Statement by the Delegation of the United States of America on the Russia’s ongoing aggression against Ukraine and illegal occupation of Crimea

This paragraph applies for the tax year 2025-26, 2026-27 or 2027-28 in relation to an individual if— So much of the payment as is matched with section 1(3) amounts for tax years before 2025-26 is qualifying overseas capital. For the purposes of matching those amounts, apply section 87A of TCGA 1992 as if— For the purposes of this paragraph, ignore any reduction of a section 1(3) amount for the tax year 2024-25 or an earlier tax year resulting from the application of section 87 or 89(2) of TCGA 1992 in the tax year 2025-26 or any subsequent tax year. Sub-paragraph (6) applies where— The section 1(3) amount is to be taken to have been reduced (but not below nil) by so much of it as matches with the capital payment for the purposes of any subsequent application of this paragraph. This paragraph is not to be taken as affecting the application of section 87A of TCGA 1992 for any purpose other than for the purposes of this paragraph and paragraph 5 (and no section 1(3) amounts or capital payments are to be taken to have been reduced as a result of the application of this paragraph for any other purpose). For the purposes of this paragraph— For the purposes of this paragraph, and paragraph 5, an individual is a qualifying individual in a tax year if the individual—

This paragraph applies— An amount of income falling within paragraph (a), (b) or (c) of sub-paragraph (1) is to be treated as an amount of qualifying overseas capital of the individual. An amount of income treated as qualifying overseas capital falling within sub-paragraph (1)(a) or (c) may only be designated in a return for the tax year in which the income was treated as arising to the individual. For the purposes of this paragraph “relevant foreign income” has the meaning it has in the Income Tax Acts.

An amount of designated qualifying overseas capital is chargeable to the TRF charge for the tax year to which the return in which it is designated relates. Amounts of TRF charge are to be charged as if they were amounts of income tax. Section 23 of ITA 2007 (calculation of income tax liability) applies in relation to a person liable to the TRF charge as if paragraph 1(8) were included in the lists of provisions in section 30(1) of that Act (amounts of tax added at Step 7). For the purposes of the collection and management of the TRF charge, all other enactments applying generally to income tax apply to the TRF charge. Those enactments include— But section 59A of TMA 1970 (payments on account of income tax) does not apply in relation to amounts of TRF charge. For the purposes of section 12B of TMA 1970 (as applied as a result of sub-paragraph (4)), the records required to be kept as a result of paragraph 8(8) are to be regarded as records that must be kept for the purposes of enabling an individual to make and deliver a correct and complete return. Paragraph 8(6) is not to be taken as preventing the amendment of a return so as to alter or revoke a designation of qualifying overseas capital made in that return, provided that amendment is made in accordance with section 9ZA of TMA 1970 (taxpayer permitted to amend return within 12 months of filing date).

This Part of this Schedule applies for the purpose of determining how the provisions of TCGA 1992 mentioned below are to apply for the tax year 2024-25 for the purposes of the amendments made by section 7 and Schedule 1.

If an asset is transferred on or after 6 April 2025 under an unconditional contract made on or after 30 October 2024 but before 6 April 2025, the disposal is, despite section 28(1) of TCGA 1992, to be treated as taking place at the time the asset is transferred (rather than at the time the contract is made) unless the contract is an excluded contract.

This paragraph applies for the purposes of an election under 169Q of TCGA 1992 in relation to a reorganisation of a company where— If, as at 30 October 2024— the disposal of the original shares is to be treated as taking place at the time of the election and not at the time of the reorganisation. For this purpose “the relevant individual” means— In this paragraph— References in this paragraph to a reorganisation do not include an exchange of shares or securities which is treated as a reorganisation by virtue of section 135 or 136 of TCGA 1992 (but see instead paragraph 17).

This paragraph applies for the purposes of an election under section 169Q of TCGA 1992 in relation to an exchange of shares or securities within section 135(1) of TCGA 1992 where— If the following condition is met, the disposal of the original shares is to be treated as taking place at the time of the election and not at the time of the exchange. The condition is that— and, for the purposes of paragraph (a), connected persons are to be treated as the same person. If— the disposal of the original shares is to be treated as taking place at the time of the election and not at the time of the exchange. If— the disposal of the original shares is to be treated as taking place immediately before the relevant time and not at the time of the exchange. For the purposes of this paragraph “the relief conditions” are met if— For the purposes of this paragraph “the relevant individual” means— If, before the exchange, the Commissioners for His Majesty's Revenue and Customs have issued a notification in respect of it under section 138(1) of TCGA 1992 (advance clearance procedure)— In this paragraph— This paragraph does not apply if both the exchange and the election occur in the same tax year.

This Part of this Schedule is to be read as if it were contained in TCGA 1992.

If an asset is transferred on or after 30 October 2024 under an unconditional contract made before that date, the disposal is, despite section 28(1) of TCGA 1992, to be treated as taking place at the time the asset is transferred (rather than at the time the contract is made) unless the contract is an excluded contract. A contract is an excluded contract if— A contract is not to be regarded as an excluded contract unless the person making the transfer makes a claim which includes a statement that the contract meets the conditions to be an excluded contract. But no claim is required if the total amount of— does not exceed £100,000. For this purpose the amount of any gain accruing on a qualifying business disposal is to be taken to be the amount of the gain under section 169N(2) of TCGA 1992. If the person making the transfer makes— section 169M(2) and (3) of that Act, or (as the case may be) section 169VM(1) and (2) of that Act, apply to a claim under sub-paragraph (3) in relation to the disposal as they apply to a claim under the section concerned. In this paragraph “qualifying business disposal” has the meaning given by Chapter 3 of Part 5 of TCGA 1992. In this paragraph any reference to the transfer of an asset includes its conveyance.

The amendments made by this Part of this Schedule have effect in relation to accounting periods commencing on or after 31 December 2024.

TCGA 1992 is amended as follows.

In section 236O, after subsection (2) insert— In section 236P, after subsection (2) insert— The amendments made by this paragraph have effect in relation to disposals made on or after 30 October 2024.

In section 236H— In section 236Q— The amendments made by this paragraph have effect in relation to claims made under those sections on or after 6 April 2025.

Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows. In section 809B (claim for remittance basis to apply), in subsection (1)— In section 809C (claim for remittance basis by long-term UK resident), in subsection (1)— In section 809D (application of remittance basis where income and gains under £2000) in subsection (1), before paragraph (a) insert—. In section 809E (application of remittance basis without claim: other cases) in subsection (1), before paragraph (a) insert—. In consequence of the amendments made by sub-paragraphs (2) to (5), in section 809A—

Part 4 of FA 2004 (pensions schemes etc.) is amended as follows. In Chapter 3 (payments by registered pension schemes), in section 185G, in subsection (3)(a) omit “and domiciled”. In the following provisions of Chapter 5 (registered pension schemes: tax charges) and Chapter 6 (schemes that are not registered pension schemes) omit “or domiciled”—

Schedule 5A to TCGA 1992 (settlements with foreign element: information) is amended in accordance with sub-paragraphs (2) and (3). In paragraph 3— In paragraph 4— Sub-paragraph (5) applies where a settlor fulfils the condition in paragraph 4(3A) of Schedule 5A to TCGA 1992 (settlements with foreign element: information) on 6 April 2025. For the purposes of paragraph 4(2)(c) of that Schedule, the settlor is to be treated as first fulfilling that condition on 6 April 2025.

ITA 2007 is amended as follows. In section 667 (trustees’ accrued income profits treated as settlement income), in subsection (2)— In section 680 (interest on securities involving accrued income losses: foreign trustees), in subsection (1)—

In section 832 of ITTOIA 2005 (relevant foreign income charge on remittance basis), in subsection (1)—

Section 834 of ITA 2007 (residence of personal representatives) is amended as follows. In subsection (3), for “domiciled in the United Kingdom” substitute “a long-term UK resident within the meaning of IHTA 1984”. Omit subsection (5).

In section 62 of TCGA 1992 (residence of personal representatives), in subsection (3), for the words from “having” to the end substitute “UK resident if the deceased was UK resident or a long-term UK resident within the meaning of IHTA 1984 at the date of death.”

In section 7 of F(No.2)A 2005 (social security pension lump sum), in subsection (3) omit “or domiciled”.

This Part of this Schedule sets out a charge on amounts of qualifying overseas capital of individuals previously subject to the remittance basis. The charge is to be known as the temporary repatriation facility charge, and is referred to in this Schedule as the “TRF charge”. Paragraphs 2 to 6 set out when amounts are, or are to be treated, as qualifying overseas capital. Amounts of qualifying overseas capital of an individual are subject to the TRF charge only if the individual designates them in accordance with this Part of this Schedule. An individual may only designate qualifying overseas capital if the individual was subject to the remittance basis for at least one tax year (being a tax year before the tax year 2025-26). An individual designates qualifying overseas capital by making an election (a “designation election”) in a return for the tax year 2025-26, 2026-27 or 2027-28 (see paragraph 8 for further provision about designation elections). A designation election may only be made in a return if, for the tax year to which the return relates, the individual is UK resident for the purposes of income tax and capital gains tax (see Schedule 45 to FA 2013). The amount of the TRF charge on qualifying overseas capital designated by an individual is— Part 2 of this Schedule sets out exemptions and reliefs from income tax and capital gains tax that apply where amounts of qualifying overseas capital are designated. Part 3 of this Schedule amends or modifies rules about the remittance of amounts where an individual has designated qualifying overseas capital. For the purposes of this Part of this Schedule—

No gain is treated as accruing under paragraph 1(2) of Schedule 1 to TCGA 1992 on the remittance of an amount of designated qualifying overseas capital that is designated on the basis that it is qualifying overseas capital as a result of a remittance provision (other than paragraph 6(1)(b)). This paragraph has effect for the tax year 2025-26 and subsequent tax years.

Section 809Q of ITA 2007 is amended as follows. In subsection (3)— In subsection (6)— After subsection (8) insert— In section 809Z10 of ITA 2007 (general interpretation), after the definition of “the remittance basis user” insert—

This following modifications have effect for the tax years 2025-26, 2026-27 and 2027-28. Chapter A1 of Part 14 of ITA 2007 has effect as if—

The amendments made by this Part of this Schedule have effect for the tax year 2025-26 and subsequent tax years. Sub-paragraph (1) does not apply to the modifications made by paragraphs 14 and 18.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sub-paragraph (2) applies where— For the purposes of applying those paragraphs for the purposes of sub-paragraph (1)(c)— The amount is to be treated as an amount of income of qualifying overseas capital of the individual. The amount may only be designated in a return for the tax year in which the income was treated as arising to the individual.

An individual may make an election for paragraph 1 not to apply to a disposal made by the individual. Sections 42 and 43 of TMA 1970 (procedure and time limit for claims), except section 42(1A) of that Act, apply in relation to an election under this paragraph as they apply in relation to a claim for relief. An election under this paragraph is irrevocable. All such adjustments are to be made, whether by way of discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to an election under this paragraph.

Schedule 15 to FA 2004 (pre-owned assets charge) is amended as follows.

This Part of this Schedule applies for the purposes of sections 7(3) and 10(2) in the cases of certain acts done before 30 October 2024.

This Part of this Schedule is to be read as if it were contained in TCGA 1992.

In paragraph 11 (exemptions from charge), in sub-paragraph (5), after paragraph (b) insert—.

In the italic heading before paragraph 12, for “resident or domiciled outside the United Kingdom” substitute “non-UK resident or not a long-term UK resident”.

Paragraph 12 is amended as follows. In sub-paragraph (2), for “domiciled outside the United Kingdom” substitute “not a long-term UK resident”. Omit sub-paragraph (3). In this paragraph, “long-term UK resident” has the same meaning as in IHTA 1984.

This Part of this Schedule applies—

If an asset is transferred on or after 6 April 2026 under an unconditional contract made at any time in the tax year 2025-26, the disposal is, despite section 28(1) of TCGA 1992, to be treated as taking place at the time the asset is transferred (rather than at the time the contract is made) unless the contract is an excluded contract.

This paragraph applies for the purposes of an election under 169Q of TCGA 1992 in relation to a reorganisation of a company where— If, when the election is made— the disposal of the original shares is to be treated as taking place at the time of the election and not at the time of the reorganisation. If, at any time (“the relevant time”) before the making of the election, anything mentioned in sub-paragraph (2)(a) or (b) ceases to be as mentioned there, the disposal of the original shares is to be treated as taking place immediately before the relevant time and not at the time of the reorganisation. For the purposes of this paragraph “the relevant individual” means— In this paragraph— References in this paragraph to a reorganisation do not include an exchange of shares or securities which is treated as a reorganisation by virtue of section 135 or 136 of TCGA 1992 (but see instead paragraph 18). This paragraph does not apply if both the reorganisation and the election occur in the same tax year.

This paragraph applies for the purposes of an election under section 169VT of TCGA 1992 in relation to a reorganisation of a company where— If, as at 30 October 2024, a relevant individual holds qualifying shares or potentially qualifying shares, the disposal of the original shares is to be treated as taking place at the time of the election and not at the time of the reorganisation. For this purpose “a relevant individual” means— References in this paragraph to a reorganisation are to a reorganisation within the meaning of section 126 of TCGA 1992 or an exchange of shares or securities which is treated as such a reorganisation by virtue of section 135 or 136 of that Act, applying for the purposes of this paragraph the provision made by sections 169VN to 169VS of that Act. In this paragraph “qualifying shares” and “potentially qualifying shares” have the meaning given by section 169VB of that Act. This paragraph does not apply if both the reorganisation and the election occur in the same tax year.

Section 122 (chargeable persons) is amended as follows. In subsection (1), omit “responsible” in both places. In subsection (2), omit “responsible” in each place. In subsection (3)(a), omit “responsible”. In subsection (7), omit “responsible”.

Chapter 6 of Part 6 of CTA 2009 (alternative finance arrangements) is amended as follows. In section 501 (introduction), in subsection (3)(b) after “section 504” insert “or 504A”. In section 504 (diminishing shared ownership arrangements)— After section 504 insert— In section 510 (application of Part 5 of CTA 2009 to alternative finance arrangements)— In section 512 (alternative finance return resulting from diminishing shared ownership arrangements)— In section 514 (exclusion of some alternative finance return from sale consideration), in subsection (2), after “section 504” insert “or 504A”. In section 515 (diminishing shared ownership arrangements not partnership)— After section 515 (diminishing shared ownership arrangements not partnerships) insert—

If an individual falling within sub-paragraph (2) would otherwise be a qualifying new resident for tax year 2025-26 for the purposes of Chapter 5C of Part 2 of ITEPA 2003 (relief for new residents on foreign employment income), the individual is to be treated as not being a qualifying new resident for that year for the purposes of that Chapter. An individual falls within this sub-paragraph if—

TCGA 1992 is amended as follows. In section 1A (territorial scope), in subsection (2)(a), for “applies” substitute “applied”. In section 1K (annual exempt amount), omit subsection (3). In the italic heading before section 3D, for “Non-UK domiciled individuals” substitute “Individuals who were non-UK domiciled”. In section 3D— Section 16ZA (losses: non-UK domiciled individuals) is omitted. In Schedule 1 (UK resident individuals not domiciled in UK)—

ITA 2007 is amended as follows. Section 809L (meaning of “remitted to the United Kingdom”) is amended in accordance with sub-paragraphs to (3) to (8). In subsection (2)— In subsection (4)— In subsection (5)— In subsection (6)— At the end of subsection (9) insert “and cases where the property is used to secure the debt.” After subsection (9) insert— In section 809N (section 809L: gift recipients, qualifying property and enjoyment)— In section 809O (section 809L: dealings where there is a connected operation)— In section 809P (section 809L: amount remitted)—

In section 55C of ITA 2007 (election to reduce personal allowance), in subsection (3)(b), for “domiciled in the United Kingdom” substitute “not a qualifying new resident”.

Section 809I of ITA 2007 (remittance basis charge: income and gains treated as remitted) does not apply for a tax year in relation to an individual if—

After section 809R of ITA 2007 insert—

Sections 397 to 398 of ITTOIA 2005 (which have been repealed and only have effect in relation to distributions made before tax year 2016-17) do not apply in relation to any amount of designated qualifying overseas capital.

IHTA 1984 is amended as follows.

Section 168 (underlying profits of transparent and reverse hybrid entities) is amended as follows. In the heading omit “and reverse hybrid”. After subsection (2) insert— In subsection (3) for the words from “each” to the end substitute “any member of the group (“R”)— In subsection (4)— For subsections (5) and (6) substitute— Omit subsection (7). For subsection (9) substitute— In subsection (10) omit “or an individual”. After subsection (10) insert— Omit subsections (11) and (12).

For section 123 substitute— In section 124 (how to calculate top-up amounts etc)— In section 254 (use of currency), in subsection (4), for “step 4 in” substitute “subsection (3) of”.

In section 128 (responsible members)— In section 257 (meaning of qualifying undertaxed profits tax), in subsection (1), after “it is” insert “—.

For the purposes of this Part of this Schedule—

In FA 1996 omit section 200 (domicile for tax purposes of overseas electors).

FA 2005 is amended as follows. In section 28 (vulnerable person’s liability: VQTI), in subsection (4)— In Schedule 1 (non-UK resident vulnerable person), in paragraph 7(1)(a) omit “and domiciled”.

In section 22 of F(No.2)A 1931 (Treasury power to issue securities with a FOTRA condition), in subsection (1)(b) for “neither domiciled nor” substitute “not”. In section 154 of FA 1996 (FOTRA securities), omit subsection (1). Any security issued with a FOTRA domicile condition is treated in relation to times on or after 6 April 2025 as if— In sub-paragraph (3)—

In the Income Tax (Digital Requirements) Regulations 2021 (S.I. 2021/1076) omit regulation 26.

Chapter 1A of Part 14 of ITA 2007 (exemption for persons not domiciled in United Kingdom) is repealed.

In section 5 (meaning of estate), for subsection (1B) substitute—

In section 169 (certain non tax resident entities to be treated as flow-through entities), in subsection (2)—

In ITA 2007 omit section 835B (domicile for income tax purposes of overseas electors).

In section 6 (excluded property), omit subsection (3).

In section 170 (adjustments for ultimate parent that is a flow-through entity), in subsection (2A) omit “and reverse hybrid”.

In section 8D(9), omit the definitions of “tax year” and “the tax year 2017-18”.

Section 178 (reallocation of tax expense) is amended as follows. In subsection (1), for “hybrid, transparent and reverse hybrid” substitute “hybrid and transparent”. After subsection (1B) insert— In subsection (2), after “(1A))” insert “or to M (under subsection (1D))”.

In section 13A(3), omit the definition of “tax year”.

In section 240 (location of flow-through entities and permanent establishments), in subsection (1)—

In section 18 (transfers between spouses or civil partners), in subsection (2), for “domiciled in the United Kingdom” substitute “a long-term UK resident,”.

In section 28A, omit subsection (3).

Section 53 (exceptions from charge under section 52) is amended as follows. In subsection (4), for “domiciled in the United Kingdom” substitute “a long-term UK resident”. After subsection (4) insert—

Section 54 (exceptions from charge on death) is amended as follows. In subsections (2) and (2B)(e), for “domiciled in the United Kingdom” substitute “a long-term UK resident”. After subsection (2B) insert—

Section 64 (charge at ten-year anniversary) is amended as follows. In subsection (1B), for the words from the beginning to “ten-year anniversary falls” substitute “Where the settlor of property comprised in a settlement meets the condition in subsection (1BZA)”. After that subsection insert— In subsection (1BA), for “subsection (1B)” substitute “subsection (1BZA)(c)”.

Section 65 (exit charges etc) is amended as follows. In subsection (7), for “section 48(3)(a) above” substitute “section 48ZA”. In subsection (7A), for the words from “becomes excluded property” to the end, substitute “is invested in a holding in an authorised unit trust or a share in an open-ended investment company and thereby becomes excluded property by virtue of section 48ZA”. Omit subsection (7B). In subsection (7C), for “section 48(3)(a) above” substitute “section 48ZA”. In subsection (8), for the words from the beginning to “subsection (8A))”, substitute “If the condition in subsection (8ZA) is met in relation to property comprised in a settlement”. After subsection (8) insert— In subsection (8A), for “subsection (8)” substitute “subsection (8ZA)(c)”.

Section 74A (arrangements involving acquisition of interest in settled property etc) is amended as follows. In subsection (1)— For subsection (2) substitute—

In section 75A, omit subsection (4).

In section 80 (initial interest of settlor or spouse), in subsection (1), after “for the purposes of this Chapter” insert “(including sections 48 and 48ZA (excluded property) as they apply for the purposes of this Chapter)”.

In section 81 (property moving between settlements), in subsection (1)—

For section 81B substitute—

Omit sections 82 and 82A (excluded property: property to which section 81 applies).

In section 94 (close companies: charge on participators), in subsection (2)(b), for “domiciled outside the United Kingdom” substitute “not a long-term UK resident”.

In section 136 (transfers within three years before death: transactions of close companies), in subsection (3), for “domiciled in the United Kingdom” substitute “a long-term UK resident”.

In section 155 (visiting forces etc), in subsections (2) and (5B), omit “or domicile”.

Section 157 (non-residents’ bank accounts) is amended as follows. In subsection (2)— In subsection (3), for the words from “if the settlor” to the end, substitute if—

In section 218 (non-resident trustees), in subsection (1)(a), for “domiciled in the United Kingdom” substitute “a long-term UK resident”.

Omit section 267 (persons treated as domiciled in United Kingdom).

Section 267ZA (election to be treated as domiciled in the United Kingdom) (as it has effect before its repeal by paragraph 26) is amended as follows. In subsections (3) and (4), for “on or after 6 April 2013 and” substitute “before 6 April 2025 but”. Omit subsection (5). In subsection (8)—

In section 267ZB (section 267ZA: further provision about election) (as it has effect before its repeal by paragraph 26), in subsection (4)(a), for “6 April 2013 or a later date” substitute “5 April 2025 or an earlier date”.

Omit sections 267ZA and 267ZB (election to be treated as domiciled in the United Kingdom).

Before section 267A insert—

Section 272 (general interpretation) is amended as follows. The existing text becomes subsection (1). In subsection (1)— Also in subsection (1), in the definition of “foreign-owned”— Also in subsection (1), at the appropriate places insert—; ; . After subsection (1) insert—

Schedule A1 (non-excluded overseas property) is amended as follows. In paragraph 1, for “48(3)(a)” substitute “48ZA”. In paragraph 5(2)(a), for “or 48(3)(a), (3A) or (4)” substitute “, section 48(4) or section 48ZA”.

In Schedule 4 (maintenance funds for historic buildings etc), in paragraph 10(8), for “domiciled in the United Kingdom” substitute “a long-term UK resident”.

Part 1 of this Schedule, other than paragraph 26, comes into force on 6 April 2025. Paragraph 26 (repeal of sections 267ZA and 267ZB) comes into force on 6 April 2032. The amendments made by paragraph 12 to section 74A of IHTA 1984 (arrangements involving acquisition of interest in settled property etc) have effect where the relevant time (as defined in section 74C(5) of that Act) is on or after 6 April 2025 (even if the arrangements were entered into before that date). The amendment made by paragraph 19 to section 136 of IHTA 1984 (transactions of close companies) has effect in relation to relevant transactions (within the meaning of that section) on or after 6 April 2025. The amendments made by paragraphs 37 to 43 to the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (S.I. 2004/2543) have effect in relation to deaths occurring on or after 6 April 2025. The amendments made by paragraph 44 to the Inheritance Tax (Delivery of Accounts) (Excepted Settlements) Regulations 2008 (S.I. 2008/606) have effect in relation to chargeable events (within the meaning of regulation 2 of those Regulations) occurring on or after 6 April 2025.

The insertion of section 272(2) of IHTA 1984 by paragraph 28(6) of this Schedule (meaning of references to dying or being alive in the case of corporate settlors) is to be disregarded in construing section 201(1)(d) of IHTA 1984 in relation to property that became comprised in the settlement before 6 April 2025.

In section 127 (excluded entities), in each of subsections (5), (6) and (7), in paragraph (a), for “it” substitute “the entity or, in the case of a permanent establishment, the main entity”.

In section 174 (amount of covered tax balance), in subsection (1), in Step 4, for “covered tax balance expense” substitute “qualifying current tax expense”.

After section 181 insert—

In section 184 (recaptured deferred tax liabilities) after subsection (4) insert—

Section 270 (amount charged) is amended as follows. Before subsection (1) insert— In subsection (1)—

In section 141 (general exclusion of dividends), in subsection (9) omit paragraph (b) and the “or” preceding it.

CTA 2009 is amended as follows. In section 202 (overview of Part 4) omit subsection (5). In section 250A (replacement domestic items relief) omit subsection (7). In section 252 (restrictions on relief) omit subsection (3). Omit Chapter 6 of Part 4 (which defines “the commercial letting of furnished holiday accommodation”). In section 748 (assets held for purposes of property business)— In Schedule 4 (index of defined expressions) omit the entry for “commercial letting of furnished holiday accommodation (in Chapter 6 of Part 4)”.

In section 312C of ITEPA 2003, after subsection (2) insert— The amendment made by this paragraph has effect in relation to qualifying bonus payments made on or after 30 October 2024.

Section 275 of TCGA 1992 (location of assets) is amended as follows. In subsection (1), omit paragraph (l). Omit subsection (3A).

In section 459 of ITTOIA 2005 (application of transfer of assets abroad legislation to disposals of deeply discounted securities), in subsection (1) omit “or domiciled”.

In section 614 of the Income and Corporation Taxes Act 1988 (exemptions and reliefs in respect of income from investments etc. of certain pension schemes), in subsections (4) and (5), omit “not domiciled and”.

In sections 175 and 176, in the headings, for “covered tax balance” substitute “qualifying current tax expense”.

Section 272 (determining top-up amounts of entity that is a member of a group) is amended as follows. After subsection (3) insert— In subsection (8) omit paragraph (e).

In section 148A (transferable tax credits), in subsection (5)(a)—

Section 176D (tax credits etc allocated under tax equity partnerships) is amended as follows. In subsection (1), for “covered tax balance” substitute “qualifying current tax expense”. For subsection (2) substitute— In subsection (3)(b)— In subsection (7), for “covered tax balance” substitute “qualifying current tax expense”. For subsection (11) substitute— Where a person became an investor in a tax equity partnership arrangement in an accounting period that began before 31 December 2024, section 176D(11) of F(No.2)A 2023 (as inserted by sub-paragraph (6)) has effect in relation to the arrangement as if “the first relevant period” were the first accounting period beginning on or after that date. In sub-paragraph (7), “investor in a tax equity partnership arrangement” has the same meaning as in section 176D of F(No.2)A 2023.

In section 170 (adjustments for ultimate parent that is a flow-through entity), in subsection (9)(b), for the words from “the ultimate parent’s“ to the end substitute —

Section 176E (flow-through tax benefits: proportional amortisation method) is amended as follows. In subsection (1), in Step 2— Also in subsection (1), in Step 7, for “flow-through benefits” substitute “flow-through tax benefits”. In subsection (2), for “covered tax balance” substitute “qualifying current tax expense”. At the end insert—

In section 171 (ultimate parent subject to qualifying dividend regime)—

Section 176F (flow-through tax benefits: subtraction method) is amended as follows. that were made available in the accounting period, and that are not qualifying refundable tax credits or marketable transferable tax credits; In Step 3, for “under arrangement” substitute “under the arrangement”.

In section 176B (value of non-marketable transferable tax credits: originator), in subsection (3), after “the”, in the fourth place it occurs, insert “end of the”.

After section 176F insert—

In section 176C (value of non-marketable transferable tax credits: purchaser)—

In Schedule 15 (elections), in paragraph 2(1) (annual elections), omit paragraph (za).

In section 176D (tax credits etc allocated under tax equity partnerships), in subsection (10), for “the amount multiplied” substitute “that amount”.

In section 211 (transfer of assets or liabilities to a member of a multinational group)—

In section 212 (meaning of “qualifying reorganisation”), in subsection (4), after “is”, in the third place it occurs, insert “no greater than”.

In section 215 (undistributed income amount), in subsection (2)(c) omit “the made a loss”.

In section 216 (election where assets and liabilities adjusted to fair value for tax purposes), in subsection (7)(a), before “immediately after” insert “or liability”.

In section 217 (post filing adjustments of covered taxes), after subsection (1) insert—

In section 217(8), for paragraph (a) substitute—.

In section 220 (top-up amount of investment entity)—

In section 222 (investment entity effective tax rate), in Step 9 for “Step 1” substitute “Step 2”.

In section 242 (ownership interests and controlling interests), in subsection (5)(a) omit “financial”.

In section 255 (Pillar Two rules), in subsection (6), for “3(1)” substitute “3 of Schedule 16”.

In Schedule 14 (administration of multinational top-up tax)—

In Schedule 16A (multinational top-up tax: safe harbours), in paragraph 4(1)(b) omit “members of the group that are”.

In section 196 (eligible payroll costs)—

Section 643EA of ITTOIA 2005 (onward gifts from non-residents or qualifying new residents), as inserted by paragraph 17 of this Schedule, applies where the onward gift is provided on or after 6 April 2025, even if the original benefit was provided before that date. Where the original benefit was provided before 6 April 2025, that section applies as if for subsection (1)(b) there were substituted—. In this paragraph, “the original benefit” and “the onward gift” have the same meanings as in section 643EA of ITTOIA 2005; and in a case within section 643EA(3) “the onward gift” means the final benefit in the series.

In section 226 (joint venture group), in subsection (2)—

In section 199 (election to treat total top-up amount as nil)— In section 228 (minority owned members), after subsection (4) insert—

In section 195 (substance based income exclusion) omit subsections (2) and (3). Accordingly, in paragraph 2 (annual elections) of Schedule 15 (multinational top-up tax: elections), omit paragraph (e).

Schedule 14 (administration) is amended as follows. In paragraph 10, after sub-paragraph (11) insert— In paragraph 13, after sub-paragraph (10) insert— In paragraph 32, after sub-paragraph (3) insert—

ITA 2007 is amended as follows. In section 117 (overview of Chapter 4 of Part 4) omit subsections (2) and (2A). Omit— In section 388 (loan to buy plant or machinery for partnership use)— In section 389 (eligibility requirements for interest on loans), in subsection (4) omit “ordinary”. In section 399A (property partnerships: restriction of relief for investment loan interest) omit subsection (9). In section 836 (jointly held property), in subsection (3) omit exceptions D and DA.

Despite the repeal of section 643M of ITTOIA 2005 by paragraph 21 of this Schedule, that section continues to have effect so far as—

Section 227 (application of Part to joint venture groups) is amended as follows. In subsection (1)— In subsection (2), for “Part,” substitute “Part (in its application by virtue of subsection (1)),” In subsection (3)—

Section 266 (qualifying entities) is amended as follows. In subsection (1), after “An entity” insert “which is not a member of a joint venture group”. After subsection (1) insert—

In section 267 (DTT excluded entities), after subsection (3) insert—

In Schedule 16, after paragraph 6 insert— The amendment made by sub-paragraph (1) has effect in relation to— In paragraph 4 (qualified financial statements and basis of calculations), in sub-paragraph (4), in the words after paragraph (b) for “paragraph 6” substitute “paragraphs 6 to 6B”. In section 155 (qualifying tier one capital), in subsection (3), for “section” substitute “Part”. qualifying tier one capital section 155(3)

In section 241 (Pillar Two territories)— In section 256 (qualifying domestic top-up tax)— In Schedule 16A (qualifying domestic top-up tax safe harbour election)— The amendments made by sub-paragraphs (1)(f), (2)(f) and (3)(b)(i) and (iv) are treated as having come into force on 7 November 2024.

No liability to income tax arises on No liability to income tax arises on an amount of income treated as qualifying overseas capital under paragraph 6 , and that falls within sub-paragraph (1)(a) or (c) of that paragraph, if the amount is designated. But such an amount is to be treated for the purposes of section 97(1) of TCGA 1992 (capital payments not to include amounts chargeable to income tax) as if it were chargeable to income tax. No liability to income tax arises on an amount of income treated as qualifying overseas capital under paragraph 7 if the amount is designated. Accordingly the amount— Any such qualifying overseas capital is to be treated as having been designated by the individual (under that paragraph or those paragraphs), but no liability to the TRF charge is to arise as a result of that deemed designation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . This paragraph has effect for the tax year 2025-26 and subsequent tax years.

Sub-paragraph (2) applies where— The gains are to be reduced by the amount of that designated qualifying overseas capital. Sub-paragraph (4) applies where— Section 91(2) of TCGA 1992 does not apply to capital gains tax payable by the individual in respect of so much of the capital payment mentioned in sub-paragraph (3)(a) as is matched with the amount of the section 1(3) amount as would also, in accordance with paragraph 3(2), be matched with the amount of a capital payment mentioned in sub-paragraph (3)(c). Sub-paragraph (6) applies where— The gains are to be reduced by the amount of that designated qualifying overseas capital. Sub-paragraph (8) applies where— Paragraph 13(2) of Schedule 4C to TCGA 1992 does not apply to capital gains tax payable by the individual in respect of so much of the capital payment mentioned in sub-paragraph (7)(a) as is matched with the amount of the section 1(3) amount in the Schedule 4C pool as would also, in accordance with paragraph 5(2), be matched with the amount of a capital payment mentioned in sub-paragraph (7)(c). For the purposes of this paragraph— This paragraph has effect for the tax year 2025-26 and subsequent tax years.

The following provisions of this Part of this Schedule have effect in relation to accounting periods commencing on or after 31 December 2023— Paragraph 47 has effect in relation to relation to accounting periods commencing on or after 31 December 2023, subject to sub-paragraph (2) of that paragraph. The following provisions of this Part of this Schedule have effect in relation to accounting periods commencing on or after 31 December 2024— The other provisions of this Part of this Schedule have effect in relation to— A retrospection election— But sub-paragraph (7) applies where any member, or former member, of a multinational group or group is, or would be on either or both of the relevant assumptions— Where this sub-paragraph applies, a retrospection election may not be made without the written consent of each such person. For the purposes of sub-paragraph (6), the relevant assumptions are— Where— a retrospection election may not be made without the written consent of each responsible member. Sub-paragraph (11) applies where— The consent of that person is to be treated as having been given before the election was made. References in this paragraph to a “group”, other than in the expression “multinational group”, are to a group for the purposes of Part 4 of F(No.2)A 2023 (domestic top-up tax).

The following provisions (which insert or amend provision relating to the commercial letting of furnished holiday accommodation) are repealed—

Section 735AF of ITA 2007 (onward gifts from non-residents or qualifying new residents), as inserted by paragraph 44 of this Schedule, applies where the onward gift is provided on or after 6 April 2025, even if the original benefit was provided before that date. Where the original benefit was provided before 6 April 2025, that section applies as if for subsection (1)(b) there were substituted—. In this paragraph, “the original benefit” and “the onward gift” have the same meanings as in section 735AF of ITA 2007; and in a case within section 735AF(3) “the onward gift” means the final benefit in the series.

In section 41 of the Constitutional Reform and Governance Act 2010 (tax status of MPs and members of the House of Lords), for subsections (2) and (3) substitute—

The amendment of section 81(1) of IHTA 1984 by paragraph 15(b) of this Schedule (trusts on which property moving between settlements is held) is to be disregarded in construing section 81(1) in a case where the property in question ceased to be comprised in the first settlement before 6 April 2025.

Section 189 of FA 2004 (tax reliefs and exemptions in connection with registered pension schemes: meaning of relevant UK earnings) is amended as follows—

Sub-paragraph (2) applies where— The amendments made by Part 4 have effect in relation to the disposal unless— In this paragraph—

This paragraph applies if— The loss or the part of the loss that would otherwise fall to be carried forward as mentioned in sub-paragraph (1)(c) is to be treated for the purposes of the relevant relieving provision as if it had been made by the company in its corresponding property business. For the purposes of this paragraph as it applies in relation to a trade a company is treated as carrying on by virtue of section 65(3) of CTA 2010— For the purposes of this paragraph as it applies in relation to a trade a company is treated as carrying on by virtue of section 67A(3) of CTA 2010—

Paragraph 3 of Schedule 7AC to TCGA 1992 (exemptions for disposals by companies with substantial shareholding: main conditions previously met) has effect in relation to a disposal made on or after 1 April 2025 in accordance with sub-paragraph (2). In determining whether the condition in sub-paragraph (2)(d) of that paragraph of that Schedule is met, sections 241 and 241A of TCGA 1992 (commercial letting of furnished holiday accommodation to be treated as a trade) are to be disregarded.

The following provisions (which insert or amend provision relating to the commercial letting of furnished holiday accommodation) are repealed—