Statement by the Delegation of Ukraine on the situation in and around Ukraine
Income tax is charged for the year 2015-16.
For that tax year—
the basic rate is 20%,
the higher rate is 40%, and
the additional rate is 45%.
For the tax year 2015-16—
the amount specified in section 37(2) of ITA 2007 (income limit for personal allowance for those born before 6 April 1938) is replaced with “ £27,700 ”,
the amount specified in section 38(1) of that Act (blind person's allowance) is replaced with “ £2,290 ”,
the amount specified in section 43 of that Act (“minimum amount” for calculating tax reductions for married couples and civil partners) is replaced with “ £3,220 ”,
the amount specified in section 45(3)(a) of that Act (amount for calculating allowance in relation to marriages before 5 December 2005 where spouse is 75 over) is replaced with “ £8,355 ”,
the amount specified in section 45(4) of that Act (income limit for calculating allowance in relation to marriages before 5 December 2005) is replaced with “ £27,700 ”,
the amount specified in section 46(3)(a) of that Act (amount for calculating allowance in relation to marriages and civil partnerships on or after 5 December 2005 where spouse or civil partner is 75 or over) is replaced with “ £8,355 ”, and
the amount specified in section 46(4) of that Act (income limit for calculating allowance in relation to marriages and civil partnerships on or after 5 December 2005) is replaced with “ £27,700 ”.
Accordingly, for that tax year, section 57 of that Act (indexation of allowances), so far as relating to the amounts specified in sections 37(2), 38(1), 43, 45(3)(a), 45(4), 46(3)(a) and 46(4) of that Act, does not apply.
Section 2 of FA 2014 (basic rate limit for 2015-16 and personal allowances from 2015) is amended as set out in subsections (2) and (3).
In subsection (1)(b) (amount specified for 2015-16 in section 35(1) of ITA 2007 (personal allowance for those born after 5 April 1938)), for “ “£10,500”” substitute “ “£10,600” ”.
In subsection (8) (amendments of section 57 of ITA 2007), omit the “and” at the end of paragraph (a) and after that paragraph insert—.
In section 55B(4)(a) of ITA 2007 (transferable tax allowance for married couples and civil partners: entitlement to tax reduction), for “£1,050” substitute “ £1,060 ”.
The amendments made by subsections (3) and (4) have effect for the tax year 2015-16 and subsequent tax years.
The amount specified in section 10(5) of ITA 2007 (basic rate limit) is replaced—
for the tax year 2016-17, with “£32,000”, and
for the tax year 2017-18, with “£33,500”.
Accordingly, for those tax years section 21 of that Act (indexation of limits), so far as relating to the basic rate limit, does not apply.
The amount specified in section 35(1) of ITA 2007 (personal allowance for those born after 5 April 1938) is replaced—
for the tax year 2016-17, with “£11,000”, and
for the tax year 2017-18, with “£11,500”.
Accordingly, for those tax years, section 57 of that Act (indexation of allowances), so far as relating to the amount specified in section 35(1) of that Act, does not apply.
In section 34(1)(a) of that Act, for “sections 35 and 37 deal” substitute “ section 35 deals ”.
In section 35 of that Act (personal allowance for those born after 5 April 1938)—
for paragraphs (a) and (b) substitute “ meets the requirements of section 56 (residence etc). ”, and
for the heading substitute “ Personal allowance ”.
Omit section 37 of that Act (personal allowance for those born before 6 April 1938).
In section 45(4) of that Act (marriages before 5 December 2005), for paragraphs (a) and (b) substitute “ half the excess ”.
In section 46(4) of that Act (marriages and civil partnerships on or after 5 December 2005), for paragraphs (a) and (b) substitute “ half the excess ”.
In section 55B of that Act (transferable tax allowance for married couples and civil partners: tax reduction: entitlement), in subsection (6) omit “or 37”.
In section 55C of that Act (election to reduce personal allowance), in subsections (1)(b) and (2), omit “or 37”.
In section 57 of that Act (indexation of allowances)—
in subsection (1)(a), for the words following “35(1)” substitute “ (personal allowance) ”,
in subsection (1)(h), omit “37(2),”, and
in subsection (4), omit “37(2),”.
The amendments made by subsections (3) to (10) have effect for the tax year 2016-17 and subsequent tax years.
Corporation tax is charged for the financial year 2016.
For that year the main rate of corporation tax is 20%.
ITEPA 2003 is amended as follows.
Section 139 (car with a CO2 figure: the appropriate percentage) is amended as set out in subsections (3) and (4).
In subsection (2)—
in paragraph (a), for “7%” substitute “ 9% ”,
in paragraph (aa), for “11%” substitute “ 13% ”, and
in paragraph (b), for “15%” substitute “ 17% ”.
In subsection (3), for “16%” substitute “ 18% ”.
In section 140(2) (car without a CO2 figure: the appropriate percentage), in the Table—
for “16%” substitute “ 18% ”, and
for “27%” substitute “ 29% ”.
In section 142(2) (car first registered before 1 January 1998: the appropriate percentage), in the Table—
for “16%” substitute “ 18% ”, and
for “27%” substitute “ 29% ”.
The amendments made by this section have effect for the tax year 2017-18.
ITEPA 2003 is amended as follows.
Section 139 (car with a CO2 figure: the appropriate percentage) is amended as set out in subsections (3) and (4).
In subsection (2)—
in paragraph (a), for “9%” substitute “ 13% ”,
in paragraph (aa), for “13%” substitute “ 16% ”, and
in paragraph (b), for “17%” substitute “ 19% ”.
In subsection (3), for “18%” substitute “ 20% ”.
In section 140(2) (car without a CO2 figure: the appropriate percentage), in the Table—
for “18%” substitute “ 20% ”, and
for “29%” substitute “ 31% ”.
In section 142(2) (car first registered before 1 January 1998: the appropriate percentage), in the Table—
for “18%” substitute “ 20% ”, and
for “29%” substitute “ 31% ”.
The amendments made by this section have effect for the tax year 2018-19 and subsequent tax years.
In section 141(2) of ITEPA 2003 (diesel cars: the appropriate percentage), in Step 3, for “35%” substitute “ 37% ”.
The amendment made by this section has effect for the tax year 2015-16.
ITEPA 2003 is amended as follows.
In section 155 (cash equivalent of the benefit of a van), for subsections (1) and (2) substitute—
In section 156(1) (reduction for periods when van unavailable), for “155(1)” substitute “ 155 ”.
In section 158(1) (reduction for payments for private use), for “155(1)” substitute “ 155 ”.
In section 160(1)(c) (benefit of fuel treated as earnings), for “section 155(1)(b)” substitute “ section 155(1B)(b) ”.
In section 170 (orders etc relating to Chapter 6 of Part 3), for subsection (1A) substitute—
Article 3 of the Van Benefit and Car and Van Fuel Benefit Order 2014 (S.I. 2014/2896) is revoked.
The amendments made by this section have effect for the tax year 2015-16 and subsequent tax years.
In Part 4 of ITEPA 2003 (employment income: exemptions) after Chapter 7 insert—
The amendment made by this section has effect for the tax year 2016-17 and subsequent tax years.
ITEPA 2003 is amended as follows.
Omit section 65 (dispensations relating to benefits for certain employees).
Omit section 96 (dispensations relating to vouchers or credit-tokens).
Accordingly—
in section 95 (disregard for money, services or goods obtained), omit subsection (1)(b) and the “or” before it, and
in Schedule 7 (transitionals and savings), omit paragraphs 15, 16, 19 and 20 and the italic headings before paragraphs 15 and 19.
The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
The repeal of sections 65 and 96 of ITEPA 2003 does not affect the power of an officer of Revenue and Customs to revoke a pre-commencement dispensation from a date earlier than 6 April 2016.
Accordingly, sections 65(6) to (9) and 96(5) to (8) of ITEPA 2003 continue to have effect in relation to a pre-commencement dispensation.
In this section “pre-commencement dispensation” means a dispensation given (or treated as given) under section 65 or 96 of ITEPA 2003 which is in force immediately before 6 April 2016.
Omit Chapter 11 of Part 3 of ITEPA 2003 (taxable benefits: exclusion of lower-paid employments from parts of benefits code).
In Part 4 of that Act (employment income: exemptions), after section 290B insert—
Schedule 1 contains amendments relating to subsections (1) and (2).
The amendments made by this section and Schedule 1 have effect for the tax year 2016-17 and subsequent tax years.
Part 4 of ITEPA 2003 (employment income: exemptions) is amended as follows.
In Chapter 8 (exemptions: special kinds of employees), after section 306 insert—
In section 228 (effect of exemptions on liability under provisions outside Part 2), in subsection (2)(d), after “291” insert “ and 306A ”.
The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.
In section 640A of ITEPA 2003 (lump sums provided under armed forces early departure scheme), at the end insert “ or the Armed Forces Early Departure Payments Scheme Regulations 2014 (S.I. 2014/2328) ”.
Subsection (1) comes into force on 1 April 2015.
ITEPA 2003 is amended as follows.
Bereavement support payment PA 2014 Section 30 Any provision made for Northern Ireland which corresponds to section 30 of PA 2014
PA 2014 The Pensions Act 2014
The amendments made by this section have effect in accordance with regulations made by the Treasury.
Regulations under subsection (4) may make different provision for different purposes.
Section 1014(4) of ITA 2007 (regulations etc subject to annulment) does not apply in relation to regulations under subsection (4).
Section 684 of ITEPA 2003 (PAYE regulations) is amended as follows.
In the list in subsection (2), after item 1 insert—
For subsection (3) substitute—
Section 100 of TMA 1970 (determination of penalties by officer of Board) is amended as follows.
In subsection (2)(c), after “those amendments” insert “ , subject to subsection (2A) ”.
After subsection (2) insert—
Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc from UK resident companies and tax treated as paid in respect of certain distributions) is amended in accordance with subsections (2) to (6).
After section 396 insert—
In section 382 (contents of Chapter 3), in subsection (1), omit the “and” at the end of paragraph (b) and after paragraph (c) insert, and
In section 385 (person liable), in subsection (1)(a) for “and 389(3)” substitute “ , 389(3) and 396A ”.
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In section 481 of ITA 2007 (other amounts to be charged at special rates for trustees), in subsection (3), after “Type 1” insert “ or Type 12 ”.
In section 482 of that Act (types of amount to be charged at special rates for trustees), at the end insert— “ Type 12 Income treated as arising to the trustees under section 396A of ITTOIA 2005 (arrangements offering a choice of income or capital return). ”
In section 1100 of CTA 2010 (qualifying distributions: right to request a statement), after subsection (6) insert—
The amendments made by subsections (2) to (4), (7) and (8) have effect in relation to things received on or after 6 April 2015 (even if the choice to receive them was made before that date).
Chapter 2 of Part 8 of ITA 2007 (gift aid) is amended as follows.
In section 416 (meaning of “qualifying donation” for the purpose of gift aid relief)—
in subsection (1)(b)—
after “the individual” insert “ , or an intermediary representing the individual, ” and
after “the charity” insert “ , or an intermediary representing the charity, ”, and
after subsection (1) insert—
For section 428(3) (regulations in relation to gift aid declarations) substitute—
The amendments made by this section have effect in relation to gifts made on or after a day appointed in regulations made by the Treasury.
Section 1014(4) of ITA 2007 (regulations etc subject to annulment) does not apply to regulations under subsection (4).
In Part 13 of ITA 2007 (tax avoidance), after Chapter 5D insert—
In section 2 of ITA 2007 (overview of Act), in subsection (13)—
after paragraph (h) insert—;
after paragraph (ha) insert—.
arrangements (in Chapter 5E of Part 13) section 809EZE(1) collective investment scheme (in Chapter 5E of Part 13) section 809EZE(1) disguised fee (in Chapter 5E of Part 13) section 809EZA(3) external investor (in Chapter 5E of Part 13) section 809EZE(1) investment (in investment scheme) (in Chapter 5E of Part 13) section 809EZE(2) investment management services (in Chapter 5E of Part 13) section 809EZE(1) investment scheme (in Chapter 5E of Part 13) section 809EZA(6) investment trust (in Chapter 5E of Part 13) section 809EZE(1) market value (in Chapter 5E of Part 13) section 809EZE(1) participant (in Chapter 5E of Part 13) section 809EZE(1) profits (on investment made for purposes of investment scheme) (in Chapter 5E of Part 13) section 809EZE(1) repayment of, and return on, investment in certain investment schemes (in Chapter 5E of Part 13) section 809EZE(4) sum (in Chapter 5E of Part 13) section 809EZB(3)
The amendments made by subsections (1), (2)(b) and (3) have effect in relation to sums arising on or after 6 April 2015 (whenever the arrangements under which the sums arise were made).
Chapter 7 of Part 4 of ITA 2007 (losses from miscellaneous transactions) is amended as follows.
In section 152 (losses from miscellaneous transactions)—
for subsection (1) substitute—;
in subsection (2)(a), for “section 1016 income” substitute “ income on which income tax is charged under, or by virtue of, a relevant section 1016 provision (“the relevant provision”) ”;
after subsection (2) insert—;
in subsection (4), after “person's” insert “ relevant ”;
in subsection (5), for “A person's miscellaneous income” substitute “ The person's “relevant miscellaneous income”, in relation to the loss, ”;
for paragraph (b) of that subsection substitute—;
in subsection (7), before “miscellaneous”, in both places it appears, insert “ relevant ”;
omit subsection (8);
in subsection (9), omit the “and” at the end of paragraph (b) and after that paragraph insert—.
In section 153 (how relief works), before “miscellaneous”, in each place it appears, insert “ relevant ”.
In section 154 (transactions in deposit rights), in subsection (3)—
after “against” insert “ relevant ”, and
for the words from the second “miscellaneous” to the end substitute “ relevant miscellaneous income, for the tax year, in relation to the loss. ”
Before section 155 (time limit for claiming relief), but after the italic heading before that section (supplementary), insert—
In section 155 (time limit for claiming relief), in subsections (1) and (2), before “miscellaneous” insert “ relevant ”.
In consequence of subsection (2)(h), in FA 2009, omit section 69.
The amendments made by subsections (2)(a) to (h), (3), (4), (6) and (7)—
have effect for the tax year 2015-16 and subsequent tax years, and
apply in relation to a loss whether it is made before, during or after that tax year.
The amendments made by subsections (2)(i) and (5) have effect in relation to losses and income arising on or after 3 December 2014 directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements (whenever the arrangements are made).
Subsection (4) of section 154A of ITA 2007 (inserted by subsection (5) of this section) applies in relation to loss relief, under section 152 of that Act, for losses whenever made.
In relation to income arising on or after 3 December 2014 but before the beginning of the tax year 2015-16, section 154A of ITA 2007 has effect as if for paragraph (a) of subsection (3) of that section there were substituted—.
In Chapter 3 of Part 15 of ITA 2007 (deduction of tax from certain payments of yearly interest), after section 888 insert—
Any power conferred on the Treasury by virtue of subsection (1) to make regulations comes into force on the day on which this Act is passed.
So far as not already brought into force by subsection (2), the amendment made by this section comes into force on such day as the Treasury may by regulations appoint.
Section 1014(4) of ITA 2007 (regulations etc subject to annulment) does not apply to regulations under subsection (3).
Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.
In section 809C (claim for remittance basis by long-term UK resident: nomination of foreign income and gains to which section 809H(2) is to apply)—
in subsection (1)(b), after “meets” insert “ the 17-year residence test, ”;
after subsection (1) insert—;
in subsection (1A), after “the individual” insert—;
in subsection (1B)(a), after “meet” insert “ the 17-year residence test or ”;
in subsection (4)—
before paragraph (a) insert—;
in paragraph (a), for “£50,000” substitute “ £60,000 ”.
In section 809H (claim for remittance basis by long-term UK resident: charge)—
in subsection (1)(c), after “meets” insert “ the 17-year residence test, ”;
in subsection (1A)—
for “809C(1A)” substitute “ 809C(1ZA), (1A) ”;
after “meets” insert “ the 17-year residence test, ”;
in subsection (5B)—
before paragraph (a) insert—;
in paragraph (a), for “£50,000” substitute “ £60,000 ”.
The amendments made by this section have effect for the tax year 2015-16 and subsequent tax years.
Part 5 of CTA 2009 (loan relationships) is amended as follows.
Omit the following provisions—
section 374 (connection between debtor and person standing in position of creditor),
section 377 (party to loan relationship having major interest in other party),
section 407 (postponement until redemption of debits for connected companies' deeply discounted securities), and
section 408 (companies connected for section 407).
In section 372 (introduction to Chapter 8), in subsection (3)—
omit paragraph (a),
at the end of paragraph (b), insert “ and ”, and
omit paragraph (c) (including the “and” at the end).
In section 373 (late interest treated as not accruing until paid in some cases), in subsection (1)(b), for “374, 375, 377” substitute “ 375 ”.
In section 406 (introduction to provisions dealing with deeply discounted securities)—
omit subsection (1)(a), and
in subsections (2), (3) and (4), for “407” substitute “ 409 ”.
Subsections (2)(a) and (b), (3) and (4) have effect—
in relation to debtor relationships entered into by a company on or after 3 December 2014, and
in relation to debtor relationships entered into by a company before 3 December 2014, where the actual accrual period (within the meaning of Chapter 8 of Part 5 of CTA 2009) begins on or after 1 January 2016.
Subsections (2)(c) and (d) and (5) have effect—
in relation to debtor relationships entered into by a company on or after 3 December 2014, and
in relation to debtor relationships entered into by a company before 3 December 2014, where the relevant period (within the meaning of section 407 of CTA 2009) begins on or after 1 January 2016.
Subsections (6)(b) and (7)(b) are subject to subsections (9) to (14).
In the case of a company which has an accounting period beginning before 1 January 2016 and ending on or after that date (“the straddling period”), so much of the straddling period as falls before that date, and so much of that period as falls on or after that date, are treated for the purposes of subsections (6)(b) and (7)(b) as separate accounting periods.
If a debtor relationship entered into by a company before 3 December 2014 is modified on or after 3 December 2014 and before 1 January 2016, subsections (2)(a) and (b), (3) and (4) have effect in relation to that debtor relationship where the actual accrual period (within the meaning of Chapter 8 of Part 5 of CTA 2009) begins on or after the date on which the modification takes effect.
For the purposes of subsection (10) a debtor relationship of a company is modified if—
there is a material change in the terms of the relationship, or
there is a change in the person standing in the position of creditor.
If a the terms of a deeply discounted security issued by a company before 3 December 2014 are modified on or after 3 December 2014 and before 1 January 2016, subsections (2)(c) and (d) and (5) have effect in relation to the debtor relationship represented by that security where the relevant period (within the meaning of section 407 of CTA 2009) begins on or after the day on which the modification takes effect.
For the purposes of subsection (12) the terms of a deeply discounted security are modified if—
there is a material change in the terms of the security, or
there is a change in the person standing in the position of creditor.
Where subsection (10) or (12) applies, an accounting period is to be taken for the purposes of that subsection to end immediately before the day on which the modification takes effect, and a new accounting period is to be taken for those purposes to begin with that day.
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Part 8 of CTA 2009 (intangible fixed assets) is amended as follows.
In section 746 (“non-trading credits” and “non-trading debits”), in subsection (2), omit the “and” at the end of paragraph (b) and after that paragraph insert—.
In section 844 (overview of Chapter 13), after subsection (2) insert—
After section 849A insert—
The amendments made by this section—
have effect in relation to accounting periods beginning on or after 3 December 2014, and
apply in relation to a relevant asset acquired by C on or after that date, unless C acquires the asset in pursuance of an obligation, under a contract, that was unconditional before that date.
If the relevant asset is acquired by C— section 849B of CTA 2009 has effect as if in subsection (1)(a) of that section “directly or indirectly” were omitted.
before 24 March 2015, or
in pursuance of an obligation, under a contract, that was unconditional before that date,
For the purposes of subsection (5)(a), an accounting period beginning before, and ending on or after, 3 December 2014 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.
For the purposes of subsections (5)(b) and (6)(b), an obligation is “unconditional” if it may not be varied or extinguished by the exercise of a right (whether under the contract or otherwise).
CTA 2009 is amended as follows.
In Chapter 6A of Part 3 (trade profits: R&D expenditure credits), in section 104M (amount of R&D expenditure credit), in subsection (3), for “10%” substitute “ 11% ”.
In Chapter 2 of Part 13 (relief for SMEs: cost of R&D incurred by SME)—
in section 1044 (additional deduction in calculating profits of trade), in subsection (8), for “125%” substitute “ 130% ”,
in section 1045 (alternative treatment for pre-trading expenditure: deemed trading loss), in subsection (7), for “225%” substitute “ 230% ”, and
in section 1055 (tax credit: meaning of “Chapter 2 surrenderable loss”), in subsection (2)(b), for “225%” substitute “ 230% ”.
In consequence of subsection (3), in Schedule 3 to FA 2012, omit paragraph 2(2) to (4).
The amendments made by this section have effect in relation to expenditure incurred on or after 1 April 2015.
CTA 2009 is amended as follows.
In Part 13 (additional relief for expenditure on research and development), in section 1126 (software or consumable items: attributable expenditure), after subsection (6) insert—
After section 1126 insert—
In each of the following, after “1126” insert “ to 1126B ”
section 104D(5);
section 104E(5);
section 104G(6);
section 104H(7);
section 104J(6);
section 104K(7);
section 1052(7);
section 1053(6);
section 1066(5);
section 1067(5);
section 1071(7);
section 1072(8);
section 1077(6);
section 1078(7);
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In section 104Y(2), for “and 1126” substitute “ to 1126B ”.
In section 1310(4) (orders and regulations subject to affirmative procedure), after paragraph (za) insert—.
The amendments made by this section have effect in relation to expenditure incurred on or after 1 April 2015.
Part 15 of CTA 2009 (film production) is amended as follows.
In section 1184 (definitions of terms including “limited-budget film”)—
omit subsections (2) and (3), and
in the heading for that section omit “and “limited-budget film””.
For section 1200(3) (film tax relief: amount of additional deduction: rate of enhancement) substitute—
In section 1202 (surrendering of loss and amount of film tax credit)—
in subsection (2) for “R is the payable credit rate (see subsection (3))” substitute “ R is 25% ”, and
omit subsection (3).
Omit section 1215 (film tax relief on basis that film is limited-budget film).
In Schedule 4 (index of defined expressions) omit the entry for “limited-budget film”.
In consequence of subsection (4), in section 32 of FA 2014—
omit subsection (3),
in subsection (4) for “amendments made by subsections (2) and (3) have” substitute “ amendment made by subsection (2) has ”,
omit subsection (5), and
in subsection (7) for “sections 1198(1) and 1202(2) and (3)” substitute “ section 1198(1) ”.
The amendments made by this section have effect in relation to films the principal photography of which is not completed before such day as the Treasury may specify by regulations.
The specified day may be before the day on which the regulations are made, but may not be before 1 April 2015.
Section 1171(4) of CTA 2010 (orders and regulations subject to negative resolution procedure) does not apply in relation to any regulations made under subsection (8).
Part 15A of CTA 2009 (television production reliefs) is amended as follows.
In section 1216AB(2) (programmes that are not animation can be relevant programmes only if conditions C and D are met in addition to conditions A and B) for “not animation” substitute “ neither animation nor a children's programme ”.
In section 1216AB(3) (condition A: types of programme that can be relevant programmes)—
omit the “or” after paragraph (b), and
after paragraph (c) insert, or
In section 1216AC (types of programme: definitions) after subsection (2) insert—
In section 1216AD(1) (meaning of “excluded programme”) after “For the purposes of this Part” insert “ , but subject to section 1216ADA, ”.
After section 1216AD insert—
The amendments made by this section have effect in relation to accounting periods beginning on or after 1 April 2015.
Subsections (9) and (10) apply where—
a company has an accounting period beginning before, and ending on or after, 1 April 2015 (“the straddling period”),
in the part of the straddling period beginning with 1 April 2015 and ending with the end of the straddling period, the company carries on activities in relation to a television programme that—
is within the definition of “children's programme” given by the new section 1216AC(2A), but
is not a relevant programme for the purposes of Part 15A of CTA 2009, and
if that part of the straddling period were a separate accounting period, in that separate accounting period—
the programme would be a relevant programme for the purposes of Part 15A of CTA 2009,
the company would for those purposes be the television production company in relation to the programme, and
the conditions for television tax relief (see section 1216C(2) of CTA 2009) would be met in relation to the programme.
For the purposes of calculating for corporation tax purposes the company's profits or losses for the straddling period of its activities in relation to the programme— are to be treated as separate accounting periods.
so much of the straddling period as falls before 1 April 2015, and
so much of that period as falls on or after that date,
Any amounts brought into account for the purposes of calculating for corporation tax purposes the company's profits or losses for the straddling period of its activities in relation to the programme are to be apportioned to the two separate accounting periods on such basis as is just and reasonable.
In section 1216CE(1) of CTA 2009 (television tax relief: UK expenditure condition) for “25%” substitute “ 10% ”.
The amendment made by subsection (1) has effect in relation to relevant programmes the principal photography of which is not completed before 1 April 2015.
Schedule 2 contains provision restricting the amount of deductions which banking companies may make in respect of certain losses carried forward from previous accounting periods.
Schedule 3 contains provision restricting the circumstances in which companies may make a deduction in respect of certain losses carried forward from previous accounting periods.
Schedule 4 contains provision about pension annuities, and other pension, paid in respect of deceased members of pension schemes.
Schedule 5 makes provision about relief for contributions to flood and coastal erosion risk management projects.
Schedule 6 makes provision about excluded activities for the purposes of the following provisions of ITA 2007—
Part 5 (enterprise investment scheme) and, by virtue of section 257DA(9) of that Act, Part 5A (seed enterprise investment scheme),
Part 5B (tax relief for social investments), and
Part 6 (venture capital trusts).
Schedule 7 contains provision about capital gains tax on the disposal of UK residential property interests—
by a person who is not resident in the United Kingdom, or
by an individual, in the overseas part of a split tax year.
Schedule 8 contains provision about the calculation of relevant high value disposals within the meaning of section 2C of TCGA 1992.
Schedule 9 contains amendments of TCGA 1992 in connection with private residence relief.
In section 45 of TCGA 1992 (exemption for certain wasting assets), after subsection (3) insert—
The amendment made by this section has effect—
for corporation tax purposes, in relation to disposals on or after 1 April 2015, and
for capital gains tax purposes, in relation to disposals on or after 6 April 2015.
Section 169K of TCGA 1992 (disposal associated with relevant material disposal) is amended as follows.
For subsections (1) and (2) substitute—
In subsection (3)—
for “the individual”, in the first place it occurs, substitute “ P ”, and
for “the withdrawal of the individual” substitute “ P's withdrawal ”.
After subsection (3) insert—
After subsection (5) insert—
The amendments made by this section have effect in relation to disposals made on or after 18 March 2015.
Chapter 3 of Part 5 of TCGA 1992 (entrepreneurs' relief) is amended as follows.
In section 169H (introduction), in subsection (3), for “section 169L” substitute “ sections 169L and 169LA ”.
In section 169L (relevant business assets), in subsection (2), after “including” insert “ , subject to section 169LA, ”.
After that section insert—
The amendments made by this section have effect in relation to qualifying business disposals made on or after 3 December 2014.
Section 169S of TCGA 1992 (entrepreneurs' relief - interpretation) is amended as follows.
After subsection (4) insert—
In subsection (5), omit the entry relating to “trading company” and “trading group” and the “and” preceding that entry.
For the purposes of conditions B and D in section 169I of TCGA 1992 (material disposal of business assets), any reference to a company ceasing to be a trading company or ceasing to be a member of a trading group does not include a case where a company ceases to be a trading company or ceases to be a member of a trading group by virtue only of the coming into force of subsections (2) and (3).
This section comes into force on 18 March 2015.
In Part 5 of TCGA 1992 (transfer of business assets) after Chapter 3 (entrepreneurs' relief) insert—
The amendment made by subsection (1) has effect in relation to cases where the disposal mentioned in the new section 169U(4)(a) or (b) is made on or after 3 December 2014.
CAA 2001 is amended as follows.
In section 45DA(1)(a) (period during which first-year qualifying expenditure may be incurred), for “5 years” substitute “ 8 years ”.
Section 45DB (exclusions from allowances under section 45DA) is amended in accordance with subsections (4) to (7).
In subsection (7), omit “notified” (in both places).
In subsection (8), omit “to that extent”.
In subsection (11), omit the definition of “notified State aid”.
After that subsection insert—
The amendments made by subsections (3) to (7) have effect—
in relation to a relevant grant or relevant payment made at any time (whether before or on or after the specified day) towards expenditure incurred on or after that day, and
in relation to a relevant grant or relevant payment made on or after the specified day towards expenditure incurred before that day.
“The specified day” means—
for income tax purposes, 6 April 2015, and
for corporation tax purposes, 1 April 2015.
Schedule 10 contains provision about plant and machinery allowances.
Schedule 11 contains provision enabling the ring fence expenditure supplement to be claimed for an additional 4 accounting periods (and as a result repeals provision for the extended ring fence expenditure supplement for onshore activities).
In section 330 of CTA 2010 (supplementary charge in respect of ring fence trades), in subsection (1), for “32%” substitute “ 20% ”.
The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 1 January 2015 (but see also subsection (3)).
Subsections (4) to (6) apply where a company has an accounting period beginning before 1 January 2015 and ending on or after that date (“the straddling period”).
For the purpose of calculating the amount of the supplementary charge on the company for the straddling period—
so much of that period as falls before 1 January 2015, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
the company's adjusted ring fence profits for the straddling period are apportioned to the two separate accounting periods in proportion to the number of days in those periods.
Sections 330A and 330B of CTA 2010 do not apply in relation to the straddling period (but do apply in relation to the separate accounting period ending on 31 December 2014).
The amount of the supplementary charge on the company for the straddling period is the sum of the amounts of supplementary charge that would, in accordance with subsections (4) and (5), be chargeable on the company for those separate accounting periods.
In this section—
Part 4 of FA 2014 (accelerated payments etc) is amended as follows.
In Part 3 of Schedule 34 (power to amend), at the end of paragraph 14(2) insert—
In section 1 of CTA 2010 (overview of Act), in subsection (3)—
for “Parts 8” substitute “ Parts 7A ”, and
before paragraph (a) insert—.
In section 393B(2)(a) of ITEPA 2003 (tax on benefits under employer-financed retirement benefit schemes: “relevant benefits” do not include benefits charged to tax under Part 9) after “charged to tax under Part 9 (pension income)” insert “, or that would be charged to tax under that Part but for section 573(2A) or (2B), 646D or 646E”.
In section 172(6A)(b) (“benefit” in section 172 includes rights to payments under certain annuities) after “lifetime annuity or dependants’ annuity” insert “, or nominees’ annuity or successors’ annuity,”.
Part 5B of ITA 2007 is further amended as follows. In section 257MQ(1) (list of excluded activities) omit paragraph (f) (subsidised generation or export of electricity). Omit section 257MS (subsidised generation or export of electricity).
Section 2D (CGT on ATED-related gains: the threshold amount) is amended as follows. In subsection (2) for “£2 million” substitute “£1 million”. In subsection (3) for “£2 million” substitute “£1 million”. In subsection (5) for ““£2 million”” substitute ““£1 million””. The amendments made by this paragraph have effect in relation to disposals occurring in the tax year 2015-16.
In section 199 (overview of Part 4), in paragraph (c) omit the “and” at the end of sub-paragraph (ii), and after sub-paragraph (iii) insert , and
banking company (in Part 7A) section 269B building society (in Chapter 3 of Part 7A) section 269CN company tax return (in Chapter 3 of Part 7A) section 269CN group (in Part 7A) section 269BD HMRC (in Chapter 3 of Part 7A) section 269CN partnership (in Chapter 3 of Part 7A) section 269CN pre-2015 carried-forward management expenses (in Chapter 3 of Part 7A) section 269CC(4) pre-2015 carried-forward non-trading deficit (in Chapter 3 of Part 7A) section 269CB(4) pre-2015 carried-forward trading loss (in Chapter 3 of Part 7A) section 269CA(4) relevant carried-forward loss (in Chapter 3 of Part 7A) section 269CN relevant non-trading profits (in Chapter 3 of Part 7A) section 269CN relevant profits (in Chapter 3 of Part 7A) section 269CN relevant regulated activity (in Part 7A) section 269BB relevant trading profits (in Chapter 3 of Part 7A) section 269CN start-up period (in Chapter 3 of Part 7A) section 269CG
Section 172A (surrenders of benefits and rights) is amended as follows. In subsection (1)(aa) (surrender of rights to payments under certain annuities triggers operation of subsection (2)) after “lifetime annuity or dependants’ annuity” insert “, or nominees’ annuity or successors’ annuity,”. In subsection (9A)(b) (references to benefits include references to rights to payments under certain annuities) after “lifetime annuity or dependants’ annuity” insert “, or nominees’ annuity or successors’ annuity,”.
Section 220 (content of notice given while a tax enquiry is in progress) is amended as follows. In subsection (2)— After subsection (4) insert— In subsection (6), for “the payment specified under subsection (2)(b)” substitute “any payment specified under subsection (2)(b) or amount specified under subsection (2)(d)”.
Section 172B (increase of rights of connected person on death) is amended as follows. In subsection (2)(aa) (relevant member includes person who has rights to payments under certain annuities) after “lifetime annuity or dependants’ annuity” insert “, or nominees’ annuity or successors’ annuity,”. In subsection (7A) (section does not apply to certain increases in rights) after “dependants’ annuity”, in both places, insert “, nominees’ annuity, successors’ annuity”. In subsection (7B)(b) (“benefit” in section 172B includes rights to payments under certain annuities) after “lifetime annuity or dependants’ annuity” insert “, or nominees’ annuity or successors’ annuity,”.
Section 221 (content of notice given pending an appeal) is amended as follows. In subsection (2)—
In section 273B(1) (power of trustees or managers to make certain payments) after paragraph (f) insert—.
Section 222 (representations about a notice) is amended as follows. In subsection (2) omit the “or” at the end of paragraph (a), and after paragraph (b) insert , or In subsection (4)—
nominees’ annuity paragraph 27AA of Schedule 28” related nominees’ annuity paragraph 3(4B) of Schedule 29 successors’ annuity paragraph 27FA of Schedule 28
Section 223 (effect of notice given while tax enquiry is in progress) is amended as follows. For subsection (1) substitute— In subsection (2), for “the amount specified in the notice in accordance with section 220(2)(b)” substitute “that amount”. Accordingly, in the heading for that section after “progress” insert “: accelerated payment”.
Schedule 28 (interpretation of the pension rules and the pension death benefit rules) is amended as follows. In paragraph 3(2B)(a) (power to make regulations about cases where lifetime annuity ceases to be payable by insurance company) after “dependants’ annuity” insert “, nominees’ annuity”. In paragraph 6(1B)(a) (power to make regulations about cases where short-term annuity ceases to be payable by insurance company) after “dependants’ annuity” insert “, nominees’ annuity”. In paragraph 27E(3) (meaning of “unused drawdown funds”)— In paragraph 27E(4)(b) and (5) (meaning of “unused uncrystallised funds”) after “not been applied towards the provision of a dependants’ annuity” insert “, not been applied towards the provision of a nominees’ annuity”. In paragraph 27K(3) (meaning of “unused drawdown funds of the beneficiary’s”)—
After section 225 insert—
Paragraph 3 of Schedule 29 (interpretation of the lump sum rule: meaning of “the applicable amount”) is amended as follows. In sub-paragraph (4) (amount applied to purchase certain annuities) after “any related dependants’ annuity” insert “and any related nominees’ annuity”. For the purposes of this Part a nominees’ annuity is related to a lifetime annuity payable to a member of a registered pension scheme— In sub-paragraph (5) (deductions in calculating applicable amount) after “any related dependants’ annuity”, in both places, insert “or any related nominees’ annuity”.
Section 227 (withdrawal, modification or suspension of accelerated payment notice) is amended as follows. In subsection (2) omit the “or” after paragraph (b) and after paragraph (c) insert , or In subsection (4), after “(2)(c)” insert “or (d)”. In subsection (6)(b), after “advantage” insert “etc”. In subsection (7), omit the “and” after paragraph (a) and after paragraph (b) insert , and After subsection (12) insert— After subsection (13) insert—
In paragraph 15(2)(a) of Schedule 29 (uncrystallised funds lump sum death benefit is sum paid in respect of funds not spent on certain annuities and other pensions) after “lifetime annuity,” insert “a nominees’ annuity,”.
After section 227 insert—
Schedule 32 (accelerated payments and partnerships) is amended as follows. In paragraph 4 (content of partner payment notice)— In paragraph 5 (representations about a partner payment notice)— In paragraph 6 (effect of partner payment notice)— After paragraph 6 insert— In paragraph 8 (withdrawal, suspension or modification of partner payment notices), in sub-paragraph (2)—
This paragraph applies if, in the absence of this Schedule, a company would hold a field allowance for an eligible oil field as a result of section 337 or 347(2) of CTA 2010 immediately before the relevant date. “The relevant date” is— The unactivated amount of field allowance held by the company for the oil field immediately before the relevant date, as determined under section 339 of CTA 2010, is to be treated for the purposes of Chapter 6A of Part 8 of CTA 2010 (inserted by paragraph 2) as an amount of unactivated investment allowance generated by the company in the oil field in the relevant period. “The relevant period” is—
Section 349A (meaning of “additionally-developed oil field”), so far as it continues to have effect for certain purposes (in accordance with Part 2 of Schedule 12 to this Act) in the case of projects authorised before 1 April 2015, is to be read as if in subsection (1)—
the “and” at the end of paragraph (aa) were omitted;
after paragraph (b) there were inserted , and
In this Part of this Schedule “the relevant period”, in relation to an amount of unpaid diverted profits tax for an accounting period of the taxpayer company, means the period—
beginning 12 months before the start of the accounting period, and
ending when the unpaid tax became payable.
A notice under this Part of this Schedule must be served before the end of the period of 3 years beginning with the date when the charging notice or supplementary charging notice imposing the charge to tax was issued.
Section 225A(3) of FA 2014 (effect of notices: surrender of losses ineffective) (inserted by paragraph 7 of this Schedule) has effect in relation to an amount specified in a notice in accordance with section 220(2)(d) or 221(2)(d) of that Act (inserted by paragraphs 3(2) and 4(2) of this Schedule) whether the consent to a claim for group relief was given, or the claim itself was made, before or on or after the day on which this Act is passed. Paragraph 6A(3) of Schedule 32 to FA 2014 (partnerships: effect of notices: surrender of losses ineffective) (inserted by paragraph 10(5) of this Schedule) has effect in relation to an amount specified in a notice in accordance with paragraph 4(1)(d) of that Schedule (inserted by paragraph 10(2) of this Schedule) whether the consent to a claim for group relief was given, or the claim itself was made, before or on or after the day on which this Act is passed.
Section 350 (meaning of “new oil field”), so far as it continues to have effect for certain purposes (in accordance with Part 2 of Schedule 12 to this Act) in the case of development authorised before 1 January 2016, is to be read as if after subsection (4) there were inserted—
Schedule 12 contains provision about the reduction of adjusted ring fence profits by means of an investment allowance.
Schedule 13 contains provision about the reduction of adjusted ring fence profits by means of a cluster area allowance.
Schedule 14 contains further amendments related to the amendments made by Schedules 12 and 13.
OTA 1975 is amended as follows.
In section 1(2) (rate of petroleum revenue tax) for “50” substitute “ 35 ”.
In paragraph 17(5)(b) of Schedule 2 (relevant percentage in relation to the amount of loss which is treated as reducing assessable profit) after “60 per cent” insert “ if that later repayment period ends on or before 31 December 2015, and 45 per cent if it ends after 31 December 2015 ”.
The amendment made by subsection (2) has effect with respect to chargeable periods ending after 31 December 2015.
ALDA 1979 is amended as follows.
In section 5 (rate of duty on spirits), for “£28.22” substitute “ £27.66 ”.
In section 36(1AA) (rates of general beer duty)—
in paragraph (za) (rate of duty on lower strength beer), for “£8.62” substitute “ £8.10 ”, and
in paragraph (a) (standard rate of duty on beer), for “£18.74” substitute “ £18.37 ”.
In section 37(4) (rate of high strength beer duty), for “£5.29” substitute “ £5.48 ”.
In section 62(1A) (rates of duty on cider)—
in paragraph (b) (cider of strength exceeding 7.5% which is not sparkling cider) for “£59.52” substitute “ £58.75 ”, and
in paragraph (c) (other cider), for “£39.66” substitute “ £38.87 ”.
For Part 2 of the table in Schedule 1 substitute—.
The amendments made by this section are treated as having come into force on 23 March 2015.
ALDA 1979 is amended as set out in subsections (2) to (5).
In section 4 (interpretation)—
in subsection (1), in the definition of “wholesale”, after “ “wholesale”” insert “ (except in Part 6A) ”,
excise duty point
in subsection (4), after “Act” insert “ (except in Part 6A) ”.
After Part 6 insert—
In section 90 (procedure for regulations)—
after subsection (1) insert—, and
in subsection (2), after “containing” insert “ any other ”.
After Schedule 2A insert—
In section 13A(2) of FA 1994 (meaning of “relevant decision”), after paragraph (e) insert—.
In Schedule 5 to that Act (decisions subject to review and appeal), in paragraph 3(1), after paragraph (o) insert—.
Subject as follows, the amendments made by this section come into force on the day on which this Act is passed.
So far as relating to section 88C(1) of ALDA 1979, subsection (3) comes into force on 1 January 2016 (but see subsection (12) for the application of section 88C(1) in cases where an application has been made but not disposed of by that date).
So far as relating to section 88F of ALDA 1979, subsection (3) comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.
An application for a person to be approved under section 88C of ALDA 1979 may not be made before 1 October 2015.
Where such an application made before 1 January 2016 has not been disposed of by that date, section 88C(1) of ALDA 1979 does not apply in relation to the person until the application is disposed of.
An application is “disposed of” when—
it is determined by Her Majesty's Revenue and Customs,
it is withdrawn, or
it is abandoned or otherwise ceases to have effect.
1. Cigarettes An amount equal to 16.5 per cent of the retail price plus £189.49 per thousand cigarettes 2. Cigars £236.37 per kilogram 3. Hand-rolling tobacco £185.74 per kilogram 4. Other smoking tobacco and chewing tobacco £103.91 per kilogram
The amendment made by this section is treated as having come into force at 6 pm on 18 March 2015.
After section 6 of TPDA 1979 (alteration of rates of duty) insert—
In section 31 of FA 1994 (passengers: exceptions), after subsection (4) insert—
The amendment made by this section has effect in relation to any carriage of a passenger which begins on or after 1 May 2015. But, in relation to any carriage of a passenger which begins before 1 March 2016, section 31(4ZA) of FA 1994 has effect as if for “16 years” there were substituted “ 12 years ”.
Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.
In paragraph 1B (graduated rates of duty for light passenger vehicles)—
CO2 emissions figure Rate (1) (2) (3) (4) Exceeding Not exceeding Reduced rate Standard rate g/km g/km £ £ 130 140 120 130 140 150 135 145 150 165 170 180 165 175 285 295 175 185 340 350 185 200 480 490 200 225 630 640 225 255 860 870 255 1090 1100 CO2 emissions figure Rate (1) (2) (3) (4) Exceeding Not exceeding Reduced rate Standard rate g/km g/km £ £ 100 110 10 20 110 120 20 30 120 130 100 110 130 140 120 130 140 150 135 145 150 165 170 180 165 175 195 205 175 185 215 225 185 200 255 265 200 225 280 290 225 255 480 490 255 495 505
in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—
In paragraph 2(1) (VED rates for motorcycles)—
in paragraph (c), for “£58” substitute “ £59 ”, and
in paragraph (d), for “£80” substitute “ £81 ”.
The amendments made by this section have effect in relation to licences taken out on or after 1 April 2015.
In Schedule 2 to VERA 1994 (exempt vehicles) in paragraph 1A(1) (exemption for old vehicles) for the words from “constructed” to the end substitute “ constructed before 1 January 1976 ”.
The amendment made by subsection (1) comes into force on 1 April 2016; but nothing in that subsection has the effect that a nil licence is required to be in force in respect of a vehicle while a vehicle licence is in force in respect of it.
Part of gross gaming yield Rate The first £2,347,500 15 per cent The next £1,618,000 20 per cent The next £2,833,500 30 per cent The next £5,981,000 40 per cent The remainder 50 per cent
The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2015.
Part 2 of FA 2001 (aggregates levy) is amended in accordance with subsections (2) to (6).
After section 30A insert—
In section 17 (meaning of “aggregate” and “taxable aggregate”), in subsection (6)(a), for “or 30A” substitute “ , 30A or 30B ”.
In section 48(1) (interpretation of Part), in the definition of “tax credit regulations”, for “or 30A” substitute “ , 30A or 30B ”.
In paragraph 9A of Schedule 6 (incorrect records etc evidencing claim for tax credit), in sub-paragraph (1)(a)—
omit the “or” at the end of sub-paragraph (i), and
after sub-paragraph (ii) insert, or .
In paragraph 2 of Schedule 8 (interest payable by the Commissioners), in sub-paragraph (3)—
in paragraph (b), for “of this Act; but” substitute “ or 30B(6)(d); ”, and
after paragraph (b) insert—.
Taxable commodity supplied Rate at which levy payable if supply is not a reduced-rate supply Electricity £0.00559 per kilowatt hour Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility £0.00195 per kilowatt hour Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state £0.01251 per kilogram Any other taxable commodity £0.01526 per kilogram
The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2016.
Schedule 6 to FA 2000 (climate change levy) is amended as follows.
In paragraph 24B (deemed taxable supply: commodities to be used in combined heat and power station)—
in sub-paragraph (2), at the end insert “ to which sub-paragraph (2A) does not apply ”,
after that sub-paragraph insert—,
in sub-paragraph (3), after “electricity” insert “ to which sub-paragraph (2A) does not apply ”, and
for sub-paragraph (7) substitute—
In paragraph 24C (initial determination under paragraph 24B(3) superseded by later determination), in sub-paragraph (1)—
in paragraph (a), at the end insert “ to which paragraph 24B(2A) does not apply ”, and
in paragraph (c)(i), after “electricity” insert “ to which paragraph 24B(2A) does not apply ”.
In paragraph 62 (tax credits), in sub-paragraph (1)(bb), after “electricity”, in both places, insert “ to which paragraph 24B(2A) does not apply ”.
The amendments made by this section have effect in relation to carbon price support rate commodities brought onto, or arriving at, a CHPQA site of a combined heat and power station in Great Britain on or after 1 April 2015.
Section 42 of FA 1996 (amount of landfill tax) is amended as follows.
In subsection (1) (standard rate), for paragraph (a) (but not the “or” following it) substitute—.
In subsection (2) (reduced rate for certain disposals), for the words from “reference” to the end substitute “ reference to £84.40 were to £2.65. ”
The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2016.
Schedule 15 makes provision about the treatment of fines for the purposes of landfill tax.
In Part 2 of VATA 1994 (reliefs, exemptions and repayments), after section 33B insert—
In section 79 of VATA 1994 (repayment supplement in respect of certain delayed payments or refunds)—
in subsection (1), after paragraph (d) insertor ;
in subsection (5), after paragraph (d) insert, and ;
in subsection (6)(b), for “or 33B” substitute “ , 33B or 33C ”.
In section 90 of VATA 1994 (failure of resolution under Provisional Collection of Taxes Act 1968), in subsection (3), after “33B,” insert “ 33C, ”.
In Schedule 9 to VATA 1994 (exemptions), in Group 14 (supplies of goods where input tax cannot be recovered), in Note (9), after “33B,” insert “ 33C, ”.
The amendments made by this section have effect in relation to supplies made, and acquisitions and importations taking place, on or after 1 April 2015.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In section 41 of VATA 1994 (application of Act to the Crown), in subsection (7)—
after “subsection (6)” insert “ each of the following is to be regarded as a body of persons exercising functions on behalf of a Minister of the Crown ”,
omit the “and” after paragraph (j), and
for the words after paragraph (k) substitute—
The amendments made by this section come into force on 1 April 2015.
FA 2003 is amended as follows.
In section 73BA (meaning of “financial institution”), after subsection (2) insert—
“financial institution” is to be read in accordance with subsections (1) and (2) of section 73BA and, in paragraphs 6A to 6H, also in accordance with subsection (3) of that section;
The amendment made by subsection (2) has effect where the effective date of the first transaction is, or is after, the day on which this Act is passed.
In subsection (4) “first transaction” means the first transaction within the meaning of section 71A(1)(a) of FA 2003.
Sub-paragraph (6) does not apply where—
The amendment made by this section has effect in relation to any land transaction of which the effective date is, or is after, the day on which this Act is passed.
£23,350 More than £2 million but not more than £5 million. £54,450 More than £5 million but not more than £10 million. £109,050 More than £10 million but not more than £20 million. £218,200 More than £20 million.
The amendment made by subsection (1) has effect for the chargeable period beginning on 1 April 2015 and, subject to section 101 of FA 2013, for subsequent chargeable periods.
Section 101(1) of FA 2013 does not apply in relation to the chargeable period beginning on 1 April 2015.
Accordingly, the Treasury is not required to make an order under section 101(5) of FA 2013 in respect of that period.
In section 102 of FA 2013 (annual tax on enveloped dwellings: taxable value), after subsection (2) insert—
Section 110 of FA 2013 (interests held by connected persons) is amended as follows.
In subsection (1), after “If on any day” insert “ (“the relevant day”) ”.
In subsection (2)—
omit “on the day in question”;
after “P's single dwelling interest” insert “ on the relevant day ”;
for “£500,000” substitute “ £250,000 ”.
After subsection (2) insert—
The amendments made by this section have effect in relation to chargeable periods beginning on or after 1 April 2015.
Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.
In section 159 (annual tax on enveloped dwellings return), after subsection (3) insert—
After section 159 insert—
In section 161 (return to include self-assessment), for subsection (2) substitute—
In Schedule 33 (annual tax on enveloped dwellings: returns etc)—
in paragraph 2(a), after “159” insert “ , 159A ”;
in paragraph 20(1), for “in question, the self assessment included in that return” substitute “ in question containing a self assessment, that self assessment ”.
The amendments made by subsections (1) to (5) have effect for chargeable periods beginning on or after 1 April 2015.
In a case (not falling within section 109(5) of FA 2014) which falls within subsection (8), section 159 of FA 2013 (annual tax on enveloped dwellings return) has effect with the same modifications as are set out in section 109(6) of FA 2014 (which provides for extended filing periods in certain cases).
The case is where—
a person has a duty to deliver to an officer of Revenue and Customs an annual tax on enveloped dwellings return with respect to a single-dwelling interest for the chargeable period beginning with 1 April 2015, and
the circumstances on the first day in that chargeable period on which that person is within the charge with respect to that single-dwelling interest are such that that duty could be discharged by the delivery to an officer of Revenue and Customs on that day of a relief declaration return.
In section 6 of IHTA 1984 (excluded property), for subsection (1B) substitute—
The amendment made by subsection (1) has effect in relation to transfers of value made, or treated as made, on or after 3 December 2014.
IHTA 1984 is amended as follows.
After section 153 insert—
In section 154 (death on active service)—
in subsection (1), for “Section 4 shall not apply” substitute “ The reliefs in subsection (1A) apply ”,
after that subsection insert—,
in subsection (2) omit “either” and after paragraph (b) insertor , and
after that subsection insert—
After section 155 insert—
The amendments made by this section have effect in relation to deaths occurring on or after 19 March 2014.
Schedule 19 to FA 2011 (bank levy) is amended as follows.
In paragraph 6 (steps for determining the amount of the bank levy), in sub-paragraph (2)—
for “0.078%” substitute “ 0.105% ”, and
for “0.156%” substitute “ 0.21% ”.
In paragraph 7 (special provision for chargeable periods falling wholly or partly before 1 January 2014)—
in sub-paragraph (1) for “1 January 2014” substitute “ 1 April 2015 ”;
in sub-paragraph (2), in the first column of the table in the substituted Step 7, for “ Any time on or after 1 January 2014 ” substitute “1 January 2014 to 31 March 2015”;
Any time on or after 1 April 2015 0.105% 0.21%
in the italic heading before paragraph 7, for “1 January 2014” substitute “ 1 April 2015 ”.
The amendments made by subsections (2) and (3) come into force on 1 April 2015.
Subsections (6) to (12) apply where—
an amount of the bank levy is treated as if it were an amount of corporation tax chargeable on an entity (“E”) for an accounting period of E,
the chargeable period in respect of which the amount of the bank levy is charged begins before but ends on or after 1 April 2015, and
under the Instalment Payment Regulations, one or more instalment payments, in respect of the total liability of E for the accounting period, were treated as becoming due and payable before 1 April 2015 (“pre-commencement instalment payments”).
Subsections (1) to (4) are to be ignored for the purpose of determining the amount of any pre-commencement instalment payment.
If there is at least one instalment payment, in respect of the total liability of E for the accounting period, which under the Instalment Payment Regulations is treated as becoming due and payable on or after 1 April 2015 (“post-commencement instalment payments”), the amount of that instalment payment, or the first of them, is to be increased by the adjustment amount.
If there are no post-commencement instalment payments, a further instalment payment, in respect of the total liability of E for the accounting period, of an amount equal to the adjustment amount is to be treated as becoming due and payable on 30 April 2015.
“The adjustment amount” is the difference between—
the aggregate amount of the pre-commencement instalment payments determined in accordance with subsection (6), and
the aggregate amount of those instalment payments determined ignoring subsection (6) (and so taking account of subsections (1) to (4)).
In the Instalment Payment Regulations—
in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13, references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those Regulations are to be read as including a reference to subsections (5) to (9) (and in regulation 7(2) “the regulation in question”, and in regulation 8(2) “that regulation”, are to be read accordingly), and
in regulation 9(3), the reference to those Regulations is to be read as including a reference to subsections (5) to (9).
In section 59D of TMA 1970 (general rule as to when corporation tax is due and payable), in subsection (5), the reference to section 59E is to be read as including a reference to subsections (5) to (10).
In this section— and references to the total liability of E for an accounting period are to be construed in accordance with regulation 2(3) of the Instalment Payment Regulations.
“notional adjusted ring fence profits”, in relation to the company, means the total of—
Section 229A is amended as follows. After subsection (5) insert— After subsection (9) insert— The amendments made by this paragraph have effect in relation to cases where the contract referred to in section 229A(1)(c) of CAA 2001 is entered into on or after 26 February 2015.
sections 86A and 86B contributions to flood and coastal erosion risk management projects
In Chapter 2 of Part 16 of CTA 2009 (investment business: management expenses), in section 1221 (amounts treated as expenses of management), in subsection (3), after paragraph (i) insert—.
The following provisions of Part 5 of ITA 2007 (enterprise investment scheme) are amended as set out in paragraphs 3 and 4—
section 198A (excluded activities for purposes of Part 5 (and, by virtue of section 257DA(9), Part 5A): subsidised generation or export of electricity), and
section 198B (excluded activities for those purposes: subsidised generation of heat and subsidised production of gas or fuel).
The amendments made by this Part of this Schedule have effect in relation to shares issued on or after 6 April 2015.
In Chapter 3 of Part 16 of CTA 2009 (investment business: amounts treated as expenses of management), after section 1244 insert—
In Chapter 5 of Part 16 of CTA 2009 (investment business: receipts), after section 1253 insert—
In section 253 of CAA 2001 (companies with investment business), in subsection (6), after “1233” insert “or 1244A”.
Section 218 is amended as follows. In subsection (1), for “(2) and” substitute “(2), (2A) and”. After subsection (2) insert— In subsection (3), for the words from the beginning to “transaction,” substitute “Otherwise,”. After that subsection insert— The amendments made by this paragraph have effect in relation to expenditure of B’s that is incurred on or after 26 February 2015.
A company is a “related company”, for the purposes of this Part of this Schedule, if, at any time in the relevant period, it was a member— For the purposes of sub-paragraph (1)(a) two companies are members of the same group if— For the purposes of sub-paragraph (1)(c), two companies are members of the same group if they are members of the same group of companies within the meaning of Part 5 of CTA 2010 (group relief). For the purposes of this Part of this Schedule— In this paragraph “51% subsidiary” has the meaning given by section 1154 of CTA 2010.
In a consortium case, the amount that the related company may be required to pay by notice under this Part of this Schedule is the proportion of the unpaid tax corresponding— For the purposes of this paragraph, a member’s share in a consortium, in relation to the relevant period, is whichever is the lowest in that period of the percentages specified in sub-paragraph (3). Those percentages are— If any of the percentages mentioned in sub-paragraph (3) has fluctuated in the relevant period, the average percentage over the period is to be taken. Chapter 6 of Part 5 of CTA 2010 (equity holders and profits or assets available for distribution) applies for the purposes of sub-paragraph (3) as it applies for the purposes of sections 143(3)(b) and (c) and 144(3)(b) and (c) of that Act.
After section 316A of FA 2004 insert—
Section 310C of FA 2004 applies in relation to notifiable arrangements, or proposed notifiable arrangements, only if a reference number under section 311 of that Act is allocated to the arrangements on or after the day on which this Act is passed. But section 310C of FA 2004 does not apply in relation to notifiable arrangements, or proposed notifiable arrangements, where prescribed information relating to the arrangements was provided to HMRC before that day in compliance with section 308 of that Act.
Part 4 of FA 2004 is amended as follows.
In Schedule 36 to FA 2004 (transitional provision etc in relation to pre-6 April 2006 pensions) after paragraph 45 insert—
In section 216(1) (benefit crystallisation events and amounts crystallised) the table is amended as follows. In the second column of the entry relating to benefit crystallisation event 4, after “any related dependants’ annuity” insert “and any related nominees’ annuity”. 5D. A person becoming entitled, on or after 6 April 2015 but before the end of the relevant two-year period, to a dependants’ annuity or nominees’ annuity in respect of the individual if— the annuity is purchased using (whether or not exclusively) relevant unused uncrystallised funds, and the individual died on or after 3 December 2014 The aggregate of— the amount of such of the sums, and the market value of such of the assets, applied to purchase the annuity as are relevant unused uncrystallised funds
The amendments made by this Schedule have effect in relation to contributions paid or provided on or after 1 January 2015.
Any notice given by HMRC under section 312A(4) of FA 2004 (notice that section 312A(2) duty does not apply) before the day on which this Act is passed is treated on and after that day as given also in relation to the duty under section 312A(2A) of that Act.
Section 217 (persons liable to lifetime allowance charge) is amended as follows. In subsection (2A) (cases where dependant or nominee liable) after “event 5C,” insert “or by reason of a person becoming entitled to an annuity as mentioned in the description of benefit crystallisation event 5D,”. In subsection (4A) (events 5C and 7 are “relevant post-death” events) after “benefit crystallisation event 5C” insert “, 5D”.
Section 316C of FA 2004 applies in relation to notifiable arrangements, or proposed notifiable arrangements, only if a reference number under section 311 of that Act is allocated to the arrangements on or after the day on which this Act is passed. But section 316C of FA 2004 does not apply in relation to notifiable arrangements, or proposed notifiable arrangements, where prescribed information relating to the arrangements was provided to HMRC before that day in compliance with section 308, 309 or 310 of that Act. Section 316C(2)(b) of FA 2004 applies in relation to a ruling of a court or tribunal only if the ruling is given on or after the day on which this Act is passed.
In section 219(7A) (events 5C and 7 are “relevant post-death” events) after “benefit crystallisation event 5C” insert “, 5D”.
In Schedule 32 (supplementary provisions about benefit crystallisation events)—
in paragraph 1 (meaning of “the relevant pension schemes”: in certain cases means schemes of which the individual was a member immediately before death) after “5C” insert “or 5D”,
purchased
in paragraph 14B (event 5C: meaning of “relevant two-year period”), and in the italic heading before that paragraph, for “event 5C” substitute “events 5C and 5D”, and
in paragraph 14C(1) (event 5C: meaning of “relevant unused uncrystallised funds”), and in the italic heading before paragraph 14C, for “event 5C” substitute “events 5C and 5D”.
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A tax (to be known as “diverted profits tax”) is charged in accordance with this Part on taxable diverted profits arising to a company in an accounting period.
Taxable diverted profits arise to a company in an accounting period only if one or more of sections 80, 81 and 86 applies or apply in relation to the company for that period.
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Sections 80 and 81 relate to cases involving entities or transactions which lack economic substance.
In these cases—
sections 82 to 85 deal with the calculation of taxable diverted profits (and ensure appropriate account is taken of any transfer pricing adjustments already made), and
section 96 deals with the estimation of those profits when initially imposing a charge.
Section 86 relates to cases where, despite activity being carried on in the United Kingdom, a company avoids carrying on its trade in the United Kingdom in circumstances where—
provision is made or imposed which involves entities or transactions lacking economic substance, or
there are tax avoidance arrangements.
In these cases—
sections 88 to 91 deal with the calculation of taxable diverted profits, and
section 97 deals with the estimation of those profits when initially imposing a charge.
There is an exception from section 86 for cases involving limited UK-related sales or expenses (see section 87).
Key terms used in this Part are defined in sections 106 to 114.
Other provisions in this Part— ensure HMRC are notified of companies potentially within the scope of the tax (see section 92); deal with the process for imposing a charge to diverted profits tax (see sections 93 to 97); deal with payment of the tax and make provision about credits given for other tax paid on the same profits (see sections 98 to 100); and provide for reviews of, and appeals against, decisions to impose a charge to diverted profits tax (see sections 101 and 102).
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A charge to diverted profits tax is imposed for an accounting period by a designated HMRC officer issuing to the company a charging notice in accordance with section 95 or a supplementary charging notice in accordance with section 101(8).
The amount of tax charged by a notice is the sum of—
25% of the amount of taxable diverted profits specified in the notice, and
the interest (if any) on the amount within paragraph (a) determined under subsection (4).
But if, and to the extent that, the taxable diverted profits are adjusted ring fence profits or notional adjusted ring fence profits, and determined under section 84 or 85, subsection (2)(a) has effect in relation to those profits as if the rate specified were 55% rather than 25%.
The interest mentioned in subsection (2)(b) is interest at the rate applicable under section 178 of FA 1989 for the period (if any) which—
begins 6 months after the end of the accounting period to which the charge relates, and
ends with the day the notice imposing the charge to tax is issued.
In this section—
“supplementary charge” means any sum chargeable under section 330(1) of CTA 2010 as if it were an amount of corporation tax.
Schedule 41 to FA 2008 is amended as follows.
The penalties referred to in paragraph 1(2) are—
a penalty under paragraph 1 of Schedule 24 to FA 2007 (penalty for error in taxpayer’s document) in relation to an inaccuracy in a document of a kind listed in the Table in paragraph 1 of that Schedule, where the tax at stake is income tax, capital gains tax or inheritance tax,
a penalty under paragraph 1 of Schedule 41 to FA 2008 (penalty for failure to notify etc) in relation to the obligation under section 7 of TMA 1970 (obligation to give notice of liability to income tax or capital gains tax), and
a penalty under paragraph 6 of Schedule 55 to FA 2009 (penalty for failures to make return etc where failure continues after 12 months), where the tax at stake is income tax, capital gains tax or inheritance tax.
“The relevant time” has the meaning given by this paragraph. Where the original penalty is under Schedule 24 to FA 2007, the relevant time is— Where the original penalty is for a failure to comply with an obligation specified in the table in paragraph 1 of Schedule 41 of FA 2008, the relevant time is the beginning of the tax year to which that obligation relates. Where the original penalty is for a failure to make a return or deliver a document specified in the table in paragraph 1 of Schedule 55 to FA 2009, the relevant time is—
A person may appeal against a decision of HMRC that a penalty is payable by the person. An appeal under this paragraph is to be treated in the same way as an appeal against an assessment to, or determination of, the tax concerned (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal). Sub-paragraph (2) does not apply in respect of a matter expressly provided for by this Schedule. On an appeal under this paragraph, the tribunal may affirm or cancel HMRC’s decision.
Paragraph 6 (amount of penalty: standard amount) is amended as follows. If the failure is in category 0, the penalty is— In sub-paragraph (2)— In sub-paragraph (5), for “3” substitute “4”.
Paragraph 6A (categorisation of failures) is amended as follows. A failure is in category 0 if— A failure is in category 1 if— In sub-paragraph (2)(a), after “matter” insert “or an offshore transfer”. In sub-paragraph (3)(a), after “matter” insert “or an offshore transfer”. A failure “involves an offshore transfer” if— In sub-paragraph (5), for the words following “revenue” substitute “and does not involve either an offshore matter or an offshore transfer”. In sub-paragraph (6)(a), after “matters” insert “or transfers”. Omit sub-paragraph (8). In sub-paragraph (9), after “paragraph” insert “and paragraph 6AA”.
After paragraph 6A insert—
37.5% case A: 12.5% case A: 0% case B: 25% case B: 12.5% 87.5% 43.75% 25% 125% 62.5% 40%
In Schedule 34 (threshold conditions), paragraph 8 (disciplinary action: professionals etc) is amended as follows. A person who carries on a trade or profession that is regulated by a professional body meets this condition if all of the following conditions are met— In the heading, for “by a professional body” substitute “against a member of a trade or profession”. In sub-paragraph (3), in paragraph (h), for “for” substitute “of”.
The Taxation of Chargeable Gains Act 1992 is amended as follows.
Schedule 4ZZA (relevant high value disposals: gains and losses) is amended as follows.
For the italic heading before paragraph 2 substitute “Assets held on 5 April 2013, 5 April 2015 or 5 April 2016: no paragraph 5 election”.
For paragraph 2 substitute—
“adjusted ring fence profits” has the same meaning as in section 330 of CTA 2010;
After Chapter 6 insert—
Schedule 55 to FA 2009 is amended as follows.
In Chapter 5 of Part 2 of ITTOIA 2005 (trade profits: rules allowing deductions), after section 86 insert—
sections 86A and 86B contributions to flood and coastal erosion risk management projects
Part 5 of ITA 2007 is further amended as follows. In section 198A— In section 198B—
Chapter 7 (reduction of supplementary charge for eligible oil fields) is omitted.
Paragraph 6 (penalty for failure continuing 12 months after penalty date) is amended as follows. In sub-paragraph (3A)— In sub-paragraph (4A)— In sub-paragraph (6), for “3” substitute “4”.
Part 6 of ITA 2007 is further amended as follows. In section 309A— In section 309B—
Paragraph 6A (categorisation of information) is amended as follows. Information is category 0 information if— Information is category 1 information if— In sub-paragraph (2)— In sub-paragraph (3)— If the liability to tax which would have been shown in the return is a liability to inheritance tax, assets are treated for the purposes of sub-paragraph (4) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable. Information “involves an offshore transfer” if— In sub-paragraph (5), for the words following “if” substitute “it does not involve an offshore matter or an offshore transfer”. In sub-paragraph (6)(a), after “matters” insert “or transfers”. Omit sub-paragraph (8). In sub-paragraph (9), after “paragraph” insert “and paragraph 6AA”.
In consequence of paragraphs 10 and 11—
in FA 2014, omit section 56(3)(b) and (6)(b), and
in the Co-operative and Community Benefit Societies Act 2014, omit paragraphs 106 and 107 of Schedule 4.
After paragraph 6A insert—
87.5% 43.75% 25% 125% 62.5% 40%
In paragraph 17(4) (interaction with other penalties and late payment surcharges), omit the “and” at the end of paragraph (b) and after that paragraph insert—.
Paragraph 3 is amended as follows. In sub-paragraph (1) for “post-April 2013” substitute “post-commencement”. In sub-paragraph (2)— In sub-paragraph (5), for “6 April 2013” substitute “6 April in the relevant year”.
Paragraph 4 is amended as follows. In sub-paragraph (1)— In sub-paragraph (2)— In sub-paragraph (4) for “post-April 2013” substitute “post-commencement”. In sub-paragraph (5) for “pre-April 2013” substitute “pre-commencement”.
Paragraph 5 is amended as follows. In sub-paragraph (1) for “5 April 2013” substitute “5 April in the relevant year”. In sub-paragraph (3) for “6 April 2013” substitute “6 April in the relevant year”. In this paragraph—
In the italic heading before paragraph 6, for “assets acquired after 5 April 2013” substitute “or none of Cases 1 to 3 apply”.
In paragraph 6, for sub-paragraph (1)(b) substitute—
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This section applies in relation to a company (“C”) for an accounting period if—
C is UK resident in that period,
provision has been made or imposed as between C and another person (“P”) (whether or not P is UK resident) by means of a transaction or series of transactions (“the material provision”),
the participation condition is met in relation to C and P (see section 106),
the material provision results in an effective tax mismatch outcome, for the accounting period, as between C and P (see sections 107 and 108),
the effective tax mismatch outcome is not an excepted loan relationship outcome (see section 109),
the insufficient economic substance condition is met (see section 110), and
C and P are not both small or medium-sized enterprises for that period.
For the purposes of subsection (1)(b) provision made or imposed as between a partnership of which C is a member and another person is to be regarded as provision made or imposed as between C and that person.
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This section applies in relation to a company (“the foreign company”) for an accounting period if—
it is non-UK resident in that period,
by reason of the foreign company carrying on a trade in the United Kingdom through a permanent establishment in the United Kingdom (“UKPE”), Chapter 4 of Part 2 of CTA 2009 (non-UK resident companies: chargeable profits) applies to determine the chargeable profits of the foreign company for that period, and
section 80 would apply to UKPE for that period were it treated for the purposes of section 80 and sections 106 to 110—
as a distinct and separate person from the foreign company (whether or not it would otherwise be so treated),
as a UK resident company under the same control as the foreign company, and
as having entered into any transaction or series of transactions entered into by the foreign company to the extent that the transaction or series is relevant to UKPE.
For the purposes of subsection (1)(c)(iii) a transaction or series of transactions is “relevant” to UKPE only if, and to the extent that, it is relevant, for corporation tax purposes, when determining the chargeable profits of the foreign company attributable (in accordance with sections 20 to 32 of CTA 2009) to UKPE.
Where section 1313(2) of CTA 2009 (UK sector of the continental shelf: profits of foreign company deemed to be profits of trade carried on by the company in the UK through a permanent establishment in the UK) applies to treat profits arising to a company as profits of a trade carried on by the company in the United Kingdom through a permanent establishment in the United Kingdom, this Part applies as if the company actually carried on that trade in the United Kingdom through that permanent establishment.
In this section “control” is to be construed in accordance with section 1124 of CTA 2010.
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If section 80 or 81 applies in relation to a company (“the relevant company”) for an accounting period—
no taxable diverted profits arise, in relation to the material provision in question, if section 83 applies, and
in other cases, section 84 or 85 applies to determine the taxable diverted profits in relation to that material provision.
But see also section 96 for how a designated HMRC officer estimates those profits when issuing a preliminary notice under section 93 or a charging notice under section 95.
Subsections (4) to (9) define some key expressions used in sections 83 to 85 and this section.
“The material provision” has the same meaning as in section 80.
“The relevant alternative provision” means the alternative provision which it is just and reasonable to assume would have been made or imposed as between the relevant company and one or more companies connected with that company, instead of the material provision, had tax (including any non-UK tax) on income not been a relevant consideration for any person at any time.
For the purposes of subsection (5), making or imposing no provision is to be treated as making or imposing an alternative provision to the material provision.
“The actual provision condition” is met if—
the material provision results in expenses of the relevant company for which (ignoring Part 4 of TIOPA 2010 (transfer pricing)) a deduction for allowable expenses would be allowed in computing—
in a case where section 80 applies, its liability for corporation tax for the accounting period, and
in a case where section 81 applies, its chargeable profits attributable (in accordance with sections 20 to 32 of CTA 2009) to UKPE, and
the relevant alternative provision—
would also have resulted in allowable expenses of the relevant company of the same type and for the same purposes (whether or not payable to the same person) as so much of the expenses mentioned in paragraph (a) as results in the effective tax mismatch outcome mentioned in section 80(1)(d), but
would not have resulted in relevant taxable income of a connected company for that company’s corresponding accounting period.
“Relevant taxable income” of a company for a period is—
income of the company, for the period, which would have resulted from the relevant alternative provision and in relation to which the company would have been within the charge to corporation tax had that period been an accounting period of the company, less
the total amount of expenses which it is just and reasonable to assume would have been incurred in earning that income and would have been allowable expenses of the company for that period.
“Connected company” means a company which is or, if the relevant alternative provision had been made, would have been connected with the relevant company.
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Where section 80 or 81 applies in relation to a company for an accounting period, no taxable diverted profits arise to the company in that period in relation to the material provision in question if—
the actual provision condition is met, and
either—
there are no diverted profits of that company for the accounting period, or
the full transfer pricing adjustment has been made.
“Diverted profits” of the company for the accounting period means an amount—
in respect of which the company is chargeable to corporation tax for that period by reason of the application of Part 4 of TIOPA 2010 (transfer pricing) to the results of the material provision, and
which, in a case where section 81 applies, is attributable (in accordance with sections 20 to 32 of CTA 2009) to UKPE.
“The full transfer pricing adjustment” is made if all of the company’s diverted profits for the accounting period are 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 the accounting period.
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This section applies where—
section 80 or 81 applies in relation to a company for an accounting period,
the actual provision condition is met, and
section 83 (cases where no taxable diverted profits arise) does not apply for that period.
In relation to the material provision in question, the taxable diverted profits that arise to the company in the accounting period are the amount (if any)—
in respect of which the company is chargeable to corporation tax for that period by reason of the application of Part 4 of TIOPA 2010 (transfer pricing) to the results of the material provision,
which, in a case where section 81 applies, is attributable (in accordance with sections 20 to 32 of CTA 2009) to UKPE, and
which is not taken into account in an assessment to corporation tax which is included before the end of the review period in the company’s company tax return for that accounting period.
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This section applies where—
section 80 or 81 applies in relation to a company (“the relevant company”) for an accounting period, and
the actual provision condition is not met.
The taxable diverted profits that arise to the relevant company in the accounting period in relation to the material provision in question are determined in accordance with subsections (3) to (5).
Subsection (4) applies if the actual provision condition would have been met but for the fact that the relevant alternative provision would have resulted in relevant taxable income of a company for that company’s corresponding accounting period.
The taxable diverted profits that arise to the relevant company in the accounting period are an amount equal to the sum of—
the amount described in section 84(2), and
the total amount of any relevant taxable income of a connected company, for that company’s corresponding accounting period, which would have resulted from the relevant alternative provision.
If subsection (4) does not apply, the taxable diverted profits that arise to the relevant company in the accounting period are the sum of—
the notional additional amount (if any) arising from the relevant alternative provision, and
the total amount (if any) of any relevant taxable income of a connected company, for that company’s corresponding accounting period, which would have resulted from the relevant alternative provision,
In subsection (5) “the notional additional amount” means the amount by which—
the amount in respect of which the company would have been chargeable to corporation tax for that period had the relevant alternative provision been made or imposed instead of the material provision, exceeds
the amount—
in respect of which the company is chargeable to corporation tax for that period by reason of the application of Part 4 of TIOPA 2010 (transfer pricing) to the results of the material provision,
which, in a case where section 81 applies, is attributable (in accordance with sections 20 to 32 of CTA 2009) to UKPE, and
which is taken into account in an assessment to corporation tax which is included before the end of the review period in the company’s company tax return for that accounting period.
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This section applies in relation to a company (“the foreign company”) for an accounting period if—
the company is non-UK resident in that period,
it carries on a trade during that period (or part of it),
a person (“the avoided PE”), whether or not UK resident, is carrying on activity in the United Kingdom in that period in connection with supplies of services, goods or other property made by the foreign company in the course of that trade,
section 87 (exception for companies with limited UK-related sales or expenses) does not operate to prevent this section applying in relation to the foreign company for the accounting period,
it is reasonable to assume that any of the activity of the avoided PE or the foreign company (or both) is designed so as to ensure that the foreign company does not, as a result of the avoided PE’s activity, carry on that trade in the United Kingdom for the purposes of corporation tax (whether or not it is also designed to secure any commercial or other objective),
the mismatch condition (see subsection (2)) or the tax avoidance condition (see subsection (3)) is met or both those conditions are met,
the avoided PE is not excepted by subsection (5), and
the avoided PE and the foreign company are not both small or medium-sized enterprises for that period.
“The mismatch condition” is that—
in connection with the supplies of services, goods or other property mentioned in subsection (1)(c) (or in connection with those supplies and other supplies), arrangements are in place as a result of which provision is made or imposed as between the foreign company and another person (“A”) by means of a transaction or series of transactions (“the material provision”),
the participation condition is met in relation to the foreign company and A (see section 106),
the material provision results in an effective tax mismatch outcome, for the accounting period, as between the foreign company and A (see sections 107 and 108),
the effective tax mismatch outcome is not an excepted loan relationship outcome (see section 109),
the insufficient economic substance condition is met (see section 110), and
the foreign company and A are not both small or medium-sized enterprises for the accounting period.
“The tax avoidance condition” is that, in connection with the supplies of services, goods or other property mentioned in subsection (1)(c) (or in connection with those supplies and other supplies), arrangements are in place the main purpose or one of the main purposes of which is to avoid or reduce a charge to corporation tax.
In subsection (1)(e) the reference to activity of the avoided PE or the foreign company includes any limitation which has been imposed or agreed in respect of that activity.
The avoided PE is “excepted” if—
activity of the avoided PE is such that, as a result of section 1142 or 1144 of CTA 2010, the foreign company would not be treated as carrying on a trade in the United Kingdom in the accounting period through a permanent establishment in the United Kingdom by reason of that activity, and
in a case where— the foreign company and the avoided PE are not connected at any time in the accounting period.
section 1142(1) of that Act applies, but
the avoided PE is not regarded for the purposes of section 1142(1) of that Act as an agent of independent status by virtue of section 1145, 1146 or 1151 of that Act,
Where the foreign company is a member of a partnership—
for the purposes of subsection (1)—
a trade carried on by the partnership is to be regarded as a trade carried on by the foreign company, and
supplies made by the partnership in the course of that trade are to be regarded as supplies made by the foreign company in the course of that trade, and
for the purposes of subsection (2)(a) provision made or imposed as between the partnership and another person is to be regarded as made between the foreign company and that person.
In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
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Section 86 does not apply to the foreign company for an accounting period if one or both of the following conditions is or are met.
The first condition is that, for the accounting period, the total of— does not exceed £10,000,000.
the UK-related sales revenues of the foreign company, and
the UK-related sales revenues of companies connected with the foreign company,
The second condition is that the total of— does not exceed £1,000,000.
the UK-related expenses of the foreign company incurred in the accounting period, and
the UK-related expenses of companies connected with the foreign company incurred in that period,
But if the accounting period is a period of less than 12 months, the amounts specified in subsections (2) and (3) are to be reduced proportionally.
In this section—
The amendment made by paragraph 2 has effect in relation to accounting periods ending on or after 1 April 2015.
After section 313ZB of FA 2004 insert—
The amendment made by paragraph 3 has effect— But sub-paragraph (1)(c) is subject to paragraphs 7 and 8 (which relate to field allowance under Chapter 7 of Part 8 of CTA 2010).
In section 316 of that Act (information to be provided in form and manner specified by HMRC), in subsection (2), for “and 313ZA(3)” substitute “, 313ZA(3) and 313ZC(5)”.
In section 98C of TMA 1970 (notification under Part 7 of FA 2004), in subsection (2), after paragraph (dc) insert—.
“the Instalment Payment Regulations” means the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175);
“VERA 1994” means the Vehicle Excise and Registration Act 1994.
The amendments made by this Schedule have effect in relation to accounting periods ending on or after 5 December 2013.
The original penalty is for a “deliberate failure” if—
in the case of a penalty within paragraph 2(a), the inaccuracy to which it relates was deliberate on P’s part (whether or not concealed);
in the case of a penalty within paragraph 2(b), the failure by P was deliberate (whether or not concealed);
in the case of a penalty within paragraph 2(c), the withholding of the information, resulting from the failure to make the return, is deliberate (whether or not concealed).
The penalty payable under paragraph 1(1) is 50% of the amount of the original penalty payable by P. The penalty payable under paragraph 1(1) is not a penalty determined by reference to a liability to tax (despite the fact that the original penalty by reference to which it is calculated may be such a penalty).
This Schedule has effect in relation to relevant offshore asset moves occurring after the day on which this Act is passed. For the purposes of this Schedule, it does not matter if liability for the original penalty first arose on or before that day, unless the case is one to which sub-paragraph (3) applies. The original penalty is to be ignored if P’s liability for it for arose before the day on which this Act is passed and before that day—
In Chapter 17 of Part 9 of ITEPA 2003 (tax on pension income: exemptions) after section 646A insert—. The amendment made by this paragraph has effect in relation to pension paid on or after 6 April 2015.
In section 573 of ITEPA 2003 (foreign pensions to which other provisions of Part 9 of ITEPA 2003 do not apply) after subsection (2D) insert—
The following provisions of Part 6 of ITA 2007 (venture capital trusts) are amended as set out in paragraphs 7 and 8—
section 309A (excluded activities for purposes of Part 6: subsidised generation or export of electricity), and
section 309B (excluded activities for those purposes: subsidised generation of heat and subsidised production of gas or fuel).
The amendments made by this Part of this Schedule have effect in relation to relevant holdings issued on or after 6 April 2015.
In Chapter 10 of Part 9 of ITEPA 2003 (other employment-related annuities) after section 611 insert—
In section 579A of ITEPA 2003 (section applies to pensions under registered pension schemes, with exceptions) after subsection (2) insert—
For section 579CZA(5)(b) of ITEPA 2003 (tax exemption for dependants’ income withdrawal overridden where any paid before 6 April 2015) substitute—. The amendment made by this paragraph has effect in relation to pension paid on or after 6 April 2015.
This paragraph applies where— The relevant companies may, within 60 days of the day the determination of the cluster area is published, jointly elect that Chapters 6A and 9 of Part 8 of CTA 2010, and Chapter 7 of that Part so far as it continues to have effect, are to have effect as if no part of the oil field were included in the cluster area (and an election made as mentioned in this sub-paragraph is effective whether made before or after the day on which this Act is passed). An election under sub-paragraph (2) made on or after the day on which this Act is passed is irrevocable. In this paragraph “the relevant companies” means the companies which are licensees in the oil field at the date of the election. “The cut-off date” means a day to be specified in regulations made by the Treasury. Section 1171(4) of CTA 2010 (regulations etc subject to annulment) does not apply to regulations under sub-paragraph (5). In this paragraph expressions which are used in Chapter 9 of Part 8 of CTA 2010 have the same meaning as in that Chapter.
This Part of this Schedule applies if— In this Part of this Schedule “the taxpayer company” means the company mentioned in sub-paragraph (1).
An officer of Revenue and Customs may serve a notice on a related company requiring it, within 30 days of the service of the notice, to pay— The notice must state— The notice has effect— as if it were a charging notice and that amount were an amount of diverted profits tax charged on that company. In this Part of this Schedule “consortium case” means a case where the related company is not within paragraph 4(1)(a).
A company that has paid an amount in pursuance of a notice under this Part of this Schedule may recover that amount from the taxpayer company. A payment in pursuance of a notice under this Part of this Schedule is not allowed as a deduction in calculating income, profits or losses for any tax purposes.
In Part 5B of ITA 2007 (tax relief for social investments), after section 257MV insert—
In section 270 of CTA 2010 (overview of Part 8) omit subsection (5A).
After Chapter 8 insert—
Section 312A of FA 2004 (duty of client to notify parties of number) is amended as follows. After subsection (2) insert— For subsection (3) substitute— In subsection (4), for “the duty under subsection (2)” substitute “one or both of the duties under this section”. In subsection (5), after “subsection (2)” insert “or (2A)”.
In section 1223 of CTA 2009 (carrying forward expenses of management and other amounts), in subsection (1)—
the words after “because” become paragraph (a), and
after that paragraph insert, or
In consequence of paragraph 7(b) of this Schedule, omit paragraph 32 of Schedule 10 to FA 2005.
“VATA 1994” means the Value Added Tax Act 1994, and
Schedule 4 to CTA 2010 (index of defined expressions) is amended as follows. the initial 6 periods (in Chapter 5 of Part 8) section 311(1A) the additional 4 periods (in Chapter 5 of Part 8) section 311(1A) the commencement period (in Chapter 5A of Part 8) section 329D(1) offshore oil-related activities (in Chapter 5A of Part 8) section 329C(3) onshore oil-related activities (in Chapter 5A of Part 8) section 329C(2) onshore ring fence loss (in Chapter 5A of Part 8) section 329P the onshore ring fence pool (in Chapter 5A of Part 8) section 329Q the period of the loss (in Chapter 5A of Part 8) section 329P post-commencement additional supplement (in Chapter 5A of Part 8) section 329N(1) the post-commencement additional supplement provisions (in Chapter 5A of Part 8) section 329N(4) post-commencement period (in Chapter 5A of Part 8) section 329D(1) pre-commencement additional supplement (in Chapter 5A of Part 8) section 329I(1) pre-commencement period (in Chapter 5A of Part 8) section 329D(1) qualifying company (in Chapter 5A of Part 8) section 329B qualifying pre-commencement onshore expenditure (in Chapter 5A of Part 8) section 329G the relevant percentage (in Chapter 5A of Part 8) section 329E straddling period (in Chapter 5A of Part 8) section 329D(3) unrelieved group ring fence profits (in Chapter 5A of Part 8) section 329H
In section 313 of that Act (duty of parties to notifiable arrangements to notify Board of number, etc), after subsection (5) insert—
In Part 8 of CTA 2010, Chapter 5A (extended ring fence expenditure supplement for onshore activities) is repealed. Accordingly, section 69 of and Schedule 14 to FA 2014 are also repealed.
In section 316 of that Act (information to be provided in form and manner specified by HMRC), in subsection (2), after “312A(2)” insert “and (2A)”.
In section 98C of TMA 1970 (notification under Part 7 of FA 2004), in subsection (2), in paragraph (da), after “312A(2)” insert “and (2A)”.
For the purposes of this section “revenues” or “expenses” of a company, in the relevant accounting period, are amounts which, in accordance with generally accepted accounting practice (“GAAP”), are recognised as revenue or (as the case may be) expenses in the company’s profit and loss account or income statement for that period.
Where a company does not draw up accounts for the relevant accounting period in accordance with GAAP, the reference in subsection (6) to any amounts which in accordance with GAAP are recognised as revenue or expenses in the company’s profit and loss account or income statement for the relevant accounting period is to be read as a reference to any amounts which would be so recognised if the company had drawn up such accounts for the relevant accounting period.
“Generally accepted accounting practice” is to be construed in accordance with section 1127 of CTA 2010.
The Treasury may by regulations, made by statutory instrument, substitute a different figure for the figure for the time being specified in subsection (2) or (3).
Regulations under this section are subject to annulment in pursuance of a resolution of the House of Commons.
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If section 86 applies for an accounting period, section 89, 90 or 91 applies to determine the taxable diverted profits of the foreign company.
But see also section 97 for how a designated HMRC officer estimates those profits when issuing a preliminary notice under section 93 or a charging notice under section 95.
Subsections (4) to (12) define some key expressions used in sections 89 to 91 and this section.
“The foreign company” has the same meaning as in section 86.
“The notional PE profits”, in relation to an accounting period, means the profits which would have been the chargeable profits of the foreign company for that period, attributable (in accordance with sections 20 to 32 of CTA 2009) to the avoided PE, had the avoided PE been a permanent establishment in the United Kingdom through which the foreign company carried on the trade mentioned in section 86(1)(b).
“The material provision” has the same meaning as in section 86.
“The relevant alternative provision” means the alternative provision which it is just and reasonable to assume would have been made or imposed as between the foreign company and one or more companies connected with that company, instead of the material provision, had tax (including any non-UK tax) on income not been a relevant consideration for any person at any time.
For the purposes of subsection (7), making or imposing no provision is to be treated as making or imposing an alternative provision to the material provision.
“The actual provision condition” is met if—
the material provision results in expenses of the foreign company for which (ignoring Part 4 of TIOPA 2010 (transfer pricing)) a deduction for allowable expenses would be allowed in computing what would have been the notional PE profits for the accounting period, and
the relevant alternative provision—
would also have resulted in allowable expenses of the foreign company of the same type and for the same purposes (whether or not payable to the same person) as so much of the expenses mentioned in paragraph (a) as results in the effective tax mismatch outcome mentioned in section 86(2)(c), but
would not have resulted in relevant taxable income of a connected company for that company’s corresponding accounting period.
“Relevant taxable income” of a company for a period is—
income of the company, for the period, which would have resulted from the relevant alternative provision and in relation to which the company would have been within the charge to corporation tax had that period been an accounting period of the company, less
the total amount of expenses which it is just and reasonable to assume would have been incurred in earning that income and would have been allowable expenses of the company for that period.
“Connected company” means a company which is or, if the relevant alternative provision had been made, would have been connected with the foreign company.
“The mismatch condition” has the same meaning as in section 86.
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This section applies where—
section 86 applies for an accounting period, and
the mismatch condition is not met.
The taxable diverted profits that arise to the foreign company in the accounting period by reason of that section applying are an amount equal to the notional PE profits for that period.
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This section applies where—
section 86 applies for an accounting period,
the mismatch condition is met, and
the actual provision condition is met.
The taxable diverted profits that arise to the foreign company in the accounting period, in relation to the material provision in question, are an amount equal to the notional PE profits for that period.
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This section applies where —
section 86 applies for an accounting period,
the mismatch condition is met, and
the actual provision condition is not met.
The taxable diverted profits that arise to the foreign company in the accounting period, in relation to the material provision in question, are determined in accordance with subsections (3) to (5).
Subsection (4) applies if the actual provision condition would have been met but for the fact that the relevant alternative provision would have resulted in relevant taxable income of a company for that company’s corresponding accounting period.
The taxable diverted profits that arise to the foreign company in the accounting period are an amount equal to the sum of—
the notional PE profits for the accounting period, and
the total amount of any relevant taxable income of a connected company, for that company’s corresponding accounting period, which would have resulted from the relevant alternative provision.
If subsection (4) does not apply, the taxable diverted profits that arise to the foreign company in the accounting period are the sum of—
what would have been the notional PE profits of the foreign company for that period had the relevant alternative provision been made or imposed instead of the material provision, and
the total amount of any relevant taxable income of a connected company, for that company’s corresponding accounting period, which would have resulted from the relevant alternative provision.
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Where a company meets the requirements in subsection (3) or (4) in relation to an accounting period of the company, the company must notify an officer of Revenue and Customs to that effect. This is subject to subsections (7) and (8).
A notification under subsection (1) must be made— See also subsection (9) for provision about the content of notifications.
in writing, and
within the period of 3 months beginning at the end of the accounting period to which it relates (“the notification period”).
A company meets the requirements of this subsection if—
section 80 or 81 applies in relation to the company for the accounting period, and
in that period, the financial benefit of the tax reduction is significant relative to the non-tax benefits of the material provision.
A company meets the requirements of this subsection if—
section 86 applies in relation to the company for the accounting period, and
where that section applies by reason of the mismatch condition being met, in that period the financial benefit of the tax reduction is significant relative to the non-tax benefits of the material provision.
For the purposes of subsections (3) and (4), this Part has effect subject to the following modifications—
in section 80, ignore subsection (1)(f),
in section 86, for subsection (1)(e) substitute—,
in subsection (2) of that section, ignore paragraph (e), and
in subsection (3) of that section, for “the main purpose or one of the main purposes of which is to avoid or reduce a charge to corporation tax” substitute “that result in the reduction of a charge to corporation tax in consequence of which there is an overall reduction in the amount of tax (including foreign tax) that would otherwise have been payable in respect of the activity mentioned in subsection (1)(c)”.
In subsections (3)(b) and (4)(b), “non-tax benefits” means financial benefits other than—
the financial benefit of the tax reduction, and
any financial benefits which derive (directly or indirectly) from any reduction, elimination or delay of any liability of any person to pay any tax (including any non-UK tax).
The duty under subsection (1) does not apply in relation to an accounting period of the company (“the current period”)—
if, at the end of the notification period, it is reasonable (ignoring the possibility of future adjustments being made in accordance with Part 4 of TIOPA 2010 (transfer pricing)) for the company to conclude that no charge to diverted profits tax will arise to the company for the current period,
if, before the end of the notification period, an officer of Revenue and Customs has confirmed that the company does not have to notify an officer in relation to the current period because—
the company, or a company which is connected with it, has provided HMRC with sufficient information to enable a designated HMRC officer to determine whether or not to give a preliminary notice under section 93 to the first mentioned company in respect of the accounting period, and
HMRC has examined that information (whether in the course of an enquiry made into a return or otherwise and whether in relation to diverted profits tax or otherwise),
if, at the end of the notification period, it is reasonable for the company to conclude that sub-paragraphs (i) and (ii) of paragraph (b) apply, or
if—
the immediately preceding accounting period of the company is a period in respect of which notification was given under subsection (1), or not required to be given by virtue of paragraph (b) or (c) or this paragraph, and
at the end of the notification period for the current period, it is reasonable for the company to conclude that there has been no change in circumstances which is material to whether a charge to diverted profits tax may be imposed for the current period.
The Commissioners for Her Majesty’s Revenue and Customs may also direct that the duty under subsection (1) does not apply in relation to an accounting period in other circumstances specified in the direction.
A notification under subsection (1) must—
state whether the obligation to notify arises by reason of section 80, 81 or 86 (as modified by subsection (5)) applying in relation to the company for the accounting period;
if it states that section 86 applies, state the name of the avoided PE;
if it states that section 80 or 81 applies, contain a description of the material provision in question and the parties between whom it has been made or imposed;
if it states that section 86 applies—
state whether or not the mismatch condition is met, and
if it is met, contain a description of the material provision in question and the parties between whom it has been made or imposed.
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If a designated HMRC officer has reason to believe that— the officer must give the company a notice (a “preliminary notice”) in respect of that period.
one or more of sections 80, 81 and 86 applies or apply in relation to a company for an accounting period, and
as a result, taxable diverted profits arise to the company in the accounting period,
See sections 96 and 97 for provision about the calculation of taxable diverted profits for the purposes of a preliminary notice.
A preliminary notice must—
state the accounting period of the company to which the notice applies;
set out the basis on which the officer has reason to believe that one or more of sections 80, 81 and 86 applies or apply in relation to the company for that accounting period;
explain the basis on which the proposed charge is calculated, including—
how the taxable diverted profits to which the proposed charge would relate have been determined,
where relevant, details of the relevant alternative provision (see section 82(5) or 88(7)) by reference to which those profits have been determined, and
how the amount of interest comprised in that charge in accordance with section 79(2)(b) would be calculated,
state who would be liable to pay the diverted profits tax;
explain how interest is applied in accordance with section 101 of FA 2009 (late payment interest on sums due to HMRC) if the diverted profits tax is not paid, the period for which interest is charged and the rate at which it is charged.
Where the designated HMRC officer has insufficient information to determine or identify any of the matters set out in subsection (3), it is sufficient if the preliminary notice sets out those matters determined to the best of the officer’s information and belief.
Subject to subsection (6), a preliminary notice may not be issued more than 24 months after the end of the accounting period to which it relates.
Where— a designated HMRC officer may issue to the company a preliminary notice in respect of that tax within the period of 4 years after the end of the accounting period.
notification under section 92 has not been received by an officer of Revenue and Customs in respect of an accounting period of a company within the period specified in subsection (2)(b) of that section, and
a designated HMRC officer believes, in relation to that accounting period, that an amount of diverted profits tax that ought to have been charged under this Part has not been charged,
Where a preliminary notice is issued to a company, the officer must give a copy of the notice—
if the notice is issued on the basis that section 81 applies, to UKPE, and
if the notice is issued on the basis that section 86 applies, to the avoided PE.
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This section applies where a designated HMRC officer gives a preliminary notice, in respect of an accounting period, to a company under section 93 (and that notice is not withdrawn).
The company has 30 days beginning with the day the notice is issued to send written representations to the officer in respect of the notice.
Representations made in accordance with subsection (2) are to be considered by the officer only if they are made on the following grounds—
that there is an arithmetical error in the calculation of the amount of the diverted profits tax or the taxable diverted profits or an error in a figure on which an assumption in the notice is based;
that the small or medium-sized enterprise requirement is not met;
that in a case where the preliminary notice states that section 80 or 81 applies—
the participation condition is not met,
the 80% payment test is met, or
the effective tax mismatch outcome is an excepted loan relationship outcome;
that in a case where the preliminary notice states that section 86 applies—
section 87 (exception for companies with limited UK-related sales or expenses) operates to prevent section 86 from applying for the accounting period, or
the avoided PE is “excepted” within the meaning of section 86(5);
that in a case where the preliminary notice states that section 86 applies and that the mismatch condition (within the meaning of section 86(2)) is met, the condition is not met because—
the participation condition is not met,
the 80% payment test is met, or
the effective tax mismatch outcome is an excepted loan relationship outcome (within the meaning of section 109(2)).
But, unless they are representations under subsection (3)(a) in respect of arithmetical errors, nothing in subsection (3) requires the officer to consider any representations if, and to the extent that, they relate to—
any provision of Part 4 of TIOPA 2010 (transfer pricing), or
the attribution of profits of a company to a permanent establishment in the United Kingdom through which the company carries on a trade (including any notional attribution made for the purposes of section 89, 90 or 91).
“The small or medium-sized enterprise requirement” is—
where the notice was issued on the basis that section 80 or 81 applies, the requirement in section 80(1)(g), and
where the notice was issued on the basis that section 86 applies to the company, the requirement in subsection (1)(h) or (2)(f) of that section.
“The participation condition” means—
where the notice was issued on the basis that section 80 or 81 applies, the condition in section 80(1)(c), and
where the notice was issued on the basis that section 86 applies to the company, the condition in subsection (2)(b) of that section.
“The 80% payment test” means the requirement in section 107(3)(d).
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This section applies where a designated HMRC officer has given a company a preliminary notice under section 93 in relation to an accounting period.
Having considered any representations in accordance with section 94, the officer must determine whether to— and must take that action before the end of the period of 30 days immediately following the period of 30 days mentioned in section 94(2).
issue a notice under this section (a “charging notice”) to the company for that accounting period, or
notify the company that no charging notice will be issued for that accounting period pursuant to that preliminary notice,
A notification under subsection (2)(b) does not prevent a charging notice being issued for the same accounting period pursuant to any other preliminary notice the person may be given in respect of that period.
See sections 96 and 97 for provision about the calculation of taxable diverted profits for the purposes of a charging notice.
A charging notice must—
state the amount of the charge to diverted profits tax imposed by the notice;
set out the basis on which the officer considers that section 80, 81 or 86 applies;
state the accounting period of the company to which the notice applies;
set out an explanation of the basis on which the charge is calculated, including—
how the taxable diverted profits to which the charge relates have been determined,
where relevant, details of the relevant alternative provision (see section 82(5) or 88(7)) by reference to which those profits have been determined, and
how the amount of interest comprised in the charge under section 79(2)(b) has been calculated;
state who is liable to pay the diverted profits tax;
state when the tax is due and payable;
explain how interest is applied in accordance with section 101 of FA 2009 (late payment interest on sums due to HMRC) if the diverted profits tax is not paid, the period for which interest is charged and the rate at which it is charged.
Where a charging notice is issued to a company, the officer must give a copy of the notice—
if the notice is issued by reason of section 81 applying, to UKPE, and
if the notice is issued by reason of section 86 applying, to the avoided PE.
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Where taxable diverted profits arising to a company in an accounting period fall to be determined under section 84 or 85, for the purposes of issuing a preliminary notice under section 93 or a charging notice under section 95 the taxable diverted profits to be specified in the notice, in relation to the material provision in question, are determined in accordance with this section.
The taxable diverted profits are such amount (if any) as the designated HMRC officer issuing the notice determines, on the basis of the best estimate that can reasonably be made at that time, to be the amount calculated in accordance with sections 84 or 85 (as the case may be). But this is subject to subsections (4) to (6).
For the purposes of this section, “the inflated expenses condition” is met if—
the material provision results in expenses of the company for which a deduction has been taken into account by the company in computing—
in a case where section 80 applies, its liability for corporation tax for the accounting period, and
in a case where section 81 applies, its chargeable profits attributable (in accordance with sections 20 to 32 of CTA 2009) to UKPE,
the expenses result, or a part of the expenses results, in the effective tax mismatch outcome mentioned in section 80(1)(d), and
in consequence of paragraphs (a) and (b), the designated HMRC officer issuing the notice considers that the relevant expenses might be greater than they would have been if they had resulted from provision made or imposed as between independent persons dealing at arm’s length.
Subsection (5) applies where the designated HMRC officer issuing the notice considers that—
the inflated expenses condition is met, and
it is reasonable to assume that section 84 or 85(4) applies.
Where this subsection applies, the best estimate made by the officer in accordance with subsection (2) is to be made on the assumption that—
so much of the deduction mentioned in subsection (3)(a) as relates to the relevant expenses is reduced by 30%, and
in relation to the relevant expenses, Part 4 of TIOPA 2010 (transfer pricing) is ignored.
But— the reduction required by subsection (5)(a) is reduced (but not below nil) to take account of that adjustment.
if the deduction for the expenses taken into account by the company in computing its liability for corporation tax takes account of an adjustment required by Part 4 of TIOPA 2010 (transfer pricing) which is reflected in the company’s company tax return prior to the issue of the charging notice, and
as a result that deduction is less than it would otherwise have been,
For the purposes of this section, sections 83(3) and 84(2)(c) have effect as if (in each case) the words “before the end of the review period” were omitted.
The Treasury may by regulations, made by statutory instrument, substitute a different percentage for the percentage for the time being specified in subsection (5)(a).
Regulations under this section are subject to annulment in pursuance of a resolution of the House of Commons.
In this section—
Chapter 5 of Part 8 of CTA 2010 (ring fence expenditure supplement) is amended as follows.
This sub-paragraph applies if— If sub-paragraph (1) applies, the banking company is not entitled to deduct from the pre-commencement profits any amount in respect of the relevant carried-forward losses. Sub-paragraph (1) does not apply in relation to a banking company which falls within section 269B(5)(b) of CTA 2010 (inserted by this Schedule). In this paragraph— Terms used in this paragraph and in Chapter 3 of Part 7A of CTA 2010 have the same meaning in this paragraph as in that Chapter; and, so far as necessary for the purposes of this sub-paragraph, that Part is to be treated as having come into force on the same day as this paragraph. This paragraph is treated as having come into force on 3 December 2014. Sub-paragraph (8) applies where a company has an accounting period beginning before 1 April 2015 and ending on or after that date (“the straddling period”). For the purposes of this paragraph—
In section 307 (overview of Chapter), in subsection (5) for “6” substitute “10”.
In section 309 (accounting periods), in subsection (4), for the words from “Chapter” to the end substitute Chapter—
Section 311 (limit on number of accounting periods for which supplement may be claimed) is amended as follows. In subsection (1) for “6” substitute “10”. After subsection (1) insert— In the heading of the section after “Limit on number” insert “etc”.
In section 316 (the mixed pool of qualifying pre-commencement expenditure and supplement previously allowed), after subsection (5) insert—
In section 317 (reduction in respect of disposal receipts under CAA 2001), at the end insert—
After section 318 insert—
Section 326 (the ring fence pool) is amended as follows. In subsection (3), for “the following provisions of this Chapter” substitute “sections 327 and 328”. In subsection (4), after “made”, in the first place, insert “under section 327 or 328”. After subsection (5) insert—
In section 327 (reductions in respect of utilised ring fence losses), after subsection (3) insert—
After section 328 insert—
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Where taxable diverted profits arising to the foreign company in an accounting period fall to be determined under section 89, 90 or 91, for the purposes of issuing a preliminary notice under section 93 or a charging notice under section 95 the taxable diverted profits to be specified in the notice are determined instead in accordance with this section.
The taxable diverted profits are such amount as the designated HMRC officer issuing the notice determines, on the basis of the best estimate that can reasonably be made at that time, to be the amount calculated in accordance with section 89, 90 or 91 (as the case may be). But this is subject to subsections (4) and (5).
For the purposes of subsection (4), “the inflated expenses condition” is met if—
the mismatch condition is met,
the material provision results in expenses of the foreign company for which (ignoring Part 4 of TIOPA 2010 (transfer pricing)) a deduction for allowable expenses would be allowed in computing the notional PE profits of the foreign company for the accounting period,
the expenses result, or a part of the expenses results, in the effective tax mismatch outcome mentioned in section 86(2)(c), and
in consequence of paragraphs (a) to (c), the designated HMRC officer issuing the notice considers that the relevant expenses might be greater than they would have been if they had resulted from provision made or imposed as between independent persons dealing at arm’s length.
Subsection (5) applies where the designated HMRC officer issuing the notice considers that—
the inflated expenses condition is met, and
it is reasonable to assume that section 90 or 91(4) applies.
Where this subsection applies, the best estimate made by the officer in accordance with subsection (2) is to be made on the assumption that—
so much of the deduction mentioned in subsection (3)(b) as relates to the relevant expenses is reduced by 30%, and
in relation to the relevant expenses, Part 4 of TIOPA 2010 (transfer pricing) is ignored.
The Treasury may by regulations, made by statutory instrument, substitute a different percentage for the percentage for the time being specified in subsection (5)(a).
Regulations under this section are subject to annulment in pursuance of a resolution of the House of Commons.
In this section—
“the relevant expenses” means so much of the expenses mentioned in subsection (3)(b) as result in the effective tax mismatch outcome as mentioned in section 86(2)(c), and
“the foreign company”, “the material provision” and “the mismatch condition” have the same meaning as in section 86.
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This section applies where a charging notice is issued to a company.
Diverted profits tax charged by the notice must be paid within 30 days after the day the notice is issued.
The company is liable to pay the tax.
The payment of the tax may not be postponed on any grounds, and so the diverted profits tax charged by the charging notice remains due and payable despite any review being conducted under section 101 or any appeal in respect of the notice.
In Schedule 16—
Part 1 contains provision treating a liability of a non-UK resident company to pay diverted profits tax as if it were also a liability of its UK representative;
Part 2 contains provision enabling unpaid diverted profits tax due from a non-UK resident company to be recovered from a related company.
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In calculating income, profits or losses for any tax purpose—
no deduction, or other relief, is allowed in respect of diverted profits tax, and
no account is to be taken of any amount which is paid (directly or indirectly) by a person for the purposes of meeting or reimbursing the cost of diverted profits tax.
An amount paid as mentioned in subsection (1)(b) is not to be regarded for the purposes of the Corporation Tax Acts as a distribution (within the meaning of CTA 2010).
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Subsection (2) applies where a company has paid— which is calculated by reference to profits of the company (“the taxed profits”).
corporation tax, or
a tax under the law of a territory outside the United Kingdom which corresponds to corporation tax,
Such credit as is just and reasonable is allowed in respect of that tax against any liability which either—
that company has to diverted profits tax in respect of the taxed profits, or
another company has to diverted profits tax in respect of taxable diverted profits arising to that other company which are calculated by reference to amounts which also constitute all or part of the taxed profits.
Subsection (4) applies where a company has paid— which is calculated by reference to profits of another company (“the CFC profits”).
the CFC charge within the meaning of Part 9A of TIOPA 2010 (controlled foreign companies) (see section 371VA), or
a tax under the law of a territory outside the United Kingdom (by whatever name known) which is similar to the CFC charge,
Such credit as is just and reasonable is allowed in respect of that charge or tax against any liability which a company has to diverted profits tax in respect of taxable diverted profits arising to that other company which are calculated by reference to amounts which also constitute all or part of the CFC profits.
But nothing in this section allows a credit, against a liability to diverted profits tax, for an amount of tax or charge which was paid after the end of—
the review period in respect of the charging notice which imposed the charge to diverted profits tax, or
where the charge to diverted profits tax was imposed by a supplementary charging notice, the review period within which that notice was issued.
For the purposes of subsection (1), any withholding tax paid on payments made to a person is (unless it is refunded) to be treated—
as tax within paragraph (a) or (b) of that subsection, and
as paid by that person (and not the person making the payment).
For the purposes of subsection (6), an amount of withholding tax paid on payments made to a person is refunded if and to the extent that—
any repayment of tax, or any payment in respect of a credit for tax, is made to any person, and
that repayment or payment is directly or indirectly in respect of the whole or part of the amount of that withholding tax.
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Where a charging notice is issued to a company for an accounting period, a designated HMRC officer, within the review period—
must carry out a review of the amount of diverted profits tax charged on the company for the accounting period, and
may carry out more than one such review.
Subject to subsection (13), “the review period” means the period of 12 months beginning immediately after the period of 30 days mentioned in section 98(2).
Subsection (4) applies if—
the company has paid (in full) the amount of diverted profits tax charged by the charging notice, and
the officer is satisfied that the total amount of diverted profits tax charged on the company for that period is excessive having regard to sections 83, 84, 85, 89, 90 and 91 (calculation of taxable diverted profits).
The officer may, during the review period, issue to the company an amending notice which amends the charging notice so as to—
reduce the amount of taxable diverted profits to which the notice relates, and
accordingly, reduce the charge to diverted profits tax imposed on the company in respect of the accounting period.
More than one amending notice may be issued to the company in respect of the charging notice.
Where an amending notice is issued, any tax overpaid must be repaid.
Subsection (8) applies if a designated HMRC officer is satisfied that the total amount of diverted profits tax charged on the company for the accounting period is insufficient having regard to sections 83, 84, 85, 89, 90 and 91 (calculation of taxable diverted profits).
The officer may, during the review period, issue a notice (a “supplementary charging notice”) to the company imposing an additional charge to diverted profits tax on the company in respect of the accounting period on taxable diverted profits which—
arise to the company for that period, and
are not already the subject of a charge to diverted profits tax.
Only one supplementary charging notice may be issued to the company in respect of a charging notice.
No supplementary charging notice may be issued during the last 30 days of the review period.
Subsections (3) to (6) (amending notices) apply in relation to a supplementary charging notice as they apply to the charging notice.
Section 95(5) (content of charging notice) and section 98 (payment of tax) apply in relation to a supplementary charging notice as they apply in relation to a charging notice.
If either of the following events occurs before the end of the period of 12 months referred to in subsection (2), the review period ends at the time of that event. The events are—
that following the issuing of a supplementary charging notice, the company notifies HMRC that it is terminating the review period;
that a designated HMRC officer and the company agree (in writing) that the review period is to terminate.
When determining on a review whether the total amount of taxable diverted profits charged on the company for an accounting period is excessive or insufficient—
the designated HMRC officer must not take any account of section 96 or (as the case may be) section 97 (which apply only for the purposes of the officer estimating the taxable diverted profits for the purposes of issuing a preliminary notice or charging notice), and
nothing in section 94 applies to restrict the representations which the officer may consider.
Where a supplementary charging notice or an amending notice is issued to a company, the officer must give a copy of the notice—
if the charging notice was issued by reason of section 81 applying, to UKPE, and
if the charging notice was issued by reason of section 86 applying, to the avoided PE.
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A company to which a charging notice or a supplementary charging notice is issued may appeal against the notice.
Notice of an appeal must be given to HMRC, in writing, within 30 days after the end of the review period (see section 101(2) and (13)).
The notice of appeal must specify the grounds of appeal.
For the purposes of an appeal, sections 96 and 97 (which apply only for the purposes of the officer estimating the taxable diverted profits for the purposes of issuing a preliminary notice or charging notice) are to be ignored when determining whether the taxable diverted profits in respect of which a charge is imposed have been correctly calculated.
On an appeal under this section the Tribunal may—
confirm the charging notice or supplementary charging notice to which the appeal relates,
amend that charging notice or supplementary charging notice, or
cancel that charging notice or supplementary charging notice.
For the purposes of Part 5 of TMA 1970 (appeals etc), an appeal under this section is to be treated as if it were an appeal under the Taxes Acts (within the meaning of that Act), and for that purpose references in that Part to an assessment include a charging notice or supplementary charging notice under this Part.
Subsection (6) is subject to section 98(4) (no postponement of payment of tax pending appeal etc).
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Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended as follows.
6ZB Diverted profits tax Amount of diverted profits tax payable under Part 3 of FA 2015 The date when, in accordance with section 98(2) of FA 2015, the amount must be paid
In paragraph 3 (amount of penalty: occasional amounts and amounts in respect of periods of 6 months or more), after sub-paragraph (1)(a) insert—.
Schedule 41 to FA 2008 (penalties: failure to notify etc) is amended as follows.
Diverted profits tax Obligation under section 92 of FA 2015 (duty to notify if within scope of diverted profits tax).
In the case of a relevant obligation relating to diverted profits tax, the potential lost revenue is the amount of diverted profits tax for which P would be liable at the end of the period of 6 months beginning immediately after the accounting period assuming—
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In Schedule 23 to FA 2011 (data-gathering powers), in paragraph 45(1) (taxes to which powers apply), after paragraph (c) insert—.
In Schedule 36 to FA 2008 (information and inspection powers), in paragraph 63(1) (taxes to which powers apply), after paragraph (c) insert—.
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This section applies for the purposes of sections 80 and 86(2).
In this section “the first party” and “the second party” mean—
where this section applies for the purposes of section 80, C and P (within the meaning of section 80) respectively, and
where this section applies for the purposes of section 86(2), the foreign company and A (within the meaning of section 86) respectively.
The participation condition is met in relation to the first party and the second party (“the relevant parties”) if—
condition A is met in relation to the material provision so far as the material provision is provision relating to financing arrangements, and
condition B is met in relation to the material provision so far as the material provision is not provision relating to financing arrangements.
Condition A is that, at the time of the making or imposition of the material provision or within the period of 6 months beginning with the day on which the material provision was made or imposed—
one of the relevant parties was directly or indirectly participating in the management, control or capital of the other, or
the same person or persons was or were directly or indirectly participating in the management, control or capital of each of the relevant parties.
Condition B is that, at the time of the making or imposition of the material provision—
one of the relevant parties was directly or indirectly participating in the management, control or capital of the other, or
the same person or persons was or were directly or indirectly participating in the management, control or capital of each of the relevant parties.
In this section “financing arrangements” means arrangements made for providing or guaranteeing, or otherwise in connection with, any debt, capital or other form of finance.
For the purposes of this section—
section 157(2) of TIOPA 2010 (“direct participation”) applies, and
sections 158 to 163 of that Act (“indirect participation” in management, control or capital of a person) apply as if in those sections—
references to section 148(2) of that Act included references to subsection (4) of this section,
references to paragraph (a) or (b) of section 148(2) of that Act included (respectively) references to paragraph (a) or (b) of subsection (4) of this section,
references to section 148(3) of that Act included references to subsection (5) of this section, and
references to paragraph (a) or (b) of section 148(3) of that Act included (respectively) references to paragraph (a) or (b) of subsection (5) of this section.
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This section applies for the purposes of sections 80 and 86(2).
In this section “the first party” and “the second party” mean—
where this section applies for the purposes of section 80, C and P (within the meaning of section 80) respectively, and
where this section applies for the purposes of section 86(2), the foreign company and A (within the meaning of section 86) respectively.
The material provision results in an effective tax mismatch outcome as between the first party and the second party for an accounting period of the first party if—
in that accounting period, in relation to a relevant tax, it results in one or both of—
expenses of the first party for which a deduction has been taken into account in computing the amount of the relevant tax payable by the first party, or
a reduction in the income of the first party which would otherwise have been taken into account in computing the amount of a relevant tax payable by the first party,
the resulting reduction in the amount of the relevant tax which is payable by the first party exceeds the resulting increase in relevant taxes payable by the second party for the corresponding accounting period of the second party,
the results described in paragraphs (a) and (b) are not exempted by subsection (6), and
the second party does not meet the 80% payment test.
In this Part, references to “the tax reduction” are to the amount of the excess mentioned in subsection (3)(b).
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 results described in subsection (3)(a) and (b) are exempted if they arise solely by reason of—
contributions paid by an employer under a registered pension scheme, or overseas pension scheme, in respect of any individual,
a payment to a charity,
a payment to a person who, on the ground of sovereign immunity, cannot be liable for any relevant tax, or
a payment to an offshore fund or authorised investment fund—
which meets the genuine diversity of ownership condition (whether or not a clearance has been given to that effect), or
at least 75% of the investors in which are, throughout the accounting period, registered pension schemes, overseas pension schemes, charities or persons who cannot be liable for any relevant tax on the ground of sovereign immunity.
“The 80% payment test” is met by the second party if the resulting increase in relevant taxes payable by the second party as mentioned in subsection (3)(b) is at least 80% of the amount of the resulting reduction in the amount of the relevant tax payable by the first party as mentioned in subsection (3)(b).
In this section—
“non-UK resident” has the same meaning as in the Corporation Tax Acts (see section 1119 of CTA 2010);
See section 108 for further provision about the determination of the tax reduction and the 80% payment test.
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For the purposes of section 107(3)(b) and (7), the resulting reduction in the first party’s liability to a relevant tax for an accounting period is— where— A is the sum of— if there are expenses within section 107(3)(a)(i), the lower of the amount of the expenses and the amount of the deduction mentioned in that provision, and any reduction in income mentioned in section 107(3)(a)(ii), and TR is the rate at which, assuming the first party has profits equal to A chargeable to the relevant tax for the accounting period, those profits would be chargeable to that tax.
For the purposes of section 107(3)(b) and (7), the resulting increase in relevant taxes payable by the second party for the corresponding accounting period is any increase in the total amount of relevant taxes that would fall to be paid by the second party (and not refunded) assuming that—
the second party’s income for that period, in consequence of the material provision were an amount equal to A,
account were taken of any deduction or relief (other than any qualifying deduction or qualifying loss relief) taken into account by the second party in determining its actual liability to any relevant tax in consequence of the material provision, and
all further reasonable steps were taken— to minimise the amount of tax which would fall to be paid by the second party in the country or territory in question (other than steps to secure the benefit of any qualifying deduction or qualifying loss relief).
under the law of any part of the United Kingdom or any country or territory outside the United Kingdom, and
under double taxation arrangements made in relation to any country or territory,
The steps mentioned in subsection (2)(c) include—
claiming, or otherwise securing the benefit of, reliefs, deductions, reductions or allowances, and
making elections for tax purposes.
For the purposes of this section, any withholding tax which falls to be paid on payments made to the second party is (unless it is refunded) to be treated as tax which falls to be paid by the second party (and not the person making the payment).
For the purposes of this section, an amount of tax payable by the second party is refunded if and to the extent that— but an amount refunded is to be ignored if and to the extent that it results from qualifying loss relief obtained by the second party.
any repayment of tax, or any payment in respect of a credit for tax, is made to any person, and
that repayment or payment is directly or indirectly in respect of the whole or part of the amount of tax payable by the second party,
Where the second party is a partnership, in section 107 and this section— and subsection (4) applies to any member of the partnership as it applies to the second party.
references to the second party’s liability to any tax (however expressed) include a reference to the liabilities of all members of the partnership to the tax,
references to any tax being payable by the second party (however expressed) include a reference to tax being payable by any member of the partnership, and
references to loss relief obtained by the second party include a reference to loss relief obtained by any member of the partnership,
In this section—
After section 310B of FA 2004 insert—
Section 313C of FA 2004 (information provided to introducers) is amended as follows. For subsection (1) substitute— In subsection (3), for “or by virtue of subsection (1)” substitute “subsection (1A)”. For the heading substitute “Provision of information to HMRC by introducers”.
After section 316B of FA 2004 insert—
In section 55 of TMA 1970 (recovery of tax not postponed), in subsection (8C) omit the “or” after paragraph (b) and after paragraph (c) insert , or
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In section 98C of TMA 1970 (notification under Part 7 of FA 2004: penalties), in subsection (2)(f) after “information” insert “or have been provided with information”.
In section 316 of that Act (information to be provided in form and manner specified by HMRC), in subsection (2), after “310A,” insert “310C,”.
In section 98C of TMA 1970 (notification under Part 7 of FA 2004), in subsection (2), after paragraph (ca) insert—.
“eligible oil field”;
The amendments made by this Part of this Schedule have effect in accordance with regulations made by the Treasury. Regulations under this paragraph may make different provision for different purposes. Section 1014(4) of ITA 2007 (regulations etc subject to annulment) does not apply in relation to regulations under this paragraph. Regulations under this paragraph may not provide for amendments of ITA 2007 to have effect—
In section 198A— In section 198B—
In section 309A—
in subsection (3), omit “or” at the end of paragraph (b) and for paragraph (c) substitute—, and
in subsection (9), at the appropriate place insert—.
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This section applies for the purposes of sections 80 and 86(2).
The effective tax mismatch outcome is an “excepted loan relationship outcome” if the result described in section 107(3)(a) arises wholly from—
anything that, if a company within the charge to corporation tax were party to it, would produce debits or credits under Part 5 of CTA 2009 (loan relationships and deemed loan relationships) (“a loan relationship”), or
a loan relationship and a relevant contract (within the meaning of Part 7 of that Act (derivative contracts)) taken together, where the relevant contract is entered into entirely as a hedge of risk in connection with the loan relationship.
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This section applies for the purposes of sections 80 and 86(2).
In this section “the first party” and “the second party” mean—
where this section applies for the purposes of section 80, C and P (within the meaning of section 80) respectively, and
where this section applies for the purposes of section 86(2), the foreign company and A (within the meaning of section 86) respectively.
The insufficient economic substance condition is met if one or more of subsections (4), (5) and (6) apply.
This subsection applies where— unless, at the time of the making or imposition of the material provision, it was reasonable to assume that, for the first party and the second party (taken together) and taking account of all accounting periods for which the transaction was to have effect, the non-tax benefits referable to the transaction would exceed the financial benefit of the tax reduction.
the effective tax mismatch outcome is referable to a single transaction, and
it is reasonable to assume that the transaction was designed to secure the tax reduction,
This subsection applies where— unless, at the time of the making or imposition of the material provision, it was reasonable to assume that, for the first party and the second party (taken together) and taking account of all accounting periods for which the transaction or series was to have effect, the non-tax benefits referable to the transaction or transactions would exceed the financial benefits of the tax reduction.
the effective tax mismatch outcome is referable to any one or more of the transactions in a series of transactions, and
it is reasonable to assume that the transaction was, or the transactions were, designed to secure the tax reduction,
This subsection applies where— unless one or both of the conditions in subsection (7) is or are met.
a person is a party to the transaction, or to any one or more of the transactions in the series of transactions, to which section 80(1)(b) or section 86(2)(a) refers, and
it is reasonable to assume that the person’s involvement in the transaction or transactions was designed to secure the tax reduction,
Those conditions are—
that, at the time of the making or imposition of the material provision, it was reasonable to assume that, for the first party and the second party (taken together) and taking account of all accounting periods for which the transaction or series was to have effect, the non-tax benefits referable to the contribution made to the transaction or series by that person, in terms of the functions or activities that that person’s staff perform, would exceed the financial benefit of the tax reduction;
that, in the accounting period—
the income attributable to the ongoing functions or activities of that person’s staff in terms of their contribution to the transaction or transactions (ignoring functions or activities relating to the holding, maintaining or protecting of any asset from which income attributable to the transaction or transactions derives), exceeds
the other income attributable to the transaction or transactions.
For the purposes of subsection (7) a person’s staff include—
any director or other officer of the person,
if the person is a partnership, any individual who is a member of the partnership, and
externally provided workers in relation to the person.
For the purposes of subsections (4)(b), (5)(b) and (6)(b)—
when determining whether it is reasonable to assume— regard must be had to all the circumstances, including any liability for any additional tax that arises directly or indirectly as a consequence of the transaction or transactions, and
that a transaction was, or transactions were, designed to secure the tax reduction, or
that a person’s involvement in a transaction or transactions was designed to secure the tax reduction,
a transaction or transactions, or a person’s involvement in a transaction or transactions, may be designed to secure the tax reduction despite it or them also being designed to secure any commercial or other objective.
In this section—
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In this Part “transaction” includes arrangements, understandings and mutual practices (whether or not they are, or are intended to be, legally enforceable).
References in this Part to a series of transactions include references to a number of transactions each entered into (whether or not one after the other) in pursuance of, or in relation to, the same arrangement.
A series of transactions is not prevented by reason only of one or more of the matters mentioned in subsection (4) from being regarded for the purposes of this Part as a series of transactions by means of which provision has been made or imposed as between any two persons.
Those matters are—
that there is no transaction in the series to which both those persons are parties,
that the parties to any arrangement in pursuance of which the transactions in the series are entered into do not include one or both of those persons, and
that there is one or more transactions in the series to which neither of those persons is a party.
In this section “arrangement” means any scheme or arrangement of any kind (whether or not it is, or is intended to be, legally enforceable).
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This section applies where a person is a member of a partnership.
Any references in this Part to the expenses, income or revenue of, or a reduction in the income of, the person includes a reference to the person’s share of (as the case may be) the expenses, income or revenue of, or a reduction in the income of, the partnership.
For this purpose “the person’s share” of an amount is determined by apportioning the amount between the partners on a just and reasonable basis.
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In this Part references to an accounting period of a company are to an accounting period of the company for the purposes of corporation tax.
Subsection (3) applies where—
a non-UK resident company (“FC”) is not within the charge to corporation tax,
a person, whether or not UK resident, is carrying on activity in the United Kingdom in connection with supplies of services, goods or other property made by FC in the course of a trade carried on by FC, and
it is reasonable to assume that any of the activity of that person or FC (or both) is designed so as to ensure that FC does not, as a result of that person’s activity, carry on that trade in the United Kingdom for the purposes of corporation tax (whether or not it is also designed to secure any commercial or other objective).
For the purposes of this Part, FC is assumed to have such accounting periods for the purposes of corporation tax as it would have had if it had carried on a trade in the United Kingdom through a permanent establishment in the United Kingdom by reason of the activity of the person mentioned in subsection (2)(b).
For the purposes of subsection (2)—
the reference in that subsection to activity of the person includes any limitation which has been imposed or agreed in respect of that activity;
where FC is a member of a partnership—
a trade carried on by the partnership is to be regarded as a trade carried on by FC, and
supplies made by the partnership in the course of that trade are to be regarded as supplies made by FC in the course of that trade.
Where the designated HMRC officer has insufficient information to identify, in accordance with subsection (3), the accounting periods of FC, for the purposes of this Part the officer is to determine those accounting periods to the best of the officer’s information and belief.
Where a company (“C1”) does not have an actual accounting period which coincides with the accounting period of another company (“the relevant accounting period”) (whether by reason of having no accounting periods or otherwise), in this Part—
references to the corresponding accounting period of C1 in relation to the relevant accounting period are to the notional accounting period of C1 that would coincide with the relevant accounting period, and
such apportionments as are just and reasonable are to be made to determine the income or tax liability of C1 for that corresponding accounting period.
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In this Part—
For the purposes of this Part a tax may correspond to corporation tax even though—
it is chargeable under the law of a province, state or other part of a country, or
it is levied by or on behalf of a municipality or other local body.
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In section 206(3) of FA 2013 (taxes to which the general anti-abuse rule applies), after paragraph (d) insert—.
In paragraph 7 of Schedule 6 to FA 2010 (enactments to which definition of “charity” in Part 1 of that Schedule applies) omit the “and” after paragraph (h) and after paragraph (i) insert , and
In section 1139 of CTA 2010 (definition of “tax advantage” for the purposes of provisions of the Corporation Tax Acts which apply this section), in subsection (2), omit the “or” at the end of paragraph (da) and after paragraph (e) insert , or
In section 178 of FA 1989 (setting rates of interest), in subsection (2), omit the “and” before paragraph (u) and after that paragraph insert , and
In section 1 of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions affecting income tax, purchase tax or customs or excise duties), in subsection (1), after “the bank levy,” insert “diverted profits tax,”.
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This Part has effect in relation to accounting periods beginning on or after 1 April 2015.
For the purposes of this Part, if an accounting period of a company begins before and ends on or after 1 April 2015 (“the straddling period”)—
so much of that accounting period as falls before 1 April 2015 and so much of it as falls on or after that date are treated as separate accounting periods, and
where it is necessary to apportion amounts for the straddling period to the different parts of that period, that apportionment is to be made on a just and reasonable basis.
For the purposes of any accounting period which ends on or before 31 March 2016, section 92 has effect as if in subsection (2)(b) of that section the reference to 3 months were a reference to 6 months.
This Part does not apply in relation to any profits arising to a Lloyd’s corporate member which are— to the extent that those profits are referable, on a just and reasonable basis, to times before 1 April 2015.
mentioned in section 220(2) of FA 1994 (Lloyd’s underwriters: accounting period in which certain profits or losses arise), and
declared in the calendar year 2015 or a later calendar year,
In subsection (4) “Lloyd’s corporate member” means a body corporate which is a member of Lloyd’s and is or has been an underwriting member.
Schedule 17 contains amendments relating to the disclosure of tax avoidance schemes.
Schedule 18 contains provision about the relationship between accelerated payments and group relief.
Schedule 19 contains provision about promoters of tax avoidance schemes.
Schedule 20 contains provisions amending—
Schedule 24 to FA 2007 (penalties for errors),
Schedule 41 to FA 2008 (penalties for failure to notify), ...
Schedule 55 to FA 2009 (penalties for failure to make returns etc), and
Schedule 43C to FA 2013 (as amended by FA 2016).
That Schedule comes into force on such day as the Treasury may by order appoint.
An order under subsection (2)—
may commence a provision generally or only for specified purposes, and
may appoint different days for different provisions or for different purposes.
The power to make an order under this section is exercisable by statutory instrument.
Schedule 21 contains provision for imposing an additional penalty in cases where—
a person is liable for a penalty for a failure to comply with an obligation or provide a document, or for providing an inaccurate document, relating to income tax, capital gains tax or inheritance tax, and
there is a related transfer of, or change in the ownership arrangements for, an asset situated or held outside the United Kingdom.
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The Treasury may make regulations for implementing the OECD’s guidance on country-by-country reporting.
“The OECD’s guidance on country-by-country reporting” is the guidance on country-by-country reporting contained in the OECD’s Guidance on Transfer Pricing Documentation and Country-by-Country Reporting, published in 2014 (or any other document replacing that Guidance).
In subsection (1), the reference to implementing the OECD’s guidance on country-by-country reporting is a reference to implementing the guidance to any extent, subject to such exceptions or other modifications as the Treasury consider appropriate.
Regulations under this section may in particular— “Specified” means specified in the regulations.
require persons specified for the purposes of this paragraph (“reporting entities”) to provide an officer of Revenue and Customs with information of specified descriptions;
require reporting entities to provide the information—
at specified times,
in relation to specified periods of time, and
in the specified form and manner;
impose obligations on reporting entities (including obligations to obtain information from specified persons for the purposes of complying with requirements imposed by virtue of paragraph (a));
make provision (including provision imposing penalties) about contravention of, or non-compliance with, the regulations;
make provision about appeals in relation to the imposition of any penalty.
The regulations may allow any requirement, obligation or other provision that may be imposed or made by virtue of subsection (4)(a), (b) or (c) to be imposed or made instead by a specific or general direction given by the Commissioners for Her Majesty’s Revenue and Customs.
The regulations may—
provide that a reference in the regulations to a provision of the Guidance mentioned in subsection (2) (or to a provision of any document replacing that Guidance) is to be read as a reference to the provision as amended from time to time;
make different provision for different purposes;
contain incidental, supplemental, transitional, transitory or saving provision.
In this section, “the OECD” means the Organisation for Economic Co-operation and Development.
The power of the Treasury to make regulations under this section is exercisable by statutory instrument; and any statutory instrument containing such regulations is subject to annulment in pursuance of a resolution of the House of Commons.
In the enactments to which Part 1 of Schedule 6 to FA 2010 applies, any reference to a charity includes—
the Commonwealth War Graves Commission, and
the Imperial War Graves Endowment Fund Trustees.
The Treasury may redeem at par any stock—
which is described in Schedule 1 to the National Debt Act 1870, or
to which that Act applies by virtue of section 1(5) of the National Debt (Conversion of Stock) Act 1884 or section 2(5) of the National Debt (Conversion) Act 1888.
The Treasury must give at least 3 months' notice in the London Gazette of their intention to redeem any stock under this section.
The sums required to redeem the stock are charged on the National Loans Fund, with recourse to the Consolidated Fund (and section 22(2) of the National Loans Act 1968 applies for the purposes of this section as if this section were contained in that Act).
The following do not apply in relation to a redemption under this section—
in section 5 of the National Debt Act 1870, the words from “All the annuities” to the end,
section 1(2) and (3) of the National Debt (Conversion of Stock) Act 1884, and
section 2(2) of the National Debt (Conversion) Act 1888.
The following are repealed—
section 19 of the Revenue, Friendly Societies, and National Debt Act 1882,
the National Debt (Conversion of Stock) Act 1884, and
the National Debt (Conversion) Act 1888.
Subsection (5) comes into force on such day as the Treasury may by regulations made by statutory instrument appoint (and the regulations may appoint different days for different paragraphs of that subsection).
The other provisions of this section come into force on the day on which this Act is passed.
In section 287(4) of TCGA 1992 (exceptions from negative resolution procedure), for paragraph (b) substitute—
In section 1014(6) of ITA 2007 (exceptions from negative resolution procedure), for paragraph (b) substitute—.
In section 1171(6) of CTA 2010 (exceptions from negative resolution procedure), for paragraph (b) substitute—
The amendments made by this section have effect only in relation to powers conferred after this Act is passed.
In this Act—
“TMA 1970” means the Taxes Management Act 1970,
Section 70DA is amended as follows. After subsection (5) insert— After subsection (8) insert— The amendments made by this paragraph have effect in relation to cases where the lease referred to in section 70DA(1)(b) of CAA 2001 is entered into on or after 26 February 2015.
Section 242 is amended as follows. After subsection (4) insert— In subsection (5), for the words from the beginning to “transaction,” substitute “Otherwise,”. In subsection (6)— After that subsection insert— The amendments made by this paragraph have effect in relation to expenditure of B’s that is incurred on or after 26 February 2015.
Schedule 24 to FA 2007 is amended as follows.
Section 167(1) (the pension death benefit rules) is amended as follows. In pension death benefit rule 3A (payments that may, by way of exception, be made to a nominee) after “other than” insert “a nominees' annuity in respect of a money purchase arrangement or”. In pension death benefit rule 3B (payments that may, by way of exception, be made to a successor) after “other than” insert “a successors' annuity in respect of a money purchase arrangement or”.
Paragraph 4 (penalties payable under paragraph 1) is amended as follows. If the inaccuracy is in category 0, the penalty is— In sub-paragraph (2)— In sub-paragraph (5), for “3” substitute “4”.
Paragraph 4A (categorisation of inaccuracies) is amended as follows. An inaccuracy is in category 0 if— An inaccuracy is in category 1 if— In sub-paragraph (2)— In sub-paragraph (3)— Where the tax at stake is inheritance tax, assets are treated for the purposes of sub-paragraph (4) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable. An inaccuracy “involves an offshore transfer” if— In sub-paragraph (5), for the words following “revenue” substitute “and does not involve either an offshore matter or an offshore transfer”. In sub-paragraph (6)(a), after “matters” insert “or transfers”. In sub-paragraph (7), for ““Category 1” substitute ““Category 0 territory”, “category 1”.
After paragraph 4A insert—
37.5% 18.75% 0% 87.5% 43.75% 25% “125% 62.5% 40%
In paragraph 12(5) (interaction with other penalties and late payment surcharges: the relevant percentage)—
before paragraph (a) insert—, and
in paragraph (a), for “100%” substitute “125%”.
Paragraph 21A (classification of territories) is amended as follows. A category 0 territory is a territory designated as a category 0 territory by order made by the Treasury. A category 2 territory is a territory that is not any of the following— An instrument containing (whether alone or with other provisions) the first order to be made under sub-paragraph (A1) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
Paragraph 21B (location of assets etc) is amended as follows. The Treasury may by regulations make provision for determining for the purposes of paragraph 4AA where— In sub-paragraph (2), for “and capital gains tax” substitute “, capital gains tax and inheritance tax”.
“CTA 2010” means the Corporation Tax Act 2010,
“TPDA 1979” means the Tobacco Products Duty Act 1979,
In this Act “FA”, followed by a year, means the Finance Act of that year.
This Act may be cited as the Finance Act 2015.
Section 13
ITEPA 2003 is amended as follows.
In section 7 (meaning of “employment income”, “general earnings” and “specific employment income”), in subsection (5)(b), for “11” substitute “ 10 ”.
In section 17 (UK resident employees: treatment of earnings for year in which employment not held), in subsection (4), for “11” substitute “ 10 ”.
In section 30 (remittance basis and non-UK resident employees: treatment of earnings for year in which employment not held), in subsection (4), for “11” substitute “ 10 ”.
Section 63 (the benefits code) is amended as follows. In subsection (1)— Omit subsections (2) to (4).
at the end of the entry relating to Chapter 7 insert “ and ”, and
omit the entry relating to Chapter 11 and the “and” before it.
In section 66 (meaning of “employment” and related expressions), after subsection (4) insert—
In section 148 (reduction of cash equivalent where car is shared), omit subsection (3).
In section 157 (reduction of cash equivalent where van is shared), omit subsection (3).
Section 169 (car available to more than one family member etc employed by same employer) is amended as follows. For subsection (2)(b) substitute— Omit subsections (3) and (4).
Section 169A (van available to more than one family member etc employed by same employer) is amended as follows. For subsection (2)(b) substitute— Omit subsections (3) and (4).
In section 184 (interest treated as paid), in subsection (3), for the words following “any of” substitute “the following Chapters of this Part— Chapter 3 (taxable benefits: expenses payments); Chapter 6 (taxable benefits: cars, vans and related benefits); Chapter 10 (taxable benefits: residual liability to charge).”
Section 188 (loan released or written off: amount treated as earnings) is amended as follows. In subsection (2), for “an excluded employment”, in each place, substitute “ lower-paid employment as a minister of religion ”. In subsection (3)(a), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.
In section 228 (effect of exemptions in Part 4 on liability under provisions outside Part 2), in subsection (2)(d), for “290 and” substitute “ 290, 290C to ”.
Section 239 (payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles) is amended as follows. In subsection (8), for “excluded employment” substitute “ lower-paid employment as a minister of religion (see section 290D) ”. Omit subsection (9).
In section 266 (exemption of non-cash vouchers for exempt benefits), in subsection (5), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.
In section 267 (exemption of credit-tokens used for exempt benefits), in subsection (1)(b), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.
In section 269 (exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle), in subsection (4)(b), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.
In section 290 (accommodation benefits of ministers of religion), in subsection (2), for “excluded employment” substitute “ lower-paid employment as a minister of religion (see section 290D) ”.
In section 290A (accommodation outgoings of ministers of religion)—
in subsection (1), for “a religious denomination” substitute “ religion ”,
in subsection (3), omit the definition of “lower-paid employment”, and
in the heading of the section, after “outgoings of” insert “ lower-paid ”.
In section 290B (allowances paid to ministers of religion in respect of accommodation outgoings)—
in subsection (1), for “a religious denomination” substitute “ religion ”,
in subsection (3), for “and “lower-paid employment” have the same meanings” substitute “ has the same meaning ”, and
in the heading of the section, after “to” insert “ lower-paid ”.
Part 2 of Schedule 1 (index of defined expressions) is amended as follows. Omit both entries relating to “excluded employment” and the entry relating to “lower-paid employment”. lower-paid employment as a minister of religion (in the benefits code) section 66(5) lower-paid employment as a minister of religion (in Part 4) section 290D
Schedule 7 (transitionals and savings) is amended as follows. In paragraph 17 (taxable benefits: benefits code)— In paragraph 27(3) (loans released or written off)—
The Social Security Contributions and Benefits Act 1992 is amended as follows. In section 10 (Class 1A contributions: benefits in kind etc), in subsection (1)(b)(ii), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”. In section 10ZB (non-cash vouchers provided by third parties), in subsection (2)— In section 122 (interpretation of Parts 1 to 6), in subsection (1)—
The Social Security Contributions and Benefits (Northern Ireland) Act 1992 is amended as follows. In section 10 (Class 1A contributions: benefits in kind etc), in subsection (1)(b)(ii), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”. In section 10ZB (non-cash vouchers provided by third parties), in subsection (2)— In section 121 (interpretation of Parts 1 to 6), in subsection (1)—
Section 173 of FA 2004 (provision of benefits by registered pension scheme) is amended as follows. In subsection (2), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”. In subsection (3)— In subsection (6), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”. In subsection (7), for “an excluded employment” substitute “ an employment which is lower-paid employment as a minister of religion ”. “lower-paid employment as a minister of religion” has the meaning given by section 290D of that Act,
In CTA 2010, in section 1065 (exception for benefits treated as employment income etc), in the first column of the table, for the words from “in section 216” to “lower-paid employment)” substitute “ in section 290C of that Act (provisions of benefits code not applicable to lower-paid ministers of religion) ”.
Section 32
In CTA 2010, after Part 7 insert—
In Schedule 18 to FA 1998 (company tax returns, assessments and related matters), after Part 9D insert—
In Chapter 5 of Part 3 of CTA 2009 (trading income and trade profits: rules allowing deductions), after section 86 insert—
In section 198A—
in subsection (3), omit “or” at the end of paragraph (b) and for paragraph (c) substitute—, and
in subsection (9), at the appropriate place insert—.
In section 309A— In section 309B—
“the chargeable period” is to be construed in accordance with paragraph 4 or (as the case may be) 5 of Schedule 19 to FA 2011;
The amendments made by paragraphs 1 to 5 of this Schedule have effect for the purposes of calculating the taxable total profits of companies for accounting periods beginning on or after 1 April 2015. But section 269CK of CTA 2010 (inserted by this Schedule) does not have effect in relation to any arrangements made before 3 December 2014. Sub-paragraph (4) applies where a company has an accounting period beginning before 1 April 2015 and ending on or after that date (“the straddling period”). For the purposes of Chapter 3 of Part 7A of CTA 2010—
Part 2 of Schedule 28 (interpretation of the pension death benefit rules) is amended as follows. After paragraph 27A insert— After paragraph 27F insert— Regulations made before 25 December 2015 under the paragraph 27AA or 27FA inserted by this paragraph may, for cases where the transfer concerned takes place on or after 6 April 2015, include provision having effect in relation to times before the regulations are made.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 33
In CTA 2010, after Part 14A insert—
In section 1 of CTA 2010 (overview of Act), in subsection (4), after paragraph (aa) insert—.
relevant carried-forward loss (in Part 14B) section 730F
The amendments made by this Schedule have effect for the purposes of calculating the taxable total profits of companies for accounting periods beginning on or after 18 March 2015. Sub-paragraph (3) applies where a company has an accounting period beginning before 18 March 2015 and ending on or after that date (“the straddling period”). For the purposes of Part 14B of CTA 2010—
Section 34
Section 35
Section 36
Section 37
TCGA 1992 is amended in accordance with paragraphs 2 to 40.
In section 1 (the charge to tax), in subsection (2A), for the words from “gains are” to the end substitute gains are—
Section 2 (persons and gains chargeable to capital gains tax, and allowable losses) is amended as follows. After subsection (2) insert— After subsection (7A) insert—
In section 2B (persons chargeable to capital gains tax on ATED-related gains), in subsection (10), in paragraph (b) of the definition of “ring-fenced ATED-related allowable losses”, for “from ATED-related chargeable gains accruing in any previous tax year on relevant high value disposals,” substitute “from chargeable gains accruing in any previous tax year,”.
Section 3 (annual exempt amount) is amended as follows. In subsection (5), for the words from “is the amount” to the end substitute is (what would apart from this section be) the total of the amounts for that year on which that individual is chargeable to capital gains tax in accordance with either (or both) of— After subsection (5B) insert— In subsection (5C), for the words from “In subsections” to “in his case by—” substitute “In subsection (5BA) “section 2 adjusted net gains”, in relation to an individual and a tax year, means the amount given in the individual’s case by—”. After subsection (5C) insert— In subsection (7), for “(5C)” substitute “(5D)”.
In section 4 (rates of capital gains tax), after subsection (3A) insert—
For section 4B (deduction of losses etc in most beneficial way) substitute—
Section 8 (company’s profits for corporation tax purposes to include chargeable gains) is amended as follows. In subsection (1), in paragraph (b), omit the words from “period” to the end and insert period— After subsection (4A) insert—
In section 10A (temporary non-residents), as that section has effect where the year of departure (as defined in Part 4 of Schedule 45 to FA 2013) is the tax year 2012-13 or an earlier tax year, in subsection (5) after “section 10” insert “, 14D”.
In section 13 (attribution of gains to members of non-resident companies), in subsection (1A), for the words from “an ATED-related gain” to the end substitute—
After section 14A insert—
In section 16 (computation of losses), in subsection (3), for “or 10B,” substitute “, 10B, 14D or 188D”.
After section 25 insert—
After section 48 insert—
In section 57A (gains and losses on relevant high value disposals), after subsection (2) insert—
In Part 2, after Chapter 5 insert—
Section 62 (death: general provisions) is amended as follows. In subsection (2A), for the words from “are gains” to the end substitute are— After subsection (2A) insert—
After section 80 insert—
In section 86 (attribution of gains to settlors with interest in non-resident or dual-resident settlements), after subsection (4) insert—
In section 87 (non-UK resident settlements: attribution of gains to beneficiaries), after subsection (5) insert—
Section 139 (reconstruction involving transfer of business) is amended as follows. In subsection (1A)— After subsection (1A) insert—
After section 159 insert—
Section 165 (relief for gifts of business assets) is amended as follows. In subsection (1), after “167,” insert “167A,”. After subsection (7) insert—
In section 166 (gifts to non-residents), in subsection (1), for “Section 165(4)” substitute “Subject to section 167A, section 165(4)”.
In section 167 (gifts to foreign-controlled companies), in subsection (1), for “Section 165(4)” substitute “Subject to section 167A, section 165(4)”.
After section 167 insert—
In section 168 (emigration of donee), in subsection (1), after paragraph (a) insert—.
After section 168 insert—
After section 187A insert—
Before section 189 (and the italic heading before it), insert—
Section 260 (gifts on which inheritance tax is chargeable etc) is amended as follows. In subsection (1), for “and 261” substitute “, 261 and 261ZA”. After subsection (6) insert—
In section 261 (section 260 relief: gifts to non-residents), in subsection (1), for “Section 260(3)” substitute “Subject to section 261ZA, section 260(3)”.
After section 261 insert—
In section 288 (interpretation), in subsection (1), at the appropriate places insert— .
Schedule 1 (application of exempt amount etc in cases involving settled property) is amended as follows. In paragraph 1(1), for “(5C)” substitute “(5D)”. In paragraph 2(1), for “(5C)” substitute “(5D)”.
After Schedule A1, insert—
After Schedule B1 (as inserted by paragraph 36), insert—
Schedule 4ZZA (relevant high value disposals: gains and losses) is amended as follows. In paragraph 1 the existing text becomes sub-paragraph (1). See also Part 4 of Schedule 4ZZB, which— See also the special rule in paragraph 6 (which takes precedence over paragraphs 3 and 4 where it applies). An election made in relation to an asset under paragraph 2(1)(b) of Schedule 4ZZB (disposals by non-residents etc of UK residential property interests: gains and losses) also has effect as an election made under this paragraph in relation to the asset. After paragraph 6 insert— After paragraph 7 insert—
After Schedule 4ZZA insert—
Where any of the disposals which the trustees are treated as having made as mentioned in sub-paragraph (2) is a non-resident CGT disposal—
TMA 1970 is amended in accordance with paragraphs 42 to 55.
After section 7 insert—
Before section 12AA (and the italic heading before it) insert—
Section 28A (completion of enquiry into personal or trustee return) is amended as follows. In subsection (1), after “9A(1)” insert “or 12ZM”. In the heading, after “return” insert “or NRCGT return”.
Before section 29 insert—
In section 29 (assessment where loss of tax discovered), in subsection (7)(a), omit the “and” following sub-paragraph (i), and after that sub-paragraph insert—.
After section 29 insert—
In section 34 (ordinary time limit of 4 years), after subsection (1) insert—
In section 42 (procedure for making claims), in subsection (11), after “8A,” insert “12ZB”.
In section 59A (payments on account of income tax), omit subsection (7).
After section 59A insert—
Section 59B (payment of income tax and capital gains tax) is amended as follows. In subsection (1)(b), after “59A” insert “or 59AA”. After subsection (2) insert—
In section 107A (relevant trustees), in subsection (2)(b), after “59A” insert “, 59AA”.
In section 118 (interpretation), in subsection (1), at the appropriate place insert—.
Schedule 3ZA (date by which payment to be made after amendment or correction of self-assessment) is amended as follows. In paragraph 1— In paragraph 2— In paragraph 3(1), after “9ZB” insert “or 12ZL” and after “trustee return” insert “or NRCGT return”. In paragraph 5(1)—
In FA 2007, Schedule 24 (penalties for errors) is amended as follows. Capital gains tax Return under section 12ZB of TMA 1970 (NRCGT return). After paragraph 21B insert—
In Schedule 36 to FA 2008 (information and inspection powers), after paragraph 21 insert—
In CTA 2009, in section 2 (charge to corporation tax), in subsection (2A), for the words from “under” to the end substitute under—
2A Capital gains tax NRCGT return under section 12ZB of TMA 1970 That Schedule, as amended by sub-paragraph (1), is taken to have come into force for the purposes of NRCGT returns on the date on which this Act is passed.
The amendments made by this Schedule have effect in relation to disposals made on or after 6 April 2015.
Section 38
After section 316 of FA 2004 insert—
In section 98C of TMA 1970 (notification under Part 7 of FA 2004)—
in subsection (3) for “penalty of the relevant sum” substitute “penalty not exceeding the relevant sum”, and
in subsection (4)—
in paragraph (a) for “£100” substitute “£5,000”,
in paragraph (b) for “£500” substitute “£7,500”, and
in paragraph (c) for “£1,000” substitute “£10,000”.
Section 2C (“relevant high value disposal”) is amended as follows. In subsection (6), in the definition of “the relevant ownership period” for “6 April 2013” substitute “6 April in the relevant year”. In that subsection, after that definition insert—. In subsection (7)(b), for “1 April 2013” substitute “1 April in the relevant year”.
In section 2E (restriction of losses), in subsection (3)—
after “5 April 2013” insert “etc”, and
for “post-April 2013” substitute “post-commencement”.
In section 98C of TMA 1970 (notification under Part 7 of FA 2004), in subsection (2), omit the “and” at the end of paragraph (e) and after paragraph (f) insert , and
In this Part of this Schedule, the following expressions have the same meaning as in Chapter 7 of Part 8 of CTA 2010—
This paragraph applies if, in the absence of this Schedule, a company would under section 335 or 336 of CTA 2010 carry all or part of a pool of field allowances into the accounting period in which 1 April 2015 falls (“the commencement period”). The amount that would be carried into that accounting period is to be treated for the purposes of Chapter 6A of Part 8 of CTA 2010 (inserted by paragraph 2) as an amount of activated investment allowance carried forward to the commencement period under section 332EA of that Act.
Sub-paragraph (2) applies if the Secretary of State has published, on any day (“the day of publication”) in the period beginning with 3 December 2014 and ending with the day before the day on which this Act is passed, a proposal to determine a specified offshore area to be a cluster area for the purposes of Chapter 9 of Part 8 of CTA 2010. The proposal is treated for the purposes of that Chapter— But this sub-paragraph is subject to paragraph 6. If a proposal published as mentioned in sub-paragraph (1) (and not withdrawn before the day on which this Act is passed) assigns an identifying number or other designation to the proposed cluster area, that number or other designation is treated as having been assigned under section 356JD(6). An area is “offshore” for the purposes of this paragraph if the whole of it lies on the seaward side of the baselines from which the territorial sea of the United Kingdom is measured. In this paragraph, references to publication are to publication on a website that is, and indicates that it is, kept by or on behalf of the Secretary of State.
In section 311(1)(a) of FA 2004 (period for allocation of reference number to arrangements) for “30 days” substitute “90 days”.
Section 237 (duty to give conduct notice) is amended as follows. After subsection (1) insert— In subsection (3), for the words from “the” to the end substitute “when a person is treated as meeting a threshold condition”. For subsection (5) substitute— In subsection (7), for “subsection (5)” substitute “subsection (5)(a)”. After subsection (7) insert— In subsection (9), omit “mentioned in subsection (1)(a)”. After subsection (9) insert—
Section 2D (CGT on ATED-related gains: the threshold amount) is amended as follows. In subsection (2) for “£1 million” substitute “£500,000”. In subsection (3) for “£1 million” substitute “£500,000”. In subsection (5) for ““£1 million”” substitute ““£500,000””. The amendments made by this paragraph have effect in relation to disposals occurring on or after 6 April 2016.
In section 283 (interpretation of Part 5), in the definition of “conduct notice”, after “section 237(7)” insert “or (7A)”.
Part 2 of Schedule 34 (meeting the threshold conditions) is amended as follows. In the heading, at the end insert “and partnerships”. For paragraph 13 substitute—
In Schedule 36 (partnerships)—
omit paragraph 4 (threshold conditions: actions of partners in a personal capacity) and the italic heading before it,
omit paragraph 20 (definition of “managing partner”) and the italic heading before it, and
in paragraph 21 (power to amend definitions) omit “or 20”.
Section 39
TCGA 1992 is amended in accordance with this Schedule.
In section 222 (relief on disposal of private residence)—
after subsection (6) insert—;
in subsection (7), for “223” substitute “222A”.
After section 222 insert—
Section 223 (amount of relief) is amended as follows. In subsection (3)— For subsection (7) substitute—
After section 223 insert—
Section 225 (private residence occupied under terms of settlement) is amended as follows. The existing text becomes subsection (1). In that subsection— After that subsection insert—
Section 225A (private residence held by personal representatives) is amended as follows. In subsection (5)— After subsection (6) insert—
In section 225B (disposals in connection with divorce etc), in subsection (4), after “222(5)” insert “or 222A”.
In section 225E (disposals by disabled persons or persons in care homes etc), in subsection (6)(b), after “subsection (5) of that section” insert “or under section 222A”.
The amendments made by this Schedule have effect in relation to disposals made on or after 6 April 2015.
Section 46
CAA 2001 is amended as follows.
Section 47
Section 49
Part 8 of CTA 2010 (oil activities) is amended in accordance with paragraphs 2 and 3.
Section 50
Part 8 of CTA 2010 (oil activities) is amended in accordance with paragraphs 2 to 4.
Section 51
CTA 2010 is amended as follows.
Section 270 (overview of Part) is amended as follows. After subsection (6) insert— Omit subsection (7). After subsection (7A) insert— In subsection (8)—
In section 330 (supplementary charge in respect of ring fence trades), for subsection (5) substitute—
After section 330 insert—
In section 356C (generation of onshore allowance), in subsection (9)(a), for “section 351” substitute “section 356IB”.
Omit section 356DB (companies with both field allowance and onshore allowance).
Before section 356J (but after the heading “Interpretation”) insert—
In section 356JB (definitions for Chapter 8), in the definition of “adjusted ring fence profits”, for the words from “means” to the end substitute “is to be read in accordance with section 330ZA”.
Schedule 4 (index of defined expressions) is amended as follows. Omit the entries for— adjusted ring fence profits (in Chapters 6A, 8 and 9 of Part 8) section 330ZA”; cluster area (in Part 8) section 356JD cluster area allowance (in Chapter 9 of Part 8) section 356JF(2) cumulative total amount of activated allowance (in Chapter 6A of Part 8) section 332E(2) cumulative total amount of activated allowance (in Chapter 9 of Part 8) section 356JG(2) investment allowance (in Chapter 6A of Part 8) section 332C(2) investment expenditure (in Chapter 6A of Part 8) section 332BA investment expenditure (in Chapter 9 of Part 8) section 356JE licence (in Chapter 6A of Part 8) section 332KA licence (in Chapter 9 of Part 8) section 356JNB licensed area (in Chapter 9 of Part 8) section 356JNB licensed sub-area (in Chapter 9 of Part 8) section 356JNA licensee (in Chapter 6A of Part 8) section 332KA licensee (in Chapter 9 of Part 8) section 356JNB qualifying oil field (in Chapter 6A of Part 8) section 332B reference period (in Chapter 6A of Part 8) section 332G reference period (in Chapter 9 of Part 8) section 356JI relevant income (in Chapter 6A of Part 8) section 332F(3) relevant income (in Chapter 9 of Part 8) section 356JH(3)
The amendments made by Part 1 of this Schedule have effect in relation to accounting periods ending on or after 1 April 2015. Sub-paragraph (1) is subject to sub-paragraphs (3) and (4). So far as they relate to cluster area allowance under Chapter 9 of Part 8 of CTA 2010 (as inserted by Schedule 13) the amendments made by Part 1 of this Schedule have effect in relation to expenditure incurred on or after 3 December 2014. So far as they relate to investment allowance under Chapter 6A of Part 8 of CTA 2010 (as inserted by Schedule 12) in respect of oil fields not falling within paragraph 6(1)(a) or (b) of that Schedule, the amendments made by Part 1 of this Schedule have effect subject to paragraphs 7 and 8 of that Schedule.
Section 65
Part 3 of FA 1996 (landfill tax) is amended as follows.
Section 42 (amount of tax charged on a taxable disposal) is amended as follows. In subsection (2), after “qualifying material” insert “or qualifying fines”. After subsection (3) insert— In subsection (4)(a), after “listed” insert “or what fines are to be qualifying fines”. In subsection (6), after “listed,” insert “or what fines are to be qualifying fines,”.
In section 63 (qualifying material: special provisions), after subsection (4) insert—
After section 63 insert—
In section 70(1) (interpretation), at the appropriate place insert—.
In section 71 (orders and regulations), subsection (7) is amended as follows. After paragraph (a) insert—. After paragraph (c) insert—.
Schedule 5 (provision about information etc) is amended as follows. In the heading to Part 1, after “Information” insert “and samples”. After paragraph 2A insert— An authorised person, if it appears to the person necessary for the protection of the revenue against mistake or fraud, may at any time take, from material which the person has reasonable cause to believe is an amount of fines retained under paragraph 2C(1)(a), such samples as the person may require with a view to determining how the fines tested ought to be or to have been treated for the purposes of tax. In paragraph 22 (information)—
The amendments made by this Schedule have effect in relation to disposals that are—
made in England and Wales or Northern Ireland, and
made (or treated as made) on or after 1 April 2015.
Section 98
Chapter 6 of Part 22 of CTA 2010 (collection etc of tax from UK representatives of non-UK resident companies) has effect as if the enactments referred to in section 969(1) of that Act included enactments relating to diverted profits tax so far as they make provision for or in connection with the charging, collection and recovery of diverted profits tax or of interest on that tax. In its application in accordance with sub-paragraph (1), that Chapter has effect subject to the following modifications. In a case where section 86 applies in relation to company, that Chapter applies in relation to the avoided PE in relation to that company as it would apply to a permanent establishment in the United Kingdom through which the company carries on a trade. In section 969(3) of that Act references to “chargeable profits of the company attributable to that establishment” are to be read as references to “taxable diverted profits arising to the company”. In section 971 of that Act references to the giving or service of a notice includes a reference to the issuing of a notice.
Section 117
Section 118
Section 119
Part 5 of FA 2014 (promoters of tax avoidance schemes) is amended as follows.
“VATA 1994” means the Value Added Tax Act 1994, and
For the purposes of sub-paragraph (1), a person (“P”) fails to comply with a provision mentioned in that sub-paragraph if and only if any of conditions A to C are met. Condition A is met if— Condition B is met if— Condition C is met if P has admitted in writing to HMRC that P has failed to comply with the provision concerned. The “appeal period” means—
The amendments made by paragraphs 2 to 7 have effect for the purposes of determining whether a person meets a threshold condition in a period of three years ending on or after the day on which this Act is passed.
A penalty is payable by a person (“P”) where Conditions A, B and C are met. Condition A is that— Condition B is that there is a relevant offshore asset move (see paragraph 4) which occurs after the relevant time (see paragraph 5). Condition C is that—
There is a “relevant offshore asset move” if, at a time when P is the beneficial owner of an asset (“the qualifying time”)— and P remains the beneficial owner of the asset, or any part of it, immediately after the qualifying time. Whether a territory is a “specified territory” or “non-specified territory” is to be determined, for the purposes of sub-paragraph (1), as at the qualifying time. Where— the original asset and the new asset are to be treated as the same asset for the purposes of determining whether there is a relevant offshore asset move. “Asset” has the meaning given in section 21(1) of TCGA 1992, but also includes sterling. “Specified territory” means a territory specified in regulations made by the Treasury by statutory instrument; and references to “non-specified territory” are to be construed accordingly. Regulations under sub-paragraph (5) are subject to annulment in pursuance of a resolution of the House of Commons.
Where a person becomes liable for a penalty under paragraph 1(1), HMRC must— A penalty under paragraph 1(1) must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued. An assessment— An assessment of a penalty under paragraph 1(1) must be made within the same period as that allowed for the assessment of the original penalty. If, after an assessment of a penalty is made under this paragraph, HMRC amends the assessment, or makes a supplementary assessment, in respect of the original penalty, it must also at the same time amend the assessment, or make a supplementary assessment, in respect of the penalty under paragraph 1(1) to ensure that it is based on the correct amount of the original penalty. In this paragraph—
Section 120
Section 121