Most Gracious Sovereign WE, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and to grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Most Gracious Sovereign
Charges, rates etc
Income tax
Income tax is charged for the tax year 2010-11.
For that tax year—
the basic rate is 20%,
the higher rate is 40%, and
the additional rate is 50%.
The amounts specified in the following provisions of ITA 2007 are the same for the tax year 2010-11 as for the tax year 2009-10—
sections 10(5) and 12(3) (basic rate limit and starting rate limit for savings),
sections 43, 45(3)(a) and (b) and 46(3)(a) and (b) (tax reductions for married couples and civil partners), and
sections 36(2), 37(2), 45(4) and 46(4) (adjusted net income limit).
Corporation tax
Corporation tax is charged for the financial year 2011.
For that year the rate of corporation tax is—
26% on profits of companies other than ring fence profits, and
30% on ring fence profits of companies.
In subsection (2) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).
For the financial year 2010 the small profits rate is—
21% on profits of companies other than ring fence profits, and
19% on ring fence profits of companies.
For the purposes of Part 3 of CTA 2010, for that year—
the standard fraction is 7/400ths, and
the ring fence fraction is 11/400ths.
In subsection (1) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).
Capital gains tax
In section 169N(3) of TCGA 1992 (limit on entrepreneurs' relief)—
for “£1 million” (in both places) substitute “ £2 million ”, and
in paragraph (b), after “total of” insert “ so much of ” and insert at the end “ as was subject to reduction under subsection (2) ”.
The amendments made by subsection (1) have effect in relation to qualifying business disposals occurring on or after 6 April 2010.
Capital allowances
In section 51A(5) of CAA 2001 (entitlement to annual investment allowance: maximum allowance), for “£50,000” substitute “ £100,000 ”.
The amendment made by subsection (1) has effect in relation to expenditure incurred on or after the relevant date.
Subsections (4) and (5) apply in relation to a chargeable period (“the actual chargeable period”) which—
begins before the relevant date, and
ends on or after that date.
The maximum allowance under section 51A of CAA 2001 for the actual chargeable period is the sum of each maximum allowance that would be found if—were treated as separate chargeable periods.
the period beginning with the first day of the chargeable period and ending with the day before the relevant date, and
the period beginning with the relevant date and ending with the last day of the chargeable period,
But, so far as concerns expenditure incurred before the relevant date, the maximum allowance under section 51A of that Act for the actual chargeable period is to be calculated as if the amendment made by subsection (1) had not been made.
In this section “the relevant date” means—
for corporation tax purposes, 1 April 2010, and
for income tax purposes, 6 April 2010.
Stamp duty land tax
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The amendment made by subsection (1) has effect in relation to any land transaction of which the effective date is on or after 6 April 2011.
But that amendment does not have effect in relation to any transaction—
effected in pursuance of a contract entered into and substantially performed before 25 March 2010, or
effected in pursuance of a contract entered into before that date and not excluded by subsection (4).
A transaction effected in pursuance of a contract entered into before 25 March 2010 is excluded by this subsection if—
there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 25 March 2010,
the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
on or after that date there is an assignment (or assignation), subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
Inheritance tax
The Table substituted in Schedule 1 to IHTA 1984 by section 155(1)(b) and (4) of FA 2006 (which provides for a rate of nil per cent on such portion of the value concerned as does not exceed £325,000 and a rate of 40 per cent on such portion as exceeds that amount) has effect in relation to chargeable transfers made on or after 6 April 2010.
Accordingly, omit—
in IHTA 1984, the Table substituted in Schedule 1 in relation to chargeable transfers made on or after that date (which provided for a rate of nil per cent on such portion of the value concerned as does not exceed £350,000 and a rate of 40 per cent on such portion as exceeds that amount), and
in FA 2007, section 4 (which substituted it).
Section 8 of IHTA 1984 (indexation) does not have effect by virtue of any difference between the retail prices index for the month of September in 2010, 2011, 2012 or 2013 and the previous September.
Alcohol and tobacco
ALDA 1979 is amended as follows.
In section 5 (rate of duty on spirits), for “£22.64” substitute “ £23.80 ”.
In section 36(1AA)(a) (standard rate of duty on beer), for “£16.47” substitute “ £17.32 ”.
In section 62(1A) (rates of duty on cider)—
in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for “£207.20” substitute “ £217.83 ”,
in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£47.77” substitute “ £54.04 ”, and
in paragraph (c) (rate of duty per hectolitre in any other case), for “£31.83” substitute “ £36.01 ”.
In section 62(1A) (as amended by subsection (4))—
in paragraph (b), for “£54.04” substitute “ £50.22 ”, and
in paragraph (c), for “£36.01” substitute “ £33.46 ”.
For the table in Schedule 1 substitute—.
The amendments made by subsections (2) to (4) and (6) are treated as having come into force on 29 March 2010.
The amendments made by subsection (5) come into force on 30 June 2010.
For the table in Schedule 1 to TPDA 1979 substitute—.
The amendment made by subsection (1) is treated as having come into force at 6 pm on 24 March 2010.
Vehicle excise duty
In paragraph 2(1) of Schedule 1 to VERA 1994 (annual rates of duty: motorcycles)—
in paragraph (c) (motorbicycle which has engine with cylinder capacity exceeding 400cc but not exceeding 600cc), for “£48” substitute “ £50 ”, and
in paragraph (d) (motorcycle not within any of paragraphs (a) to (c)), for “£66” substitute “ £70 ”.
The amendments made by subsection (1) have effect in relation to licences taken out on or after 1 April 2010.
Fuel duties
HODA 1979 is amended as follows.
In section 6(1A) (main rates)—
in paragraph (a) (unleaded petrol), for “£0.5619” substitute “ £0.5719 ”,
in paragraph (aa) (aviation gasoline), for “£0.3457” substitute “ £0.3835 ”,
in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.6591” substitute “ £0.6691 ”, and
in paragraph (c) (heavy oil), for “£0.5619” substitute “ £0.5719 ”.
In section 6AA(3) (rate of duty on biodiesel), for “shall be £0.3619 a litre” substitute “ is the same as that in the case of heavy oil ”.
In section 6AB (rate of duty on bioblend)—
in subsection (3), for the words after “is the” substitute “ same as that in the case of heavy oil. ”, and
omit subsections (4) and (5).
In section 6AD(3) (rate of duty on bioethanol), for “shall be £0.3619 a litre.” substitute “ is the same as that in the case of unleaded petrol. ”
In section 6AE (rate of duty on blends of bioethanol and hydrocarbon oil)—
in subsection (3), for the words after “bioethanol blend” substitute “ is the same as that in the case of unleaded petrol. ”, and
omit subsections (4) and (5).
In section 8(3) (road fuel gas)—
in paragraph (a) (natural road fuel gas), for “£0.2216” substitute “ £0.2360 ”, and
in paragraph (b) (other road fuel gas), for “£0.2767” substitute “ £0.3053 ”.
In section 11(1) (rebate on heavy oil)—
in paragraph (a) (fuel oil), for “£0.1037” substitute “ £0.1055 ”, and
in paragraph (b) (gas oil), for “£0.1080” substitute “ £0.1099 ”.
In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1037” substitute “ £0.1055 ”.
In section 14A(2) (rebate on certain biodiesel), for “£0.1080” substitute “ £0.1099 ”.
The following are revoked—
the Hydrocarbon Oil Duties (Hydrogenation of Biomass) (Reliefs) Regulations 2006 (S.I. 2006/3426),
the Hydrocarbon Oil Duties (Sulphur-free Diesel) (Hydrogenation of Biomass) (Reliefs) (Amendment) Regulations 2007 (S.I. 2007/2406), and
regulation 11 of the Hydrocarbon Oil, Biofuels and Other Fuel Substitutes (Determination of Composition of a Substance and Miscellaneous Amendments) Regulations 2008 (S.I. 2008/753).
The amendments made by this section are treated as having come into force on 1 April 2010.
HODA 1979 is amended as follows.
In section 6(1A) (main rates)—
in paragraph (a) (unleaded petrol)—
on 1 October 2010, for “£0.5719” substitute “ £0.5819 ”, and
on 1 January 2011, for “£0.5819” substitute “ £0.5895 ”,
in paragraph (b) (light oil other than unleaded petrol or aviation gasoline)—
on 1 October 2010, for “£0.6691” substitute “ £0.6791 ”, and
on 1 January 2011, for “£0.6791” substitute “ £0.6867 ”, and
in paragraph (c) (heavy oil)—
on 1 October 2010, for “£0.5719” substitute “ £0.5819 ”, and
on 1 January 2011, for “£0.5819” substitute “ £0.5895 ”.
In section 8(3) (road fuel gas)—
in paragraph (a) (natural road fuel gas)—
on 1 October 2010, for “£0.2360” substitute “ £0.2505 ”, and
on 1 January 2011, for “£0.2505” substitute “ £0.2615 ”, and
in paragraph (b) (other road fuel gas)—
on 1 October 2010, for “£0.3053” substitute “ £0.3195 ”, and
on 1 January 2011, for “£0.3195” substitute “ £0.3304 ”.
In section 11(1) (rebate on heavy oil)—
in paragraph (a) (fuel oil)—
on 1 October 2010, for “£0.1055” substitute “ £0.1074 ”, and
on 1 January 2011, for “£0.1074” substitute “ £0.1088 ”, and
in paragraph (b) (gas oil)—
on 1 October 2010, for “£0.1099” substitute “ £0.1118 ”, and
on 1 January 2011, for “£0.1118” substitute “ £0.1133 ”.
In section 14(1) (rebate on light oil for use as furnace fuel)
on 1 October 2010, for “£0.1055” substitute “ £0.1074 ”, and
on 1 January 2011, for “£0.1074” substitute “ £0.1088 ”.
In section 14A(2) (rebate on certain biodiesel)—
on 1 October 2010, for “£0.1099” substitute “ £0.1118 ”, and
on 1 January 2011, for “£0.1118” substitute “ £0.1133 ”.
Other environmental taxes
In section 30 of FA 1994 (air passenger duty: rates)—
in subsection (2) (journeys ending in UK or Part 1 territory), for “£11” substitute “ £12 ” and for “£22” substitute “ £24 ”,
in subsection (3) (journeys ending in Part 2 territory), for “£45” substitute “ £60 ” and for “£90” substitute “ £120 ”,
in subsection (4) (journeys ending in Part 3 territory), for “£50” substitute “ £75 ” and for “£100” substitute “ £150 ”, and
in subsection (4A) (other journeys), for “£55” substitute “ £85 ” and for “£110” substitute “ £170 ”.
The amendments made by subsection (1) have effect in relation to the carriage of passengers beginning on or after 1 November 2010.
The amendments made by subsection (1) have effect in relation to disposals made (or treated as made) on or after 1 April 2011.
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In Schedule 6 to FA 2000 (climate change levy), for the table in paragraph 42(1) substitute—.
The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2011.
In Schedule 6 to FA 2000 (climate change levy), in paragraph 42(1)(c) (reduced-rate supplies), for “20 per cent.” substitute “ 35 per cent. ”.
The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2011.
Gambling
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In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—.
The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 1 April 2010.
In section 23(2) of BGDA 1981 (amount of duty payable on amusement machine licence), for the table substitute—.
The amendment made by subsection (1) has effect in relation to cases where the application for the amusement machine licence is received by the Commissioners for Her Majesty's Revenue and Customs after 4 pm on 26 March 2010.
New taxes
Schedule 1 contains provision for and in connection with bank payroll tax.
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Anti-avoidance and revenue protection
Losses, capital allowances etc
Schedule 3 contains provision about sideways relief etc.
Chapter 4 of Part 4 of ITA 2007 (losses from property businesses) is amended as follows.
In section 117 (overview of Chapter), after subsection (2) insert—
In section 120 (deduction of property losses from general income), after subsection (6) insert—
After section 127 insert—
The amendments made by this section have effect in relation to a loss if it arises directly or indirectly in consequence of, or otherwise in connection with—
arrangements which are entered into on or after 24 March 2010, or
any transaction forming part of arrangements which is entered into on or after that date.
But those amendments do not have effect where the arrangements are, or any such transaction is, entered into pursuant to an unconditional obligation in a contract made before that date.
“An unconditional obligation” means an obligation which may not be varied or extinguished by the exercise of a right (whether or not under the contract).
Schedule 4 contains provisions about capital allowance buying.
Schedule 5 contains provisions about leased assets.
Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.
Section 70J (meaning of “funding lease”) is amended as follows.
After subsection (1) insert—
In subsection (2), for “Subsection (1) is” substitute “ Subsections (1) and (1A) are ”.
After subsection (6) insert—
In section 104A(1) (special rate expenditure)—
omit the “and” at the end of paragraph (d), and
after paragraph (e) insert
After section 104F insert—
The amendments made by subsections (2) to (5) have effect in relation to leases whose inception (within the meaning given by section 70YI(1) of CAA 2001) is on or after 1 April 2010.
The amendments made by subsection (6) have effect in relation to expenditure incurred on or after 1 April 2010.
The amendment made by subsection (7) has effect in relation to disposal events on or after 1 April 2010.
Chapters 3 and 4 of Part 9 of CTA 2010 (sales of lessors) are amended as follows.
In section 393(7) (qualifying 75% subsidiaries), omit “or 90%”.
In section 394 (consortium relationships)—
in subsections (1)(b), (4) and (5)(b), for “90%” substitute “ 75% ”, and
in subsection (9)(b), omit “or 90%”.
In section 398 (qualifying 75% or 90% subsidiary), omit—and, in the heading, omit “or 90%”.
subsections (5) and (6), and
in subsection (7)(b), “and “90% subsidiary””,
In section 405(2)(b) and (6) (adjustments to basic amount), for “90%” substitute “ 75% ”.
In sections 408(5)(b) and 430(4)(b) (associated company), for “90%” substitute “ 75% ”.
In Schedule 4 to CTA 2010, omit the entry relating to “qualifying 90% subsidiary (in Chapters 3 to 6 of Part 9)”.
The amendments made by this section have effect where the relevant day is on or after 9 December 2009.
Corresponding amendments, having effect where the relevant day is on or after that date, are to be treated as having been made in Schedule 10 to FA 2006.
Charities etc
Schedule 6 contains provision about the meaning of “charity” (and related expressions) and “community amateur sports club”.
Schedule 7 contains provision about schemes to obtain or increase relief in respect of certain gifts to charities.
Schedule 8 contains miscellaneous amendments of provisions relating to charities.
Remittance basis
Section 809M of ITA 2007 (remittance basis: meaning of “relevant person”) is amended as follows.
In subsection (2)(f), insert at the end “ or a company which is a 51% subsidiary of such a company, ”.
In subsection (3)(ca), for “Act),” substitute “ Act) and, in relation to a company that would be a close company if it were resident in the United Kingdom, means a person who would be such a participator if it were a close company, ”.
The amendments made by this section are treated as having come into force on 6 April 2010.
Schedule 9 contains provision about foreign currency bank accounts.
Other international matters
Schedule 10 contains provision about penalties in respect of offshore income etc.
Schedule 10 comes into force on such day as the Treasury may by order appoint.
An order under subsection (2)—
may make different provision for different purposes, and
may include transitional provisions and savings.
The Treasury may by order make any incidental, supplemental, consequential, transitional or transitory provision or saving that appears appropriate in consequence of, or otherwise in connection with, Schedule 10.
An order under subsection (4) may—
make different provision for different purposes, and
make provision amending, repealing or revoking an enactment or instrument (whenever passed or made).
An order under this section is to be made by statutory instrument.
A statutory instrument containing an order under subsection (4) is subject to annulment in pursuance of a resolution of the House of Commons.
Schedule 11 contains provision about activities designed to increase the amount allowed by way of credit or reduction in respect of foreign tax.
In section 140 of TCGA 1992 (postponement of charge on transfer of assets to non-resident company)—
in subsection (4), for “the consideration received by it on the disposal shall be treated as increased by” substitute “ there shall be deemed to accrue to the transferor company as a chargeable gain on that occasion ”, and
after that subsection insert—
In Schedule 7AC to that Act (exemption for disposals by companies with substantial shareholding), omit paragraph 35 (recovery of charge postponed on transfer of asset to non-resident company).
The amendments made by this section have effect in relation to disposals of securities on or after 6 January 2010.
Securities etc
Schedule 12 contains provision about transactions in securities.
In Part 4 of Schedule 4 to ITEPA 2003 (shares to which approved CSOP schemes can apply), omit paragraph 17(1)(c) (shares in a company which is under the control of a listed company).
Accordingly, in that Schedule—
in paragraph 17—
after sub-paragraph (1)(a) insert “ or ”,
omit “or” at the end of sub-paragraph (1)(b), and
omit sub-paragraph (2), and
omit paragraph 20(3)(c) (and the “or” before it).
The amendments made by this section—
come into force on 24 September 2010, and
have effect in relation to options granted on or after that day.
If—the share option is to be treated for the purposes of the CSOP code as not having been granted in accordance with the provisions of an approved CSOP scheme.
during the period beginning with 24 March 2010 and ending with 23 September 2010 (“the transitional period”), a share option is granted to an individual in accordance with the provisions of an approved CSOP scheme, and
the shares which may be acquired by the exercise of the option are shares in a company which is under the control of a listed company, other than shares of a class listed on a recognised stock exchange,
An alteration made to a scheme during the transitional period in order to meet the amended paragraph 17 requirement is to be regarded as an alteration made in a key feature of the scheme for the purposes of paragraph 30 of Schedule 4 to ITEPA 2003 (withdrawal of approval).
Where the amended paragraph 17 requirement is not met in respect of an approved CSOP scheme at the end of the transitional period, the requirement is to be treated for the purposes of paragraph 30(2)(a) of that Schedule (disqualifying events) as ceasing to be met immediately after that time.
Where, by virtue of subsection (6), approval is withdrawn from a scheme under Part 7 of that Schedule, that withdrawal has effect (from the time determined in accordance with paragraph 30(1) of that Schedule) in relation to options granted on or after 24 September 2010 only.
In subsections (3) to (7) references to options having been granted include new share options granted under the terms of a provision included in a scheme under paragraph 26 of Schedule 4 to ITEPA 2003 (exchange of shares on company reorganisation); but paragraph 27(5) of that Schedule (new share options treated as granted at same time as old share options) does not apply for the purposes of those subsections.
In this section—“the amended paragraph 17 requirement” means the requirement of paragraph 17 of Schedule 4 to ITEPA 2003 as amended by this section;“approved” and “CSOP scheme” have the meaning given by section 521 of that Act;“control” and “listed company” have the same meaning as in paragraph 17 of Schedule 4 to that Act.
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Schedule 14 contains provision about index-linked gilt-edged securities.
Paragraph 84(1) of Schedule 2 to ITEPA 2003 (approved share incentive plans) is amended as follows.
For paragraph (d) substitute—.
In paragraph (e), for “have been awarded to participants” substitute “ are subject to the plan trust ”.
Section 989 of CTA 2009 (deduction for contribution to plan trust) is amended as follows.
In subsection (1), after paragraph (a) insert—.
After subsection (6) insert—
The amendments made by subsections (1) to (3) have effect in relation to events taking place on or after 24 March 2010.
The amendments made by subsections (4) to (6) have effect in relation to payments made on or after that day.
Loan relationships and derivative contracts
In CTA 2009, after section 321 insert—
The amendment made by subsection (1) has effect in relation to debts (or parts of debts) released or written off on or after 24 March 2010.
Schedule 15 contains provision about releases of debts in cases involving connected companies.
In paragraph 4 of Schedule 13 to FA 2007 (ignoring effect on borrower of sale of securities), in sub-paragraph (4) omit the “and” at the end of paragraph (a) and after that paragraph insert—.
In section 550 of CTA 2009 (ignoring effect on borrower of sale of securities)—
in subsection (4), for “and (6)” substitute “ to (6) ”, and
after subsection (5) insert—
The amendments made by this section are treated as always having had effect.
Schedule 16 contains provision about risk transfer schemes.
Insurance companies
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Pensions
Schedule 35 to FA 2009 (special annual allowance charge) is amended as follows.
In paragraph 1(2) (high-income individual)—
in the first sentence, for “£150,000” substitute “ £130,000 ”, and
insert at the end—
In paragraph 2 (calculation of relevant income)—for “£150,000” substitute “ £130,000 ”.
in the last sentence of sub-paragraph (1),
in sub-paragraph (2) (in each place), and
in sub-paragraph (3) (in both places),
After sub-paragraph (5) of that paragraph insert—
In paragraph 11(3)(b), after “22 April” insert “ 2009 ”.
After paragraph 16 insert—
The amendments made by this section have effect for the tax year 2009-10 and subsequent tax years (but see paragraph 21(2) of Schedule 35 to FA 2009).
In section 251(5) of FA 2004 (persons who can be required to provide information to scheme administrators etc), after paragraph (a) insert—.
Value added tax and insurance premium tax
In section 55A of VATA 1994 (customers to account for tax on supplies of goods of a kind used in missing trader intra-community fraud), after “goods” (in each place, including the heading) insert “ or services ”.
In paragraph 2(3B) of Schedule 11 to that Act (power to require notifications relating to supplies to which section 55A(6) applies), after “goods” insert “ or services ”.
Part 3 of FA 1994 (insurance premium tax) is amended as follows.
Section 72 (meaning of “premium”) is amended as follows.
After subsection (1A) insert—
After subsection (9) insert—
In section 74(4) and (6) (orders which need to be approved by House of Commons), for “or 71” substitute “ , 71 or 72 ”.
The amendment made by subsection (3) has effect in relation to payments made on or after 24 March 2010.
Inheritance tax
In IHTA 1984, after section 81 insert—
The amendment made by subsection (1) has effect in relation to reversionary interests to which a relevant reversioner becomes beneficially entitled on or after 9 December 2009.
IHTA 1984 is amended as follows.
In section 3A (potentially exempt transfers)—
in subsection (6), omit “other than section 52”, and
after that subsection insert—
In section 5 (meaning of estate)—
in subsection (1)(a)(ii), after “below” insert “ unless it falls within subsection (1B) below ”, and
after subsection (1A) insert—
In—insert at the end (not as part of paragraph (c))—
section 49(1A) (treatment of interests in possession),
section 51(1A) (disposal of interest in possession), and
section 52(2A) and (3A) (charge on termination of interest in possession),
In section 57A(1A) (relief where property enters maintenance fund), insert at the end (not as part of paragraph (c))—
In section 100(1A) (alterations of capital etc where participators are trustees), insert at the end (not as part of paragraph (c))—
In section 101(1A) (companies' interests in settled property), insert at the end (not as part of paragraph (b))—
In section 102ZA(1)(b)(ii) of FA 1986 (gifts with reservation: termination of interests in possession), after “serial interest” insert “ or falls within section 5(1B) of the 1984 Act ”.
In F(No.2)A 1987, omit section 96(2)(c).
The amendments made by this section have effect in relation to an interest in possession to which a person is beneficially entitled if the person becomes beneficially entitled to it on or after 9 December 2009.
Stamp taxes
Part 4 of FA 1986 (stamp duty reserve tax) is amended as follows.
In section 95(1) (depositary receipts: exceptions), before “there shall be” insert “ subject to section 97C, ”.
In section 97(1) (clearance services: exceptions), before “there shall be” insert “ subject to section 97C, ”.
In section 97B (transfer between depositary receipt system and clearance system), after subsection (1) insert—
After that section insert—
The amendments made by this section have effect in relation to transfers of chargeable securities on or after 1 October 2009.
In section 75C of FA 2003 (SDLT anti-avoidance: supplemental)—
in subsection (8), omit paragraph (b) (and the “and” before it), and
after that subsection insert—
The amendments made by subsection (1) have effect in relation to any notional transaction of which the effective date is on or after 24 March 2010.
But those amendments do not have effect in relation to a notional transaction if any scheme transaction is—
completed before that date,
effected in pursuance of a contract entered into and substantially performed before that date, or
effected in pursuance of a contract entered into before that date and not excluded by subsection (4).
A scheme transaction effected in pursuance of a contract entered into before 24 March 2010 is excluded by this subsection if—
there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 24 March 2010,
the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
it is a land transaction and on or after that date there is an assignment (or assignation), subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
Administration
Schedule 17 contains amendments of the provisions relating to the disclosure of tax avoidance schemes.
Section 106 of the Postal Services Act 2000 (power to detain postal packets containing contraband) is amended as follows.
In subsection (4), for paragraphs (a) and (b) substitute “ in the presence of a representative of the postal operator ”.
Omit subsection (5).
In subsection (7)(b), omit “if he is absent”.
Other provisions
Income tax: benefits in kind
Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans and related benefits) is amended as follows.
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Omit subsection (5A).
Section 140 (cars first registered in 1998 or later without emissions figure) is amended as follows.
In subsection (3), for the words after “year is” substitute—
After that subsection insert—
Omit subsection (4).
In section 149(4) (car fuel benefit), for “for an electrically propelled vehicle” substitute “ or any energy for a car which cannot in any circumstances emit CO 2 by being driven. ”
In section 155 (vans), for subsections (1) to (3) substitute—
In—for “155(2)(a) or (b)” substitute “ 155(1) ”.
section 156(1) (reduction for periods when van unavailable), and
section 158(1) (reduction for payments for private use),
In section 160 (van fuel benefit)—
in subsection (1), for “155(2)(b)” substitute “ 155(1)(b) ”, and
omit subsection (4).
In section 170(1A) (power to amend section 155(2)(a) and (3)(b))—
in paragraph (a), for “155(2)(a)” substitute “ 155(1)(a) ” and after “employee” insert “ or a zero-emission van ”, and
in paragraph (b), for “155(3)(b)” substitute “ 155(1)(b) ”.
In FA 2006, in section 59, omit subsection (7).
In FA 2009, in Schedule 28, omit paragraph 7.
The amendments made by subsections (2) to (16) have effect for the tax year 2010-11 and subsequent tax years.
The amendment made by subsection (17) is treated as always having had effect.
The amendment of section 142 of ITEPA 2003 made by paragraph 8 of Schedule 28 to FA 2009 has effect for the tax year 2010-11 (as well as for the tax year 2011-12 and subsequent tax years).
Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans and related benefits) is further amended as follows.
For section 139 substitute—
In section 170 (Treasury orders and regulations varying various amounts)—
omit subsection (2A) (power to vary limit in section 139(3A)), and
in subsection (3)—
for “ “lower” substitute “ “ relevant ”,
for “the Table in section 139(4)” substitute “ section 139(5) ”, and
for “2006” substitute “ 2013 ”.
In consequence of the amendments made by subsections (2) and (3), omit—
in FA 2006, section 59,
in FA 2009, in Schedule 28, paragraphs 6, 9 and 10(1), and
The amendments made by this section have effect for the tax year 2012-13 and subsequent tax years.
Section 317 of ITEPA 2003 (exemption from income tax in respect of provision for employees by employer of free or subsidised meals) is amended as follows.
In subsection (1), for “C” substitute “ D ”.
After subsection (4) insert—
After subsection (5) insert—
The amendments made by this section have effect for the tax year 2011-12 and subsequent tax years.
Corporation tax
Schedule 18 contains provision amending Chapter 3 of Part 9 of CTA 2010 (and corresponding earlier provision) to introduce a system for electing out of the charge on a qualifying change.
Schedule 19 contains provision conferring powers on the Treasury to make regulations about cases where, in consequence of a change in accounting standards in relation to loan relationships or derivative contracts, there is a change in the way in which a company is permitted or required for accounting purposes to recognise amounts.
Miscellaneous
Schedule 20 contains provision exempting certain persons from income tax in respect of certain income arising in connection with the 2011 Champions League final.
The Treasury may by regulations make provision for and in connection with the application of the relevant taxes in relation to circumstances in which there is relevant intervention under the FSCS.
“Relevant intervention” means—
anything done under, or while seeking to make, arrangements for securing continuity of insurance in connection with protected contracts of insurance,
anything done as part of measures for safeguarding policyholders in connection with protected contracts of insurance, or
the payment of compensation in connection with protected contracts of insurance.
In this section—“the FSCS” means the Financial Services Compensation Scheme (established under Part 15 of FISMA 2000);“protected contracts of insurance” has the same meaning as in the PRA Handbook made by the Prudential Regulation Authority under that Act as it has effect from time to time.
The provision that may be made by regulations under this section includes provision imposing any of the relevant taxes (as well as provisions for exemptions or reliefs).
The relevant taxes are—
income tax,
capital gains tax,
corporation tax,
inheritance tax,
stamp duty land tax,
stamp duty,
stamp duty reserve tax, and
insurance premium tax.
Regulations under this section may include provision having effect in relation to any time before they are made if the provision does not increase any person's liability to tax.
The provision made by regulations under this section may be framed as provision modifying, or applying with appropriate modifications, provisions having effect in relation to protected contracts of insurance.
Regulations under this section may, in particular—
amend, repeal or revoke or otherwise modify any enactment or instrument (whenever passed or made),
make different provision for different cases or otherwise for different purposes, and
make incidental, consequential, supplementary or transitional provision.
Regulations under this section are to be made by statutory instrument.
A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.
In sections 116(1)(b) and 117(1)(b) of FA 1991 (investment exchanges and clearing houses: stamp duty and SDRT), for the words after “description) of such an exchange” substitute “ or clearing house, or a nominee (or nominee of a prescribed description) of a member of such an exchange or clearing house, and ”.
The amendments made by subsection (1) are treated as always having had effect.
In section 1 of ALDA 1979 (dutiable alcoholic liquors), after subsection (6) insert—
In paragraph 42 of Schedule 6 to FA 2000 (amount payable by way of levy), after sub-paragraph (2) insert—
Section 280(2) of FA 2004 (Part 4: index) is amended as follows.
After the definition of “active membership period (in sections 221 to 223)” insert—
In the definition of “basic rate limit”, for “20(2)” substitute “ 10 ”.
After the entry relating to “higher rate” insert—
The amendments made by subsections (2) and (4) have effect for the tax year 2010-11 and subsequent tax years.
The amendment made by subsection (3) has effect for the tax year 2008-09 and subsequent tax years.
Final provisions
In this Act—“ALDA 1979” means the Alcoholic Liquor Duties Act 1979;“BGDA 1981” means the Betting and Gaming Duties Act 1981;“CAA 2001” means the Capital Allowances Act 2001;“CTA 2009” means the Corporation Tax Act 2009;“CTA 2010” means the Corporation Tax Act 2010;“FISMA 2000” means the Financial Services and Markets Act 2000;“HODA 1979” means the Hydrocarbon Oil Duties Act 1979;“ICTA” means the Income and Corporation Taxes Act 1988;“IHTA 1984” means the Inheritance Tax Act 1984;“ITA 2007” means the Income Tax Act 2007;“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;“TCGA 1992” means the Taxation of Chargeable Gains Act 1992;“TIOPA 2010” means the Taxation (International and Other Provisions) Act 2010;“TMA 1970” means the Taxes Management Act 1970;“TPDA 1979” means the Tobacco Products Duty Act 1979;“VATA 1994” means the Value Added Tax Act 1994;“VERA 1994” means the Vehicle Excise and Registration Act 1994.
In this Act—“FA”, followed by a year, means the Finance Act of that year;“F(No.2)A”, followed by a year, means the Finance (No.2) Act of that year.
This Act may be cited as the Finance Act 2010.
Bank payroll tax
The tax
The tax
This Schedule makes provision for taxable companies to be charged to a tax to be known as “bank payroll tax”.
Bank payroll tax is chargeable on the aggregate of the amounts of chargeable relevant remuneration awarded during the chargeable period to or in respect of relevant banking employees of a taxable company by reason of their employment as relevant banking employees.
Relevant remuneration awarded during the chargeable period to or in respect of a relevant banking employee of a taxable company by reason of the employee's employment as a relevant banking employee is “chargeable” relevant remuneration only if and to the extent that its amount exceeds £25,000.
Rate
Bank payroll tax is charged at the rate of 50%.
“Taxable company”
“Taxable company” means a company which—
is a UK resident bank or a relevant foreign bank,
is a company not within paragraph (a) which is a member of a banking group and—
is a UK resident investment company or a UK resident financial trading company, or
is a relevant foreign financial trading company, or
is a building society or is a UK resident investment company, or a UK resident financial trading company, which is a member of the same group as a building society.
“Relevant remuneration”
“Relevant remuneration”, in relation to a relevant banking employee of a taxable company, means anything that—
constitutes earnings (within the meaning of section 62 of ITEPA 2003) in relation to the employee's employment by the taxable company as a relevant banking employee, or
while not constituting earnings, constitutes a benefit provided by reason of that employment.
Whether or not the relevant banking employee is chargeable to income tax in respect of anything is irrelevant in determining whether or not it is relevant remuneration.
Excluded remuneration is not relevant remuneration.
“Excluded remuneration”
“Excluded remuneration” means—
anything which is regular salary or wages or a regular benefit,
anything in the case of which a contractual obligation to pay or provide it to or in respect of the employee concerned arose before the beginning of the chargeable period,
any shares awarded under an approved share incentive plan (within the meaning of section 488 of ITEPA 2003), or
any share option granted under an approved SAYE option scheme (within the meaning of section 516 of that Act).
In sub-paragraph (1)(a) “regular”, in relation to salary or wages or a benefit, means so much of the amount of the salary or wages or benefit as cannot vary according to—
the performance of, or of any part of—
any business of the taxable company concerned, or
any business of a person connected with the taxable company,
the contribution made by the employee concerned to the performance of, or of any part of, any business within paragraph (a)(i) or (ii),
the performance by the employee of any of the duties of the employment, or
any similar considerations.
For the purposes of sub-paragraph (1)(b) a contractual obligation to pay or provide something to or in respect of the employee does not arise until—
the amount to be paid or provided is fixed or is capable of becoming fixed without the exercise of discretion by any person, or
the total amount of things to be paid or provided to or in respect of a number of employees including the employee is fixed or is capable of becoming fixed without the exercise of discretion by any person.
A contractual obligation to pay or provide something is taken to arise for those purposes even if payment or provision of it is dependent on compliance by the employee with any conditions.
“Awarded”
Relevant remuneration is “awarded” during the chargeable period if—but subject to sub-paragraph (3).
a contractual obligation to pay or provide it arises during the chargeable period, or
the relevant remuneration is paid or provided during the chargeable period without any such obligation having arisen during the chargeable period,
Sub-paragraph (3)(a) of paragraph 5 applies for the purposes of sub-paragraph (1) as for the purposes of sub-paragraph (1)(b) of that paragraph.
Relevant remuneration is not to be taken to be awarded during the chargeable period by virtue of sub-paragraph (1)(a) if—
it is required to be paid or provided at intervals,
it is to be paid or provided in respect of contribution, performance or similar considerations only for times after the end of the chargeable period, and
the reduction or elimination of a liability to bank payroll tax is not the main purpose or one of the main purposes of any person in assuming the obligation to pay or provide it.
Sub-paragraph (4) of paragraph 5 applies for the purposes of this paragraph as for the purposes of sub-paragraph (1)(b) of that paragraph.
“Amount” of remuneration
Subject to sub-paragraphs (2) to (4), the amount of any relevant remuneration is—
if it is money, its amount when awarded,
if it is money's worth, the amount of the money's worth when awarded, or
if it is a benefit not constituting earnings, the cost of providing it.
Where relevant remuneration is awarded to or in respect of an employee by virtue of paragraph 6(1)(a) and its amount is not fixed when it is awarded, its amount is such as it is reasonable at that time to assume would be its amount (in accordance with sub-paragraph (1)) if and when paid or provided.
Where the market value of any relevant remuneration at the time it is awarded exceeds, or would exceed, what would otherwise be its amount, its amount is that market value.
Where anything constituting relevant remuneration is or would be, when awarded, subject to any restriction or restrictions, the restriction is, or restrictions are, to be ignored in arriving at its amount.
For this purpose “restriction” means any condition, restriction or other similar provision which causes the value of the relevant remuneration to be less than it otherwise would be.
“The chargeable period”
“The chargeable period” is the period—
beginning at 12.30 pm on 9 December 2009, and
ending with 5 April 2010.
“Relevant banking employee”
An employee of a taxable company is a relevant banking employee of the taxable company if—
the employment in which the employee is employed by the taxable company is a banking employment, and
either—
the employee is resident in the United Kingdom in the tax year 2009-10, or
the duties of the banking employment are at any time in that tax year performed wholly or partly in the United Kingdom.
“Banking employment” means an employment the duties of which are wholly or mainly concerned (whether directly or indirectly) with activities to which sub-paragraph (3) applies.
This sub-paragraph applies to activities which are—
listed regulated activities, or
activities which are not listed regulated activities but consist of the lending of money or of dealing in currency or commodities as principal.
“Listed regulated activity” means an activity which is a regulated activity for the purposes of FISMA 2000 by virtue of any of the following provisions of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544)—
article 5 (accepting deposits),
article 14 (dealing in investments as principal),
article 21 (dealing in investments as agent),
article 25 (arranging deals in investments),
article 40 (safeguarding and administering investments),
article 53 (advising on investments), and
article 61 (entering into regulated mortgage contracts).
But an activity is not a listed regulated activity in relation to an employee of a taxable company if—
the taxable company is an insurance company, or a member of the same group as an insurance company, and the activity is carried on wholly on behalf of the insurance company, or
it—
is either of the activities described in the provisions mentioned in sub-paragraph (4)(c) and (d), and
is carried on as part of, or wholly in support of, activities of the taxable company, or of a company which is a member of the same group as the taxable company, and the activities consist of acting as discretionary investment manager for clients none of which is a linked entity.
An employee of a taxable company who spends no more than 60 days in the United Kingdom in the tax year 2009-10 is to be treated as not being a relevant banking employee of the taxable company.
In determining for the purposes of sub-paragraph (6) whether an individual spends no more than 60 days in the United Kingdom treat a day as a day spent by the individual in the United Kingdom if (and only if) the individual is present in the United Kingdom at the end of the day.
But in determining that issue for those purposes do not treat as a day spent by the individual in the United Kingdom any day on which the individual arrives in the United Kingdom as a passenger if—
the individual departs from the United Kingdom on the next day, and
during the time between arrival and departure the individual does not engage in activities which are to a substantial extent unrelated to the individual's passage through the United Kingdom.
Multiple employments
The threshold of £25,000 in paragraph 1(3) applies whether or not an employee has more than one employment as a relevant banking employee with a taxable company.
If relevant remuneration is awarded during the chargeable period to or in respect of a relevant banking employee by reason of the employee's employment as such by a number of associated taxable companies, the threshold in paragraph 1(3) in relation to each of the taxable companies is £25,000 divided by the number of the taxable companies.
For this purpose taxable companies are associated if—
one of them is under the control of the other, or
one of them is under the control of a third person who controls or is under the control of the other.
Payments etc to intermediaries
This paragraph applies where—
an individual personally performs banking services for a taxable company,
the banking services are provided not under a contract directly between the individual and the taxable company but under arrangements involving any other person (“the intermediary”), and
the circumstances are such that, if the banking services were provided under a contract directly between the taxable company and the individual, the individual would be a relevant banking employee of the taxable company.
The individual is to be regarded as a relevant banking employee of the taxable company.
Anything done by the intermediary in relation to the individual which, if the banking services were provided under a contract directly between the taxable company and the individual, would be regarded as the award of relevant remuneration during the chargeable period to or in respect of the individual (as a relevant banking employee) by reason of the employee's employment as a relevant banking employee is to be so regarded.
“Banking services” means services which are wholly or mainly concerned (whether directly or indirectly) with activities which are activities to which paragraph 9(3) applies.
Arrangements for future payments etc
This paragraph applies where—
arrangements are made during the chargeable period by reason of an employee's employment as a relevant banking employee of a taxable company,
the arrangements make provision under which money may be paid, or any money's worth or other benefit provided, to or in respect of the employee in accordance with the arrangements, and
were the money so paid, or the money's worth or other benefit so provided, during the chargeable period, it would be relevant remuneration awarded to or in respect of the employee during the chargeable period.
The making of the arrangements is to be regarded as the awarding of relevant remuneration to or in respect of the relevant banking employee by reason of the employment; and the amount of the relevant remuneration is to regarded as the amount of any money which it is reasonable to assume will be paid, and any money's worth or other benefit which it is reasonable to assume will be provided, as mentioned in sub-paragraph (1).
Loans
This paragraph applies where—
at any time during the chargeable period a relevant loan is provided to or in respect of a relevant banking employee of a taxable company by reason of the employee's employment as a relevant banking employee otherwise than pursuant to a contractual obligation arising before the chargeable period, or
at any time during the chargeable period there arises a contractual obligation to provide a relevant loan to or in respect of the employee by reason of the employee's employment as a relevant banking employee of the taxable company.
A loan is a “relevant” loan if the main purpose, or one of the main purposes, of providing it, or undertaking to provide it, is the reduction or elimination of a liability to bank payroll tax or any other tax or national insurance contributions.
The loan is to be regarded as relevant remuneration awarded during the chargeable period to or in respect of the relevant banking employee by reason of the employee's employment as a relevant banking employee; and the amount of the relevant remuneration is to be regarded as the amount which is loaned or (where the amount of the loan is not fixed) the amount which it is reasonable to assume will be loaned.
A contractual obligation to provide a relevant loan is taken to arise for the purposes of this paragraph even if provision of it is dependent on compliance by the relevant banking employee with any conditions.
Anti-avoidance
This paragraph applies where—
relevant arrangements are entered into by one or more persons during the chargeable period, and
the main purpose, or one of the main purposes, of the person, or any of the persons, in entering into the relevant arrangements is a relevant tax avoidance purpose.
“Relevant arrangements” means arrangements involving either or both of the following—
the making of a payment of money, or the provision of any money's worth or other benefit, otherwise than during the chargeable period, and
the giving otherwise than in the form of relevant remuneration of any reward which equates in substance to relevant remuneration.
A “relevant tax avoidance purpose” is the reduction or elimination of a liability to bank payroll tax which would exist if—
in a case within paragraph (a) of sub-paragraph (2), the money were paid, or the money's worth or other benefit provided, during the chargeable period, or
in a case within paragraph (b) of that sub-paragraph, the reward were given in the form of relevant remuneration.
Liability to bank payroll tax is to be determined as it would have been if—
in a case within paragraph (a) of sub-paragraph (2), the money were paid, or the money's worth or other benefit provided, during the chargeable period, or
in a case within paragraph (b) of that sub-paragraph, the reward were given in the form of relevant remuneration.
No deduction in computing profits
No amount of bank payroll tax is to be taken into account in calculating profits or losses for the purposes of income tax or corporation tax.
Collection and management of tax
Responsibility for collection and management
The Commissioners are responsible for the collection and management of bank payroll tax.
Due date for payment
Bank payroll tax is payable by taxable companies on or before 31 August 2010.
Obligation to deliver return
In order to establish the amount of bank payroll tax payable by it, every taxable company must deliver a return to HMRC.
The return must be delivered on or before 31 August 2010.
A return under this paragraph is referred to as a bank payroll tax return.
Content etc of return
HMRC may publish requirements as to—
the information to be contained in bank payroll tax returns,
the form in which they must be made,
the manner in which they must be delivered, and
the documents to be delivered with them.
A bank payroll tax return must include—
an assessment (a “self-assessment”) of the amount of bank payroll tax payable by the taxable company on the basis of the information contained in it, and
a declaration by the person making it that, to the best of that person's knowledge, it is correct and complete.
Failure to include self-assessment
If a taxable company delivers a bank payroll tax return but fails to include a self-assessment, HMRC may make the assessment on the company's behalf on the basis of the information contained in it.
The assessment is treated for the purposes of this Schedule as a self-assessment and as included in the return.
Amendment of return by company
A taxable company may amend its bank payroll tax return.
An amendment under this paragraph is made by notice to HMRC in such form, and accompanied by such information, as HMRC may reasonably require.
No such amendment may be made after 31 August 2011.
Nothing in sub-paragraph (1) permits a taxable company to amend its return to revise an amount determined under paragraph 7(2), 12(2) or 13(3) merely because the amount determined under that provision differs from the amount which is actually paid or provided (or loaned).
Correction of return by HMRC
HMRC may amend a bank payroll tax return so as to correct obvious errors or omissions in it (whether errors of principle, arithmetical mistakes or otherwise).
A correction under this paragraph is made by notice to the taxable company concerned.
No such correction may be made more than 9 months after—
the day on which the return was delivered, or
if the correction is required in consequence of an amendment made under paragraph 21, the day on which that amendment was made.
A correction under this paragraph is of no effect if the taxable company gives notice rejecting it.
Notice of rejection must be given—
to the officer of Revenue and Customs by whom the correction notice was given, and
before the end of the period of 30 days beginning with the date on which the correction notice was given.
Enquiry into return
HMRC may enquire into a bank payroll tax return if they give notice to the taxable company of their intention to do so within the time allowed.
If the return was delivered on or before 31 August 2010, notice of enquiry may be given at any time on or before 31 August 2011.
If the return was delivered after 31 August 2010, notice of enquiry may be given at any time up to and including whichever of 31 January, 30 April, 31 July or 31 October next follows the first anniversary of the day on which the return was delivered.
An enquiry extends to anything contained in the return or required to be contained in the return.
The following provisions of Schedule 18 to FA 1998 apply to an enquiry into a bank payroll tax return under this Schedule as they apply to an enquiry into a company tax return under that Schedule—
paragraph 24(4) to (5) (notice of enquiry),
paragraph 25(2) (enquiry following amendment by company) (but as if the reference there to paragraph 24(2) or (3) were to sub-paragraph (2) or (3) of this paragraph),
paragraph 31 (amendment of return by company during enquiry),
paragraphs 31A to 31D (referral of questions to the tribunal during enquiry),
paragraph 32(1) (completion of enquiry),
paragraph 33 (direction to complete enquiry), and
paragraph 34 (amendment of return after enquiry).
Determination by HMRC
HMRC may determine to the best of their knowledge and belief the amount of bank payroll tax payable by a taxable company if the company has not delivered a bank payroll tax return on or before 31 August 2010.
Notice of the determination—
must be served on the company, and
must state the date on which it is given.
The amount determined by HMRC is taken to be the amount payable by the company (in the same way as if it were an assessment) unless and until the determination is superseded by a relevant assessment.
A relevant assessment is an assessment—
included in a bank payroll tax return delivered by the company within the period of 12 months beginning with the date on which notice of the determination was given, or
made by HMRC under paragraph 20 following delivery of such a return.
If—the proceedings may be continued as if they were proceedings for the recovery of so much of the tax shown in the assessment as has not been paid.
proceedings have been commenced for the recovery of an amount determined by HMRC under this paragraph, and
before the proceedings are concluded, the determination is superseded by a relevant assessment,
No determination may be made under this paragraph after 31 August 2013.
Discovery assessment by HMRC
This paragraph applies if HMRC discover, with respect to a taxable company, any of the following situations—
an amount which ought to have been assessed to bank payroll tax has not been assessed,
an assessment to bank payroll tax is insufficient, or
an amount of bank payroll tax has been repaid which ought not to have been repaid.
HMRC may make an assessment (a “discovery assessment”) in the amount or further amount which ought in their opinion to be charged or recovered in order to make good to the Crown the loss of bank payroll tax.
If the company has delivered a bank payroll tax return, HMRC may only make a discovery assessment if condition A or condition B is met.
Condition A is that the situation discovered by HMRC was brought about carelessly or deliberately by the company or a person acting on its behalf.
Condition B is that HMRC could not reasonably have been expected to be aware of the situation at the time when they—
ceased to be entitled to give notice of enquiry into the return, or
completed their enquiries into the return.
Notice of a discovery assessment—
must be served on the taxable company, and
must state the date on which it is given and the time by which an appeal may be brought against it.
No discovery assessment may be made after the relevant deadline.
The relevant deadline is 5 April 2030 if the situation—
was brought about deliberately by the taxable company, or
was attributable to the taxable company's careless failure to deliver a bank payroll tax return on or before 31 August 2010.
Subject to sub-paragraph (2)(b), the relevant deadline is 5 April 2016 if the situation was brought about carelessly by the taxable company.
In all other cases, the relevant deadline is 5 April 2014.
In this paragraph—
references to the situation are to the one discovered by HMRC, and
references to the taxable company include a person acting on the company's behalf.
If a discovery assessment is made with respect to a taxable company, the company may appeal against it.
Notice of appeal must be given—
in writing,
within the period of 30 days beginning with the date on which notice of the assessment was given, and
to the officer of Revenue and Customs by whom notice of the assessment was given.
Any objection to a discovery assessment on the ground that paragraph 25, 26 or 27 was not complied with can only be made on an appeal against the assessment under this paragraph.
Collection and recovery
HMRC may publish requirements as to the method or methods of payment to be used by taxable companies for paying bank payroll tax.
Part 6 of TMA 1970 (collection and recovery) applies in relation to a charge to bank payroll tax as it applies in relation to a charge to corporation tax.
See also Chapter 5 of Part 7 of FA 2008 (which makes general provision about payment and enforcement).
Interest on late payments and repayments
This paragraph applies if an order is made under section 104(3) of FA 2009 appointing a day on which sections 101 to 103 of that Act are to come into force for the purposes of bank payroll tax.
Part 2 of Schedule 53 to that Act (which makes special provision about the late payment interest start date) has effect for those purposes as if—
the reference in paragraph 4(1) to income tax or capital gains tax included a reference to bank payroll tax, and
the Part included a provision that the late payment interest start date in respect of an amount of bank payroll tax assessed and recoverable under paragraph 25(1)(c) of this Schedule is 31 August 2010.
Interest charged under section 101 of FA 2009 on an amount of bank payroll tax may be enforced as if it were an amount of bank payroll tax payable by the taxable company.
Overpaid tax etc
Paragraphs 50 to 51G of Schedule 18 to FA 1998 (overpaid tax etc) apply (so far as relevant) to bank payroll tax assessable for the chargeable period as they apply to corporation tax assessable for an accounting period, subject to the following modifications.
With respect to bank payroll tax, a claim under paragraph 51 may not be made after 31 August 2014.
For the purposes of paragraph 51E, the relevant restrictions for making a discovery assessment under this Schedule are—
the conditions mentioned in paragraph 25(3), and
expiry of the relevant deadline as defined in paragraph 27.
Nothing in sub-paragraph (1) permits a taxable company to make a claim under paragraph 51 of Schedule 18 to FA 1998 with respect to bank payroll tax merely because an amount determined under paragraph 7(2), 12(2) or 13(3) differs from the amount which is actually paid or provided (or loaned).
Appeals and other proceedings
Part 5 of TMA 1970 (appeals and other proceedings) applies in relation to an appeal against a discovery assessment to bank payroll tax as it applies in relation to an appeal against an assessment to corporation tax.
References in that Part to tax are to be read accordingly.
Where a provision of FA 1998 is applied by this Part of this Schedule, a reference in section 46D of TMA 1970 (questions to be determined by the relevant tribunal) to that provision includes a reference to that provision as so applied.
A reference in section 48 of TMA 1970 (application to appeals and other proceedings) to the Taxes Acts includes a reference to those Acts as applied by this Part of this Schedule.
Where a provision of FA 1998 is applied by this Part of this Schedule—
a reference in section 55 of TMA 1970 (recovery of tax not postponed) to that provision includes a reference to that provision as so applied, and
references in that section to tax are to be read accordingly.
Obligation to preserve records
Each taxable company must—
keep such records as may be needed to enable it to establish and verify the amount of bank payroll tax payable by it and to deliver a correct and complete bank payroll tax return, and
preserve those records, and any other relevant records, until the end of 31 August 2016.
Other relevant records are records that—
may be needed for a purpose mentioned in sub-paragraph (1)(a), and
are in the company's possession or power immediately before the commencement of this Schedule.
The obligation under sub-paragraph (1)(b) may be discharged by—
preserving the records in any form and by any means, or
preserving the information contained in them in any form and by any means.
The obligation under sub-paragraph (1)(b) includes an obligation to preserve supporting documents (such as contracts, accounts and correspondence).
A taxable company which fails to comply with paragraph 34 is liable to a penalty of an amount not exceeding £3,000.
Sections 100 to 102 of TMA 1970 apply to a penalty under this paragraph as they apply to a penalty under section 12B(5) of that Act.
Information powers
Schedule 36 to FA 2008 (information and inspection powers) has effect as if the definition of tax in paragraph 63(1) included bank payroll tax.
Paragraph 21 of that Schedule (taxpayer notices) applies where a taxable company has made a bank payroll tax return as it applies where a person has made a company tax return and, in relation to bank payroll tax—
a reference in that paragraph to a chargeable period is to the chargeable period within the meaning of this Schedule, and
a reference in that paragraph to a notice of enquiry is to a notice of enquiry under paragraph 23 of this Schedule.
Penalties
Schedule 24 to FA 2007 (penalties for errors) has effect as if in the Table in paragraph 1—
the list of taxes included bank payroll tax, and
the list of documents included a bank payroll tax return.
In relation to bank payroll tax, any reference in that Schedule to a tax period is to the chargeable period within the meaning of this Schedule.
Schedule 55 to FA 2009 (penalties for failure to make returns etc) has effect as if—
a bank payroll tax return were specified in the Table in paragraph 1 (and bank payroll tax were specified in relation to it), and
the reference in paragraph 2 to a return falling within certain items in the Table included a reference to a bank payroll tax return.
Schedule 55 to FA 2009 has effect for the purposes of bank payroll tax in accordance with this paragraph whether or not it has come into force for other purposes.
Schedule 56 to FA 2009 (penalties for failure to make payments on time etc) has effect for the purposes of bank payroll tax as follows.
The part of the Table in paragraph 1 headed “Principal amounts” has effect as if bank payroll tax were specified in column 2 and, in relation to that tax—
an amount shown (or treated as shown) in a bank payroll tax return were specified in column 3, and
31 August 2010 were specified in column 4.
The part of that Table headed “Amounts payable in default of a return being made” has effect as if bank payroll tax were specified in column 2 and, in relation to that tax—
an amount shown in a determination under paragraph 24 of this Schedule were specified in column 3, and
31 August 2010 were specified in column 4.
The part of that Table headed “Amount shown to be due in other assessments, determinations, etc” has effect as if—
bank payroll tax were a tax falling within any of items 1 to 6, 9 or 10, and
an amount shown (or treated as shown) in a bank payroll tax return were an amount falling within any of those items.
Paragraph 2 (assessments and determinations in default of return) has effect as if the reference in paragraph (a) to a return falling within any item in the Table in Schedule 55 included a reference to a bank payroll tax return.
Paragraph 3 (amount of penalty) has effect as if sub-paragraph (1)(a) included a reference to a payment of bank payroll tax.
Schedule 56 to FA 2009 has effect for the purposes of bank payroll tax in accordance with this paragraph whether or not it has come into force for other purposes.
Miscellaneous
The following provisions of TMA 1970 apply for the purposes of bank payroll tax and this Schedule as they apply for the purposes of corporation tax and the Taxes Acts—
section 108 (responsibility of company officers),
section 112 (loss, destruction or damage to assessments, returns etc),
section 114 (want of form), and
section 115 (delivery and service of documents).
The application of section 115 of TMA 1970 in relation to the delivery of bank payroll tax returns is subject to any requirements published under paragraph 19(1) of this Schedule.
Chapter 6 of Part 22 of CTA 2010 (collection etc of tax from UK representatives of non-UK resident companies) applies to this Part of this Schedule as it applies to enactments relating to corporation tax.
Section 118(5) to (7) of TMA 1970 (meaning of carelessly etc) applies for the interpretation of this Part of this Schedule, with references to tax being read as references to bank payroll tax.
Definitions
“UK resident bank” and “relevant foreign bank”
“UK resident bank” means a company which—
is resident in the United Kingdom,
is an authorised person for the purposes of FISMA 2000 (see section 31 of that Act),
is a person—
whose activities include the relevant regulated activity described in the provision mentioned in paragraph 44(1)(a), or
which is both a BIPRU 730k firm and a full scope BIPRU investment firm, whose activities consist wholly or mainly of any of the relevant regulated activities described in the provisions mentioned in paragraph 44(1)(b) to (f) and which meets the capital resources condition,
carries on that relevant regulated activity, or those relevant regulated activities, wholly or mainly in the course of trade, and
is not an excluded company.
“UK resident bank” also includes a company which—
meets the conditions in sub-paragraph (1)(a) and (e), and
is a member of a partnership which meets the conditions in sub-paragraph (1)(b) to (d).
“Relevant foreign bank” means a company which—
is not resident in the United Kingdom,
is an authorised person for the purposes of FISMA 2000 (see section 31 of that Act),
is a person which carries on a trade in the United Kingdom through a permanent establishment in the United Kingdom and—
whose activities include the relevant regulated activity described in the provision mentioned in paragraph 44(1)(a), or
which is both a BIPRU 730k firm and a full scope BIPRU investment firm, whose activities consist wholly or mainly of any of the relevant regulated activities described in the provisions mentioned in paragraph 44(1)(b) to (f) and which meets the capital resources condition,
carries on that relevant regulated activity, or those relevant regulated activities, wholly or mainly in the course of that trade, and
is not an excluded company.
“Relevant foreign bank” also includes a company which—
meets the conditions in sub-paragraph (3)(a) and (e), and
is a member of a partnership which meets the conditions in sub-paragraph (1)(b) to (d).
“Relevant regulated activity”, “capital resources condition”, “excluded company”, “asset management activities”, “linked entity” etc
“Relevant regulated activity” means an activity which is a regulated activity for the purposes of FISMA 2000 by virtue of any of the following provisions of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544)—
article 5 (accepting deposits),
article 14 (dealing in investments as principal),
article 21 (dealing in investments as agent),
article 25 (arranging deals in investments),
article 40 (safeguarding and administering investments), and
article 61 (entering into regulated mortgage contracts).
“The capital resources condition” is that the company has a capital resources requirement of at least £100 million.
But if the company is a member of a group, “the capital resources condition” is that the company and—have (in aggregate) capital resources requirements of at least that amount.
any other companies which—
are members of the group,
meet either of the conditions in sub-paragraph (4),
are not excluded companies, and
are not members of any partnership within paragraph (b), and
any partnership—
the members of which are or include one or more companies that are members of the group and not excluded companies, and
which meets either of those conditions,
The conditions referred to in sub-paragraph (3) are that the company or partnership—
is both a BIPRU 730k firm and a full scope BIPRU investment firm, or
is a company or partnership which carries on in the United Kingdom activities including the relevant regulated activity described in the provision mentioned in sub-paragraph (1)(a).
For the purposes of sub-paragraphs (2) and (3) the capital resources requirement of a company or a partnership is that as at the end of the last period of account of the company or partnership ending no later than the end of the chargeable period.
In determining whether the company is a UK resident bank or a relevant foreign bank by virtue of paragraph 43(2) or (4), the references in sub-paragraph (2) to the company are to the partnership.
If any company or partnership whose capital resources may be material for the purposes of sub-paragraph (2) or (3) prepares its accounts in a currency other than sterling, the amount of its capital resources at the end of the period of account mentioned in that sub-paragraph is to be translated into its sterling equivalent by reference to the average spot rate of exchange on the day on which that period ends.
If any company whose capital resources may be material for the purposes of sub-paragraph (2) or (3) carries on a trade in the United Kingdom through a permanent establishment in the United Kingdom, its capital resources are to be determined as they would be for the purposes of corporation tax (see Chapter 4 of Part 2 of CTA 2009).
“Excluded company” means a company which is—
an insurance company or an insurance special purpose vehicle,
a company which is a member of a group and does not carry on any relevant regulated activities otherwise than on behalf of an insurance company or insurance special purpose vehicle which is a member of the same group,
a company which does not carry on any relevant regulated activities otherwise than as the manager of a pension scheme,
an investment trust (within the meaning given by section 1158 of CTA 2010),
a company which does not carry on any relevant regulated activities other than asset management activities,
an exempt BIPRU commodities firm,
a company which does not carry on any relevant regulated activities otherwise than for the purpose of trading in commodities or commodity derivatives,
a company which does not carry on any relevant regulated activities otherwise than for the purpose of dealing in contracts for differences as principal with persons all or all but an insignificant proportion of whom are retail clients or of dealing in contracts for differences with another person to enable the company or other person to deal in contracts for differences as principal with such persons,
a society incorporated under the Friendly Societies Act 1992,
a society registered as a credit union under the Co-operative and Community Benefit Societies Act 2014 or the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (NI 12)), or
a building society.
“Asset management activities” means activities which consist (or, if they were carried on in the United Kingdom, would consist) of any or all of the following—
acting as the operator of a collective investment scheme (within the meaning of Part 17 of FISMA 2000: see sections 235 and 237 of that Act),
acting as a discretionary investment manager for clients none of which is a linked entity, and
acting as an authorised corporate director.
“Linked entity”, in relation to a company (“C”), means—
a member of the same group as C,
a company in which a company which is a member of the same group as C has a major interest (within the meaning of Part 5 of CTA 2009: see section 473 of that Act), or
a partnership the members of which include a company—
which is a member of the same group as C, and
whose share of the profits or losses of a trade carried on by the partnership for an accounting period of the partnership any part of which falls within the chargeable period is at least a 40% share (see Part 17 of CTA 2009 for provisions about shares of partnership profits and losses).
The following have the meanings given in the PRA Handbook made by the Prudential Regulation Authority (as that Handbook has effect from time to time)—“authorised corporate director”,“BIPRU 730k firm”,“capital resources requirement”,“contracts for differences”,“discretionary investment manager”,“exempt BIPRU commodities firm”,“full scope BIPRU investment firm”,“pension scheme”,“principal”, and“retail clients”.
A company which would be a BIPRU 730k firm and a full scope BIPRU investment firm by virtue of activities carried on in the United Kingdom but for the fact that its registered office (or, if it does not have a registered office, its head office) is not in the United Kingdom is to be treated as being one.
The Treasury may by order amend this paragraph.
An order under this paragraph may be made so as to have effect in relation to any time after the beginning of the chargeable period.
An order under this paragraph is to be made by statutory instrument.
An order under this paragraph may not be made unless a draft of the instrument containing it has been laid before, and approved by a resolution of, the House of Commons.
“Member of a banking group”
A company is a “member of a banking group” at any time if—
it is within sub-paragraph (2) at that time, or
it was within that sub-paragraph immediately before the chargeable period.
A company is within this sub-paragraph if—
it is a member of a group,
any of conditions A to C is met, and
the group does not meet the exempt activities test.
Condition A is that the principal company of the group is a UK resident bank or a relevant foreign bank.
Condition B is that—and (in either case) any member of the group is a UK resident bank or a relevant foreign bank.
the principal company of the group is a company which is not resident in the United Kingdom but which (if it were so resident) would be a UK resident bank, or
the principal company of the group is a company which is not resident in the United Kingdom, and is a member of a partnership which is not so resident, but which (if both the company and the partnership were so resident) would be a UK resident bank,
Condition C is that—
the principal company is the holding company of another company, and
if that other company were the principal company of the group, condition A or B would be met.
For the purposes of condition C a company (“H”) is a “holding company” of another company (“S”) if—
H is an investment company, and
S is—
an effective 51% subsidiary of H, and
not an effective 51% subsidiary of any company which is not an investment company.
A group meets the exempt activities test if at least 90% of the trading income of the group for the relevant period is derived from exempt activities.
For this purpose—“exempt activities” means—insurance activities, asset management activities and related activities, and activities carried on by a company which is not a financial trading company (or a company which would be a financial trading company if it were resident in the United Kingdom) other than lending activities or dealing on own account,“the relevant period”, in relation to a group, means the last period of account of the group ending no later than the end of the chargeable period, and“the trading income of the group” for the relevant period is to be calculated in accordance with paragraph 46.
In sub-paragraph (8)—“insurance activities” means—the effecting or carrying out of contracts of insurance by a regulated insurer, and investment business that arises directly from activities falling within paragraph (a);“lending activities” means—acceptance of deposits or other repayable funds, lending of money, including consumer credit, mortgage credit, factoring (with or without recourse) and financing of commercial transactions (including forfeiting), finance leasing (as lessor), issuing and administering means of payment, provision of guarantees or commitments to provide money, money transmission services, provision of alternative finance arrangements, and other activities carried on in connection with activities falling within any of paragraphs (a) to (g);“related activities” means—activities which are ancillary to insurance activities or asset management activities of any company which is a member of the group (whether or not the company carrying on the insurance activities or asset management activities), and activities which would not be carried on but for such insurance activities or asset management activities being carried on, but does not include dealing on own account.
In sub-paragraph (9)—“activities” includes buying, holding, managing and selling assets;“regulated insurer”, in relation to a group, means a member of the group that—is authorised under the law of any territory to carry on insurance business, or is a member of a body or organisation which is so authorised.
A company which is a member of a banking group ceases to be a member of a banking group when it ceases to be within sub-paragraph (2), but only if it ceases to be within that provision as a result of—
an arm's length transaction undertaken for wholly commercial purposes, or
following a recommendation of a relevant regulatory body.
For the purposes of sub-paragraph (11) obtaining a tax advantage is not a commercial purpose.
“Tax advantage” means—and, for this purpose, “tax” includes bank payroll tax and any other tax.
a relief from tax or increased relief from tax (relief here including a tax credit),
a repayment of tax or increased repayment of tax,
the avoidance or reduction of a charge to tax or an assessment to tax (obtained in any way), or
the avoidance of a possible assessment to tax (so obtained),
In sub-paragraph (11) “relevant regulatory body” means—
the Financial Conduct Authority,
the Prudential Regulation Authority, or
a body discharging functions under the law of a country or territory outside the United Kingdom corresponding to functions discharged by the Financial Conduct Authority or the Prudential Regulation Authority.
In this paragraph “dealing on own account” has the same meaning as in Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (see Article 4(1)(6)).
“The trading income of the group” for the relevant period
This paragraph applies for calculating the “trading income of the group” for the relevant period for the purposes of paragraph 45.
The trading income for the group for the relevant period is the aggregate of—
the gross income calculated in accordance with sub-paragraph (3), and
the net income calculated in accordance with sub-paragraph (4).
The income referred to in sub-paragraph (2)(a) is the gross income—without taking account of any deductions (whether for expenses or otherwise).
arising from the activities of the group (other than net-basis activities), and
disclosed as such in the financial statements of the group,
The income referred to in sub-paragraph (2)(b) is the net income arising from the net-basis activities of the group that—
is accounted for as such under international accounting standards or in accordance with practice which is generally accepted accounting practice in the territory in which the principal company of the group is resident, or
would be accounted for as such if income arising from such activities were accounted for under such standards or in accordance with such practice.
In this paragraph “net-basis activities” means activities normally reported on a net basis in financial statements prepared in accordance with such standards or practice.
“Investment company” etc
“Investment company”—
means a company whose business consists wholly or mainly of, and the principal part of whose income is derived from, the making of investments, and
also includes any savings bank or other bank for savings.
“UK resident investment company” means an investment company which is resident in the United Kingdom.
“Financial trading company” etc
“Financial trading company” means a company which—
is an authorised person for the purposes of FISMA 2000 (see section 31 of that Act), or
is not within paragraph (a) but carries on a trade consisting wholly or partly in dealing in securities.
“UK resident financial trading company” means a financial trading company which is resident in the United Kingdom.
“Relevant foreign financial trading company” means a company which meets conditions A and B.
Condition A is that the company—
is not resident in the United Kingdom, and
carries on a trade in the United Kingdom through a permanent establishment in the United Kingdom.
Condition B is that, disregarding any activities of the company other than those carried on through that permanent establishment, the company is a financial trading company.
In this paragraph “securities” includes—
shares,
rights of unit holders in unit trust schemes to which TCGA 1992 applies as a result of section 99 of that Act, and
in the case of a company with no share capital, interests in the company possessed by members of the company.
Other interpretative provisions
In this Schedule—“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);“benefit” includes a facility of any kind;“building society” means a building society within the meaning of the Building Societies Act 1986;“the Commissioners” means the Commissioners of Her Majesty's Revenue and Customs;“contract of insurance” has the meaning given by section 431(2) of ICTA;“control” has the meaning given by section 995 of ITA 2007;“employment”, “employee” and “employer” have the same meaning as in the employment income Parts of ITEPA 2003 (see sections 4 and 5 of that Act);“enactment” includes an enactment or instrument (whenever passed or made);“HMRC” means Her Majesty's Revenue and Customs;“insurance company” and “insurance special purpose vehicle” have the meaning given by section 431(2) of ICTA;“market value” has the same meaning it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act;“money's worth” has the meaning given by section 62(3) of ITEPA 2003;“partnership” includes—a limited liability partnership, and an entity established under the law of a territory outside the United Kingdom of a similar character to a partnership (and “member”, in relation to a partnership, is to be read accordingly);“period of account” and “permanent establishment” have the meaning given by section 1119 of CTA 2010;“the tax year 2009-10” has the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).
Section 170(2) to (11) of TCGA 1992 (“group”, “principal company”, “effective 51% subsidiary”, “company” etc) has effect for the interpretation of this Schedule as for the interpretation of sections 171 to 181 of that Act.
Section 993 of ITA 2007 (meaning of “connected” persons) applies for the purposes of this Schedule.
For the purposes of this Schedule the territory in which a company is resident is to be determined as for the purposes of the Corporation Tax Acts.
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Sideways relief etc
Amendments of Chapter 2 of Part 4 of ITA 2007
Chapter 2 of Part 4 of ITA 2007 (trade losses) is amended as follows.
In section 60(1)(c) (overview of Chapter), for “(see sections 75” substitute “ and capital gains relief (see sections 74ZA ”.
In section 64(8) (deduction of losses from general income)—
in paragraph (ba), for “74A” substitute “ 74ZA ”,
at the end of paragraph (c), insert “ and ”, and
omit paragraph (e).
In section 72(5) (relief for individuals for losses in first 4 years of trade)—
in paragraph (ba), for “74A” substitute “ 74ZA ”,
at the end of paragraph (c), insert “ and ”, and
omit paragraph (e).
Before section 74A insert—
Omit section 74B (no relief for tax-generated losses in case of non-active individuals carrying on trade).
Section 74C (meaning of “non-active capacity” for purposes of sections 74A and 74B etc) is amended as follows.
In subsection (1), for “sections 74A and 74B” substitute “ section 74A ”.
In the heading, for “sections 74A and 74B” substitute “ section 74A ”.
Section 74D (meaning of “qualifying film expenditure” for purposes of sections 74A and 74B) is amended as follows.
In subsections (1) and (4), for “74A and 74B” substitute “ 74ZA and 74A ”.
In the heading, for “74A and 74B” substitute “ 74ZA and 74A ”.
Omit section 81 (dealings in commodity futures).
Other amendments
In FA 2009, in Schedule 6, in paragraph 1(11)—
in paragraph (b), for “74B” substitute “ 74ZA ”,
at the end of paragraph (c), insert “ and ”, and
omit paragraph (e) (and the “and” before it).
Commencement
The amendments made by this Schedule have effect in relation to a loss if it arises directly or indirectly in consequence of, or otherwise in connection with—
arrangements which are entered into on or after 21 October 2009, or
any transaction forming part of arrangements which is entered into on or after that date.
But those amendments do not have effect where the arrangements are, or any such transaction is, entered into pursuant to an unconditional obligation in a contract made before that date.
“An unconditional obligation” means an obligation which may not be varied or extinguished by the exercise of a right (whether or not under the contract).
Capital allowance buying
Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.
After Chapter 16 insert—
For the heading of Chapter 17 substitute “ Other anti-avoidance ”.
Section 247 (giving effect to allowances and charges: trades) is renumbered as subsection (1) of that section; and after that subsection insert—
The amendments made by this Schedule have effect where the relevant day is on or after 21 July 2009.
But in relation to cases where the relevant day is before 9 December 2009 the amendment made by paragraph 2 has effect—
with the omission of section 212C(2)(b),
as if in section 212K(1) “which is amount 1” were substituted for “ and is to be found by adding together amounts 1 and 2 ”,
with the omission of section 212K(3) and (4)(c),
with the omission from section 212O(5) of the words “or under section 212Q(8)”,
with the omission of section 212Q, and
with the omission of section 212S.
Leased assets
Restriction of qualifying expenditure
In Chapter 17 of Part 2 of CAA 2001 (plant and machinery: anti-avoidance), after section 228M insert—
The amendment made by sub-paragraph (1) has effect in relation to capital expenditure incurred on or after 9 December 2009.
Restriction of deduction for rental rebate
In Chapter 4 of Part 2 of ITTOIA 2005 (trading income: rules restricting deductions), after section 55A insert—
In Chapter 4 of Part 3 of CTA 2009 (trading income: rules restricting deductions), after section 60 insert—
The amendments made by this paragraph have effect in relation to rental rebates payable on or after 9 December 2009.
Arrangements reducing disposal value of asset
In Chapter 5 of Part 2 of CAA 2001 (plant and machinery: general provisions about charges and allowances), after section 64 insert—
The amendment made by sub-paragraph (1) has effect in relation to disposal events taking place on or after 9 December 2009.
Charities and community amateur sports clubs: definitions
Definition of “charity”, “charitable company” and “charitable trust”
Definition of “charity” etc
For the purposes of the enactments to which this Part applies “charity” means a body of persons or trust that—
is established for charitable purposes only,
meets the jurisdiction condition (see paragraph 2),
meets the registration condition (see paragraph 3), and
meets the management condition (see paragraph 4).
For the purposes of the enactments to which this Part applies—“charitable company” means a charity that is a body of persons;“charitable trust” means a charity that is a trust.
Sub-paragraphs (1) and (2) are subject to any express provision to the contrary.
For the meaning of “charitable purpose”, see section 2 of the Charities Act 2011(which—
applies regardless of where the body of persons or trust in question is established, and
Jurisdiction condition
A body of persons or trust meets the jurisdiction condition if it falls to be subject to the control of—
a relevant UK court in the exercise of its jurisdiction with respect to charities, ...
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In sub-paragraph (1)(a) “a relevant UK court” means—(and, for enactments relating to value added tax, includes the High Court of the Isle of Man).
the High Court,
the Court of Session, or
the High Court in Northern Ireland
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Registration condition
A body of persons or trust meets the registration condition if—
in the case of a body of persons or trust that is a charity within the meaning of section 10 of the Charities Act 2011, condition A is met, and
in the case of any other body of persons or trust, condition B is met.
Condition A is that the body of persons or trust has complied with any requirement to be registered in the register of charities kept under section 29 of the Charities Act 2011.
Condition B is that the body of persons or trust has complied with any requirement under the law of a territory outside England and Wales to be registered in a register corresponding to that mentioned in sub-paragraph (2).
Management condition
A body of persons or trust meets the management condition if its managers are fit and proper persons to be managers of the body or trust.
In this paragraph “managers”, in relation to a body of persons or trust, means the persons having the general control and management of the administration of the body or trust.
Periods over which management condition treated as met
This paragraph applies in relation to any period throughout which the management condition is not met.
The management condition is treated as met throughout the period if the Commissioners for Her Majesty's Revenue and Customs consider that—
the failure to meet the management condition has not prejudiced the charitable purposes of the body or trust, or
it is just and reasonable in all the circumstances for the condition to be treated as met throughout the period.
Publication of names and addresses of bodies or trusts regarded by HMRC as charities
Her Majesty's Revenue and Customs may publish the name and address of any body of persons or trust that appears to them to meet, or at any time to have met, the definition of a charity in paragraph 1.
Enactments to which this Part applies
The enactments to which this Part applies are the enactments relating to—
income tax
capital gains tax,
corporation tax,
value added tax,
inheritance tax,
stamp duty,
stamp duty land tax, ...
stamp duty reserve tax , and
annual tax on enveloped dwellings. ...
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Repeals of superseded definitions and other consequential amendments
FA 1982
In section 129(1) of FA 1982 (stamp duty: exemption from duty on grants, transfers to charities etc), for “a body of persons established for charitable purposes only or to the trustees of a trust so established” substitute “ a charitable company or to the trustees of a charitable trust ”.
FA 1983
In section 46(3) of FA 1983 (Historic Buildings and Monuments Commission for England) for “a body of persons established for charitable purposes only” substitute “ a charitable company ”.
IHTA 1984
In section 272 of IHTA 1984 (general interpretation), omit the definitions of “charity” and “charitable”.
FA 1986
In section 90(7) of FA 1986 (stamp duty reserve tax: exceptions from principal charge)—
in paragraph (a), for “a body of persons established for charitable purposes only” substitute “ a charitable company ”, and
in paragraph (b), for “a trust so established” substitute “ a charitable trust ”.
FA 1989
In paragraph 4 of Schedule 5 to FA 1989 (employee share ownership trusts), omit sub-paragraph (10).
TCGA 1992
TCGA 1992 is amended as follows.
In section 222(8B)(b)(iii) (relief on disposal of private residence), for “established for charitable purposes only” substitute “ a charitable company ”.
In section 256 (charities), omit subsections (6) and (8).
In section 256C (attributing gains to the non-exempt amount: charitable companies), omit subsection (6).
In section 256D (how gains are attributed to the non-exempt amount: charitable companies), omit subsection (7).
F(No.2)A 1997
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FA 1999
Schedule 19 to FA 1999 (stamp duty and stamp duty reserve tax: unit trusts) is amended as follows.
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In paragraph 15(c), for “bodies of persons established for charitable purposes only or trustees of trusts so established” substitute “ charitable companies or trustees of charitable trusts ”.
CAA 2001
In section 63(2) of CAA 2001 (cases in which disposal value is nil)—
in paragraph (a), omit “within the meaning of Part 10 of ITA 2007 (see section 519 of that Act)”, and
in paragraph (aa), omit “within the meaning of Part 11 of CTA 2010 (see section 467 of that Act)”.
ITEPA 2003
ITEPA 2003 is amended as follows.
In section 99(3)(b)(ii) (accommodation provided for performance of duties), for “established for charitable purposes only” substitute “ a charitable company ”.
In section 216(3)(b) (provisions not applicable to lower-paid employments) for “established for charitable purposes only” substitute “ a charitable company ”.
In section 223(7)(b)(ii) (payments on account of director's tax other than by the director), for “established for charitable purposes only” substitute “ a charitable company ”.
In section 290(5) (accommodation benefits of ministers of religion), omit the definition of “charity”.
In section 351 (expenses of ministers of religion), omit subsection (5).
In section 714(2) (payroll giving: meaning of “donation”), in the definition of “charity”, omit “means any body of persons or trust established for charitable purposes only and”.
FA 2003
Schedule 8 to FA 2003 (SDLT: charities relief) is amended as follows.
In paragraph 1 (charities relief), omit sub-paragraph (4).
In paragraph 4 (charitable trusts), in sub-paragraph (2), omit “and “charity” has the same meaning as in paragraph 1”.
ITTOIA 2005
ITTOIA 2005 is amended as follows.
In section 410(3)(b) (when stock dividend income arises), for “trust established for charitable purposes only” substitute “ charitable trust ”.
In section 545(1) (definitions for Chapter 9 of Part 4), omit the definition of “charitable trust”.
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In Part 2 of Schedule 4 (index of defined expressions)—
in the entry for “charitable trust (in Chapter 9 of Part 4)”—
omit “(in Chapter 9 of Part 4)”, and
for “section 545(1)” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”, and
in the entry for “charity”, for “section 989 of ITA 2007” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”.
F(No.2)A 2005
In section 18(3)(b)(i) of F(No.2)A 2005 (authorised unit trusts and OEICS: specific powers) omit “(within the meaning of section 989 of ITA 2007)”.
ITA 2007
ITA 2007 is amended as follows.
In section 479(1)(b) (special rates for trustees' income), for “trust established for charitable purposes only” substitute “ charitable trust ”.
In section 481(1)(c) (other special rates for trustees), for “trust established for charitable purposes only” substitute “ charitable trust ”.
Omit section 519 (meaning of “charitable trust”).
In section 873(2) (discretionary or accumulation settlements), in paragraphs (a) and (b), for “trust established for charitable purposes only” substitute “ charitable trust ”.
In section 989 (definitions), omit the definition of “charity”.
In Schedule 4 (index of defined expressions)—
in the entry for “charitable trust (in Part 10)”—
omit “(in Part 10)”, and
for “section 519” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”, and
in the entries for “charity”, “charity (in Chapter 2 of Part 8)” and “charity (in Chapter 3 of Part 8)”, for “section 989” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”.
FA 2008
In paragraph 60(2) of Schedule 36 to FA 2008 (references to carrying on a business), omit the definition of “charity”.
CTA 2009
CTA 2009 is amended as follows.
In section 1319 (other definitions), omit the definition of “charity”.
In Schedule 4 (index of defined expressions), in the entry for “charity”, for “section 1319” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”.
FA 2009
In paragraph 8 of Schedule 49 to FA 2009 (general interpretation), omit the definition of “charity”.
CTA 2010
CTA 2010 is amended as follows.
In section 202 (meaning of “charity” in Chapter 2 of Part 6)—
for “means” substitute “ includes ”, and
omit paragraph (a).
In section 217 (meaning of “charity” in Chapter 3 of Part 6)—
for “means” substitute “ includes ”, and
omit paragraph (a).
Omit section 467 (meaning of “charitable company” in Part 11).
In section 610(2)(a) (discretionary payments by trustees to companies), omit “as defined in section 467”.
In section 1119 (definitions), omit the definition of “charity”.
In Schedule 4 (index of defined expressions)—
in the entry for “charitable company (in Part 11)”—
omit “(in Part 11)”, and
for “section 467” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”,
in the entry for “charity (except in Chapters 2 and 3 of Part 6)” for “section 1119” substitute “ paragraph 1 of Schedule 6 to FA 2010 ”,
in the entry for “charity (in Chapter 2 of Part 6)”, for “section 202” substitute “ paragraph 1 of Schedule 6 to FA 2010 (and see section 202 of this Act) ”, and
in the entry for “charity (in Chapter 3 of Part 6)”, for “section 217” substitute “ paragraph 1 of Schedule 6 to FA 2010 (and see section 217 of this Act) ”.
TIOPA 2010
In section 326(3) of TIOPA 2010 (charities), omit the definition of “charity” and the “and” immediately after it.
Power to make further consequential provision
The Commissioners for Her Majesty's Revenue and Customs may by order make such further consequential, incidental, supplemental, transitional or transitory provision or saving as appears appropriate in consequence of, or otherwise in connection with, Part 1.
An order under this paragraph may—
make different provision for different purposes, and
make provision repealing, revoking or otherwise amending any enactment or instrument (whenever passed or made).
An order under this paragraph is to be made by statutory instrument.
A statutory instrument containing an order under this paragraph is subject to annulment in pursuance of an order of the House of Commons.
Meaning of “community amateur sports club”
Chapter 9 of Part 13 of CTA 2010 (community amateur sports clubs) is amended as follows.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After section 661 insert—
Commencement
Commencement of Part 1
Part 1 is treated as having come into force on 6 April 2010.
But the definitions of “charity”, “charitable company” and “charitable trust” in that Part do not apply for the purposes of an enactment in relation to which, on that date, another definition applies until such time as that other definition ceases to have effect on the coming into force of provision made by or under Part 2.
For provision about the coming into force of provision made by that Part, see paragraph 34.
Commencement of Part 2
The repeal of the definition of “charity” in section 989 of ITA 2007 made by paragraph 23(6) above has effect—
so far as it applies for the purposes of Chapter 2 of Part 8 of that Act (gift aid), in relation to gifts made on or after 6 April 2010, and
so far as it applies for other purposes, in accordance with such provision as the Treasury may make by order.
The other amendments made by Part 2 come into force in accordance with such provision as the Treasury may make by order.
An order under this paragraph may—
make different provision for different purposes, and
include transitional provision and savings.
An order under this paragraph is to be made by statutory instrument.
Commencement of Part 3
The amendments made by Part 3 are treated as having come into force on 6 April 2010.
Gifts of shares etc to charities
Gifts by individuals
Chapter 3 of Part 8 of ITA 2007 (relief for gifts by individuals of shares, securities and real property to charities etc) is amended as follows.
Section 437 (value of net benefit to charity) is amended as follows.
In subsection (1), for “market” (in both places) substitute “ relevant ”.
After that subsection insert—
In subsection (2), after the entry relating to section 438 insert— “ section 438A (acquisition value of qualifying investments), ”.
After section 438 insert—
In Schedule 4 to ITA 2007 (index of defined expressions), after the entry relating to accumulated or discretionary income insert—.
Gifts by companies
Chapter 3 of Part 6 of CTA 2010 (charitable donations relief: amounts treated as qualifying charitable donations) is amended as follows.
Section 209 (value of net benefit to charity) is amended as follows.
In subsection (1), for “market” (in both places) substitute “ relevant ”.
After that subsection insert—
In subsection (2), after paragraph (a) insert—.
After section 210 insert—
In Schedule 4 to CTA 2010 (index of defined expressions), after the entry relating to accounts (in Chapter 2 of Part 16) insert—.
Commencement and corresponding ICTA amendments
The amendments made by this Schedule have effect in relation to any disposal made to a charity on or after 15 December 2009.
Amendments corresponding to the ones made by paragraphs 6 and 7, having effect in relation to any such disposal, are to be treated as having been made in section 587B of ICTA.
Charities: miscellaneous amendments
Payroll giving
In ITA 2007, after section 521 insert—
In CTA 2010, after section 472 insert—
Payments to bodies outside the UK: non-charitable expenditure
In section 547(b) of ITA 2007 (payments by charitable trusts to bodies outside the UK), after “such steps as” insert “ the Commissioners for Her Majesty's Revenue and Customs consider ”.
In section 500(b) of CTA 2010 (payments by charitable companies to bodies outside the UK), after “such steps as” insert “ the Commissioners for Her Majesty's Revenue and Customs consider ”.
Gift aid: disqualified overseas gifts
Chapter 2 of Part 8 of ITA 2007 (gift aid) is amended as follows.
In section 416 (meaning of “qualifying donation”)—
in subsection (1)(a) for “G” substitute “ F ”, and
omit subsection (8).
Omit section 422 (disqualified overseas gifts).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gift aid administration: charitable trusts
Section 42 of TMA 1970 (procedure for making claims etc) is amended as follows.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After subsection (3) insert—
ITA 2007 is amended as follows.
In section 518(4) (overview of Part 10), for “section 538” substitute “ sections 538 and 538A ”.
After section 538 insert—
Gift aid administration: charitable companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In CTA 2010, after section 477 insert—
Commencement
The amendments made by paragraph 1 have effect in relation to gifts made on or after 24 March 2010.
An amendment corresponding to that made by paragraph 1(2), having effect in relation to gifts made on or after that date, is to be treated as having been made in ICTA.
The amendments made by paragraph 2 have effect in relation to payments representing expenditure incurred on or after 24 March.
An amendment corresponding to that made by paragraph 2(2), having effect in relation to payments representing expenditure incurred on or after that date, is to be treated as having been made in ICTA.
The amendments made by paragraph 3 have effect in relation to gifts made on or after 6 April 2010.
The amendments made by paragraphs 4 and 6 have effect in relation to claims whenever made.
Foreign currency bank accounts
In TCGA 1992, after section 252 insert—
In that Act, after Schedule 8 insert—
The amendments made by this Schedule have effect in relation to disposals on or after 16 December 2009.
Penalties: offshore income etc
Schedule 24 to FA 2007
Schedule 24 to FA 2007 (penalties for errors) is amended as follows.
For paragraph 4 substitute—
For paragraph 10 substitute—.
In paragraph 12 (interaction with other penalties), for sub-paragraph (4) substitute—
In Part 5 (general), before the heading “Interpretation” insert—
After paragraph 23A insert—
Schedule 41 to FA 2008
Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing) is amended as follows.
For paragraph 6 substitute—
For paragraph 13 substitute—.
Schedule 55 to FA 2009
Schedule 55 to FA 2009 (penalties for failure to make returns etc) is amended as follows.
Paragraph 6 (amount of penalty if failure continues more than 12 months) is amended as follows.
In sub-paragraph (3)(a), for “100%” substitute “ the relevant percentage ”.
After sub-paragraph (3) insert—
In sub-paragraph (4)(a), for “70%” substitute “ the relevant percentage ”.
After sub-paragraph (4) insert—
After sub-paragraph (5) insert—
After paragraph 6 insert—
Paragraph 15 (reductions for disclosure) is amended as follows.
For sub-paragraphs (1) and (2) substitute—.
Omit sub-paragraphs (3) and (4).
In paragraph 17 (interaction with other penalties)—
in sub-paragraph (3), for “100%” substitute “ the relevant percentage ”, and
after that sub-paragraph insert—
Reliefs and reductions for foreign tax
Effect of foreign tax becoming payable
Paragraph 3 of Schedule 28AB to ICTA (schemes about effect of paying foreign tax) is amended as follows.
In sub-paragraph (2)—
in paragraph (a), after “paid” insert “ or payable ”, and
in paragraph (b), for “of the payment of that amount of foreign tax on the foreign tax total” substitute “ on the foreign tax total of that amount being so paid or payable ”.
In sub-paragraph (3)(b), for “the payment by the claimant of that amount of foreign tax” substitute “ that amount of foreign tax being paid or payable by the claimant ”.
Section 85 of TIOPA 2010 (schemes about effect of paying foreign tax) is amended as follows.
In subsection (2)—
for paragraph (a) substitute—, and
in paragraph (b), for “of the payment of the FT amount on the foreign-tax total” substitute “ on the foreign-tax total of the FT amount being so paid or payable ”.
In subsection (3), in paragraph (b) of the definition of “the foreign-tax total”, for “the payment by C of the FT amount” substitute “ the FT amount being paid or payable by C ”.
The amendments made by paragraphs 1 and 2 have effect in relation to amounts of foreign tax payable on or after 21 October 2009.
But see paragraph 5 for amounts of foreign tax payable on or after 1 April 2010 (as regards corporation tax) or 6 April 2010 (as regards income tax or capital gains tax).
Schemes about deemed foreign tax
In TIOPA 2010, after section 85 insert—
The amendment made by this paragraph has effect in relation to amounts treated as if they were amounts of foreign tax paid or payable on or after 21 October 2009.
A corresponding amendment, having effect in relation to such amounts, is to be treated as having been made in Schedule 28AB to ICTA.
Foreign tax payable by other participants
In section 85 of TIOPA 2010 (schemes about effect of paying foreign tax) as amended by paragraph 2—
in subsection (1), for “for foreign tax” substitute “ in respect of the payment of an amount of foreign tax (“the FT amount”) ”,
for subsection (2) substitute—, and
in subsection (3)—
for “subsection (2)(b)” substitute “ subsection (2) ”, and
in paragraph (b) of the definition of “the foreign-tax total”, omit “by C”.
In section 85A of TIOPA 2010 (schemes involving deemed foreign tax) as inserted by paragraph 4—
in subsection (1)(a), omit “by the claimant”, and
in subsection (4), in the definition of “the foreign-tax total”, omit “by C”.
The amendments made by this paragraph have effect in relation to amounts of foreign tax, or amounts treated as if they were amounts of foreign tax, payable—
as regards corporation tax, on or after 1 April 2010, and
as regards income tax or capital gains tax, on or after 6 April 2010.
Claims etc made before scheme or arrangement made
In section 86 of TIOPA 2010 (schemes about claims or elections etc)—
in subsection (1), omit “under the scheme or arrangement”, and
after subsection (3) insert—
The amendments made by this paragraph have effect in relation to amounts of foreign tax payable—
as regards corporation tax, on or after 1 April 2010, and
as regards income tax or capital gains tax, on or after 6 April 2010.
Limit on reduction for foreign tax
In section 112 of TIOPA 2010 (deduction from income for foreign tax), after subsection (2) insert—
The amendment made by this paragraph has effect in relation to amounts in respect of non-UK tax that are paid—
as regards corporation tax, on or after 1 April 2010, and
as regards income tax, on or after 6 April 2010.
Transactions in securities
Income tax
Chapter 1 of Part 13 of ITA 2007 (transactions in securities: income tax advantages) is amended as follows.
For sections 682 to 694 substitute—
In section 698(6) (counteraction notices), omit—
the entry relating to section 699, and
in the entry relating to section 700, “in section 690 cases”.
Omit section 699 (limit on amount assessed in section 689 and 690 cases).
In section 700 (timing of assessments in section 690 cases)—
in subsection (1), for “690 (receipt of relevant company assets (circumstance E))” substitute “ 685(2)(c) or (3) ”, and
in the heading, omit “in section 690 cases”.
In the heading before section 701, omit “and information powers”.
Section 713 (interpretation) is amended as follows.
Before the definition of “company” insert—.
Omit the definition of “transaction in securities”.
Corporation tax
Part 15 of CTA 2010 (transactions in securities: corporation tax advantages) is amended as follows.
In section 733(2) (company liable to counteraction of corporation tax advantage), omit the entry relating to section 735.
Omit section 735 (abnormal dividends used for exemptions or reliefs).
Consequential amendments
In section 809S of ITA 2007 (remittance basis: anti-avoidance provisions relating to transfers of mixed funds), for subsection (4) substitute—
Schedule 4 to that Act (index of defined expressions) is amended as follows.
After the definition of “close company” insert—
In the entry relating to “income tax advantage (in Chapter 1 of Part 13)”, for “683(1)” substitute “ 687 ”.
In the entry relating to “transaction in securities (in Chapter 1 of Part 13)”, for “713” substitute “ 684(2) ”.
In FA 2007, in Schedule 26, omit paragraph 12(11).
In CTA 2010, in Schedule 1, omit paragraphs 545 and 546.
Commencement
The amendments made by paragraphs 2 to 5, 7 and 11 to 13 (and paragraph 1 so far as relating to them) have effect in relation to income tax advantages obtained on or after 24 March 2010.
The amendment made by paragraph 6 (and paragraph 1 so far as relating to it) are treated as having come into force on 1 April 2009.
The amendments made by paragraphs 8 to 10 have effect in relation to corporation tax advantages obtained on or after 1 April 2010.
The repeals made by paragraph 14 are treated as having come into force on 1 April 2010.
Unauthorised unit trusts
Amendments of Chapter 13 of Part 15 of ITA 2007
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consequential amendments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commencement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transitional provision: opening value of trustees' double tax relief pool
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index-linked gilt-edged securities
Amendments of Chapter 12 of Part 5 of CTA 2009
Chapter 12 of Part 5 of CTA 2009 (loan relationships: special rules for particular kinds of securities) is amended as follows.
In section 398(2) (overview of Chapter), for paragraph (a) substitute—.
For the heading before section 399 substitute— “ Index-linked gilt-edged securities ”.
Section 399 (index-linked gilt-edged securities: basic rules) is amended as follows.
For the heading substitute “ Basic rules ”.
For subsection (3) substitute—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 400 (index-linked gilt-edged securities: adjustments for changes in index) is amended as follows.
For the heading substitute “ Adjustments for changes in index ”.
In subsection (1)(a)—
for “the amounts” substitute “ an amount ”, and
for “fall” substitute “ falls ”.
After subsection (2) insert—
After section 400 insert—.
Consequential amendment
In section 317(5)(g) of CTA 2009 (carrying value), for “and 400” substitute “ to 400C ”.
Commencement
The amendments made by this Schedule have effect in relation to adjustments made under section 400(2) of CTA 2009 in respect of increases in the retail prices index over periods beginning on or after 9 December 2009.
Transitional provision
This paragraph applies in relation to an accounting period of a company beginning before 9 December 2009 if, apart from this paragraph—
an amount to be brought into account for the purposes of Part 5 of CTA 2009 in respect of an index-linked gilt-edged security falls to be determined by reference to its value at two different times, and
the earlier time is before 9 December 2009 and the later time is on or after that date.
Instead of bringing into account the amount determined as mentioned in sub-paragraph (1)(a), the company is to bring into account the amounts that it would have brought into account for—had those parts been separate periods of account (and so separate accounting periods).
that part of the accounting period that falls before 9 December 2009, and
that part of the accounting period that falls on or after that date,
Connected companies: releases of debts
Amendments of section 322 of CTA 2009
Section 322 of CTA 2009 (release of debts: cases where credits not required to be brought into account) is amended as follows.
In subsection (4), after “release is” insert “ not a release of relevant rights and is ”.
After that subsection insert—
Amendments of Chapter 6 of Part 5 of CTA 2009
Chapter 6 of Part 5 of CTA 2009 (connected companies relationships: release of debts etc) is amended as follows.
In section 353(2)(b) (introduction to Chapter), for “except where the release is a deemed release under section 361 or 362” substitute “ subject to some exceptions ”.
In section 358 (exclusion of credits on release of connected companies debts: general)—
in subsection (1)(a), for “a company's debtor relationship is released,” substitute “ a debtor relationship of a company (“D”) is released, and ”,
in subsection (2), for “The company” substitute “ D ” and for “it is a deemed release” substitute, and
at the end insert—
In section 361 (acquisition of creditor rights by connected company at undervalue)—
in subsection (1), for paragraph (f) substitute—, and
for subsection (2) substitute—
After section 361 insert—
In section 363—
in the heading, for “and” substitute “ to ”, and
in subsections (1) and (4), for “and” substitute “ to ”.
Commencement
The amendments made by paragraph 1 have effect in relation to a release of rights that takes place on or after 9 November 2009.
The amendments made by paragraph 2(2) and (4) to (6) have effect in relation to a relevant acquisition that is made on or after 14 October 2009.
The amendments made by paragraph 2(3) have effect in relation to a release of rights that takes place on or after 14 October 2009.
Sub-paragraphs (1) to (3) are subject to paragraph 4.
In this paragraph and paragraph 4 “relevant acquisition” means an acquisition of rights within subsection (1)(a) to (e) of section 361 of CTA 2009 (acquisition of creditor rights by connected company at an undervalue).
Transitional provision
The amendments made by this Schedule do not have effect in relation to a relevant acquisition that is made on or after 14 October 2009, or to a release of rights acquired by way of such an acquisition, if—
the acquisition is made pursuant to an agreement entered into before 14 October 2009, or
the acquisition is made during the transitional period and condition A, B or C is met.
Condition A is that, before 14 October 2009—
the original creditor received a proposal from the new creditor that the acquisition should be made, or
the new creditor received a proposal from the original creditor that the acquisition should be made.
Condition B is that—
the acquisition is of rights under a loan relationship that is represented by a security,
during the transitional period the new creditor acquires rights under other loan relationships represented by securities, and
before 14 October 2009, either—
persons together holding more than 50% by value of the securities referred to in paragraphs (a) and (b) (“the bought-back securities”) received proposals from the new creditor that the acquisitions should be made, or
the new creditor received proposals from persons together holding more than 50% by value of the bought-back securities that the acquisitions should be made.
In sub-paragraphs (2) and (3)—
a reference to the original creditor includes any person acting on behalf of, or who controls, the original creditor,
a reference to the new creditor includes any person acting on behalf of, or who controls, the new creditor, and
a reference to a person holding a security includes any person acting on behalf of, or who controls, the person holding the security.
Condition C is that—
before 14 October 2009, the Financial Services Authority gave its agreement (“the FSA agreement”) to the acquisition being made (and had not withdrawn that agreement),
if the FSA agreement was given subject to the agreement of any other person, the agreement of that other person was also given (and not withdrawn) before that date, and
condition A or B would have been met but for the compliance by the original creditor or the new creditor with any other term on which the FSA agreement was given.
In this paragraph—
“the original creditor”, in relation to a relevant acquisition, means the person from whom the rights are acquired, and
“the new creditor”, in relation to a relevant acquisition, means the person who acquires the rights.
In this paragraph “the transitional period” means the period—
beginning with 14 October 2009, and
ending with 31 January 2010.
Section 472 of CTA 2009 (meaning of “control”) applies for the purposes of this paragraph.
Risk transfer schemes
Amendments
CTA 2010 is amended as follows.
In section 1(4) (overview of Act) omit the “and” at the end of paragraph (g), insert “ , and ” at the end of paragraph (h) and after that paragraph insert—
After Part 21 insert—
In Schedule 4 (index of defined expressions), insert at the appropriate places—
Commencement and transitional provision
The amendments made by this Schedule have effect in relation to accounting periods that begin on or after 1 April 2010 (“the commencement date”).
Where a company has an accounting period (“the straddling accounting period”) that—the straddling accounting period is to be treated as split.
begins before the commencement date, and
ends on or after that date,
Where this paragraph provides that the straddling accounting period is to be treated as split, that part of the straddling accounting period that falls before the commencement date and that part of the straddling accounting period that falls on or after that date are to be treated for the purposes of the amendments made by this Schedule as separate accounting periods.
In relation to the first accounting period of a company in relation to which the amendments made by this Schedule have effect—
section 937I of CTA 2010 (as inserted by paragraph 3 above) does not apply, and
as at the beginning of the period, the amounts of the company's losses pool and profits pool for any risk transfer scheme to which the company is a party is nil.
Disclosure of tax avoidance schemes
Introduction
Part 7 of FA 2004 (disclosure of tax avoidance schemes) is amended as follows.
Initial marketing
Section 307 (meaning of “promoter”) is amended as follows.
In paragraph (a) of subsection (1), for the words from “business” to “makes” substitute “business, the person (“P”)—.
In paragraph (b) of that subsection, after “(a)(ii)” insert “ or (iii) ”.
After subsection (1) insert—
After subsection (4) insert—
In subsection (5), after “promoter” insert “ or introducer ”.
In subsection (6), after “promoter” (in both places) insert “ or introducer ”.
Section 308(2) (duties of promoter) is amended as follows.
For “earlier” substitute “ earliest ”.
Before paragraph (a) insert—.
In section 313A(1) (pre-disclosure enquiry), for “of a proposal or arrangements” substitute “ or introducer of a proposal, or the promoter of arrangements, ”.
In section 318(1) (interpretation), after the definition of “HMRC” insert—.
Promoters to provide client lists
After section 313 insert—
In section 316 (information to be provided in manner and form specified by HMRC), for “and 313(1) and (3)” substitute “ , 313(1) and (3) and 313ZA(3) ”.
In section 317(2) (regulations), after “may” insert “ make different provision for different cases and may ”.
Information provided to introducers
After section 313B insert—
Penalties
Section 98C of TMA 1970 (penalties for failures to comply with duties relating to disclosure of tax avoidance schemes) is amended as follows.
In subsection (1)(a) (initial penalty for failing to comply with duties), for “£5,000” substitute—
In subsection (2)—
omit the “and” at the end of paragraph (da),
after that paragraph insert—, and
insert at the end
After that subsection insert—
In subsection (2A), for “amount specified in subsection (1)(b) above shall be increased to the prescribed sum” substitute “ amounts specified in subsection (1)(a)(i) and (b) above shall be increased to the prescribed sum in relation to days falling after the prescribed period ”.
In subsection (2B), for “amount specified in subsection (1)(b)” substitute “ amounts specified in subsection (1)(a)(i) and (b) ”.
In subsection (2C)(b), after “section” insert “ 306A or ”.
In subsection (2D), after “under section” insert “ 306A or ”.
In subsection (2E), after “under section” insert “ 306A or ”.
In subsection (2F)—
in the opening words, for “subsection (2C)” substitute “ this section ”, and
in paragraph (c), after “subsection” insert “ (2ZE) or ”.
Commencement
The amendments made by this Schedule come into force on such day as the Treasury may by order made by statutory instrument appoint.
An order may appoint different days for different provisions or for different purposes.
Sale of lessors: election out of charge
Main changes
Chapter 3 of Part 9 of CTA 2010 (sale of lessors: leasing business carried on by company alone) is amended as follows.
Section 382 (introduction to Chapter) is amended as follows.
In subsection (1)—
for “qualifying change of ownership in relation to” substitute “ relevant change in the relationship between ”, and
insert at the end “ and a principal company of the company. ”
In subsection (3), for “ “qualifying change of ownership”, see sections 392 to 398.” substitute “relevant change in the relationship between a company and a principal company of the company”, see sections 392 to 394. ”
In section 383 (income and matching expense in different accounting periods), after subsection (1) insert—
For section 392 (and the italic heading before it) substitute—
After section 394 insert—
After section 398 insert—
Interpretation
In section 437 of CTA 2010 (interpretation of the sales of lessors Chapters), after subsection (8) insert—
In Schedule 4 to that Act (index of defined expressions), insert at the appropriate places—and in the entry relating to “qualifying change of ownership in relation to a company (in Chapters 3 to 6 of Part 9)” for “392 to 398” substitute “ 394A to 398A ”).
Commencement etc
The amendments made by this Schedule have effect where the relevant day is on or after 9 December 2009.
Amendments corresponding to those made by this Schedule, having effect where the relevant day is on or after that date, are to be treated as having been made in Schedule 10 to FA 2006.
Neither section 398F of CTA 2010 (inserted by paragraph 6) nor the corresponding provision treated as inserted by paragraph 10 apply in relation to expenditure incurred in pursuance of a written contract which is finalised by A before 9 December 2009; and for this purpose a contract is finalised on the earliest date on which—
it is unconditional or (if conditional) the conditions are met, and
no terms remain to be agreed.
Section 398A of CTA 2010 (as inserted by paragraph 6) has effect in relation to a relevant change in the relationship between A and a principal company of A in the case of which the relevant day is before 24 March 2010 as if—were omitted.
in subsection (3)(b), the words “falling within subsection (4)”, and
subsections (4) and (5),
Section 398D of CTA 2010 (as inserted by paragraph 6)—
has effect with the omission of subsection (6) in relation to accounting periods beginning before 24 March 2010, and
has effect with the omission of subsection (7) until that date.
Accounting standards: loan relationships and derivative contracts
Loan relationships
In Chapter 18 of Part 5 of CTA 2009 (loan relationships: general and supplementary provision), before section 466 (and the heading before it) insert—
Derivative contracts
In Chapter 13 of Part 7 of CTA 2009 (derivative contracts: general and supplementary provision), after section 701 insert—
Affirmative resolution procedure
In section 1310(4) of CTA 2009 (orders and regulations subject to affirmative resolution of House of Commons), before paragraph (za) insert—.
Champions League final
Exemption from income tax
This paragraph applies if an employee or contractor of an overseas team which competes in the 2011 Champions League final (“the final”) is neither UK resident nor ordinarily UK resident at the time of the final.
That person is not liable to income tax in respect of any income arising to the person which is related to duties or services performed by the person in the United Kingdom in connection with the final.
This paragraph is subject to paragraphs 2 and 3.
For the meaning of some expressions used in this paragraph, see paragraphs 5 and 6.
Exclusion of certain income
Paragraph 1(2) does not apply to income which arises as a result of—
a contract entered into after the final, or
any amendment, after the final, of a contract entered into before the end of the final.
Tax avoidance
This paragraph applies if conditions A and B are met.
Condition A is that arrangements have been made which, but for this paragraph, would result in a person obtaining exemption under paragraph 1 in respect of particular income.
Condition B is that those arrangements have, or form part of arrangements which have, as their main purpose, or one of their main purposes, the obtaining of that exemption.
Paragraph 1(2) does not apply to that income.
Disapplication of section 966 of ITA 2007
Section 966 of ITA 2007 (duty to deduct and account for sums representing income tax) does not apply to any payment or transfer which gives rise to income within paragraph 1(2).
Interpretation
References in this Schedule to income are to be read as references to—
income that would be employment income but for the provisions of paragraph 1, and
In this Schedule—“the 2011 Champions League final” means the final of the UEFA Champions League 2010/2011 competition held in England in 2011;“contractor”, in relation to an overseas team, means an individual who is not an employee of the team but who performs services for the team—under the terms of a contract with the team, or under the terms of a contract, or that individual's employment, with a company which is a member of the same group of companies as the team (within the meaning given by section 152 of CTA 2010);“employee” and “employment” are to be read in accordance with section 4 of ITEPA 2003;“overseas team” means a football club which is not a member of the Football Association, the Scottish Football Association, the Football Association of Wales or the Irish Football Association.