement which HMRC enters into with P is treated as an assessment to tax (other than a self-assessment); and in relation to contract settlements references in sub-paragraph (5) to the basis an which any assessment or adjustments are made, or any other action is taken, are to be read with any necessary modifications.
A UK group falls within this Part of this Schedule (“this Part”) if—
the group has persistently engaged in unco-operative behaviour (see paragraphs 36 to 38),
some or all of the unco-operative behaviour has caused there to be, or contributed to there being, two or more significant tax issues in respect of the group or members of the group which are unresolved (see paragraph 39), and
there is a reasonable likelihood of further instances of the group engaging in unco-operative behaviour in a manner which causes there to be, or contributes to there being, significant tax issues in respect of the group or members of the group.
Where a person is found liable for a penalty under paragraph 1 HMRC must— A penalty must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued. An assessment of a penalty— A supplementary assessment may be made in respect of a penalty if an earlier assessment operated by reference to an underestimate of the liability to tax that would have been shown in a return. Sub-paragraph (6) applies if— HMRC may amend the assessment so that it is based upon the correct amount. But an amendment under sub-paragraph (6)—
Subject to the provisions of this Part of this Schedule, the following provisions of TMA 1970 apply for the purposes of this Part of this Schedule as they apply for the purposes of the Taxes Acts—
section 108 (responsibility of company officers),
section 114 (want of form), and
section 115 (delivery and service of documents).
In its application for the purpose mentioned in paragraph 18(1) Schedule 36 to FA 2008 has effect as if—
any provisions which can have no application for that purpose, or are specifically excluded by paragraph 20, were omitted,
references to “the taxpayer” were references to the relevant person whose position as regards liability for a penalty under paragraph 1 is to be checked, and references to “a taxpayer” were references to a relevant person,
references to a person’s “tax position” are to the relevant person’s position as regards liability for a penalty under paragraph 1,
references to prejudice to the assessment or collection of tax included a reference to prejudice to the investigation of the relevant person’s position as regards liability for a penalty under paragraph 1,
references to information relating to the conduct of a pending appeal relating to tax were references to information relating to the conduct of a pending appeal relating to an assessment of liability for a penalty under paragraph 1.
A UK group has “engaged in unco-operative behaviour” if— Those conditions are— A UK group has engaged in unco-operative behaviour “persistently” if— References in this Part to doing something “persistently” include doing it on a sufficient number of occasions for it to be clear that it represents a pattern of behaviour.
An assessment of a person as liable to a penalty under paragraph 1 may not take place more than 2 years after the fulfilment of the conditions mentioned in paragraph 1(1) (in relation to that person) first came to the attention of an officer of Revenue and Customs.
A member of a UK group has, or two or more members of a UK group (taken together) have, “satisfied the behaviour condition” if it has, or they have, behaved in a manner which has delayed or otherwise hindered HMRC in the exercise of their functions in connection with determining the liability to UK taxation of the group or a member of the group. Factors which may indicate that a member of a UK group has behaved as described in sub-paragraph (1) include— An interpretation of legislation relating to UK taxation is “speculative” if it is likely that a court or tribunal would disagree with it.
A member of a UK group has “satisfied the arrangements condition” if it is a party to a tax avoidance scheme. “Tax avoidance scheme” means—
There is a significant tax issue in respect of a UK group or a member of a UK group where— The reference in sub-paragraph (1)(a) to circumstances in which there is a disagreement include circumstances in which there is a reasonable likelihood of a disagreement. The Treasury may by regulations substitute a higher amount for the amount for the time being specified in sub-paragraph (1)(c).
The references in paragraphs 36 to 39 to things done by a member of a UK group (“the group in question”)—
include acts and omissions of a relevant body that is not a member of the group in question if they took place at a time when the relevant body was a member of a group headed by the body that is the head of the group in question;
do not include acts or omissions of a relevant body that is a member of the group in question if they took place at a time when the relevant body was not a member of a group headed by the body that is the head of the group in question.
This section extends to Scotland only.
This section applies if a sum payable to or by the Commissioners under a judgment or order given or made in any court proceedings relating to a taxation matter (a “tax-related judgment debt”) carries interest.
In a case where the rate of interest is specified in the judgment (in the case of the High Court) or directed by the judge (in the case of a county court), the rate specified or directed in relation to that debt may not exceed (and may not be capable of exceeding)—
in the case of a sum payable to the Commissioners, the late payment interest rate, and
in the case of a sum payable by the Commissioners, the special repayment rate.
In a case where the rate of interest in relation to the tax-related judgment debt is not specified in the judgment or directed by the judge but provided for by an enactment or rule of court (whenever passed or made), that enactment or rule is to have effect in relation to the debt as if for the rate for which it provides there were substituted—
in the case of a sum payable to the Commissioners, the late payment interest rate, and
in the case of a sum payable by the Commissioners, the special repayment rate.
This section has effect in relation to interest for periods beginning on or after the day on which this Act is passed, regardless of—
the date of the judgment or order in question, and
whether interest begins to run on or after the day on which this Act is passed, or began to run before that date.
In this section—
This section extends to Northern Ireland only.
In section 52 of F(No. 2)A 2015 (rates of interest applicable to judgment debts etc in taxation matters: England and Wales), in subsection (15), in the definition of “taxation matter” omit “, other than national insurance contributions,”.
This section has effect in relation to interest for periods beginning on or after the day on which this Act is passed, regardless of—
the date of the judgment or order in question, and
whether interest begins to run on or after the day on which this Act is passed, or began to run before that date.
This section extends to England and Wales only.
At the end of section 428 of ITA 2007 insert—
The amendment made by this section comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.
Part 11 of CEMA 1979 (arrest of persons, forfeiture and legal proceedings) is amended as set out in subsections (2) and (3).
In section 146A(7) (definition of prosecuting authority)—
in the opening words, for “prosecution” substitute “ prosecuting ”;
in paragraph (b), omit “the Commissioners or”;
in paragraph (c), for “the Commissioners” substitute “ the Director of Public Prosecutions for Northern Ireland ”.
In section 150(1) (joint and several liability), for the words from “the Director” to “Ireland)” substitute “ prosecuting authority (within the meaning of section 146A) ”.
In consequence of subsection (3), in Schedule 4 to the Commissioners for Revenue and Customs Act 2005, omit paragraph 25.
The amendments made by this section apply in relation to proceedings commenced on or after the day on which this Act is passed.
CEMA 1979 is amended as follows.
Schedule 2A (detention of things as liable to forfeiture) is amended as set out in subsections (3) and (4).
In paragraph 3(2) (exceptions to requirement of notice of detention)—
omit the “or” at the end of paragraph (b), and after that paragraph insert—;
in paragraph (c), after “on” insert “ or from ”;
at the end insert, or
In paragraph 4(2) (unauthorised removal or disposal of things detained: definition of “responsible person”), for paragraphs (a) and (b) substitute—
In Schedule 3 (seizure and forfeiture), in paragraph 1(2) (exceptions to requirement of notice of seizure)—
after paragraph (b) insert—;
in paragraph (c), for “in” substitute “ on or from ”;
at the end insert; or
The amendments made by this section have effect in relation to things detained or seized on or after the day on which this Act is passed.
In Part 2 of Schedule 23 to FA 2011 (data-gathering powers: relevant data-holders), after paragraph 13A insert—
This section applies in relation to relevant data with a bearing on any period (whether before, on or after the day on which this Act is passed).
Part 4 of Schedule 23 to FA 2011 (data-gathering powers: penalties) is amended as follows.
In paragraph 38 (increased daily default penalty)—
in sub-paragraphs (1)(c) and (2), for “imposed” substitute “ assessable ”;
for sub-paragraphs (3) and (4) substitute—;
in sub-paragraph (5), for “the amount” substitute “ the new maximum amount ”.
In paragraph 39—
in sub-paragraph (1), for “a data-holder becomes liable to a penalty” substitute “ the tribunal makes a determination ”;
in sub-paragraph (2), for “the day from which the increased penalty is to apply” substitute “ new maximum amount and the day from which it applies ”;
omit sub-paragraph (3).
In paragraph 40 (enforcement of penalties), in sub-paragraph (2)(a) omit “or 39”.
At the end of paragraph 36 (right to appeal against penalty), the existing text of which becomes sub-paragraph (1), insert—
Sections 130 and 131 of FA 2008 (which deal with the availability of set-off in England and Wales and Northern Ireland) extend also to Scotland.
Accordingly, those sections are amended as follows.
In section 130—
omit subsection (10), and
in the heading omit “: England and Wales and Northern Ireland”.
In section 131—
in subsection (5), in paragraph (a), after “winding up order” insert “ or award of sequestration ”,
in that subsection, omit the “or” at the end of paragraph (d) and after paragraph (e) insert, or , and
omit subsection (9).
After section 8J of TPDA 1979 insert—
In section 9 of TPDA 1979 (regulations)—
in subsection (1), after “statutory instrument and” insert “ , subject to subsection (1A), ”, and
after subsection (1) insert—
In section 13A(2) of FA 1994 (customs and excise reviews and appeals: “relevant decisions”), after paragraph (g) insert—.
In Schedule 5 to FA 1994 (decisions subject to review and appeal) after paragraph 5 insert—
The amendments made by this section come into force on such day as the Commissioners for Her Majesty's Revenue and Customs may by regulations made by statutory instrument appoint.
Regulations under subsection (5) may appoint different days for different purposes.
The powers conferred by this section are only exercisable for the purpose of complying (or enabling another person to comply) with relevant EU obligations.
The Commissioners may determine that claims made for a tax advantage of a description listed in Part 1 of Schedule 24 must include (or be accompanied by) such information, presented in such form, as the determination may specify.
For the purposes of subsection (2) “information” includes—
information about the claimant (or the claimant's activities),
information about the subject-matter of the claim, and
other information which relates to the grant of state aid through the provision of the tax advantage in question.
A determination under subsection (2)—
may make different provision for different descriptions of tax advantages or for different cases or circumstances, and
may be revoked or amended by another determination.
Subsection (6) applies where it appears to the Commissioners that a tax advantage of a description listed in Part 2 of Schedule 24—
has been given, or
may be given in the future.
The Commissioners may give the relevant person a notice requiring the person—
to supply the Commissioners with the information specified in the request, and
if the notice so provides, to present it in the form specified in the request.
The relevant person must comply with those requirements within the period specified in the notice.
In subsections (6) and (7) “the relevant person”, in relation to a tax advantage of any description, means the person mentioned in the third column of the entry for that tax advantage in Part 2 of Schedule 24.
For the purposes of subsection (6) “information” includes—
information about—
the person to whom the request is given (or their activities),
any other person who is the beneficiary of the tax advantage,
information about the tax advantage (including the circumstances in which it was obtained), and
any other information which relates to the grant of state aid through the provision of the tax advantage in question.
A determination under subsection (2) may not apply to claims made before 1 July 2016.
A notice under subsection (6) may relate to any information required by the Commissioners for the purpose mentioned in subsection (1) (including information which relates to matters arising before this Act is passed).
The Commissioners may publish any state aid information for the purpose of securing compliance with any relevant EU obligation which requires the publication of that information.
That power includes power to disclose state aid information to another person for the purpose of securing its publication.
In this section “state aid information” means information which relates to the grant of state aid through the provision of a tax advantage and includes (but is not limited to) any information mentioned in section 180(3) or (9).
This section applies to any state aid information (including information which relates to a tax advantage given before the passing of this Act).
In sections 180 and 181—
The “General Block Exemption Regulation” is Commission Regulation (EU) No 651/2014 declaring certain categories of aid to be compatible with the internal market in application of Articles 107 and 108 of the Treaty establishing the European Union (which relate to state aids granted by Member States) as it has effect by virtue of the Protocol on Ireland/Northern Ireland in the EU withdrawal agreement. “Post-withdrawal obligations” means obligations that arise or continue by virtue of the EU withdrawal agreement (including the Protocol on Ireland/Northern Ireland).
The Treasury may by regulations made by statutory instrument amend Part 1 or Part 2 of Schedule 24 by adding, omitting or varying an entry for any description of tax advantage.
Regulations under subsection (3) may include incidental or supplemental provision.
A statutory instrument containing regulations under subsection (3) is subject to annulment in pursuance of a resolution of the House of Commons.
The powers under sections 180 and 181 are in addition to any other powers of the Commissioners to acquire, disclose or publish information.
In this section “qualifying transformer vehicle” means a transformer vehicle which meets conditions which are specified in regulations made by the Treasury.
The Treasury may by regulations make provision about the treatment for the purposes of any enactment relating to taxation of—
qualifying transformer vehicles;
investors in qualifying transformer vehicles;
transactions involving qualifying transformer vehicles.
Regulations under subsection (2) may, in particular, disapply, apply (with or without modification) or modify the application of any enactment.
Without limiting the generality of subsection (2), regulations under that subsection may in particular include—
provision for profits or other amounts to be calculated with any adjustments, or on any basis, set out in the regulations;
provision conferring, altering or removing an exemption or relief;
provision about the treatment of arrangements the purpose, or one of the main purposes, of which is to secure a tax advantage;
provision about collection and enforcement (including the withholding of tax);
in relation to qualifying transformer vehicles, requirements with regard to the provision of information to investors;
in relation to qualifying transformer vehicles or investors in qualifying transformer vehicles, requirements with regard to—
the provision of information to Her Majesty's Revenue and Customs,
the preparation of accounts,
the keeping of records, or
other administrative matters.
Regulations under this section—
may provide for Her Majesty's Revenue and Customs to exercise a discretion in dealing with any matter;
may make provision by reference to rules, guidance or other documents issued by any person (as they have effect from time to time).
Regulations under this section may—
make different provision for different cases or different purposes (including different provision in relation to different descriptions of qualifying transformer vehicle or, as the case may be, transformer vehicle);
contain incidental, supplementary, consequential and transitional provision and savings.
Regulations under this section are to be made by statutory instrument.
A statutory instrument containing regulations under subsection (1) is subject to annulment in pursuance of a resolution of the House of Commons.
But the first set of regulations under subsection (1) may not be made unless a draft has been laid before, and approved by a resolution of, the House of Commons.
A statutory instrument containing regulations under subsection (2) may not be made unless a draft has been laid before, and approved by a resolution of, the House of Commons.
In this section—
“disposal” is to be interpreted in accordance with section 517R of ITA2007;
Where a person (P) becomes liable for an asset-based penalty under paragraph 1, HMRC must— A penalty under paragraph 1 must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued. An assessment— An assessment of an asset-based penalty under paragraph 1 must be made within the period allowed for making an assessment of the standard offshore tax penalty to which the asset-based penalty relates (and where an asset-based penalty relates to more than one standard offshore tax penalty, the assessment must be made within the latest of those periods). In this Part of this Schedule references to an assessment to tax, in relation to inheritance tax, are to a determination.
In section 103ZA to TMA 1970 (disapplication of sections 100 to 103 in case of certain penalties), omit the “or” at the end of paragraph (h), and at the end insert , or. In section 107A of that Act (relevant trustees)— In Schedule 24 to FA 2007 (penalties for errors), in paragraph 12 (interaction with other penalties etc), in sub-paragraph (2A) at the end insert “or Schedule 22 to FA 2016 (asset-based penalty)”. In Schedule 41 to FA 2008 (penalties for failure to notify), in paragraph 15 (interaction with other penalties etc), in sub-paragraph (1A) at the end insert “or Schedule 22 to FA 2016 (asset-based penalty).” In Schedule 55 to FA 2009 (penalty for failure to make return etc), in paragraph 17 (interaction with other penalties etc), in sub-paragraph (2), at the end insert , or
Section 97A of TMA 1970 (two or more tax-geared penalties in respect of same tax) does not apply in relation to an asset-based penalty imposed under this Schedule.
Subject to the following sub-paragraphs of this paragraph, the amendments made by this Schedule have effect in relation to dividends paid or arising (or treated as paid), and other distributions made (or treated as made), in the tax year 2016-17 or at any later time. The following have effect for the tax year 2016-17 and subsequent tax years— The amendment in paragraph 23 of Schedule 6 to F(No.2)A 1997 has effect in relation to foreign income dividends received on or after 6 April 2016. The amendments in sections 393 and 406 of ITTOIA 2005, and the repeal of paragraph 19 of Schedule 12 to FA 2008, have effect in relation to cash dividends paid over in the tax year 2016-17 or at any later time. The amendment in section 396A of ITTOIA 2005 has effect in relation to things received on or after 6 April 2016 (even if the choice to receive them was made before that date). The amendments in section 401 of ITTOIA 2005 have effect where the subsequent distribution is made in the tax year 2016-17 or at any later time, even if the prior distribution is made before 6 April 2016. The amendments in sections 411 and 414 of ITTOIA 2005, and the repeal of paragraph 520 of Schedule 1 to ITA 2007, have effect in relation to stock dividend income treated as arising in the tax year 2016-17 or at any later time. The amendments in sections 651 to 680A of ITTOIA 2005 (but not the repeal of section 680(3)(a) of that Act) and the amendment in section 425(5)(b) of ITA 2007— The amendments in Chapter 6 of Part 4 of ITTOIA 2005 and in section 463 of CTA 2010, and the repeal of paragraph 522 of Schedule 1 to ITA 2007, have effect in relation to amounts released or written off in the tax year 2016-17 or at any later time. The amendments in section 614ZD of ITA 2007 have effect in relation to manufactured payments made on or after 6 April 2016. The amendments in section 687 of ITA 2007 have effect where the relevant consideration is received in the tax year 2016-17 or at any later time. The amendments in section 1222 of CTA 2009 have effect in relation to income arising in the tax year 2016-17 or at any later time. The amendment in section 1026(1) of CTA 2010 has effect where the bonus share capital is issued on or after 6 April 2016. Sub-paragraph (1) does not apply in relation to—
Part 4 of FA 2004 (registered pension schemes etc) is amended as follows. Omit section 205A (serious ill-health lump sum charge on payment to member who has reached 75). In Part 1 of Schedule 29 (interpretation of lump sum rule), paragraph 4 (serious ill-health lump sums) is amended in accordance with sub-paragraphs (4) and (5). In sub-paragraph (1) (meaning of “serious ill-heath lump sum”)— In subsection (1)(ca)(ii) “uncrystallised rights”, in relation to the member, means rights of the member that are uncrystallised rights as defined by section 212(1) and (2).
Where a body corporate (“R”) is the representative member of a group (and accordingly is treated for the purposes of this Schedule as mentioned in section 43(1) of VATA 1994), anything which has been done by or in relation to another body corporate (“B”) in B’s capacity as representative member of that group is treated for the purposes of this Schedule as having been done by or in relation to R in R’s capacity as representative member of the group. Accordingly paragraph 3 (warning period) operates as if the successive representative members of a group were a single person. This Schedule has effect as if the representative member of a group, so far as acting in its capacity as such, were a different person from that body corporate so far as acting in any other capacity. In this paragraph the reference to a “group” is to be interpreted in accordance with sections 43A to 43D of VATA 1994.
For the purposes of paragraph 47 two persons are associated with one another if— Two bodies corporate are under common control if both are controlled— For the purposes of this section a body corporate (“H”) is taken to control another body corporate (“B”) if— For the purposes of this section an individual or individuals are taken to control a body corporate (“B”) if the individual or individuals, were they a body corporate, would be B’s holding company within the meaning of those provisions.
If paragraph 50 applies in relation to a partnership return, the appropriate partner must give HMRC a written notice (a “partnership information notice”) in respect of each sub-period in the information period. The “information period” is the period of 5 years beginning with the day after the day of the relevant defeat mentioned in paragraph 50. If, in the case of a partnership, a new information period (relating to another partnership return) begins during an existing information period, those periods are treated for the purposes of this paragraph as a single period (which includes all times that would otherwise fall within either period). An information period under this paragraph ends if the partnership ceases. A partnership information notice must be given not later than the 30th day after the end of the sub-period to which it relates. A partnership information notice must state— In this paragraph— If a partnership information notice states that a relevant partnership return has been made on the basis mentioned in sub-paragraph (6)(a) the notice must— HMRC may require the appropriate partner to give HMRC a notice (a “supplementary information notice”) setting out further information in relation to a partnership information notice. In relation to a partnership information notice “further information” means information which would have been required to be set out in the notice by virtue of sub-paragraph (6)(a) or (8) had there not been a failure to deliver a relevant partnership return. A requirement under sub-paragraph (9) must be made by a written notice and the notice must state the period within which the notice must be complied with. If a person fails to comply with a requirement of (or imposed under) this paragraph, HMRC may by written notice extend the information period concerned to the end of the period of 5 years beginning with— or, if earlier, the time when the information period would have expired but for the extension. For the purposes of this paragraph— In this paragraph “the appropriate partner” means the partner in the partnership who is for the time being nominated by HMRC for the purposes of this paragraph.
In the case of inheritance tax, each of the following is treated as a return for the purposes of this Schedule— and such a return is treated as made by the person in question. In this Schedule (except where the context requires otherwise) “assessment”, in relation to inheritance tax, includes a determination.
In section 103ZA of TMA 1970 (disapplication of sections 100 to 103 in the case of certain penalties)—
omit “or” at the end of paragraph (ga), and
after paragraph (h) insert or
A person may appeal against—
a decision of HMRC that a penalty under paragraph 1 is payable by that person, or
a decision of HMRC as to the amount of a penalty under paragraph 1 payable by the person.
This paragraph applies for the purposes of this Schedule. References to an assessment to tax, in relation to inheritance tax, are to a determination.
Section 636A of ITEPA 2003 (exemption for certain lump sums under registered pension schemes) is amended as follows. In the heading, for “Exemption” substitute “Exemptions and liabilities”. For subsection (3A) (serious ill-health lump sum paid to member who has reached 75 is taxed only under section 205A of FA 2004) substitute—
In section 212 of FA 2014 (follower notices: aggregate penalties), in subsection (4)—
omit “or” at the end of paragraph (b), and
after paragraph (c) insert , or
An appeal under paragraph 12 is to be treated in the same way as an appeal against an assessment to the tax at stake (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal). Sub-paragraph (1) does not apply—
In consequence of the amendment made by paragraph 1(2), in Part 4 of FA 2004— In consequence of the amendment made by paragraph 1(2), in section 30(1) of ITA 2007 omit the entry for section 205A of FA 2004. In consequence of the amendments made by paragraphs 1 and 2 and sub-paragraphs (1) and (2)—
The Social Security Contributions and Benefits Act 1992 is amended as follows. In section 11A (application of certain provisions of the Income Tax Acts in relation to Class 2 contributions under section 11(2)), in subsection (1), at the end of paragraph (e) insert—. In section 16 (application of Income Tax Acts and destination of Class 4 contributions), in subsection (1), at the end of paragraph (d) insert and.
On an appeal under paragraph 12(a) that is notified to the tribunal, the tribunal may affirm or cancel HMRC’s decision. On an appeal under paragraph 12(b) that is notified to the tribunal, the tribunal may— If the tribunal substitutes its own decision for HMRC’s, the tribunal may rely on paragraph 7 or 9 (or both)— In sub-paragraph (3)(b) “flawed” means flawed when considered in the light of the principles applicable in proceedings for judicial review. In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of paragraph 13(1).
The amendments made by paragraphs 1 to 3 have effect in relation to lump sums paid after the day on which this Act is passed.
In the Social Security Contributions and Benefits (Northern Ireland) Act 1992, in section 11A (application of certain provisions of the Income Tax Acts in relation to Class 2 contributions under section 11(2)), in subsection (1), at the end of paragraph (e) insert—.
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There continues to be an Office of Tax Simplification (referred to in this Act as the “OTS”).
Schedule 25 contains provision about the OTS.
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The OTS must provide advice to the Chancellor of the Exchequer, on request or as the OTS considers appropriate, on the simplification of the tax system.
For the purposes of this section and section 186—
“the tax system” means the law relating to, and the administration of, relevant taxes,
“relevant taxes” means taxes that the Commissioners for Her Majesty’s Revenue and Customs are responsible for collecting and managing, and
a reference to “taxes” includes a reference to duties and national insurance contributions.
References in this section and section 186 (however expressed) to the simplification of the tax system include references to improving the efficiency of the administration of relevant taxes.
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At the request of the Chancellor of the Exchequer, the OTS must conduct a review of an aspect of the tax system for the purpose of identifying whether, and if so how, that aspect of the tax system could be simplified.
The OTS must prepare a report—
setting out the results of the review, and
making such recommendations (if any) as the OTS consider appropriate.
The OTS must send a copy of the report to the Chancellor of the Exchequer.
The Chancellor of the Exchequer must—
publish the report, and
lay a copy of the report before Parliament.
The Chancellor of the Exchequer must prepare and publish a response to the report.
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The OTS must prepare a report of the performance of its functions in each financial year.
The report relating to a financial year must be prepared as soon as reasonably practicable after the end of the financial year.
The OTS must—
send a copy of the report to the Chancellor of the Exchequer, and
publish the report.
The Chancellor of the Exchequer must lay a copy of the report before Parliament.
For the purposes of this paragraph, each of the following is a “financial year”—
the period beginning with the day on which this section comes into force and ending with the following 31 March, and
each successive period of 12 months.
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The Treasury must, before the end of each review period, conduct a review of the effectiveness of the OTS in performing its functions.
The “review period” means—
in relation to the first review, the period of 5 years beginning with the day on which this section comes into force, and
in relation to subsequent reviews, the period of 5 years beginning with the day on which the previous review was completed.
The Treasury must prepare and publish a report of each review.
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In this Act—
A group is a “qualifying group” in any financial year if, at the end of the previous financial year— The qualification test for a group other than an MNE Group is that the group satisfied either or both of the following conditions (by reference to the previous financial year)— 1. Group turnover More than £200 million 2. Group balance sheet total More than £2 billion. In sub-paragraph (2)— Where the financial year of a UK company within in the group does not end on the same day as the previous financial year of the head of the group, the figures from the company that are to be included in the aggregate figures are those for the company’s financial year ending last before the end of the previous financial year of the head of the group. For the purposes of assessing the turnover or balance sheet total of the group, sub-paragraphs (3) and (4) apply as if a UK permanent establishment of a foreign member of the group were a UK company and a member of the group. The Treasury may by regulations provide— and in this sub-paragraph “specified” means specified in the regulations. In this paragraph “financial year”, in relation to a group, means a financial year of the head of the group.
“Financial year”—
in relation to a UK company, has the meaning given by the Companies Act 2006 (see section 390 of that Act),
in relation to any other relevant body, means any period in respect of which a profit and loss account for the body’s undertaking is required to be made up (whether by its constitution or by the law under which it is established), whether that period is a year or not,
in relation to a UK partnership, means any period of account for which its representative partner has provided or is required to provide a partnership statement under a return issued under section 12AB TMA 1970.
This paragraph applies where paragraph 16 requires a group tax strategy to be published for a UK group in any financial year of the head of the UK group. The head of the group is liable to a penalty of £7,500 if— Subject to sub-paragraph (5) the head of the group is only liable to one penalty by virtue of sub-paragraph (2) in respect of a group tax strategy required for the financial year in question. Sub-paragraph (5) applies where— At the end of that period, the head of the group—
This paragraph applies where paragraph 19 requires a sub-group tax strategy to be published for a UK sub-group in any financial year of the head of the sub-group. The head of the sub-group is liable to a penalty of £7,500 if— Subject to sub-paragraph (5), the head of the sub-group is only liable to one penalty by virtue of sub-paragraph (2) in respect of a sub-group tax strategy required for the financial year in question. Sub-paragraph (5) applies where— At the end of that period, the head of the sub-group is liable—
This paragraph applies where paragraph 22 requires a company tax strategy to be published for a UK company in any financial year. The company is liable to a penalty of £7,500 if— Subject to sub-paragraph (5), the company is only liable to one penalty by virtue of sub-paragraph (2) in respect of a company tax strategy required for the financial year in question. Sub-paragraph (5) applies where— At the end of that period, the company is liable—
A failure to do anything required by this Part to be done within a limited period of time goes not give rise to liability to a penalty if it is done within such further time (if any) as an officer of Revenue and Customs may have allowed.
A person may appeal against a decision of HMRC that a penalty is payable by that person. Notice of an appeal must be given— Notice of an appeal must state the grounds of appeal. On an appeal that is notified to the tribunal, the tribunal may confirm or cancel the decision. Subject to this paragraph and paragraph 31, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to appeals under this Schedule as they have effect in relation to an appeal against an assessment to income tax.
Subject to the provisions of this Part, the following provisions of TMA 1970 apply for the purposes of this Part as they apply for the purposes of the Taxes Acts—
section 108 (responsibility of company officers),
section 114 (want of form), and
section 115 (delivery and service of documents).
A designated HMRC officer may give the head of a UK group a notice under this paragraph (a “warning notice”) if the officer considers that the group is a qualifying group that falls within this Part. The notice must set out the reasons why the officer considers that the group falls within this Part. The notice— Once a warning notice has been given — Sub-paragraph (4) applies while the group is subject to—
For the purposes of Schedule 24 to FA 2007 (penalties for errors), an inaccuracy in a document given to HMRC by or on behalf of a person is to be treated as being due to failure by the person to take reasonable care if— A group is “subject to a special measures notice” if a special measures notice— An interpretation of legislation relating to UK taxation is “speculative” if it is likely that a court or tribunal would disagree with it. Sub-paragraph (1) does not apply to an inaccuracy if—
A UK company falls within this Part if— Paragraphs 36 to 39 apply in relation to a company as they apply in relation to a UK group. Paragraphs 41 to 45 apply in relation to a company as they apply in relation to the head of a UK group. As applied by this paragraph, paragraphs 36 to 39 and 41 to 45 have effect as if references to a UK group, the head of a UK group or a member of a UK group were references to a company. Paragraph 47 applies in relation to a company as it applies in relation to a member of a group. Paragraph 49 applies in relation to a company as it applies in relation to a group. As applied by this paragraph, paragraphs 47 and 49 have effect as if references to a group, the head of a group or a member of a group were references to a company.
The penalty payable under paragraph 1 is (except in a case mentioned in sub-paragraph (2)) the higher of— In a case where P has enabled Q to engage in conduct which makes Q liable to a penalty under paragraph 1 of Schedule 21 to FA 2015, the penalty payable under paragraph 1 is the higher of— In sub-paragraph (2)(a) “the original tax non-compliance” means the conduct that incurred the original penalty and “the potential lost revenue” (in respect of that non-compliance) is— according to whether the original penalty was incurred under paragraph 1 of Schedule 24, paragraph 1 of Schedule 41 or paragraph 6 of Schedule 55.
This paragraph applies where any amount of potential lost revenue in a case falling within paragraph 4 or 5 is attributable not only to Q’s offshore tax evasion or non-compliance but also to any other tax evasion or non-compliance by Q. In that case the potential lost revenue in respect of Q’s offshore tax evasion or non-compliance is to be taken for the purposes of assessing the penalty to which P is liable as being or (as the case may be) including such share as is just and reasonable of the amount mentioned in sub-paragraph (1).
Paragraph 47 of Schedule 19 to FA 2016 (special measures for persistently unco-operative large businesses) provides for certain inaccuracies to be treated, for the purposes of this Schedule, as being due to a failure by P to take reasonable care.
This Act may be cited as the Finance Act 2016.