URMAS v. FINLAND

“Taxable company” means a company which—

In Chapter 17 of Part 2 of CAA 2001 (plant and machinery: anti-avoidance), after section 228M insert— The amendment made by sub-paragraph (1) has effect in relation to capital expenditure incurred on or after 9 December 2009.

For the purposes of the enactments to which this Part applies “charity” means a body of persons or trust that— For the purposes of the enactments to which this Part applies— Sub-paragraphs (1) and (2) are subject to any express provision to the contrary. For the meaning of “charitable purpose”, see section 2 of the Charities Act 2006 (which—

This paragraph applies in relation to any period throughout which the management condition is not met. The management condition is treated as met throughout the period if the Commissioners for Her Majesty’s Revenue and Customs consider that—

In section 18(3)(b)(i) of F(No.2)A 2005 (authorised unit trusts and OEICS: specific powers) omit “(within the meaning of section 989 of ITA 2007)”.

CTA 2009 is amended as follows. In section 1319 (other definitions), omit the definition of “charity”. In Schedule 4 (index of defined expressions), in the entry for “charity”, for “section 1319” substitute “paragraph 1 of Schedule 6 to FA 2010”.

In section 326(3) of TIOPA 2010 (charities), omit the definition of “charity” and the “and” immediately after it.

The amendments made by paragraph 1 have effect in relation to gifts made on or after 24 March 2010. An amendment corresponding to that made by paragraph 1(2), having effect in relation to gifts made on or after that date, is to be treated as having been made in ICTA. The amendments made by paragraph 2 have effect in relation to payments representing expenditure incurred on or after 24 March. An amendment corresponding to that made by paragraph 2(2), having effect in relation to payments representing expenditure incurred on or after that date, is to be treated as having been made in ICTA. The amendments made by paragraph 3 have effect in relation to gifts made on or after 6 April 2010. The amendments made by paragraphs 4 and 6 have effect in relation to claims whenever made.

Chapter 13 of Part 15 of ITA 2007 (deduction of income tax at source: unauthorised unit trusts) is amended as follows. In section 941(6) (deemed payments to unit holders and deemed deductions of income tax), after the definition of “deemed deduction”, insert—. In section 942 (income tax to be collected from trustees) after subsection (5) insert— After section 943 (calculation of trustees’ income pool) insert—

This paragraph applies, and section 943C of ITA 2007 does not apply, in relation to the determination of the amount of the trustees’ double tax relief pool as at the start of the tax year 2009-10. That amount is— Amount A is the sum of— Amount B is 20% of the amount (if any) of the trustees’ income pool as at the start of the tax year 2009-10 (calculated in accordance with section 943 of ITA 2007).

Chapter 3 of Part 9 of CTA 2010 (sale of lessors: leasing business carried on by company alone) is amended as follows.

Section 382 (introduction to Chapter) is amended as follows. In subsection (1)— In subsection (3), for ““qualifying change of ownership”, see sections 392 to 398.” substitute ““relevant change in the relationship between a company and a principal company of the company”, see sections 392 to 394.”

In section 383 (income and matching expense in different accounting periods), after subsection (1) insert—

For section 392 (and the italic heading before it) substitute—

After section 394 insert—

After section 398 insert—

“Relevant remuneration”, in relation to a relevant banking employee of a taxable company, means anything that— Whether or not the relevant banking employee is chargeable to income tax in respect of anything is irrelevant in determining whether or not it is relevant remuneration. Excluded remuneration is not relevant remuneration.

Subject to sub-paragraphs (2) to (4), the amount of any relevant remuneration is— Where relevant remuneration is awarded to or in respect of an employee by virtue of paragraph 6(1)(a) and its amount is not fixed when it is awarded, its amount is such as it is reasonable at that time to assume would be its amount (in accordance with sub-paragraph (1)) if and when paid or provided. Where the market value of any relevant remuneration at the time it is awarded exceeds, or would exceed, what would otherwise be its amount, its amount is that market value. Where anything constituting relevant remuneration is or would be, when awarded, subject to any restriction or restrictions, the restriction is, or restrictions are, to be ignored in arriving at its amount. For this purpose “restriction” means any condition, restriction or other similar provision which causes the value of the relevant remuneration to be less than it otherwise would be.

The threshold of £25,000 in paragraph 1(3) applies whether or not an employee has more than one employment as a relevant banking employee with a taxable company. If relevant remuneration is awarded during the chargeable period to or in respect of a relevant banking employee by reason of the employee's employment as such by a number of associated taxable companies, the threshold in paragraph 1(3) in relation to each of the taxable companies is £25,000 divided by the number of the taxable companies. For this purpose taxable companies are associated if—

This paragraph applies where— A loan is a “relevant” loan if the main purpose, or one of the main purposes, of providing it, or undertaking to provide it, is the reduction or elimination of a liability to bank payroll tax or any other tax or national insurance contributions. The loan is to be regarded as relevant remuneration awarded during the chargeable period to or in respect of the relevant banking employee by reason of the employee's employment as a relevant banking employee; and the amount of the relevant remuneration is to be regarded as the amount which is loaned or (where the amount of the loan is not fixed) the amount which it is reasonable to assume will be loaned. A contractual obligation to provide a relevant loan is taken to arise for the purposes of this paragraph even if provision of it is dependent on compliance by the relevant banking employee with any conditions.

In order to establish the amount of bank payroll tax payable by it, every taxable company must deliver a return to HMRC. The return must be delivered on or before 31 August 2010. A return under this paragraph is referred to as a bank payroll tax return.

A taxable company may amend its bank payroll tax return. An amendment under this paragraph is made by notice to HMRC in such form, and accompanied by such information, as HMRC may reasonably require. No such amendment may be made after 31 August 2011. Nothing in sub-paragraph (1) permits a taxable company to amend its return to revise an amount determined under paragraph 7(2), 12(2) or 13(3) merely because the amount determined under that provision differs from the amount which is actually paid or provided (or loaned).

HMRC may determine to the best of their knowledge and belief the amount of bank payroll tax payable by a taxable company if the company has not delivered a bank payroll tax return on or before 31 August 2010. Notice of the determination— The amount determined by HMRC is taken to be the amount payable by the company (in the same way as if it were an assessment) unless and until the determination is superseded by a relevant assessment. A relevant assessment is an assessment— If— the proceedings may be continued as if they were proceedings for the recovery of so much of the tax shown in the assessment as has not been paid. No determination may be made under this paragraph after 31 August 2013.

This paragraph applies if an order is made under section 104(3) of FA 2009 appointing a day on which sections 101 to 103 of that Act are to come into force for the purposes of bank payroll tax. Part 2 of Schedule 53 to that Act (which makes special provision about the late payment interest start date) has effect for those purposes as if— Interest charged under section 101 of FA 2009 on an amount of bank payroll tax may be enforced as if it were an amount of bank payroll tax payable by the taxable company.

In FA 2009, in Schedule 6, in paragraph 1(11)—

Chapter 3 of Part 8 of ITA 2007 (relief for gifts by individuals of shares, securities and real property to charities etc) is amended as follows.

Paragraph 3 of Schedule 28AB to ICTA (schemes about effect of paying foreign tax) is amended as follows. In sub-paragraph (2)— In sub-paragraph (3)(b), for “the payment by the claimant of that amount of foreign tax” substitute “that amount of foreign tax being paid or payable by the claimant”.

In section 86 of TIOPA 2010 (schemes about claims or elections etc)— The amendments made by this paragraph have effect in relation to amounts of foreign tax payable—

The amendments made by this Schedule have effect in relation to accounting periods that begin on or after 1 April 2010 (“the commencement date”). Where a company has an accounting period (“the straddling accounting period”) that— the straddling accounting period is to be treated as split. Where this paragraph provides that the straddling accounting period is to be treated as split, that part of the straddling accounting period that falls before the commencement date and that part of the straddling accounting period that falls on or after that date are to be treated for the purposes of the amendments made by this Schedule as separate accounting periods. In relation to the first accounting period of a company in relation to which the amendments made by this Schedule have effect—

Section 437 (value of net benefit to charity) is amended as follows. In subsection (1), for “market” (in both places) substitute “relevant”. After that subsection insert— section 438A (acquisition value of qualifying investments),

Section 85 of TIOPA 2010 (schemes about effect of paying foreign tax) is amended as follows. In subsection (2)— In subsection (3), in paragraph (b) of the definition of “the foreign-tax total”, for “the payment by C of the FT amount” substitute “the FT amount being paid or payable by C”.

After section 438 insert—

The amendments made by paragraphs 1 and 2 have effect in relation to amounts of foreign tax payable on or after 21 October 2009. But see paragraph 5 for amounts of foreign tax payable on or after 1 April 2010 (as regards corporation tax) or 6 April 2010 (as regards income tax or capital gains tax).

acquisition value of a qualifying investment (in Chapter 3 of Part 8) section 438A

The Commissioners are responsible for the collection and management of bank payroll tax.

HMRC may publish requirements as to— A bank payroll tax return must include—

HMRC may amend a bank payroll tax return so as to correct obvious errors or omissions in it (whether errors of principle, arithmetical mistakes or otherwise). A correction under this paragraph is made by notice to the taxable company concerned. No such correction may be made more than 9 months after— A correction under this paragraph is of no effect if the taxable company gives notice rejecting it. Notice of rejection must be given—

This paragraph applies if HMRC discover, with respect to a taxable company, any of the following situations— HMRC may make an assessment (a “discovery assessment”) in the amount or further amount which ought in their opinion to be charged or recovered in order to make good to the Crown the loss of bank payroll tax. If the company has delivered a bank payroll tax return, HMRC may only make a discovery assessment if condition A or condition B is met. Condition A is that the situation discovered by HMRC was brought about carelessly or deliberately by the company or a person acting on its behalf. Condition B is that HMRC could not reasonably have been expected to be aware of the situation at the time when they—

Paragraphs 50 to 51G of Schedule 18 to FA 1998 (overpaid tax etc) apply (so far as relevant) to bank payroll tax assessable for the chargeable period as they apply to corporation tax assessable for an accounting period, subject to the following modifications. With respect to bank payroll tax, a claim under paragraph 51 may not be made after 31 August 2014. For the purposes of paragraph 51E, the relevant restrictions for making a discovery assessment under this Schedule are— Nothing in sub-paragraph (1) permits a taxable company to make a claim under paragraph 51 of Schedule 18 to FA 1998 with respect to bank payroll tax merely because an amount determined under paragraph 7(2), 12(2) or 13(3) differs from the amount which is actually paid or provided (or loaned).

The following provisions of TMA 1970 apply for the purposes of bank payroll tax and this Schedule as they apply for the purposes of corporation tax and the Taxes Acts— The application of section 115 of TMA 1970 in relation to the delivery of bank payroll tax returns is subject to any requirements published under paragraph 19(1) of this Schedule.

The amendments made by this Schedule have effect in relation to any disposal made to a charity on or after 15 December 2009.

Chapter 1 of Part 13 of ITA 2007 (transactions in securities: income tax advantages) is amended as follows.

After section 313 insert—

The amendments made by this Schedule come into force on such day as the Treasury may by order made by statutory instrument appoint. An order may appoint different days for different provisions or for different purposes.

Notice of a discovery assessment—

Chapter 6 of Part 22 of CTA 2010 (collection etc of tax from UK representatives of non-UK resident companies) applies to this Part of this Schedule as it applies to enactments relating to corporation tax.

Amendments corresponding to the ones made by paragraphs 6 and 7, having effect in relation to any such disposal, are to be treated as having been made in section 587B of ICTA.

For sections 682 to 694 substitute—

In section 316 (information to be provided in manner and form specified by HMRC), for “and 313(1) and (3)” substitute “, 313(1) and (3) and 313ZA(3)”.

No discovery assessment may be made after the relevant deadline. The relevant deadline is 5 April 2030 if the situation— Subject to sub-paragraph (2)(b), the relevant deadline is 5 April 2016 if the situation was brought about carelessly by the taxable company. In all other cases, the relevant deadline is 5 April 2014. In this paragraph—

Section 118(5) to (7) of TMA 1970 (meaning of carelessly etc) applies for the interpretation of this Part of this Schedule, with references to tax being read as references to bank payroll tax.

In section 698(6) (counteraction notices), omit—

In section 317(2) (regulations), after “may” insert “make different provision for different cases and may”.

If a discovery assessment is made with respect to a taxable company, the company may appeal against it. Notice of appeal must be given— Any objection to a discovery assessment on the ground that paragraph 25, 26 or 27 was not complied with can only be made on an appeal against the assessment under this paragraph.

Omit section 699 (limit on amount assessed in section 689 and 690 cases).

In section 700 (timing of assessments in section 690 cases)—

In the heading before section 701, omit “and information powers”.

Section 713 (interpretation) is amended as follows. Before the definition of “company” insert—. Omit the definition of “transaction in securities”.

Each taxable company must— Other relevant records are records that— The obligation under sub-paragraph (1)(b) may be discharged by— The obligation under sub-paragraph (1)(b) includes an obligation to preserve supporting documents (such as contracts, accounts and correspondence).

A company is a “member of a banking group” at any time if— A company is within this sub-paragraph if— Condition A is that the principal company of the group is a UK resident bank or a relevant foreign bank. Condition B is that— and (in either case) any member of the group is a UK resident bank or a relevant foreign bank. Condition C is that— For the purposes of condition C a company (“H”) is a “holding company” of another company (“S”) if— A group meets the exempt activities test if at least 90% of the trading income of the group for the relevant period is derived from exempt activities. For this purpose— In sub-paragraph (8)— In sub-paragraph (9)— A company which is a member of a banking group ceases to be a member of a banking group when it ceases to be within sub-paragraph (2), but only if it ceases to be within that provision as a result of— For the purposes of sub-paragraph (11) obtaining a tax advantage is not a commercial purpose. “Tax advantage” means— and, for this purpose, “tax” includes bank payroll tax and any other tax. In sub-paragraph (11) “relevant regulatory body” means— In this paragraph “dealing on own account” has the same meaning as in Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (see Article 4(1)(6)).

“Financial trading company” means a company which— “UK resident financial trading company” means a financial trading company which is resident in the United Kingdom. “Relevant foreign financial trading company” means a company which meets conditions A and B. Condition A is that the company— Condition B is that, disregarding any activities of the company other than those carried on through that permanent establishment, the company is a financial trading company. In this paragraph “securities” includes—

In section 129(1) of FA 1982 (stamp duty: exemption from duty on grants, transfers to charities etc), for “a body of persons established for charitable purposes only or to the trustees of a trust so established” substitute “a charitable company or to the trustees of a charitable trust”.

In section 90(7) of FA 1986 (stamp duty reserve tax: exceptions from principal charge)—

In section 35(3)(a) of F(No.2)A 1997 (transitional relief for charities) omit “(as defined in section 506(1) of the Taxes Act 1988)”.

ITEPA 2003 is amended as follows. In section 99(3)(b)(ii) (accommodation provided for performance of duties), for “established for charitable purposes only” substitute “a charitable company”. In section 216(3)(b) (provisions not applicable to lower-paid employments) for “established for charitable purposes only” substitute “a charitable company”. In section 223(7)(b)(ii) (payments on account of director’s tax other than by the director), for “established for charitable purposes only” substitute “a charitable company”. In section 290(5) (accommodation benefits of ministers of religion), omit the definition of “charity”. In section 351 (expenses of ministers of religion), omit subsection (5). In section 714(2) (payroll giving: meaning of “donation”), in the definition of “charity”, omit “means any body of persons or trust established for charitable purposes only and”.

In ITA 2007, after section 521 insert— In CTA 2010, after section 472 insert—

Section 42 of TMA 1970 (procedure for making claims etc) is amended as follows. In subsection (2), for “(3A)” substitute “(3ZA)”. After subsection (3) insert—

In TIOPA 2010, after section 85 insert— The amendment made by this paragraph has effect in relation to amounts treated as if they were amounts of foreign tax paid or payable on or after 21 October 2009. A corresponding amendment, having effect in relation to such amounts, is to be treated as having been made in Schedule 28AB to ICTA.

In section 112 of TIOPA 2010 (deduction from income for foreign tax), after subsection (2) insert— The amendment made by this paragraph has effect in relation to amounts in respect of non-UK tax that are paid—

CTA 2010 is amended as follows.

Section 307 (meaning of “promoter”) is amended as follows. In paragraph (a) of subsection (1), for the words from “business” to “makes” substitute “business, the person (“P”)—. In paragraph (b) of that subsection, after “(a)(ii)” insert “or (iii)”. After subsection (1) insert— After subsection (4) insert— In subsection (5), after “promoter” insert “or introducer”. In subsection (6), after “promoter” (in both places) insert “or introducer”.

Section 98C of TMA 1970 (penalties for failures to comply with duties relating to disclosure of tax avoidance schemes) is amended as follows. In subsection (1)(a) (initial penalty for failing to comply with duties), for “£5,000” substitute— In subsection (2)— After that subsection insert— In subsection (2A), for “amount specified in subsection (1)(b) above shall be increased to the prescribed sum” substitute “amounts specified in subsection (1)(a)(i) and (b) above shall be increased to the prescribed sum in relation to days falling after the prescribed period”. In subsection (2B), for “amount specified in subsection (1)(b)” substitute “amounts specified in subsection (1)(a)(i) and (b)”. In subsection (2C)(b), after “section” insert “306A or”. In subsection (2D), after “under section” insert “306A or”. In subsection (2E), after “under section” insert “306A or”. In subsection (2F)—

A taxable company which fails to comply with paragraph 34 is liable to a penalty of an amount not exceeding £3,000. Sections 100 to 102 of TMA 1970 apply to a penalty under this paragraph as they apply to a penalty under section 12B(5) of that Act.

ITA 2007 is amended as follows. In section 518(4) (overview of Part 10), for “section 538” substitute “sections 538 and 538A”. After section 538 insert—

In section 1(4) (overview of Act) omit the “and” at the end of paragraph (g), insert “, and” at the end of paragraph (h) and after that paragraph insert—

Section 308(2) (duties of promoter) is amended as follows. For “earlier” substitute “earliest”. Before paragraph (a) insert—.

After Part 21 insert—

In section 313A(1) (pre-disclosure enquiry), for “of a proposal or arrangements” substitute “or introducer of a proposal, or the promoter of arrangements,”.

associated with (in Part 21A) section 937K” “economic loss (in Part 21A) section 937L” “economic profit (in Part 21A) section 937L” “the relevant group (in Part 21A) section 937B(3)” “relevant scheme profit (in Part 21A) section 937F” “ring-fenced scheme loss (in Part 21A) section 937F” “risk transfer scheme (in Part 21A) section 937C” “scheme (in Part 21A) section 937N” “scheme loss (in Part 21A) section 937E” “scheme profit (in Part 21A) section 937E” “the scheme rate, index or value (in Part 21A) section 937D

In section 318(1) (interpretation), after the definition of “HMRC” insert—.

“UK resident bank” means a company which— “UK resident bank” also includes a company which— “Relevant foreign bank” means a company which— “Relevant foreign bank” also includes a company which—

This paragraph applies for calculating the “trading income of the group” for the relevant period for the purposes of paragraph 45. The trading income for the group for the relevant period is the aggregate of— The income referred to in sub-paragraph (2)(a) is the gross income— without taking account of any deductions (whether for expenses or otherwise). The income referred to in sub-paragraph (2)(b) is the net income arising from the net-basis activities of the group that— In this paragraph “net-basis activities” means activities normally reported on a net basis in financial statements prepared in accordance with such standards or practice.

In this Schedule— Section 170(2) to (11) of TCGA 1992 (“group”, “principal company”, “effective 51% subsidiary”, “company” etc) has effect for the interpretation of this Schedule as for the interpretation of sections 171 to 181 of that Act. Section 993 of ITA 2007 (meaning of “connected” persons) applies for the purposes of this Schedule. For the purposes of this Schedule the territory in which a company is resident is to be determined as for the purposes of the Corporation Tax Acts.

Part 1 is treated as having come into force on 6 April 2010. But the definitions of “charity”, “charitable company” and “charitable trust” in that Part do not apply for the purposes of an enactment in relation to which, on that date, another definition applies until such time as that other definition ceases to have effect on the coming into force of provision made by or under Part 2. For provision about the coming into force of provision made by that Part, see paragraph 34.

Chapter 12 of Part 5 of CTA 2009 (loan relationships: special rules for particular kinds of securities) is amended as follows.

This paragraph applies in relation to an accounting period of a company beginning before 9 December 2009 if, apart from this paragraph— Instead of bringing into account the amount determined as mentioned in sub-paragraph (1)(a), the company is to bring into account the amounts that it would have brought into account for— had those parts been separate periods of account (and so separate accounting periods).

In Chapter 18 of Part 5 of CTA 2009 (loan relationships: general and supplementary provision), before section 466 (and the heading before it) insert—

This paragraph applies if conditions A and B are met. Condition A is that arrangements have been made which, but for this paragraph, would result in a person obtaining exemption under paragraph 1 in respect of particular income. Condition B is that those arrangements have, or form part of arrangements which have, as their main purpose, or one of their main purposes, the obtaining of that exemption. Paragraph 1(2) does not apply to that income.

In section 398(2) (overview of Chapter), for paragraph (a) substitute—.

For the heading before section 399 substitute—.

Section 399 (index-linked gilt-edged securities: basic rules) is amended as follows. For the heading substitute “Basic rules”. For subsection (3) substitute— In subsection (4), for “section 400” substitute “sections 400 to 400C”.

Section 400 (index-linked gilt-edged securities: adjustments for changes in index) is amended as follows. For the heading substitute “Adjustments for changes in index”. In subsection (1)(a)— After subsection (2) insert—

After section 400 insert—.

A body of persons or trust meets the jurisdiction condition if it falls to be subject to the control of— In sub-paragraph (1)(a) “a relevant UK court” means— In sub-paragraph (1)(b) “a relevant territory” means— Regulations under this paragraph are to be made 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.

Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing) is amended as follows.

In section 437 of CTA 2010 (interpretation of the sales of lessors Chapters), after subsection (8) insert—

In Chapter 13 of Part 7 of CTA 2009 (derivative contracts: general and supplementary provision), after section 701 insert—

Paragraph 1(2) does not apply to income which arises as a result of—

References in this Schedule to income are to be read as references to—

For paragraph 6 substitute—

property business (in Chapters 3 to 6 of Part 9) section 437(8A)” “relevant change in relationship (in Chapters 3 to 6 of Part 9) section 392 and in the entry relating to “qualifying change of ownership in relation to a company (in Chapters 3 to 6 of Part 9)” for “392 to 398” substitute “394A to 398A”).

In this Schedule—

For paragraph 13 substitute—.

A body of persons or trust meets the registration condition if— Condition A is that the body of persons or trust has complied with any requirement to be registered in the register of charities kept under section 3 of the Charities Act 1993. Condition B is that the body of persons or trust has complied with any requirement under the law of a territory outside England and Wales to be registered in a register corresponding to that mentioned in sub-paragraph (2).

Her Majesty’s Revenue and Customs may publish the name and address of any body of persons or trust that appears to them to meet, or at any time to have met, the definition of a charity in paragraph 1.

ITTOIA 2005 is amended as follows. In section 410(3)(b) (when stock dividend income arises), for “trust established for charitable purposes only” substitute “charitable trust”. In section 545(1) (definitions for Chapter 9 of Part 4), omit the definition of “charitable trust”. In section 568(3) (special rule for certain income of trustees), for “trust established for charitable purposes” substitute “charitable trust”. In Part 2 of Schedule 4 (index of defined expressions)—

In paragraph 60(2) of Schedule 36 to FA 2008 (references to carrying on a business), omit the definition of “charity”.

CTA 2010 is amended as follows. In section 202 (meaning of “charity” in Chapter 2 of Part 6)— In section 217 (meaning of “charity” in Chapter 3 of Part 6)— Omit section 467 (meaning of “charitable company” in Part 11). In section 610(2)(a) (discretionary payments by trustees to companies), omit “as defined in section 467”. In section 1119 (definitions), omit the definition of “charity”. In Schedule 4 (index of defined expressions)—