Finance Act 2019

After section 424 insert—

In section 433 (meaning of “qualifying infrastructure company”), in subsection (5), after paragraph (c) insert—.

To determine the “uplifted decommissioning costs estimate” in relation to the TTH asset—

Ring fence profits of an accounting period are “eligible” for the purposes of a TTH election if, as at the date the TTH election is made—

This paragraph applies if, in a loss period, more than one TTH election in respect of the TTH asset has effect in relation to the purchaser. For the purposes of paragraph 44 (allocation of activated TTH to an accounting period)—

At the end of Chapter 12 of Part 5 of CTA 2009 insert—

Part 5 of CTA 2009 (loan relationships) is amended as follows. In section 398 (overview of Chapter 12), in subsection (2)— In section 465(3) (provisions preventing amounts from being distributions), before paragraph (za) insert—.

, but ignoring amounts that represent the reimbursement of expenses incurred by C or the other company.

The “net cost amount” is the appropriate DSA estimate of the decommissioning costs for the TTH oil field. A “DSA estimate” is an estimate approved for the purposes of a qualifying decommissioning security agreement. If there is only one qualifying decommissioning security agreement relating to the TTH oil field, the “appropriate DSA estimate” is the most recent DSA estimate approved for the purposes of that agreement within the relevant period. If there is more than one qualifying decommissioning security agreement relating to the TTH oil field, the “appropriate DSA estimate” is the lowest of the DSA estimates approved for the purposes of any of those agreements within the relevant period. For the purposes of sub-paragraphs (3) and (4), the “relevant period” is the period of 12 months ending with—

In determining, for the purposes of this Schedule, the amount of the seller’s eligible ring fence profits for an accounting period that falls partly before 17 April 2002, the amount of the seller’s eligible ring fence profits for that period is to be reduced by the proportion which the part of the accounting period falling before that date bears to the whole of the accounting period.

After section 475B of CTA 2009 insert— In a case where a company became a party to a loan relationship before 1 January 2019, section 475C(8)(b) of CTA 2009 has effect as if the election were required to be made on or before 30 September 2019.

Part 10 of TIOPA 2010 (corporate interest restriction) is amended as follows. In section 413(6) (adjusted net group-interest expense: “relevant enactment”) for paragraph (b) substitute— In section 415 (qualifying net group-interest expense: interpretation), omit subsection (8).

The “transferred proportion” of the net cost amount is the proportion of the decommissioning costs for the TTH oil field that, under the qualifying decommissioning security agreement for the purposes of which the appropriate DSA estimate is approved, is allocated to—

In section 1015 of CTA 2010 (meaning of “special securities”) after subsection (1) insert—

The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 (S.I. 2004/3256) are amended in accordance with this paragraph. In regulation 2(1) (interpretation)— In regulation 3 (exchange gains or losses arising from liabilities or assets hedging shares etc), in paragraph (5)(c), for “a regulatory capital security” substitute “a hybrid capital instrument”. In regulation 4 (exchange gains or losses arising from derivative contracts hedging shares etc), in paragraph (4A)(c), for “a regulatory capital security” substitute “a hybrid capital instrument”.

In paragraph 5(b), the “relevant proportion” means—

To adjust the allocated amount for the purposes of paragraph 5(c)— The adjustments to be disregarded are— The “standard inflation adjustment amount” means the amount (if any) by which the relevant proportion of the estimate of the decommissioning costs for the TTH oil field would be increased if an adjustment for the purposes of taking account of inflation were made on the basis specified by Her Majesty’s Revenue and Customs for the purposes of this paragraph.

A “decommissioning security agreement” is an agreement entered into for the purpose of— A decommissioning security agreement is “qualifying” for the purposes of this Schedule if— In a case where the corporate restructuring condition (see paragraph 56(2)) is met, sub-paragraph (2)(a) has effect as if the reference to the seller were a reference to a party to the third party election (as defined in that paragraph). In sub-paragraph (1)— See paragraph 98 of this Schedule and section 271 of CTA 2010 for further provision about the meaning of “associated companies”.

Section 82 (calculation of taxable diverted profits in section 80 or 81 case: introduction) is amended as follows. In subsection (3) for “(9)” substitute “(10)”. In subsection (7) (when the “actual provision condition” is met) in paragraph (a) omit “(ignoring Part 4 of TIOPA 2010 (transfer pricing))”. After subsection (7) insert— After subsection (9) insert—

In section 101 (HMRC review of charging notice)— The amendments made by this paragraph do not have effect in relation to a review period that, but for the amendments, expires before 29 October 2018.

In section 83 (section 80 or 81 cases where no taxable diverted profits arise) omit subsection (2).

In section 84 (section 80 or 81: calculation of profits by reference to the actual provision) in subsection (2) for the words from “the amount (if any)” to the end substitute “an amount equal to so much of the diverted profits of the company for the accounting period as are not taken into account in an assessment to corporation tax included before the end of the review period in the company’s company tax return for that accounting period.”

Section 85 (section 80 or 81: calculation of profits by reference to the relevant alternative provision) is amended as follows. In subsection (4) for paragraph (a) (but not the “and” immediately after it) substitute—. In subsection (6) (meaning of “the notional additional amount”)— After subsection (6) insert—

Section 88 (calculation of taxable diverted profits in section 86 case: introduction) is amended as follows. After subsection (5A) insert— In subsection (9)(a) omit “(ignoring Part 4 of TIOPA 2010 (transfer pricing)”. After subsection (9) insert—

After section 111 insert—

The amendments made by paragraphs 2 to 7 have effect in relation to accounting periods beginning on or after 29 October 2018.

In TMA 1970, after section 8B insert—

For section 45G of CTA 2010 substitute—

The amendments made by this Part of this Schedule have effect in relation to periods of account beginning on or after 1 January 2019. But, for the purposes of Chapter 7 of Part 10 of TIOPA 2010 (corporate interest restriction: group-interest and group-EBITDA), the amendments made by paragraph 5 have effect in relation to periods of account of a worldwide group (within the meaning given by section 480 of that Act) beginning on or after 1 January 2019.

In FA 2011, omit section 53 (leases and changes to accounting standards). The amendment made by this paragraph has effect in relation to periods of account beginning on or after 1 January 2019. But, for the purposes of Chapter 7 of Part 10 of TIOPA 2010 (corporate interest restriction: group-interest and group-EBITDA), the amendment made by this paragraph has effect in relation to periods of account of a worldwide group (within the meaning given by section 480 of that Act) beginning on or after 1 January 2019.

This paragraph applies if the right-of-use asset falls (or would fall) to be first recognised for accounting purposes in the accounts of the lessee for a period of account earlier than the first period of account. The change of basis provisions and this Part of this Schedule have effect— In this paragraph “the first period of account” has the same meaning as in paragraph 13.

This paragraph applies if a lessee, in accordance with generally accepted accounting practice, prepares accounts by reference to a portfolio of leases having similar characteristics rather than by reference to the individual leases. Paragraphs 12 to 14 and 16 apply to the portfolio (subject to any necessary modifications) in the same way as they apply to a lease. If there is a transfer of the portfolio (or an individual lease within the portfolio), paragraph 15 applies to the transfer (subject to any necessary modifications) in the same way as it applies to the transfer of a lease.

The total TTH amount must not exceed the lower of—

The transferred profits amount for an accounting period, other than the earliest period, must be an amount equal to the amount of the seller’s eligible ring fence profits for the period. The transferred profits amount for the earliest period must be an amount equal to the amount of the seller’s eligible ring fence profits for that period, so far as that amount does not exceed the TTH balance for the earliest period. The “TTH balance” for the earliest period is an amount equal to— In this paragraph, “earliest period” means the earliest accounting period for which there is a transferred profits amount.

Sub-paragraphs (2) and (3) apply if the seller makes a loss in a trade in an accounting period. For the purposes of section 37(3)(b) of CTA 2010 (including for the purposes of that provision as it has effect under the other trade loss relief provisions), the seller’s total profits of a pre-transfer accounting period are treated as being— For the purposes of section 42 of CTA 2010, the seller’s profits of a ring fence trade of a pre-transfer accounting period are treated as being—

The “total activated TTH amount” held by the purchaser for a loss period which is the first activation period is the lower of—

The transferred profits amount for an accounting period is to be disregarded for the purposes of the application of any provision of the Corporation Tax Acts by reference to which the seller would (apart from this paragraph) be entitled to relief from, or a repayment of, corporation tax.

The “total activated TTH amount” held by the purchaser for a loss period which is a post-activation period is the lower of—

Paragraphs 16 and 17 are subject to this paragraph. If, on or after the licence transfer date, the seller’s eligible ring fence profits for a pre-transfer accounting period are reduced to an amount which is lower than the transferred profits amount for that period—

This paragraph applies if, in relation to a post-activation period— The “additional activated TTH amount” for the post-activation period is an amount equal to the excess. For the purposes of paragraph 39, the adjusted activated TTH amount is the total of— In this paragraph and in paragraph 41, “relevant proportion” has the same meaning as in paragraph 30(5).

This paragraph applies if, in relation to a post-activation period— The “TTH reduction amount” for the post-activation period is an amount equal to the excess. If the TTH reduction amount is less than the closing balance amount, the adjusted activated TTH amount for the purposes of paragraph 39 is an amount equal to the difference. If the TTH reduction amount is equal to, or greater than, the closing balance amount, the adjusted activated TTH amount for the purposes of paragraph 39 is nil. In this paragraph, references to the “closing balance amount” are references to the closing balance of activated TTH for the accounting period immediately preceding the post-activation period.

If neither paragraph 40 nor paragraph 41 applies in relation to a post-activation period, the “adjusted activated TTH amount” for the purposes of paragraph 39 is—

ITA 2007 is amended as follows.

This paragraph applies if— Despite section 144(2) or 144A(2)(b) of TCGA 1992, the grantor remains subject to the obligations under this Schedule in relation to the grant of the option. In this paragraph references to sale are to be read in accordance with section 144(6) of TCGA 1992.

In this Part of this Schedule— In this Part of this Schedule the “completion” of a disposal is regarded as occurring— This Part of this Schedule has effect as if it were included in TCGA 1992.

TMA 1970 is amended as follows. Omit section 7A (disregard of certain NRCGT gains for purposes of section 7). Omit sections 12ZA to 12ZN (NRCGT returns) and the italic heading before those sections. In section 28A (completion of enquiry into personal or trustee return)— Omit section 28G (determination of amount notionally chargeable where no NRCGT return delivered). In section 29 (assessment where loss of tax discovered), omit subsection (7)(a)(ia). Omit section 29A (non-resident CGT disposals: determination of amount which should have been assessed). In section 34 (ordinary time limit of 4 years), omit subsection (1A). In section 42 (procedure for making claims etc), in subsection (11)(a)— After section 59A insert— Omit section 59AA (non-resident CGT disposals: payments on account of capital gains tax). In section 59B (payment of income tax and capital gains tax: assessments other than simple assessments)— In section 59BA (payment of income tax and capital gains tax: simple assessments), in subsection (2)(b), for “or 59AA” substitute “of this Act or under Schedule 2 to the Finance Act 2019”. In section 107A (relevant trustees), in subsection (2)(b)— In section 118 (interpretation), omit the definition of “NRCGT return”. In Schedule 3ZA (date by which payment to be made after amendment or correction of self-assessment)—

The amendments made by this Part of this Schedule have effect in relation to disposals made on or after 6 April 2019. But section 12ZG of TMA 1970 (cases where advance self-assessment not required) continues to have effect in relation to disposals made on or after that date but before 6 April 2020; and that section has effect in relation to those disposals—

Arrangements are “profit fragmentation arrangements” if— But arrangements are not “profit fragmentation arrangements” if— For the purposes of sub-paragraph (1)(a) provision made or imposed as between a partnership of which the resident party is a member and the overseas party is to be regarded as provision made or imposed as between the resident party and the overseas party.

The material provision results in a tax mismatch for a tax period of the resident party if— In this Schedule references to “the tax reduction” are to the amount of the excess mentioned in sub-paragraph (1)(b)(i). It does not matter whether the tax reduction results from the application of different rates of tax, the operation of a relief, the exclusion of any amount from a charge to tax, or otherwise. “The 80% payment test” is met by the overseas party if the resulting increase in relevant taxes paid by that party as mentioned in sub-paragraph (1)(b)(i) is at least 80% of the amount of the resulting reduction in the amount of the relevant tax payable by the resident party. The results described in sub-paragraph (1)(a) and (b)(i) are exempted if they arise solely by reason of— In this paragraph and paragraph 6, where the overseas party does not have an actual period for the purposes of relevant taxes which coincides with the tax period of the resident party— In this paragraph—

This paragraph applies where— In order to avoid the double payment of tax, the resident party may make a claim in writing for one or more consequential adjustments to be made in respect of the tax paid mentioned in sub-paragraph (1)(a). On a claim under this paragraph an officer of Revenue and Customs must make such of the consequential adjustments claimed (if any) as are just and reasonable. The amount of any consequential adjustments must not exceed the lesser of— Consequential adjustments may be made—

In this Schedule—

CTA 2010 is amended as follows.

Where a period of account of a company begins before and ends on or after the commencement date, it is to be assumed for the purposes of the amendments made by this Schedule—

Section 93 (preliminary notice) is amended as follows. In subsection (5) (period for issuing a notice) for the words from “, a preliminary notice” to the end substitute — After subsection (5) insert— The amendments made by this paragraph do not have effect in relation to a preliminary notice if the period during which it may be issued (but for the amendments) expires before this Act is passed.

After section 101 insert—

CTA 2010 is amended as follows.

In section 70I (“short lease”)— In section 70YF (the “term” of a lease)— In section 220 (allocation of expenditure to a chargeable period), in subsection (4)(c), for “5” substitute “7”.

This paragraph applies if the right-of-use asset falls (or would fall) to be first recognised for accounting purposes in the accounts of the lessee for the first period of account beginning on or after 1 January 2019 (“the first period of account”). Any adjustment income or adjustment expense, or any receipt or expense, treated by any of the change of basis provisions as arising in consequence of a change of accounting policy that results in the right-of-use asset being first recognised for accounting purposes is to be treated as arising over a period (“the spreading period”) determined in accordance with the following steps— Step 1 Find for each lease the amount by which the credits exceed the debits (or vice-versa). For this purpose, the credits and the debits are the amounts which, under generally accepted accounting practice— are taken to equity as adjustments in the accounts of the lessee for the first period of account, and are in consequence of the change of accounting policy that results in the right-of-use asset being first recognised for accounting purposes in those accounts. Step 2 Calculate for each lease the percentage (“the relevant percentage”) that— the amount found under Step 1 for the lease bears to the total of all amounts found under Step 1 (treating such amounts as positive amounts). Step 3 Find for each lease the period which results from applying the relevant percentage to the term of the lease that remains unexpired as at the date on which the first period of account begins. For this purpose, the term of a lease is to be determined in accordance with generally accepted accounting practice as it applies for the first period of account. Step 4 Calculate the sum of all periods found under Step 3. Step 5 The spreading period is the period equal to the sum calculated under Step 4 beginning with the day on which the first period of account begins. An amount to be treated as arising in any period falling wholly or partly in the spreading period is to be determined in proportion to the number of days of the period falling within the spreading period. This paragraph is subject to paragraphs 15 and 16 (transfers of leases and cessation of activities).

Sub-paragraph (2) applies if— The amount so far as not otherwise treated as arising— immediately before the cessation.

Sub-paragraph (2) applies if— For the purposes of Part 10 of TIOPA 2010 (corporate interest restriction)— This paragraph has effect in relation to adjustments to which the financial statements of a worldwide group are treated by section 426 of TIOPA 2010 (changes in accounting policy) as subject in the same way as it has effect in relation to adjustments made under the change of accounting policy provisions by a company and accordingly— In this paragraph—

This Part applies if—

In section 641 (accrued income profits and losses: trustees of a disabled person's trusts), in subsection (4), in the definition of “disabled person's trusts”, for “paragraph 1(1) of Schedule 1” substitute “ paragraph 3 of Schedule 1C ”.

Section 9 (non-UK resident company preparing return of accounts in currency other than sterling) is amended as follows. For subsection (1) substitute— In subsection (4) omit from “of its” to “United Kingdom”.

This paragraph applies if— Relief for the purposes of corporation tax is given to the company under this paragraph for the unrelieved amount. For this purpose— The profits are— In this paragraph “post-commencement accounting period” means an accounting period ending after the commencement date.

In section 188DD (group relief for carried-forward losses: claimant company’s relevant maximum for overlapping period) omit subsection (4).

In section 643 (accrued income profits and losses: non-residents), in subsection (5), for “section 10(6)” substitute “ section 1B(5) ”.

In section 107 (group relief: restriction on losses etc surrenderable by non-UK resident) in subsection (1) for “company” (in the second place it occurs) to the end substitute “company within the charge to corporation tax”.

This paragraph applies if— The basis period for the notional business for the tax year is taken to end with 5th April in that tax year (if it would not otherwise do so). In this paragraph “untaxed income” has the meaning given by section 854(6) of ITTOIA 2005.

In section 188ED (group relief for carried-forward losses: claimant company’s relevant maximum for overlapping period)—

In section 809F (remittance basis: effect on what is chargeable), in subsection (4), for “section 12 of TCGA 1992” substitute “ paragraph 1 of Schedule 1 to TCGA 1992 ”.

In section 188BI (group relief for carried-forward losses: restriction on surrender of losses made when non-UK resident) in subsection (1) for “company” (in the second place it occurs) to the end substitute “company within the charge to corporation tax”.

This paragraph applies if— Section 327 (disallowance of imported losses etc) does not apply in relation to so much of the loss as is referable to the pre-commencement time.

In section 269ZB (restriction on deductions from trading profits) in subsection (8) for paragraph (b) substitute—

In section 809G (claim for remittance basis: effect on allowances etc), in subsection (3), for “section 3(1A)” substitute “ section 1K(6) ”.

This paragraph applies for an accounting period (“the loss period”) of a non-UK resident company beginning on or after the commencement date if— The amounts brought into account for the loss period in accordance with Part 7 of CTA 2009 must be such as to secure that none of the loss referable to that time is treated as arising in the loss period or any other accounting period of the company. For the purposes of this section a loss is referable to a time when a contract is not subject to corporation tax so far as, at the time to which the loss is referable, the company would not have been chargeable to corporation tax on any profits arising from the contract. If the company was not a party to the contract at the time to which the loss is referable, subparagraph (3) applies as if the reference to the company were a reference to the person who at that time was in the same position as respects the contract as is subsequently held by the company. An amount which would be brought into account in accordance with Part 7 of CTA 2009 in respect of a derivative contract apart from this paragraph is treated for the purposes of section 699(1) of CTA 2009 (amounts brought into account under Part 7 excluded from being otherwise brought into account) as if it were so brought into account. Accordingly, that amount must not be brought into account for corporation tax purposes as respects the derivative contract either in accordance with Part 7 of CTA 2009 or otherwise.

In section 269ZC (restriction on deductions from non-trading profits) in subsection (6) for paragraph (b) substitute—

In section 809K (introduction to rules on remittance of income and gains), in subsection (1), for paragraph (e) substitute—

This paragraph applies for an accounting period (“the relevant period”) of a non-UK resident company beginning on or after the commencement date if— So much of the loss amount as does not exceed the profit amount may be brought into account in the relevant period in accordance with Part 5 or Part 7 of CTA 2009. For the purposes of sub-paragraph (1) the first instrument and the second instrument are in a hedging relationship with one another in so far as one of them is intended to act as a hedge of the company’s exposure to changes in the fair value of the other. In a case where the first instrument and the second instrument are in a hedging relationship with one another to a limited extent, subsection (2) has effect in relation to so much of the loss amount as is just and reasonable having regard to the extent of that hedging relationship. For the purposes of this paragraph a profit is referable to a time when the first instrument is not subject to corporation tax so far as, at the time to which the profit is referable, the company would not have been chargeable to corporation tax on any profits arising from the instrument. If the company was not a party to the first instrument at the time to which the profit is referable, subparagraph (5) applies as if the reference to the company were a reference to the person who at that time was in the same position as respects the instrument as is subsequently held by the company.

Section 269ZD (restriction on deductions from total profits) is amended as follows. In subsection (2)— In subsection (4)(a) after “period” insert “(see section 269ZFA)”. Omit subsection (5). For subsection (7) substitute—

In section 809VK (retention of funds to meet CGT liabilities), for subsection (5) substitute—

Where— the amounts to be brought into account in respect of the derivative contract for the purposes of Part 7 of CTA 2009 are to be adjusted in such manner as is just and reasonable having regard to the tax asymmetry. For the purposes of subparagraph (1) there is a tax asymmetry in relation to the derivative contract if— In this paragraph—

Omit section 269ZE (restriction on deductions from total profits: insurance companies).

Section 809YD (chargeable gains accruing on sales of exempt property) is amended as follows. In subsection (1)(c)(ii), for “section 13” substitute “ section 3 ”. In subsection (3), for “section 12 of TCGA 1992” substitute “ paragraph 1 of Schedule 1 to TCGA 1992 ”. In subsection (5)(a)— In subsection (7)— In subsection (8), for “section 14A(2)” substitute “ section 3D(2) ”.

This paragraph applies if— In determining the amounts the company is to bring into account for the purposes of Part 7 of CTA 2009 for an accounting period beginning on or after the commencement date— In this paragraph—

After section 269ZF insert—

In section 809Z7 (meaning of “foreign income and gains” etc), in subsection (5), for the words from “are the foreign” to the end substitute “ are the chargeable gains accruing to the individual in that year on the disposal of foreign assets (within the meaning of Schedule 1 to TCGA 1992) ”.

This paragraph applies if— The company is to be treated for the purposes of regulation 6A of the Disregard Regulations as if it was a new adopter. In this paragraph—

After section 269ZFA (as inserted by paragraph 8) insert—

This paragraph applies if on the commencement date— Part 8 of CTA 2009 applies as if— In this paragraph—

In section 269ZJ (exclusion of shock losses from restrictions) omit subsection (4).

An election under section 792 of CTA 2009 (reallocation of degrouping charge within a group) may not be made if— An election under section 792 of CTA 2009 may not be made if— In this paragraph references to “B” and “the relevant time” must be read in accordance with section 792 of CTA 2009.

In section 269ZQ (power to amend) in subsection (2)(b) for “124E” substitute “124C”.

This paragraph applies if— Subsection (7) of section 1147 of CTA 2009 (which enables a company to obtain relief for expenditure on contaminated or derelict land incurred prior to carrying on a UK property business) does not apply in relation to the expenditure.

In section 269ZV (group allowance allocation statement: requirements and effects) after subsection (5) insert—.

Where on the commencement date— the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175) do not have effect in relation to that accounting period.

In section 269CC (restrictions on deductions by banking companies: management expenses etc) in subsection (7) (how to determine “relevant maximum”) in Step 1 for “269ZD(5)” substitute “269ZFA”.

This paragraph applies if on or after 29 October 2018 a company enters into an arrangement the main purpose or one of the main purposes of which is to secure for any person a tax advantage related to the coming into force of this Schedule. The tax advantage is to be counteracted by means of adjustments. The adjustments may be made (whether by an officer of Revenue and Customs or the person who would obtain the tax advantage) by way of an assessment, the modification of an assessment, an amendment or disallowance of a claim, or otherwise. In this paragraph—

In section 269CN (restrictions on deductions by banking companies: definitions) in the definition of “relevant profits” for “269ZD(5)” substitute “269ZFA”.

This paragraph applies if— If the arrangement is entered into on or after 29 October 2018, the tax advantage is not to be counteracted by means of adjustments under paragraph 49. In addition, the tax advantage is not to be counteracted by means of adjustments under section 461 of TIOPA 2010 irrespective of the date on which the arrangement was entered into.

In section 304(7) (certain deductions in respect of losses made in a ring fence trade to be ignored for the purposes of the restriction on deductions from trading profits) in paragraph (b) for “total” substitute “trade”.

FA 2012 is amended as follows.

In section 124 (carry forward of pre-1 April 2017 BLAGAB trade losses against subsequent profits) in subsection (5) omit “(but see also section 124D)”.

In section 124A (carry forward of post-1 April 2017 BLAGAB trade losses against subsequent profits) in subsection (5) omit “(but see also section 124D)”.

In section 124C (further carry forward against subsequent profits of post-1 April 2017 loss not fully used) in subsection (6) omit “(but see also section 124D)”.

Omit sections 124D and 124E (restriction on deductions from BLAGAB trade profits).

In section 11 of FA 1997, for subsection (10) substitute—

CTA 2010 is amended as follows.

This paragraph applies for determining the amount of capital gains tax (if any) which is notionally chargeable on a person as at the filing date for a return. The amount of capital gains tax notionally chargeable on the person as at that date is the amount of that tax for which the person would be liable for the tax year concerned, ignoring, for this purpose, the following disposals— A disposal on which a loss accrues is not to be ignored under sub-paragraph (2)(a) if the time at which the disposal is made (as determined under section 28 of TCGA 1992) falls on or before the completion date of the disposal in respect of which the return is made. In the case of a disposal to which this Schedule applies as a result of paragraph 1(1)(b) where a proportion of the chargeable gain accruing on the disposal is not a residential property gain, ignore that proportion for the purposes of this paragraph. For provision relevant to the operation of this paragraph, see paragraphs 14 and 15 (making of assumptions, reasonable estimates etc).

The amendment provisions applicable to ordinary tax returns apply in relation to returns made by a person under this Schedule as they apply in relation to ordinary tax returns, but subject to the following limitations or other modifications. An amendment is permitted only so far as the return under this Schedule could, when originally delivered, have included the amendment by reference to things already done. A person may not make an amendment of a return under this Schedule in respect of a disposal at any time on or after— If a person is not required to deliver an ordinary tax return for the tax year concerned, the person may not make an amendment of a return under this Schedule more than 12 months after the last day for delivery of an ordinary tax return. For the purposes of this paragraph “the amendment provisions applicable to ordinary tax returns” means sections 9ZA and 9ZB of TMA 1970.

The Revenue determination provision applicable to ordinary tax returns applies in relation to returns made by a person under this Schedule as it applies in relation to ordinary tax returns, but subject to the following modifications. The modifications are that— If— any amount which, as a result of the supersession, is payable or repayable under paragraph 6 or 8 is to be payable or repayable on the filing date for the return. For the purposes of this paragraph “the Revenue determination provision” means section 28C of TMA 1970.

This paragraph applies where, in respect of a loss period, an activated transferred profits amount for a pre-acquisition accounting period is to be applied in accordance with paragraph 25(2)(b) or (3)(b). A repayment of tax to be determined as if— See paragraph 53 for provision about the “activated ARFP amount”.

The “decommissioning expenditure amount” attributable to the TTH oil field for an accounting period, is the total of each of the following amounts attributable to the field for the post-acquisition accounting period—

A TTH election in respect of a TTH asset— References in this Schedule to the “effective date of a TTH election” are to be construed in accordance with sub-paragraph (1)(a).

This paragraph applies if an officer of Revenue and Customs discovers that a TTH election incorrectly states an amount that affects, or may affect— The officer— But the power to amend the TTH election under this paragraph may only be exercised if, at the time the election was approved (see paragraphs 61 and 62), an officer of Revenue and Customs could not have been reasonably expected, on the basis of the information made available to the officer before that time, to be aware that the amount stated was incorrect. An amendment under this paragraph may not be made more than 12 months after information that, in the opinion of an officer of Revenue and Customs, justifies the correction of the TTH election, comes to the officer’s attention. An amendment under this paragraph is to be ignored for the purposes of the application of Part 3 of this Schedule (effect of a TTH election on the seller). If, on or after the licence transfer date, the seller’s total profits for a pre-transfer accounting period are reduced, the statement of the total profits (or a statement of an amount determined by reference to the total profits) is not to be regarded as incorrect for the purposes of this paragraph (but see paragraph 18). See paragraph 94 for provision about appeals against a decision under this paragraph.

The following have effect for accounting periods beginning on or after 1 January 2019—

In section 533 (financial statements: supplementary), after subsection (1) insert—

In this Schedule, references to the transferred adjusted ring fence profits amount for a pre-acquisition accounting period of the purchaser are references to— The overlapping proportion, in relation to an accounting period of the seller, is the same as the proportion that the part of the seller’s accounting period that overlaps with the pre-acquisition accounting period of the purchaser bears to the whole of the seller’s accounting period.

The “special allowance amount” for an accounting period is the amount of a special allowance made under section 164 of CAA 2001 (general decommissioning expenditure incurred before cessation of ring fence trade) for that period. A special allowance amount is attributable to the TTH oil field so far as the expenditure in respect of which the allowance is made is expenditure incurred on decommissioning plant or machinery brought into use for the purposes of oil-related activities carried on wholly or partly in direct connection with the field.

This paragraph applies if, before the correction under paragraph 74 is made, an activated transferred profits amount for a pre-acquisition accounting period has been applied in accordance with paragraph 25(2)(b) or (3)(b). An amendment made under paragraph 74(2) may not—

An accounting period beginning before and ending on or after 1 January 2019 is to be treated for the purposes of the provision made by this Schedule (other than paragraph 12 or 13) as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.

After section 535 insert—

The “post-cessation expenditure amount” for an accounting period is the amount that, under section 165(3)(a) of CAA 2001 (general decommissioning expenditure after ceasing ring fence trade), is allocated to the appropriate pool for that period. A post-cessation expenditure amount is attributable to the TTH oil field so far as the general decommissioning expenditure in respect of which the amount is allocated is expenditure incurred on decommissioning plant or machinery brought into use for the purposes of oil-related activities carried on wholly or partly in direct connection with the field.

This paragraph applies in the case of a security which was a regulatory capital security for the purposes of the Taxation of Regulatory Capital Securities Regulations 2013 immediately before 1 January 2019 (referred to in this Part of this Schedule as a “transitional qualifying instrument”). The revocations made by paragraph 1 do not affect any case where regulation 3(2)(a) or (b), (3) or (3A) of those Regulations would have applied in relation to accounting periods ending on or before 31 December 2023 but for the provision made by paragraph 1. In a case where sub-paragraph (2) has applied, paragraph 13 makes provision for corporation tax purposes in relation to an accounting period beginning on 1 January 2024 (“the 2024 period”) to bring in credits or debits in respect of a transitional qualifying instrument which exists immediately before that date so far as they would not otherwise be brought into account. For the purposes of this paragraph and paragraph 13, an accounting period beginning before and ending on or after 1 January 2024 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.

In section 547 (funds awaiting reinvestment), at the end insert—

The “restoration expenditure amount” for an accounting period is the amount that is treated as qualifying expenditure under section 416ZA of CAA 2001 (ring fence trades: expenditure on site restoration) for that period. A restoration expenditure amount is attributable to the TTH oil field if the qualifying expenditure is incurred in relation to the field.

If there is a difference between— a credit or debit (as the case may be) of an amount equal to the difference must be brought into account for the purposes of Part 5 of CTA 2009 for the 2024 period in the same way as a credit or debit which is brought into account in determining the company’s profit or loss for that period in accordance with generally accepted accounting practice. For the purposes of this paragraph “tax-adjusted carrying value” is to be construed in accordance with— Where in the 2024 period, in accordance with generally accepted accounting practice, the rights and liabilities under the transitional qualifying instrument have been treated as divided between— the reference in this paragraph to the tax-adjusted carrying value of the transitional qualifying instrument means the sum of the tax-adjusted carrying values for each of those component instruments. In sub-paragraph (3) “equity instrument” has the meaning it has for accounting purposes.

In section 550(3) (attribution of distributions), after “section 535” insert “ or 535A ”.

For the purposes of paragraphs 32(2), 33(2) and 34(2), expenditure for an accounting period is to be apportioned between the TTH oil field and other oil fields (or parts of oil fields) on a just and reasonable basis.

This paragraph applies to a transitional qualifying instrument which qualified as a regulatory capital security as a result of falling within regulation 2(1)(c) or (d) of the Taxation of Regulatory Capital Securities Regulations 2013. The revocations made by paragraph 1 do not affect the application of regulation 3(2)(c)(i) of those Regulations in a case where the writing down or conversion concerned took place before 1 July 2019.

Section 556 (disposal of assets) is amended as follows. After subsection (3) insert— In subsection (7), for “Section 535 is” substitute “ Sections 535 and 535A are ”.

This paragraph applies if— No debit is to be brought into account under that Part in respect of the writing up of the principal amount of the security in accordance with any regulatory requirements or the provisions governing the security.

In section 582 (early exit), in subsection (3)(b), for “or 535(1)” substitute “ , 535(1) or 535A ”.

This Schedule comes into force on 6 April 2020 (“the commencement date”).

In sections 59FA, 109B and 109E of and Schedule 3ZB to TMA 1970 (including any headings of, and in, those provisions)— In Schedule 56 to FA 2009 (penalties), in the Table at the end of paragraph 1, in entry 6ZA, in the third column, for “an exit charge payment plan” substitute “a CT exit charge payment plan”.

In section 730C of CTA 2010 (disallowance of deductible amounts: relevant claims)— In Schedule 4 to F(No.2)A 2017 (relief for carried-forward losses) omit paragraph 172.

In Chapter 3 (tax-interest amounts), after section 391 insert—

Section 410 (net group-interest expense), after subsection (5) insert—

A TTH activation event occurs in relation to the TTH asset if— The “total decommissioning expenditure amount” is the relevant proportion of the total of the decommissioning expenditure amounts (see paragraph 31) attributable to the TTH oil field, in respect of which an allowance or allocation is made to the purchaser, for— The “total net profits amount” is the aggregate of the tracked profit or loss amounts (see paragraphs 64 and 65) attributable to the TTH asset for— But if the aggregate of the tracked profit or loss amounts attributable to the TTH asset for the periods mentioned in sub-paragraph (3)(a) and (b) is a negative amount, the total net profits amount is nil. In this paragraph, “the relevant proportion” means the proportion that the interest in the TTH oil field which is the TTH asset bears to the purchaser’s other interests in the TTH oil field or, if the proportion cannot reasonably be determined on that basis, such other proportion determined on a just and reasonable basis.

This paragraph applies for the purposes of allocating an amount to a pre-acquisition accounting period under Step 3 of paragraph 44. The “available activated TTH amount” held by the purchaser for the loss period, is an amount equal to— In sub-paragraph (2)(b) the reference to “later pre-acquisition accounting periods” is a reference to pre-acquisition accounting periods that begin after the period mentioned in sub-paragraph (1).

The “activated ARFP amount” for a pre-acquisition accounting period is the amount equal to— where— A is the amount applied, in relation to the loss period, in accordance with paragraph 25(2)(b) or (3)(b) for the pre-acquisition accounting period, T is the unused transferred profits amount for that period, and In sub-paragraph (1), “unused transferred profits amount” has the same meaning as it has for the purposes of Steps 1 and 2 of paragraph 44 (see paragraph 46). Sub-paragraph (4) applies if, in respect of an earlier loss period— The amount of the transferred adjusted ring fence profits for the pre-acquisition accounting period is treated, for the purposes of sub-paragraph (1), as being reduced by an amount equal to the total of the activated ARFP amounts for that period for the purposes of each earlier repayment.

A TTH election in respect of a TTH asset may not be made— Paragraph 3 of Schedule 1A to TMA 1970 (amendment of claims and elections) does not apply in relation to a TTH election (but see paragraph 74 (amounts discovered to be incorrect)).

The purchaser is required, as a condition of the approval of the election—

Section 413 (adjusted net group-interest expense) is amended as follows. In subsection (3)— In subsection (4)— For subsection (5) substitute—

Section 423 (capitalised interest brought into account for tax purposes in accordance with GAAP) is amended as follows. After subsection (2) insert— In subsection (3), for “But subsection (2)(b) of this section is of no effect where” substitute “But subsections (2)(b) and (2A) of this section are of no effect so far as”. In subsection (4), at the end insert “(and, for the purposes of this subsection, an asset is a GAAP-taxable asset even if an election under section 730 of CTA 2009 is, or could be, made in respect of it)”.

Section 426 (changes in accounting policy in cases where interest allowance (alternative calculation) election has effect) is amended as follows. In subsection (3)— For subsection (4) substitute—

Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

The amendments made by this Part of this Schedule have effect in relation to leases entered into on or after 1 January 2019.

In Part 5 of TCGA 1992 (transfer of business assets), after Chapter 3 (entrepreneurs’ relief) insert—

CTA 2010 is amended as follows.

After section 395 insert—

Any value attributable to the transfer of tax history is to be taken into account in determining the market value of the licence interest for the purposes of—

In section 357JI (Northern Ireland losses: transfers of trade without a change of ownership) in subsection (2) for the words from the beginning to “that section” substitute “Sections 943A to 944C (which modify the application of Chapter 2 of Part 4) have effect as if the references in those sections”.

In section 676 (disallowance of trading loss on change in ownership of company: company reconstructions)—

In section 676AF (restriction on use of carried-forward post-1 April 2017 trade losses)—

In section 676BC (disallowance of relief for trade losses)—

This paragraph applies if— The person is liable to pay that amount on account of the person's liability to capital gains tax for the tax year concerned so far as that amount has not already become payable as a result of any previous return under this Schedule in respect of a disposal in that period. The amount is payable on the filing date for the return. For cases where there are repayments of amounts previously paid on account of capital gains tax, see paragraphs 8 and 9.

A return under this Schedule—

The total TTH amount may not include an amount representing the eligible ring fence profits for a particular accounting period (other than the reference accounting period) unless it also includes an amount representing the eligible ring fence profits for the next following qualifying accounting period. An accounting period is “qualifying” for the purposes of this Schedule if the seller has eligible ring fence profits for that period.

Paragraphs 20 and 21 apply in relation to an accounting period for which there is a transferred profits amount.

This paragraph applies for the purposes of recalculating the transferred adjusted ring fence profits amount for the pre-acquisition accounting period mentioned in paragraph 26(1) (for the purposes of paragraph 26(2)(c)). The recalculated transferred adjusted ring fence profits amount for the period is the aggregate of— But if the amount given by taking the steps in sub-paragraph (2) is a negative amount, the recalculated transferred adjusted ring fence profits amount is nil.

The “ARFP uplift amount” for a pre-acquisition accounting period is the amount equal to— where— SC is the percentage specified in section 330(1) of CTA 2010 for the pre-acquisition accounting period, and A is the amount applied, in relation to the loss period, in accordance with paragraph 25(2)(b) or (3)(b) for the pre-acquisition accounting period.

If the seller is a party to a decommissioning relief agreement, a TTH election may only be made if the agreement provides for the total TTH amount to be disregarded when determining the reference amount. In this Schedule, “decommissioning relief agreement” and “reference amount” have the meaning given by section 80(2) of FA 2013.

This paragraph applies if— Paragraph 5(2)(a) of Schedule 1A to TMA 1970 (power to enquire into claims: time limits) has effect in relation to the election as if the reference in that provision to the day on which the claim was made were a reference to—

This Part applies if—

Section 11 of FA 1997 (rate of gaming duty) is amended as follows. In subsection (2), for “subsection (3)” substitute “subsections (3), (4A) and (4B)”. After subsection (4) insert—

The transferred adjusted ring fence profits amount for the accounting period is to be disregarded for the purposes of any provision of the Corporation Tax Acts by reference to which the seller would (apart from this paragraph) be entitled to a repayment of supplementary charge. The “transferred adjusted ring fence profits amount” is—

Sub-paragraph (2) applies if— Interests in the licence acquired later by the first purchaser are treated, for the purposes of this Part, as being transferred to the second purchaser before interests in the licence acquired earlier by the first purchaser.

Paragraph 9 of Schedule 1 to FA 1997 (accounting periods) is amended as follows. Where the Commissioners and every relevant person so agree, the gaming duty provisions of this Act shall have effect in relation to any premises as if accounting periods for the purposes of those provisions were the periods specified in the agreement, which may be— If the Commissioners have reason to believe that the liability in relation to any premises may not be discharged as it falls due from time to time, the Commissioners may direct that periods shorter than six months are to be treated as accounting periods for the purposes of the gaming duty provisions of this Act. The Commissioners may direct in relation to any premises that periods beginning on dates other than 1st April and 1st October are to be treated as accounting periods for the purposes of the gaming duty provisions of this Act. The Commissioners may by direction or by agreement with every relevant person make transitional arrangements in relation to any premises for periods (whether of six months or otherwise) to be treated as accounting periods for the purposes of the gaming duty provisions of this Act where— The Commissioners must not enter into an agreement under sub-paragraph (1) or give a direction under sub-paragraph (1B) unless they are satisfied that any transitional arrangements which are appropriate for the protection of the revenue have been agreed or directed. Any direction under this paragraph continues to have effect until it is withdrawn by the Commissioners (unless otherwise specified in the direction). Withdrawal of a direction under this paragraph in relation to any premises does not prevent the giving of further directions in relation to those premises. In sub-paragraph (2), for “sub-paragraph (1) above” substitute “this paragraph”. Omit sub-paragraphs (3) and (4). The decisions mentioned in sub-paragraph (6) are to be treated as if they were listed in subsection (2) of section 13A of FA 1994 (customs and excise reviews and appeals: meaning of “relevant decision”) and accordingly are to be treated— The decisions are—

For the purposes of the application of any provision of Part 4 or Part 8 of CTA 2010 in relation to the seller— “ARFP component”, in relation to an accounting period, means— See paragraph 17 for provision about disregarding the transferred profits amount for an accounting period. Sub-paragraph (1) does not apply in relation to the application of any provision for the purposes of determining the seller’s eligible adjusted ring fence profits for an accounting period for the purposes of this Schedule.