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Finance Act 2012

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Finance Act 2012

2012 c. 14

An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

Enacted[17th July 2012]

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:—

PART 1  Income tax, corporation tax and capital gains tax

CHAPTER 1 Income tax and corporation tax charges and rate bands

Income tax

1 Charge for 2012-13 and rates for 2012-13 and subsequent tax years

1 Income tax is charged for the tax year 2012-13, and for that tax year—
a the basic rate is 20%,
b the higher rate is 40%, and
c the additional rate is 50%.
2 For the tax year 2013-14—
a the basic rate is 20%,
b the higher rate is 40%, and
c the additional rate is 45%.
3 In Chapter 2 of Part 2 of ITA 2007 (rates at which income tax is charged)—
a in section 8(3) (dividend additional rate), for “42.5%” substitute “ 37.5% ”,
b in section 9(1) (trust rate), for “50%” substitute “ 45% ”, and
c in section 9(2) (dividend trust rate), for “42.5%” substitute “ 37.5% ”.
4 In section 394 of ITEPA 2003 (charge on relevant benefits provided under employer-financed retirement benefits scheme), in subsection (4) for “50%” substitute “ 45% ”.
5 In section 640 of ITTOIA 2005 (capital sums treated as income of the settlor: grossing-up of deemed income), in subsection (6)(b)—
a omit the “and” at the end of sub-paragraph (ii),
b in sub-paragraph (iii) for “or any subsequent tax year.” substitute “ , 2011-12 or 2012-13, and ”, and
c after that sub-paragraph insert—
6 The amendments made by subsections (3) to (5) have effect for the tax year 2013-14 and subsequent tax years.

2 Basic rate limit for 2012-13

1 For the tax year 2012-13 the amount specified in section 10(5) of ITA 2007 (basic rate limit) is replaced with “ £34,370 ”.
2 Accordingly section 21 of that Act (indexation of limits), so far as relating to the basic rate limit, does not apply for that tax year.

3 Personal allowance for 2012-13 for those aged under 65

1 For the tax year 2012-13 the amount specified in section 35(1) of ITA 2007 (personal allowance for those aged under 65) is replaced with “ £8,105 ”.
2 Accordingly section 57 of that Act (indexation of allowances), so far as relating to the amount specified in section 35(1) of that Act, does not apply for that tax year.

4 Personal allowances from 2013

1 Chapter 2 of Part 3 of ITA 2007 (personal allowance etc) is amended in accordance with subsections (2) to (6).
2 In section 35 (personal allowance for those aged under 65)—
a in subsection (1), for paragraph (a) substitute—
, and
b in the heading for “aged under 65” substitute “ born after 5 April 1948 ”.
3 In section 36 (personal allowance for those aged 65 to 74)—
a for subsection (1) substitute—
,
b in subsection (2)—
i for “For” substitute “ If the allowance under subsection (1) is greater than the section 35 amount, for ”,
ii in paragraph (a), for “half the excess” substitute “ an amount equal to half of that excess income ”, and
iii in paragraph (b), for the words from “amount” to the end substitute “ section 35 amount. ”,
c after that subsection insert—
, and
d in the heading for “aged 65 to 74” substitute “ born after 5 April 1938 but before 6 April 1948 ”.
4 In section 37 (personal allowance for those aged 75 and over)—
a for subsection (1) substitute—
,
b in subsection (2)—
i for “For” substitute “ If the allowance under subsection (1) is greater than the section 35 amount, for ”,
ii in paragraph (a), for “half the excess” substitute “ an amount equal to half of that excess income ”, and
iii in paragraph (b), for the words from “amount” to the end substitute “ section 35 amount. ”,
c after that subsection insert—
, and
d in the heading for “aged 75 and over” substitute “ born before 6 April 1938 ”.
5 In section 41 (allowances in year of death), omit subsections (2) and (3).
6 In section 57 (indexation of allowances)—
a in subsection (1)—
i in paragraph (a) for “aged under 65” substitute “ born after 5 April 1948 ”, and
ii omit paragraphs (b) and (c), and
b in subsection (3)(a), for “, 36(1), 37(1),” substitute “ and ”.
7 In section 508A of ICTA (contemplative religious communities: profits exempt from corporation tax), in subsections (5) and (9)(b) for “under 65” substitute “ born after 5 April 1948 ”.
8 The amendments made by this section have effect for the tax year 2013-14 and subsequent tax years.

Corporation tax

5 Main rate of corporation tax for financial year 2012

1 In section 5(2)(a) of FA 2011 (main corporation tax rate for financial year 2012 on profits other than ring fence profits), for “25%” substitute “ 24% ”.
2 The amendment made by this section is treated as having come into force on 1 April 2012.

6 Charge and main rate for financial year 2013

1 Corporation tax is charged for the financial year 2013.
2 For that year the rate of corporation tax is—
a 23% on profits of companies other than ring fence profits, and
b 30% on ring fence profits of companies.
3 In subsection (2) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

7 Small profits rate and fractions for financial year 2012

1 For the financial year 2012 the small profits rate is—
a 20% on profits of companies other than ring fence profits, and
b 19% on ring fence profits of companies.
2 For the purposes of Part 3 of CTA 2010, for that year—
a the standard fraction is 1/100th, and
b the ring fence fraction is 11/400ths.
3 In subsection (1) “ring fence profits” has the same meaning as in Part 8 of that Act (see section 276 of that Act).

CHAPTER 2 Income tax: general

Child benefit

8 High income child benefit charge

Schedule 1 contains provision for and in connection with a high income child benefit charge.

Anti-avoidance

9 Post-cessation trade or property relief: tax-generated payments or events

1 Part 4 of ITA 2007 (loss relief) is amended as follows.
2 In section 96(7) (post-cessation trade relief), after paragraph (b) insert—
.
3 After section 98 insert—
4 In section 125(6) (post-cessation property relief), after paragraph (b) insert—
.
5 The amendments made by subsections (2) and (3) have effect in relation to—
a payments which are made on or after 12 January 2012 except where they are made pursuant to an unconditional obligation in a contract made before that date, or
b events which occur on or after that date.
6 The amendment made by subsection (4) has effect in relation to—
a payments which are made on or after 13 March 2012 except where they are made pursuant to an unconditional obligation in a contract made before that date, or
b events which occur on or after that date.
7 In subsections (5)(a) and (6)(a) “an unconditional obligation” means an obligation which may not be varied or extinguished by the exercise of a right (whether under the contract or otherwise).
8 For the purposes of subsections (5)(b) and (6)(b) section 98 of ITA 2007 applies for determining when an event occurs.

10 Property loss relief against general income: tax-generated agricultural expenses

1 Chapter 4 of Part 4 of ITA 2007 (losses from property businesses) is amended as follows.
2 In section 117(3) (overview of Chapter), for “section 127A” substitute “ sections 127A and 127B ”.
3 In section 120(7) (deduction of property losses from general income), at the end insert “ and section 127B (no relief for tax-generated agricultural expenses) ”.
4 After section 127A insert—
5 The amendments made by this section have effect in relation to expenses arising directly or indirectly in consequence of, or otherwise in connection with—
a arrangements which are entered into on or after 13 March 2012, or
b any transaction forming part of arrangements which is entered into on or after that date.
6 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.
7 “An unconditional obligation” means an obligation which may not be varied or extinguished by the exercise of a right (whether under the contract or otherwise).

11 Gains from contracts for life insurance etc

1 In Chapter 9 of Part 4 of ITTOIA 2005 (gains from contracts for life insurance etc), after section 473 insert—
2 In section 491(2) of that Act (calculating gains from contracts for life insurance etc: general rules), in the definition of “PG”, at the end insert “ but only in so far as those gains have been, or fall to be, taken into account in calculating the total income of a person as a result of this Chapter or Chapter 2 of Part 13 of ITA 2007 ”.
3 In section 552 of ICTA (information: duty of insurers), for subsection (13) substitute—
4 The amendments made by this section have effect in relation to—
a any policy issued in respect of an insurance made on or after 21 March 2012, or
b any contract made on or after that date.
5 The amendments made by this section also have effect in the case of any insurance or contract made before 21 March 2012 if on or after that date—
a the policy or contract is varied with the result that there is an increase in the benefits secured,
b there is an assignment of rights, or a share of the rights, conferred by the policy or contract (whether or not for money's worth), or
c some or all of the rights conferred by the policy or contract become held as security for a debt.
6 For the purposes of subsection (5)(a)—
a an exercise of rights conferred by a policy or contract is to count as a variation of the policy or contract, and
b the reference to an increase in the benefits secured by a policy or contract includes an increase in the benefits secured by another policy or contract with which the policy or contract is connected (within the meaning given by section 473A of ITTOIA 2005, as inserted by subsection (1)).

12 Settlements: income originating from settlors other than individuals

1 ITTOIA 2005 is amended as follows.
2 In section 627 (income where settlor retains an interest: exceptions), at the end insert—
3 In section 645 (property or income originating from settlor), in subsection (2), for “section 644” substitute “ sections 627 and 644 ”.
4 The amendments made by this section have effect in relation to income arising on or after 21 March 2012.

Reliefs

C1613 Champions League final 2013

1 No liability to income tax arises in respect of any income from the 2013 Champions League final that arises to a person who is—
a an employee or contractor of an overseas team that competes in the final, and
b non-UK resident at the time of the final.
2 The reference in subsection (1) to income from the 2013 Champions League final is to income related to duties or services performed by the person in the United Kingdom in connection with the final.
3 The exemption under subsection (1) does not apply to—
a income that arises as a result of a contract entered into after the final, or of any amendment, after the final, of a contract entered into before the end of the final, or
b income that is the subject of tax avoidance arrangements.
4 Income is the subject of tax avoidance arrangements if—
a arrangements have been made which, but for subsection (3)(b), would result in a person obtaining an exemption under subsection (1) for the income, and
b those arrangements, or other arrangements of which they form part, have as their main purpose, or one of their main purposes, the obtaining of that exemption.
5 Section 966 of ITA 2007 (deduction of sums representing income tax) does not apply to any payment or transfer which gives rise to income benefiting from the exemption under subsection (1).
6 In this section—
  • “the 2013 Champions League final” means the final of the UEFA Champions League 2012/2013 competition held in England in 2013;
  • “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—
    1. under the terms of a contract with the team, or
    2. 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;
  • “income” means employment income or profits of a trade, profession or vocation (including profits treated as arising as a result of section 13 or 14 of ITTOIA 2005);
  • “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.

14 Cars: security features not to be regarded as accessories

1 ITEPA 2003 is amended as follows.
2 In section 125 (meaning of “accessory” and related terms) after subsection (3) insert—
3 After that section insert—
4 In Part 2 of Schedule 1 (index of defined expressions), in the entry for “accessory”, in the second column for “section 125(2)” substitute “ sections 125(2) and 125A(2) ”.
5 The amendments made by this section have effect for the tax year 2011-12 and subsequent tax years.

15 Termination payments to MPs ceasing to hold office

1 In section 291 of ITEPA 2003 (exemptions: termination payments to MPs and others ceasing to hold office), for subsection (2)(a) substitute—
.
2 The amendment made by this section has effect in relation to grants and payments made on or after 1 April 2012.

16 Employment income exemptions: armed forces

1 Chapter 8 of Part 4 of ITEPA 2003 (exemptions: special kinds of employees) is amended as follows.
2 In section 297A (exemption for Operational Allowance), in subsection (2), for “by the Secretary of State” substitute “ under a Royal Warrant made under section 333 of the Armed Forces Act 2006 ”.
3 In section 297B (exemption for Council Tax Relief), in subsection (2), for “by the Secretary of State” substitute “ under a Royal Warrant made under section 333 of the Armed Forces Act 2006 ”.
4 After that section insert—
5 The amendments made by this section have effect in relation to payments made on or after 6 April 2012.

Other provisions

17 Taxable benefits: “the appropriate percentage” for cars for 2014-15

1 In section 139 of ITEPA 2003 (car with a CO2 emissions figure: the appropriate percentage), for subsections (2) and (3) substitute—
2 The amendment made by this section has effect for the tax year 2014-15 and subsequent tax years.

18 Qualifying time deposits

1 In section 866 of ITA 2007 (qualifying time deposits), in subsection (1), after “deposit” insert “ made before 6 April 2012 ”.
2 The amendment made by this section is treated as having come into force on 6 April 2012.

CHAPTER 3 Corporation tax: general

Support for business

19 Profits arising from the exploitation of patents etc

Schedule 2 contains provision about the treatment for corporation tax purposes of profits arising from the exploitation of patents etc.

20 Relief for expenditure on R&D

Schedule 3 contains provision about corporation tax relief for expenditure on research and development.

21 Real estate investment trusts

Schedule 4 amends Part 12 of CTA 2010 (real estate investment trusts).

Anti-avoidance

F1622 Treatment of the receipt of manufactured overseas dividends

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

23 Loan relationships: debts becoming held by connected company

1 Chapter 6 of Part 5 of CTA 2009 (loan relationships: connected companies and impairment losses and releases of debt) is amended as follows.
2 In section 362 (parties becoming connected where creditor's rights subject to impairment adjustment)—
a in subsection (1)—
i omit paragraph (c) (impairment in pre-connection carrying value of creditor's loan relationship), and
ii omit the “and” before that paragraph and, at the end of paragraph (a), insert “ and ”,
b for subsections (3) and (4) substitute—
c in subsection (5)—
i in the opening words, for “the carrying value is determined taking no account of—” substitute “ no account is to be taken of— ”,
ii at the end of paragraph (a) insert “ or ”, and
iii omit paragraph (c) (together with the “or” before that paragraph), and
d in the heading, at the end insert “ etc ”.
3 After section 363 insert—
4 The amendments made by subsection (2) have effect as follows—
a the amendments made by paragraphs (a), (b) and (d) have effect in relation to any case where the companies become connected on or after 27 February 2012, but if the companies become connected on or after that date but before 1 April 2012 section 362 of CTA 2009 has effect as if the following were substituted for subsections (3) and (4) of that section—
b the amendments made by paragraph (c) have effect in relation to any case where the companies become connected on or after 1 April 2012,
and section 363 of CTA 2009 applies for the purposes of this subsection as it applies for the purposes of sections 361 to 362 of that Act.
5 The amendment made by subsection (3) has effect in relation to—
a arrangements entered into on or after 27 February 2012, or
b arrangements entered into before that date where the amount is treated as released, or would have been treated as released, on or after that date.
6 But subsection (5)(b) does not apply if the amount is treated as released, or would have been treated as released, pursuant to an unconditional obligation in a contract made before 27 February 2012.
7 An “unconditional” obligation is one which may not be varied or extinguished by the exercise of a right (whether under the contract or otherwise).
8 The conditions in section 361(1)(a) to (c) of CTA 2009 are treated as met (and the remaining provisions of that section have effect accordingly) in any case where—
a arrangements are entered into by any party at any time,
b directly or indirectly in consequence of, or otherwise in connection with, those arrangements a company (“C”) becomes a party to a loan relationship as creditor,
c the time at which C becomes a party to the loan relationship falls on or after 1 December 2011 but before 27 February 2012,
d directly or indirectly in consequence of, or otherwise in connection with, those arrangements C subsequently becomes connected with another company ( “ D ”) which is a party to the loan relationship as debtor, and
e that subsequent time falls before 27 February 2012.
9 For the purposes of subsection (8)—
a “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
b the reference to C becoming connected with D is to be read in accordance with section 363 of CTA 2009.
10 Subsections (8) and (9) are to have effect as if they were contained in Part 5 of CTA 2009 (and the cases in which section 361 of CTA 2009 has effect in accordance with subsection (8) include any case where C or D is a member of a firm which becomes or is a party to the loan relationship and in that case references to C or D (other than references to the connection which C or D has with a company) are references to the firm).
11 For the purpose of applying section 361 of CTA 2009 in accordance with subsection (8) no account is to be taken of anything done on or after 27 February 2012.
12 If section 361 of CTA 2009 has effect in accordance with subsection (8), section 362 of that Act does not apply.

24 Companies carrying on businesses of leasing plant or machinery

1 CTA 2010 is amended as follows.
2 In section 385 (sales of lessors: no carry back of the expense)—
a for subsections (2) and (3) substitute—
, and
b in the heading, for “No carry back of the expense” substitute “ No carry back of loss against the income ”.
3 In section 392 (sales of lessors: “relevant change in relationship”), at the end insert “ or section 394ZA (company joining tonnage tax group) ”.
4 After section 394 insert—
5 In section 394A (sales of lessors: “qualifying change of ownership”)—
a the existing text becomes subsection (1), and
b after that subsection insert—
6 In section 427 (sales of lessors: no carry back of the expense)—
a for subsections (2) and (3) substitute—
, and
b in the heading, for “No carry back of the expense” substitute “ No carry back of loss against the income ”.
7 In section 950 (transfers of trade without a change of ownership: transfers of trade involving business of leasing plant or machinery), after subsection (3) insert—
8 In Schedule 22 to FA 2000 (tonnage tax), after paragraph 79 insert—
9 The amendments made by subsections (2) and (6) have effect—
a where the income arises as a result of a company becoming a member of a tonnage tax group on or after 21 March 2012 and entering tonnage tax at the same time,
b where the income arises as a result of a company becoming a member of a tonnage tax group on or after 23 April 2012 without entering tonnage tax at the same time, or
c where the relevant day is on or after 21 March 2012 (in any case not within paragraph (a) or (b)).
10 The amendments made by subsections (3) to (5) and (8) have effect—
a where a company becomes a member of a tonnage tax group on or after 21 March 2012 and enters tonnage tax at the same time, or
b where a company becomes a member of a tonnage tax group on or after 23 April 2012 without entering tonnage tax at the same time.
11 The amendment made by subsection (7) has effect—
a except in a case within paragraph (b), where the transfer day is on or after 21 March 2012, and
b in a case where the relevant change in the relationship occurs as a result of a company becoming a member of a tonnage tax group without entering tonnage tax at the same time, where the transfer day is on or after 23 April 2012.

Insurance

25 Corporate members of Lloyd's: stop-loss insurance and quota share contracts

1 In section 225 of FA 1994 (corporate members of Lloyd's: stop-loss and quota share insurance), after subsection (3B) insert—
2 The amendment made by this section has effect in relation to—
a any stop-loss insurance (as defined by section 230(1) of FA 1994) taken out on or after 6 December 2011, or
b any quota share contract (as defined by section 225(4) of FA 1994) entered into on or after that date.
3 If before 6 December 2011 a corporate member enters into a multi-year contract—
a insurance is to be regarded for the purposes of subsection (2)(a) as taken out on the anniversary date of the contract which falls on or after the day on which this Act is passed, and
b premiums payable under the insurance in respect of an underwriting year beginning on or after that day are premiums falling to be dealt with in accordance with the amendment made by this section.
4 For this purpose—
  • “multi-year contract” means a contract which (unless cancelled) operates in respect of successive underwriting years, and
  • “the anniversary date of the contract” means the date which is the anniversary of the date on which the contract was entered into.
5 If—
a before 6 December 2011 a corporate member enters into a contract for insurance in respect of an underwriting year, and
b on or after 6 December 2011 the contract is renewed in respect of a further underwriting year (whether as a result of the exercise of an option conferred by the contract or otherwise),
insurance is to be regarded for the purposes of subsection (2)(a) as taken out on the date of the renewal.

I8426 Abolition of relief for equalisation reserves: general insurers

1 Sections 444BA to 444BD of ICTA (equalisation reserves) are repealed.
2 In consequence of the repeal of those sections, omit—
a in TMA 1970, in the second column of the table in section 98, the entry relating to regulations under section 444BB of ICTA and the entry relating to regulations under section 444BD of ICTA,
b in FA 1996, section 166 and Schedule 32,
c in FA 2003, in section 153(1)(a), the reference “444BB(3)(b),”,
d in CTA 2009, paragraphs 155 and 156 of Schedule 1, and
e in TIOPA 2010, paragraph 9 of Schedule 8.
3 The amendments made by this section have effect in relation to accounting periods ending on or after such day (“the specified day”) as is specified in an order made by the Treasury (and different days may be specified for different cases).
C174 In the case of an insurance company's existing equalisation or equivalent reserve—
a an amount equal to one-sixth of the amount of the reserve is to be treated as a receipt of the company's business in the calendar year in which the specified day falls, and
b an amount equal to one-sixth of the amount of the reserve is to be treated as a receipt of the company's business in each of the next five calendar years.
C175 If there are different accounting periods falling in a calendar year, a receipt arising as a result of subsection (4) is apportioned between those periods in proportion to the number of days of the calendar year falling in those periods.
C176 If—
a the company ceases to carry on the business in a calendar year, and
b an amount would otherwise have been treated as a result of subsection (4) as a receipt of the company's business in a later calendar year,
any amount within paragraph (b) is treated instead as a receipt of the company's business in the accounting period in which the company ceased to carry on the business.
C177 For the purposes of this section—
a “equalisation reserve”, in relation to an insurance company, means the equalisation reserve in respect of a business which the company was required, by virtue of equalisation reserves rules (within the meaning of section 444BA of ICTA), to maintain,
b “equivalent reserve” means an equivalent reserve (within the meaning of section 444BD of ICTA) in relation to which section 444BA of ICTA applied,
c a company's “existing” equalisation or equivalent reserve means the equalisation or equivalent reserve as it stood immediately before the first accounting period of the company (“the relevant accounting period”) in relation to which the amendments made by this section have effect (but see subsection (8)), and
d references in this section to the company's business are to the business in respect of which the equalisation or equivalent reserve was maintained.
C178 If—
a an insurance company has made an election under section 444BA(4) of ICTA in relation to an accounting period ending before the specified day, and
b an amount would, but for this section, have been carried forward to the relevant accounting period of the company as a deductible amount,
that amount is not to be carried forward to that period as a deductible amount but is instead to be deducted from the amount of the equalisation or equivalent reserve as it stood immediately before that period.
9 References in this section to section 444BA of ICTA include that section as modified by regulations made under section 444BB or 444BC of that Act.

C1827 Election to accelerate receipts under s.26(4)

1 An insurance company may make an election in relation to a calendar year (“the relevant year”) for all of the amounts that would, as a result of section 26(4), otherwise be treated as arising in later calendar years as receipts of a business carried on by the company to be treated instead as receipts of the business arising in the relevant year.
2 An election under this section—
a must be made by notice to an officer of Revenue and Customs within 2 years from the end of the relevant year, and
b is irrevocable.
3 A company which makes an election under section 29 as the transferor or the transferee may make an election under this section but not in relation to the calendar year in which the transfer takes place.

28 Deemed receipts under s.26(4): double taxation relief

1 This section applies if—
a a receipt is treated as arising to an insurance company's business in an accounting period as a result of section 26(4),
b the company carries on business through a permanent establishment outside the United Kingdom by reference to which double taxation relief is afforded in respect of any income or gains, and
c the permanent establishment is one in relation to which regulation 10(2) of the Insurance Companies (Reserves) (Tax) Regulations 1996 previously applied.
2 For the purpose of calculating the profits or losses by reference to which double taxation relief is afforded for the accounting period, only the appropriate proportion (if any) of the receipt is to be taken into account.
3 The appropriate proportion of the receipt is—
a equal to the mean of each proportion found for each relevant period (if any), or
b equal to such other proportion as the company may determine on a just and reasonable basis.
4 For the purposes of subsection (3)(a) a proportion for a relevant period is the proportion which the PE's premium income for the period bears to the company's premium income for the period.
5 For the purposes of subsections (3)(a) and (4)—
  • “the company's premium income”, in relation to a relevant period, means the amount of net premiums written by reference to which the calculation under section 444BA(2)(a) or (b) of ICTA was made for the period,
  • “the PE's premium income”, in relation to a relevant period, means so much of the company's premium income for the period as is attributable to the permanent establishment, and
  • a “relevant period” means an accounting period of the company in relation to which each of the following conditions is met—
    1. section 444BA of ICTA has applied in relation to the accounting period,
    2. the business mentioned in subsection (1)(a) has been carried on through the permanent establishment in the accounting period, and
    3. the accounting period is the company's last accounting period in relation to which section 444BA of ICTA applied or is one that falls wholly or partly in the period of six years ending with the day on which that last accounting period ended.
6 In subsection (5)—
a “net premiums written” means gross premiums written net of reinsurance premiums payable under reinsurance ceded, and
b references to section 444BA of ICTA include that section as modified by regulations made under that Act.

29 Transfer of whole or part of the business

1 If—
a an insurance company carries on a business,
b amounts fall to be treated as receipts of the business as a result of section 26(4) (“deemed receipts”), and
c under an insurance business transfer scheme there is a transfer of the whole or part of the business to another insurance company within the charge to corporation tax,
the transferor and the transferee may jointly make an election for those deemed receipts to be allocated between them in accordance with the following provisions.
2 If the transfer is a transfer of the whole of the business or substantially the whole of the business—
a section 26(6) does not apply in relation to the transferor (if it would otherwise have applied),
b the deemed receipt which, on the assumption that there had been no transfer, would have arisen in the transfer year is apportioned between the transferor and the transferee in accordance with subsection (5), and
c the remaining deemed receipts (if any) which, on that assumption, would have arisen in subsequent calendar years are treated as receipts of the transferee (and not as receipts of the transferor).
3 If the transfer is a transfer of a part of the business and subsection (2) does not apply—
a the appropriate portion of the deemed receipt arising in the transfer year is apportioned between the transferor and the transferee in accordance with subsection (5), and
b the appropriate portions of the remaining deemed receipts (if any) are treated as receipts of the transferee (and the receipts of the transferor are reduced accordingly).
4 The appropriate portion of a deemed receipt is to be determined on a just and reasonable basis.
5 An apportionment under subsection (2)(b) or (3)(a) is to be made in proportion to the number of days of the calendar year falling before the day of the transfer and the number of days of the calendar year falling on or after the day of transfer.
6 A deemed receipt which is treated as a receipt of the transferee as a result of this section is treated as a receipt of the business of the transferee which consists of or includes the transferred business, and, accordingly, section 26(4) and (6) have effect in relation to the transferee—
a as if references to the company were references to the transferee, and
b as if references to the business were references to the business of the transferee which consists of or includes the transferred business.
7 An election under this section—
a must be made by notice to an officer of Revenue and Customs within 28 days from the end of the day on which the transfer takes place,
b must be accompanied by an explanation as to the way in which the transferor and the transferee have determined any issue falling to be determined for the purposes of this section, and
c is irrevocable.
8 In this section—
  • “the transferred business” means so much of the business as is transferred to the transferee, and
  • “the transfer year” means the calendar year in which the transfer takes place.
9 If a company makes an election under this section as the transferee, this section has effect for the purposes of any subsequent elections made by the company under this section as the transferor as if references to the business were references to the activities in respect of which deemed receipts are treated as arising to it.

30 Abolition of relief for equalisation reserves: Lloyd's corporate members etc

1 Regulations made by the Treasury under section 47 of FA 2009 (equalisation reserves for Lloyd's corporate and partnership members) that revoke previous regulations made under that section may include provision corresponding to the provision made by sections 26(4) to (8) and 27, subject to such modifications as may be made in the regulations.
I852 Section 47 of FA 2009 is repealed.
3 That repeal has effect in relation to accounting periods ending on or after such day (“the specified day”) as is specified in an order made by the Treasury (and different days may be specified for different cases).
4 Subsections (2) and (3) are not to affect the operation of any transitional or saving provision included (whether as a result of this section or otherwise) in regulations made under section 47 of FA 2009 that revoke previous regulations made under that section so far as the provision remains capable of having effect in relation to times falling on or after the specified day.

Miscellaneous

F7231 Tax treatment of financing costs and income

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

32 Group relief: meaning of “normal commercial loan”

1 CTA 2010 is amended as follows.
2 In section 162(2)(c) (meaning of “normal commercial loan”), after “securities in” insert “ a quoted unconnected company (see section 164(2A)) or in ”.
3 In section 164 (sections 160 and 162: supplementary), in subsection (2)(c), after “securities in” insert “ a quoted unconnected company (see subsection (2A)) or in ”.
4 After subsection (2) of that section insert—
5 In subsection (4) of that section—
a for “If the candidate company's” substitute “ In the case of a company whose ”, and
b for “subsection (3)(c) is” substitute “ subsections (2A)(a) and (3)(c) are ”.
6 In subsection (5) of that section, for “subsections (3) and (4)” substitute “ this section ”.
7 The amendments made by this section have effect in relation to loans made on or after 21 March 2012.

33 Company distributions

1 Part 23 of CTA 2010 (company distributions) is amended as follows.
2 Section 1002 (exceptions for certain transfers of assets or liabilities between a company and its members) is repealed.
3 In section 1020 (transfers of assets or liabilities treated as distributions)—
a in subsection (2), omit from “But” to the end, and
b after that subsection insert—
4 Section 1021 (transfers of assets or liabilities treated as distributions: exceptions) is repealed.
5 In consequence of the repeal made by subsection (2)—
a omit section 194(2) of CTA 2010,
b in section 998(3) of that Act, for “1002” substitute “ 1003 ”,
c in section 1001 of that Act, in the third column of the table, omit “Section 1002 (exception for certain transfers of assets and liabilities)”, and
d omit paragraph 1(2) of Schedule 3 to F(No.3)A 2010.
6 The amendments made by this section have effect in relation to distributions made on or after the day on which this Act is passed.

CHAPTER 4 Capital gains

34 Annual exempt amount

1 TCGA 1992 is amended as follows.
2 In section 3 (annual exempt amount), for the figure specified in subsection (2) substitute “ £10,600 ”.
3 In that section—
a in each of subsections (3), (3A), (3B) and (4), for “RPI” substitute “ CPI ”, and
b in subsection (3A), for “retail prices index” substitute “ consumer prices index ”.
4 In section 288 (interpretation), after subsection (2) insert—
5 The amendment made by subsection (2) has effect for the tax year 2012-13 and subsequent tax years.
6 Section 3(3) of TCGA 1992 (indexation) does not apply in relation to the tax year 2012-13.
7 The amendments made by subsections (3) and (4) have effect for the tax year 2013-14 and subsequent tax years.

35 Foreign currency bank accounts

1 TCGA 1992 is amended as follows.
2 In section 13 (attribution of gains to members of non-resident companies), in subsection (5), omit paragraph (c).
3 In section 251 (debts: general provisions), after subsection (5) insert—
4 For section 252 substitute—
5 Omit section 252A and Schedule 8A (foreign currency bank accounts).
6 The amendments made by this section have effect in relation to disposals occurring on or after 6 April 2012.

36 Collective investment schemes: chargeable gains

1 TCGA 1992 is amended as follows.
2 In section 99A(2) (treatment of umbrella schemes), after “subsection (1)” insert “ and section 103C ”.
3 After section 103B insert—

37 Roll-over relief

1 In section 155 of TCGA 1992 (roll-over relief: relevant classes of assets), in the entry for Class 7A, for “Council Regulation (EC) No. 1782/2003” substitute “ Council Regulation (EC) No 73/2009 ”.
2 In section 86 of FA 1993, for subsection (2) (power to add to classes specified in section 155 of TCGA 1992) substitute—
3 Accordingly, section 43(3) of FA 2002 is repealed.
4 The amendment made by subsection (1) has effect where the disposal of the old assets (or an interest in them) or the acquisition of the new assets (or an interest in them) is on or after 1 January 2009.

CHAPTER 5 Miscellaneous

Enterprise incentives

38 Seed enterprise investment scheme

Schedule 6 contains provision for and in connection with the seed enterprise investment scheme (including provision for re-investment relief under TCGA 1992).

39 Enterprise investment scheme

Schedule 7 contains provision about the enterprise investment scheme (including provision about deferral relief under Schedule 5B to TCGA 1992).

40 Venture capital trusts

Schedule 8 contains provision about venture capital trusts.

Capital allowances

41 Plant and machinery: restricting exception for manufacturers and suppliers

1 In section 230 of CAA 2001 (exception for manufacturers and suppliers), in subsection (1), for “restrictions in sections 217 and 218 do” substitute “ restriction in section 218 does ”.
2 The amendment made by subsection (1) has effect in relation to expenditure of B's that is incurred on or after 12 August 2011 (regardless of when the relevant transaction was entered into).
3 But, in relation to any such expenditure that is incurred before the next amendment date, the restriction in section 217 of CAA 2001 does not apply (despite subsection (1)) if B can show that the condition in subsection (4) is met.
4 The condition is that, had the amendments made by paragraphs 1 to 7 of Schedule 9 had effect in relation to the expenditure, the restriction in section 217 would not have applied.
5 “The next amendment date” means the date defined in paragraph 9 of Schedule 9 as the start date.

42 Plant and machinery allowances: anti-avoidance

Schedule 9 contains provision to counter abuse of Part 2 of CAA 2001.

43 Plant and machinery allowances: fixtures

Schedule 10 contains provision about plant and machinery allowances in respect of fixtures.

44 Expenditure on plant and machinery for use in designated assisted areas

Schedule 11 contains provision about first-year allowances in respect of expenditure on plant and machinery for use in designated assisted areas.

45 Allowances for energy-saving plant and machinery

1 Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.
F872 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F883 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 In section 104A (special rate expenditure)—
a in subsection (1), omit the “and” after paragraph (e), and after paragraph (f) insert
, and
b after subsection (3) insert—

46 Plant and machinery: long funding leases

1 Section 70E of CAA 2001 (disposal events and disposal values) is amended as follows.
2 In subsection (2A), for the definition of “R” substitute—
3 After subsection (2F) insert—
4 For subsection (2G) substitute—
5 The amendments made by this section have effect in relation to cases where the relevant event occurs on or after 21 March 2012.

Foreign income and gains

47 Foreign income and gains

Schedule 12 contains provision about the taxation of foreign income and gains.

Pensions

48 Employer asset-backed pension contributions etc

Schedule 13 contains—
a provision relating to employers who pay contributions under registered pension schemes and arrangements for which their contributions are used (directly or indirectly), and
b provision amending Chapter 5B of Part 13 of ITA 2007 and Chapter 2 of Part 16 of CTA 2010 (finance arrangements).

Charitable giving etc

49 Gifts to the nation

Schedule 14 contains provision for a person's tax liability to be reduced in return for giving pre-eminent property to the nation.

50 Gift aid: giving through self-assessment return

1 Section 429 of ITA 2007 (gift aid: giving through self-assessment return) is repealed.
2 The following repeals are made in consequence of subsection (1)—
a in section 426 of ITA 2007 (election by donor: gift treated as made in previous tax year), omit subsection (8),
b in section 538 of that Act (requirement to make claim), omit subsection (3),
c in section 133 of FA 2008 (set-off etc where right to be paid a sum has been transferred), in subsection (8)(a), omit the words from “except” to the end,
d in section 472 of CTA 2010 (gifts qualifying for gift aid relief: corporation tax liability and exemption), omit subsection (5), and
e in section 475 of that Act (gifts qualifying for gift aid relief: income tax treated as paid and exemption), omit subsection (7).
3 Accordingly, the following provisions are also repealed—
a section 130(9) of FA 2008, and
b paragraph 3(4) of Schedule 8 to FA 2010.
4 The repeals made by this section are treated as having come into force on 6 April 2012.

51 Relief for gift aid and other income of charities etc

Schedule 15 contains provision about relief in respect of gifts qualifying for gift aid relief and other income of charities and other bodies.

52 Meaning of “community amateur sports club”

1 In section 658 of CTA 2010 (meaning of “community amateur sports club”), for subsection (1) substitute—
2 In consequence of the amendment made by subsection (1), omit paragraph 31 of Schedule 6 to FA 2010.
3 The amendments made by this section are treated as having come into force on 6 April 2010.

Other provisions

53 Site restoration payments

1 In section 168 of ITTOIA 2005 (site restoration payments), at the beginning of subsection (2) insert “ Subject to subsection (3A), ”.
2 For subsection (3) of that section substitute—
3 At the end of that section insert—
4 In section 145 of CTA 2009 (site restoration payments), at the beginning of subsection (2) insert “ Subject to subsection (3A), ”.
5 For subsection (3) of that section substitute—
6 At the end of that section insert—
7 The amendments made by this section have effect in relation to any site restoration payment made on or after 21 March 2012, other than a payment made pursuant to an unconditional obligation in a contract made before 21 March 2012.
8 An unconditional obligation is an obligation which may not be varied or extinguished by the exercise of a right (whether or not under the contract).

54 Changes of accounting policy

1 In section 227 of ITTOIA 2005 (adjustment on change of accounting basis: income tax)—
a in subsection (3)(a) for “relevant change of accounting approach” substitute “ change of accounting policy ”, and
b for subsection (4) substitute—
2 In section 180 of CTA 2009 (adjustment on change of accounting basis: corporation tax)—
a in subsection (3)(a) for “relevant change of accounting approach” substitute “ change of accounting policy ”, and
b for subsection (4) substitute—
3 Corresponding amendments are to be treated as having been made in section 64 of FA 2002.
4 In consequence of the amendment made by subsection (1)(b), omit paragraph 2 of Schedule 6 to F(No.2)A 2005.
5 The amendments made by this section have effect in relation to a change of basis if the new basis—
a is adopted for a period of account which begins on or after 1 January 2012, or
b is adopted for a period of account which begins before 1 January 2012 and the adoption is in consequence of the issue, revocation, amendment or recognition of, or withdrawal of recognition from, an accounting standard by an accounting body on or after 1 January 2012.
6 In this section—
  • “accounting body” means the International Accounting Standards Board, the Accounting Standards Board, or a successor body to either of those Boards;
  • “accounting standard” includes any statement of practice, guidance or other similar document.

PART 2 Insurance companies carrying on long-term business

CHAPTER 1 Introductory

Outline of provisions of Part

55 Overview

1 This Part makes special provision for corporation tax purposes in relation to life assurance business and other long-term business carried on by insurance companies.
2 Chapter 1 explains some of the key concepts for the purposes of this Part, including the concept of basic life assurance and general annuity business (abbreviated to “BLAGAB”).
3 Chapter 2—
a provides for the profits of BLAGAB to be subject to a charge to corporation tax on the I - E basis as the profits of a separate business, and
b provides for the profits of other long-term business to be charged to corporation tax under section 35 of CTA 2009 as the profits of a single trade.
4 Chapter 3 sets out the rules applicable to the I - E charge (which operate in part by reference to the calculation of an insurance company's BLAGAB trade profit or loss).
5 Chapter 4 sets out rules for determining for the purposes of the I - E charge how to apportion items to an insurance company's basic life assurance and general annuity business.
6 Chapter 5—
a provides for the policyholders' share of the I - E profit to be charged at the policyholders' rate (the basic rate of income tax), and
b provides for policyholder tax to be taken into account in calculating an insurance company's BLAGAB trade profit or loss.
7 Chapter 6 contains special rules that are to apply for the purpose of calculating an insurance company's BLAGAB trade profit or loss or the profits of an insurance company's other long-term business.
8 Chapter 7 sets out rules for determining for the purposes of that calculation how to allocate items between BLAGAB and other long-term business.
9 The remainder of the Part contains—
a provision in relation to assets held for the purposes of an insurance company's long-term business (see Chapter 8),
b provision for relieving BLAGAB trade losses and restrictions in relation to the policyholders' share of an I - E profit (see Chapter 9),
c provision in relation to the transfer of BLAGAB or other long-term business (see Chapter 10), and
d definitions and other supplementary material (see Chapters 11 and 12).

Meaning of “life assurance business”

56 Meaning of “life assurance business”

1 This section defines for the purposes of this Part what is meant by “life assurance business”.
2 Business is “life assurance business” if—
a it consists of the effecting or carrying out of contracts of insurance which fall within paragraph I, II, III or VII(b) of Part 2 of Schedule 1 to the FISMA (Regulated Activities) Order 2001, or
b it is capital redemption business (see subsection (3)).
3 Business is “capital redemption business” if it consists of the effecting on the basis of actuarial calculations, and the carrying out, of contracts under which, in return for one or more fixed payments, a sum of a specified amount (or a series of sums of a specified amount) become payable at a future time or over a period.

Meaning of “basic life assurance and general annuity business”

C157 Meaning of “basic life assurance and general annuity business”

1 This section defines for the purposes of this Part what is meant by “basic life assurance and general annuity business”.
2 “Basic life assurance and general annuity business” means life assurance business other than—
a pension business (which is defined for the purposes of this section by section 58),
b child trust fund business (which is defined for the purposes of this section by section 59),
c individual savings account business (which is defined for the purposes of this section by section 60),
d business which consists of the effecting or carrying out of immediate needs annuities (within the meaning of section 725 of ITTOIA 2005),
e re-insurance of life assurance business other than excluded business,
f overseas life assurance business (which is defined for the purposes of this section by section 61), or
g protection business (which is defined for the purposes of this section by section 62).
3 In subsection (2)(e) “excluded business” means business of any description excluded for the purposes of this section by regulations made by HMRC Commissioners.

58 Section 57: meaning of “pension business”

1 This section defines for the purposes of the definition of “basic life assurance and general annuity business” given by section 57 what is meant by “pension business”.
2 Life assurance business is “pension business” if—
a it consists of the effecting or carrying out of contracts entered into for the purposes of a registered pension scheme, or
b it is the re-insurance of business within paragraph (a).
3 Subsection (4) applies if the pension scheme ceases to be a registered pension scheme as a result of the withdrawal of its registration under section 157 of FA 2004.
4 The company's life assurance business that was pension business when the scheme was a registered pension scheme is treated as ceasing to be pension business at the beginning of the company's period of account in which the scheme so ceases to be a registered pension scheme.
5 If—
a immediately before 6 April 2006 an annuity contract fell within any of the descriptions of contracts specified in section 431B(2) of ICTA as it had effect immediately before that date, but
b the contract does not fall to be regarded for the purposes of this section as having been entered into for the purposes of a registered pension scheme,
the contract is treated for the purposes of this section as having been entered into for those purposes.

59 Section 57: meaning of “child trust fund business”

1 This section defines for the purposes of the definition of “basic life assurance and general annuity business” given by section 57 what is meant by “child trust fund business”.
2 Life assurance business is “child trust fund business” if it consists of the effecting or carrying out of child trust fund policies.
3 But the re-insurance of business consisting of the effecting or carrying out of child trust fund policies is not “child trust fund business”.
4 In this section “child trust fund policy” means a policy of life insurance which is an investment under a child trust fund (within the meaning of the Child Trust Funds Act 2004).

60 Section 57: meaning of “individual savings account business”

1 This section defines for the purposes of the definition of “basic life assurance and general annuity business” given by section 57 what is meant by “individual savings account business”.
2 Life assurance business is “individual savings account business” if it consists of the effecting or carrying out of individual savings account policies.
3 But the re-insurance of business consisting of the effecting or carrying out of individual savings account policies is not “individual savings account business”.
4 In this section “individual savings account policy” means a policy of life insurance which is an investment of a kind specified in regulations made as a result of section 695(1) of ITTOIA 2005.

61 Section 57: meaning of “overseas life assurance business”

1 This section defines for the purposes of the definition of “basic life assurance and general annuity business” given by section 57 what is meant by “overseas life assurance business”.
2 Life assurance business is “overseas life assurance business” if—
a it consists of the effecting or carrying out of contracts with policyholders or annuitants who are not resident in the United Kingdom, and
b it does not consist of excluded business,
but the re-insurance of business that meets the conditions in paragraphs (a) and (b) is not “overseas life assurance business”.
3 For this purpose “excluded business” means—
a business which is pension business within the meaning of section 58,
b business which is child trust fund business within the meaning of section 59,
c business which is individual savings account business within the meaning of section 60, or
d business of any description excluded by regulations made by HMRC Commissioners.
4 HMRC Commissioners may by regulations—
a make provision as to the circumstances in which a trustee who is a policyholder or annuitant residing in the United Kingdom is to be treated for the purposes of this section as not residing there, and
b provide that nothing in Chapter 9 of Part 4 of ITTOIA 2005 is to apply to a policy or contract which constitutes overseas life assurance business as a result of provision made under paragraph (a).
5 HMRC Commissioners may by regulations make provision for giving effect to this section.
6 Regulations under subsection (5) may—
a provide that, in prescribed circumstances, any prescribed issue as to whether business is, or is not, overseas life assurance business (or overseas life assurance business of a particular kind) is to be determined by reference to prescribed matters,
b require companies to obtain certificates, undertakings, information or declarations from any person for the purposes of the regulations,
c make provision for dealing with cases where any issue within paragraph (a) is (for any reason) wrongly determined, including provision allowing for charges to tax to be imposed (with or without limits on time) on the insurance company concerned or on the policyholders or annuitants concerned,
d require companies to supply information and make available books, documents and other records for inspection by officers of Revenue and Customs, and
e make provision (including provision imposing penalties) for contravention of, or non-compliance with, the regulations.
7 The matters that may be prescribed under subsection (6)(a) include—
a the giving of certificates or undertakings,
b the giving or possession of information, and
c the making of declarations.
8 Regulations under this section may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision (including provision amending any enactment or instrument made under any enactment).

62 Section 57: meaning of “protection business”

1 This section defines for the purposes of the definition of “basic life assurance and general annuity business” given by section 57 what is meant by “protection business”.
2 Life assurance business is “protection business” if it consists of the effecting or carrying out of any contract of long-term insurance in relation to which the following conditions are met—
a the benefits payable cannot exceed the amount of premiums paid except on death or in respect of incapacity due to injury, sickness or other infirmity, and
b the contract is made on or after 1 January 2013.
3 For the purposes of subsection (2)(a) ignore—
a any benefit (other than a payment of money) that, when the contract is entered into, is provided as an inducement for entering into the contract and that is not repayable (to any extent) in any circumstances,
b any case where the amount by which the benefits can exceed the amount of premiums paid is an insignificant proportion of those premiums, and
c any case which a reasonable person, as the policyholder under the policy effected by the contract, can reasonably regard as highly unlikely to arise.
4 If at any time—
a a contract is varied otherwise than as a result of the operation of, or the exercise of rights conferred by, provisions forming part of the contract or a connected arrangement, and
b as a result of the variation the contract becomes, or ceases to be, one in respect of which the condition in subsection (2)(a) is met,
the contract is to be treated for the purposes of this section as ending at that time and a new contract (on the varied terms) is to be treated for those purposes as being made immediately after that time.
5 For this purpose a “connected arrangement”, in relation to a contract, means any agreement or other arrangement entered into in connection with the making of the contract.
6 If—
a a contract (“the new contract”) is made on or after 1 January 2013 as a result of the operation of, or the exercise of rights conferred by, provisions of a contract (“the old contract”) made before that date, and
b the provisions of the new contract were (or could have been) determined by reference to provisions of the old contract when the old contract was made,
the new contract is to be regarded for the purposes of this section as if it were made before 1 January 2013.

Meaning of “long-term business” and “PHI business”

C263 Meaning of “long-term business” and “PHI business”

1 For the purposes of this Part “long-term business” means—
a life assurance business, or
b other business which consists of the effecting or carrying out of contracts of long-term insurance.
2 For the purposes of this Part “PHI business” means the other business mentioned in subsection (1)(b).

Meaning of contract of “insurance” or “long-term insurance” and “insurance company”

64 Meaning of “contract of insurance” and “contract of long-term insurance”

For the purposes of this Part—
  • “contract of insurance” has the meaning given by article 3(1) of the FISMA (Regulated Activities) Order 2001, and
  • “contract of long-term insurance” means a contract which falls within Part 2 of Schedule 1 to that Order.

C2865 Meaning of “insurance company”

1 This section defines for the purposes of this Part what is meant by an “insurance company”.
2 A person who carries on the activity of effecting or carrying out contracts of insurance is an “insurance company” if—
a the person has permission under Part 4 of FISMA 2000 to carry on that activity,
F98b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F99c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 The above definition is subject to the following qualifications—
a a friendly society within the meaning of Part 3 is not an insurance company, and
b an insurance special purpose vehicle (see section 139) is an insurance company only if, in addition to falling within subsection (2)(a), F100... it is a BLAGAB group re-insurer.
4 A person is a “BLAGAB group re-insurer” if for an accounting period—
a the person carries on basic life assurance and general annuity business,
b it is not the case that substantially all of the person's long-term business is long-term business other than basic life assurance and general annuity business, and
c all of its life assurance business is re-insurance business of a description which is excluded business for the purposes of section 57(2)(e).

CHAPTER 2 Charge to tax on I - E basis etc

Separate businesses etc

C366 Separate businesses for BLAGAB and other long-term business

1 If an insurance company carries on—
a basic life assurance and general annuity business, and
b other long-term business,
the general rule is that business within paragraphs (a) and (b) is to be treated for corporation tax purposes as two separate businesses carried on by the company.
2 One of the separate businesses is to consist of the basic life assurance and general annuity business.
3 The other separate business is to be regarded for corporation tax purposes as a single trade consisting of the other long-term business.
4 If an insurance company carries on—
a life assurance business none of which is basic life assurance and general annuity business, and
b PHI business,
the company is to be treated for corporation tax purposes as carrying on a single trade consisting of the businesses within paragraphs (a) and (b).
5 For the purposes of this Part “non-BLAGAB long-term business” means—
a a single trade within subsection (3) or (4), or
b in a case where an insurance company carries on life assurance business none of which is basic life assurance and general annuity business but does not carry on other long-term business, that life assurance business.
6 If an insurance company carries on short-term insurance business, that business is to be regarded for corporation tax purposes as a separate trade.
7 For this purpose “short-term insurance business” means any insurance business which is not long-term business.

C467 Exception where BLAGAB small part of long-term business

1 There is an exception to the general rule set out in section 66(1) if for an accounting period of an insurance company substantially all of its long-term business is not basic life assurance and general annuity business.
2 In that case, there is for the accounting period to be no separate business consisting of the company's basic life assurance and general annuity business.
3 There is instead to be one business that is to be regarded for corporation tax purposes as a single trade of the company consisting of its long-term business.
4 That single trade is to be regarded as “non-BLAGAB long-term business” for the purposes of this Part.
5 Accordingly, references in this Part (apart from in section 66 and this section) to a company's basic life assurance and general annuity business do not include any business which, as a result of this section, is regarded as non-BLAGAB long-term business.

BLAGAB taxed on I - E basis

68 Charge to tax on I - E profit

1 The charge to corporation tax applies to the I - E profit of the basic life assurance and general annuity business carried on by an insurance company.
2 For the meaning of “I - E profit”, see section 73.

69 Exclusion of charge under s.35 of CTA 2009 etc

The charge to corporation tax under section 68 has effect instead of—
a the charge to corporation tax on income under section 35 of CTA 2009 (charge to tax on trade profits),
b any other charge to corporation tax on income under any other provision of the Corporation Tax Acts that would otherwise have applied, and
c the charge to corporation tax on chargeable gains so far as referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business.

70 Rules for calculating I - E profit or excess BLAGAB expenses

1 The rules set out in Chapter 3 determine whether for an accounting period an insurance company carrying on basic life assurance and general annuity business has an I - E profit or excess BLAGAB expenses (and, if so, the amount of the profit or expenses).
2 Those rules are referred to in this Part as “the I - E rules”.
3 The calculation of the I - E profit or excess BLAGAB expenses is to operate by reference to the amounts that are credited or debited in the accounts of the company for a period of account drawn up in accordance with generally accepted accounting practice.
4 But, in the case of amounts of a particular description, that is subject to any provision which (whether expressly or by implication) provides for that calculation to operate by reference to something else.
5 For the meaning of “excess BLAGAB expenses”, see section 73.

Non-BLAGAB long-term business

71 Charge to tax on profits of non-BLAGAB long-term business

1 The charge to corporation tax on income under section 35 of CTA 2009 (charge to tax on trade profits) applies to the profits of non-BLAGAB long-term business carried on by an insurance company.
2 The rules for calculating those profits are subject to the provision made by—
a Chapter 6 (trade calculation rules applying to long-term business),
b Chapter 7 (trading apportionment rules), and
c section 131 (transfers of business).
3 Subsection (1) does not apply if the business is mutual business, and in that case no other provision of the Corporation Tax Acts has effect to charge the income of the business to corporation tax.

PHI only business

72 Companies carrying on only PHI business

Nothing in—
a this Part, or
b any other provision of the Corporation Tax Acts that makes special provision in relation to, or by reference to, long-term business carried on by insurance companies,
is to apply in relation to a company which carries on long-term business which consists wholly of PHI business.

CHAPTER 3 The I - E basis

Introduction

73 The I - E basis

This section sets out rules, in relation to the basic life assurance and general annuity business carried on by an insurance company, for determining whether the company has an I - E profit or excess BLAGAB expenses for an accounting period (and, if so, the amount of the profit or expenses).
  • Step 1 Calculate the income chargeable for the accounting period that is referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business. The meaning here of “income” is given by section 74.
  • Step 2 Calculate the BLAGAB chargeable gains of the company for the accounting period as adjusted for allowable losses (see section 75).
  • Step 3 Calculate so much of the amount (or the total amount) of any I - E receipt under section 92 or 93(5)(a) as is not taken into account in the calculation required by step 1 or 2.
  • Step 4 Add together the amounts given by the calculations required by steps 1 to 3. Reduce the total of those amounts by the relievable amount of any non-trading deficit which the company has for the accounting period under section 388 of CTA 2009 (loan relationships and derivative contracts). The result is “I”. In this step, “the relievable amount” of a non-trading deficit means so much of the deficit as does not exceed the total of—
    (a) the amount given by the calculation required by step 1,
    (b) the amount given by the calculation required by step 2, and
    (c) any amount of an I-E receipt under section 92 brought into account under step 3.
  • Step 5 Calculate the adjusted BLAGAB management expenses of the company for the accounting period (see section 76). The result is “E”.
  • Step 6 Subtract E from I (which, if E is a negative figure, would have the effect of increasing the result of the calculation).
    If the result is a positive amount, that is (subject to section 95) the amount for the accounting period chargeable to corporation tax under section 68. That amount is referred to in this Part as an “I - E profit”.
    If the result is a negative amount, that amount is to be carried forward by the company as an expense to its next accounting period to be used in accordance with step 5 of section 76. That amount is referred to in this Part as “excess BLAGAB expenses”

Definitions of expressions comprising “I”

74 Meaning of “income”

1 In section 73 “income”, in relation to an insurance company, means the following income or credits so far as arising from the company's long-term business—
a income of the company chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of any separate UK property business or overseas property business within section 86(4),
b credits in respect of any loan relationships of the company,
c credits in respect of any derivative contracts of the company,
d credits brought into account by the company under Part 8 of CTA 2009 (intangible fixed assets),
e income of the company chargeable under Part 9A of CTA 2009 (company distributions),
F19f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g income of the company chargeable under Chapter 6 of Part 10 of CTA 2009 (sale of foreign dividend coupons),
h income of the company chargeable under Chapter 7 of Part 10 of CTA 2009 (annual payments not otherwise charged),
i income of the company arising from a source outside the United Kingdom which is chargeable under Chapter 8 of Part 10 of CTA 2009 (income not otherwise charged), F20...
j income of the company chargeable under any provision to which section 1173 of CTA 2010 (miscellaneous charges) applies other than section 752 of CTA 2009 (non-trading gains on intangible fixed assets), and
k income of the company chargeable under regulation 15 of the Unauthorised Unit Trusts (Tax) Regulations 2013.
2 The reference in subsection (1)(a) to income chargeable under Chapter 3 of Part 4 of CTA 2009 includes income chargeable under that Chapter in respect of distributions treated by section 548(5) of CTA 2010 as profits of a UK property business carried on by the company.
3 References in subsection (1)(b) to (d) to credits need to be read with section 88(3) and (4).
4 The reference in subsection (1)(j) to income chargeable as mentioned there needs to be read with section 89(1).
5 For the purposes of this section references to income or credits that are chargeable or brought into account under any provision are to income or credits that, but for sections 68 and 69, would be chargeable or brought into account under that provision.
6 For the purposes of this section no account is to be taken of income which arises from an asset forming part of the long-term business fixed capital of the company (see section 137).

75 Meaning of “BLAGAB chargeable gains” etc

1 This section explains for the purposes of section 73 how to calculate the BLAGAB chargeable gains of the company for the accounting period as adjusted for allowable losses.
  • Step 1 First, calculate the chargeable gains—
    1. that accrue to the company in the accounting period from the disposal of assets held for the purposes of the company's long-term business, and
    2. that are referable, in accordance with Chapter 4, to its basic life assurance and general annuity business.
  • Step 2 Then, deduct from the amount of those gains—
    1. any allowable losses that accrue to the company in the accounting period from the disposal of assets held for the purposes of the company's long-term business and that are so referable, and
    2. so far as not previously deducted from any chargeable gains, any allowable losses that accrued to the company in a previous accounting period from the disposal of assets held for the purposes of the company's long-term business and that were so referable.
    The resulting amount is the amount of the BLAGAB chargeable gains of the company for the accounting period as adjusted for allowable losses.
2 The deduction at step 2 may reduce an amount to nil but no further.
3 For the purposes of this section no account is to be taken of a chargeable gain or allowable loss accruing to the company on a disposal for the purposes of TCGA 1992 of an asset that forms part of the long-term business fixed capital of the company.
4 References in this section to chargeable gains or allowable losses are references to those gains or losses as calculated in accordance with the rules contained in TCGA 1992.

Definitions of expressions comprising “E”

76 Meaning of “adjusted BLAGAB management expenses”

This section explains for the purposes of section 73 how to calculate the adjusted BLAGAB management expenses of the company for the accounting period.
  • Step 1 Calculate the ordinary BLAGAB management expenses of the company referable to the accounting period (see sections 77, 81 and 82). In making the calculation ignore so much of those expenses as is deductible under other relevant rules (see section 78(2)). If the company is an overseas life insurance company, see also section 96.
  • F115...
  • Step 3 Calculate the total amount of any deemed BLAGAB management expenses for the accounting period (see section 78(3)). For this purpose ignore any amounts that have already been included in step 1.
  • Step 4 Find the basic amount by adding together the amount given by the calculation required by step 1 F116... and the amount given by the calculation required by step 3. Adjust the basic amount by deducting from it any expenses reversed in the accounting period (see section 78(4)) and any BLAGAB trade loss relieved for the accounting period (see section 78(5)).
  • Step 5 Add together any amounts carried forward as expenses from the previous accounting period to the accounting period as a result of section 73 or 93 to give the carried-forward amount. Add the carried-forward amount to the basic amount or, as the case may be, the basic amount adjusted in accordance with step 4. The resulting amount is the amount of adjusted BLAGAB management expenses of the company for the accounting period.

77 Section 76: meaning of “ordinary BLAGAB management expenses” etc

1 This section explains for the purposes of section 76 what is meant by the “ordinary BLAGAB management expenses of the company referable to the accounting period”.
2 Amounts are “ordinary BLAGAB management expenses” of the company if—
a they are, in accordance with generally accepted accounting practice, debited in accounts drawn up by the company for a period of account F117...,
b they are expenses of management of the company's long-term business that are referable, in accordance with Chapter 4, to its basic life assurance and general annuity business, and
c they are not excluded amounts (see subsections (4) to (7)).
F1183 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 The following are “excluded amounts”—
a amounts of a capital nature,
b re-insurance premiums,
c refunds of premiums,
d profit commissions and profit participations (however described),
e a liability of the company to pay an amount of commission or other expenses so far as exceeding the amount which it could reasonably be expected to pay if sections 68 and 69 were not applicable,
f non-commercial amounts payable by the company,
g amounts payable in connection with a policy or contract to a policyholder or annuitant under the policy or contract or to any other person entitled to receive benefits under the policy or contract.
5 For the purposes of subsection (4)(f) expenses or other amounts are “non-commercial amounts” payable by the company so far as the company's purpose in incurring the liability to make the payment is not a business or other commercial purpose of the company.
6 Amounts payable as mentioned in paragraph (g) of subsection (4) include—
a amounts payable to any person acting on behalf of a person within that paragraph, and
b amounts payable to the personal representatives of a deceased person who was (or acted on behalf of a person who was) within that paragraph.
7 Amounts payable as mentioned in subsection (4)(g) do not include amounts payable to an insurance company which is a policyholder under the policy.
8 In the case of ordinary BLAGAB management expenses in respect of a period of account which coincides with or falls wholly in an accounting period of the company, all of those expenses are “referable to” the accounting period.
9 In the case of ordinary BLAGAB management expenses in respect of any other period of account—
a those expenses are to be apportioned to the accounting period of the company in accordance with section 1172 of CTA 2010, and
b the apportioned amount of those expenses is “referable to” the accounting period.

78 Section 76: meaning of other expressions

1 This section explains for the purposes of section 76 what is meant by—
  • “other relevant rules”,
  • “deemed BLAGAB management expenses for the accounting period”,
  • “expenses reversed in the accounting period”, and
  • “BLAGAB trade loss relieved for the accounting period”.
2 An expense is deductible under another “relevant rule” if—
a it is deductible as a result of section 92(3),
b it is deductible in calculating, for corporation tax purposes, the profits of a property business, or
c it is deductible as a result of section 272 of CTA 2009 in calculating income from the letting of rights to work minerals in the United Kingdom.
3 An amount is a “deemed BLAGAB management expense for the accounting period” if it is treated as such for the purposes of section 76 as a result of—
  • F119... paragraph 33(2) of Schedule 17 (spreading of acquisition expenses),
  • section 83 (general annuity business),
  • section 87(3) (losses from property businesses where land held for purposes of long-term business),
  • section 88(6) (excess of debits in respect of intangible fixed assets),
  • section 89(2) (excess of miscellaneous losses),
  • paragraph 16(1) of Schedule 7 to FA 1991 (transitional relief for old general annuity contracts),
  • section 256(2)(a) of CAA 2001 (allowances in respect of plant or machinery consisting of management asset),
  • section 270HH of CAA 2001 (allowances in respect of structures or buildings consisting of management asset),
  • section 391(3) of CTA 2009 (loan relationships: carry forward of surplus to next accounting period),
  • F12...
  • section 1162 of CTA 2009 (additional relief for remediation of contaminated or derelict land), or
  • section 814C(7) of CTA 2010 (manufactured dividends).
4 “Expenses reversed in the accounting period” means the total amount of the expenses—
a which were relieved in any previous accounting period in accordance with step 1 F120... or step 3 of section 76, but
b which are subsequently reversed in the accounting period.
5 A “BLAGAB trade loss relieved for the accounting period” means any of the following—
a a BLAGAB trade loss of the company for the accounting period in question, so far as relief is given for the loss under—
i section 37 of CTA 2010 (relief for trade losses against total income), as applied by section 123, or
ii Chapter 4 of Part 5 of that Act (group relief), as applied by section 125;
b an amount deducted under section 124B (relief for excess carried forward post-1 April BLAGAB trade losses) from the company's total profits of the accounting period in question;
c an amount of a BLAGAB trade loss of the company relieved under Chapter 3 of Part 5A of CTA 2010 (group relief for carried-forward losses) if the surrender period (see section 188BB(7)) to which the claim relates is the accounting period in question.

F12179 Spreading of acquisition expenses

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

F12280 Section 79: meaning of “acquisition expenses”

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

81 Amounts treated as ordinary BLAGAB management expenses

1 This section applies in relation to amounts which meet the conditions in section 77(2)(a) and (b).
2 The relevant permissive rules apply for the purpose of treating the amounts as ordinary BLAGAB management expenses for the purposes of section 76 as they apply for the purpose of treating amounts as expenses of management for the purposes of Chapter 2 of Part 16 of CTA 2009 (companies with investment business).
3 The following provisions of CTA 2009 are “relevant permissive rules”—
a section 1000 (costs of setting up employee share ownership trust),
b section 1234 (payments for restrictive undertakings),
c section 1235 (employees seconded to charities and educational establishments),
d section 1237 (counselling and other outplacement expenses),
e section 1238(1) to (3) (retraining courses),
f sections 1239 to 1242 (redundancy payments and approved contractual payments),
g section 1243 (payments made by the Government), and
h section 1244 (contributions to local enterprise organisations or urban regeneration companies).
4 If—
a an employer's liability to corporation tax for an accounting period is determined on the assumption that a deduction for expenditure is allowed as a result of the application by this section of section 1238(1) to (3) of CTA 2009, and
b the deduction would not otherwise have been allowed,
section 75(2) to (4) of CTA 2009 (retraining courses: recovery of tax) apply.
F1235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6 Section 1253 of CTA 2009 (contributions to local enterprise organisations or urban regeneration companies: disqualifying benefits) applies in the case of amounts treated, as a result of the application by this section of section 1244 of that Act, as ordinary BLAGAB management expenses as it applies in the case of amounts for which a deduction has been made under section 1219 of that Act as a result of section 1244 of that Act.
7 For the purposes of this section—
a references in any relevant permissive rule to a company carrying on business that consists wholly or partly of making investments or to a company with investment business are to be read as references to a company carrying on basic life assurance and general annuity business,
b references in any relevant permissive rule to an amount being deductible under section 1219 of CTA 2009 are to be read as references to an amount being deductible as an ordinary BLAGAB management expense,
c section 1239 of CTA 2009 is to be treated as having effect with the omission of subsection (1)(c),
d the reference in section 1240(4) of CTA 2009 to sections 1224 to 1227 of that Act is to be read as a reference to section 77(8) and (9) of this Act, and
e section 1243 of CTA 2009 is to be treated as having effect with the omission of subsection (1)(c).
8 An amount is treated as an ordinary BLAGAB management expense as a result of this section only so far as it would not otherwise be regarded as an ordinary BLAGAB management expense.

82 Restrictions in relation to ordinary BLAGAB management expenses

1 This section applies in relation to an amount which is (or, but for this section, would be) regarded for the purposes of section 76 as an ordinary BLAGAB management expense of an insurance company.
2 Section 1249(1) and (2) of CTA 2009 (unpaid remuneration) apply for the purpose of determining the period of account for which the amount is debited in the accounts of the company for the purposes of section 77 F124....
3 Section 1249(1) and (3) of CTA 2009 apply for the purpose of determining whether the amount is to be regarded as an ordinary BLAGAB management expense of the company.
4 Section 1251(1) and (2) of CTA 2009 (car hire) apply for the purpose of determining the amount of the ordinary BLAGAB management expense of the company.
5 For the purposes of subsections (2) to (4)—
a references in section 1249 or 1251 of CTA 2009 to a company with investment business are to be read as references to a company carrying on basic life assurance and general annuity business (and, accordingly, the reference in section 1251(1) to total profits is to be read as a reference to profits of basic life assurance and general annuity business), and
b references in section 1249 or 1251 of CTA 2009 to an amount being deductible under section 1219 of CTA 2009 are to be read as references to an amount being deductible as an ordinary BLAGAB management expense.
6 If—
a an amount is reduced as a result of subsection (4) or a corresponding rule,
b subsequently there is a rebate (however described) of the hire charges, and
c an amount representing the rebate is deductible as a reversed expense or taken into account in calculating the amount of an I - E receipt under section 92,
the amount that would otherwise be so deductible or taken into account is reduced by 15%.
7 If—
a an amount is reduced as a result of subsection (4) or a corresponding rule,
b subsequently a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency arrangement, and
c an amount representing the release is deductible as a reversed expense,
the amount that would otherwise be so deductible is reduced by 15%.
8 For the purposes of subsections (6) and (7)—
  • “corresponding rule” means section 56(2) or 1251(2) of CTA 2009 or section 48(2) of ITTOIA 2005,
  • “deductible as a reversed expense” means deductible at step 4 in section 76 as an expense reversed in an accounting period, and
  • “statutory insolvency arrangement” has the meaning given by section 1319(1) of CTA 2009.

83 General annuity business

1 This section applies if an insurance company pays qualifying BLAGAB annuities in an accounting period.
2 An amount equal to the difference between—
a the total amount of those annuities paid by the company in the accounting period, and
b the total of the amounts exempt under section 717 of ITTOIA 2005 (exemption for part of purchased life annuity payments) contained in those annuities so paid,
is treated for the purposes of section 76 as a deemed BLAGAB management expense for the accounting period.
3 An annuity is a “qualifying BLAGAB annuity” if—
a it is referable to the company's basic life assurance and general annuity business, and
b it is paid under a contract made by the company in an accounting period beginning on or after 1 January 1992 (but see section 85).
4 For the purposes of this section the amounts exempt under section 717 of ITTOIA 2005 are so much of the payments under the qualifying BLAGAB annuities as would be within the exemption under that section if—
a section 718 of ITTOIA 2005 were omitted, and
b the exemption under section 717 of ITTOIA 2005 applied in relation to companies as well as individuals.
5 If a qualifying BLAGAB annuity (“the actual annuity”) is a steep-reduction annuity, the calculations required by subsection (2)(a) and (b) are to be made as if—
a the contract for the actual annuity provided instead for the annuities identified below (“the deemed annuities”), and
b the consideration for each of the deemed annuities were equal to an apportionment of the consideration for the actual annuity on a just and reasonable basis.
6 The deemed annuities are—
a an annuity the payments in respect of which are confined to payments in respect of the actual annuity that fall to be made at the earliest time for the making in respect of that annuity of a reduced payment within section 84(1)(c), and
b an annuity the payments in respect of which are all the payments in respect of the actual annuity other than those mentioned in paragraph (a).
7 If a deemed annuity within subsection (6)(b) (“the later annuity”) would itself be a steep-reduction annuity, the deemed annuities—
a do not include the later annuity, but
b include instead the annuities which would be identified by subsection (6) (with as many further applications of this subsection as may be necessary for securing that none of the deemed annuities is a steep-reduction annuity) if references in that subsection to the actual annuity were to the later annuity.
8 This section needs to be read with section 84 (meaning of “steep-reduction annuity” etc).

84 General annuity business: meaning of “steep-reduction annuity” etc

1 For the purposes of section 83 an annuity is a “steep-reduction annuity” if—
a the amount of any payment in respect of it (but not its term) depends on a contingency other than the duration of a human life or lives,
b the annuitant is entitled to payments of different amounts at different times, and
c the payments include a payment (“a reduced payment”) of an amount which is substantially smaller than the amount of at least one of the earlier payments.
2 If there are different intervals between the payments, it is to be assumed for the purposes of subsection (1)(b) and (c)—
a that the annuitant's entitlement, after the first payment, to payments is an entitlement to payments at yearly intervals on the anniversary of the first payment, and
b that the amount to which the annuitant is assumed to be entitled is equal to the annuitant's assumed entitlement for the year ending with the anniversary in question.
3 For this purpose the annuitant's assumed entitlement for a year is determined as follows—
a the annuitant's entitlement to each payment is taken to accrue at a constant rate during the interval between the previous payment and that payment, and
b the annuitant's assumed entitlement for a year is taken to be equal to the total amount which, in accordance with paragraph (a), is treated as accruing in the year.
4 In the case of an annuity to which subsection (2) applies, the reference in section 83(6)(a) to the making of a reduced payment is to be read as a reference to the making of a payment which (applying subsection (3)(a)) is taken to accrue at a rate that is substantially less than the rate at which at least one of the earlier payments is taken to accrue.
5 If—
a a question arises whether a payment is substantially smaller than, or accrues at a rate substantially less than, an earlier payment, and
b the annuitant or (as the case may be) every annuitant is an individual who is beneficially entitled to all the rights conferred on him or her as such an annuitant,
the question is determined without regard to so much of the difference between the amounts or rates as is referable to a reduction falling to be made as a result of a death.
6 If the amount of any one or more of the payments depends on a contingency, the annuitant's entitlement to the payments is determined for the purposes of section 83 and this section according to whatever is the most likely outcome in relation to the contingency (applying any relevant actuarial principles).
7 If an agreement or other arrangement has effect for varying the rights of the annuitant in relation to a payment, the payment is taken for the purposes of section 83 and this section to be a payment of the amount to which the annuitant is entitled in accordance with the agreement or other arrangement.
8 For the purposes of this section references to a contingency include a contingency consisting wholly or partly in the exercise of an option.

85 General annuity business: payments made in pre-1992 accounting periods

1 If—
a a payment in respect of an annuity is made by an insurance company under a group annuity contract made in a pre-1992 accounting period, and
b the company's liabilities first include an amount in respect of that annuity in a post-1992 accounting period,
the payment is treated for the purposes of section 83(3)(b) as if the contract had been made in a post-1992 accounting period.
2 If—
a a payment in respect of an annuity is made by a re-insurer under a re-insurance treaty made in a pre-1992 accounting period, and
b the re-insurer's liabilities first include an amount in respect of that annuity in a post-1992 accounting period,
the payment is, as respects the re-insurer, treated for the purposes of section 83(3)(b) as if the treaty had been made in a post-1992 accounting period.
3 In this section—
  • “a pre-1992 accounting period” means an accounting period beginning before 1 January 1992,
  • “a post-1992 accounting period” means an accounting period beginning on or after 1 January 1992,
  • “group annuity contract” means a contract under which the insurance company undertakes to become liable to pay annuities to or in respect of persons who may subsequently be specified or otherwise ascertained under or in accordance with the contract (whether or not annuities under the contract are also payable to or in respect of persons who are specified or ascertained at the time the contract is made), and
  • “re-insurance treaty” means a contract under which one insurance company is obliged to cede, and another (referred to in this section as a “re-insurer”) to accept, the whole or part of a risk of a class or description to which the contract relates.

Special rules applying to I - E basis

86 Separate property businesses for BLAGAB etc

1 This section modifies the rules in sections 208 and 209 of CTA 2009 (basic meaning of UK and overseas property business) for the purpose of applying the I - E rules in relation to an insurance company.
2 The company is treated as carrying on separate UK property businesses or overseas property businesses in accordance with the following provisions.
3 The exploitation of land held otherwise than for the purposes of the company's long-term business is treated as a separate business from the exploitation of land held for those purposes.
4 In the case of the exploitation of land held for the purposes of the company's long-term business, each of the following is treated as a separate business—
a the exploitation of land which is matched to BLAGAB liabilities of the company,
b the exploitation of land which is matched to other long-term business liabilities of the company, and
c the exploitation of land so far as it is not matched to long-term business liabilities of the company.
5 In the case of land part of which is matched to a BLAGAB liability or other long-term business liability, only the part of the land in question is to count for the purposes of this section as matched to the liability in question.
6 In this section “land” means any estate, interest or right in or over land.

87 Losses from property businesses where land held for long-term business

1 This section applies for the purpose of applying the I - E rules in relation to an insurance company if, in an accounting period, the company makes a loss in any of its separate UK property businesses or overseas property businesses within section 86(4).
2 The provisions of Chapter 4 of Part 4 of CTA 2010 (loss relief: property businesses) do not apply to the loss.
3 So far as the loss is referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business, it is treated for the purposes of section 76 as a deemed BLAGAB management expense for the accounting period.
4 If the company has two or more separate property businesses within section 86(4), then for the purposes of subsection (3) the loss in question is taken to be the total net loss after—
a setting the losses from the businesses which are referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business, against
b the profits from the businesses which are so referable.

88 Loan relationships, derivative contracts and intangible fixed assets

1 This section applies if an insurance company has—
a credits or debits in respect of any loan relationships,
b credits or debits in respect of any derivative contracts, or
c credits or debits brought into account by the company under Part 8 of CTA 2009 (intangible fixed assets),
that are referable, in accordance with Chapter 4, to its basic life assurance and general annuity business.
2 In the application of the I - E rules in relation to the company's basic life assurance and general annuity business—
a the loan relationship rules,
b the derivative contract rules, and
c the intangible fixed asset rules,
have effect as if the activities carried on by the company in the course of its basic life assurance and general annuity business did not constitute the whole or any part of a trade or of a property business.
3 In the application of the I - E rules for an accounting period in relation to the company's basic life assurance and general annuity business—
a BLAGAB credits in respect of its loan relationships for the period are to count as income for the purposes of those rules only in so far as they exceed BLAGAB debits in respect of its loan relationships for the period, and
b BLAGAB credits brought into account by the company under Part 8 of CTA 2009 for the period are to count as income for the purposes of those rules only in so far as they exceed BLAGAB debits brought into account by the company under that Part for the period.
4 References in subsection (3)(a) to BLAGAB credits or BLAGAB debits in respect of a company's loan relationships include, as a result of subsection (2) and section 574 of CTA 2009, BLAGAB credits or BLAGAB debits in respect of the company's derivative contracts.
5 If for an accounting period the BLAGAB debits mentioned in subsection (3)(a) exceed the BLAGAB credits mentioned there, the excess is dealt with in accordance with sections 388 to 391 of CTA 2009.
6 If for an accounting period the BLAGAB debits mentioned in subsection (3)(b) exceed the BLAGAB credits mentioned there, the excess is treated for the purposes of section 76 as a deemed BLAGAB management expense for that period.
7 In this section—
  • “BLAGAB credits”, in relation to a company, means credits arising from the company's long-term business that are referable, in accordance with Chapter 4, to its basic life assurance and general annuity business,
  • “BLAGAB debits”, in relation to a company, means debits arising from the company's long-term business that are referable, in accordance with Chapter 4, to its basic life assurance and general annuity business,
  • “the loan relationship rules” means the rules set out in Part 5 of CTA 2009 (including provisions of other enactments by reference to which amounts are to be brought into account for the purposes of that Part),
  • “the derivative contract rules” means the rules set out in Part 7 of CTA 2009, and
  • “the intangible fixed asset rules” means the rules set out in Part 8 of CTA 2009.

89 Miscellaneous income and losses

1 In the application of the I - E rules for an accounting period in relation to an insurance company's basic life assurance and general annuity business, BLAGAB miscellaneous income of the company for the period is to count as income for the purposes of those rules only in so far as it exceeds BLAGAB miscellaneous losses of the company for the period.
2 If for an accounting period the BLAGAB miscellaneous losses exceed the BLAGAB miscellaneous income, the excess—
a is carried forward to the next accounting period, and
b is treated for the purposes of section 76 as a deemed BLAGAB management expense for that period.
3 In this section—
  • “BLAGAB miscellaneous income”, in relation to a company, means income of the company arising from its long-term business which—
    1. is chargeable under any provision to which section 1173 of CTA 2010 (miscellaneous charges) applies other than section 752 of CTA 2009 (non-trading gains on intangible fixed assets), and
    2. is referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business, and
  • “BLAGAB miscellaneous losses”, in relation to a company, means losses of the company arising from its long-term business which—
    1. arise from miscellaneous transactions, and
    2. are referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business.
4 For the purposes of subsection (3) a transaction is a “miscellaneous transaction” if income arising from it would be chargeable under any provision to which section 1173 of CTA 2010 applies other than—
a section 752 of CTA 2009, or
b regulation 18(4) of the Offshore Funds (Tax) Regulations 2009 (offshore income gains).
5 For the purposes of this section references to income that is chargeable under any provision to which section 1173 of CTA 2010 applies are to income that, but for sections 68 and 69, would be chargeable under that provision.

90 Investment return where risk in respect of policy or contract re-insured

1 This section applies if an insurance company re-insures any risk in respect of a policy or contract attributable to its basic life assurance and general annuity business.
2 For the purposes of the I - E rules the investment return on the policy or contract is treated as accruing to the company while the risk remains re-insured by the company under the re-insurance arrangement.
3 The investment return that is treated as accruing to the company—
a is treated for the purposes of those rules as income that is referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business, and
b is, accordingly, brought into account for the purposes of those rules at step 1 in section 73.
4 HMRC Commissioners may make provision by regulations as to the amount of investment return that is treated as accruing in each accounting period during which the re-insurance arrangement is in force.
5 HMRC Commissioners may by regulations exclude from the operation of this section—
a such descriptions of insurance company,
b such descriptions of policies or contracts, and
c such descriptions of re-insurance arrangement,
as may be prescribed by the regulations.
6 Nothing in this section applies in relation to the re-insurance of a policy or contract where the policy or contract was made, and the re-insurance arrangement effected, before 29 November 1994.

91 Regulations under section 90(4): supplementary provision

1 This section applies to regulations under section 90(4).
2 The regulations may provide for the calculation of the investment return treated as accruing to a company in respect of a policy or contract in an accounting period to be made by reference to—
a the total amount of sums paid (by way of premium or otherwise) by the company to the re-insurer during the accounting period and any earlier accounting periods,
b the total amount of sums paid (by way of commission or otherwise) by the re-insurer to the company during the accounting period and any earlier accounting periods,
c the total amount of the net investment return treated as accruing to the company in any earlier accounting periods, that is to say, net of tax at such rate as may be prescribed by the regulations, and
d such percentage rate of return as may be prescribed by the regulations.
3 The regulations may make provision dealing with the transfer of the re-insurance arrangement from one insurance company to another.
4 The regulations must provide that the amount of investment return treated as accruing in respect of a policy or contract in the final accounting period during which the policy or contract is in force is the amount, ascertained in accordance with the regulations, by which the overall profit exceeds the total amount treated as accruing in earlier accounting periods.
5 “The overall profit” means the profit over the whole period during which the policy or contract, and the re-insurance arrangement, were in force.
6 If the overall profit is less than the total amount treated as accruing in earlier accounting periods, the difference—
a must be set off against amounts treated as a result of section 90 as accruing in the final accounting period from other policies or contracts, and
b if not fully set off as mentioned in paragraph (a), may be carried forward for set-off against amounts treated as a result of that section as accruing in subsequent accounting periods.
7 The regulations may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.
8 An example of the kind of supplementary provision within subsection (7)(b) is provision requiring payments made during an accounting period to be treated as made on such date or dates as may be prescribed by the regulations.

Deemed I - E receipts

92 Certain BLAGAB trading receipts to count as deemed I - E receipts

1 This section applies if—
a an insurance company has receipts that are taken into account in calculating its BLAGAB trade profit or loss (see section 136) for an accounting period,
b the receipts would not fall within the charge to corporation tax apart from this section, and
c the receipts are not excluded receipts.
2 The appropriate amount of the receipts is an I - E receipt of the company for the accounting period.
3 The “appropriate amount” of the receipts is found by deducting expenses from the receipts so far as is necessary for calculating the full amount of the profits.
4 Chapter 1 of Part 20 of CTA 2009 (general rules for restricting deductions) is to apply to that calculation.
5 The following receipts are “excluded” receipts—
a premiums,
aa sums paid to the company under re-insurance arrangements under which the re-insurer assumes substantially all of the insurance risks relating to the business that is re-insured,
b sums , other than sums falling within paragraph (aa), received under re-insurance contracts (but see subsection (6) for exceptions),
c sums which do not fall within the charge to corporation tax because of an exemption,
d payments received under the Financial Services Compensation Scheme, and
e payments received from other insurance companies to enable the company to meet its obligations to policyholders.
6 A sum received under a re-insurance contract , other than a sum falling within paragraph (aa), is not an excluded receipt if—
a it is a re-insurance commission (however described), or
b it is a sum calculated to any extent by reference to the ordinary BLAGAB management expenses of the company referable to the accounting period (within the meaning of section 77).

Minimum profits charge

93 Minimum profits test

1 This section applies if an insurance company has a BLAGAB trade profit for an accounting period.
2 A comparison must be made between—
a the I - E profit or excess BLAGAB expenses for the accounting period, and
b the BLAGAB trade profit for the accounting period,
adjusted as need be in accordance with sections 94, 124, 124A and 124C.
3 In making the calculation required by subsection (2)(a), it is to be assumed that this Chapter has effect with the omission of subsection (5)(a) (but, apart from that, all the other rules in this Chapter have effect for the purposes of that calculation).
4 If there are excess BLAGAB expenses for the accounting period, the amount of the excess is treated for the purposes of this section as a negative figure equal to that amount.
5 If, for the accounting period, the adjusted BLAGAB trade profit exceeds the adjusted I - E profit or excess BLAGAB expenses—
a an amount equal to the difference is an I - E receipt of the company for the accounting period (see section 73), and
b the same amount is carried forward to the company's next accounting period as an expense (see section 76).
6 For the purposes of this section, assume that non-BLAGAB allowable losses cannot be deducted to any extent from BLAGAB chargeable gains (and, accordingly, assume that section 95 is not included in this Act).

94 Adjustment of I - E profit or excess BLAGAB expenses

1 This section applies if the BLAGAB trade profit for the accounting period includes non-taxable distributions receivable by the company in that period that are referable, in accordance with Chapter 7, to the company's basic life assurance and general annuity business.
2 For the purposes of section 93(5) (the comparison of the BLAGAB trade profit with the I - E profit or excess BLAGAB expenses), the calculation required by section 73 is performed again but adding to the amount of “I” found by step 4 the total amount of the non-taxable distributions receivable by the company in the accounting period that are so referable.
3 Accordingly, once an adjustment is made in accordance with subsection (2), an amount of excess BLAGAB expenses for the accounting period might become an adjusted I - E profit for that period.
4 For the purposes of this Part “non-taxable distributions” means distributions that are exempt for the purposes of Part 9A of CTA 2009 (company distributions).
5 For the purposes of this Part the amount of a non-taxable distribution does not include any amount withheld from it on account of tax payable under the laws of a territory outside the United Kingdom.

Non-BLAGAB allowable losses

95 Use of non-BLAGAB allowable losses to reduce I - E profit

1 This section applies if—
a an insurance company has an I - E profit for an accounting period, and
b non-BLAGAB allowable losses have accrued to the company that are available for deduction under section 2A(1) of TCGA 1992, as permitted by section 210A(2) and (2A) of that Act, from the shareholders' share of BLAGAB chargeable gains that have accrued to the company.
2 Those losses may be deducted from those gains in accordance with that provision so as to reduce the amount of the I - E profit for the accounting period to nil but no further.
3 For the purposes of subsection (1)(a), assume that non-BLAGAB allowable losses cannot be deducted from any BLAGAB chargeable gains (and, accordingly, ignore the effect of this section).

Overseas life insurance companies

96 Expenses referable to exempt FOTRA profits

1 This section applies if the profits for an accounting period of the basic life assurance and general annuity business carried on by an overseas life insurance company in the United Kingdom consist of or include exempt FOTRA profits.
2 In making the calculation required by step 1 of section 76 for the accounting period, ignore so much of the ordinary BLAGAB management expenses of the company as are referable to exempt FOTRA profits.
3 The relevant proportion of those expenses is to be regarded for the purposes of this section as referable to exempt FOTRA profits.
4 The relevant proportion is—
FOTRA FOTRA + 1
where—
FOTRA is the amount of the exempt FOTRA profits arising in the accounting period, and
I is the amount of I found by the calculations required by step 4 in section 73 in relation to the company's basic life assurance and general annuity business for the accounting period.
5 In this section “exempt FOTRA profits” means profits in respect of which no liability to corporation tax arises as a result of section 1279 of CTA 2009.

CHAPTER 4 Apportionment rules for I - E charge

Introduction

C597 Application of Chapter

1 This Chapter applies in the case of an insurance company that carries on—
a basic life assurance and general annuity business, and
b other business.
2 This Chapter contains rules for determining for the purposes of Chapter 3—
a the credits or other income, the debits or other losses and the expenses that are referable to the company's basic life assurance and general annuity business, and
b the chargeable gains and allowable losses accruing on the disposal of assets (or parts of assets) that are referable to the company's basic life assurance and general annuity business.

Allocation of income, losses and expenses

C698 Commercial allocation

1 This section makes provision for determining—
a the credits or other income and the debits or other losses arising from the company's long-term business, and
b the expenses incurred in the course of the company's long-term business,
that, for the purposes of Chapter 3, are to be regarded as referable to its basic life assurance and general annuity business.
2 Those items are to be determined in accordance with an acceptable commercial method adopted by the company for the period of account in which the income or losses arise or the expenses are incurred.
3 A method is an “acceptable commercial method” if, in all the circumstances, it can reasonably be regarded as providing a fair method for the purposes of Chapter 3 for determining for a period of account what is referable to the company's basic life assurance and general annuity business.
4 The Treasury may make regulations for the purposes of this section—
a prescribing cases in which a method is, or is not, to be regarded as an acceptable commercial method, and
b prescribing cases in which the only acceptable commercial method is to be a method prescribed, or of a description prescribed, in the regulations.
5 Subject to any provision made by regulations under subsection (4), the method adopted for the purposes of this section for a period of account—
a must be consistent with the method adopted for the purposes of section 115 for that period, and
b in the case of an overseas life insurance company, must also be consistent with the method for that period for attributing assets in accordance with the provision made by or under Chapter 4 of Part 2 of CTA 2009 to its permanent establishment in the United Kingdom.
6 In this section “debits or other losses” means—
a losses in any separate UK property business carried on by the company which is within section 86(4),
b losses in any separate overseas business carried on by the company which is within section 86(4),
c debits in respect of any loan relationships of the company,
d debits in respect of any derivative contracts of the company,
e debits brought into account by the company under Part 8 of CTA 2009 (intangible fixed assets), and
f losses of the company which arise from miscellaneous transactions (as defined by section 89(4)).

Allocation of chargeable gains and allowable losses on disposals of assets

99 Application of sections 100 and 101

1 Sections 100 and 101 apply for determining the chargeable gains or allowable losses that, for the purposes of Chapter 3, are to be regarded as referable to a company's basic life assurance and general annuity business whenever it disposes of assets held for the purposes of its long-term business (including cases where, as a result of Chapter 8 or any other provision of the Corporation Tax Acts, it is deemed to make a disposal).
2 Expressions that are used in sections 100 and 101 and in TCGA 1992 have the same meaning in those sections as they have for the purposes of that Act.

100 Assets wholly or partly matched to BLAGAB liabilities

1 If, immediately before the disposal, the whole of the asset was matched to a BLAGAB liability, the whole of the gain or loss is referable to the company's basic life assurance and general annuity business.
2 If, immediately before the disposal, a part of the asset was matched to a BLAGAB liability, the appropriate portion of the gain or loss is referable to the company's basic life assurance and general annuity business.
3 “The appropriate proportion” means the proportion equal to the proportion of the asset matched to the BLAGAB liability.
4 If, as a result of Chapter 8, there is a disposal of a part of an asset where the part concerned is matched to a BLAGAB liability, the whole of the gain or loss is referable to the company's basic life assurance and general annuity business.
5 The concept of the whole or a part of an asset being matched to a BLAGAB liability is explained by section 138.

101 Commercial allocation for disposals not wholly dealt with by section 100

1 This section applies if, in the case of the disposal—
a no part of the gain or loss is dealt with by section 100, or
b section 100 deals with only a proportion of the gain or loss.
2 The gain or loss, or (as the case may be) the remaining proportion of the gain or loss, which is referable to the company's basic life assurance and general annuity business is determined in accordance with an acceptable commercial method adopted by the company for the period of account in which the disposal is made.
3 A method is an “acceptable commercial method” if it secures that gains or losses are referable to the company's basic life assurance and general annuity business in a way that fairly represents the contribution that the assets in question have made to that business during the period in which they have been held for the purposes of the company's long-term business.
4 The Treasury may make regulations for the purposes of this section—
a prescribing cases in which a method is, or is not, to be regarded as an acceptable commercial method, and
b prescribing cases in which the only acceptable commercial method is to be a method prescribed, or of a description prescribed, in the regulations.
5 Subject to any provision made by regulations under subsection (4), the method adopted for the purposes of this section for a period of account—
a must be consistent with the method adopted for the purposes of section 98 for that period and the method adopted for the purposes of section 115 for that period, and
b in the case of an overseas life insurance company, must also be consistent with the method for that period for attributing assets in accordance with the provision made by or under Chapter 4 of Part 2 of CTA 2009 to its permanent establishment in the United Kingdom.

CHAPTER 5 I - E profit: policyholders' rate of tax

Tax rate on policyholders' share of I - E profit

102 Policyholders' rate of tax on policyholders' share of I - E profit

1 This section applies if an insurance company has an I - E profit for an accounting period.
2 The rate of corporation tax chargeable for a financial year on the policyholders' share (if any) of the I - E profit is the policyholders' rate of tax.
3 The policyholders' rate of tax is the rate at which income tax at the savings basic rate is charged for the tax year that begins on 6 April in the financial year.
4 The policyholders' share of the I - E profit is determined in accordance with section 103.
F255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 The policyholders' share of the I - E profit for an insurance company's accounting period is to be left out of account in determining for the purposes of Part 3A of CTA 2010 (companies with small profits)—
a the augmented profits of the company for the accounting period, and
b the taxable total profits of the company for the accounting period.

C22103 Rules for determining policyholders' share of I - E profit

1 This section determines for the purposes of section 102 the policyholders' share of the I - E profit of an insurance company for an accounting period.
2 If the basic life assurance and general annuity business of the company carried on by the company in the accounting period is mutual business, the policyholders' share of the I - E profit is the whole of that profit.
3 In any other case, the policyholders' share of the I - E profit is determined as follows.
4 The first step is to calculate whether the company has a BLAGAB trade profit for the accounting period, and, if so, its amount.
5 If the company does not have a BLAGAB trade profit for that period, the policyholders' share of the I - E profit is the whole of that profit.
6 If—
a the company has a BLAGAB trade profit for that period, and
b the adjusted amount of the BLAGAB trade profit is less than the amount of the I - E profit for that period,
the difference between those amounts represents the policyholders' share of the I - E profit.
7 If—
a the company has a BLAGAB trade profit for that period, and
b the adjusted amount of the BLAGAB trade profit is equal to or more than the amount of the I - E profit,
there is no policyholders' share of the I - E profit.
8 References to the adjusted amount of the BLAGAB trade profit are to be read in accordance with section 104.

104 Meaning of “the adjusted amount”

1 This section explains for the purposes of section 103 what is meant by the adjusted amount of the BLAGAB trade profit.
2 The following adjustments are to be made to the amount of the BLAGAB trade profit.
3 If relief is available under section 124, 124A or 124C (carry forward of BLAGAB trade losses against subsequent profits), the BLAGAB trade profit is to be reduced as mentioned in that section.
4 If, as a result of relief given under any of those sections, the BLAGAB trade profit is reduced to nil, then the adjusted amount of the BLAGAB trade profit for the purposes of section 103 is nil.
5 If—
a the BLAGAB trade profit is not reduced to nil as a result of relief given under section 124, 124A or 124C or no relief is available under those sections, and
b in the accounting period BLAGAB non-taxable distributions are receivable by the company,
the BLAGAB trade profit is reduced or further reduced (but not below nil) by subtracting from it an amount equal to the shareholders' share of those distributions.
6 The BLAGAB trade profit as so reduced or further reduced is the adjusted BLAGAB trade profit for the purposes of section 103.

105 Meaning of “BLAGAB non-taxable distributions” and “shareholders' share”

1 This section explains for the purposes of section 104 what is meant by—
  • “BLAGAB non-taxable distributions”, and
  • “the shareholders' share” of BLAGAB non-taxable distributions.
2 Non-taxable distributions are “BLAGAB” non-taxable distributions if they are referable, in accordance with Chapter 7, to the company's basic life assurance and general annuity business.
3 The “shareholders' share” of the BLAGAB non-taxable distributions receivable by the company in the accounting period is the relevant proportion of those distributions.
4 The relevant proportion is—
BTP BNTD + 1
where—
BTP is the amount of the BLAGAB trade profit of the company for the accounting period,
BNTD is the amount of the BLAGAB non-taxable distributions receivable by the company in the accounting period, and
I is the total of the amounts given by the calculations required by steps 1 to 3 in section 73 (I - E basis: income referable to BLAGAB) in relation to the company's basic life assurance and general annuity business for the accounting period.
5 If BTP exceeds BNTD + I, the shareholders' share of the BLAGAB non-taxable distributions receivable by the company in the accounting period is the whole of those distributions.

Policyholder tax and calculation of BLAGAB trade profit or loss

106 Deduction for current policyholder tax

1 This section applies for the purpose of calculating the BLAGAB trade profit or loss for an accounting period of any basic life assurance and general annuity business carried on by an insurance company in a case where the company has an I - E profit for that period.
2 In calculating the profit or loss for the accounting period, a deduction is allowed for an amount equal to the amount of corporation tax charged at the policyholders' rate of tax on the policyholders' share of the company's I - E profit for that period.

107 Expenses or receipts for deferred policyholder tax

1 This section applies for the purpose of calculating the BLAGAB trade profit or loss for a period of account of any basic life assurance and general annuity business carried on by an insurance company.
2 In calculating the profit or loss, an amount is brought into account that is equal to—
a the closing deferred policyholder tax balance for the period of account, less
b the closing deferred policyholder tax balance for the previous period of account.
3 The amount—
a is brought into account as an expense, if it is a negative figure, and
b is brought into account as a receipt, if it is a positive figure.
4 The amount is brought into account under this section only if, in accordance with generally accepted accounting practice, it is debited or credited in accounts drawn up by the company for the period of account.
5 If the closing deferred policyholder tax balance for a period of account is a liability, the amount of the balance is taken to be a negative figure for the purposes of this section.
6 If the closing deferred policyholder tax balance for a period of account is an asset, the amount of the balance is taken to be a positive figure for the purposes of this section.
7 Section 108 applies for determining the closing deferred policyholder tax balance for a period of account.

108 Meaning of “the closing deferred policyholder tax balance” etc

1 For the purposes of section 107 “the closing deferred policyholder tax balance for a period of account” means so much of the closing amount shown, in accordance with generally accepted accounting practice, in the accounts of the company for that period in respect of deferred tax as is wholly attributable to policyholder tax.
2 Provision forming part of the closing amount is “wholly attributable to policyholder tax” if—
a the provision is made in respect of a BLAGAB matter (see subsection (3)), and
b anything included in the closing amount in respect of that matter is calculated wholly by reference to the policyholders' rate of tax chargeable on the policyholders' share of the company's I - E profit for any accounting period.
3 A “BLAGAB matter” means—
a an amount of excess BLAGAB expenses,
F125b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c an amount of expenses otherwise falling to be taken into account in the future under the I - E rules,
d an amount of BLAGAB allowable loss (within the meaning of section 210A of TCGA 1992) carried forward for future use,
e an amount to which section 213 of TCGA 1992 applies (spreading of gains and losses under section 212), or
f an amount in respect of the future disposal (or part disposal) of an asset which would fall to be taken into account in accordance with section 75.
4 If—
a for a period of account of the company the provision made in respect of a BLAGAB matter is taken into account for the purposes of section 107, and
b for a subsequent period of account of the company the provision made in respect of that matter is no longer wholly attributable to policyholder tax because the condition in subsection (2)(b) ceases to be met,
there is to be a reversal in the subsequent period of account in respect of the provision (so far as section 107 does not otherwise apply in relation to the case).
5 The reversal in the subsequent period of account is to be made as follows—
a if the provision was an amount which for accounting purposes was regarded as an asset, a negative amount equal to that amount is to be taken into account in calculating the closing deferred policyholder tax balance for that period for the purposes of section 107, and
b if the provision was an amount which for accounting purposes was regarded as a liability, a positive amount equal to that amount is to be taken into account in calculating the closing deferred policyholder tax balance for that period for the purposes of section 107.
6 The Treasury may by order amend the definition of a “BLAGAB matter”.
7 An order under subsection (6) may contain incidental, supplementary, consequential, transitional, transitory or saving provision.

CHAPTER 6 Trade calculation rules applying to long-term business

109 Application of Chapter

1 The rules contained in this Chapter have effect for the purpose of—
a calculating the BLAGAB trade profit or loss of any basic life assurance and general annuity business carried on by an insurance company, and
b calculating for corporation tax purposes the profits of any non-BLAGAB long-term business carried on by an insurance company,
but, in the case of section 112, see also subsection (6) of that section.
2 In this Chapter references to the calculation of the profits are, in the case of the calculation of the BLAGAB trade profit or loss, to be read as references to the calculation of that profit or loss.
3 See also section 47 of CTA 2009 (losses calculated on same basis as profits).
4 In the case of the calculation of the BLAGAB trade profit or loss, see also sections 106 to 108.

110 Allocations to policyholders

1 In calculating the profits for an accounting period, a deduction is allowed for any amount which is allocated to policyholders or annuitants in respect of the accounting period.
2 But there is no deduction for an amount of a capital nature that—
a is allocated to holders of with-profits policies, and
b has not been funded from an amount credited in accounts of the business drawn up in accordance with generally accepted accounting practice (whether drawn up by the company or another company).
3 For this purpose a payment made in connection with the reattribution of inherited estate is to be regarded as an amount of a capital nature.
4 “With-profits policies” means policies under which the holders are eligible to participate in surplus.

111 Dividends and other distributions

1 Dividends or other distributions—
a which are receivable by the company, and
b which are referable, in accordance with Chapter 7, to the business concerned,
are to be brought into account as receipts in calculating the profits.
2 This rule—
a applies whether or not the distributions are exempt for the purposes of Part 9A of CTA 2009 or would otherwise be dealt with under that Part, but
b does not apply in the case of distributions that are of a capital nature.

112 Index-linked gilt-edged securities

1 If, for an accounting period, a company has a loan relationship which is represented by an index-linked gilt-edged security, sections 400 to 400C of CTA 2009 (adjustments for changes in index) are not to apply in calculating the profits for the accounting period.
2 But subsection (1) does not apply to loan relationships of the company that are qualifying PHI loan relationships.
3 A loan relationship is a “qualifying PHI loan relationship” if
a the loan relationship is identified in the records of the company as an asset held for the purposes of index-linked PHI business carried on by the company, and
b none of the credits or debits in respect of the loan relationship are referable to BLAGAB,
but see subsection (5) for a case in which a loan relationship meeting the conditions in paragraphs (a) and (b) is not a qualifying PHI loan relationship.
4 Credits or debits are referable to BLAGAB if—
a they are referable, in accordance with Chapter 4, to any basic life assurance and general annuity business of the company, or
b they are taken into account in calculating the profit or loss that is, in accordance with Chapter 7, allocated to any basic life assurance and general annuity business of the company.
5 A loan relationship which, but for this subsection, would be a qualifying PHI loan relationship of the company is not a qualifying PHI loan relationship if the value of the loan relationship when added to the value of qualifying PHI loan relationships of the company exceeds the value of the liabilities incurred by the company for the purposes of its index-linked PHI business.
6 A loan relationship of the company which at any time is a qualifying PHI loan relationship is to be regarded for the purposes of this Part as an asset which is held at that time for the purposes of the company's long-term business but which is not matched to its long-term business liabilities or held by it for the purposes of any with-profits funds.
7 In this section—
  • “index-linked gilt-edged security” has the same meaning as it has in sections 400 to 400C of CTA 2009 (see section 399(4) of that Act), and
  • “index-linked PHI business” means PHI business so far as consisting of the effecting or carrying out of contracts of long-term insurance under which the benefits payable are linked to an index of prices published by the Statistics Board.

113 Receipts or expenses relating to long-term business fixed capital

Receipts or expenses which arise from an asset forming part of the long-term business fixed capital of the company are to be left out of account in calculating the profits.

CHAPTER 7 Trading apportionment rules

C7114 Application of Chapter

1 This Chapter applies in the case of an insurance company which, as a result of section 66, has—
a a business consisting of basic life assurance and general annuity business, and
b a non-BLAGAB long-term business.
2 The rules contained in this Chapter determine—
a how to allocate between those two businesses the profits or loss of the long-term business calculated in accordance with generally accepted accounting practice, and
b how to allocate the tax adjustments in making the calculations mentioned in subsection (5)(a) and (b).
3 The amount of the profits or loss mentioned in subsection (2)(a) is referred to in this Chapter as the “accounting profit or loss”.
4 For the purposes of this Chapter “the tax adjustments” means the adjustments required or authorised by law in calculating for corporation tax purposes the profits of the long-term business (applying the same rules as apply to the calculation for those purposes of the profits of non-BLAGAB long-term business).
5 The rules contained in this Chapter have effect for the purpose of—
a calculating the BLAGAB trade profit or loss of the company, and
b calculating for corporation tax purposes the profits of the non-BLAGAB long-term business carried on by the company.

C8115 Commercial allocation of accounting profit or loss and tax adjustments

1 The accounting profit or loss, and the tax adjustments, are to be allocated between the two separate businesses in accordance with an acceptable commercial method adopted by the company.
2 A method is an “acceptable commercial method” if it secures that the accounting profit or loss, and the tax adjustments, are allocated to the two separate businesses in a way that fairly represents the contribution made by those businesses to the accounting profit or loss as adjusted to take into account the tax adjustments.
3 The Treasury may make regulations for the purposes of this section—
a prescribing cases in which a method is, or is not, to be regarded as an acceptable commercial method, and
b prescribing cases in which the only acceptable commercial method is to be a method prescribed, or of a description prescribed, in the regulations.
4 Subject to any provision made by regulations under subsection (3), the method adopted for the purposes of this section for a period of account—
a must be consistent with the method adopted for the purposes of section 98 for that period, and
b in the case of an overseas life insurance company, must also be consistent with the method for that period for attributing assets in accordance with the provision made by or under Chapter 4 of Part 2 of CTA 2009 to its permanent establishment in the United Kingdom.

CHAPTER 8 Assets held for purposes of long-term business

Transfers of assets from different categories

116 UK life insurance companies

1 If, at any time in a period of account of a UK life insurance company, an asset (or a part of an asset) held by the company—
a ceases to be within one of the long-term business categories, and
b comes within another of those categories,
the company is treated for the purposes of corporation tax on chargeable gains as if it had disposed of and immediately re-acquired the asset (or part) at that time for a consideration equal to the fair value of the asset (or part) at that time.
2 The long-term business categories in question are—
a assets which are matched to BLAGAB liabilities of the company,
b assets which are matched to other long-term business liabilities of the company,
c assets which are held by the company for the purposes of any with-profits fund but which are not matched to its long-term business liabilities, and
d assets which are held for the purposes of the company's long-term business but which are not matched to its long-term business liabilities or held by it for the purposes of any with-profits funds.
3 If the company has more than one with-profits fund within subsection (2)(c), the assets which are held by it for the purposes of a particular fund but which are not matched to its long-term business liabilities are treated as assets within a separate long-term business category.
4 Subsection (1) does not apply if all the income of the company's long-term business is chargeable to corporation tax on income under section 35 of CTA 2009.
5 If, at any time in a period of account of a UK life insurance company, an asset (or a part of an asset) held by the company—
a ceases to be within a category set out in subsection (6), and
b comes within the other category set out there,
the company is treated for the purposes of corporation tax as if it had disposed of and immediately re-acquired the asset (or part) for a consideration equal to the fair value of the asset (or part) at that time.
6 The categories in question are—
a assets which are held for the purposes of the company's long-term business, and
b other assets.

117 Overseas life insurance companies: rule corresponding to s.116

1 If, at any time in a period of account of an overseas life insurance company, an asset (or a part of an asset) held by the company—
a ceases to be within one of the UK long-term business categories, and
b comes within another of those categories,
the company is treated for the purposes of corporation tax on chargeable gains as if it had disposed of and immediately re-acquired the asset (or part) at that time for a consideration equal to the fair value of the asset (or part) at that time.
2 The UK long-term business categories in question are—
a UK assets which are matched to BLAGAB liabilities of the company,
b UK assets which are matched to other long-term business liabilities of the company,
c UK assets which are held by the company for the purposes of any with-profits fund but which are not matched to its long-term business liabilities, and
d UK assets which are held for the purposes of the company's long-term business but which are not matched to its long-term business liabilities or held by it for the purposes of any with-profits funds.
3 If the company has more than one with-profits fund within subsection (2)(c), the UK assets which are held by it for the purposes of a particular fund but which are not matched to its long-term business liabilities are treated as assets within a separate UK long-term business category.
4 Subsection (1) does not apply if all the income of the company's long-term business is chargeable to corporation tax on income under section 35 of CTA 2009.
5 If, at any time in a period of account of an overseas life insurance company, an asset (or a part of an asset) held by the company—
a ceases to be within a category set out in subsection (6), and
b comes within another category set out there,
the company is treated for the purposes of corporation tax as if it had disposed of and immediately re-acquired the asset (or part) for a consideration equal to the fair value of the asset (or part) at that time.
6 The categories in question are—
a UK assets which are held for the purposes of the company's long-term business,
b other UK assets, and
c assets which are held by the company but which are not UK assets.
7 For the purposes of this section and section 118, assets (whether situated in the United Kingdom or elsewhere) are “UK assets” of an overseas life insurance company if, in accordance with the provision made by or under Chapter 4 of Part 2 of CTA 2009, they fall to be attributed to the permanent establishment in the United Kingdom through which the company carries on life assurance business.

118 Transfers of business and transfers within a group

1 If—
a as a result of an insurance business transfer scheme transferring long-term business, a UK life insurance company or an overseas life insurance company acquires an asset, and
b the asset (or part of it) is within one of the applicable categories at the time immediately before the acquisition but is not within that category immediately after that time,
the transferor is treated for the purposes of corporation tax on chargeable gains as if it had disposed of and immediately re-acquired the asset (or part) at the time immediately before the acquisition.
2 The consideration for this deemed disposal and re-acquisition is equal to the fair value of the asset (or part) at that time.
3 If the transferor or the transferee is an overseas life insurance company, an asset (or part of an asset) is taken as being in the same category immediately before and after the acquisition if the asset (or part)—
a was within one category immediately before the acquisition, and
b was within a corresponding category immediately after the acquisition.
4 Subsections (1) to (3) do not apply if all the income of the long-term business of either the transferor or the transferee is chargeable to corporation tax on income under section 35 of CTA 2009.
5 For the purposes of subsections (1) to (3) “the applicable categories” means—
a in the case of a UK life insurance company, the long-term business categories or a category of assets which are not held for the purposes of its long-term business, and
b in the case of an overseas life insurance company, the UK long-term business categories, a category of UK assets which are not held for the purposes of its long-term business or a category of assets which are held by it but which are not UK assets.
6 If—
a a UK life insurance company or an overseas life insurance company disposes of or acquires an asset (or part of an asset),
b immediately before or after doing so, the asset (or part) is within the applicable category, and
c section 171 or 173 of TCGA 1992 (transfers within a group) would, but for this subsection, apply to the disposal or acquisition,
that section does not apply to the disposal or acquisition.
7 For the purposes of subsection (6) “the applicable category” means—
a in the case of a UK life insurance company, the category of assets which are held for the purposes of its long-term business, and
b in the case of an overseas life insurance company, the category of UK assets which are held for the purposes of its long-term business.

Share pooling rules

119 UK life insurance companies

1 If the assets of a UK life insurance company include securities of a class all of which would, but for this section, be regarded as one holding for the purposes of corporation tax on chargeable gains, the following pooling rules apply instead for those purposes—
a so many of the securities so far as matched to BLAGAB liabilities of the company are treated as a separate holding,
b so many of the securities so far as matched to other long-term business liabilities of the company are treated as a separate holding,
c so many of the securities as are held by the company for the purposes of any with-profits fund but are not matched to its long-term business liabilities are treated as a separate holding,
d so many of the securities as are held for the purposes of the company's long-term business but are not matched to its long-term business liabilities or held by it for the purposes of any with-profits funds are treated as a separate holding, and
e any remaining securities are treated as a separate holding which is held otherwise than for the purposes of the company's long-term business.
2 If the company has more than one with-profits fund within subsection (1)(c), so many of the securities as are held by it for the purposes of a particular fund but are not matched to its long-term business liabilities are treated as a separate holding for the purposes of corporation tax on chargeable gains.
3 Subsection (1) does not apply if all the income of the company's long-term business is chargeable to corporation tax on income under section 35 of CTA 2009.
4 In that case, if the company's assets include securities of a class all of which would, but for this section, be regarded as one holding for the purposes of corporation tax on chargeable gains, the following pooling rules apply instead for those purposes—
a so many of the securities as are held for the purposes of its long-term business are treated as a separate holding, and
b any remaining securities are treated as a separate holding which is held otherwise than for the purposes of its long-term business.

120 Overseas life insurance companies: rule corresponding to s.119

1 If the assets of an overseas life insurance company include securities of a class all of which would, but for this section, be regarded as one holding for the purposes of corporation tax on chargeable gains, the following pooling rules apply instead for those purposes—
a so many of the securities so far as UK securities matched to BLAGAB liabilities of the company are treated as a separate holding,
b so many of the securities so far as UK securities matched to other long-term business liabilities of the company are treated as a separate holding,
c so many of the securities as are UK securities held by the company for the purposes of any with-profits fund but not matched to its long-term business liabilities are treated as a separate holding,
d so many of the securities as are UK securities held for the purposes of the company's long-term business but not matched to its long-term business liabilities or held by it for the purposes of any with-profits funds are treated as a separate holding,
e any remaining UK securities are treated as a separate holding which is held otherwise than for the purposes of the company's long-term business, and
f any securities which are held by the company but which are not UK securities are treated as a separate holding.
2 If the company has more than one with-profits fund within subsection (1)(c), so many of the securities as are UK securities held by it for the purposes of a particular fund but are not matched to its long-term business liabilities are treated as a separate holding for the purposes of corporation tax on chargeable gains.
3 Subsection (1) does not apply if all the income of the company's long-term business is chargeable to corporation tax on income under section 35 of CTA 2009.
4 In that case, if the company's assets include securities of a class all of which would, but for this section, be regarded as one holding for the purposes of corporation tax on chargeable gains, the following pooling rules apply instead for those purposes—
a so many of the securities as are UK securities held for the purposes of its long-term business are treated as a separate holding,
b any remaining UK securities are treated as a separate holding which is held otherwise than for the purposes of its long-term business, and
c any securities which are held by the company but which are not UK securities are treated as a separate holding.
5 For the purposes of this section, securities (whether situated in the United Kingdom or elsewhere) are “UK securities” of an overseas life insurance company if, in accordance with the provision made by or under Chapter 4 of Part 2 of CTA 2009, they fall to be attributed to the permanent establishment in the United Kingdom through which the company carries on life assurance business.

121 Sections 119 and 120: supplementary

1 The applicable pooling rules also apply if the assets of the company in question include securities of a class and but for this section—
a some of them would be regarded as a 1982 holding for the purposes of corporation tax on chargeable gains, and
b the rest of them would be regarded as a section 104 holding for those purposes.
2 “The applicable pooling rules” means—
a the pooling rules set out in section 119(1)(a) to (e) and (4)(a) and (b), or
b the pooling rules set out in section 120(1)(a) to (f) and (4)(a) to (c).
3 In applying the applicable pooling rules in a case within subsection (1)—
a the reference in any of the paragraphs in section 119(1) or (4) or 120(1) or (4) to a separate holding is to be read, where necessary, as a reference to a separate 1982 holding and a separate section 104 holding, and
b the questions whether that reading is necessary for a paragraph and, if it is, how many securities falling within the paragraph constitute each of the two holdings are determined in accordance with paragraph 12 of Schedule 6 to FA 1990 and the identification rules applying on any subsequent acquisitions and disposals.
4 If the applicable pooling rules apply, section 105 of TCGA 1992 has effect as if securities regarded as included in different holdings as a result of those rules were securities of different classes.
5 In this section—
  • “1982 holding” has the same meaning as in section 109 of TCGA 1992, and
  • “section 104 holding” has the same meaning as in section 104(3) of TCGA 1992.
6 In this section and sections 119 and 120 “securities” means—
a shares,
b securities of a company, and
c any other assets where they are of a nature to be dealt in without identifying the particular assets disposed of or acquired.

Long-term business fixed capital

122 Assets forming part of long-term business fixed capital

For the purposes of this Chapter assets that form part of the long-term business fixed capital of an insurance company are to be regarded as assets held by the company otherwise than for the purposes of its long-term business.

CHAPTER 9 Relief for BLAGAB trade losses etc

The reliefs

123 Relief for BLAGAB trade losses against total profits

1 Section 37 of CTA 2010 (relief for trade losses against total profits) is to apply in relation to a BLAGAB trade loss for an accounting period as it applies in relation to any other loss made in a trade for an accounting period.
2 Subsection (1) applies despite the fact that, had there been a BLAGAB trade profit for the accounting period, that profit would not have been charged to tax under section 35 of CTA 2009 and the I - E rules would have been applicable instead.

124 Carry forward of pre-1 April 2017 BLAGAB trade losses against subsequent profits

1 This section applies if an insurance company carrying on basic life assurance and general annuity business makes a BLAGAB trade loss for an accounting period beginning before 1 April 2017.
2 Relief is available under this section for that part of the BLAGAB trade loss (“the unrelieved loss”) for which no relief is given under section 37 of CTA 2010 (as applied by section 123).
3 The relief for the unrelieved loss is to be given as follows.
4 The unrelieved loss is to be carried forward to subsequent accounting periods (so long as the company continues to carry on basic life assurance and general annuity business).
5 For the purposes of—
a section 93 (minimum profits charge), and
b section 104 (policyholders' rate of tax),
the BLAGAB trade profit of any such period is reduced by the unrelieved loss so far as that loss cannot be used under this subsection to reduce the BLAGAB trade profit of an earlier period F89....
6 Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts.

C23124A Carry forward of post-1 April 2017 BLAGAB trade losses against subsequent profits

1 This section applies if—
a an insurance company carrying on basic life assurance and general annuity business makes a BLAGAB trade loss for an accounting period beginning on or after 1 April 2017 (“the loss-making period”),
b relief under—
  • section 37 of CTA 2010 (as applied by section 123), or
  • Part 5 of CTA 2010 (group relief) (as applied by section 125),
is not given for an amount of the loss (“the unrelieved amount”), and
c the company continues to carry on basic life assurance and general annuity business in the next accounting period (“the later period”).
2 The unrelieved amount is carried forward to the later period.
3 Relief for the unrelieved amount is given to the company in the later period if the company has a BLAGAB trade profit for the later period.
4 The relief is given as set out in subsection (5).
C235 For the purposes of—
a section 93 (minimum profits charge), and
b section 104 (policyholders' rate of tax),
the BLAGAB trade profit of the later period is reduced by the unrelieved amount F90....
6 Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts.

C23124B C24Excess carried forward post-1 April 2017 losses: relief against total profits

1 This section applies if—
a an amount of an insurance company's BLAGAB trade loss for an accounting period is carried forward to an accounting period of the company (“the later period”) under section 124A(2) or 124C(3), and
b any of that amount (“the unrelieved amount”) is not deducted under section 124A(5) or 124C(6) (as the case may be) from the company's BLAGAB trade profit (if any) of the later period.
2 The company may make a claim for relief to be given for the unrelieved amount under this section.
3 If the company makes a claim, the relief is given by deducting the unrelieved amount, or any part of it specified in the claim, from the company's total profits of the later period.
4 But (if the company is a Solvency 2 insurance company)—
a the company may not make a claim under this section if the unrelieved amount is wholly a shock loss, and
b the company may not make a claim specifying a part of the unrelieved amount if that part is (to any extent) a shock loss.
5 For the purposes of subsection (4) assume that in any use by the company of the BLAGAB trade loss for relief under—
a section 37 of CTA 2010 (as applied by section 123),
b Part 5 of CTA 2010 (as applied by section 125), or
c section 124A(5) or 124C(6),
any part of it that is a shock loss is used before any part of it that is not a shock loss.
6 A claim under this section must be made—
a within the period of two years after the end of the later period, or
b within such further period as an officer of Revenue and Customs may allow.
7 Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts.
8 In this section—
  • “Solvency 2 insurance company” means an insurance undertaking, a reinsurance undertaking or a third-country insurance undertaking;
  • “insurance undertaking” has the meaning given in Article 13(1) of the Solvency 2 Directive;
  • “reinsurance undertaking” has the meaning given in Article 13(4) of the Solvency 2 Directive;
  • “Solvency 2 Directive” means Directive 2009/138/EC of the European Parliament and the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II);
  • “shock loss” has the meaning given by section 269ZK of CTA 2010;
  • “third-country insurance undertaking” means an undertaking that has received authorisation under Article 162 of the Solvency 2 Directive from the Prudential Regulation Authority or the Financial Conduct Authority.

C23124C Further carry forward against subsequent profits of post-1 April 2017 loss not fully used

1 This section applies if—
a an amount of an insurance company's BLAGAB trade loss for an accounting period is carried forward to an accounting period (“the later period”) of the company under section 124A(2) or subsection (3) of this section,
b any of that amount is unrelieved in the later period, and
c the company continues to carry on basic life assurance and general annuity business in the accounting period (“the further period”) after the later period.
2 An amount carried forward as mentioned in subsection (1)(a) is “unrelieved in the later period” so far as it is not—
a deducted under section 124A(5) or subsection (6) of this section from the company's BLAGAB trade profit (if any) of the later period,
b deducted from the company's total profits of the later period on a claim under 124B, or
c surrendered by way of group relief for carried-forward losses under Part 5A of CTA 2010.
3 So much of the amount mentioned in subsection (1)(a) as is unrelieved in the later period is carried forward to the further period.
4 Relief for the amount carried forward under subsection (3) (“the remaining carried forward amount”) is given to the company in the further period if the company has a BLAGAB trade profit for that period.
5 The relief is given as set out in subsection (6).
6 For the purposes of—
a section 93 (minimum profits charge), and
b section 104 (policyholders' rate of tax),
the BLAGAB trade profit of the further period is reduced by the remaining carried forward amount F91....
7 Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts.

F92124D Restriction on deductions from BLAGAB trade profits

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F93124E Section 124D: shock losses excluded from the restriction

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125 Group relief

1 Part 5 of CTA 2010 (group relief) is to apply in relation to a BLAGAB trade loss for an accounting period as it applies in relation to any other loss made in a trade for an accounting period.
2 Subsection (1) applies despite the fact that, had there been a BLAGAB trade profit for the accounting period, that profit would not have been charged to tax under section 35 of CTA 2009 and the I - E rules would have been applicable instead.
3 If for an accounting period an insurance company has—
a an I - E profit, and
b losses or other amounts within section 99(1)(d) to (g) of CTA 2010,
the company's gross profits of the accounting period for the purposes of section 105 of that Act (restriction on surrender of those amounts) are not to include the policyholders' share of the I - E profit (as determined for the purposes of section 102).
4 For provision about the application of Part 5A of CTA 2010 (group relief for carried-forward losses) in relation to BLAGAB trade losses see subsections (3) to (5) of section 188BB of that Act.

Restrictions

126 Restrictions in respect of non-trading deficit

1 The amount of a BLAGAB trade loss for an accounting period of an insurance company that is available for relief under—
a section 37 of CTA 2010 (as applied by section 123), or
b Part 5 of CTA 2010 (group relief) (as applied by section 125),
is to be reduced by the amount of any relevant non-trading deficit which the company has for the accounting period.
1A A loss falls within subsection (1B) so far as it—
a would (apart from that subsection) be available for relief under section 124B (excess carried forward post-1 April 2017 losses: relief against total profits), and
b arose in an accounting period for which the insurance company has a relevant non-trading deficit.
1B A loss (or amount of a loss) falling within this subsection is available for relief under section 124B only so far as it exceeds the amount of that relevant non-trading deficit.
1C A loss falls within subsection (1D) so far as it—
a is an amount which a company (“the surrendering company“) may surrender by virtue of section 188BB(4) (surrender of carried-forward BLAGAB trade losses), and
b arose in an accounting period for which the surrendering company has a relevant non-trading deficit.
1D A loss (or amount of a loss) falling within this subsection is available for relief under Chapter 3 of Part 5A of CTA 2010 (claims for group relief) only so far as it exceeds the amount of that relevant non-trading deficit.
1E For the purposes of subsections (1A) and (1C) it is to be assumed (where relevant) that in previous accounting periods losses which arose earlier have been utilised before losses which arose later.
2 In this section references to a relevant non-trading deficit for an accounting period are to the non-trading deficit which the company has, calculated by reference only to credits and debits—
a arising in respect of such of the company's loan relationships as are debtor relationships (see section 302(6) of CTA 2009), and
b referable, in accordance with Chapter 4, to the company's basic life assurance and general annuity business.

127 No relief against policyholders' share of I - E profit

1 This section applies in the case of an insurance company carrying on basic life assurance and general annuity business.
2 None of the following reliefs are to be given against the policyholders' share of any I - E profit of the company for any accounting period (as determined for the purposes of section 102).
3 The reliefs in question are—
za relief under section 124B (relief of excess carried-forward BLAGAB trade losses against total profits),
a relief under section 37 of CTA 2010 (including as applied by section 123),
b relief under Chapter 2 or 4 of Part 4 of CTA 2010 (loss relief),
c relief under Part 5 of CTA 2010 (group relief) (including as applied by section 125),
ca relief under Chapter 3 of Part 5A of CTA 2010 (group relief for carried-forward losses),
d relief in respect of any qualifying charitable donation,
e relief in respect of any amount representing a non-trading deficit on the company's loan relationships calculated otherwise than by reference to debits and credits referable, in accordance with Chapter 4, to its basic life assurance and general annuity business.
4 If the company's basic life assurance and general annuity business is mutual business, subsection (3)(d) does not apply.

CHAPTER 10 Transfers of long-term business

Transfers of BLAGAB

128 Relief for transferee in respect of transferor's excess BLAGAB expenses

1 This section applies if, under an insurance business transfer scheme, there is a transfer of basic life assurance and general annuity business (or any part of that business) from one insurance company to another.
F1262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1263 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1264 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 Relief at step 5 in section 76 is to be given to the transferee for any excess BLAGAB expenses for which, on the assumptions set out below, that relief would have been given to the transferor for an accounting period starting after the date of the transfer.
6 For the purposes of this section it is to be assumed that—
a the transferor had continued to carry on the transferred business after the transfer, and
b the transferor had an accounting date ending with the date of the transfer (if that would not otherwise be the case).
7 If the transfer is a transfer of part of the business, references in this section to any expenses are to be read as references to the appropriate part of the expenses.
8 Any relief given to the transferee as a result of this section is instead of any relief that would otherwise have been given to the transferor.

129 Intra-group transfers and demutualisation

1 This section applies if—
a under an insurance business transfer scheme, there is a transfer of basic life assurance and general annuity business (or any part of that business) from one insurance company to another, and
b the transfer is a relevant intra-group transfer or is in connection with a demutualisation.
2 A transfer is a “relevant intra-group transfer” if—
a the transferor and transferee are members of the same group of companies when the transfer occurs, and
b the transferee is within the charge to corporation tax in relation to the transfer.
3 A transfer is “in connection with a demutualisation” if—
a it is for the purposes of the conversion of a company (under the law of any territory) from one without share capital to one with share capital (without any change of legal personality), or
b it is a transfer by a mutual life insurance company of all, or substantially all, of its basic life assurance and general annuity business to an insurance company which is not a mutual life insurance company,
and for the purposes of paragraph (b) a “mutual life insurance company” means an insurance company which carries on mutual life assurance business.
4 For the purpose of calculating the BLAGAB trade profit or loss of the transferor for any accounting period, any amount in respect of the transfer that is debited or credited in accounts drawn up by the transferor in accordance with generally accepted accounting practice is to be ignored.
5 For the purpose of calculating the BLAGAB trade profit or loss of the transferee for any accounting period, any amount in respect of the transfer that is debited or credited in accounts drawn up by the transferee in accordance with generally accepted accounting practice is to be ignored.
6 But if there is a difference between—
a the net amount recognised by the transferee in respect of the transfer of contracts of long-term insurance or contracts made in the course of capital redemption business, and
b the net amount recognised by the transferor in respect of the transfer of those contracts,
the amount of the difference is to be taken into account for the purpose of calculating the BLAGAB trade profit or loss of the transferee for the accounting period in which those contracts are transferred.
7 The difference is to be taken into account—
a as a receipt (if, when added to the net amount in subsection (6)(b), the result is the net amount in subsection (6)(a)), and
b as an expense (if, when subtracted from the net amount in subsection (6)(b), the result is the net amount in subsection (6)(a)).
8 The net amount recognised by an insurance company in respect of the transfer of the contracts is determined by subtracting—
a the total amount in respect of relevant liabilities relating to the contracts that is or would be recognised for the purposes of a balance sheet drawn up at the relevant time by the company in accordance with generally accepted accounting practice, from
b the total amount in respect of relevant assets relating to the contracts that is or would be recognised for those purposes,
In this paragraph, “relevant liabilities” and “relevant assets” means those liabilities and assets which give rise to amounts that are taken into account as part of the calculation under Chapter 6 of Part 2, and “relevant time” means the time immediately before the transfer (in the case of the transferor) and the time immediately after it (in the case of the transferee).
9 The Treasury may by order amend any of subsections (6) to (8).
10 This section does not apply to any amount that arises in respect of a transfer so far as the transfer consists of a with-profits fund transfer.The reference here to a with-profits fund transfer is a reference to—
a a transfer of business from a with-profits fund to a fund that is not a with-profits fund, or
b a transfer of business from a fund that is not a with-profits fund to a with-profits fund.
11 If this section applies, the provisions of Part 4 of TIOPA 2010 (transfer pricing) do not apply.

130 Transfers between non-group companies: present value of in-force business

1 This section applies if—
a under an insurance business transfer scheme, there is a transfer of basic life assurance and general annuity business (or any part of that business) from one insurance company to another,
b either the transferor and transferee are not members of the same group of companies when the transfer occurs or, if they are, the transfer consists of or includes a with-profits fund transfer within the meaning of section 129(10),
c the accounts of the transferee drawn up in accordance with generally accepted accounting practice include an asset that represents, as at the time of the transfer, the value of future profits arising from the relevant transferred business, and
d the asset is not one to which Part 8 of CTA 2009 (intangible fixed assets) applies.
2 Amounts in respect of the asset that are debited or credited in accounts drawn up by the transferee in accordance with generally accepted accounting practice are to be taken into account in calculating the BLAGAB trade profit or loss of the transferee.
3 In subsection (1)(c) “the relevant transferred business” means—
a if the transferor and transferee are not members of the same group of companies when the transfer occurs, the business (or part of the business) transferred under the insurance business transfer scheme, and
b if the transfer consists of or includes a with-profits fund transfer, the business transferred by the with-profits fund transfer.
4 For the purposes of subsection (1)(c) no account is to be taken of an asset so far as it is regarded for accounting purposes as internally-generated.
5 This section does not apply so far as section 129(5) applies in relation to the transfer.
6 Nothing in this section is to apply in relation to transfers taking place before 1 January 2013.

130A  Re-insurance in the course of transfer of BLAGAB

1 This section applies to a re-insurer in relation to the re-insurance of the whole, or part of, a cedant’s basic life assurance and general annuity business, if—
a the business is not excluded business for the purposes of section 57(2)(e), and
b it is reasonable to suppose that the arrangements for the re-insurance are made, or are operated, in connection with an insurance business transfer scheme under which the business will be transferred to the re-insurer or a person connected with the re-insurer.
2 Where the arrangements are operated, but were not made, in connection with the insurance business transfer scheme, this section is to apply to the re-insurer from the later of—
a the beginning of the accounting period in which it is reasonable to suppose that the arrangements were first operated in connection with the transfer, and
b 15 December 2022.
3 Where this section applies in relation to re-insurance, that re-insurance (so far as it is of basic life assurance and general annuity business) is to be treated as excluded business for the purposes of section 57(2)(e) (and that business is referred to in this section as “the re-insured business”).
4 Accordingly—
a the re-insured business is, or forms part of, the separate basic life assurance and general annuity business of the re-insurer (see section 66(2)), and
b accounting profit or loss and the tax adjustments (within the meaning of section 114(4)) referable to the re-insured business are, for the purposes of provision made by or under this Part or Schedule 5 to FA 2022, to be allocated to the basic life assurance and general annuity business.
5 But, subject to subsection (6), no amount referable to the re-insured business is to be included in the determination of the I-E profit of the re-insurer for an accounting period (and accordingly, subject to that subsection, the I-E profit referable to that business for the accounting period will be nil).
6 Any BLAGAB trade loss relieved for an accounting period (see section 78(5)) that is referable to the re-insured business is to be included (as a deduction in Step 4 in section 76) in determining the adjusted BLAGAB management expenses of the re-insurer for the accounting period (which, accordingly, may result in the I-E profit referable to that business for the accounting period being greater than nil).
7 Nothing in this section is to be taken to affect the liability of the cedant to corporation tax.
8 For the purposes of this section “arrangements” includes any agreement, scheme, transaction or understanding (whether or not legally enforceable).
9 Section 1122 of CTA 2010 (connected persons) has effect for the purposes of this section.

Transfers of non-BLAGAB long-term business

131 Application of ss. 129 and 130 to transfers of non-BLAGAB long-term business

1 This section applies if, under an insurance business transfer scheme, there is a transfer of non-BLAGAB long-term business (or any part of that business) from one insurance company to another.
2 If, for the purposes of section 129, the transfer—
a is a relevant intra-group transfer, or
b is in connection with a demutualisation,
section 129 applies for the purpose of calculating for corporation tax purposes the profits of the non-BLAGAB long-term business of the transferor or transferee for any accounting period.
3 If the conditions in section 130(1)(b) to (d) are met in the case of the transfer, section 130 applies for the purpose of calculating for corporation tax purposes the profits of the non-BLAGAB long-term business of the transferee for any accounting period.

Transfers of long-term business: anti-avoidance

132 Anti-avoidance

1 This section applies if—
a under an insurance business transfer scheme, there is a transfer on or after 1 January 2013 from one insurance company to another of basic life assurance and general annuity business (or any part of that business) or non-BLAGAB long-term business (or any part of that business), and
b the main purpose, or one of the main purposes, of a company (“C”) in entering into one or more of the arrangements included in the insurance business transfer arrangements is an unallowable purpose.
2 The “insurance business transfer arrangements” consist of—
a the insurance business transfer scheme under which the transfer is made, and
b any arrangement entered into on or after 1 January 2013 with a connection (direct or indirect) to that scheme.
3 A purpose is an “unallowable purpose” if—
a it consists of securing a tax advantage for C or any other company, or
b it is not amongst C's business or other commercial purposes.
4 There are to be made such adjustments of any income or gains chargeable to corporation tax as are required to negate any tax advantage arising to C or any other company so far as referable to the unallowable purpose on a just and reasonable apportionment.
5 For the purposes of this section—
a “arrangement” includes any agreement, scheme, transaction or understanding (whether or not legally enforceable), and
b section 1139 of CTA 2010 (meaning of “tax advantage”) applies, but reading references to tax as references to corporation tax.
6 If C is not within the charge to corporation tax in respect of a part of its activities, C's business or other commercial purposes for the purposes of this section do not include the purposes of that part of its activities.

133 Clearance procedure

1 Section 132 does not apply if, on an application by C, HMRC Commissioners give a notice under this section stating that they are satisfied—
a that C's main purpose in entering into the arrangements included in the insurance business transfer arrangements is not an unallowable purpose or none of C's main purposes in entering into those arrangements is an unallowable purpose, or
b that the transferor and the transferee are members of the same group of companies when the transfer occurs and that the transfer produces no tax advantage for the group.
2 For this purpose the transfer produces no tax advantage for the group if—
a as a result of the insurance business transfer arrangements, there is an increase in the liability to corporation tax of one or more companies which are members of the group, and
b the amount (or total amount) of that increase is at least equal to the amount (or total amount) of the reduction in the liability to corporation tax of the transferor or the transferee that arises as a result of those arrangements.

134 Section 133: supplementary

1 An application under section 133 must—
a be in writing, and
b contain particulars of the insurance business transfer arrangements.
2 HMRC Commissioners may by notice require C to provide further particulars in order to enable them to determine the application.
3 A requirement may be imposed under subsection (2) within 30 days of the receipt of the application or of any further particulars required under that subsection.
4 If a notice under that subsection is not complied with within 30 days or such longer period as HMRC Commissioners may allow, they need not proceed further on the application.
5 HMRC Commissioners must give notice to C of their decision on an application under section 133—
a within 30 days of receiving the application, or
b if they give a notice under subsection (2), within 30 days of that notice being complied with.
6 If any particulars provided under this section do not fully and accurately disclose all facts and considerations material for the decision of HMRC Commissioners, any resulting notice under section 133 is void.

Interpretation

135 Meaning of “group” of companies

For the purposes of this Chapter whether or not at any time companies are members of the same group of companies is to be determined in accordance with section 170(2) to (11) of TCGA 1992.

CHAPTER 11 Definitions

136 Meaning of “BLAGAB trade profit” and “BLAGAB trade loss”

1 In relation to the carrying on by an insurance company of basic life assurance and general annuity business, this section explains for the purposes of this Part what is meant by—
a the “BLAGAB trade profit” of the company, and
b the “BLAGAB trade loss” of the company.
2 The company has a “BLAGAB trade profit” for an accounting period if, calculated in accordance with the ordinary trading rules, there are profits of that business for the accounting period that, but for sections 68 and 69, would be chargeable to corporation tax on income under section 35 of CTA 2009 (charge to tax on trade profits).
3 The amount of the BLAGAB trade profit is the amount of those profits that, but for those sections, would be so chargeable.
4 The company has a “BLAGAB trade loss” for an accounting period if, calculated in accordance with the ordinary trading rules, the company makes a loss in that business for the accounting period in a case where, had there been profits, they would, but for those sections, have been so chargeable.
5 The ordinary trading rules have effect for the purpose of calculating the company's BLAGAB trade profit or loss subject to the provision made by—
a sections 106 to 108 (policyholder tax),
b Chapter 6 (trade calculation rules applying to long-term business),
c Chapter 7 (trading apportionment rules), and
d sections 129 and 130 (transfers of BLAGAB).
6 For the purposes of this section “the ordinary trading rules” means the rules for calculating the profits of a trade for the purposes of the charge to corporation tax on income under section 35 of CTA 2009.

C21137 Meaning of “the long-term business fixed capital”

1 This section explains for the purposes of this Part what is meant by an asset forming part of “the long-term business fixed capital” of an insurance company.
2 An asset forms part of “the long-term business fixed capital” of the company if—
a it is held for the purposes of its long-term business, and
b it is a structural asset of that business.
3 The reference to a structural asset of a company's long-term business includes shares, debts and loans which—
a are held by the company in a fund that is not a with-profits fund, and
b are of a kind that, if they had been held on 31 December 2012, their value would have been required to be entered in lines 21 to 24 of Form 13 in the periodical return of the company for the period ending immediately before 1 January 2013 (UK insurance dependants and other insurance dependants).
4 For the purposes of subsection (3)(b) “periodical return” has the same meaning as it has in Chapter 1 of Part 12 of ICTA.
5 The Treasury may make regulations providing for assets of a company's long-term business which are of a description specified in the regulations to be regarded for the purposes of this section as being, or as not being, structural assets of that business.

138 Meaning of assets that are “matched to” liabilities

1 This section—
a defines for the purposes of this Part what is meant by an asset that is matched to a BLAGAB liability or other long-term business liability and what is meant by the whole or a part of an asset being matched, and
b explains for those purposes how to work out the part of an asset that is matched to a BLAGAB liability or other long-term business liability.
2 An asset is matched to a BLAGAB liability if, in accordance with the applicable method, some or all of the income or other return arising from that particular asset is specifically referable to the company's basic life assurance and general annuity business.
3 An asset is matched to another long-term business liability if, in accordance with the applicable method, some or all of the income or other return arising from that particular asset is specifically referable to the company's non-BLAGAB long-term business.
4 The whole of an asset is matched to a BLAGAB liability if, in accordance with the applicable method, the whole of the income or other return arising from that particular asset is specifically referable to the company's basic life assurance and general annuity business.
5 A part of an asset is matched to a BLAGAB liability or other long-term business liability if, in accordance with the applicable method, part of the income or other return arising from that particular asset is specifically referable to the company's basic life assurance and general annuity business or (as the case may be) its non-BLAGAB long-term business.
6 A part of an asset is matched to a BLAGAB liability or other long-term business liability in proportion to the income or other return arising from that particular asset that, in accordance with the applicable method, is specifically referable to the company's basic life assurance and general annuity business or (as the case may be) its non-BLAGAB long-term business.
7 For the purposes of this section “the applicable method”—
a in relation to the company's basic life assurance and general annuity business, means the method adopted for the purposes of section 98 which has effect in relation to the period of account in which the income or other return arises, and
b in relation to the company's non-BLAGAB long-term business, means the method adopted for the purposes of section 115 which has effect in relation to the period of account in which the income or other return arises.
8 For the purposes of this section any income or other return arising from an asset is to be regarded as specifically referable to a category of business in accordance with the applicable method in so far as that method is adopted in relation to the income or other return in consequence of a contractual requirement imposed on the company relating to the category of business in question.

139 Minor definitions

1 In this Part—
  • “closing”, in relation to a period of account, means the position at the end of the period of account,
  • “derivative contract” has the same meaning as in Part 7 of CTA 2009,
  • “fair value”—
    1. in relation to money, means its amount, and
    2. in relation to other assets, means the amount which an independent person selling the assets would get,
  • “HMRC Commissioners” means the Commissioners for Her Majesty's Revenue and Customs,
  • “insurance business transfer scheme” means—
    1. a scheme falling within section 105 of FISMA 2000, including an excluded scheme falling within Case 2, 3, 4 or 5 of subsection (3) of that section, or
    2. a scheme which would fall within that subsection but for subsection (1)(b) of that section,
  • “insurance special purpose vehicle” means an undertaking which—
    1. assumes risks from insurance or re-insurance undertakings, and
    2. fully funds its exposures to those risks through the proceeds of a debt issue or other financing mechanism where the repayment rights of the providers of the mechanism are subordinated to the re-insurance obligations of the undertaking,
  • “liabilities”, in relation to an insurance company, means—
    1. the mathematical reserves of the company as determined in accordance with section 1.2 of the INSPRU, and
    2. liabilities of the company (whose value falls to be determined in accordance with section 1.3 of the GENPRU) which arise from deposit back arrangements,
  • “overseas life insurance company” means an insurance company which is not resident in the United Kingdom but which carries on life assurance business in the United Kingdom through a permanent establishment there,
  • “re-insurance” includes retrocession,
  • “UK life insurance company” means an insurance company other than an overseas life insurance company,
  • “with-profits fund” has the meaning given by the IPRU (INS).
2 In this Part any reference to the debiting or crediting of an amount in accounts drawn up by an insurance company is a reference to bringing in the amount as a debit or credit in—
a the company's profit and loss account, income statement or statement of comprehensive income (or other comprehensive income),
b a statement of total recognised gains and losses, or
c any other statement of items used in calculating the company's income or gains, or its losses or expenses, for accounting purposes,
irrespective of how any account or statement within any of paragraphs (a) to (c) is described or otherwise referred to.
3 For this purpose—
  • “credit” means an amount which for accounting purposes increases or creates a profit, or reduces a loss, for a period of account, and
  • “debit” means an amount which for accounting purposes reduces a profit, or increases or creates a loss, for a period of account.
4 In this section—
  • “deposit back arrangements” means arrangements by which an amount is deposited by the re-insurer under a contract of re-insurance with the cedant,
  • “GENPRU” means the General Prudential Sourcebook made by the Prudential Regulation Authority under FISMA 2000,
  • “INSPRU” means the Prudential Sourcebook for Insurers made by the Prudential Regulation Authority under FISMA 2000, and
  • “IPRU (INS)” means the Interim Prudential Sourcebook for Insurers made by the Prudential Regulation Authority under FISMA 2000.
  • F11...
  • F11...
  • F11...

140 Abbreviations

1 In this Part—
  • “FISMA 2000” means the Financial Services and Markets Act 2000, and
  • “FISMA (Regulated Activities) Order 2001” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
2 For abbreviations of other Acts, see section 228.

141 Index of defined terms, etc

1 In this Part the following expressions are defined or otherwise explained by the provisions indicated—
ExpressionWhere explained
basic life assurance and general annuity business (abbreviated to “BLAGAB”)sections 57 and 67(5)
BLAGAB trade losssection 136
BLAGAB trade profitsection 136
closingsection 139(1)
contract of insurancesection 64
contract of long-term insurancesection 64
debiting or crediting an amount in accounts drawn up by a companysection 139(2) and (3)
derivative contractsection 139(1)
excess BLAGAB expensessection 73
fair valuesection 139(1)
HMRC Commissionerssection 139(1)
I - E profitsection 73
the I - E rulessection 70(1) and (2)
insurance business transfer schemesection 139(1)
insurance companysection 65
insurance special purpose vehiclesection 139(1)
liabilitiessection 139(1)
life assurance businesssection 56
long-term businesssection 63(1)
long-term business fixed capitalsection 137
matched (in case of assets matched to a BLAGAB liability or other long-term business liability)section 138
non-BLAGAB long-term businesssections 66 and 67
non-taxable distributionssection 94(4) and (5)
overseas life insurance companysection 139(1)
PHI businesssection 63(2)
re-insurancesection 139(1)
UK life insurance companysection 139(1)
with-profits fundsection 139(1)
2 The expressions in the above table have the same meaning in any other provision of the Corporation Tax Acts that makes special provision in relation to—
a insurance companies,
b any category of life assurance business carried on by insurance companies, or
c long-term business carried on by insurance companies.

CHAPTER 12 Supplementary

Powers conferred on Treasury or HMRC Commissioners

142 Power to amend Part 2 etc

1 If, in consequence of the exercise of any power under FISMA 2000, they consider it expedient to do so, the Treasury may by order amend—
a this Part, or
b any other provision of the Corporation Tax Acts that makes special provision in relation to insurance companies, any category of life assurance business carried on by insurance companies or long-term business carried on by insurance companies.
2 An order under subsection (1) may be made so as to have effect in relation to—
a any period ending on or before the day on which the order is made, or
b any period beginning before and ending after that day,
but only if the power under FISMA 2000 is exercised so as to have effect in relation to the period.
3 An order under subsection (1) may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.

143 Power to amend definition of “insurance business transfer scheme” etc

1 If, in consequence of any amendment of section 105 of FISMA 2000 (insurance business transfer schemes), they consider it expedient to do so, the Treasury may by order amend—
a the definition of “insurance business transfer scheme” given by section 139, or
b any other provision of the Corporation Tax Acts that makes special provision in relation to insurance companies, any category of life assurance business carried on by insurance companies or long-term business carried on by insurance companies.
2 An order under subsection (1) may be made so as to have effect in relation to—
a any period ending on or before the day on which the order is made, or
b any period beginning before and ending after that day,
but only if the amendment of section 105 of FISMA 2000 has effect in relation to that period.
3 An order under subsection (1) may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.

144 Power to modify provisions applying to overseas life insurance companies

1 The Treasury may by regulations provide for the Corporation Tax Acts to have effect in relation to overseas life insurance companies subject to such exceptions and other modifications as may be prescribed by the regulations.
2 The power under subsection (1) includes power to make provision in place of, and in consequence to repeal or revoke, any provision in relation to overseas life insurance companies which is made by or under—
a this Part, or
b any other provision of the Corporation Tax Acts.
3 Regulations under subsection (1) may be made so as to have effect in relation to any period ending on or after the day on which the regulations are made.
4 Regulations under subsection (1) may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.
5 The power to make consequential provision conferred by subsection (4)(b) includes power to amend any provision made by or under any Act.

145 Orders and regulations

1 Any power of the Treasury or HMRC Commissioners to make any order or regulations under this Part is exercisable by statutory instrument.
2 Any statutory instrument containing any order or regulations made by the Treasury or HMRC Commissioners under this Part is subject to annulment in pursuance of a resolution of the House of Commons.
3 Nothing in this Part that authorises the inclusion of any particular kind of provision in any order or regulations under this Part is to be read as restricting the generality of the provision that may be included in the order or regulations.

Minor and consequential amendments and transitional provision

146 Minor and consequential amendments

Schedule 16 contains minor and consequential amendments.

147 Transitional provision

Schedule 17 contains transitional provision in connection with the coming into force of this Part.

Commencement etc

148 Commencement

1 The provisions of this Part (other than section 149) have effect in relation to accounting periods of companies beginning on or after 1 January 2013.
2 Subsection (1) is subject to the operation of any provision of Schedule 17 in relation to times before that date.

149 Accounting periods straddling 1 January 2013

1 If, apart from this section, an insurance company would have had an accounting period beginning before 1 January 2013 and ending on or after that date, the accounting period of the company is to end instead on 31 December 2012.
2 Accordingly, the rules in section 10 of CTA 2009 (end of accounting period) are subject to this section.

PART 3  Friendly societies carrying on long-term business

Outline of provisions of Part

150 Overview

1 This Part makes special provision for corporation tax purposes in relation to long-term and other business carried on by friendly societies.
2 Sections 151 and 152 contain provision for applying provisions of the Corporation Tax Acts relating to insurance companies so that they also apply to friendly societies, subject to provision made by regulations.
3 Sections 153 to 163 make provision for, and in connection with, a special exemption from corporation tax for BLAGAB or eligible PHI business.
4 Sections 164 to 169 make provision for, and in connection with, a further exemption from corporation tax for other business.
5 The remainder of the Part contains—
a provision in relation to certain transfer schemes (see section 170),
b provision for an exemption from corporation tax for unregistered friendly societies (see section 171), and
c definitions and other supplementary material (see sections 172 to 179).

Long-term business rules to apply to friendly societies

151 Friendly societies subject to same basic rules as mutual insurers

1 The Corporation Tax Acts apply to—
a life assurance business carried on by friendly societies, and
b other long-term business carried on by friendly societies,
in the same way as they apply respectively to mutual life assurance business carried on by insurance companies and other long-term business carried on by insurance companies.
2 Subsection (1) does not apply to business which is exempt BLAGAB or eligible PHI business.
3 The Treasury may by regulations provide that the Corporation Tax Acts as applied by subsection (1) have effect subject to such exceptions or other modifications as may be prescribed by the regulations.
4 The regulations may require any part of any business to be treated as a separate business.
5 The regulations may make provision having retrospective effect.
6 The regulations may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.

152 Friendly societies subject to transfer of business rules

1 In this section “the transfer of business rules” means—
a Chapter 10 of Part 2, and
b any other provisions of the Corporation Tax Acts that apply on the transfer from an insurance company to another insurance company of the whole or part of its life assurance business or of its other long-term business.
2 The transfer of business rules apply in the same way—
a on the transfer of the whole or part of the business of a friendly society to another friendly society,
b on the amalgamation of friendly societies,
c on the transfer of the whole or part of the business of a friendly society to a company which is not a friendly society,
d on the conversion of a friendly society into a company which is not a friendly society, and
e on the transfer of the whole or part of the business of an insurance company to a friendly society.
3 The Treasury may by regulations provide that the transfer of business rules as applied by subsection (2) have effect subject to such exceptions or other modifications as may be prescribed by the regulations.
4 The regulations may make provision having retrospective effect.
5 The regulations may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.

Exempt BLAGAB or eligible PHI business

153 Exemption for certain BLAGAB or eligible PHI business

1 A friendly society is not liable to pay corporation tax (whether on income or chargeable gains) on its profits arising from exempt BLAGAB or eligible PHI business.
2 The exemption applies only if the society makes a claim.
3 For the meaning of “BLAGAB or eligible PHI business”, see section 154.
4 For the meaning of “exempt” BLAGAB or eligible PHI business, see section 155.

154 Meaning of “BLAGAB or eligible PHI business”

1 In this Part “BLAGAB or eligible PHI business” means—
a basic life assurance and general annuity business, and
b any PHI business so far as consisting of the effecting or carrying out of qualifying contracts,
but see subsections (3) and (4) for some qualifications.
2 A contract is a “qualifying” contract if—
a it is made before 1 September 1996, or
b it is made on or after that date and it also falls within paragraph I, II or III of Part 2 of Schedule 1 to the FISMA (Regulated Activities) Order 2001.
3 A contract made before 1 September 1996 which effects a policy affording provision for injury, sickness or other infirmity is to be regarded for the purposes of this Part as forming part of “BLAGAB or eligible PHI business” only if—
a the policy also affords assurance for a gross sum independent of injury, sickness or other infirmity,
b at least 60% of the total premiums are attributable to the provision afforded during injury, sickness or other infirmity, and
c there is no bonus or addition which may be declared or accrue upon the assurance of the gross sum.
4 Business is not to be regarded as “BLAGAB or eligible PHI business” of a friendly society for the purposes of this Part so far as it consists of the assurance of any annuity the consideration for which consists of sums obtainable—
a on the maturity, or
b on the surrender,
of any other policy of assurance issued by the society which forms part of its exempt BLAGAB or eligible PHI business.

155 Meaning of “exempt” BLAGAB or eligible PHI business

1 In this Part “exempt” BLAGAB or eligible PHI business means BLAGAB or eligible PHI business other than non-qualifying business.
2 Business is “non-qualifying” so far as it consists of—
a the assurance of gross sums, or the granting of annuities, which meet the conditions set out in the following table (which vary according to the date on which the contracts in question were made), or
b the effecting or carrying out of contracts for the assurance of gross sums which are made on or after 20 March 1991 and which are expressed at the outset not to be made in the course of exempt BLAGAB or eligible PHI business.
3 This is the table mentioned above—
Contracts to which assurance or annuities relateApplicable limit for premiums or gross sumsApplicable limit for annuities
Contracts made on or after 1 May 1995Assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £270Granting of annuities of annual amounts exceeding £156
Contracts made on or after 25 July 1991 but before 1 May 1995Assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £200Granting of annuities of annual amounts exceeding £156
Contracts made on or after 1 September 1990 but before 25 July 1991Assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £150Granting of annuities of annual amounts exceeding £156
Contracts made on or after 1 September 1987 but before 1 September 1990Assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £100Granting of annuities of annual amounts exceeding £156
Contracts made on or after 14 March 1984 but before 1 September 1987Assurance of gross sums exceeding £750Granting of annuities of annual amounts exceeding £156
Contracts made before 14 March 1984Assurance of gross sums exceeding £500Granting of annuities of annual amounts exceeding £104
4 In applying the limits in the above table in relation to the total premiums payable in any period of 12 months (in the case of contracts made on or after 1 September 1987)—
a if the premiums are payable more frequently than annually, ignore an amount equal to 10% of the premiums, and
b ignore so much of any premium as is charged on the ground that an exceptional risk of death or disability is involved.
5 In applying the limits in the above table in the case of contracts made on or after 1 September 1987, ignore any bonus or addition declared upon an annuity.
6 In applying the limits in the above table in the case of contracts made before 1 September 1987, ignore any bonus or addition which—
a is declared upon the assurance of a gross sum or annuity, or
b accrues upon the assurance of a gross sum or annuity by reference to an increase in the value of any investments.
7 In the case of a contract for the assurance of a gross sum under exempt BLAGAB or eligible PHI business made on or after 1 September 1987 but before 1 May 1995, there is a special rule if the amount payable by way of premium under the contract is increased as a result of a variation made—
a in the period beginning with 25 July 1991 and ending with 31 July 1992, or
b in the period beginning with 1 May 1995 and ending with 31 March 1996.
8 The rule is that, in relation to any profits relating to the contract as varied, the contract is to be treated for the purposes of the above table as made at the time of the variation.

156 Societies with no provision for assuring gross sums exceeding £2,000 etc

1 This section applies to a friendly society if its rules make no provision for it to carry on BLAGAB or eligible PHI business, or other long-term business, consisting of—
a the assurance of gross sums exceeding £2,000, or
b the granting of annuities of annual amounts exceeding £416.
2 The table in section 155 applies in relation to a friendly society to which this section applies as if, in the final row of that table—
a the reference to £500 were a reference to £2,000, and
b the reference to £104 were a reference to £416.
3 If at any time a friendly society to which this section applies amends its rules so as to cease to be such a friendly society, any part of its BLAGAB or eligible PHI business which—
a relates to contracts made before that time, and
b immediately before that time was exempt BLAGAB or eligible PHI business,
continues to be exempt BLAGAB or eligible PHI business for the purposes of this Part.
4 If at any time a friendly society to which this section does not apply amends its rules so as to become a friendly society to which this section applies, any part of its BLAGAB or eligible PHI business which—
a relates to contracts made before that time, and
b immediately before that time was not exempt BLAGAB or eligible PHI business,
continues not to be exempt BLAGAB or eligible PHI business for the purposes of this Part.
5 If at any time a friendly society to which this section does not apply acquires by way of transfer of engagements or amalgamation from another friendly society any BLAGAB or eligible PHI business which—
a relates to contracts made before that time, and
b immediately before that time was exempt BLAGAB or eligible PHI business,
that business continues to be exempt BLAGAB or eligible PHI business for the purposes of this Part.
6 If at any time a friendly society to which this section applies acquires by way of transfer of engagements or amalgamation from another friendly society any BLAGAB or eligible PHI business which—
a relates to contracts made before that time, and
b immediately before that time was not exempt BLAGAB or eligible PHI business,
that business continues not to be exempt BLAGAB or eligible PHI business for the purposes of this Part.

157 Transfers to friendly societies

1 If at any time an insurance business transfer scheme transfers any long-term business to a friendly society, any BLAGAB or eligible PHI business which relates to contracts included in the transfer is subsequently not to be capable of being exempt BLAGAB or eligible PHI business for the purposes of this Part.
2 This rule does not apply in relation to business relating to contracts to which section 158 applied immediately before the transfer had effect.

158 Transfers from friendly societies to insurance companies etc

1 If at any time an insurance company acquires by way of transfer of engagements from a friendly society any BLAGAB or eligible PHI business which—
a relates to contracts made before that time, and
b immediately before that time was exempt BLAGAB or eligible PHI business,
that business continues to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it.
2 If at any time a friendly society ceases as a result of section 91 of FSA 1992 (conversion into company) to be registered under that Act, any part of its BLAGAB or eligible PHI business which—
a relates to contracts made before that time, and
b immediately before that time was exempt BLAGAB or eligible PHI business,
continues to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it.
3 If contracts constituting or forming part of the business of a company covered by this section are varied during an accounting period of the company so as to increase the premiums payable under them, the business relating to those contracts is not exempt from corporation tax for that or any subsequent accounting period.
4 For the purposes of the Corporation Tax Acts any part of a company's business which is exempt from corporation tax as a result of this section is to be treated as a separate business from any other business carried on by the company.
5 The Treasury may by regulations provide that, where any part of the business of a company is exempt from corporation tax as a result of this section, the Corporation Tax Acts have effect subject to such exceptions or other modifications as they consider appropriate.
6 The regulations may make provision having retrospective effect.
7 The regulations may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.

159 Exception in case of breach of maximum benefits payable to members

1 The exemption from corporation tax afforded by section 153, 156(3) or (5) or 158 does not apply in relation to so much of the profits arising to a friendly society or insurance company from any business as is attributable to a policy which—
a is not a qualifying policy as a result of sub-paragraph (2) of paragraph 6 of Schedule 15 to ICTA and is not an excluded policy, and
b would not be a qualifying policy as a result of that sub-paragraph if all excluded policies were ignored.
2 A policy is an excluded policy if—
a it is held otherwise than with the friendly society or insurance company, or
b the person who has the contract effecting the policy acquired the rights under it on an assignment otherwise than for money or money's worth.
3 This section does not withdraw the exemption from corporation tax afforded by section 153, 156(3) or (5) or 158 in relation to profits arising from any part of a business relating to contracts made on or before 3 May 1966.

Exempt BLAGAB or eligible PHI business: benefits payable by friendly societies etc

160 Maximum benefits payable to members

1 This section imposes restrictions on the entitlement of a person to have at any time outstanding contracts with any one or more friendly societies, registered branches or insurance companies (“relevant persons”) which are—
a for the assurance of gross sums under business which is afforded exemption from corporation tax under section 153, 156(3) or (5) or 158 (see subsections (2) and (3)), or
b for the assurance by way of annuity under business which is afforded exemption from corporation tax under any of those provisions (see subsection (4)).
2 In the case of contracts for the assurance of gross sums made before 1 September 1987, a person is not entitled to have outstanding at any time with relevant persons contracts which, taking them all together, are for the assurance of more than £750 (but see subsection (9)).
3 In the case of contracts for the assurance of gross sums at least one of which was made on or after that date, a person is not entitled to have outstanding at any time with relevant persons—
a contracts under which the total premiums payable in any period of 12 months exceed £270,
b contracts made before 1 May 1995 under which the total premiums payable in any period of 12 months exceed £200,
c contracts made before 25 July 1991 under which the total premiums payable in any period of 12 months exceed £150, or
d contracts made before 1 September 1990 under which the total premiums payable in any period of 12 months exceed £100.
4 In the case of contracts for the assurance by way of annuity, a person is not entitled to have at any time outstanding with relevant persons contracts which, taking them all together, are for the assurance of more than £156 (but see subsection (9)).
5 In applying the limits in this section in relation to the total premiums payable in any period of 12 months—
a if the premiums are payable more frequently than annually, ignore an amount equal to 10% of the premiums, and
b ignore so much of any premium as is charged on the ground that an exceptional risk of death or disability is involved.
6 In applying the limits in this section, ignore —
a any bonus or addition which is declared upon an assurance of a gross sum or annuity or which accrues upon an assurance of a gross sum or annuity by reference to an increase in the value of any investments,
b any policy of insurance or annuity contract by means of which the benefits to be provided under an occupational pension scheme (within the meaning of section 150(5) of FA 2004) are secured,
c any annuity contract which constitutes, or is issued or held in connection with, a registered pension scheme other than one within paragraph (b), and
d any increase in a benefit under a friendly society contract (within the meaning given by section 6 of the Decimal Currency Act 1969) resulting from the adoption of a scheme prescribed or approved under subsection (3) of that section.
7 In the case of a contract for the assurance of a gross sum made on or after 1 September 1987 but before 1 May 1995, there is a special rule if the amount payable by way of premium under the contract is increased as a result of a variation made—
a in the period beginning with 25 July 1991 and ending with 31 July 1992, or
b in the period beginning with 1 May 1995 and ending with 31 March 1996.
8 The rule is that, in relation to times when the contract has effect as varied, the contract is to be treated for the purposes of this section as made at the time of variation.
9 If a person's outstanding contracts with relevant persons were contracts which were all made before 14 March 1984—
a subsection (2) has effect as if the reference to £750 were a reference to £2,000, and
b subsection (4) has effect as if the reference to £156 were a reference to £416.

161 Section 160: supplementary

1 This section makes further provision for the purposes of section 160 the application of which depends on whether or not a friendly society is an old society.
2 For the purposes of this Part an “old society” means—
a a registered friendly society which was registered before 4 February 1966,
b a registered friendly society which was registered in the period beginning with that date and ending with 3 May 1966 and which on or before 3 May 1966 carried on any life or endowment business (within the meaning of section 29 of FA 1966), or
c an incorporated friendly society which, before its incorporation, was a registered friendly society within paragraph (a) or (b).
3 In applying the limits in section 160(3) in relation to the total premiums payable in any period of 12 months, ignore £10 of the premiums payable under any contract made before 1 September 1987 by an old society.
4 In applying the limits in section 160(3), the premiums under any contract for an annuity which was made before 1 June 1984 by a friendly society other than an old society are to be dealt with as if the contract were for the assurance of a gross sum.
5 In applying the limits in section 160 in any case where a person has outstanding with relevant persons one or more contracts made after 13 March 1984 and one or more contracts made on or before that date, any contract for an annuity which was made before 1 June 1984 by a friendly society other than an old society is to be regarded—
a as a contract for the annual amount concerned, and
b as a contract for the assurance of a gross sum equal to 75% of the total premiums which would be payable under the contract if it were to run for its full term or, as the case may be, if the member concerned were to die at the age of 75.

162 Section 160: statutory declarations

A friendly society, registered branch or insurance company may require a person to make and sign a statutory declaration—
a that the total amount assured under outstanding contracts entered into by that person with any one or more friendly societies, registered branches or insurance companies (taken together) does not exceed the limits set out in section 160, and
b that the total premiums under those contracts do not exceed those limits.

Exempt BLAGAB or eligible PHI business: directions to old societies

163 Directions given to old societies

1 HMRC Commissioners may give a direction under this section to an old society.
2 The Commissioners may give the direction if—
a the society begins to carry on exempt BLAGAB or eligible PHI business or, in their opinion, begins to carry on exempt BLAGAB or eligible PHI business on an enlarged scale or of a new character, and
b it appears to them, having regard to the restrictions placed on qualifying policies issued by friendly societies other than old societies by paragraphs 3(1)(b) and 4(3)(b) of Schedule 15 to ICTA, that for the protection of the revenue it is expedient to give the direction.
3 The direction is that (and has the effect that) the society is to be treated for the purposes of this Part and Schedule 15 to ICTA as a friendly society other than an old society with respect to business carried on after the date of the direction.
4 The society may appeal against the direction on the ground that—
a it has not begun to carry on business as mentioned in subsection (2)(a), or
b the direction is not necessary for the protection of the revenue.
5 The appeal must be made within 30 days of the date on which the direction is given.
6 If a registered friendly society in respect of which a direction is in force under this section becomes an incorporated friendly society, the direction continues to have effect, so that for the purposes of this Part and Schedule 15 to ICTA it is treated as a friendly society other than an old society.

Exemption for other business

164 Societies registered before 1 June 1973, etc

1 A registered friendly society which is a qualifying society is not liable to pay corporation tax (whether on income or chargeable gains) on its profits other than those arising from—
a life assurance business, or
b PHI business comprised in BLAGAB or eligible PHI business.
2 A registered friendly society is a qualifying society if—
a it was registered before 1 June 1973 (but see section 168 for circumstances in which it ceases to be a qualifying society),
b it is registered on or after that date and its business is limited to the provision, in accordance with its rules, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by HMRC Commissioners, or
c it is registered on or after that date but before 27 March 1974 and its rules limit the total amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as HMRC Commissioners may authorise for the purposes of this section.
3 For the purposes of this section a registered friendly society formed on the amalgamation of two or more friendly societies is treated as registered before 1 June 1973 if, at the time of amalgamation, each of the societies amalgamated was a qualifying society (but otherwise is treated as registered at that time).
4 The exemption applies only if the society makes a claim.

165 Incorporated friendly societies

1 An incorporated friendly society which is a qualifying society is not liable to pay corporation tax (whether on income or chargeable gains) on its profits other than those arising from—
a life assurance business, or
b PHI business comprised in BLAGAB or eligible PHI business.
2 An incorporated friendly society is a qualifying society if it falls within any of cases A to C (but see section 168 for circumstances in which it ceases to be a qualifying society).
3 Case A is that, immediately before its incorporation, it was a registered friendly society which was a qualifying society within the meaning of section 164.
4 Case B is that—
a it was formed otherwise than by the incorporation of a registered friendly society or the amalgamation of two or more friendly societies, and
b its business is limited to the provision, in accordance with its rules, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by HMRC Commissioners.
5 Case C is that—
a it was formed by the amalgamation of two or more friendly societies, and
b at the time of the amalgamation each of the societies being amalgamated was a qualifying society within the meaning of section 164 or this section.
6 The exemption applies only if the society makes a claim.
7 The exemption does not apply to any profits arising or accruing to the society from, or by reason of its interest in, a body corporate—
a which is a subsidiary of the society (within the meaning of FSA 1992), or
b of which the society has joint control (within the meaning of FSA 1992).

166 Transfers from friendly societies to insurance companies etc

1 For the purposes of this Part “relevant other business” means any business other than—
a life assurance business, or
b PHI business comprised in BLAGAB or eligible PHI business.
2 If—
a at any time an insurance company acquires by way of transfer of engagements from a friendly society any relevant other business, and
b immediately before that time the society was exempt from corporation tax on profits arising from that business as a result of section 164 or 165,
the insurance company is exempt from corporation tax on its profits arising from the relevant other business so far as relating to contracts made before that time.
3 If a friendly society—
a at any time ceases as a result of section 91 of FSA 1992 (conversion into company) to be registered under that Act, and
b immediately before that time the society was, as a result of section 164 or 165, exempt from corporation tax on profits arising from any relevant other business carried on by it,
the company into which the society is converted is exempt from corporation tax on its profits arising from the relevant other business so far as relating to contracts made before that time.
4 If during an accounting period of a company there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on relevant other business relating to contracts made before the time of transfer or conversion, the company is not exempt from corporation tax as a result of this section for that or any subsequent accounting period.
5 For the purposes of the Corporation Tax Acts any part of a company's business which is exempt from corporation tax as a result of this section is to be treated as a separate business from any other business carried on by the company.
6 The Treasury may by regulations provide that, where any part of the business of a company is exempt from corporation tax as a result of this section, the Corporation Tax Acts have effect subject to such exceptions or other modifications as they consider appropriate.
7 The regulations may make provision having retrospective effect.
8 The regulations may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.

167 Transfers between friendly societies

1 If—
a at any time a friendly society acquires by way of transfer of engagements or amalgamation from another friendly society any relevant other business, and
b immediately before that time the transferor was exempt from corporation tax on profits arising from that business as a result of section 164 or 165,
the transferee is exempt from corporation tax on its profits arising from the relevant other business so far as relating to contracts made before that time.
2 If during an accounting period of the transferee there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on relevant other business relating to contracts made before that time, the transferee is not exempt from corporation tax as a result of this section for that or any subsequent accounting period.
3 If—
a at any time a friendly society acquires by way of transfer of engagements or amalgamation from another friendly society any relevant other business, and
b immediately before that time the transferor was not exempt from corporation tax on profits arising from that business as a result of section 164 or 165,
the transferee is not exempt from corporation tax on its profits arising from the relevant other business so far as relating to contracts made before that time.
4 The Treasury may by regulations provide that, where any part of the business of a friendly society is, or is not, exempt from corporation tax as a result of this section, the Corporation Tax Acts have effect subject to such exceptions or other modifications as they consider appropriate.
5 The regulations may make provision having retrospective effect.
6 The regulations may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.
7 Nothing in this section applies in relation to transfers or amalgamations taking place before 21 July 2008.

168 Withdrawal of qualifying status

1 HMRC Commissioners may give a direction under this section to—
a a registered friendly society which is a qualifying society for the purposes of section 164 as a result of its registration before 1 June 1973, or
b an incorporated friendly society which is a qualifying society for the purposes of section 165 as a result of falling within case A or C and whose business and rules are not of a kind mentioned in section 164(2)(b) or (c).
2 The Commissioners may give the direction if—
a the society begins to carry on relevant other business or, in their opinion, begins to carry on relevant other business on an enlarged scale or of a new character, and
b it appears to them, having regard to the restrictions imposed by section 164 on registered friendly societies registered on or after 1 June 1973, that for the protection of the revenue it is expedient to give the direction.
3 The direction is that (and has the effect that) the society ceases to be a qualifying society as from the date of the direction.
4 The society may appeal against the direction on the ground that—
a it has not begun to carry on business as mentioned in subsection (2)(a), or
b the direction is not necessary for the protection of the revenue.
5 The appeal must be made within 30 days of the date on which the direction is given.

169 Payments by non-qualifying societies treated as qualifying distributions

1 This section applies if—
a a friendly society which is not a qualifying society makes a payment to a member in respect of the member's interest in the society,
b the payment is made in the course of relevant other business, and
c the payment exceeds the total amount of any sums paid by the member to the society by way of contributions or deposits after deducting from that total any relevant previous payment and any relevant earlier repayment.
2 The excess is treated for the purposes of corporation tax and income tax as a F58... distribution.
3 In this section—
a the reference to a relevant previous payment is to the amount of any previous payment made by the society to the member in respect of the member's interest in the society, and
b the reference to a relevant earlier repayment is to the amount of any earlier repayment of sums paid by the member to the society by way of contributions or deposits.
4 In the case of an incorporated friendly society which, immediately before its incorporation, was a registered friendly society which was not a qualifying society—
a references in this section to payments (or repayments) to or from the society include payments (or repayments) to or from the registered friendly society, but
b subsection (3)(a) does not apply to a payment made before 27 March 1974 or, if the registered friendly society was previously a qualifying society but ceased to be one as a result of a direction given to it under section 168(1)(a), a payment made on or before such later date as was specified in the direction.
5 In the case of any other incorporated friendly society which was previously a qualifying society but ceased to be one as a result of a direction given to it under section 168(1)(b), subsection (3)(a) does not apply to a payment made on or before the date specified in the direction.
6 In the case of a registered friendly society, subsection (3)(a) does not apply to—
a a payment made before 27 March 1974, or
b if the society was previously a qualifying society but ceased to be one as a result of a direction given to it under section 168(1)(a), a payment made on or before such later date as was specified in the direction.
7 For the purposes of this section—
a a registered friendly society is not a qualifying society at any time if, at that time, it is not a qualifying society within the meaning of section 164, and
b an incorporated friendly society is not a qualifying society at any time if, at that time, it is not a qualifying society within the meaning of section 165.

Miscellaneous

170 Transfer schemes under s.6(5) of FSA 1992

1 This section applies if assets of a branch of a registered friendly society have been identified in a scheme under section 6(5) of FSA 1992 (property, rights etc excluded from transfer to the society on its incorporation).
2 In relation to any time after the incorporation of the society, the assets are to be treated for the purposes of the Tax Acts as assets of the society (and, accordingly, any corporation tax or income tax liability arising in respect of them is a liability of the society rather than of the branch).
3 If, as a result of this section, corporation tax or income tax in respect of any of the assets becomes chargeable on and is paid by the society, the society may recover from the trustees in whom those assets are vested the amount of the tax paid.

171 Exemption for unregistered friendly societies

1 A friendly society which is neither a registered friendly society nor an incorporated friendly society is not liable to pay corporation tax (whether on income or chargeable gains) on its profits if its income does not exceed £160 a year.
2 The exemption applies only if the society makes a claim.

Interpretation

C9172 Minor definitions

1 In this Part—
  • “friendly society”, without qualification, means (except in section 171) a registered friendly society or an incorporated friendly society,
  • “incorporated friendly society” means a society incorporated under FSA 1992,
  • “policy”, in relation to BLAGAB or eligible PHI business, includes an instrument evidencing a contract to pay an annuity upon human life,
  • “registered branch” has the same meaning as in FSA 1992 (and includes any branch that as a result of section 96(3) of FSA 1992 is treated as a registered branch), and
  • “registered friendly society” has the same meaning as in FSA 1992 (and includes any society that as a result of section 96(2) of FSA 1992 is treated as a registered friendly society).
2 Any other expression which is used in this Part and in Part 2 has the same meaning in this Part as in that Part.
3 References in this Part to a friendly society include, in the case of a registered friendly society, references to any branch of that society.
4 It is declared that for the purposes of this Part (except where provision to the contrary is made) a friendly society formed on the amalgamation of two or more friendly societies is treated as different from the amalgamated societies.
5 A registered friendly society formed on the amalgamation of two or more friendly societies is treated for the purposes of this Part as registered not later than 3 May 1966 if at the time of the amalgamation—
a all the societies amalgamated were registered friendly societies eligible for the exemption conferred by section 153, and
b at least one of them was an old society,
or, if the amalgamation took place before 19 March 1985, the society was treated as registered not later than 3 May 1966 as a result of the proviso to section 337(4) of the Income and Corporation Taxes Act 1970.
6 An incorporated friendly society formed on the amalgamation of two or more friendly societies is treated for the purposes of this Part as a society which, before its incorporation, was a registered friendly society registered not later than 3 May 1966 if at the time of the amalgamation—
a all the societies amalgamated were registered friendly societies eligible for the exemption conferred by section 153, and
b at least one of them was an old society.

173 Abbreviations

1 In this Part—
  • “FSA 1992” means the Friendly Societies Act 1992, and
  • “FISMA (Regulated Activities) Order 2001” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
2 For abbreviations of other Acts, see section 228.

C10174 Index of defined terms

In this Part the following expressions are defined or otherwise explained by the provisions indicated—
ExpressionWhere explained
basic life assurance and general annuity business (abbreviated to “BLAGAB”)sections 57, 67(5) and 172(2)
BLAGAB or eligible PHI businesssection 154
contract of insurancesections 64 and 172(2)
exempt BLAGAB or eligible PHI businesssection 155
friendly societysection 172(1)
HMRC Commissionerssections 139(1) and 172(2)
incorporated friendly societysection 172(1)
insurance business transfer schemesections 139(1) and 172(2)
insurance companysections 65 and 172(2)
life assurance businesssections 56 and 172(2)
long-term businesssections 63(1) and 172(2)
old societysection 161(2)
PHI businesssections 63(2) and 172(2)
policysection 172(1)
registeredsection 172(5) and (6)
registered branchsection 172(1)
registered friendly societysection 172(1) and (3)
relevant other businesssection 166
re-insurancesections 139(1) and 172(2)

Regulations

175 Regulations

1 Any power of the Treasury to make any regulations under this Part is exercisable by statutory instrument.
2 Any statutory instrument containing any regulations made by the Treasury under this Part is subject to annulment in pursuance of a resolution of the House of Commons.
3 Nothing in this Part that authorises the inclusion of any particular kind of provision in any regulations under this Part is to be read as restricting the generality of the provision that may be included in the regulations.

Consequential amendments and transitional provision

176 Consequential amendments

Schedule 18 contains consequential amendments.

177 Transitional provision

Schedule 19 contains transitional provision in connection with the coming into force of this Part.

Commencement etc

178 Commencement

The provisions of this Part (other than section 179) have effect in relation to accounting periods of companies beginning on or after 1 January 2013.

179 Accounting periods straddling 1 January 2013

1 If, apart from this section, a friendly society would have had an accounting period beginning before 1 January 2013 and ending on or after that date, the accounting period of the society is to end instead on 31 December 2012.
2 Accordingly, the rules in section 10 of CTA 2009 (end of accounting period) are subject to this section.

PART 4  Controlled foreign companies and foreign permanent establishments

180 Controlled foreign companies and foreign permanent establishments

Schedule 20 makes—
a provision for and in connection with a charge on UK resident companies which have interests in non-UK resident companies controlled by UK resident persons, and
b provision about foreign permanent establishments of UK resident companies.

PART 5  Oil

181 Transfers within a group by companies carrying on ring fence trade

1 Section 171A of TCGA 1992 (election to reallocate gain or loss to another member of group) is amended as follows.
2 In subsection (4), at the end insert “ (but see subsection (4A)) ”.
3 After subsection (4) insert—
4 The amendments made by this section have effect in relation to chargeable gains accruing, or treated by virtue of section 197(4) of TCGA 1992 as accruing, in chargeable periods ending on or after 6 December 2011 (but see also subsection (5)).
5 In relation to a chargeable period of a company beginning before 6 December 2011 and ending on or after that date (“the straddling period”), the amendments made by this section have effect as if, for the purposes of section 197 of TCGA 1992, so much of the straddling period as falls before 6 December 2011, and so much of that period as falls on or after that date, were separate chargeable periods.

182 Supplementary charge

1 In section 330 of CTA 2010 (supplementary charge in respect of ring fence trades), in subsection (2), for “profits of the company's ring fence trade” substitute “ company's ring fence profits ”.
2 This section is treated as having come into force on 6 December 2011.

183 Relief in respect of decommissioning expenditure

Schedule 21 contains provision about the relief available in respect of decommissioning expenditure.

184 Reduction of supplementary charge for certain oil fields

Schedule 22 contains provision extending the availability of field allowances for oil fields.

PART 6  Excise duties

Tobacco products duty

185 Rates of tobacco products duty

1 For the table in Schedule 1 to TPDA 1979 substitute—
.
2 The amendment made by this section is treated as having come into force at 6 pm on 21 March 2012.

Alcoholic liquor duties

186 Rates of alcoholic liquor duties

1 ALDA 1979 is amended as follows.
2 In section 5 (rate of duty on spirits), for “£25.52” substitute “ £26.81 ”.
3 In section 36(1AA) (rates of general beer duty)—
a in paragraph (za) (rate of duty on lower strength beer), for “£9.29” substitute “ £9.76 ”, and
b in paragraph (a) (standard rate of duty on beer), for “£18.57” substitute “ £19.51 ”.
4 In section 37(4) (rate of high strength beer duty), for “£4.64” substitute “ £4.88 ”.
5 In section 62(1A) (rates of duty on cider)—
a in paragraph (a) (rate of duty per hectolitre on sparkling cider of a strength exceeding 5.5 per cent), for “£233.55” substitute “ £245.32 ”,
b in paragraph (b) (rate of duty per hectolitre on cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£53.84” substitute “ £56.55 ”, and
c in paragraph (c) (rate of duty per hectolitre in any other case), for “£35.87” substitute “ £37.68 ”.
6 For the table in Schedule 1 substitute—
.
7 The amendments made by this section are treated as having come into force on 26 March 2012.

187 Repeal of drawback on British compounds and spirits of wine

1 Section 22 of ALDA 1979 (drawback on British compounds and spirits of wine) is repealed.
2 In consequence of the provision made by subsection (1), omit the following provisions—
a in Schedule 1 to the Isle of Man Act 1979, paragraph 29;
b in Schedule 8 to FA 1981, paragraph 16;
c in Schedule 4 to FA 1994, paragraph 24;
d in Schedule 5 to that Act, paragraph 3(1)(ha);
e in Schedule 42 to FA 2008, paragraph 2(2).

Hydrocarbon oil etc duties

188 Rates of duty and rebates from 1 August 2012 to 31 December 2012

In relation to products charged with duty under HODA 1979 on or after 1 August 2012 but before 1 January 2013, that Act has effect as if the amendments made by section 20 of FA 2011 had never been made.

F128189 Rebated fuel: private pleasure craft

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

Air passenger duty

190 Air passenger duty

Schedule 23 amends, and makes amendments connected with, Chapter 4 of Part 1 of FA 1994 (air passenger duty).

Gambling duties

191 Machine games duty

Schedule 24 contains provision replacing amusement machine licence duty with a new excise duty and making related changes to VATA 1994.

192 Amusement machine licence duty

1 In section 23(2) of BGDA 1981 (amount of duty payable on amusement machine licence), for the table substitute—
.
2 The amendment made by this section 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 23 March 2012.

193 Rates of gaming duty

1 In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—
.
2 The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2012.

194 Remote gambling: double taxation relief

Schedule 25 contains provision for double taxation relief in respect of remote gambling.

Vehicle excise duty

195 VED rates for light passenger vehicles, light goods vehicles, motorcycles etc

1 Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.
2 In paragraph 1 (general)—
a in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder capacity not exceeding 1,549cc), for “£215” substitute “ £220 ”, and
b in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£130” substitute “ £135 ”.
3 In paragraph 1B (graduated rates of duty for light passenger vehicles)—
a for the tables substitute—
;
b in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—
4 In paragraph 1J (VED rates for light goods vehicles)—
a in paragraph (a), for “£210” substitute “ £215 ”, and
b in paragraph (b), for “£130” substitute “ £135 ”.
5 In paragraph 2(1) (VED rates for motorcycles)—
a in paragraph (b), for “£35” substitute “ £36 ”,
b in paragraph (c), for “£53” substitute “ £55 ”, and
c in paragraph (d), for “£74” substitute “ £76 ”.
6 The amendments made by this section have effect in relation to licences taken out on or after 1 April 2012.

PART 7  Value added tax

196 Changes to the categorisation of supplies

1 Schedule 26 contains provision about the categorisation of supplies for the purposes of value added tax.
2 Schedule 27 contains provision for an anti-forestalling charge to value added tax related to changes in the descriptions of exempt or zero-rated supplies.

197 Exempt supplies

1 In Part 1 of Schedule 9 to VATA 1994 (index to exempt supplies of goods and services), at the appropriate place in the table insert—
.
2 In Part 2 of that Schedule (the groups), at the end insert—
3 In section 31 of that Act (exempt supplies and acquisitions), after subsection (2) insert—

198 Supply of goods or services by public bodies

1 VATA 1994 is amended as follows.
2 In section 41 (application to the Crown)—
a omit subsection (2), and
b in subsection (3)(b) for “a direction under subsection (2) above,” substitute “ section 41A, ”.
3 After that section insert—

199 Relief from VAT on low value goods: restriction relating to Channel Islands

1 In Schedule 2 to the Value Added Tax (Imported Goods) Relief Order 1984 (S.I. 1984/746) (reliefs for goods of certain descriptions), Group 8 (articles sent for miscellaneous purposes) is amended as follows.
2 The existing Note becomes Note (1) (and accordingly “ Note ” in Group 8 becomes “ Notes ”).
3 After that Note insert—
4 The amendment of that Schedule by this section is without prejudice to any power to amend that Schedule by subordinate legislation.
5 The amendments made by this section have effect in relation to goods imported on or after 1 April 2012.

200 Group supplies using an overseas member

1 VATA 1994 is amended as follows.
2 In section 43 (groups of companies), in subsection (2C)(c), after “above” insert “ and paragraph 8A of Schedule 6 ”.
3 In section 83 (appeals), in subsection (1)(v) for “or 2” substitute “ , 2 or 8A ”.
4 In section 97(4) (orders requiring Parliamentary approval within 28 days of being made), in paragraph (f), after “1A(7)” insert “ or 8A(7) ”.
5 Schedule 6 (valuation: special cases) is amended as follows.
6 In paragraph 1 (cases where Commissioners may direct value is open market value), in sub-paragraph (5), after “paragraph”, in the second place it occurs, insert “ 8A or ”.
7 After paragraph 8 insert—
8 The amendments made by this section have effect in relation to supplies made on or after the day on which this Act is passed.

201 Face-value vouchers

1 In Schedule 10A to VATA 1994 (face-value vouchers), after paragraph 7 insert—
2 The amendment made by subsection (1) has effect in relation to supplies of face-value vouchers issued on or after 10 May 2012.
3 Subsection (4) applies where—
a a face-value voucher issued before 10 May 2012 is used on or after that date to obtain goods or services,
b paragraphs 2 to 4, 6 and 7 of Schedule 10A to VATA 1994 would not have applied in relation to the issue, or any subsequent supply, of the voucher because of paragraph 7A of that Schedule if the voucher had been issued on or after 10 May 2012, and
c VAT is not payable under the law of another member State on the supply of the voucher to the user.
4 The use of the voucher is to be treated for the purposes of VATA 1994 as a supply of the goods or services by the person from whom they are obtained to the user of the voucher.

202 Power to require notification of arrival of means of transport in UK

In Schedule 11 to VATA 1994 (administration, collection and enforcement), in paragraph 2 (accounting for VAT and payment of VAT), after sub-paragraph (5) insert—

203 Non-established taxable persons

Schedule 28 contains provision about non-established taxable persons.

204 Administration of VAT

Schedule 29 contains provision about the administration of VAT.

PART 8  Other taxes

Landfill tax

205 Standard rate of landfill tax

1 In section 42(1)(a) and (2) of FA 1996 (amount of landfill tax) for “£64” substitute “ £72 ”.
2 The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2013.

206 Landfill sites in Scotland

The following provisions are to be treated as having come into force, in so far as they extend to Scotland, on 21 March 2000—
a paragraph 19 of Schedule 2 to the Pollution Prevention and Control Act 1999 (which inserts paragraph (ba) into section 66 of FA 1996 (landfill sites)), and
b section 6(1) of the Pollution Prevention and Control Act 1999, so far as relating to paragraph 19 of that Schedule.

Climate change levy

207 Climate change levy

The following Schedules amend, or make amendments connected with, Schedule 6 to FA 2000 (climate change levy)—
a Schedule 30 (reduced-rate supplies, rates etc);
b Schedule 31 (climate change agreements);
c Schedule 32 (supplies subject to the carbon price support rates and combined heat and power stations).

Inheritance tax

208 Indexation of rate bands

1 Section 8 of IHTA 1984 (indexation of rate bands) is amended as follows.
2 In subsection (1), for “retail prices index for the month of September in 1993 or any later year” substitute “ consumer prices index for the month of September in any year ”.
3 In subsection (2), for “retail prices index” substitute “ consumer prices index ”.
4 For subsection (3) substitute—
5 The amendments made by this section have effect for the purposes of chargeable transfers made on or after 6 April 2015.

209 Gifts to charities etc

Schedule 33 contains provision for a lower rate of inheritance tax to be charged on transfers made on death that include sufficient gifts to charities or registered clubs.

210 Settled property: effect of certain arrangements

1 IHTA 1984 is amended as follows.
2 In section 48 (settled property: excluded property)—
a in subsection (1), after paragraph (c) insert
,
b in subsection (3), for “subsection (3B)” substitute “ subsections (3B) and (3D) ”, and
c after subsection (3C) insert—
3 After section 74 insert—
4 In section 201 (liability for tax: settled property), after subsection (4) insert—
5 The amendments made by this section are treated as having come into force on 20 June 2012 and have effect in relation to arrangements entered into on or after that day.

Bank levy

211 The bank levy

Schedule 34 contains provision about the bank levy.

Stamp duty land tax, stamp duty reserve tax and stamp duty

212 Prevention of avoidance: subsales etc

1 In section 45 of FA 2003 (contract and conveyance: effect of transfer of rights), after subsection (1) insert—
2 The amendment made by this section has effect in relation to grants or assignments of options on or after 21 March 2012.

213 Rate in respect of residential property where consideration over £2m

F341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 The amendment made by this section has effect in relation to any land transaction of which the effective date is on or after 22 March 2012.
3 But that amendment does not have effect in relation to any transaction—
a effected in pursuance of a contract entered into and substantially performed before 22 March 2012, or
b effected in pursuance of a contract entered into before that date and not excluded by subsection (4).
4 A transaction effected in pursuance of a contract entered into before 22 March 2012 is excluded by this subsection if—
a there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 22 March 2012,
b 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
c 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.

214 Higher rate for certain transactions

Schedule 35 contains provision about the amount of tax chargeable on certain transactions involving higher threshold interests in dwellings.

215 Disclosure of stamp duty land tax avoidance schemes

In section 308 of FA 2004 (duties of promoter), after subsection (5) insert—

216 Health service bodies

1 In Part 4 of FA 2003 (stamp duty land tax), after section 67 insert—
2 The following provisions are repealed—
a section 61(3) to (3C) of the National Health Service and Community Care Act 1990 (stamp duty and stamp duty land tax reliefs for health service bodies);
b section 58 of the National Health Service Act 2006 (which applies those stamp duty and stamp duty land tax reliefs to NHS foundation trusts);
c paragraphs 132 and 133 of Schedule 1 to the National Health Service (Consequential Provisions) Act 2006.
3 The repeals in subsection (2), to the extent that they relate to stamp duty, have effect in relation to any instrument executed on or after the day on which this Act is passed.
4 Subject to that, the amendments made by this section have effect in relation to any land transaction of which the effective date is on or after the day on which this Act is passed.
F1125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1136 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

217 Collective investment schemes: stamp duty and stamp duty reserve tax

1 The Treasury may by regulations confer an exemption or other relief from stamp duty or stamp duty reserve tax for transactions relating to collective investment schemes.
2 The regulations may, in particular—
a specify descriptions of collective investment scheme in relation to which the exemption or relief is available, and
b specify the cases in which the exemption or relief is available.
3 Regulations under this section may make different provision for different cases or different purposes.
4 Regulations under this section—
a may modify any enactment or instrument (whenever passed or made), and
b may include incidental, consequential, supplementary or transitional provision.
5 Regulations under this section are to be made by statutory instrument.
6 A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.
7 In this section—
  • “collective investment scheme” has the meaning given by section 235 of the Financial Services and Markets Act 2000, and
  • “modify” includes amend, repeal or revoke.

PART 9  Miscellaneous matters

International matters

218 Agreement between UK and Switzerland

1 Schedule 36 contains provision giving effect to—
a an agreement signed on 6 October 2011 between the United Kingdom and the Swiss Confederation on co-operation in the area of taxation, as amended by a protocol signed by them on 20 March 2012 and by a mutual agreement signed by them on 18 April 2012 implementing article XVIII of that protocol, and
b the joint declaration (concerning a tax finality payment) forming an integral part of that protocol.
2 Schedule 36 comes into force on the day on which the agreement of 6 October 2011 enters into force.
3 In section 23 of the Constitutional Reform and Governance Act 2010, after subsection (2A) insert—

219 Penalties: offshore income etc

In paragraph 21A of Schedule 24 to FA 2007 (classification of territories), in sub-paragraph (4)—
a omit “and” at the end of paragraph (b), and
b at the end of paragraph (c) insert—

220 International military headquarters, EU forces, etc

Schedule 37 contains provision about the tax treatment of international military headquarters, EU forces, etc.

Financial sector regulation

221 Tax consequences of financial sector regulation

1 The Treasury may by regulations make provision about the tax consequences in relation to securities of any regulatory requirement imposed, or which appears to the Treasury likely to be imposed, by any EU legislation (whenever adopted) or enactment on—
a persons who are authorised persons for the purposes of the Financial Services and Markets Act 2000 (see section 31 of that Act), or
b parent undertakings (as defined in section 420 of that Act) of such persons.
2 Regulations under this section may, in particular, make provision—
a charging any tax or granting, withdrawing or restricting an exemption or other relief from any tax, and
b about the treatment of arrangements the purpose, or one of the main purposes, of which is to secure a tax advantage.
3 Regulations under this section may provide that a reference in the regulations—
a to any EU legislation or enactment,
b to any document, or
c to any provision of any EU legislation, enactment or document
is to be construed as a reference to that legislation, enactment, document or provision as amended from time to time.
4 Regulations under this section—
a may apply (with or without modifications) or disapply any enactment,
b may modify, amend, repeal or revoke any enactment,
c may make different provision for different cases or different purposes, and
d may include incidental, consequential, supplementary or transitional provision.
4A Where regulations under this section make provision about the tax consequences of any regulatory requirement which appears to the Treasury likely to be imposed by any EU legislation or enactment—
a the regulations may be made (and, accordingly, may have effect) before the proposed legislation or enactment is adopted, passed or made, and
b failure after the regulations are made to adopt, pass or make the proposed legislation or enactment does not affect the validity of the regulations.
5 Regulations under this section are to be made by statutory instrument.
6 No regulations may be made under this section unless a draft of the statutory instrument containing them has been laid before and approved by a resolution of the House of Commons.
7 In this section—
  • “arrangements” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable and whether involving a single transaction or two or more transactions;
  • “enactment” includes an enactment contained in subordinate legislation (within the meaning of the Interpretation Act 1978), and includes an enactment whenever passed or made;
  • “tax” includes stamp duty;
  • “tax advantage” means—
    1. a relief from tax (including a tax credit) or increased relief from tax,
    2. a repayment of tax or increased repayment of tax,
    3. the avoidance, reduction or delay of a charge to tax or an assessment to tax, or
    4. the avoidance of a possible assessment to tax.

Incapacitated persons and minors

222 Removal of special provision for incapacitated persons and minors

1 In TMA 1970 omit—
a section 42(8) (procedure for making claims etc on behalf of incapacitated persons),
b section 72 (trustees, guardians, etc of incapacitated persons), and
c section 73 (further provision as to infants).
2 In Part 4 of FA 2003 (stamp duty land tax), omit section 106(1) and (2) (persons acting in a representative capacity on behalf of incapacitated persons and minors).
3 Accordingly, incapacitated persons are (and minors remain) assessable and chargeable to the taxes in question.
4 In consequence of the amendments made by subsections (1) and (2)—
a in section 118(1) of TMA 1970, omit the definitions of “incapacitated person” and “infant”,
b omit paragraphs 33 and 34 of Schedule 1 to the Age of Legal Capacity (Scotland) Act 1991,
c in paragraph 5 of Schedule 2 to the Social Security Contributions and Benefits Act 1992—
i omit paragraph (a) (and the “or” after it), and
ii in paragraph (b), for “such” substitute “ Class 4 ”,
d in paragraph 5 of Schedule 2 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992—
i omit paragraph (a) (and the “or” after it), and
ii in paragraph (b), for “such” substitute “ Class 4 ”, and
e in section 81B(4) of FA 2003, omit paragraph (b) (and the “or” before it).
5 The amendments made by subsections (1) and (4)(a) to (d) have effect for the tax year 2012-13 and subsequent tax years.
6 The amendments made by subsections (2) and (4)(e) have effect in relation to land transactions of which the effective date is on or after the day on which this Act is passed.

Administration

223 Tax agents: dishonest conduct

1 Schedule 38 contains provision about tax agents who engage in dishonest conduct.
2 That Schedule comes into force on such day as the Treasury may by order appoint.
3 An order under subsection (2)—
a may make different provision for different purposes, and
b may include transitional provision and savings.
4 The Treasury may by order make any incidental, supplemental, consequential, transitional or saving provision in consequence of Schedule 38.
5 An order under subsection (4) may—
a make different provision for different purposes, and
b make provision amending, repealing or revoking any provision made by or under an Act (whenever passed or made).
6 An order under this section is to be made by statutory instrument.
7 A statutory instrument containing an order under subsection (4) is subject to annulment in pursuance of a resolution of the House of Commons.

224 Information powers

1 Schedule 36 to FA 2008 (information and inspection powers) is amended as follows.
2 After paragraph 5 insert—
3 In paragraph 6 (notices), in sub-paragraph (1), for “or 5” substitute “ , 5 or 5A ”.
4 In paragraph 31 (right to appeal against notice given under paragraph 5), after “paragraph 5” insert “ or 5A ”.
5 Accordingly, in the heading immediately before paragraph 31, at the end insert “ or 5A ”.
6 In section 18D of TMA 1970 (savings income: content of regulations under section 18B), in subsection (1), for “sections 17 and 18” substitute “ paragraph 1 of Schedule 23 to the Finance Act 2011 (data-gathering powers) ”.
7 The amendments made by subsections (1) to (5) apply for the purpose of checking the tax position of a taxpayer as regards periods or tax liabilities whenever arising (whether before, on or after the day on which this Act is passed).
8 The amendment made by subsection (6) is treated as having come into force on 1 April 2012.

225 PAYE regulations: information

1 Section 684 of ITEPA 2003 (PAYE regulations) is amended as follows.
2 In the list in subsection (2)—
a after item 4 insert—
, and
b after item 8 insert—
3 After subsection (3B) insert—
4 After subsection (4) insert—

High value residential property or dwellings

226 New tax on ownership of high-value residential properties or dwellings

The Commissioners for Her Majesty's Revenue and Customs may incur expenditure in preparing for the introduction of a new tax to be charged in respect of high-value residential properties or dwellings owned otherwise than by individuals.

Miscellaneous reliefs etc

227 Repeals of miscellaneous reliefs etc

Schedule 39 contains repeals of miscellaneous reliefs etc.

PART 10  Final provisions

228 Interpretation

1 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,
  • “CEMA 1979” means the Customs and Excise Management Act 1979,
  • “CRCA 2005” means the Commissioners for Revenue and Customs Act 2005,
  • “CTA 2009” means the Corporation Tax Act 2009,
  • “CTA 2010” means the Corporation Tax Act 2010,
  • “F(No.3)A 2010” means the Finance (No. 3) Act 2010,
  • “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,
  • “OTA 1975” means the Oil Taxation Act 1975,
  • “PRTA 1980” means the Petroleum Revenue Tax Act 1980,
  • “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, and
  • “VERA 1994” means the Vehicle Excise and Registration Act 1994.
2 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.

229 Short title

This Act may be cited as the Finance Act 2012.

SCHEDULES

SCHEDULE 1 

High income child benefit charge

Section 8

The high income child benefit charge

1In Part 10 of ITEPA 2003 (social security benefits), after Chapter 7 insert—

Consequential amendments

2In section 7 of TMA 1970 (notice of liability to income tax and capital gains tax), in subsection (3), for the words from “his total income” to the end substitute
3After section 13 of the Social Security Administration Act 1992 insert—
4After section 11 of the Social Security Administration (Northern Ireland) Act 1992 insert—
5
1 ITEPA 2003 is amended as follows.
2 In section 1 (overview of contents of Act)—
a in subsection (1)(c), after “see” insert “ Chapters 1 to 7 of ”, and
b in subsection (3), after paragraph (a) insert—
.
3 In section 655 (structure of Part 10), in subsection (1), at the end insert—
4 In section 684 (PAYE regulations), in subsection (2), after Item 2 insert—
5 In section 685 (tax tables), in subsection (2)(b), after “2” insert “ , 2ZA ”.
6 In section 717 (orders and regulations made by Treasury or Commissioners), in subsection (4), after “companies)” insert “ or to which section 681F(3) (variation of income limit etc for high income child benefit charge: orders increasing liability to tax) applies ”.
7 In Part 2 of Schedule 1 (index of defined expressions), insert at the appropriate places—
6
1 ITA 2007 is amended as follows.
2 In section 1 (overview of the Income Tax Acts), in subsection (1)(a), after “social security income” insert “ and makes provision for the high income child benefit charge ”.
3 In section 30 (additional tax), in subsection (1), after “section 809ZO (tainted charity donations by trustees: charge to tax),” insert—
.

Commencement

7
1 The amendments made by this Schedule have effect for the tax year 2012-13 and subsequent tax years.
2 In relation to the tax year 2012-13, references in section 681B of ITEPA 2003 (as inserted by paragraph 1) to an amount to which a person is entitled in respect of child benefit for a week in the tax year do not include any amount to which the person is entitled in respect of child benefit for a week beginning before 7 January 2013.
3 In sub-paragraph (2), “week” means a period of 7 days beginning with a Monday.

SCHEDULE 2 

Profits arising from the exploitation of patents etc

Section 19

PART 1  Amendments of CTA 2010

1
1 In CTA 2010, after Part 8 insert—
2 In Schedule 4 to CTA 2010 (index of defined expressions), at the appropriate place insert—
;
;
;
;
;
;
;
;
;
;
;
.

PART 2  Amendments of TIOPA 2010

2In Part 4 of TIOPA 2010 (transfer pricing), Chapter 3 (exemptions from basic rule) is amended as follows.
3In section 166 (exemption for small and medium-sized enterprises), in subsection (2)(a), for “section 167” substitute “ sections 167 and 167A ”.
4After section 167 insert—
5In section 170 (appeals against transfer pricing notices), in subsection (1), for the words from “on the ground that” to the end substitute
6In section 171 (tax returns where transfer pricing notice given), in subsection (3)(a), before “medium-sized” insert “ small or ”.

PART 3  Commencement and transitional provision

Application

7
1 The amendments made by this Schedule have effect in relation to accounting periods beginning on or after 1 April 2013 for which an election under section 357A of CTA 2010 has effect.
2 Sub-paragraph (3) applies where a company has an accounting period beginning before 1 April 2013 and ending on or after that date (“the straddling period”).
3 For the purposes of Part 8A of CTA 2010—
a so much of the straddling period as falls before 1 April 2013, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
b any amounts brought into account for the purposes of calculating for corporation tax purposes the profits of any trade of the company for the straddling period are apportioned to the two separate accounting periods on such basis as is just and reasonable.

Special treatment of profits from patents etc to be phased in

8
1 In each of the financial years in the Table below, the reference to RP in the formula in section 357A(3) of CTA 2010 is to be read as a reference to the percentage of RP given for that year—
Financial yearPercentage of RP
201360%
201470%
201580%
201690%
2 Sub-paragraph (3) applies where there is a set-off amount in relation to any trade of a company for an accounting period falling wholly or partly within a financial year mentioned in the Table in sub-paragraph (1) (“the relevant year”) and—
a section 357EB of CTA 2010 (allocation of set-off amount within group) applies in relation to the set-off amount (or so much of it as remains after the operation of section 357EA(2) of that Act) for a relevant accounting period falling wholly or partly within the financial year following the relevant year, or
b section 357EC of that Act (carry-forward of set-off amount) applies in relation to the set-off amount (or so much of it as remains after the operation of section 357EA(2) or 357EB(2) of that Act).
3 For the purposes of section 357EB or (as the case may be) 357EC of CTA 2010 there is to be deducted from the relevant amount an amount equal to the appropriate fraction of that amount.“The relevant amount” is the amount in relation to which that section applies as mentioned in sub-paragraph (2).
4 The appropriate fraction is—
10 % P
where P is—
  1. the percentage given as the percentage of RP by that Table for the financial year following the relevant year, or
  2. where the relevant year is the financial year 2016, 100%.
5 If a company's accounting period falls within more than one financial year—
a the amount of any relevant IP profits of a trade of the company for the accounting period, and
b where sub-paragraph (3) applies, the relevant amount (within the meaning of that sub-paragraph),
must for the purposes of this paragraph be apportioned between the financial years in which the accounting period falls on such basis as is just and reasonable.
6 In this paragraph—
  • “relevant accounting period” has the meaning given by section 357EB(3) of CTA 2010,
  • “relevant IP profits”, in relation to a trade of a company for an accounting period, has the same meaning in this paragraph as in Part 8A of that Act, and
  • “set-off amount”, in relation to a trade of a company for an accounting period, is to be read in accordance with Chapter 5 of that Act.

SCHEDULE 3 

Relief for expenditure on R&D

Section 20

Introductory

1Part 13 of CTA 2009 (additional relief for expenditure on research and development) is amended as follows.

Amount of relief for expenditure on R&D by small or medium-sized enterprises (“SMEs”)

2
1 Chapter 2 (relief for SMEs: cost of R&D incurred by SME) is amended as follows.
F392 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F393 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F394 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 In section 1058 (amount of tax credit), in subsection (1)(a), for “12.5%” substitute “ 11% ”.

Removal of R&D threshold

3
1 Chapter 2 (relief for SMEs: cost of R&D incurred by SME) is amended as follows.
2 In section 1043 (overview of Chapter), in subsection (3), omit paragraph (e) (but not the “and” after it).
3 In section 1044 (additional deduction in calculating profits of trade), omit subsection (3).
4 In section 1045 (alternative treatment for pre-trading expenditure: deemed trading loss)—
a in subsection (1), omit “, B”, and
b omit subsection (3).
5 Omit section 1050 (R&D threshold).
4
1 Chapter 3 (relief for SMEs: R&D sub-contracted to SME) is amended as follows.
2 In section 1063 (additional deduction in calculating profits of trade)—
a in subsection (1), omit “, B”, and
b omit subsection (3).
3 Omit section 1064 (R&D threshold).
5
1 Chapter 4 (relief for SMEs: subsidised and capped expenditure on R&D) is amended as follows.
2 In section 1068 (additional deduction in calculating profits of trade)—
a in subsection (1), omit “, B”, and
b omit subsection (3).
3 Omit section 1069 (R&D threshold).
6
1 Chapter 5 (relief for large companies) is amended as follows.
2 In section 1074 (additional deduction in calculating profits of trade)—
a in subsection (1), omit “, B”, and
b omit subsection (3).
3 Omit section 1075 (R&D threshold).
F597. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8In consequence of the amendments made by paragraphs 3 to 7, in Schedule 4 to CTA 2009 omit each of the entries for “R&D threshold”.

Company not a going concern when in administration or liquidation

9Chapter 2 (relief for SMEs: cost of R&D incurred by SME) is amended as follows.
10
1 Section 1046 (relief only available where company is going concern) is amended as follows.
2 At the end of subsection (2) insert—
3 After subsection (2) insert—
11
1 Section 1057 (tax credit only available where company is going concern) is amended as follows.
2 At the end of subsection (4) insert—
3 After subsection (4) insert—
F6612. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6613. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6614. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Removal of limit on amount of tax credit based on PAYE and NIC liabilities

15
1 Chapter 2 (relief for SMEs: cost of R&D incurred by SME) is amended as follows.
2 In section 1058 (amount of tax credit), in subsection (1), omit paragraph (b) (and the “or” before it).
3 Omit section 1059 (total amount of company's PAYE and NIC liabilities).

Abolition of vaccine research relief for SMEs

16
1 Section 1039 (overview of Part 13) is amended as follows.
F602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 In subsection (7)—
a for “Chapters 2 and 7 also provide” substitute “ Chapter 2 also provides ”, and
b in paragraph (a), omit “or 7”.
F6117. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18In section 1046 (relief only available where company is going concern), in subsection (2)(b), omit “or Chapter 7”.
19In section 1057 (tax credit only available where company is going concern), in subsection (4)(b), omit “or Chapter 7”.
F6720. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6721. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6722. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6723. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6724. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6725. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6726. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6727. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6728. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6729. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6730. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
1 Chapter 8 (cap on aid for R&D) is amended as follows.
F622 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 In section 1115 (“the tax credits”), in subsection (1), omit “or 7”.
32In consequence of the amendments made by paragraphs 16 to 31—
a in Schedule 4 to CTA 2009 (index of defined expressions), omit the entry for “Chapter 7 surrenderable loss”,
b in Schedule 1 to CTA 2010, omit paragraphs 672 to 674, and
c in section 43 of FA 2011, omit subsections (7) to (11).

Qualifying expenditure on externally provided workers

33Chapter 9 (supplementary) is amended as follows.
34
1 Section 1128 (“externally provided worker”) is amended as follows.
2 In subsection (7), for “the staff provider” substitute “ a person other than the company (the “staff controller”) ”.
3 After subsection (8) insert—
35
1 Section 1129 (connected persons) is amended as follows.
2 In subsection (1), for paragraphs (b) and (c) substitute—
3 In subsection (2)(b), for “the staff provider's relevant expenditure” substitute “ the aggregate of the relevant expenditure of each staff controller ”.
4 In subsection (3)—
a for “of the staff provider” substitute “ , in relation to a staff controller, ”, and
b in paragraph (a), for “staff provider” substitute “ staff controller ”.
5 In subsection (4)—
a after “ “Relevant period”” insert “ , in relation to a person, ”, and
b in paragraph (a), for “staff provider” substitute “ person ”.
6 In subsection (5)—
a for “the staff provider's expenditure” substitute “ the expenditure of a staff controller ”, and
b for “the staff provider” substitute “ a staff controller ”.
7 In subsection (7), for “staff provider” substitute “ a staff controller ”.
36
1 Section 1130 (election for connected persons treatment) is amended as follows.
2 For subsection (1) substitute—
3 In subsection (2), for “must be made” substitute “ has effect ”.
37In section 1131 (qualifying expenditure on externally provided workers: other cases), in subsection (1), for paragraph (b) (but not the “and” following it) substitute—
.

Application

38The amendments made by paragraphs 2 and 16 to 37 have effect in relation to expenditure incurred on or after 1 April 2012.
39The amendments made by paragraphs 3 to 8 and 15 have effect in relation to accounting periods ending on or after 1 April 2012.
40The amendments made by paragraphs 9 to 14 have effect in relation to claims or elections made on or after 1 April 2012.

SCHEDULE 4 

Real estate investment trusts

Section 21

Introduction

1Part 12 of CTA 2010 (real estate investment trusts) is amended as follows.

Being a UK REIT: conditions for company - close companies

2
1 Section 525 (becoming a UK REIT: supplementary provision) is amended as follows.
2 In subsection (1)(c) for “the conditions” substitute “ conditions A, B, C, E and F ”.
3 In subsection (4)(a) omit “D,”.
4 Omit subsections (5) to (8).
3In section 527 (being a UK REIT in relation to an accounting period) after subsection (4) insert—
4
1 Section 528 (conditions for company) is amended as follows.
2 In subsection (4)(b) for the words from “a limited partnership” to the end substitute “ an institutional investor ”.
3 After subsection (4) insert—
5In section 558 (demergers: disposal of asset) in subsections (3) and (6) for “C to F” substitute “ C, E and F ”.
6In section 559 (demergers: company leaving group UK REIT) in subsections (6) and (9) for “C to F” substitute “ C, E and F ”.
7In section 561 (notice of breach of relevant Chapter 2 condition) after subsection (4) insert—
8
1 Section 562 (breach of conditions C and D in section 528) is amended as follows.
2 In the heading for “conditions C and D” substitute “ condition C ”.
3 In subsection (1) for the words from “or D” to “conditions)” substitute “ in section 528 ”.
4 In subsection (2)—
a for “both conditions C and D are” substitute “ condition C is ”, and
b for “breaches are” substitute “ breach is ”.
5 Omit subsections (3) and (4).
6 In subsection (5)—
a in paragraph (a) for “either condition C or D” substitute “ condition C ”, and
b in paragraph (b) omit “or (3)”.
9After section 562 insert—
10
1 Section 572 (termination by notice given by HMRC) is amended as follows.
2 In subsection (2) after “573,” insert “ 573A, ”.
3 After subsection (5) insert—
11After section 573 insert—
12
1 Section 577 (multiple breaches of conditions in Chapter 2) is amended as follows.
2 In subsection (5)(a) for “section 562(2) and (3)” substitute “ section 562A(6) ”.
3 In subsection (7)—
a in paragraph (b) omit “or D” and “or (5) to (7)”, and
b in paragraph (c) for “C to F” substitute “ C, E and F ”.
4 After subsection (7) insert—
13
1 The amendments made by paragraph 2 have effect in relation to notices given under section 523 or 524 specifying a date which is on or after the day on which this Act is passed.
2 The amendments made by paragraphs 3 to 12 have effect in relation to—
a groups of companies in respect of which notices are given under section 523 specifying a date which is on or after the day on which this Act is passed, and
b companies which give notices under section 524 specifying a date which is on or after the day on which this Act is passed.
3 The amendments made by paragraph 4 also have effect in relation to—
a groups of companies in respect of which notices are given under section 523 specifying a date which is before the day on which this Act is passed, and
b companies which give notices under section 524 specifying a date which is before the day on which this Act is passed,
for accounting periods beginning on or after the day on which this Act is passed (including, in relation to a breach beginning in an accounting period beginning before that day, for the purpose of determining under section 562(3) whether the breach is remedied in an accounting period beginning on or after that day).

Being a UK REIT: conditions for company - trading of shares on recognised stock exchange

14In section 527 (being a UK REIT in relation to an accounting period) in subsections (2) and (3) after paragraph (a) insert—
.
15In section 528 (conditions for company) in subsection (3) for “listed” substitute “ admitted to trading ”.
16After section 528 insert—
17In section 561 (notice of breach of relevant Chapter 2 condition) in subsection (3) before “conditions A and B in section 529” insert—
.
18Before section 563 insert—
19
1 Section 572 (termination by notice given by HMRC) is amended as follows.
2 In subsection (2) before “574” insert “ 573B, ”.
3 Before subsection (6) insert—
20Before section 574 insert—
21
1 Subject to what follows, the amendments made by paragraphs 14 to 20 have effect for accounting periods beginning on or after the day on which this Act is passed.
2 Sections 528B, 562C and 573B have no effect in relation to—
a groups of companies in respect of which notices are given under section 523 specifying a date which is before the day on which this Act is passed, or
b companies which give notices under section 524 specifying a date which is before the day on which this Act is passed.

Being a UK REIT: condition as to distribution of profits

22In section 530 (condition as to distribution of profits) in subsection (6D) for “three” substitute “ 6 ”.
23After section 530 insert—
24In section 564 (breach of condition as to distribution of profits) omit subsections (5) to (8).
25
1 Section 565 (which defines the amount to be charged to corporation tax where there is a breach of the condition in section 530) is amended as follows.
2 In subsections (2) and (3), in the definition of “D”—
a for “on or before” substitute “ within ”,
b in paragraph (a) for “filing date referred to in” substitute “ deadline set by ”, and
c in paragraph (b) for “date specified” substitute “ deadline set ”.
3 After subsection (3) insert—
26
1 The amendment made by paragraph 22 has effect in relation to distributions made on or after the day on which this Act is passed.
2 The amendments made by paragraphs 23 to 25 have effect for accounting periods beginning on or after the day on which this Act is passed.

Being a UK REIT: conditions as to balance of business

27
1 Section 531 (conditions as to balance of business) is amended as follows.
2 For subsection (5) substitute—
3 In subsection (6)(b) after “business” insert “ (and the amount of the group's cash is to be determined accordingly) ”.
4 After subsection (7) insert—
28In section 547 (funds awaiting reinvestment) omit subsection (3).
29
1 Section 566 (breach of condition B in section 531 in accounting period 1) is amended as follows.
2 In subsection (2) omit the words from “but an amount of income” to the end.
3 Omit subsections (3) to (6).
30Omit section 567 (breach of condition B in section 531 in accounting period 1: meaning of “the notional amount”).
31In section 568 (breach of balance of business conditions after accounting period 1) in subsection (2)(b) for “value of the assets involved in property rental business of the UK REIT in question” substitute “ sum of the values mentioned in section 531(5)(a) and (b) ”.
32
1 The amendments made by paragraphs 27, 28 and 31 have effect for accounting periods beginning on or after the day on which this Act is passed.
2 The amendments made by paragraphs 29 and 30 have effect in relation to a breach of condition B in section 531 if accounting period 1 begins on or after the day on which this Act is passed.

Abolition of entry charge

33
1 Omit sections 538 to 540 (entry charge).
2 Sub-paragraph (1) does not affect the application of section 540 in relation to a company if the date of entry is before the day on which this Act is passed.
34
1 In section 545 (cancellation of tax advantage) in subsection (5) omit the words from “(and includes,” to “538)”.
2 Sub-paragraph (1) does not affect the powers of an officer of Revenue and Customs under section 545 in cases in which a company which is, or is a member of, a UK REIT tries before the day on which this Act is passed to obtain a tax advantage.
35
1 In section 556 (disposal of assets) omit subsection (4).
2 Sub-paragraph (1) does not affect the application of subsection (4) in relation to a company if entry is before the day on which this Act is passed.
36
1 In section 558 (demergers: disposal of asset) in subsection (4) omit “and section 538 (entry charge)”.
2 Sub-paragraph (1) has no effect in relation to cases in which the date specified in the notice under section 523(1) is before the day on which this Act is passed.
37In section 559 (demergers: company leaving group UK REIT) in subsection (8) omit “section 538 (entry charge),”.
38In section 583 (overview of Chapter 10 relating to joint ventures) omit subsection (4)(b).
39Omit sections 595 to 597 (additional entry charges in cases involving joint ventures) and the italic heading before section 595.

Financing cost ratio

40
1 Section 543 (financing cost ratio) is amended as follows.
2 In subsection (1) after “period” insert “ (unless it is nil or a negative amount) ”.
3 For subsection (3) substitute—
41
1 Section 544 (meaning of “property financing costs” etc) is amended as follows.
2 In subsection (5) for “include” and paragraphs (a) to (e) substitute
3 After subsection (5) insert—
42The amendments made by paragraphs 40 and 41 have effect for accounting periods beginning on or after the day on which this Act is passed.

Disposal of assets

43
1 Section 556 (disposal of assets) is amended as follows.
2 In subsection (1)—
a omit the “and” after paragraph (a), and
b after paragraph (b) insert
3 In subsection (3)—
a omit the “and” after paragraph (b), and
b after paragraph (c) insert
44The amendments made by paragraph 43 have effect in relation to disposals occurring on or after the day on which this Act is passed.

F69SCHEDULE 5 

Tax treatment of financing costs and income

Section 31

F691. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F692. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F693. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F694. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F695. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F696. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F697. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F698. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F699. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6910. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6911. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6912. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6913. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6914. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6915. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6916. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6917. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6918. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6919. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6920. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6921. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6922. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 6 

Seed enterprise investment scheme

Section 38

PART 1  The scheme

1In ITA 2007, after Part 5 (enterprise investment scheme) insert—

PART 2  Relief for capital gains

Introductory

2TCGA 1992 is amended as follows.

Disposal of shares to which SEIS relief is attributable

3Before section 151 insert—

Seed enterprise investment scheme: re-investment relief

4After section 150F (inserted by paragraph 3 of this Schedule) insert—
5After Schedule 5B insert—

PART 3  Consequential amendments

ITA 2007

6ITA 2007 is amended as follows.
7In section 2 (overview of Act), after subsection (5) insert—
8In section 26 (tax reductions), in subsection (1)(a), after the entry for Chapter 1 of Part 5, insert— “ Chapter 1 of Part 5A (SEIS relief), ”.
9In section 27 (order of deducting tax reductions: individual), in subsection (5), after the entry for “Chapter 1 of Part 5 (EIS relief)” insert— “ Chapter 1 of Part 5A (SEIS relief), ”.
10In section 169 (directors qualifying for relief despite connection), in subsection (4), for the words after “before” substitute
F4011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12In section 173A (enterprise investment scheme: maximum amount raised annually through risk capital schemes requirement), in subsection (3)(b), after sub-paragraph (i) (and the “or” at the end of it) insert—
F4113. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
1 Section 246 (identification of shares on a disposal) is amended as follows.
2 In subsection (3)—
a in paragraph (a) for “neither EIS relief nor deferral relief” substitute “ no EIS relief, deferral relief or SEIS relief ”, and
b after that paragraph insert—
.
3 In subsection (7), at the end insert—
F4215. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16In section 292A (venture capital trusts: maximum amount raised annually through risk capital schemes requirement), in subsection (3)(b), after sub-paragraph (i) (and the “or” at the end of it) insert—
F4317. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
1 Schedule 4 (index of defined expressions) is amended as follows.
2 Insert the following entries at the appropriate places—
3 In the entry for “control”, in the second column, after “257(3),” insert “ 257HJ(3), ”.

TCGA 1992

19TCGA 1992 is amended as follows.
20
1 Section 150A (enterprise investment scheme) is amended as follows.
2 For “relief”, in each place it occurs (except subsections (6)(c) and (10)), substitute “ EIS relief ”.
3 In subsection (6)—
a omit the “and” at the end of paragraph (b) and after that paragraph insert—
,
b in paragraph (c), for “relief is not” substitute “ neither EIS nor SEIS relief is ”, and
c after “paragraph (a), (b)” insert “ , (ba) ”.
4 In subsection (10), for “the relief” substitute “ EIS relief ”.
5 In subsection (10A), at the appropriate place, insert—
, and
21
1 Section 150B (enterprise investment scheme: reduction of relief) is amended as follows.
2 For “relief”, in each place it occurs, substitute “ EIS relief ”.
3 After subsection (5) insert—
22In Schedule 5B (enterprise investment scheme: re-investment), in paragraph 2 (postponement of original gain)—
a in sub-paragraph (3)(b), after “Schedule” insert “ or paragraph 1(5) of Schedule 5BB ”, and
b in sub-paragraph (4), after “this Schedule” insert “ or paragraph 1(5) of Schedule 5BB ”.

TMA 1970

23In section 98 of TMA 1970 (special returns, etc)—
a in the first column of the Table, after the entry for “sections 242 and 243(1) and (2) of ITA 2007” insert—
, and
b in the second column of that Table, after the entry for “sections 240 and 241 of ITA 2007” insert—
.

PART 4  Commencement

24
1 Subject to sub-paragraphs (2) and (3), the amendments made by this Schedule have effect in relation to shares issued on or after 6 April 2012.
2 The amendments made by paragraphs 15 to 17 have effect for the purpose of determining whether shares or securities issued on or after 6 April 2012 are to be regarded as comprised in a company's qualifying holdings.
3 Sub-paragraph (1) does not apply to the amendments made by paragraphs 4, 5 and 22.

SCHEDULE 7 

Enterprise investment scheme

Section 39

PART 1  Enterprise investment scheme

Introduction

1Part 5 of ITA 2007 (enterprise investment scheme) is amended as follows.

Minimum subscription

2In section 157 (eligibility for EIS relief), omit subsections (2) and (3).

Increase in amount of relief

3
1 In section 158 (form and amount of EIS relief), in subsection (2)(b) for “£500,000” substitute “ £1 million ”.
2 Accordingly, section 31 of FA 2008 is repealed.

Loan capital

4In section 170 (person interested in capital etc of company)—
a in subsection (1)(b), omit “loan capital and”, and
b omit subsections (8) and (10).

Overview of Chapter 3

5In section 172 (overview of Chapter 3), omit the “and” at the end of paragraph (e) and after paragraph (f) insert

Relaxation of the shares requirement

6
1 Section 173 (the shares requirement) is amended as follows.
2 In subsection (2), for paragraph (a) (but not the “or” after it) substitute—
3 After that subsection insert—

Increase in the maximum amount permitted to be raised annually

7
1 Section 173A (the maximum amount raised annually through risk capital schemes requirement) is amended as follows.
I22 In subsection (1) for “£2 million” substitute “ £5 million ”.
3 In subsection (3)—
a in paragraph (b), omit sub-paragraph (ii), and
b after that paragraph insert

Acquisition of shares or stock

8In section 175 (the use of the money raised requirement), after subsection (1) insert—

No disqualifying arrangements requirement

9After section 178 insert—

Meaning of “qualifying business activity”

10In section 179 (meaning of “qualifying business activity”), in subsection (1) omit “This is subject to subsections (3) and (5).”

Increase in the gross assets limits

I311In section 186 (the gross assets requirement)—
a in subsections (1)(a) and (2)(a), for “£7 million” substitute “ £15 million ”, and
b in subsections (1)(b) and (2)(b), for “£8 million” substitute “ £16 million ”.

Relaxation of restriction on number of employees

F4912. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subsidised generation or export of electricity

13
1 Section 192 (meaning of “excluded activities”) is amended as follows.
2 In subsection (1), omit “and” at the end of paragraph (k) and after that paragraph insert—
.
3 In subsection (2), omit the “and” at the end of paragraph (e) and after paragraph (f) insert
14After section 198 insert—
15In section 199 (excluded activities: provision of services or facilities for another business), in subsection (1)(a), for “(k)” substitute “ (ka) ”.

Powers to amend

F4416. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disposal of shares

17In section 209 (disposal of shares), after subsection (5) insert—

Date from which interest is chargeable

18In section 239 (date from which interest is chargeable), in subsection (2) for “sections 181 to 188” substitute “ sections 180A to 188 ”.

Information

19In section 243 (power to require information in other cases)—
a in subsection (1), omit the “or” at the end of paragraph (d) and after that paragraph insert—
b in subsection (4), at the appropriate place in the table, insert—

Approved investment fund as nominee

20In section 251 (approved investment fund as nominee), omit subsection (3).

Interpretation

21In section 257 (minor definitions etc), in subsection (1), for the definition of “arrangements” substitute—
.

Commencement and transitional provision

C2522
1 The amendments made by paragraphs 2 to 6, 7(1) and (3), 8, 9, 10 and 19 have effect in relation to shares issued on or after 6 April 2012.
2 But—
a for the purposes of paragraphs 5, 9 and 19 it does not matter whether the disqualifying arrangements were entered into before or on or after 6 April 2012, and
b nothing in sub-paragraph (1) prevents shares issued before that date constituting a “relevant investment” (by virtue of the amendment made by paragraph 7(3)(b) of this Schedule) for the purposes of determining whether the requirement of section 173A(1) of ITA 2007 is met in relation to shares issued on or after that date.
23
1 The amendments made by paragraphs 7(2), 11 and 12 come into force on such day as the Treasury may by order appoint.
2 Those amendments have effect in relation to shares issued on or after 6 April 2012.
24
1 Subject to sub-paragraph (2), the amendments made by paragraphs 13 to 15 have effect in relation to shares issued on or after 23 March 2011.
2 Those amendments do not have effect in relation to shares issued before 6 April 2012 if the issuing company, or a qualifying 90% subsidiary of that company, first began to carry on activities of the kind mentioned in section 192(1)(ka) of ITA 2007 before that day.
F293 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
1 The amendment made by paragraphs 18 and 21 are to be treated as having come into force on 6 April 2012.

PART 2  Enterprise investment scheme: chargeable gains

Introduction

26TCGA 1992 is amended as follows.

Disposal of shares to which EIS relief is attributable

27In section 150A (disposal of shares to which EIS relief is attributable)—
a in subsection (3), in paragraph (b) for “basic rate” substitute “ EIS original rate ”, and
b after that subsection insert—
28Accordingly, in Schedule 1 to FA 2008, paragraph 48 is repealed.

Maximum annual investment

I429In paragraph 1 of Schedule 5B to the TCGA 1992 (EIS re-investment relief: application of Schedule), in sub-paragraph (2)(da), for “£2 million” substitute “ £5 million ”.

No disqualifying arrangements

30After paragraph 11 insert—

Information

31In paragraph 16 (information)—
a in sub-paragraph (6), for “or 11(1)” substitute “ , 11(1) or 11A ”,
b in sub-paragraph (7), omit the “and” at the end of paragraph (b) and after that paragraph insert—
, and
c in that sub-paragraph, for “and (b)” substitute “ , (b) and (ba) ”.

Meaning of “arrangements”

32In paragraph 19 (interpretation), in sub-paragraph (1) for the definition of “arrangements” substitute—
.

Commencement

33
1 The amendment made by paragraph 29 comes into force on such day as the Treasury may by order appoint.
2 That amendment has effect in relation to shares issued on or after 6 April 2012.
34
1 The amendments made by paragraphs 27, 28, 30 and 31 have effect in relation to shares issued on or after 6 April 2012.
2 For the purposes of those paragraphs it does not matter whether the disqualifying arrangements were entered into before or on or after that date.
35The amendment made by paragraph 32 is treated as having come into force on 6 April 2012.

SCHEDULE 8 

Venture capital schemes

Section 40

Introduction

1Part 6 of ITA 2007 (venture capital trusts) is amended in accordance with paragraphs 2 to 13.

VCT approvals

2
1 Section 274 (requirements for the giving of approval) is amended as follows.
2 In subsection (2), in the list of conditions, at the end insert—
3 In subsection (3), omit the “and” at the end of paragraph (d), and after paragraph (e) insert
3After section 280A insert—

Qualifying holdings: introduction

4In section 286 (qualifying holdings: introduction), in subsection (3), omit the “and” at the end of paragraph (k) and after paragraph (l) insert

Relaxation of maximum qualifying investment requirement

5
1 Section 287 (maximum qualifying investment requirement) is amended as follows.
2 In subsection (1), after “that” insert “ , if the condition in subsection (1A) is met, ”.
3 After that subsection insert—
4 In subsection (2)—
a for “Subject to subsection (7), the” substitute “ The ”, and
b after “exceeds” insert “ the relevant fraction of ”.
5 After that subsection insert—
6 Omit subsections (6) and (7).

Increase in the maximum amount permitted to be raised annually

6
1 Section 292A (the maximum amount raised annually through risk capital schemes requirement) is amended as follows.
I52 In subsection (1) for “£2 million” substitute “ £5 million ”.
3 In subsection (3)—
a in paragraph (b), omit sub-paragraph (ii), and
b after that paragraph insert
4 In subsection (5) omit “or paragraph 42 of Schedule 15 to FA 2000”.

Acquisition of shares

7In section 293 (the use of the money raised requirement), after subsection (5) insert—

Increase in the gross assets limits

I68In section 297 (the gross assets requirement)—
a in subsections (1)(a) and (2)(a), for “£7 million” substitute “ £15 million ”, and
b in subsections (1)(b) and (2)(b), for “£8 million” substitute “ £16 million ”.

Relaxation of restriction on number of employees

F459. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

No disqualifying arrangements requirement

10After section 299 insert—

Subsidised generation or export of electricity

11
1 Section 303 (meaning of “excluded activities”) is amended as follows.
2 In subsection (1), omit “and” at the end of paragraph (k) and after that paragraph insert—
.
3 In subsection (2), omit the “and” at the end of paragraph (e) and after paragraph (f) insert
12After section 309 insert—
13In section 310 (excluded activities: provision of services or facilities for another business), in subsection (1)(a), for “(k)” substitute “ (ka) ”.

Powers to amend

F4614. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information

15After section 312 insert—
16In section 313 (interpretation of Chapter 4), in subsection (5), after “Chapter” insert “ (other than section 312A) ”.

Consequential amendment

17In section 98 of TMA 1970 (special returns, etc), in the first column of the Table, before the entry for “regulations under Chapter 5 of Part 6 of ITA 2007” insert—
.

Commencement and transitional provision

C2618
1 The amendments made by paragraphs 2 and 3 have effect in relation to investments made on or after the day on which this Act is passed.
2 But nothing in sub-paragraph (1) prevents investments made before that day constituting a “relevant investment” for the purposes of section 280B of ITA 2007 (as inserted by paragraph 3) for the purposes of determining whether the investment limits condition in section 274 of that Act is breached by an investment made on or after that day.
C2719
1 The amendments made by paragraphs 4, 5, 6(1) and (3), 10, 15 and 16 have effect for the purpose of determining whether shares or securities issued on or after 6 April 2012 are to be regarded as comprised in a company's qualifying holdings.
2 But for the purposes of paragraphs 4, 10, 15 and 16 it does not matter whether the disqualifying arrangements were entered into before or on or after 6 April 2012.
20
1 The amendments made by paragraphs 6(2), 8 and 9 come into force on such day as the Treasury may by order appoint.
2 Those amendments have effect for the purpose of determining whether shares or securities issued on or after 6 April 2012 are to be regarded as comprised in a company's qualifying holdings.
21
1 Paragraph 7 is to be treated as having come into force on 6 April 2012.
F472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
1 Subject to sub-paragraph (2), the amendments made by paragraphs 11 to 13 have effect in relation to a relevant holding issued on or after 23 March 2011.
2 Those amendments do not have effect in relation to any relevant holding issued before 6 April 2012 if the relevant company, or a qualifying 90% subsidiary of that company, first began to carry on activities of the kind mentioned in section 303(1)(ka) of ITA 2007 before that day.
F303 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 9 

Capital allowances for plant and machinery: anti-avoidance

Section 42

Transactions to obtain allowances

1For section 215 of CAA 2001 substitute—

Restrictions on writing-down allowances

2In section 57(3) of CAA 2001 (available qualifying expenditure), after “section 218(1),” insert “ 218ZA(1) or (3), ”.
3In section 214 of that Act (connected persons), after “218” insert “ (or, as the case may be, 218ZA(3)) ”.
4In section 216 of that Act (sale and leaseback, etc), in subsection (1), after “218” insert “ (or, as the case may be, 218ZA(3)) ”.
5
1 Section 218 of that Act (restriction on B's qualifying expenditure) is amended as follows.
2 In subsection (1), for “section 214, 215 or 216” substitute “ section 214 or 216 ”.
3 At the end insert—
4 Accordingly, in the heading of that section, insert at the end “ : section 214 or 216 ”.
6After section 218 of that Act insert—

Restriction of exception for manufacturers and suppliers

7
1 Section 230 of CAA 2001 (exception for manufacturers and suppliers), as amended by section 41 of this Act, is amended as follows.
2 For subsection (1) substitute—
3 Omit subsection (2).

Relevant transactions

8After section 268D of CAA 2001 insert—

Commencement

9
1 The amendments made by paragraphs 1 to 7 of this Schedule have effect in relation to expenditure of B's that is incurred on or after the start date (regardless of when the relevant transaction was entered into).
2 The amendment made by paragraph 8 of this Schedule has effect in relation to expenditure that is incurred on or after the start date.
3 The start date is—
a 1 April 2012, for corporation tax purposes, and
b 6 April 2012, for income tax purposes.

SCHEDULE 10 

Plant and machinery allowances: fixtures

Section 43

Introductory

1CAA 2001 is amended as follows.

Changes in ownership

2After section 187 insert—
3In section 198 (election to apportion sale price on sale of qualifying interest)—
a in subsection (1), after “item 1” insert “ or 9 ”, and
b in subsection (2)(a), after “item 1” insert “ or (as the case may be) 9 ”.
4
1 Section 201 (elections under sections 198 and 199: procedure) is amended as follows.
2 In subsection (1), at the end insert—
3 After that subsection insert—
4 For subsection (3)(f) substitute—
5
1 In section 563 (procedure for determining certain questions affecting two or more persons), in subsection (1)(a) for “two” substitute “ one ”.
2 Accordingly, in the heading for that section for “two” substitute “ one ”.

Fixtures on which business premises renovation allowance has been made

6After section 186 insert—
7In section 9 (interaction between fixtures claims and other claims), in subsection (2)—
a in paragraph (a), after “Part 3” insert “ , 3A ”, and
b in paragraph (b), after “section 186(2)” insert “ , 186A(2) ”.
8In section 57 (available qualifying expenditure), in subsection (3), after “section 186(2)” insert “ , 186A(2) ”.
9In section 198 (election to apportion sale price on sale of qualifying interest), for subsection (5)(a) substitute—
.
10In section 199 (election to apportion capital sum given by lessee on grant of lease), for subsection (5)(a) substitute—
.

Commencement and transitionals

11The amendments made by paragraphs 2 to 5 have effect—
a for income tax purposes, in relation to new expenditure incurred on or after 6 April 2012, and
b for corporation tax purposes, in relation to new expenditure incurred on or after 1 April 2012.
12The amendments made by paragraph 6 to 10 have effect—
a for income tax purposes, in relation to balancing events which occur on or after 6 April 2012, and
b for corporation tax purposes, in relation to balancing events which occur on or after 1 April 2012.
13
1 Where (ignoring this sub-paragraph) plant or machinery would be treated for the purposes of subsection (1)(b) of section 187A of CAA 2001 as having been owned by a person for a period which began and ended before the commencement date, that period of ownership is, for those purposes, to be regarded as not occurring at a relevant earlier time.
2 Section 187A(3)(a) of CAA 2001 (imposition of the pooling requirement) does not apply if the period for which the plant or machinery is treated as having been owned by the past owner as a result of incurring the historic expenditure ends no later than the end of the period of 2 years beginning with the commencement date.
3 “The commencement date” means—
a for income tax purposes, 6 April 2012, and
b for corporation tax purposes, 1 April 2012.

SCHEDULE 11 

Expenditure on plant and machinery for use in designated assisted areas

Section 44

1CAA 2001 is amended as follows.
2In section 39 (first-year allowances available for certain types of qualifying expenditure only), at the appropriate place in the list insert—
3After section 45J insert—
4In section 46 (general exclusions applying to first-year qualifying expenditure), in subsection (1), at the appropriate place in the list insert—
5
1 Section 52 (first-year allowances) is amended as follows.
2 In subsection (3), at the appropriate place in the Table insert—
3 In subsection (5)—
a omit the “and” at the end of the entry for section 212T, and
b after that entry insert— “ section 212U (cap on first-year allowances: expenditure on plant and machinery for use in designated assisted areas), and ”.
6In section 52A (prevention of double relief) for the words after “not” substitute
7
1 In Chapter 16B (cap on first-year allowances: zero-emission goods vehicles), after section 212T insert—
2 Accordingly, in the heading for that Chapter omit “: zero-emission goods vehicles”.
8The amendments made by this Schedule have effect for chargeable periods ending on or after 1 April 2012.

SCHEDULE 12 

Foreign income and gains

Section 47

PART 1  Increased remittance basis charge

Increased charge

1Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.
2
1 Section 809C (claim for remittance basis by long-term UK resident: nomination of foreign income and gains to which section 809H(2) is to apply) is amended as follows.
2 In subsection (1), for paragraph (b) substitute—
3 After that subsection insert—
4 In subsection (4), for “£30,000” substitute
3
1 Section 809H (claim for remittance basis by long-term UK resident: charge) is amended as follows.
2 In subsection (1), for paragraph (c) substitute—
3 After that subsection insert—
4 In subsection (4), for “£30,000”, in each place it occurs, substitute “ the applicable amount ”.
5 After subsection (5A) insert—
4For section 809V substitute—

Application of Part 1

5The amendments made by this Part of this Schedule have effect for the tax year 2012-13 and subsequent tax years.

PART 2  Remittance for investment purposes

Relief for investments

6For the italic heading preceding section 809V substitute “ Relief for money used to pay tax etc ”.
7After section 809V insert—
8After the sections inserted by paragraph 7 insert the heading “ Relief for certain UK services ”.
9Immediately before section 809X insert the heading “Exempt property relief”.

Formerly exempt property used to make investment

10In section 809Y (property that ceases to be exempt property treated as remitted), after subsection (5) insert—
11In section 809Z2 (personal use rule), in subsection (2), omit paragraph (a) (including the word “and” at the end of it).
12In section 809Z4 (temporary importation rule), in subsection (3)—
a omit “or” at the end of paragraph (b),
b insert “ or ” at the end of paragraph (c), and
c after that paragraph insert—

Interpretation provisions

13In section 809M (meaning of “relevant person”), in subsection (1), for “sections 809L, 809N and 809O” substitute “ this Chapter ”.
14In section 809Z7 (interpretation of Chapter), omit subsection (7).
15For the heading of that section substitute “ Meaning of “foreign income and gains” etc ”.
16After that section insert—

Application of Part 2

17The amendments made by this Part of this Schedule have effect where the relevant event (as defined in section 809VA of ITA 2007) or the ceasing to be exempt property (as defined in section 809Y of that Act) occurs on or after 6 April 2012.

PART 3  Sales of exempt property

Relief from deemed remittance rule

18After section 809Y of ITA 2007 (property that ceases to be exempt property treated as remitted) insert—

Application of Part 3

19The amendment made by this Part of this Schedule has effect in relation to exempt property that is sold on or after 6 April 2012 (including property sold pursuant to a contract entered into before that date so long as the contract only becomes unconditional on or after that date).

PART 4  Nominated income

Disapplication of ordering rules

20
1 Section 809I of ITA 2007 (remittance basis charge: income and gains treated as remitted) is amended as follows.
2 In subsection (1)—
a omit “and” at the end of paragraph (a), and
b at the end of paragraph (b) insert
3 In subsection (3), after “earlier tax year” insert “ (each such year for which the individual has made a nomination under that section being referred to as a “nomination year”) ”.
4 After subsection (4) insert—

Application of Part 4

21The amendments made by this Part of this Schedule have effect for determining whether section 809I of ITA 2007 applies for the tax year 2012-13 or any subsequent tax year.

SCHEDULE 13 

Employer asset-backed pension contributions etc

Section 48

PART 1  Denial of relief for contributions paid during period 29 November 2011 to 21 February 2012

1In Chapter 4 of Part 4 of FA 2004 (registered pension schemes: tax reliefs and exemptions) after section 196A insert—
2In section 280(1) of FA 2004 (abbreviations)—
a omit the “and” after the definition of “ITA 2007”, and
b after the definition of “CTA 2009” insert
.
3
1 The amendment made by paragraph 1 above has effect in accordance with sub-paragraphs (2) to (6); and the amendments made by paragraph 2 above have effect accordingly.
2 Sections 196B to 196J of FA 2004 have effect in relation to contributions paid by employers on or after 29 November 2011 but before 22 February 2012.
3 Section 196G of FA 2004 also has effect in relation to contributions paid by employers before 29 November 2011 where the event mentioned in section 196G(1)(d) occurs on or after that date (and, for the purpose of applying section 196G in relation to such contributions, assume that sections 196B to 196D also have effect in relation to such contributions).
4 In cases where the relevant event occurs before 21 March 2012, section 196G has effect as if subsection (3) were omitted.
5 Section 196H of FA 2004 also has effect in relation to contributions paid by employers before 29 November 2011 (and, for the purpose of applying section 196H in relation to such contributions, assume that sections 196B to 196D also have effect in relation to such contributions).
6 Section 196I of FA 2004 also has effect in relation to contributions paid by employers before 29 November 2011 (and, for the purpose of applying section 196I in relation to such contributions, assume that sections 196B to 196D also have effect in relation to such contributions).

PART 2  Transitional provision relating to Part 1

Application and interpretation

4
1 This Part of this Schedule applies if—
a before 29 November 2011, an employer (“E”) pays a contribution (“E's contribution”) under a registered pension scheme (“the relevant scheme”),
b at any time, relief is given in respect of E's contribution,
c if the reference in paragraph 3(2) above to 29 November 2011 were instead a reference to the date on which E's contribution is paid, E would have no entitlement to relief in respect of E's contribution by virtue of section 196B, 196C or 196D of FA 2004, and
d the asset-backed arrangement is not completed before 29 November 2011.
2 For the purposes of sub-paragraph (1)(c) section 196F of FA 2004 is to be ignored.
5For the purposes of this Part of this Schedule—
a terms used in section 196B, 196C or 196D of FA 2004 (as the case may be) have the same meaning as in that section, and
b as necessary, assume that section 196B, 196C or 196D of FA 2004 (as the case may be) has effect in relation to E's contribution.
6
1 This paragraph applies for the purposes of this Part of this Schedule.
2 Sub-paragraph (3) applies if the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196B of FA 2004.
3 The asset-backed arrangement is “completed” when neither the lender nor any person connected with the lender is any longer entitled under the asset-backed arrangement (conditionally or unconditionally) to payments in respect of the security.
4 Sub-paragraph (5) applies if the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196C or 196D of FA 2004.
5 The asset-backed arrangement is “completed”—
a when the share in the partnership's profits of the person involved in the relevant change is no longer to be determined under the asset-backed arrangement (conditionally or unconditionally) by reference (wholly or partly) to payments in respect of the security, or
b if earlier, when no responsible authority is any longer entitled (conditionally or unconditionally) to any payments in connection with the asset-backed arrangement.
6 In sub-paragraph (5)(b) the reference to payments are to payments of any type including drawings or distributions from a partnership, payments in respect of the security and other payments in respect of an asset (as read in accordance with section 776(4)(b) of CTA 2010).
7 “Responsible authority” means—
a the persons who from time to time are the trustees of the relevant scheme, or
b the persons who from time to time are the persons controlling the management of the relevant scheme,
in their capacity as such.
8 A responsible authority is entitled to a payment “in connection with” the asset-backed arrangement if it is entitled to the payment directly or indirectly in consequence of the arrangement or otherwise in connection with the arrangement.
7
1 In this Part of this Schedule “the completion day” means the earliest of the following—
a the day on which the asset-backed arrangement is to be completed determined as at the beginning of 29 November 2011;
b the day on which the asset-backed arrangement is actually completed;
c the day on which a completion event occurs (see sub-paragraphs (2) to (5));
d if an event falling within paragraph 8 occurs, the day on which falls the time immediately before the occurrence of the event.
2 To determine if a completion event occurs for the purposes of sub-paragraph (1)(c) first determine, as at the beginning of 22 February 2012, the following—
a the number of payments to be made after the beginning of 22 February 2012 to which a responsible authority is entitled in connection with the asset-backed arrangement,
b what the amounts of those payments are to be, and
c the times at which those payments are to be made.
3 A completion event occurs for the purposes of sub-paragraph (1)(c) if, after the beginning of 22 February 2012—
a whether as a result of a term of the asset-backed arrangement or another arrangement or otherwise—
i there is a change in the number of payments to be made from that determined under sub-paragraph (2),
ii there is a significant change in the amount of a payment to be made from that so determined, or
iii there is a significant change in the time at which a payment is to be made from that so determined,
b a payment determined under sub-paragraph (2) is not made,
c a payment determined under sub-paragraph (2) is made but its amount is significantly different from the amount so determined for the payment, or
d a payment determined under sub-paragraph (2) is made but is made at a time significantly different from the time so determined for the payment.
4 In sub-paragraphs (2) and (3) references to payments are to payments of any type including drawings or distributions from a partnership, payments in respect of the security and other payments in respect of an asset (as read in accordance with section 776(4)(b) of CTA 2010).
5 For the purposes of sub-paragraph (3)(b) to (d) it does not matter if the event in question is authorised by a term of the asset-backed arrangement or any other arrangement or results from the occurrence or non-occurrence of another event which is so authorised.
8
1 The events falling within this paragraph are those listed in sub-paragraph (2).But an event falls within this paragraph only if it occurs after the beginning of 21 March 2012.
2 The events are—
a if E is a company within the charge to corporation tax when E's contribution is paid, E ceases to be within that charge;
b if E is a limited liability partnership in relation to which section 863(1) of ITTOIA 2005 or section 1273(1) of CTA 2009 applies when E's contribution is paid, that provision ceases to apply in relation to E;
c if E is a firm for the purposes of ITTOIA 2005 (see section 847) or CTA 2009 (see section 1257) (other than a limited liability partnership) when E's contribution is paid, the partnership ceases to carry on the trade, profession or business in question;
d in any case—
i if E is a company, E enters administration or the winding up of E starts;
ii if E is a partnership, the partnership is dissolved;
iii if E is an individual, E dies.
3 Sections 10(3) and 12(7) of CTA 2009 apply for the purposes of sub-paragraph (2)(d)(i).

Certain tax consequences not to have effect

9
1 This paragraph applies if—
a the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196B of FA 2004, and
b the asset-backed arrangement would have the relevant effect (ignoring this paragraph).
2 The asset-backed arrangement is not to have the relevant effect.
3 The relevant effect is that—
a an amount of income on which the borrower or a person connected with the borrower would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of the borrower or of a person connected with the borrower is not so brought into account, or
c the borrower or a person connected with the borrower becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
4 But if the borrower is a partnership the relevant effect is that—
a an amount of income on which a member of the partnership would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of a member of the partnership is not so brought into account, or
c a member of the partnership becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
5 In sub-paragraphs (3) and (4) “amount” means an amount which arises on or after 29 November 2011 but on or before the completion day.
10
1 This paragraph applies if—
a the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196C of FA 2004, and
b any relevant change in relation to the partnership would have the relevant effect (ignoring this paragraph).
2 In such a case—
a Part 9 of ITTOIA 2005 or sections 1259 to 1265 of CTA 2009 (as the case may be) is or are to have effect in relation to the transferor, or any person connected with the transferor, as if the relevant change in relation to the partnership had not occurred, and
b accordingly, the asset-backed arrangement is not to have the relevant effect.
3 The relevant effect is that—
a an amount of income on which the transferor, or the person connected with the transferor, would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of the transferor, or the person connected with the transferor, is not so brought into account, or
c the transferor, or the person connected with the transferor, becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
4 In sub-paragraph (3) “amount” means an amount which arises on or after 29 November 2011 but on or before the completion day.
5 In deciding whether sub-paragraph (1)(b) is met assume that amounts of income equal to the payments mentioned in section 196C(2)(g) of FA 2004 were payable to the partnership before the relevant change in relation to it occurred.
11
1 This paragraph applies if—
a the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196D of FA 2004, and
b any relevant change in relation to the partnership would have the relevant effect (ignoring this paragraph).
2 The relevant effect is that—
a an amount of income on which a relevant member would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of a relevant member is not so brought into account, or
c a relevant member becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
3 A relevant member is a person who—
a was a member of the partnership immediately before the relevant change in relation to it occurred, and
b is not the lender.
4 In sub-paragraph (2) “amount” means an amount which arises on or after 29 November 2011 but on or before the completion day.
5 If this paragraph applies—
a Part 9 of ITTOIA 2005 or sections 1259 to 1265 of CTA 2009 (as the case may be) is or are to have effect in relation to any relevant member as if the relevant change in relation to the partnership had not occurred, and
b accordingly, the asset-backed arrangement is not to have the relevant effect.
6 In deciding whether sub-paragraph (1)(b) is met assume that amounts of income equal to the payments mentioned in section 196D(2)(e) of FA 2004 were payable to the partnership before the relevant change in relation to it occurred.

Adjustments

12
1 For the purposes of paragraphs 13 and 14—
a amount A is the total amount of relief given in respect of E's contribution,
b amount B is the total of the following amounts—
i any amounts of income which are charged to tax by virtue of paragraph 9, 10 or 11 above (as the case may be),
ii any amounts brought into account in calculating income for tax purposes by virtue of paragraph 9, 10 or 11 above (as the case may be) (so far as not reflected in sub-paragraph (i)), and
iii any amounts stopped from being the subject of an income deduction by virtue of paragraph 9, 10 or 11 above (as the case may be) (so far as not reflected in sub-paragraph (i) or (ii)), and
c subject to sub-paragraph (7), amount C is the amount of the payment mentioned in sub-paragraph (4) or (6) (as the case may be) so far as the payment—
i is made under the asset-backed arrangement on the completion day,
ii is not reflected in amount B,
iii is not the subject of an income deduction, and
iv is not a contribution paid by E under the relevant scheme but nevertheless becomes (directly or indirectly) part of the sums held for the purposes of the relevant scheme.
2 In sub-paragraph (1) “income deduction” means a deduction to which any person is entitled—
a in calculating income for tax purposes, or
b from total income or total profits.
3 Sub-paragraph (4) applies if the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196B of FA 2004.
4 The payment referred to in sub-paragraph (1)(c) is the payment (if any) which the borrower, or a person connected with the borrower, makes to the lender, or a person connected with the lender, in order to acquire—
a the security, or
b any asset substituted for the security under the asset-backed arrangement.
5 Sub-paragraph (6) applies if the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196C or 196D of FA 2004.
6 The payment referred to in sub-paragraph (1)(c) is the payment (if any) which E, or a person connected with E, makes—
a to the lender, or a person connected with the lender, in order to reverse the relevant change in relation to the partnership, or
b otherwise to a responsible authority in order to buy out the authority's interest in any partnership involved in the asset-backed arrangement.
7 Amount C is to be taken to be nil if—
a the completion day is on or after 22 February 2012,
b on or before the completion day, a commitment (whether or not legally enforceable and whether or not subject to any conditions) is given (directly or indirectly) to a relevant person, and
c the commitment—
i is a commitment to secure that a person receives money or another asset, and
ii is linked (directly or indirectly) to the making of the payment covered by amount C.
8 In sub-paragraph (7)(b) “relevant person” means—
a E;
b a person connected with E;
c a person acting (directly or indirectly) at the direction or request, or with the agreement, of E or a person connected with E;
d a person chosen (directly or indirectly) by E or a person connected with E;
e a person within a class of person chosen (directly or indirectly) by E or a person connected with E;
f a partnership.
9 But “relevant person” does not include a responsible authority.
13
1 This paragraph applies if amount A exceeds the sum of amounts B and C.
2 The amount of the excess is treated as follows as relevant—
a for corporation tax purposes, the amount is treated as if it were a profit which E has in respect of E's loan relationships chargeable to corporation tax under section 299 of CTA 2009 for E's accounting period in which the beginning of the completion day falls, or
b for income tax purposes, the amount is treated as if it were an amount of income of E chargeable to income tax under Chapter 8 of Part 5 of ITTOIA 2005 for the tax year in which the beginning of the completion day falls.
14If the sum of amounts B and C exceeds amount A—
a E is to be treated as having paid a contribution under the relevant scheme in respect of any individual of an amount equal to the excess,
b the contribution is to be treated as having been paid at the beginning of the completion day, and
c E is to be given relief as provided for by section 196 of FA 2004 accordingly.

PART 3  Denial of relief for contributions paid on or after 22 February 2012

15In Chapter 4 of Part 4 of FA 2004 (registered pension schemes: tax reliefs and exemptions) after section 196A insert—
16In section 280(1) of FA 2004 (abbreviations)—
a omit the “and” after the definition of “ITA 2007”, and
b after the definition of “CTA 2009” insert
.
17
1 Subject to what follows, the amendments made by paragraphs 15 and 16 above have effect in relation to contributions paid by employers on or after 22 February 2012.
2 In cases where the relevant time falls before 21 March 2012, section 196I of FA 2004 has effect as if subsection (6) were omitted.
3 An event falls within section 196J of FA 2004 only if it occurs after the beginning of 21 March 2012.

PART 4  Transitional provision relating to Part 3

Application and interpretation

18
1 This Part of this Schedule applies if—
a before 22 February 2012, an employer (“E”) pays a contribution (“E's contribution”) under a registered pension scheme (“the relevant scheme”),
b Part 2 of this Schedule does not apply in relation to E's contribution,
c at any time, relief is given in respect of E's contribution,
d if the reference in paragraph 17 above to 22 February 2012 were instead a reference to the date on which E's contribution is paid, E would have no entitlement to relief in respect of E's contribution by virtue of section 196B, 196D or 196F of FA 2004, and
e the asset-backed arrangement is not completed before 22 February 2012.
2 For the purposes of sub-paragraph (1)(d) assume that Parts 1 and 2 of this Schedule were never enacted.
3 For the purposes of sub-paragraph (1)(d), in sections 196C(5), 196E(5) and 196G(5) the reference to one year is to be read as a reference to 18 months.
19For the purposes of this Part of this Schedule—
a terms used in section 196B, 196D or 196F of FA 2004 (as the case may be) have the same meaning as in that section, and
b as necessary, assume that section 196B, 196D or 196F of FA 2004 (as the case may be) has effect in relation to E's contribution.
20
1 This paragraph applies for the purposes of this Part of this Schedule.
2 Sub-paragraph (3) applies if the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196B of FA 2004.
3 The asset-backed arrangement is “completed” when neither the lender nor any person connected with the lender is any longer entitled under the asset-backed arrangement (conditionally or unconditionally) to payments in respect of the security.
4 Sub-paragraph (5) applies if the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196D or 196F of FA 2004.
5 The asset-backed arrangement is “completed” when the share in the partnership's profits of the person involved in the relevant change is no longer to be determined under the asset-backed arrangement (conditionally or unconditionally) by reference (wholly or partly) to payments in respect of the security.
21
1 In this Part of this Schedule “the completion day” means the earliest of the following—
a the day on which the asset-backed arrangement is to be completed determined as at the beginning of 22 February 2012;
b the day on which the asset-backed arrangement is actually completed;
c the day which is the last day of the period of 25 years beginning with the day on which E's contribution is paid;
d the day on which a completion event occurs (see sub-paragraphs (2) to (11));
e if an event falling within paragraph 22 occurs, the day on which falls the time immediately before the occurrence of the event.
2 Sub-paragraphs (3) and (4) apply if the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196B of FA 2004.
3 To determine if a completion event occurs for the purposes of sub-paragraph (1)(d) first determine, as at the beginning of 22 February 2012, the following—
a the number of payments to be made after the beginning of 22 February 2012 to which the lender or a person connected with the lender is entitled in connection with the asset-backed arrangement,
b what the amounts of those payments are to be, and
c the times at which those payments are to be made.
4 A completion event occurs for the purposes of sub-paragraph (1)(d) if, after the beginning of 22 February 2012—
a whether as a result of a term of the asset-backed arrangement or another arrangement or otherwise—
i there is a change in the number of payments to be made from that determined under sub-paragraph (3),
ii there is a significant change in the amount of a payment to be made from that so determined, or
iii there is a significant change in the time at which a payment is to be made from that so determined,
b a payment determined under sub-paragraph (3) is not made,
c a payment determined under sub-paragraph (3) is made but its amount is significantly different from the amount so determined for the payment, or
d a payment determined under sub-paragraph (3) is made but is made at a time significantly different from the time so determined for the payment.
5 Sub-paragraphs (6) and (7) apply if the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196D or 196F of FA 2004.
6 To determine if a completion event occurs for the purposes of sub-paragraph (1)(d) first determine, as at the beginning of 22 February 2012, the following—
a what the amount of the share in the partnership's profits of the person involved in the relevant change is to be so far as the share is to be determined under the asset-backed arrangement by reference to payments made after the beginning of 22 February 2012,
b the number of drawings to be made from the partnership on account of the amount determined under paragraph (a) and the number of any other payments to be made after the beginning of 22 February 2012 to which the person involved in the relevant change, the lender or any other person connected with the lender is entitled in connection with the asset-backed arrangement,
c what the amounts of those drawings or other payments are to be, and
d the times at which those drawings or other payments are to be made.
7 A completion event occurs for the purposes of sub-paragraph (1)(d) if, after the beginning of 22 February 2012—
a whether as a result of a term of the asset-backed arrangement or another arrangement or otherwise—
i there is a change in the number of drawings or other payments to be made from that determined under sub-paragraph (6),
ii there is a significant change in the amount of a drawing or other payment to be made from that so determined, or
iii there is a significant change in the time at which a drawing or other payment is to be made from that so determined,
b a drawing or other payment determined under sub-paragraph (6) is not made,
c a drawing or other payment determined under sub-paragraph (6) is made but its amount is significantly different from the amount so determined for the drawing or other payment, or
d a drawing or other payment determined under sub-paragraph (6) is made but is made at a time significantly different from the time so determined for the drawing or other payment.
8 In sub-paragraphs (3) and (4) and (6) and (7) references to payments are to payments of any type including drawings or distributions from a partnership, payments in respect of the security and other payments in respect of an asset (as read in accordance with section 776(4)(b) of CTA 2010).
9 In sub-paragraphs (6) and (7) references to the making of drawings from the partnership include references to the receiving of distributions from the partnership.
10 For the purposes of sub-paragraphs (3)(a) and (6)(b) a person is entitled to a payment “in connection with” the asset-backed arrangement if the person is entitled to the payment directly or indirectly in consequence of the arrangement or otherwise in connection with the arrangement.
11 For the purposes of sub-paragraphs (4)(b) to (d) and (7)(b) to (d) it does not matter if the event in question is authorised by a term of the asset-backed arrangement or any other arrangement or results from the occurrence or non-occurrence of another event which is so authorised.
22
1 The events falling within this paragraph are those listed in sub-paragraph (2).But an event falls within this paragraph only if it occurs after the beginning of 21 March 2012.
2 The events are—
a if E is a company within the charge to corporation tax when E's contribution is paid, E ceases to be within that charge;
b if E is a limited liability partnership in relation to which section 863(1) of ITTOIA 2005 or section 1273(1) of CTA 2009 applies when E's contribution is paid, that provision ceases to apply in relation to E;
c if E is a firm for the purposes of ITTOIA 2005 (see section 847) or CTA 2009 (see section 1257) (other than a limited liability partnership) when E's contribution is paid, the partnership ceases to carry on the trade, profession or business in question;
d in any case—
i if E is a company, E enters administration or the winding up of E starts;
ii if E is a partnership, the partnership is dissolved;
iii if E is an individual, E dies.
3 Sections 10(3) and 12(7) of CTA 2009 apply for the purposes of sub-paragraph (2)(d)(i).

Certain tax consequences not to have effect

23
1 This paragraph applies if—
a the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196B of FA 2004, and
b the asset-backed arrangement would have the relevant effect (ignoring this paragraph).
2 The asset-backed arrangement is not to have the relevant effect.
3 The relevant effect is that—
a an amount of income on which the borrower or a person connected with the borrower would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of the borrower or of a person connected with the borrower is not so brought into account, or
c the borrower or a person connected with the borrower becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
4 But if the borrower is a partnership the relevant effect is that—
a an amount of income on which a member of the partnership would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of a member of the partnership is not so brought into account, or
c a member of the partnership becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
5 In sub-paragraphs (3) and (4) “amount” means an amount which arises on or after 22 February 2012 but on or before the completion day.
24
1 This paragraph applies if—
a the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196D of FA 2004, and
b any relevant change in relation to the partnership would have the relevant effect (ignoring this paragraph).
2 In such a case—
a Part 9 of ITTOIA 2005 or sections 1259 to 1265 of CTA 2009 (as the case may be) is or are to have effect in relation to the transferor, or any person connected with the transferor, as if the relevant change in relation to the partnership had not occurred, and
b accordingly, the asset-backed arrangement is not to have the relevant effect.
3 The relevant effect is that—
a an amount of income on which the transferor, or the person connected with the transferor, would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of the transferor, or the person connected with the transferor, is not so brought into account, or
c the transferor, or the person connected with the transferor, becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
4 In sub-paragraph (3) “amount” means an amount which arises on or after 22 February 2012 but on or before the completion day.
5 In deciding whether sub-paragraph (1)(b) is met assume that amounts of income equal to the payments mentioned in section 196D(2)(g) of FA 2004 were payable to the partnership before the relevant change in relation to it occurred.
25
1 This paragraph applies if—
a the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196F of FA 2004, and
b any relevant change in relation to the partnership would have the relevant effect (ignoring this paragraph).
2 The relevant effect is that—
a an amount of income on which a relevant member would otherwise have been charged to tax is not so charged,
b an amount which would otherwise have been brought into account in calculating for tax purposes any income of a relevant member is not so brought into account, or
c a relevant member becomes entitled to deduct an amount—
i in calculating income for tax purposes, or
ii from total income or total profits (as the case may be).
3 A relevant member is a person who—
a was a member of the partnership immediately before the relevant change in relation to it occurred, and
b is not the lender.
4 In sub-paragraph (2) “amount” means an amount which arises on or after 22 February 2012 but on or before the completion day.
5 If this paragraph applies—
a Part 9 of ITTOIA 2005 or sections 1259 to 1265 of CTA 2009 (as the case may be) is or are to have effect in relation to any relevant member as if the relevant change in relation to the partnership had not occurred, and
b accordingly, the asset-backed arrangement is not to have the relevant effect.
6 In deciding whether sub-paragraph (1)(b) is met assume that amounts of income equal to the payments mentioned in section 196F(2)(e) of FA 2004 were payable to the partnership before the relevant change in relation to it occurred.
26
1 This paragraph applies if, apart from this Part of this Schedule, a relevant charging provision applies in relation to the asset-backed arrangement.
2 The relevant charging provision is to apply in relation to the asset-backed arrangement instead of paragraph 23, 24 or 25 above (as the case may be) to the extent of any overlap.
3 In this paragraph “relevant charging provision” means—
a section 809BZB, 809BZC, 809BZH or 809BZK of ITA 2007, or
b section 759, 760, 765 or 768 of CTA 2010.
27
1 This paragraph applies if, apart from this Part of this Schedule—
a a relevant interest provision applies in relation to the asset-backed arrangement, and
b as a result of the application of the relevant interest provision in relation to the asset-backed arrangement, an amount is or may be treated as interest under that provision.
2 Without prejudice to the generality of paragraphs 23(3) and (4), 24(3) and 25(2), the amount is not to be treated as interest if the amount arises on or after 22 February 2012 but on or before the completion day.
3 In this paragraph “relevant interest provision” means—
a section 809BZD, 809BZE, 809BZI or 809BZL of ITA 2007, or
b section 761, 762, 766 or 769 of CTA 2010.
28
1 Section 196G of FA 2004 (as inserted by paragraph 1 above) does not apply in relation to E's contribution (if it would otherwise do so) if the relevant event occurs on or after 22 February 2012.
2 Section 196H of FA 2004 (as inserted by paragraph 1 above) does not apply in relation to E's contribution at all (if it would otherwise do so).

Adjustments

29
1 For the purposes of paragraphs 30 and 31—
a amount A is the total amount of relief given in respect of E's contribution,
b amount B is the total of the following amounts—
i any amounts of income which are charged to tax by virtue of a relevant provision,
ii any amounts brought into account in calculating income for tax purposes by virtue of a relevant provision (so far as not reflected in sub-paragraph (i)), and
iii any amounts stopped from being the subject of an income deduction by virtue of a relevant provision (so far as not reflected in sub-paragraph (i) or (ii)), and
c subject to sub-paragraph (9), amount C is the amount of the payment mentioned in sub-paragraph (6) or (8) (as the case may be) so far as the payment—
i is made under the asset-backed arrangement on the completion day,
ii is not reflected in amount B,
iii is not the subject of an income deduction, and
iv is not a contribution paid by E under the relevant scheme but nevertheless becomes (directly or indirectly) part of the sums held for the purposes of the relevant scheme.
2 In sub-paragraph (1)(b) “relevant provision” means—
a paragraph 23, 24 or 25 above (as the case may be);
b a relevant charging provision (as defined in paragraph 26 above) as applied in relation to the asset-backed arrangement for amounts arising on or before the completion day;
c paragraph 27 above (if applicable).
3 No amount is to be included in amount B by virtue of sub-paragraph (2)(c) so far as it is reflected in an amount included in amount B by virtue of sub-paragraph (2)(a) or (b).
4 In sub-paragraph (1) “income deduction” means a deduction to which any person is entitled—
a in calculating income for tax purposes, or
b from total income or total profits.
5 Sub-paragraph (6) applies if the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196B of FA 2004.
6 The payment referred to in sub-paragraph (1)(c) is the payment (if any) which the borrower, or a person connected with the borrower, makes to the lender, or a person connected with the lender, in order to acquire—
a the security, or
b any asset substituted for the security under the asset-backed arrangement.
7 Sub-paragraph (8) applies if the section which would have applied as mentioned in paragraph 18(1)(d) above is section 196D or 196F of FA 2004.
8 The payment referred to in sub-paragraph (1)(c) is the payment (if any) which E, or a person connected with E, makes to the lender, or a person connected with the lender, in order to reverse the relevant change in relation to the partnership.
9 Amount C is to be taken to be nil if—
a on or before the completion day, a commitment (whether or not legally enforceable and whether or not subject to any conditions) is given (directly or indirectly) to a relevant person, and
b the commitment—
i is a commitment to secure that a person receives money or another asset, and
ii is linked (directly or indirectly) to the making of the payment covered by amount C.
10 In sub-paragraph (9)(a) “relevant person” means—
a E;
b a person connected with E;
c a person acting (directly or indirectly) at the direction or request, or with the agreement, of E or a person connected with E;
d a person chosen (directly or indirectly) by E or a person connected with E;
e a person within a class of person chosen (directly or indirectly) by E or a person connected with E;
f a partnership.
11 But “relevant person” does not include—
a the persons who from time to time are the trustees of the relevant scheme, or
b the persons who from time to time are the persons controlling the management of the relevant scheme,
in their capacity as such.
30
1 This paragraph applies if amount A exceeds the sum of amounts B and C.
2 The amount of the excess is treated as follows as relevant—
a for corporation tax purposes, the amount is treated as if it were a profit which E has in respect of E's loan relationships chargeable to corporation tax under section 299 of CTA 2009 for E's accounting period in which the beginning of the completion day falls, or
b for income tax purposes, the amount is treated as if it were an amount of income of E chargeable to income tax under Chapter 8 of Part 5 of ITTOIA 2005 for the tax year in which the beginning of the completion day falls.
31If the sum of amounts B and C exceeds amount A—
a E is to be treated as having paid a contribution under the relevant scheme in respect of any individual of an amount equal to the excess,
b the contribution is to be treated as having been paid at the beginning of the completion day, and
c E is to be given relief as provided for by section 196 of FA 2004 accordingly.

PART 5  Other provision relating to finance arrangements

Chapter 5B of Part 13 of ITA 2007

32Chapter 5B of Part 13 of ITA 2007 (finance arrangements) is amended as follows.
33In section 809BZA (type 1 finance arrangements: definition) after subsection (2) insert—
34
1 Section 809BZF (type 2 finance arrangements: definition) is amended as follows.
2 In subsection (2)(b) after “transferor” insert “ or a person connected with the transferor ”.
3 After subsection (2) insert—
35In section 809BZH (type 2 finance arrangements: certain tax consequences not to have effect) after “transferor” (wherever occurring) insert “ or the person connected with the transferor ”.
36In section 809BZJ (type 3 finance arrangements: definition) after subsection (2) insert—

Chapter 2 of Part 16 of CTA 2010

37Chapter 2 of Part 16 of CTA 2010 (finance arrangements) is amended as follows.
38In section 758 (type 1 finance arrangements: definition) after subsection (2) insert—
39
1 Section 763 (type 2 finance arrangements: definition) is amended as follows.
2 In subsection (2)(b) after “transferor” insert “ or a person connected with the transferor ”.
3 After subsection (2) insert—
40In section 765 (type 2 finance arrangements: certain tax consequences not to have effect) after “transferor” (wherever occurring) insert “ or the person connected with the transferor ”.
41In section 767 (type 3 finance arrangements: definition) after subsection (2) insert—

Commencement

42
1 Subject to what follows, the amendments made by paragraphs 32 to 41 above have effect in relation to arrangements whenever made.
2 In relation to arrangements made before 21 March 2012, an amount is by virtue of the amendments—
a to be charged to tax, or
b to be brought into account in calculating any income for tax purposes or deducted from any income for tax purposes,
only if the amount arises on or after 21 March 2012.
3 The amendments have no effect for the purposes of section 196J(4) of FA 2004 inserted by paragraph 1 above.
4 The amendments have no effect for the purposes of section 196C(2)(b), 196E(2)(b) or 196G(2)(b) of FA 2004 inserted by paragraph 15 above if the asset-backed arrangement is made before 21 March 2012.

SCHEDULE 14 

Gifts to the nation

Section 49

PART 1 Introduction

Qualifying gifts

1
1 For the purposes of this Schedule, a person makes a “qualifying gift” if the person makes a gift in the circumstances described in sub-paragraph (2).
2 The circumstances are—
a the person offers to give pre-eminent property to be held for the benefit of the public or the nation,
b the person is legally and beneficially entitled to the property and the property is not owned jointly (or in common) with others,
c the offer is made in accordance with a scheme set up by the Secretary of State for the purposes of this Schedule,
d the offer is registered in accordance with the scheme,
e the offer, or a part of the offer, is accepted in accordance with the scheme, and
f the gift is made pursuant to the offer, or the part of the offer, accepted.
3 In this Schedule—
a “the agreed terms” means the terms on which acceptance is agreed, as recorded in the manner prescribed by the scheme, and
b “the offer registration date” means the date when the offer was registered in accordance with the scheme.

PART 2 Income tax and capital gains tax

Taxes affected

2
1 This Part applies to an individual's liability to income tax and capital gains tax.
2 It does not apply to any liability arising as a trustee or personal representative.
3 Subject to sub-paragraph (2)—
a a reference in this Part to an individual's “tax liability” is to the individual's liability to income tax and capital gains tax, and
b references to an amount of or on account of “tax” are to be read accordingly.

The basic rule

3
1 If an individual (“N”) makes a qualifying gift, a portion of N's tax liability for each relevant tax year is to be treated as satisfied, as if N had paid that portion when it became due (or on the offer registration date, if the portion became due before that date).
2 A “relevant tax year” is a tax year identified in the agreed terms as a tax year to which this paragraph is to apply.
3 Up to 5 tax years may be identified in the agreed terms, but each one must be either—
a the tax year in which the offer registration date falls, or
b one of the 4 tax years following that tax year.

The portion treated as satisfied

4
1 The portion of N's tax liability for a relevant tax year that is to be treated as satisfied is an amount equal to the smaller of—
a the tax reduction figure allocated to that tax year, and
b the amount of N's tax liability for that tax year less any portion of that amount that is treated as satisfied in consequence of any qualifying gift made by N on a previous occasion.
2 The amount determined under sub-paragraph (1) may be nil.
3 The tax reduction figure allocated to a tax year is such part of the total tax reduction figure as is expressed in the agreed terms to be allocated to that tax year.
4 The figures allocated to the relevant tax years must in total add up to no more than the total tax reduction figure.
5 “The total tax reduction figure” is 30% of the value set out in the agreed terms as the agreed value of the property forming the subject of the qualifying gift.
6 The Treasury may by order substitute a different percentage for the percentage specified for the time being in sub-paragraph (5).

Order in which benefit is applied

5
1 If the tax reduction figure allocated to a relevant tax year is less than the amount determined under paragraph 4(1)(b) for that tax year, the benefit of paragraph 3(1) is to be applied to N's tax liability in the order specified in the agreed terms.
2 If no order is specified, the order is—
a first, to N's liability to income tax for that year, and
b then, to N's liability to capital gains tax for that year.

Effect of basic rule on interest and penalties

6
1 This paragraph explains the effect of paragraph 3(1) as regards late payment interest and late payment penalties.
2 The effect is that liability to pay amounts specified in sub-paragraph (3) ceases when the qualifying gift is made, as if the liability had never arisen.
3 The amounts are—
a any late payment interest that accrued on the relevant portion during the negotiation period, and
b any late payment penalty to which N became liable in the negotiation period for failing to pay the relevant portion (together with any interest on such a penalty).
4 “The relevant portion” is the portion of N's tax liability for a relevant tax year that is treated under paragraph 3 as satisfied.
5 In determining for the purposes of sub-paragraph (2) whether or to what extent—
a late payment interest accruing on an amount of or on account of N's tax liability for the relevant tax year is attributable to the relevant portion, or
b a late payment penalty incurred for failing to pay an amount of or on account of N's tax liability for the relevant tax year is attributable to the relevant portion,
any attribution or apportionment is to be done in the way that maximises the relief obtained by N by virtue of this paragraph.
6 “The negotiation period” is the period—
a beginning with the offer registration date, and
b ending with the day on which the qualifying gift is made.
7 Nothing in this paragraph affects any late payment interest that accrued, or any late payment penalty to which N became liable, before the offer registration date.

Changes to N's tax liability

7
1 If the amount of N's tax liability for a relevant tax year is revised at any time, the portion of that liability that is treated under paragraph 3(1) as satisfied is to be re-calculated.
2 But nothing in this paragraph permits any revision of the agreed terms.

Gifts set aside etc

8If a qualifying gift is set aside or declared void after it is made—
a the portion of N's tax liability for each relevant tax year that is treated as satisfied ceases to be treated as satisfied,
b the effect described in paragraph 6 is negated, and
c N is required to pay the portion due for each relevant tax year, together with any late payment interest and late payment penalties in respect of it, by the later of—
i the end of the period of 30 days beginning with the day on which the gift was set aside or declared void, and
ii the day by which N would have been required to pay those amounts but for this Schedule.

Suspension pending negotiations

9
1 An individual who makes an offer in the circumstances described in paragraph 1 (a “potential donor”) may make a request under this paragraph if—
a the offer is registered in accordance with the scheme,
b the offer includes a proposal (“the donor proposal”) of what should be in the agreed terms,
c the potential donor will be required to pay an amount of or on account of tax for a relevant tax year by a certain date, and
d the negotiations are not expected to conclude before that date (referred to as “the due date”).
2 For the purposes of this paragraph, the negotiations “conclude” when—
a a qualifying gift is made pursuant to the offer,
b the offer is withdrawn by the potential donor, or
c the offer is rejected.
3 A request under this paragraph is a request that the potential donor's obligation to pay the amount by the due date be suspended until the negotiations conclude.
4 But the running total of amounts for which suspension may be requested under this paragraph in respect of the same offer and the same relevant tax year must not exceed the proposed tax reduction figure for that tax year.
5 “The proposed tax reduction figure” for a tax year is the amount shown in the donor proposal as the proposed tax reduction figure for that year.
6 A request under this paragraph—
a must be made in writing to HMRC at least 45 days before the due date, and
b must be accompanied by a copy of the donor proposal and such other information as an officer of Revenue and Customs may reasonably require.
7 In considering whether or to what extent to agree to a request, HMRC must have regard to all the circumstances of the case (including, for example, the creditworthiness of the potential donor).
8 HMRC may impose conditions with respect to the suspension.
10
1 Suspension under paragraph 9 of a potential donor's obligation to pay an amount of or on account of tax stops the donor from becoming liable to late payment penalties for or in connection with the failure to pay that amount by the due date.
2 But it does not stop late payment interest from accruing on that amount from the due date.
3 HMRC may by notice in writing to the potential donor withdraw its agreement to the suspension with effect from such date, before conclusion of the negotiations, as may be specified in the notice.
4 If it does so, the potential donor must pay the amount, together with any late payment interest that has accrued on it since the due date, by the end of the period of 30 days beginning with the date specified in the notice.
5 The last day of that 30-day period is to be treated for the purposes of any enactment relating to late payment penalties as the date on or before which the amount must be paid.
6 Paragraph 11 explains what happens once the negotiations conclude (depending on the outcome of the negotiations).

Conclusion of negotiations

11
1 This paragraph applies if a potential donor's obligation to pay an amount of or on account of tax remains suspended under paragraph 9 when the negotiations conclude (within the meaning of that paragraph).
2 The potential donor must pay the amount, together with any late payment interest that has accrued on it since the due date, within the period of 30 days beginning with the day on which the negotiations concluded.
3 The last day of that 30-day period is to be treated for the purposes of any enactment relating to late payment penalties as the date on or before which the amount must be paid.
4 But if the negotiations conclude because a qualifying gift is made pursuant to the offer or a part of the offer—
a sub-paragraph (2) is to be read subject to paragraph 3(1) (and its effect as described in paragraph 6), and
b accordingly, the potential donor is only required to pay so much as is not treated as satisfied under paragraph 3(1).
5 If the negotiations conclude in relation to a part only of the offer—
a this paragraph is to be given effect as far as reasonably practicable in relation to that part, and
b on receipt of a revised copy of the donor proposal, HMRC may give effect to paragraph 9 in relation to the part of the offer that remains under negotiation.

PART 3 Corporation tax

Taxes affected

12
1 This Part applies to a company's liability to corporation tax.
2 A reference in this Part to a company's “tax liability” is to the company's liability to corporation tax.
3 References to an amount of or on account of “tax” are to be read accordingly.

The basic rule

13
1 If a company (“C”) makes a qualifying gift, a portion of C's tax liability for the relevant accounting period is to be treated as satisfied, as if C had paid that portion when it became due (or on the offer registration date, if the portion became due before that date).
2 “The relevant accounting period” is the accounting period of C's in which the offer registration date falls.

The portion treated as satisfied

14
1 The portion of C's tax liability for the relevant accounting period that is to be treated as satisfied is an amount equal to the smaller of—
a the tax reduction figure, and
b the amount of C's tax liability for that period less any portion of that amount that is treated as satisfied in consequence of any qualifying gift made by C on a previous occasion.
2 The amount determined under sub-paragraph (1) may be nil.
3 The tax reduction figure is—
a 20% of the value set out in the agreed terms as the agreed value of the property forming the subject of the qualifying gift, or
b such lower figure as may be specified in the agreed terms as the tax reduction figure.
4 The Treasury may by order substitute a different percentage for the percentage specified for the time being in sub-paragraph (3)(a).

Effect of basic rule on interest and penalties

15
1 This paragraph explains the effect of paragraph 13 as regards late payment interest and late payment penalties.
2 The effect is that liability to pay amounts specified in sub-paragraph (3) ceases when the qualifying gift is made, as if the liability had never arisen.
3 The amounts are—
a any late payment interest that accrued on the relevant portion during the negotiation period, and
b any late payment penalty to which C became liable in the negotiation period for failing to pay the relevant portion (together with any interest on such a penalty).
4 “The relevant portion” is the portion of C's tax liability for the relevant accounting period that is treated under paragraph 13 as satisfied.
5 In determining for the purposes of sub-paragraph (2) whether or to what extent—
a late payment interest accruing on an amount of or on account of C's tax liability for the relevant accounting period is attributable to the relevant portion, or
b a late payment penalty incurred for failing to pay an amount of or on account of C's tax liability for the relevant accounting period is attributable to the relevant portion,
any attribution or apportionment is to be done in the way that maximises the relief obtained by C by virtue of this paragraph.
6 “The negotiation period” is the period—
a beginning with the offer registration date, and
b ending with the day on which the qualifying gift is made.
7 Nothing in this paragraph affects any late payment interest that accrued, or any late payment penalty to which C became liable, before the offer registration date.

Changes to C's tax liability

16
1 If the amount of C's tax liability for the relevant accounting period is revised at any time, the portion of that liability that is treated under paragraph 13 as satisfied is to be re-calculated.
2 But nothing in this paragraph permits any revision of the agreed terms.

Gifts set aside etc

17If a qualifying gift is set aside or declared void after it is made—
a the portion of C's tax liability for the relevant accounting period treated as satisfied ceases to be treated as satisfied,
b the effect described in paragraph 15 is negated, and
c C is required to pay the portion due, together with any late payment interest and late payment penalties in respect of it, by the later of—
i the end of the period of 30 days beginning with the day on which the gift was set aside or declared void, and
ii the day by which C would have been required to pay those amounts but for this Schedule.

Suspension pending negotiations

18
1 A company that makes an offer in the circumstances described in paragraph 1 (a “potential donor”) may make a request under this paragraph if—
a the offer is registered in accordance with the scheme,
b the offer includes a proposal (“the donor proposal”) of what should be in the agreed terms,
c the potential donor will be required to pay an amount of or on account of tax for the relevant accounting period by a certain date, and
d the negotiations are not expected to conclude before that date (referred to as “the due date”).
2 For the purposes of this paragraph, the negotiations “conclude” when—
a a qualifying gift is made pursuant to the offer,
b the offer is withdrawn by the potential donor, or
c the offer is rejected.
3 A request under this paragraph is a request that the potential donor's obligation to pay the amount by the due date be suspended until the negotiations conclude.
4 But the running total of amounts for which suspension may be requested under this paragraph in respect of the same offer must not exceed the proposed tax reduction figure.
5 “The proposed tax reduction figure” is the amount shown in the donor proposal as the proposed tax reduction figure.
6 A request under this paragraph—
a must be made in writing to HMRC at least 45 days before the due date, and
b must be accompanied by a copy of the donor proposal and such other information as an officer of Revenue and Customs may reasonably require.
7 In considering whether or to what extent to agree to a request, HMRC must have regard to all the circumstances of the case (including, for example, the creditworthiness of the potential donor).
8 HMRC may impose conditions with respect to the suspension.
19
1 Suspension under paragraph 18 of a potential donor's obligation to pay an amount of or on account of tax stops the donor from becoming liable to late payment penalties for or in connection with the failure to pay that amount by the due date.
2 But it does not stop late payment interest from accruing on that amount from the due date.
3 HMRC may by notice in writing to the potential donor withdraw its agreement to the suspension with effect from such date, before conclusion of the negotiations, as may be specified in the notice.
4 If it does so, the potential donor must pay the amount, together with any late payment interest that has accrued on it since the due date, by the end of the period of 30 days beginning with the date specified in the notice.
5 The last day of that 30-day period is to be treated for the purposes of any enactment relating to late payment penalties as the date on or before which the amount must be paid.
6 Paragraph 20 explains what happens once the negotiations conclude (depending on the outcome of the negotiations).

Conclusion of negotiations

20
1 This paragraph applies if a potential donor's obligation to pay an amount of or on account of tax remains suspended under paragraph 18 when the negotiations conclude (within the meaning of that paragraph).
2 The potential donor must pay the amount, together with any late payment interest that has accrued on it since the due date, within the period of 30 days beginning with the day on which the negotiations concluded.
3 The last day of that 30-day period is to be treated for the purposes of any enactment relating to late payment penalties as the date on or before which the amount must be paid.
4 But if the negotiations conclude because a qualifying gift is made pursuant to the offer or a part of the offer—
a sub-paragraph (2) is to be read subject to paragraph 13 (and its effect as described in paragraph 15), and
b accordingly, the potential donor is only required to pay so much as is not treated as satisfied under paragraph 13.
5 If the negotiations conclude in relation to a part only of the offer—
a this paragraph is to be given effect as far as reasonably practicable in relation to that part, and
b on receipt of a revised copy of the donor proposal, HMRC may give effect to paragraph 18 in relation to the part of the offer that remains under negotiation.

PART 4 General provision

Orders

21
1 An order under Part 2 or 3 of this Schedule is to be made by statutory instrument.
2 It may include transitional and saving provisions.
3 A statutory instrument containing an order under Part 2 or 3 of this Schedule is subject to annulment in pursuance of a resolution of the House of Commons.

Pre-eminent property

22
1 In this Schedule, “pre-eminent property” means—
a any picture, print, book, manuscript, work of art, scientific object or other thing that the relevant Minister is satisfied is pre-eminent for its national, scientific, historic or artistic interest,
b any collection or group of pictures, prints, books, manuscripts, works of art, scientific objects or other things if the relevant Minister is satisfied that the collection or group, taken as a whole, is pre-eminent for its national, scientific, historic or artistic interest, or
c any object that is or has been kept in a significant building if it appears to the relevant Minister desirable for the object to remain associated with the building.
2 A “significant building” is any building falling within section 230(3)(a) to (d) of IHTA 1984 (acceptance of property in lieu of tax).
3 “National interest” includes interest within any part of the United Kingdom.
4 In determining whether an object or collection or group of objects is pre-eminent, regard is to be had to any significant association of the object, collection or group with a particular place.

The relevant Minister

23
1 For the purposes of paragraph 22, “the relevant Minister” is—
a for items with a purely Scottish interest, the Scottish Ministers,
b for items with some Scottish interest but with no Northern Irish interest and no Welsh interest, the Secretary of State and the Scottish Ministers concurrently,
c for items with a purely Northern Irish interest, the Northern Ireland Department of Culture, Arts and Leisure,
d for items with some Northern Irish interest but with no Scottish interest and no Welsh interest, the Secretary of State and the Northern Ireland Department of Culture, Arts and Leisure concurrently,
e for items with a purely Welsh interest, the Welsh Ministers,
f for items with some Welsh interest but with no Scottish interest and no Northern Irish interest, the Secretary of State and the Welsh Ministers concurrently, and
g for any other items, the Secretary of State.
2 If an item within sub-paragraph (1)(g) has more than one devolved interest, the Secretary of State must consult the appropriate Minister for each such interest before making a decision under paragraph 22 affecting the item.
3 An item has a purely Scottish interest if—
a it is located in Scotland, and
b the offer contains—
i no wish about where the item is to be displayed, or
ii a wish that it is to be displayed in Scotland.
4 An item has some Scottish interest if it does not have a purely Scottish interest but—
a it is located in Scotland, or
b the offer contains a wish that it is to be displayed in Scotland.
5 An item has no Scottish interest if it does not have a purely Scottish interest and it does not have some Scottish interest.
6 References to items with a purely Northern Irish or purely Welsh interest, to items with some Northern Irish or some Welsh interest and to items with no Northern Irish interest or no Welsh interest are to be read in accordance with sub-paragraphs (3) to (5), but replacing references to Scotland with references to Northern Ireland or, as the case may be, Wales.
7 A “devolved interest” is some Scottish interest, some Northern Irish interest or some Welsh interest.
8 “The appropriate Minister” is—
a if the item has some Scottish interest, the Scottish Ministers,
b if the item has some Northern Irish interest, the Northern Ireland Department of Culture, Arts and Leisure, and
c if the item has some Welsh interest, the Welsh Ministers.
9 “Item” means an object or collection or group of objects.

General interpretation

24In this Schedule—
  • “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;
  • “company” has the meaning given in section 992 of ITA 2007;
  • “corporation tax” includes any amount assessable or chargeable as if it were corporation tax;
  • “HMRC” means Her Majesty's Revenue and Customs;
  • “late payment interest” means interest under section 101 of FA 2009, or under or by virtue of Part 9 of TMA 1970, on amounts payable to HMRC;
  • “late payment penalty” means a penalty under Schedule 56 to FA 2009.
25Nothing in this Schedule is to give rise to any right or expectation that an offer made as mentioned in paragraph 1 will be accepted.

PART 5 Related changes

IHTA 1984

26IHTA 1984 is amended as follows.
27In section 25 (gifts for national purposes etc), after subsection (2) insert—
28In section 26A (potentially exempt transfer of property subsequently held for national purposes etc), in paragraph (b), after “below” insert “ or in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to the nation) ”.
29
1 Section 32 (conditionally exempt transfers: chargeable events) is amended as follows.
2 In subsection (3), for “subsections (4) and (5)” substitute “ subsections (4), (4A) and (5) ”.
3 After subsection (4) insert—
30
1 Section 32A (associated properties) is amended as follows.
2 After subsection (5) insert—
3 In subsection (7), after “(5)(a) or (b)” insert “ or (5A)(a) or (b) ”.
31In section 33 (amount of charge under section 32), in subsection (6)—
a for “section 32(4)” substitute “ section 32(4) or (4A) ”, and
b for “section 32A(5)”, in both places it appears, substitute “ section 32A(5) or (5A) ”.
32In section 34 (reinstatement of transferor's cumulative total), in subsection (4)—
a for “section 32(4)” substitute “ section 32(4) or (4A) ”, and
b for “section 32A(5)”, in both places it appears, substitute “ section 32A(5) or (5A) ”.
32A
1 This paragraph applies where a person (“the donor”) makes a qualifying gift of an object in circumstances where, had the donor instead sold the object to an individual at market value, a charge to estate duty would have arisen under section 40 of FA 1930 on the proceeds of sale.
2 At the time when the gift is made, estate duty becomes chargeable under that section as if the gift were such a sale (subject to any limitation imposed by paragraph 33(2)).
3 In the application of this paragraph to Northern Ireland, the references to section 40 of FA 1930 are to be read as references to section 2 of the Finance Act (Northern Ireland) 1931.

Estate duty etc

33
1 This paragraph applies if a person makes a qualifying gift and as a result—
a estate duty becomes chargeable under section 40 of FA 1930 (exemption from death duties of objects of national etc interest), or
b tax becomes chargeable under Schedule 5 to IHTA 1984 (conditional exemption: deaths before 7 April 1976).
2 Despite any other enactment, the amount of duty or tax that becomes so chargeable as a result of the gift is to be limited to the amount (if any) by which A exceeds B.
3 For these purposes—
  • “A” is the amount of duty or tax that becomes so chargeable as a result of the gift (absent this paragraph), and
  • “B” is what that amount would be if the effective rate at which the duty or tax is charged were the highest rate specified in column 3 of the Table in Schedule 1 to IHTA 1984.
4 References in this paragraph to the amount of duty or tax that becomes so chargeable are to the amount before applying any credit allowable against it under section 33(7) of IHTA 1984.
5 Nothing in this paragraph entitles a person to any repayment of inheritance tax if the amount of any such credit exceeds the amount (if any) chargeable in accordance with sub-paragraph (2).
6 In the application of this paragraph to Northern Ireland, for the reference to section 40 of FA 1930 substitute a reference to section 2 of the Finance Act (Northern Ireland) 1931.

TCGA 1992

34In section 258 of TCGA 1992 (works of art etc), before subsection (2) insert—

ITA 2007

35In Chapter A1 of Part 14 of ITA 2007 (income tax: remittance basis), after section 809YD (inserted by Schedule 12 to this Act) insert—

PART 6 Commencement

36
P11 Parts 2 and 3 of this Schedule have effect in relation to liabilities for tax years and accounting periods beginning on or after such day as the Treasury may by order appoint.
2 The power of the Treasury under sub-paragraph (1) includes power to appoint a day that is earlier than the day on which the order is made, but no earlier than 1 April 2012.
3 An order under this paragraph is to be made by statutory instrument.

SCHEDULE 15 

Relief in respect of gift aid and other income

Section 51

Claims by charitable trusts etc

1
1 In Part 10 of ITA 2007 (special rules about charitable trusts etc), section 538A (claims in relation to gift aid relief) is amended as follows.
2 Before subsection (1) insert—
3 In subsection (1)—
a before “applies” insert “ also ”, and
b for the words after “tax” substitute
4 Accordingly, in the heading, after “relief” insert “ etc ”.

Claims by charitable companies etc

2Part 11 of CTA 2010 (charitable companies etc) is amended as follows.
3
1 In Chapter 2 (gifts and other payments), section 477A (claims in relation to gift aid relief) is amended as follows.
2 Before subsection (1) insert—
3 In subsection (1), before “applies” insert “ also ”.
4In Chapter 3 (other exemptions), after section 491 insert—

Community amateur sports clubs: gift aid and other income

5Chapter 9 of Part 13 of CTA 2010 (special types of company etc: community amateur sports clubs) is amended as follows.
6After section 661C insert—
7After section 665 insert—
8In consequence of the provision made by paragraph 6, in section 413 of ITA 2007 (overview of gift aid relief), after subsection (5) insert—

Treatment of income tax deducted or repaid

9In section 59B of TMA 1970 (payment of income tax and capital gains tax), in subsection (7), at the end insert—
10
1 Section 967 of CTA 2010 (set-off of income tax deductions against corporation tax: payments received by UK resident companies) is amended as follows.
2 After subsection (4) insert—
3 In subsection (5) (as inserted by sub-paragraph (2)), after the entry for section 475 insert—
.

Administration of claims under ITA 2007

11
1 Section 42 of TMA 1970 (procedure for making claims etc) is amended as follows.
2 In subsection (2), for “and (3ZA)” substitute “ to (3ZB) ”.
3 In subsection (3ZA), for the words from “by virtue of” to the end substitute
4 After subsection (3ZA) insert—
12In consequence of the amendments made by paragraph 11, in Schedule 8 to FA 2010 omit paragraph 4(2).

Administration of claims under CTA 2010

13Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended as follows.
14
1 Paragraph 9 (claims that cannot be made without a return) is amended as follows.
2 In sub-paragraph (2), at the end insert—
3 For sub-paragraph (2A) substitute—
15
1 Paragraph 57 (claims or elections affecting a single accounting period) is amended as follows.
2 In sub-paragraph (1), at the end insert—
3 For sub-paragraph (1A) substitute—
16In consequence of the amendments made by paragraphs 14 and 15, in Schedule 8 to FA 2010 omit paragraph 6.

Application

17
1 The amendments made by paragraphs 1 to 4 and 7 are treated as having come into force on 8 April 2010.
2 The amendments made by paragraphs 6, 8 and 10 are treated as having effect—
a for corporation tax purposes, for accounting periods ending on or after 1 April 2010, and
b for income tax purposes, for the tax year 2010-11 and subsequent tax years.
3 The amendment made by paragraph 9 has effect in relation to income tax repaid on gifts made or income received on or after 6 April 2006.Accordingly, any reference in that amendment to a provision of ITA 2007 is to be read as including a reference to any corresponding earlier enactment which was rewritten in that provision.
4 An amendment corresponding to that made by paragraph 10(2) is to be treated as having been made in ICTA and having had effect in relation to—
a gifts made by individuals to charitable companies and eligible bodies on or after 6 April 2000 which were not covenanted payments,
b covenanted payments falling to be made by individuals to charitable companies and eligible bodies on or after that date, and
c payments made to community amateur sports clubs on or after 6 April 2002.
5 An amendment corresponding to that made by paragraph 10(3) is to be treated as having been made in ICTA and having had effect in relation to payments of income made on or after 1 April 2006.
6 The amendments made by paragraphs 11 to 16 have effect in relation to claims whenever made.

SCHEDULE 16 

Part 2: minor and consequential amendments

Section 146

PART 1  Amendments of ICTA

1ICTA is amended as follows.
2Omit section 76 (expenses of insurance companies).
3Omit section 76ZA (payments for restrictive undertakings).
4Omit section 76ZB (seconded employees).
5Omit sections 76ZC to 76ZE (counselling and retraining expenses).
6Omit sections 76ZF to 76ZJ (redundancy payments etc).
7Omit section 76ZK (contributions to local enterprise organisations or urban regeneration companies).
8Omit sections 76ZL and 76ZM (unpaid remuneration).
9Omit section 76ZN (car hire).
10In section 95ZA(3) (taxation of UK distributions received by insurance companies), for “life assurance business” substitute “ business in relation to which section 111 of the Finance Act 2012 applies ”.
11Omit section 431 (interpretative provisions relating to insurance companies).
12Omit section 431ZA (election for assets not be foreign business assets).
13Omit section 431A (amendment of Chapter etc).
14Omit section 431B (meaning of “pension business”).
15Omit section 431BA (meaning of “child trust fund business”).
16Omit section 431BB (meaning of “individual savings account business”).
17Omit section 431C (meaning of “life reinsurance business”).
18Omit sections 431D and 431E (meaning of “overseas life assurance business” etc).
19Omit section 431EA (meaning of “gross roll-up business”).
20Omit section 431F (meaning of “basic life assurance and general annuity business”).
21Omit section 431G (company carrying on life assurance business).
22Omit section 431H (company carrying on life assurance business and other insurance business).
23Omit section 432YA (PHI business — adjustment consequent of change in Insurance Prudential Sourcebook).
24Omit section 432ZA (linked assets).
25Omit section 432A (apportionment of income and gains).
26Omit section 432AA (property businesses).
27Omit section 432AB (losses from property businesses).
28Omit sections 432B to 432G (apportionment of receipts brought into account).
29Omit section 434 (franked investment income etc).
30Omit section 434A (computation of losses and limitation on relief).
31Omit sections 434AZA to 434AZC (reduced loss relief for additions to non-profit funds).
32Omit section 436A (gross roll-up business: separate charge on profits).
33Omit section 436B (gains referable to gross-roll up business not to be chargeable gains).
34Omit sections 437 and 437A (general annuity business).
35Omit section 438 (pension business: exemption from tax).
36Omit section 440 (transfers of assets etc).
37Omit section 440A (securities).
38Omit section 440B (modifications where tax charged under s.35 of CTA 2009).
39Omit section 440C (modifications for change of tax basis).
40Omit section 440D (modifications in relation to BLAGAB group reinsurers).
41Omit section 442 (overseas business of UK companies).
42Omit section 442A (taxation of investment return where risk reinsured).
43Omit sections 444A to 444AED (transfers of business).
44Omit sections 444AF to 444AL (surpluses of mutual and former mutual businesses).
45In Schedule 15 (qualifying policies), in paragraph 24(3)(a), for “section 431(2)” substitute “ section 56 of the Finance Act 2012 ”.
46Omit Schedule 19ABA (modifications in relation to BLAGAB group reinsurers).

PART 2  Amendments of FA 1989

47FA 1989 is amended as follows.
48In section 67(2) (employee share ownership trusts), for paragraph (b) (and the “or” before that paragraph) substitute—
49Omit section 82 (calculation of profits: bonuses etc).
50Omit section 82A (calculation of profits: policy holders' tax).
51Omit section 82B (unappropriated surplus on valuation).
52Omit sections 82D to 82F (treatment of profits: life assurance — adjustment consequent on change in Insurance Prudential Sourcebook).
53Omit section 83 (receipts to be taken into account).
54Omit section 83XA (structural assets).
55Omit sections 83YA and 83YB (changes in value of assets brought into account: non-profit companies).
56Omit sections 83YC to 83YF (FAFTS).
57Omit section 83A (meaning of “brought into account”).
58Omit section 83B (changes in recognised accounts: attribution of amounts carried forward under s.432F of ICTA).
59Omit section 85 (charge of certain receipts of basic life assurance business).
60Omit section 85A (excess adjusted life assurance trade profits).
61Omit section 86 (spreading of relief for acquisition expenses).
62Omit section 88 (corporation tax: policy holders' share of profits).
63Omit section 89 (policy holders' share of profits).

PART 3  Amendments of other Acts

Finance Act 1950

64FA 1950 is amended as follows.
65In section 39(3)(b)(ii) (treatment for taxation purposes of enemy debts etc written off during the war), for “an expenses deduction for the purposes of Step 1 of section 76(7) of the Income and Corporation Taxes Act 1988” substitute “ ordinary BLAGAB management expenses for the purposes of section 76 of the Finance Act 2012 ”.

Taxes Management Act 1970

66TMA 1970 is amended as follows.
67
1 Section 98 (special returns) is amended as follows.
2 In the first column of the Table—
a omit the entry relating to regulations under section 431E(1) of ICTA, and
b at the end insert—
.
3 In the second column of the Table—
a omit the entry relating to section 76ZE(4) of ICTA,
b omit the entry relating to regulations under section 431E(1) of ICTA, and
c at the end insert—
.

Inheritance Tax Act 1984

68IHTA 1984 is amended as follows.
69In section 59(3)(b) (qualifying interest in possession), for “Chapter I of Part XII of the Taxes Act 1988” substitute “ Part 2 of the Finance Act 2012 ”.

Finance Act 1991

70FA 1991 is amended as follows.
71In paragraph 16(1) of Schedule 7 (transitional relief for old general annuity contracts), for the words from “computation” to “1988” substitute “ application of the I - E rules in relation to an accounting period of an insurance company, an amount equal to the lesser of the following amounts is to be treated (if it is not nil) for the purposes of section 76 of the Finance Act 2012 as a deemed BLAGAB management expense for the accounting period ”.

Taxation of Chargeable Gains Act 1992

72TCGA 1992 is amended as follows.
73In section 10B (non-resident company with United Kingdom permanent establishment), after subsection (3) insert—
74In section 100(2B)(a) (exemption for authorised unit trusts etc), for “section 431 of the Taxes Act” substitute “ section 65 of the Finance Act 2012 ”.
75In section 140C (transfer or division of non-UK business), omit subsection (8).
76In section 151I(1) (meaning of “financial institution”)—
a in paragraph (g), for “section 431(2) of ICTA” substitute “ section 65 of the Finance Act 2012 ”, and
b in paragraph (h), for “section 431(2) of ICTA” substitute “ section 139(1) of the Finance Act 2012 ”.
77
1 Section 171C (elections under s.171A: insurance companies) is amended as follows.
2 In subsection (2), for “section 440(3) of the Taxes Act” substitute “ section 118 of the Finance Act 2012 ”.
3 In subsection (3)(b), for “part of that company's long-term insurance fund” substitute “ held for the purposes of the company's long-term business ”.
4 In subsection (4), for the words from “as arising” to the end substitute “ for the purposes of section 210A (ring-fencing of losses) as a non-BLAGAB chargeable gain or (as the case may be) a non-BLAGAB allowable loss ”.
5 Omit subsection (5).
78In section 185 (deemed disposal of assets on company ceasing to be UK resident), after subsection (4) insert—
79In section 204(10)(a) (policies of insurance and non-deferred annuities), for “Chapter 1 of Part 12 of the Taxes Act” substitute “ section 56(3) of the Finance Act 2012 ”.
80
1 Section 210A (ring-fencing of losses) is amended as follows.
2 For subsection (2) substitute—
3 For subsections (10) and (10A) substitute—
4 In subsection (11)—
a for “the policy holders' share” substitute “the shareholders' share”, and
b for “subsection (10)” substitute “ subsections (10) to (10C) ”.
5 Omit subsection (12).
6 In subsection (13)—
a in the definitions of “BLAGAB allowable losses” and “BLAGAB chargeable gains”, for “(in accordance with section 432A of the Taxes Act)” substitute “ , in accordance with Chapter 4 of Part 2 of the Finance Act 2012, ”, and
b omit the definitions of “the relevant profits” and “the policy holders' share of the relevant profits” (together with the “and” before the definition of “the relevant profits”).
81
1 Section 210B (disposal and acquisition of section 440A securities) is amended as follows.
2 In subsection (1)—
a in the opening words, for “section 440A securities” (in both places) substitute “ section 119 or 120 securities ”, and
b in paragraphs (a) and (b), for “chargeable section 440A holding” substitute “ chargeable section 119 or 120 holding ”.
3 In subsection (7)(a), for “linked assets” substitute “ assets wholly matched to BLAGAB liabilities and the assets are ”.
4 For subsection (8) substitute—
5 In the heading, for “section 440A securities” substitute “ section 119 or 120 securities ”.
82In section 210C(2) (losses on disposal of authorised investment fund assets to connected manager), in the definition of “authorised investment fund assets”, for “of the company's long-term insurance fund consisting of” substitute “ held by the company for the purposes of its long-term business that consist of ”.
83
1 Section 211 (transfers of business) is amended as follows.
2 In subsection (2)—
a in paragraph (a), for “of the transferor's long-term insurance fund” substitute “ held by the transferor for the purposes of its long-term business ”, and
b in paragraph (b), for “of the transferee's long-term insurance fund” substitute “ held by the transferee for the purposes of its long-term business ”.
3 In subsection (2A), for “structural assets within the meaning of section 83XA of the Finance Act 1989” substitute “ assets which formed part of the long-term business fixed capital of the company in question ”.
4 After subsection (3) insert—
84In section 211ZA(10) (transfers of business: transfer of unused losses), for “(in accordance with section 432A of the Taxes Act)” substitute “ , in accordance with Chapter 4 of Part 2 of the Finance Act 2012, ”.
85
1 Section 212 (annual deemed disposal of holdings of unit trusts etc) is amended as follows.
2 In subsection (1), for “of an insurance company's long-term insurance fund” substitute “ held by an insurance company for the purposes of its long-term business ”.
3 Omit subsection (2).
4 At the end insert—
86
1 Section 213 (spreading of gains and losses under section 212) is amended as follows.
2 In subsection (1A), for “(in accordance with section 432A of the Taxes Act)” substitute “ , in accordance with Chapter 4 of Part 2 of the Finance Act 2012, ”.
3 After subsection (4) insert—
87After section 213 insert—
88
1 Schedule 7AC (exemptions for disposals by companies with substantial shareholdings) is amended as follows.
2 In paragraph 6(1)(c), for “section 440(1) or (2) of the Taxes Act” substitute “ any of sections 116 to 118 of the Finance Act 2012 ”.
3 Paragraph 17 is amended as follows.
4 In sub-paragraph (2), for “of its long-term insurance fund” substitute “ held by it for the purposes of its long-term business ”.
5 In sub-paragraph (3)(b), for “of its long-term insurance fund” substitute “ for the purposes of its long-term business ”.
6 In sub-paragraph (4), for “as assets of its long-term insurance fund” substitute “ for the purposes of its long-term business ”.
7 In sub-paragraph (4A)—
a for “of the investing company's long-term insurance fund” substitute “ held by the investing company for the purposes of its long-term business ”,
b for “as assets of its long-term insurance fund” substitute “ for the purposes of its long-term business ”, and
c for “a structural asset, or structural assets, within the meaning of section 83XA of the Finance Act 1989” substitute “ an asset or assets which formed part of the long-term business fixed capital of the company in question ”.
8 In the italic heading before that paragraph, for “insurance company's long-term insurance fund” substitute “ insurance company held for the purposes of its long-term business ”.
89In paragraph 1 of Schedule 7AD (gains of insurance company from venture capital investment partnership), for “the assets of the long-term insurance fund of an insurance company (“the company”)” substitute “ the assets held by an insurance company (“the company”) for the purposes of its long-term business ”.

Finance Act 1993

90FA 1993 is amended as follows.
91In section 91 (deemed disposals of unit trusts by insurance companies), omit subsection (2).

Finance Act 1999

92FA 1999 is amended as follows.
93In section 81(8) (acquisitions disregarded under insurance companies concession), in the definition of “insurance company”, for “meaning of Chapter I of Part XII of the Taxes Act 1988” substitute “ meaning given by section 65 of the Finance Act 2012 ”.

Capital Allowances Act 2001

94CAA 2001 is amended as follows.
95In section 19(5) (special leasing of plant or machinery), for “life assurance business” substitute “ long-term business ”.
96In the italic heading before section 254, for “Life assurance” substitute “ Long-term ”.
97In section 254(1) (introductory), for “life assurance business” substitute “ long-term business ”.
98For section 255 substitute—
99
1 Section 256 (different giving effect rules for different categories of business) is amended as follows.
2 In subsection (1)(b)—
a for “under the I minus E basis” substitute “ in accordance with the I - E rules ”, and
b for “its life assurance business” substitute “ that business ”.
3 In subsection (2)(a), for the words from “as expenses payable” to “section 76(7) of ICTA” substitute “ for the purposes of section 76 of FA 2012 as deemed BLAGAB management expenses for the chargeable period in question ”.
4 Omit subsections (3) and (4).
5 In the heading, for “different categories of business” substitute “ BLAGAB ”.
100In section 257(2) (supplementary), for paragraphs (a) and (b) substitute—
101
1 Section 261 (special leasing: life assurance business) is amended as follows.
2 For “life assurance business” substitute “ long-term business ”.
3 In the heading, for “life assurance business” substitute “ long-term business ”.
102In the heading for Chapter 1 of Part 12, for “LIFE ASSURANCE” substitute “ LONG-TERM ”.
103
1 Section 544 (management assets) is amended as follows.
2 In subsections (1) and (2), for “life assurance business” substitute “ long-term business ”.
3 Omit subsection (3).
104
1 Section 545 (investment assets) is amended as follows.
2 In subsection (1), for “life assurance business” substitute “ long-term business ”.
3 For subsections (3) to (5) substitute—
105
1 Section 560 (transfer of insurance company business) is amended as follows.
2 In subsection (1)(b)(ii), omit the words from “within” to the end.
3 In subsection (5), after paragraph (d) insert—
F94106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
107
1 Part 2 of Schedule 1 (index of defined expressions) is amended as follows.
2 Omit the entry for “life assurance business”.
3 Insert the following entries at the appropriate places—

Finance Act 2003

108FA 2003 is amended as follows.
109Omit section 156 (overseas life insurance companies).

Income Tax (Earnings and Pensions) Act 2003

110ITEPA 2003 is amended as follows.
111In section 357(3) (business entertainment and gifts: exception where employer's expenses disallowed), for paragraph (b) substitute—

Finance Act 2004

112FA 2004 is amended as follows.
113In section 196(4) (relief for employers in respect of contributions paid)—
a in the opening words, for “section 76 of ICTA” substitute “ section 76 of FA 2012 ”, and
b in paragraph (a), for “brought into account at Step 1 in subsection (7) of that section to the extent that they otherwise would not be” substitute “ treated as meeting the conditions in section 77(2)(a) and (c) of that Act to the extent that they would otherwise not meet them ”.
114In section 196A(4)(c) (power to restrict relief), for “brought into account at Step 1 in section 76(7) of ICTA (expenses of insurance companies) in respect of the employer” substitute “ ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012 ”.
115In section 196L(2) (employer asset-backed contributions: supplementary), as inserted by Part 3 of Schedule 13 to this Act, for paragraph (c) substitute—
116In section 197(10)(b) (spreading of relief), for “section 76 of ICTA” substitute “ section 76 of FA 2012 ”.
117In section 199 (deemed contributions), for subsection (5) substitute—
118In section 199A(10)(c) (indirect contributions), for “brought into account at Step 1 in section 76(7) of ICTA (expenses of insurance companies) in respect of E” substitute “ ordinary BLAGAB management expenses of E for an accounting period for the purposes of section 76 of FA 2012 ”.
119In section 200 (no other relief for employers in connection with contributions), for paragraph (c) substitute—
.
120
1 Section 246 (restriction of deduction for non-contributory provision) is amended as follows.
2 In subsection (2), for paragraph (c) substitute—
3 In subsection (3)(b), for “section 76 of ICTA” substitute “ section 76 of FA 2012 ”.
121In section 246A(4)(c) (case where no relief for provision by an employer), for “brought into account at Step 1 in section 76(7) of ICTA (expenses of insurance companies) in respect of the employer” substitute “ ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012 ”.
122In section 280(1) (abbreviations)—
a omit the “and” before the definition of “CTA 2009”, and
b after that definition insert—

Finance (No.2) Act 2005

123F(No.2)A 2005 is amended as follows.
124In section 18(3)(b) (specific powers relating to authorised unit trusts and open-ended investment companies), for sub-paragraph (iii) (but not the “or” at the end of it) substitute—
.

Income Tax (Trading and Other Income) Act 2005

125ITTOIA 2005 is amended as follows.
126In section 48(4A) (car hire)—
a at the end of paragraph (a) insert “ or ”,
b in paragraph (b), after “management),” insert “ including as applied by section 82(4) of FA 2012. ”, and
c omit paragraph (c) (together with the “or” before that paragraph).
127In section 473(2) (policies and contracts to which Chapter 9 of Part 4 applies: general), in the definition of “capital redemption policy”, for “within the meaning of Chapter 1 of Part 12 of ICTA” substitute “ within the meaning given by section 56(3) of FA 2012 ”.
128In section 476(3) (special rules: foreign policies), in the definition of “overseas life assurance business”, for “same meaning as in Part 12 of ICTA (see section 431D of that Act)” substitute “ meaning given by section 61 of FA 2012 ”.
129In section 504(7) (part surrenders: payments under guaranteed income bonds etc), in the definition of “pension business”, for “section 431B of ICTA” substitute “ section 58 of FA 2012 ”.
130
1 Section 531 (gains from contracts for life insurance etc: cases where income tax not treated as paid) is amended as follows.
2 In subsection (3), after paragraph (b) insert—
.
3 In subsection (4), in the definition of “basic life assurance and general annuity business”, for “Chapter 1 of Part 12 of ICTA (see section 431F)” substitute “ Part 2 of FA 2012 (see sections 57 and 67(5)) ”.
131In paragraph 118(2) of Schedule 2 (pre-1 January 2005 contracts for immediate needs annuities: income tax treated as paid), for the words from “means” to the end substitute “ means the application of section 57(2)(d) of FA 2012 ”.

Income Tax Act 2007

132ITA 2007 is amended as follows.
133In section 564B(1) (meaning of “financial institution”)—
a in paragraph (g), for “section 431(2) of ICTA” substitute “ section 65 of FA 2012 ”, and
b in paragraph (h), for “section 431(2) of ICTA” substitute “ section 139(1) of FA 2012 ”.
134In section 681DP (relevant tax relief), for paragraph (c) substitute—
.

Corporation Tax Act 2009

135CTA 2009 is amended as follows.
136In section A1(2) (overview of the Corporation Tax Acts)—
a omit paragraph (a), and
b omit the “and” before paragraph (j) and after that paragraph insert—
.
137
1 Section 18Q (UK resident insurance companies: profits of foreign permanent establishments) is amended as follows.
2 In subsection (1), omit “(as defined in section 431(2) of ICTA)”.
3 Omit subsections (2) and (3).
138For section 24 substitute—
139In section 36(3) (farming and market gardening), for “of the company's long-term insurance fund” substitute “ held by the company for the purposes of its long-term business ”.
140In section 38(3)(d) (commercial occupation of land other than woodlands), for “of the company's long-term insurance fund” substitute “ held by the company for the purposes of its long-term business ”.
141In section 39(5)(a) (profits of mines, quarries and other concerns), for “of the company's long-term insurance fund” substitute “ held by the company for the purposes of its long-term business ”.
142In section 46(3)(a) (generally accepted accounting practice), omit sub-paragraph (ii) (together with the “or” before it).
143In section 56(5) (car hire)—
a at the end of paragraph (a), insert “ including as applied by section 82(4) of FA 2012, or ”, and
b omit paragraph (c) (together with the “or” before that paragraph).
144In section 130(1)(a) (insurers receiving distributions etc), for “life assurance business” substitute “ business in relation to which section 111 of FA 2012 applies ”.
145In section 201 (priority rules: provisions which must be given priority over Part 3 of Act), after subsection (1) insert—
146In section 203(4) (property businesses)—
a for “section 432AA of ICTA” substitute “ section 86 of FA 2012 ”, and
b for “in the case of” substitute “ for the purpose of applying the I - E rules in relation to ”.
147
1 Section 298 (meaning of trade and purposes of trade) is amended as follows.
2 In subsection (3)—
a at the end of paragraph (a), insert “ or ”, and
b omit paragraph (c) (together with the “or” before it).
3 After subsection (5) insert—
148
1 Section 336 (transfers of loans on group transactions) is amended as follows.
2 In subsection (4), for “is within one of the categories set out in section 440(4)(a), (d) and (e) of ICTA (assets held for certain categories of long-term business)” substitute “ is held for the purposes of a company's long-term business ”.
3 After that subsection insert—
149
1 Section 337 (transfers of loans on insurance business transfers) is amended as follows.
2 After subsection (3) insert—
3 In subsection (4)(a), for “the categories set out in section 440(4) of ICTA” substitute “ the applicable categories ”.
4 After subsection (4) insert—
150
1 Section 386 (overview of Chapter 10 of Part 5 (insurance companies)) is amended as follows.
2 In subsection (2)—
a in paragraph (a), after “apply” insert “ for the purposes of the I - E rules ” and at the end insert “ and ”, and
b omit paragraph (c) (together with the “and” before it).
3 In subsection (3)—
a in paragraph (a), omit “or of BLAGAB”,
b in paragraph (a), after “trade)” insert “ and section 88 of FA 2012 (equivalent rule for activities carried on in the course of BLAGAB) ”, and
c in paragraph (f), for “as expenses of insurance companies at Step 1 of section 76(7) of ICTA” substitute “ as ordinary BLAGAB management expenses ”.
151In section 387(1) (treatment of deficit on BLAGAB: introduction), after “apply” insert “ for the purposes of the I - E rules ”.
152In section 388(3) (basic rule: deficit set off against income and gains of deficit period), for “before any expenses deduction under section 76 of ICTA (expenses of insurance companies)” substitute “ in accordance with step 4 in section 73 of FA 2012 (that is to say, before any deduction for the adjusted BLAGAB management expenses of the company for the deficit period) ”.
153In section 389 (claim to carry back deficit), after subsection (2) insert—
154
1 Section 390 (meaning of “available profits”) is amended as follows.
2 In subsection (4), for the words from “which is” to the end substitute “ of the BLAGAB credits in respect of the company's loan relationships that count as income for the purposes of the I - E rules for that period (as determined by section 88(3) and (4) of FA 2012) ”.
3 In subsection (5)—
a in step 1(a), for “so much of the expenses deduction for the period given by Step 8 in section 76(7) of ICTA (expenses of insurance companies) as is referable to BLAGAB” substitute “ the amount for the purposes of section 73 of FA 2012 of the adjusted BLAGAB management expenses of the company for the period ”,
b in step 1(b), for “so referable” substitute “ referable to BLAGAB ”,
c in step 2, for paragraph (a) (together with the “and” at the end of it) substitute—
, and
d in step 2(b), for “so referable” substitute “ referable to BLAGAB ”.
4 For subsection (6) substitute—
155In section 391 (carry forward of surplus deficit to next accounting period), for subsection (3) substitute—
156Omit sections 393 and 394 (insurance companies: determination of questions requiring apportionments) and the italic heading before those sections.
157In section 399 (index-linked gilt-edged securities), at the end insert—
158In section 464(3) (list of exceptions to general rule that Part 5 (loan relationships) has priority for corporation tax purposes), omit paragraph (h) (but not the “and” at the end of that paragraph).
159In section 471(3) (connections between persons: creditors who are insurance companies carrying on BLAGAB), for “is linked for that period to that business” substitute “ is matched for that period to a BLAGAB liability ”.
160In section 472(4)(b) (meaning of “control”), for “of an insurance company's long-term insurance fund” substitute “ held by an insurance company for the purposes of its long-term business ”.
161In section 473(3)(b) (meaning of “major interest”), for “of an insurance company's long-term insurance fund” substitute “ held by an insurance company for the purposes of its long-term business ”.
162In section 486(4) (exclusion of exchange gains and losses in respect of tax debts etc), for paragraph (c) substitute—
163In section 502(1) (meaning of “financial institution”)—
a in paragraph (g), for “section 431(2) of ICTA” substitute “ section 65 of FA 2012 ”, and
b in paragraph (h), for “section 431(2) of ICTA” substitute “ section 139(1) of FA 2012 ”.
164In section 560(4) (investment life insurance contracts: introduction)—
a in paragraph (a), for “section 431(2) of ICTA” substitute “ section 65 of FA 2012 ” and for “that section” substitute “ section 63 of that Act ”, and
b in paragraph (b), for the words from “but” to the end substitute “ if subsection (3)(a) were omitted from section 65 of that Act. ”
165In section 561(2) (meaning of “investment life insurance contract”), in the definition of “capital redemption policy”, for “section 431(2ZF) of ICTA” substitute “ section 56(3) of FA 2012 ”.
166In section 563(6)(a) (increased non-trading credits for BLAGAB and EEA taxed contracts), for “section 88(1) of FA 1989” substitute “ section 102(3) of FA 2012 ”.
167
1 Section 591 (conditions A to E mentioned in section 589(5)) is amended as follows.
2 In subsection (2)(a), for “life assurance business” substitute “ long-term business ”.
3 In subsection (2)(b), after “Sourcebook” insert “ (within the meaning given by section 139(4) of FA 2012) ”.
168
1 Section 634 (insurance companies) is amended as follows.
2 The existing text becomes subsection (1) of that section.
3 In that subsection, omit paragraph (b) (together with the “or” before it).
4 After that subsection insert—
169
1 Section 635 (creditor relationships of insurance companies: embedded derivatives which are options) is amended as follows.
2 In subsection (1)(a), for “life assurance business” substitute “ basic life assurance and general annuity business ”.
3 In subsection (2), for “This Part” substitute “ For the purpose of applying the I - E rules, this Part ”.
170
1 Section 636 (insurance companies: modifications of Chapter 5 (continuity of treatment on transfers within groups)) is amended as follows.
2 In subsection (3), after the subsection (2B) which is treated as if it were inserted in section 626 insert—
3 In subsection (4), for the words from “the asset was within one of the categories set out in section 440(4)(a), (d) and (e) of ICTA” to the end substitute “ , immediately before or after the transfer, the asset was held for the purposes of a company's long-term business (but, in the case of an overseas life insurance company, ignoring assets which are not UK assets (within the meaning of section 117 of FA 2012)). ”
4 In subsection (5)(a), for “the categories set out in section 440(4) of ICTA (transfers of assets etc)” substitute “ the applicable categories ”.
5 After subsection (5) insert—
6 After subsection (7) insert—
171In section 699(3) (list of exceptions to general rule that Part 7 (derivative contracts) has priority for corporation tax purposes)—
a at the end of paragraph (a) insert “ and ”, and
b omit paragraph (c) (together with the “and” before it).
172In section 710 (derivative contracts: other definitions)—
a in the definition of “capital redemption policy”, for “section 431(2ZF) of ICTA” substitute “ section 56(3) of FA 2012 ”,
b in the definition of “contract of insurance”, for “section 431(2) of ICTA” substitute “ section 64 of FA 2012 ”, and
c in the definition of “contract of long-term insurance”, for “section 431(2) of ICTA” substitute “ section 64 of FA 2012 ”.
173In section 746(2)(c) (“non-trading credits” and “non-trading debits”), for “section 901(3)” substitute “ section 901 ”.
174In section 800(3) (excluded assets: introduction), omit paragraph (b) (together with the “and” before it).
175In section 806(3) (assets excluded from Part 8 (intangible fixed assets): financial assets), after paragraph (c) (but before the “and” at the end of that paragraph) insert—
.
176In section 810 (mutual trade or business), omit subsection (2).
177In section 815 (election to exclude capital expenditure on software), omit subsection (8).
178In section 855(4) (further provision about regulations under section 854), omit “or section 902”.
179For section 901 substitute—
180Omit sections 902 (excluded assets) and 903 (elections to exclude capital expenditure on computer software) and the italic heading before those sections.
181Omit section 904 (transfers of life assurance business: transfers of assets treated as tax-neutral).
182In section 906(3) (list of exceptions to general rule that Part 8 has priority for corporation tax purposes), omit paragraph (b) (but not the “and” at the end of that paragraph).
183In section 931S(3) (company distributions: meaning of “small company”), in the definition of “insurance company”, for “section 431 of ICTA” substitute “ section 65 of FA 2012 ”.
184In section 931W (provisions which must be given priority over Part 9A), omit subsection (3).
185In section 985 (references to a deduction being allowed to a company), for subsection (4) substitute—
186In section 999 (deduction for costs of setting up SAYE option scheme or CSOP scheme), for subsection (5) substitute—
187
1 Section 1000 (deduction for costs of setting up employee share ownership trust) is amended as follows.
2 In subsection (2), for “subsections (3) and (4)” substitute “ subsection (3) ”.
3 Omit subsection (4).
188In section 1013 (relief if shares acquired by employee or other person: how relief is given), for subsection (4) substitute—
189In section 1021 (relief if employee or other person obtains option to acquire shares: how relief is given), for subsection (4) substitute—
F13190. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
191In section 1083 (refunds of expenditure treated as income chargeable to tax), omit subsections (4) and (5).
192In section 1143(4) (overview of Part 14)—
a in paragraph (a), for “life assurance business” substitute “ basic life assurance and general annuity business ”, and
b in paragraph (b), for “ “life assurance company tax credits”” substitute “ “BLAGAB tax credits” ”.
193
1 Section 1153 (land remediation tax credit: amount of a loss which is “unrelieved”) is amended as follows.
2 In subsection (3), for the words from “, as a result of section 432AB(3) of ICTA,” to the end substitute “ , as a result of section 87(3) of FA 2012, the loss is treated for the purposes of section 76 of that Act as a deemed BLAGAB management expense for the relevant accounting period. ”
3 In subsections (4) to (6), for “section 76(12) of ICTA” substitute “ section 73 of FA 2012 ”.
4 In subsection (7), for paragraph (b) substitute—
5 In subsection (8)—
a in paragraph (b), for “section 432AA of ICTA” substitute “ section 86 of FA 2012 ”, and
b in the words after that paragraph, for “section 432AB(4) of ICTA” substitute “ section 87(4) of FA 2012 ”.
194
1 Section 1158 (restriction on losses carried forward where tax credit claimed) is amended as follows.
2 In subsection (3)—
a for paragraph (a) substitute—
and
b in paragraph (b), for “section 76(12) of ICTA” substitute “ section 73 of FA 2012 ”.
3 In subsection (4), for “section 76(12) of ICTA” substitute “ section 73 of FA 2012 ”.
195In the heading for Chapter 4 of Part 14, for “LIFE ASSURANCE BUSINESS” substitute “ BLAGAB ”.
196Omit section 1159 (limitation on relief under Chapter 2 of Part 14: insurance companies) and the italic heading before that section.
197In section 1160 (provision in respect of I minus E basis)—
a for “The remaining provisions of this Chapter apply” substitute “ This Chapter applies ”, and
b for “under the I minus E basis in respect of its life assurance business” substitute “ in respect of its basic life assurance and general annuity business in accordance with the I - E rules ”.
198
1 Section 1161 (relief in respect of I minus E basis: expenses payable) is amended as follows.
2 In subsection (6), for “section 76(7) of ICTA” substitute “ section 76 of FA 2012 ”.
3 In subsection (7)(a), for “life assurance business” substitute “ basic life assurance and general annuity business ”.
199
1 Section 1162 (additional relief) is amended as follows.
2 In subsection (3), for the words from “as expenses payable” to the end substitute “ for the purposes of section 76 of FA 2012 as deemed BLAGAB management expenses for the accounting period ”.
3 In subsection (4)(b), for the words from “which” to the end substitute “ of the expenditure which, for the purposes of section 76 of FA 2012, is not an ordinary BLAGAB management expense of the company referable to the accounting period as a result of the application of section 77(2)(b) of that Act ”.
200In the italic heading before section 1164, for “Life assurance” substitute “ BLAGAB ”.
201
1 Section 1164 (entitlement to tax credit) is amended as follows.
2 In subsections (1) and (2)—
a for “a life assurance company tax credit” substitute “ a BLAGAB tax credit ”, and
b for “qualifying life assurance business loss” substitute “ qualifying BLAGAB loss ”.
3 In subsections (3) and (4), for “a life assurance company tax credit” substitute “ a BLAGAB tax credit ”.
202
1 Section 1165 (meaning of “qualifying life assurance business loss”) is amended as follows.
2 In subsection (1)—
a in the opening words, for “ “qualifying life assurance business loss”” substitute “ “qualifying BLAGAB loss” ”, and
b in paragraph (b), for “section 76(12) of ICTA (unrelieved expenses carried forward)” substitute “ section 73 of FA 2012 as excess BLAGAB expenses ”.
3 In subsection (2), for “section 76(12) of ICTA” substitute “ section 73 of FA 2012 as excess BLAGAB expenses ”.
4 In subsection (3), for paragraph (b) substitute—
5 In subsection (4), for “qualifying life assurance business loss” substitute “ qualifying BLAGAB loss ”.
6 In the heading, for “ “qualifying life assurance business loss”” substitute “ “qualifying BLAGAB loss” ”.
203In section 1166(1) (amount of tax credit)—
a for “life assurance company tax credit” substitute “ BLAGAB tax credit ”, and
b for “qualifying life assurance business loss” substitute “ qualifying BLAGAB loss ”.
204In section 1167(1) and (3)(a) (payment of tax credit etc), for “a life assurance company tax credit” substitute “ a BLAGAB tax credit ”.
205
1 Section 1168 (restriction on carrying forward expenses payable where tax credit claimed) is amended as follows.
2 In subsection (1), for “a life assurance company tax credit” substitute “ a BLAGAB tax credit ”.
3 In subsection (2)—
a for “section 76 of ICTA” substitute “ section 73 of FA 2012 ”,
b for “subsection (12) of that section” substitute “ that section as excess BLAGAB expenses ”, and
c for “Step 7 in subsection (7) of that section” substitute “ step 5 in section 76 of FA 2012 ”.
4 In subsection (3), for “qualifying life assurance business loss” substitute “ qualifying BLAGAB loss ”.
206In section 1169(2) (artificially inflated claims for relief or tax credit)—
a in paragraph (c), for “life assurance business” substitute “ basic life assurance and general annuity business ”, and
b in paragraph (d), for “life assurance company tax credits” substitute “ BLAGAB tax credits ”.
207After section 1223 insert—
208
1 Section 1251 (car hire) is amended as follows.
2 In subsection (3), after “subsection (2)” insert “ (including as applied by section 82(4) of FA 2012) ”.
3 In subsection (5)—
a at the end of paragraph (a) insert “ or ”, and
b omit paragraph (c) (together with the “or” before that paragraph).
209In section 1288(4) (unpaid remuneration)—
a in paragraph (a), after “business),” insert “ including as applied by section 82 of FA 2012 ”, and
b omit paragraph (b) (together with the “and” before it).
210
1 Section 1297 (life assurance business) is amended as follows.
2 In subsection (1), for “section 76 of ICTA applies (expenses of companies carrying on life assurance business)” substitute “ the I - E rules apply ”.
F1273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 In subsection (4)—
a for “purposes of section 86 of FA 1989” substitute “ purpose of calculating the adjusted BLAGAB management expenses of the company for the purposes of section 73 of FA 2012 ”, and
b for “payable for that period which fall to be included at Step 1 in section 76(7) of ICTA” substitute “ debited, in accordance with generally accepted accounting practice, in the accounts drawn up by the company for that period ”.
5 In subsection (5)(a), for “an amount being brought into account under section 76 of ICTA as expenses payable” substitute “ an amount constituting ordinary BLAGAB management expenses of the company for the purposes of section 76 of FA 2012 ”.
6 For the heading substitute “ Basic life assurance and general annuity business ”.
211In section 1298(2) (business entertainment and gifts), for paragraph (c) substitute—
212In section 1304 (crime-related payments), for subsection (3) substitute—
213
1 Schedule 2 (transitionals and savings) is amended as follows.
2 In paragraph 139—
a in sub-paragraph (3), for the words from “Section 76ZE” to “section 75)” substitute “ Section 81(4) of FA 2012 (which, in the case of companies carrying on basic life assurance and general annuity business, applies section 75(2) to (4)) ”,
b in that sub-paragraph, for “condition in subsection (1) of that section” substitute “ conditions in paragraphs (a) and (b) of that subsection ”, and
c in sub-paragraph (4), for “and section 76ZE of ICTA” substitute “ (including as applied by section 81(4) of FA 2012) ”.
3 In paragraph 140(1)(b), for “section 76ZL of ICTA” substitute “ the application by section 82 of FA 2012 of section 1249(1) to (3) of this Act ”.
214In Schedule 4 (index of defined expressions)—
a in the entry for “basic life assurance and general annuity business”, for “section 431F of ICTA (as applied by section 431(2) of that Act)” substitute “ sections 57 and 67(5) of FA 2012 (as applied by section 141(2) of that Act) ”,
b omit the entry for “deposit back arrangements”,
c omit the entry for “gross roll-up business”,
d in the entry for “the I minus E basis”, for “I minus E basis” substitute “ I - E rules ” and for “section 431(2) of ICTA” substitute “ section 70(1) and (2) of FA 2012 (as applied by section 141(2) of that Act) ”,
e in the entry for “insurance business transfer scheme”, for “section 431(2) of ICTA” substitute “ section 139(1) of FA 2012 (as applied by section 141(2) of that Act) ”,
f in the entry for “insurance company”, for “section 431(2) of ICTA” substitute “ section 65 of FA 2012 (as applied by section 141(2) of that Act) ”,
g omit the entry for “the Insurance Prudential Sourcebook”,
h in the entry for “life assurance business”, for “section 431(2) of ICTA” substitute “ section 56 of FA 2012 (as applied by section 141(2) of that Act) ”,
i omit the entry for “linked assets”,
j in the entry for “long-term business”, for “section 431(2) of ICTA” substitute “ section 63 of FA 2012 (as applied by section 141(2) of that Act) ”,
k omit the entry for “long-term insurance fund”,
l in the entry for “overseas life insurance company”, for “section 431(2) of ICTA” substitute “ section 139(1) of FA 2012 (as applied by section 141(2) of that Act) ”, and
m omit the entry for “qualifying overseas transfer”.

Corporation Tax Act 2010

215CTA 2010 is amended as follows.
216In section 17(3) (interpretation of Chapter: meaning of “carried-forward amount”)—
a in paragraph (f), for “section 76(12) or (13) of ICTA (certain expenses of insurance companies)” substitute “ section 73 or 93 of FA 2012 for use at step 5 in section 76 of that Act (the I - E basis for insurance companies) ”, and
b omit paragraph (g).
217In section 54(2) (non-UK resident company: receipts of interest, dividends or royalties), for the words from “any of these provisions—” to the end substitute “ section 37 or 45 ”.
218In Chapter 4 of Part 4 (property losses), after section 67A insert—
219In section 606(5) (groups), in the definition of “insurance company”, for “section 431(2) of ICTA” substitute “ section 65 of FA 2012 ”.
F15220. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F15221. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F15222. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F15223. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
224In section 835(2) (transferor or associate becomes liable for payment of rent), for paragraph (c) substitute—
225In section 836(2) (transferor or associate becomes liable for payment other than rent), for paragraph (c) substitute—
226
1 Section 839 (deduction under section 76 of ICTA not to exceed commercial rent) is amended as follows.
2 In subsection (1), for “the deduction under section 76 of ICTA allowed for” substitute “ the amount to be taken into account as mentioned in section 835(2)(c) or 836(2)(c) in respect of ”.
3 In subsection (3), for “The deduction” substitute “ The amount of the payment to be taken into account ”.
4 In the heading, omit “under section 76 of ICTA”.
227
1 Section 840 (carrying forward parts of payments) is amended as follows.
2 In subsection (2), for “allowed as a deduction under section 76 of ICTA is not allowed” substitute “ taken into account as mentioned in section 835(2)(c) or 836(2)(c) is not taken into account ”.
3 In subsection (4), for “a deduction under section 76 of ICTA” substitute “ the calculation at step 1 of section 76 of FA 2012 ”.
4 In subsection (5), for “allowed as a deduction under section 76 of ICTA” substitute “ taken into account in the calculation at step 1 of section 76 of FA 2012 ”.
228In section 860 (relevant corporation tax relief), for paragraph (d) (but not the “and” at the end of that paragraph) substitute—
.
229In section 886 (relevant tax relief), for paragraph (c) substitute—
.
230In section 1171(2) (powers under orders and regulations excluded from general provision)—
a omit the “and” before paragraph (g), and
b after that paragraph insert
231In section 1173(2) (miscellaneous charges), in Part 3 of the table, omit—
a the entry relating to section 436A(1) of ICTA,
b the entry relating to section 442A(1) of ICTA,
c the entry relating to section 85(1) of FA 1989, and
d the entry relating to section 85A(1) of FA 1989.

Taxation (International and Other Provisions) Act 2010

232TIOPA 2010 is amended as follows.
233In section 43(7) (profits attributable to permanent establishments for purposes of section 42(2)), omit “(within the meaning given by section 431(2) of ICTA)”.
234In section 72(2) (application of section 73(1)), omit paragraph (b) (together with the “or” before it).
235In section 96(1) (companies with overseas branches: restriction of credit)—
a omit “or section 436A of ICTA”,
b omit “, calculated in accordance with the provisions applicable for the purposes of section 35 of CTA 2009,” and
c for “life assurance business or gross roll-up business” substitute “ non-BLAGAB long-term business ”.
236For section 97 substitute—
237Omit section 98 (attribution for section 97 purposes if category is gross roll-up business).
238In section 99(7) (allocation of expense etc in calculations under section 35 of CTA 2009), for “98” substitute “ 97A ”.
239Omit section 102 (interpreting sections 99 to 101 for life assurance or gross roll-up business).
240
1 Section 103 (interpreting sections 99 to 101 for other insurance business) is amended as follows.
2 In subsection (1), omit the words from “if” to the end.
3 In the heading, omit “for other insurance business”.
241In section 104(3) (interpreting sections 100 and 101: amounts referable to category of business), for “98” substitute “ 97A ”.
F85242. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
243In section 310(2) (meaning of “carried-forward amount”)—
F86a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b omit paragraph (b).
244In Part 1 of Schedule 11 (index of defined expressions used in Parts 2 and 3 of Act), insert the following entries at the appropriate places—

Finance Act 2011

245FA 2011 is amended as follows.
246In paragraph 73(2) of Schedule 19 (bank levy: meaning of “excluded entity”), for “meaning given by section 431(2) of ICTA” substitute “ meanings given by sections 65 and 139 of FA 2012 respectively ”.

PART 4  Consequential repeals

247In consequence of the amendments made by Parts 1 to 3 of this Schedule (or previous amendments made by other enactments), omit the following provisions—
a in FA 1989—
i section 84(4), and
ii Schedule 8,
b in FA 1990—
i sections 41 and 42,
ii section 45(1) to (7) and (9) to (11),
iii section 48,
iv paragraphs 1, 4 and 8 of Schedule 6,
v Schedule 7, and
vi paragraphs 4 and 7 of Schedule 9,
c in FA 1991—
i paragraphs 5 and 12 of Schedule 7, and
ii paragraph 15 of Schedule 15,
d in TCGA 1992, paragraph 14(22) to (24) of Schedule 10,
e in FA 1993, section 103(1) and (3),
f in FA 1995—
i section 51,
ii Schedule 8, and
iii paragraph 1 of Schedule 9,
g in FA 1996—
i section 163,
ii section 167(3) and (10),
iii section 168(2),
iv paragraph 23 of Schedule 14,
v Schedule 31, and
vi Schedule 33,
h in FA 1997, section 67,
i in FA 1998—
i section 123(5)(a), and
ii paragraph 39 of Schedule 5,
j in FA 2000, sections 108 and 109,
k in FA 2003, paragraphs 1, 2, 5, 8, 10, 12, 20, 22 to 24 and 29 of Schedule 33,
l in FA 2004—
i sections 40 and 41,
ii section 44,
iii Schedule 6,
iv paragraphs 5, 8 and 9(2) of Schedule 7, and
v paragraph 20 of Schedule 35,
m in F(No.2)A 2005, paragraphs 1 to 3, 5, 10, 12 to 15, 17 and 18 of Schedule 9,
n in ITTOIA 2005, paragraphs 176 and 178 of Schedule 1,
o in FA 2006—
i section 86, and
ii Schedule 11,
p in FA 2007—
i paragraphs 3, 6, 8 to 14, 16, 17, 19, 21 to 23, 25, 26, 31 to 33, 35 to 38, 57 to 59 and 80 to 84 of Schedule 7,
ii paragraphs 2 to 6, 8, 9, 11 to 16, 28 and 29 of Schedule 8,
iii paragraphs 1(1) and (3), 3(1) and (3), 4 to 8, 10, 11(3), 12, 15 and 16 of Schedule 9, and
iv paragraphs 2(1), 4, 11 to 13 and 15(1) to (3) of Schedule 10,
q in FA 2008—
i paragraph 2 of Schedule 14, and
ii paragraphs 1, 2, 4 to 6, 8, 9(2) and (3), 10, 11, 17, 18, 20 to 22, 26, 28(3) and (4), 31 to 34 and 37 of Schedule 17,
r in CTA 2009, paragraphs 30 to 44, 126 to 154, 282, 307(3)(a) and 341 to 351 of Schedule 1,
s in FA 2009—
i section 46,
ii paragraph 24 of Schedule 7,
iii paragraph 60 of Schedule 11, and
iv paragraphs 1 to 7 of Schedule 23,
t in CTA 2010, paragraphs 9, 10, 42 to 51, 213 and 214 of Schedule 1,
u in FA 2010, section 47,
v in F(No.2)A 2010, section 9,
w in F(No.3)A 2010, section 15,
x in TIOPA 2010, paragraph 34 of Schedule 8, and
y in FA 2011, section 56.

SCHEDULE 17 

Part 2: transitional provision

Section 147

PART 1 Deemed receipts or expenses

General outline of the provision of this Part of this Schedule

1
1 This Part of this Schedule makes provision, by reference to the 2012 balance sheet and the 2012 periodical return of an insurance company (see paragraphs 2 to 4), for deeming amounts to be receipts or expenses of basic life assurance and general annuity business, or non-BLAGAB long-term business, carried on by the company (see paragraphs 9(1) and (2) and 10(1) and (2)).
2 Those amounts are determined in accordance with provision made by or under paragraphs 5 to 8.
3 The deeming is to have effect for the purpose of calculating the BLAGAB trade profit or loss or (as the case may be) for the purpose of calculating for corporation tax purposes the profits of the non-BLAGAB long-term business (see paragraphs 9(3) and 10(3)).
4 The general rule is that, subject to exceptions, the receipts or expenses are treated as arising over a 10-year period (see paragraphs 11 to 15).
5 Special provision is made in relation to the operation of sections 83YC to 83YF of FA 1989 (see paragraph 16).
6 Anti-avoidance provision is made by paragraphs 17 to 19.
7 Provision in relation to overseas life insurance companies is made by paragraph 20.

Basic concepts

2In this Part of this Schedule—
  • “the 2012 balance sheet”, in relation to an insurance company, means—
    1. an actual balance sheet of the company drawn up as at the end of 31 December 2012 in accordance with generally accepted accounting practice, or
    2. a deemed balance sheet of the company under paragraph 3, and
  • “the 2012 periodical return”, in relation to an insurance company, means—
    1. an actual periodical return of the company covering a period ending immediately before 1 January 2013, or
    2. a deemed periodical return of the company under paragraph 4.
3
1 This paragraph applies if an insurance company does not have a balance sheet drawn up as at the end of 31 December 2012 in accordance with generally accepted accounting practice.
2 For the purposes of this Part of this Schedule the company is deemed to have drawn up a balance sheet as at the end of 31 December 2012 in accordance with generally accepted accounting practice.
3 For the purposes of this Part of this Schedule the entries shown in this deemed balance sheet are deemed to be those entries which would have been shown in an actual balance sheet of the company drawn up as mentioned in sub-paragraph (1).
4 The generally accepted accounting practice that is to be applicable for the purposes of sub-paragraphs (2) and (3) is the practice that is actually adopted for the accounts of the company drawn up for the period in which 31 December 2012 falls.
4
1 This paragraph applies if an insurance company does not have a periodical return covering a period ending immediately before 1 January 2013.
2 For corporation tax purposes the company is deemed to have a periodical return covering the period—
a beginning immediately after the last period ending before 1 January 2013 that is covered by a periodical return of the company, and
b ending immediately before 1 January 2013.
3 This deemed periodical return is deemed to contain such entries as would be included in an actual periodical return of the company covering the period beginning and ending as mentioned in sub-paragraph (2)(a) and (b).
4 For corporation tax purposes the period beginning and ending as mentioned in sub-paragraph (2)(a) and (b) is deemed to be a period of account of the company.

The comparison etc

5
1 In the case of an insurance company, a comparison must be made between—
a the amount attributed to shareholders as at 31 December 2012 (see sub-paragraphs (2) to (4)), and
b the cumulative taxed surplus as at 31 December 2012 (see sub-paragraph (5) and (6)).
2 The amount attributed to shareholders as at 31 December 2012 is—
a the amount shown in line 75 of Form 14 of the 2012 periodical return in respect of the whole of the company's long-term business, less
b the amount (if any) shown in the 2012 balance sheet of the company in respect of the fund for future appropriations or unallocated divisible surplus.
3 In prescribed cases the amount attributed to shareholders as at 31 December 2012 is to be found by making prescribed adjustments to the amount found by sub-paragraph (2)(a) and (b).
4 In sub-paragraph (3) “prescribed” means prescribed, or of a description prescribed, by regulations made by the Treasury.The regulations may be made so as to have effect in relation to any period beginning before but ending on or after the day on which the regulations are made (as well as in relation to periods no part of which falls before that day).
5 The cumulative taxed surplus as at 31 December 2012 is found by adding together the amounts (if any) found by the following paragraphs—
a the amount shown in line 13 of Form 14 of the 2012 periodical return in respect of the whole of the company's long-term business but excluding the amount representing any undistributed demutualisation surplus of the company for the period of account ending immediately before 1 January 2013, and
b the total amount brought into account for any period of account of the company as a result of section 83YA(3) of FA 1989 less the total amount brought into account for any period of account as a result of section 83YA(4) of FA 1989 (changes in value of assets brought into account: non-profit companies).
6 In sub-paragraph (5)(a) “undistributed demutualisation surplus” means the undistributed demutualisation surplus of the company for the period of account in question for the purposes of section 444AF of ICTA.
7 The difference between the amount attributed to shareholders as at 31 December 2012 and the cumulative taxed surplus as at 31 December 2012 is referred to in this Part of this Schedule as “the total transitional difference”.
8 If the amount attributed to shareholders as at 31 December 2012 exceeds the cumulative taxed surplus as at 31 December 2012, the total transitional difference is a positive figure.
9 If the cumulative taxed surplus as at 31 December 2012 exceeds the amount attributed to shareholders as at 31 December 2012, the total transitional difference is a negative figure.
6
1 The insurance company—
a must, by comparing amounts shown in the 2012 periodical return with amounts shown in the 2012 balance sheet, determine the particular items that, when taken together, result in the total transitional difference, and
b must allocate a positive or negative amount to each of those items.
2 The positive or negative amounts allocated to those items in accordance with this paragraph must, when added together, equal the total transitional difference.
3 The Treasury may make regulations prescribing—
a the way in which the comparison or determination under sub-paragraph (1)(a) must be done, and
b the method for making the allocation under sub-paragraph (1)(b).
4 The provision that may be made by regulations under sub-paragraph (3)(a) includes provision prescribing descriptions of amounts which are, or are not, to be compared with each other.
7
1 Each of the items determined in accordance with paragraph 6(1)(a) is a “relevant computational item” for the purposes of this Part of this Schedule except in so far as it consists of an excluded item.
2 An item is “an excluded item” in so far as it—
a represents an amount forming part of the company's deferred acquisition costs which is included in its 2012 balance sheet and which has been taken into account in calculating its life assurance trade profits,
b represents an amount which is included in the company's 2012 balance sheet as an asset in respect of the value of future profits arising from a business (or part of a business) transferred to the company (but excluding an asset so far as it is regarded for accounting purposes as internally-generated),
c represents an outstanding contingent loan or an outstanding re-insurance amount,
d represents an asset to which Part 8 of CTA 2009 (intangible fixed assets) applies for an accounting period of the company beginning on or after 1 January 2013, or
e falls within a description of item excluded for the purposes of this paragraph by regulations made by the Treasury.
3 In sub-paragraph (2)(c) “outstanding contingent loan” means the total amount of the credits brought into account by the company as part of total income—
a for the period of account ending immediately before 1 January 2013, or
b for any earlier period of account,
in respect of money debts so far as those debts have not been repaid before that date.
4 In sub-paragraph (2)(c) “outstanding re-insurance amount” means the total of the amounts which would (but for section 83YF(2) of FA 1989) have been taken into account in calculating the company's life assurance trade profits—
a for the period of account ending immediately before 1 January 2013, or
b for any earlier period of account,
in respect of the re-insurance of relevant liabilities (within the meaning of section 83YC of FA 1989) to the extent that they have not ceased to be re-insured before that date.
5 In this paragraph “life assurance trade profits” means profits arising from life assurance business calculated in accordance with the provisions applicable for the purposes of the taxation of such profits under section 35 of CTA 2009 (charge on trade profits).
6 For any accounting period beginning on or after 1 January 2013, an amount is not to be taken into account—
a in calculating the BLAGAB trade profit or loss of any basic life assurance and general annuity business, or
b in calculating for corporation tax purposes the profits of non-BLAGAB long-term business,
in so far as the amount consists of an excluded item as a result of falling within sub-paragraph (2)(a) to (d) or, in a case where the regulations provide for the application of this sub-paragraph, within sub-paragraph (2)(e).
8
1 Each relevant computational item must be apportioned between—
a any basic life assurance and general annuity business carried on by the company as at 31 December 2012,
b any gross roll-up business carried on by the company as at that date, and
c any PHI business carried on by the company as at that date.
2 The Treasury may make regulations for apportioning for the purposes of this Part of this Schedule relevant computational items between those businesses (including provision for the whole amount of a relevant computational item to be apportioned to one of those businesses).
3 A relevant computational item (or a part of a relevant computational item) allocated in accordance with this paragraph to the company's basic life assurance and general annuity business or gross roll-up business is dealt with in accordance with paragraph 9 or 10.
4 But a relevant computational item (or a part of a relevant computational item) allocated in accordance with this paragraph to the company's PHI business is ignored in the application of the remaining provisions of this Part of this Schedule.

Deemed receipts or expenses of BLAGAB or non-BLAGAB long-term business

9
1 If a relevant computational item (or a part of a relevant computational item) allocated in accordance with paragraph 8 to the company's basic life assurance and general annuity business is a positive amount, the item (or part of the item) is to be treated as a receipt of that business.
2 If a relevant computational item (or a part of a relevant computational item) allocated in accordance with paragraph 8 to the company's basic life assurance and general annuity business is a negative amount, the item (or part of the item) is to be treated as an expense of that business.
3 Receipts and expenses within this paragraph are to be taken into account, in accordance with the provisions of this Part of this Schedule, in calculating the BLAGAB trade profit or loss of that business for accounting periods beginning on or after 1 January 2013.
4 Receipts within this paragraph are to count as excluded receipts for the purposes of section 92.
10
1 If a relevant computational item (or a part of a relevant computational item) allocated in accordance with paragraph 8 to the company's gross roll-up business is a positive amount, the item (or part of the item) is to be treated as a receipt of the company's non-BLAGAB long-term business.
2 If a relevant computational item (or a part of a relevant computational item) allocated in accordance with paragraph 8 to the company's gross roll-up business is a negative amount, the item (or part of the item) is to be treated as an expense of the company's non-BLAGAB long-term business.
3 Receipts and expenses within this paragraph are to be taken into account, in accordance with the provisions of this Part of this Schedule, in calculating for corporation tax purposes the profits of the company's non-BLAGAB long-term business for accounting periods beginning on or after 1 January 2013.

Period over which deemed receipts or expenses arise

11
1 A receipt or expense within paragraph 9 or 10 is to be treated as arising over the period of 10 years beginning with 1 January 2013.
2 The amount of the receipt or expense apportioned to (and treated as arising in) any accounting period falling wholly or partly in that 10-year period is to be determined in proportion to the number of days of the accounting period falling within that 10-year period.
3 This paragraph does not apply to a receipt which consists of a relevant court-protected item within the meaning of paragraph 12.
4 This paragraph is subject to paragraphs 13 to 15 (transfers and cessation of business etc).
12
1 For the purposes of this paragraph a “relevant court-protected item” means a relevant computational item that relates to an excess of assets over liabilities held in a non-profit fund in respect of which an order made by a court is in force preventing the distribution of the excess (in any circumstances whatever) before the end of a period specified in the order.
2 A receipt within paragraph 9 or 10 consisting of a relevant court-protected item is to be treated as arising over the period of 10 years beginning with the relevant day.
3 The relevant day is whichever of the following days occurs first—
a the day on which the court order ceases to be in force, or
b 1 January 2015.
4 The amount of the receipt apportioned to (and treated as arising in) any accounting period falling wholly or partly in that 10-year period is to be determined in proportion to the number of days of the accounting period falling within that 10-year period.
5 This paragraph is subject to paragraphs 13 to 15 (transfers and cessation of business etc).
13
1 This paragraph applies if—
a under an insurance business transfer scheme, there is a transfer from one insurance company to another of basic life assurance and general annuity business (or any part of that business) or non-BLAGAB long-term business (or any part of that business),
b the transfer is a relevant intra-group transfer, and
c the transfer occurs at a time when the full amount of the receipts or expenses within paragraph 9 or 10 of the business the whole or part of which is transferred has not been treated as arising.
2 A transfer is a “relevant intra-group transfer” for the purposes of this paragraph if—
a the transferor and the transferee are members of the same group of companies when the transfer occurs (as determined in accordance with section 170(2) to (11) of TCGA 1992), and
b the transferee is within the charge to corporation tax in relation to the transfer.
3 The receipts or expenses are to continue to be dealt with in accordance with the provisions of this Schedule, but are treated as arising to the transferee over so much of the 10-year period in question as falls on or after the date on which the transfer takes place.
4 If only part of a business is transferred—
a the appropriate amount of the receipts or expenses is treated as arising to the transferee over so much of the 10-year period in question as falls on or after the date on which the transfer takes place, and
b the remainder of the receipts or expenses is treated as arising to the transferor over so much of that period.
5 In sub-paragraph (4)(a), “the appropriate amount” means the amount which fairly represents the value of the receipts or expenses attributable to the part of the business transferred immediately before the transfer.
6 For the purposes of this paragraph and paragraphs 11 and 12 the accounting periods of the transferor and the transferee in which the transfer takes place are deemed to end immediately before the transfer takes place.
14
1 This paragraph applies if—
a under an insurance business transfer scheme, there is a transfer from one insurance company to another of basic life assurance and general annuity business (or any part of that business) or non-BLAGAB long-term business (or any part of that business),
b the transfer is not a relevant intra-group transfer for the purposes of paragraph 13, and
c the transfer occurs at a time when the full amount of the deemed receipts or expenses of the relevant business has not been treated as arising to the transferor.
2 The remaining amount of the deemed receipts or expenses of the relevant business is to be treated as arising to the transferor in the accounting period in which the transfer takes place.
3 In this paragraph references to the deemed receipts or expenses of the relevant business—
a are references to the receipts or expenses within paragraph 9 or 10 of the business the whole or part of which is transferred, but
b do not include references to so much of those receipts or expenses as fall (or have fallen) to be treated as arising to a company other than the company which is the transferor for the purposes of this paragraph.
15
1 This paragraph applies if—
a an insurance company ceases at any time to carry on basic life assurance and general annuity business or non-BLAGAB long-term business otherwise than as a result of a transfer under an insurance business transfer scheme, and
b at that time the full amount of the deemed receipts or expenses of the business concerned has not been treated as arising to the company.
2 The remaining amount of the deemed receipts or expenses of the business concerned is to be treated as arising to the company in the accounting period in which it ceases to carry on the business concerned.
3 For the purposes of this paragraph an insurance company is to be regarded as ceasing to carry on a business at any time if, at that time, it ceases to be within the charge to corporation tax in relation to the business.
4 In this paragraph references to the deemed receipts of the business concerned—
a are references to the receipts or expenses within paragraph 9 or 10 of the business concerned, but
b do not include references to so much of those receipts or expenses as fall (or have fallen) to be treated as arising to a company other than the company concerned.

Financing-arrangement-funded transfers to shareholders in relation to non-profit funds

16
1 This paragraph applies if, as at 1 January 2013, an insurance company has an unrelieved charge under subsection (3) of section 83YC of FA 1989 (FAFTS: charge in relevant period of account).
2 An insurance company has, as at that date, an unrelieved charge under that subsection if either—
a that subsection has operated in the case of the company for the period of account ending immediately before that date (“the 2012 period of account”), or
b that subsection has operated in the case of the company for one or more earlier periods of account, and the total of the amounts which are the relevant amount for the 2012 period of account or those earlier periods under section 83YD of FA 1989 does not exceed the amount which is the taxed amount under that section.
3 The appropriate amount of the unrelieved charge is to be treated for the purposes of this Part of this Schedule as if it were a relevant computational item of a negative amount.
4 The appropriate amount of the unrelieved charge is whichever is the smaller of—
a in a case within sub-paragraph (2)(a), the amount brought into account under section 83YC(3) of FA 1989, or, in a case within sub-paragraph (2)(b), the amount by which the taxed amount mentioned there exceeds the relevant amount mentioned there, and
b the sum of the outstanding debt amount and the outstanding re-insurance amount.
5 “The outstanding debt amount” means the total amount of the credits brought into account by the company in relation to a non-profit fund for the purposes of section 83YC of FA 1989 as part of total income—
a for the 2012 period of account, or
b for any earlier period of account,
in respect of relevant money debts to the extent that they have not been repaid before that date.
6 “The outstanding re-insurance amount” means the total of the amounts which would (but for section 83YF(2) of FA 1989) have been taken into account in calculating the profits of the company's life assurance business in accordance with the life assurance trade profits provisions—
a for the 2012 period of account, or
b for any earlier period of account,
in respect of the re-insurance of relevant liabilities to the extent that they have not ceased to be re-insured before that date.
7 Any expression which is used in this paragraph and in section 83YC of FA 1989 has the same meaning in this paragraph as in that section.
8 In this paragraph references to sections 83YC and 83YD of FA 1989 include references to those sections as they have effect in accordance with paragraph 4(2) to (6) of Schedule 17 to FA 2008.

Anti-avoidance

17
1 This paragraph applies if—
a on or after 21 March 2012 an insurance company (“C”) enters into any arrangements or does any other thing directly or indirectly for the purposes of, or in connection with, the operation of the transitional rules, and
b the main purpose, or one of the main purposes, of C in entering into the arrangements or doing the other thing is an unallowable purpose.
2 A purpose is an “unallowable purpose” if—
a it consists of securing a tax advantage for C or any other company which is connected to the operation of the transitional rules, or
b it is not amongst C's business or other commercial purposes.
3 If a tax advantage connected to the operation of the transitional rules arises to C, an officer of Revenue and Customs may make such adjustments as are required to negate the tax advantage so far as referable to the unallowable purpose on a just and reasonable apportionment.
4 If a tax advantage connected to the operation of the transitional rules arises to a company other than C, an officer of Revenue and Customs may make such adjustments as are required to negate the tax advantage.
5 The power to make adjustments under this paragraph includes power to make adjustments by any of the following means—
a an amendment of the company's tax return under paragraph 34(2) or (2A) of Schedule 18 to FA 1998 (amendment after enquiry),
b an assessment,
c the nullifying of a right to repayment,
d the requiring of the return of a repayment already made, and
e the calculation or recalculation of profits or gains or liability to corporation tax.
6 Nothing in this paragraph authorises the making of an assessment later than 6 years after the accounting period to which the tax advantage relates.
7 For the purposes of this paragraph—
a “arrangement” includes any agreement, scheme, transaction or understanding (whether or not legally enforceable),
b the reference to the operation of the transitional rules is a reference to the operation of any provision made by or under this Part of this Schedule,
c one example (among others) of entering into arrangements or otherwise doing something for the purposes of, or in connection with, the operation of those rules is entering into the arrangements or otherwise doing the thing to secure that an item is, or is not, taken into account in calculating the total transitional difference, and
d section 1139 of CTA 2010 (meaning of “tax advantage”) applies, but reading references to tax as references to corporation tax.
8 If C is not within the charge to corporation tax in respect of a part of its activities, C's business or other commercial purposes for the purposes of this paragraph do not include the purposes of that part of its activities.
9 This paragraph does not apply in any case if section 132 applies in that case.
18
1 Paragraph 17 does not apply if, on an application by C, HMRC Commissioners give a notice under this paragraph stating that they are satisfied that the doing of the relevant things is or will be such that no action ought to be taken by an officer of Revenue and Customs under that paragraph.
2 The reference here to the doing of the relevant things is a reference to the entering into of any arrangements, or the doing of any other thing, directly or indirectly for the purposes of, or in connection with, the operation of the transitional rules (within the meaning of paragraph 17).
19
1 An application under paragraph 18 must—
a be in writing, and
b contain particulars of the arrangements or the thing done or proposed to be done.
2 HMRC Commissioners may by notice require C to provide further particulars in order to enable them to determine the application.
3 A requirement may be imposed under sub-paragraph (2) within 30 days of the receipt of the application or of any further particulars required under that sub-paragraph.
4 If a notice under that sub-paragraph is not complied with within 30 days or such longer period as HMRC Commissioners may allow, they need not proceed further on the application.
5 HMRC Commissioners must give notice to C of their decision on an application under paragraph 18—
a within 30 days of receiving the application, or
b if they give a notice under sub-paragraph (2), within 30 days of that notice being complied with or within such longer period as may be agreed with C.
6 If any particulars provided under this paragraph do not fully and accurately disclose all facts and considerations material for the decision of HMRC Commissioners, any resulting notice under paragraph 18 is void.

Overseas life insurance companies

20Receipts or expenses are not to be treated as arising under this Part of this Schedule in a case where—
a an overseas life insurance company has, in accordance with international accounting standards or the Council Directive of 19th December 1991 on the annual accounts and consolidated accounts of insurance undertakings (No 91/674/EEC), prepared accounts for a period which includes 31 December 2012, and
b parts of the income statements or the technical accounts (or part of the technical accounts) included in those accounts are recognised for the purposes of sections 82A to 83ZA of FA 1989 as a result of provision made by regulation 24 of the Overseas Life Insurance Companies Regulations 2006.

PART 2 Specific transitional provisions

Insurance company with BLAGAB consisting wholly of protection business

21
1 This paragraph applies if—
a in its first accounting period to which this Part applies an insurance company carries on business which, under the old law, would have been basic life assurance and general annuity business,
b the business in question consists wholly of the effecting or carrying out of contracts of long-term insurance in relation to which the condition in section 62(2)(a) is met, and
c some or all of the contracts are made before 1 January 2013.
2 On or before the filing date for that accounting period, the company may make an election for the contracts made before that date to be treated for the purposes of section 62 as if they were made on or after that date.
3 Accordingly, no relief is available for any amount that, but for the election, would have constituted excess BLAGAB expenses for that accounting period.
4 The election has effect for the first accounting period of the company to which this Part applies and all subsequent accounting periods.
5 The election is irrevocable.
6 In this paragraph—
  • “the filing date”, in relation to an accounting period of an insurance company, means the date which, for the purposes of paragraph 14 of Schedule 18 to FA 1998, is the filing date for the company's tax return for that period, and
  • “the old law” means the law as it had effect immediately before the day on which this Act is passed.

Disregard of amounts previously taken into account for tax purposes

22
1 This paragraph applies if, for an accounting period ending before 1 January 2013, an amount is taken into account in calculating the profits of an insurance company arising from life assurance business in accordance with the provisions applicable for the purposes of the taxation of such profits under section 35 of CTA 2009 (charge on trade profits).
2 For any accounting period beginning on or after 1 January 2013—
a the amount is not to be taken into account in calculating the BLAGAB trade profit or loss of any basic life assurance and general annuity business carried on by the company, and
b the amount is not to be taken into account in calculating for corporation tax purposes the profits of any non-BLAGAB long-term business carried on by the company.
3 If the business mentioned in sub-paragraph (1) (or any part of that business) is transferred under an insurance business transfer scheme to another insurance company—
a references in sub-paragraph (2) to the company include the transferee, and
b references in sub-paragraph (2) to the amount include an amount that derives from the amount mentioned in sub-paragraph (1) and include so much of an amount as is taken into account in any calculation required under section 129(6)(a) or (b) and as is referable to the amount mentioned in sub-paragraph (1) (and, accordingly, section 129(7) is subject to the operation of this paragraph).
23For the purposes of section 76 an expense is to be treated as deductible under another relevant rule so far as it was brought into account at Step 1 in section 76(7) of ICTA as an expense referable to an accounting period ending before 1 January 2013.

Intangible fixed assets

24
1 This paragraph applies to assets—
a which, under the old law, were assets excluded from Part 8 of CTA 2009 (intangible fixed assets), and
b which, as a result of provision made by this Part of this Act, become assets which are not excluded from Part 8 of that Act.
2 Any expenditure incurred before 1 January 2013 on an asset to which this paragraph applies is to be left out of account in determining any amount to be brought into account under Part 8 of CTA 2009.
3 Section 780 of CTA 2009 (company ceasing to be member of group: deemed realisation and re-acquisition at market value) is not to apply in relation to any asset to which this paragraph applies.
4 For the purposes of this paragraph references to an asset's exclusion from Part 8 of CTA 2009 includes its exclusion from that Part except as respects royalties.
5 In this paragraph “the old law” means the law as it had effect immediately before the day on which this Act is passed.

Assets held for purposes of long-term business

25
1 The rules in sections 116 to 118 apply in relation to anything occurring on or after 1 January 2013 (and the rules in section 440 of ICTA, including as modified, apply in relation to anything occurring before that date).
2 Accordingly, the replacement of the rules in section 440 of ICTA with the different rules in sections 116 to 118 is not by itself sufficient to give rise to a deemed disposal and re-acquisition for the purposes of corporation tax on chargeable gains.
26
1 The rules in sections 119 to 121 apply in relation to securities held on or after 1 January 2013 (and the rules in section 440A of ICTA, including as modified, apply in relation to securities held before that date).
2 The replacement of the separate holdings given by section 440A of ICTA (including as modified) with the separate holdings given by sections 119 to 121 is, for the purposes of corporation tax on chargeable gains, not to be treated as involving a disposal or acquisition that gives rise to a chargeable gain or allowable loss.
3 But see paragraph 27 for provision for carrying forward the base cost of the old holdings into the base cost of the new holdings.
27
1 This paragraph applies if—
a immediately before 1 January 2013 securities are treated, as a result of section 440A of ICTA (including as modified), as separate holdings of a company for the purposes of corporation tax, and
b the securities that are comprised in those separate holdings (the “old holdings”) are, as at 1 January 2013, comprised in separate holdings of the company as determined by the rules in sections 119 to 121 (the “new holdings”).
2 Each new holding is treated for the purposes of corporation tax on chargeable gains as if it were a holding of the company with a base cost and an indexation allowance as at 1 January 2013 equal to the total of the base costs and indexation allowances of the old holdings that are carried into the new holding.
3 In the case of securities (“new securities”) comprised in a new holding, the amount of the base cost or indexation allowance of an old holding that is carried into the new holding is equal to the proportion which the new securities derived from the old holding bear to all of the securities comprised in the old holding.
4 For the purpose of calculating the indexation allowance of a new holding in respect of any period falling on or after 1 January 2013, it is to be assumed that, on that date, there had been a disposal of the holding for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the company.
5 For the purposes of this paragraph—
a references to a base cost are—
i in the case of a section 104 holding, references to the amount of qualifying expenditure within the meaning of section 110 of TCGA 1992, and
ii in the case of a 1982 holding, references to the amount of expenditure that would fall to be deducted if the holding were disposed of,
b references to an indexation allowance are—
i in the case of a section 104 holding, references to the indexation allowance as found in accordance with section 110 of TCGA 1992, and
ii in the case of a 1982 holding, references to the indexation allowance within the meaning of Chapter 4 of Part 2 of that Act,
c the base cost and the indexation allowance of an old holding are calculated on the assumption that the holding is disposed of immediately before 1 January 2013,
d “section 104 holding” has the same meaning as in section 104(3) of TCGA 1992, and
e “1982 holding” has the same meaning as in section 109 of that Act.
28
1 This paragraph applies in a case where—
a section 210B(2) to (4) of TCGA 1992 would, but for this Part of this Act, have applied in relation to a disposal and acquisition of section 440A securities, and
b the identification in accordance with those subsections of the section 440A securities disposed of with the section 440A securities acquired would have involved—
i identifying securities disposed of before 1 January 2013 with securities acquired on or after that date, or
ii identifying securities acquired before 1 January 2013 with securities disposed of on or after that date.
2 The securities disposed of are to be identified with the securities acquired (if necessary applying the rules in section 210B(3) and (4) of TCGA 1992 and subject to section 105(1) of that Act), and—
a in a case within sub-paragraph (1)(b)(i), the securities acquired are not therefore to be comprised in a separate holding of securities within any of sections 119 to 121 of this Act, and
b in a case within sub-paragraph (1)(b)(ii), the securities acquired are not therefore to be regarded as comprised in a separate holding of securities within section 440A of ICTA (including as applied).
3 In this paragraph “section 440A securities” has the same meaning as in section 210B of TCGA 1992.

Carry-forward of trading losses and excess management expenses

29
1 Any unused losses arising to an insurance company in an accounting period ending before 1 January 2013 from gross roll-up business may be relieved in subsequent accounting periods in accordance with section 45 of CTA 2010 (carry forward of trade loss against subsequent trade profits) as if they were losses that had arisen from non-BLAGAB long-term business.
2 For this purpose a loss is “unused” so far as no relief has been given for it under—
a section 436A of ICTA (including as applied by any provision of Part 2 of Schedule 7 to FA 2007), or
b any other provision of the Corporation Tax Acts.
30
1 Any unused losses arising to an insurance company in an accounting period ending before 1 January 2013 from PHI business may be relieved in subsequent accounting periods in accordance with section 45 of CTA 2010 as if they were losses that had arisen from non-BLAGAB long-term business.
2 For this purpose a loss is “unused” so far as, but for this Part of this Act, it would have been available for carry forward under section 45 of CTA 2010 for use in relation to profits of the PHI business for subsequent accounting periods.
31
1 The appropriate part of any unused life assurance trade losses arising to an insurance company in an accounting period ending before 1 January 2013 is to be treated for the purposes of section 124 as if it were the unrelieved loss available for relief in subsequent accounting periods in accordance with that section.
2 A “life assurance trade loss” means a loss arising to an insurance company from life assurance business which is calculated in accordance with the life assurance trade profits provisions.
3 A life assurance trade loss is “unused” so far as no relief is given for it under—
a section 85A or 89 of FA 1989, or
b any other provision of the Corporation Tax Acts.
4 The “appropriate” part of any unused life assurance trade losses is the amount (if any) by which—
a the amount of the unused life assurance trade losses, exceeds
b the amount of unused losses arising to an insurance company in an accounting period ending before 1 January 2013 from gross roll-up business (with the definition of “unused” in paragraph 29(2) applying here).
32
1 This paragraph applies if, but for this Part of this Act, an amount would have been carried forward to an accounting period of an insurance company under section 76(12) or (13) of ICTA (expenses of insurance companies).
2 The amount is to be treated for the purposes of step 5 of section 76 as an expense from a previous accounting period carried forward as a result of section 73 to the accounting period of the company beginning on 1 January 2013.
33
1 This paragraph applies if, but for this Part of this Act, any amount of expenses would, as a result of section 86(8) and (9) of FA 1989 (relief for fraction of acquisition expenses for earlier accounting periods), have been relieved in an accounting period of an insurance company beginning on or after 1 January 2013.
2 Relief is to continue to be given for the expenses in question as follows—
a the amount of the relief for each accounting period is to be determined in accordance with section 86(8) and (9) of FA 1989 (despite their repeal by this Part of this Act), and
b the relief is to be given by treating the amount of the expenses as deemed BLAGAB management expenses for the accounting periods in question for the purposes of section 76.
3 But relief is not to be given as a result of sub-paragraph (2) for any expenses for any accounting period (“the period concerned”) if the expenses are reversed in the period concerned or any preceding accounting period.

Relief for BLAGAB trade losses for accounting period beginning on or after 1 January 2013

34
1 This paragraph applies if—
a an insurance company carries on basic life assurance and general annuity business in an accounting period beginning on or after 1 January 2013, and
b the company has a BLAGAB trade loss for the accounting period.
2 For the purposes of section 37(6) of CTA 2010 (as applied by section 123) the company is to be treated as carrying on that business in a previous accounting period if the company carried on life assurance business in that period.

Assets of the shareholder fund

35
1 This paragraph applies in relation to assets of an insurance company carrying on life assurance business which were assets of the shareholder fund of the company for the period of account ending immediately before 1 January 2013.
2 Those assets are, in relation to times on or after that date, to be regarded for the purposes of this Part as assets forming part of the long-term business fixed capital of the company (whether or not they would otherwise be so regarded).
3 An asset is an “asset of the shareholder fund of an insurance company for the period of account ending immediately before 1 January 2013” if it is shown in any of lines 11 to 102 of Form 13 in the company's periodical return ending immediately before that date in respect of assets other than those of its long-term business.
4 But an asset is not to be regarded as an asset of the shareholder fund for that period of account if for any accounting period ending before 1 January 2013—
a income arising from the asset was, or chargeable gains or allowable losses accruing on any part disposal of the asset for the purposes of TCGA 1992 were, taken into account for the purposes of the charge to corporation tax on the I minus E basis, or
b income arising from the asset was taken into account in calculating the profits of the company in respect of its life assurance business in accordance with the provisions applicable for the purposes of the taxation of such profits under section 35 of CTA 2009 (charge on trade profits).
35A
1 Sub-paragraph (2) applies to assets which by reason of paragraph 35 (or the previous application of this paragraph) are regarded for the purposes of this Part as assets forming part of the long-term business fixed capital of a company (“company A”).
2 Where—
a company A transfers all of its basic life assurance and general annuity business and non-BLAGAB business to another company (“company B”), and
b the transfer is a relevant intra-group transfer,
for the purposes of this Part the assets form part of the long-term business fixed capital of company B instead of company A.
3 “Relevant intra-group transfer” has the same meaning for the purposes of this paragraph as it has for the purposes of paragraph 13.

PART 3 Supplementary

General transitional provision in relation to provisions re-enacted in Part 2 of this Act

36
1 This paragraph applies where any provision of this Part of this Act re-enacts (with or without modification) an enactment repealed by this Part of this Act.
2 The repeal and re-enactment does not affect the continuity of the law.
3 Any subordinate legislation or other thing which—
a has been made or done, or has effect as if made or done, under or for the purposes of the repealed provision, and
b is in force or effective in relation to accounting periods of insurance companies ending on 31 December 2012,
has effect in relation to subsequent accounting periods of insurance companies as if made or done under or for the purposes of the corresponding provision of this Part of this Act.
4 Any reference (express or implied) in any enactment, instrument or document to a provision of this Part of this Act is to be read as including, in relation to times, circumstances or purposes in relation to which the corresponding repealed provision had effect, a reference to that corresponding provision.This sub-paragraph applies only so far as the context permits.
5 Any reference (express or implied) in any enactment, instrument or document to a repealed provision is to be read, in relation to times, circumstances or purposes in relation to which the corresponding provision of this Part of this Act has effect, as a reference or (as the context may require) as including a reference to that corresponding provision.This sub-paragraph applies only so far as the context permits.
6 This paragraph is subject to any specific transitional, transitory or saving provision made by or under this Schedule.
7 The generality of this paragraph is not to be affected by specific transitional, transitory or saving provision made by or under this Schedule.
8 This paragraph has effect instead of section 17(2) of the Interpretation Act 1978.

Power to make supplementary transitional provision etc

37
1 The Treasury may by regulations make further transitional, transitory or saving provision in connection with the coming into force of any of the provisions of this Part of this Act.
2 The provision that may be made by the regulations includes provision (whether by way of textual amendment or otherwise) altering or supplementing the effect of any provision made by or under this Schedule.
3 The regulations may be made so as to have effect in relation to any period beginning before but ending on or after the day on which the regulations are made (as well as in relation to periods no part of which falls before that day).
38Any regulations made by the Treasury under any provision of this Schedule may—
a make different provision for different cases or circumstances, and
b contain incidental, supplementary, consequential, transitional, transitory or saving provision.

Interpretation

39The following expressions have the same meaning in this Schedule as they have in Chapter 1 of Part 12 of ICTA—
  • “brought into account” (except in paragraph 24),
  • “gross roll-up business”,
  • “the I minus E basis”,
  • “the life assurance trade profits provisions”,
  • “non-profit fund”,
  • “period of account”,
  • “periodical return”, and
  • “PHI business”.

SCHEDULE 18 

Part 3: consequential amendments

Section 176

Income and Corporation Taxes Act 1988

1ICTA is amended as follows.
2Omit section 459 (unregistered friendly societies: exemption from tax).
3Omit section 460 (exemption from tax in respect of life or endowment business).
4Omit section 461 (taxation in respect of other business).
5Omit sections 461A to 461C (taxation in respect of other business: incorporated friendly societies qualifying for exemption).
6Omit section 461D (transfers of business).
7Omit section 462 (conditions for tax exempt business).
8Omit section 463 (long-term business of friendly societies: application of Corporation Tax Acts).
9Omit section 464 (maximum benefits payable to members).
10Omit section 465 (old societies).
11Omit section 465A (assets of branch of registered friendly society to be treated as assets of society after incorporation).
12Omit section 466 (interpretation of Chapter 2 of Part 12).
13
1 Schedule 15 (qualifying policies) is amended as follows.
2 In paragraph 3—
a in sub-paragraphs (1) and (4)(c), for “tax exempt life or endowment business” substitute “ exempt BLAGAB or eligible PHI business ”,
b in sub-paragraph (8)(b)(i), for “a new society” substitute “ a society other than an old society ”, and
c in sub-paragraph (8)(b)(ii), for “a society other than a new society” substitute “ an old society ”.
3 In paragraph 4(3)(b)(ii), for “a new society” substitute “ a society other than an old society ”.
4 Omit paragraph 5.
5 In paragraph 6—
a in sub-paragraph (1)—
i omit “(as defined in section 466)” in both places, and
ii for “tax exempt life or endowment business” substitute “ exempt BLAGAB or eligible PHI business ”, and
b in sub-paragraph (2), for “section 464” substitute “ section 160 of the Finance Act 2012 ”.
6 After paragraph 6 insert—

Taxation of Chargeable Gains Act 1992

14TCGA 1992 is amended as follows.
15In section 100(2B)(b) (exemption for authorised unit trusts etc), for “section 466(2) of the Taxes Act” substitute “ section 172 of the Finance Act 2012 ”.
16In section 171(5) (transfers within a group: general provisions), for “section 461B of the Taxes Act” substitute “ section 165 of the Finance Act 2012 ”.

Income Tax (Trading and Other Income) Act 2005

17ITTOIA 2005 is amended as follows.
18
1 Section 531 (gains from contracts for life insurance etc: cases where income tax not treated as paid) is amended as follows.
2 In subsection (3)(a), for “tax exempt life or endowment business” substitute “ exempt BLAGAB or eligible PHI business ”.
3 In subsection (4), for the definition of “tax exempt life or endowment business” substitute—

Corporation Tax Act 2009

19CTA 2009 is amended as follows.
20In section A1(2) (overview of the Corporation Tax Acts), after paragraph (k) (as inserted by paragraph 136(b) of Schedule 16 to this Act) insert
21In section 564(1) (section 563: interpretation), for “section 460 of ICTA” substitute “ section 158 of FA 2012 ”.
22In section 931S(3) (company distributions: meaning of “small company”), in the definition of “friendly society”, for “section 466(2) of ICTA” substitute “ section 172 of FA 2012 ”.

Consequential repeals

23In consequence of the amendments made by this Schedule, omit the following provisions—
a in FA 1990—
i section 49(1) to (4),
ii section 50, and
iii paragraph 6 of Schedule 9,
b in FA 1991, paragraphs 1 to 3 of Schedule 9,
c in FA 1995, paragraphs 1 and 2 of Schedule 10,
d in FA 1996, section 171,
e in FA 2007—
i section 44,
ii paragraphs 40 and 43 of Schedule 7, and
iii Schedule 12, and
f in FA 2008—
i section 44, and
ii Schedule 18.

SCHEDULE 19 

Part 3: transitional provision

Section 177

Approvals given for purposes of section 461 or 461C of ICTA

1Anything which, as a result of section 461(11) or 461A(4) of ICTA, is treated as having been done by HMRC Commissioners on a particular date under a provision of ICTA repealed by this Act is to continue to be treated as having been done by them on that date under the provision of this Part corresponding to that repealed provision, despite the fact that neither section 461(11) nor section 461A(4) of ICTA is rewritten in this Act.

General transitional provision in relation to provisions re-enacted in Part 3 of this Act

2
1 This paragraph applies where any provision of this Part of this Act re-enacts (with or without modification) an enactment repealed by this Part of this Act.
2 The repeal and re-enactment does not affect the continuity of the law.
3 Any subordinate legislation or other thing which—
a has been made or done, or has effect as if made or done, under or for the purposes of the repealed provision, and
b is in force or effective in relation to accounting periods of friendly societies ending on 31 December 2012,
has effect in relation to subsequent accounting periods of friendly societies as if made or done under or for the purposes of the corresponding provision of this Part of this Act.
4 Any reference (express or implied) in any enactment, instrument or document to a provision of this Part of this Act is to be read as including, in relation to times, circumstances or purposes in relation to which the corresponding repealed provision had effect, a reference to that corresponding provision.This sub-paragraph applies only so far as the context permits.
5 Any reference (express or implied) in any enactment, instrument or document to a repealed provision is to be read, in relation to times, circumstances or purposes in relation to which the corresponding provision of this Part of this Act has effect, as a reference or (as the context may require) as including a reference to that corresponding provision.This sub-paragraph applies only so far as the context permits.
6 This paragraph is subject to any specific transitional, transitory or saving provision made by or under this Schedule.
7 The generality of this paragraph is not to be affected by specific transitional, transitory or saving provision made by or under this Schedule.
8 This paragraph has effect instead of section 17(2) of the Interpretation Act 1978.

SCHEDULE 20 

Controlled foreign companies and foreign permanent establishments

Section 180

PART 1  Controlled foreign companies

1After Part 9 of TIOPA 2010 insert—

PART 2  Foreign permanent establishments

Main provision

2Chapter 3A of Part 2 of CTA 2009 (foreign permanent establishments of UK resident companies) is amended as follows.
3In section 18A(1) omit “UK resident”.
4After section 18C insert—
5
1 Section 18F is amended as follows.
2 In subsection (1)(a) for “subsection (6)” substitute “ subsections (6) to (8) ”.
3 For subsection (2) substitute—
4 In subsection (6) for “The election can be revoked” substitute “ An election can be revoked by the company which made it ”.
5 After subsection (6) insert—
6For sections 18G to 18I substitute—
7After section 18P(2) insert—

Lloyd's underwriters

8In Chapter 5 of Part 4 of FA 1994 (Lloyd's underwriters) after section 227B insert—

Plant and machinery allowances

9In section 15 of CAA 2001 (plant and machinery allowances: qualifying activities) after subsection (2A) insert—

PART 3  Other amendments

TMA 1970

10TMA 1970 is amended as follows.
11In section 55 (recovery of tax not postponed) in subsection (1) omit paragraph (d).
12In section 59E (provision about when corporation tax due and payable) in subsection (11) for paragraph (b) substitute—
.
13In section 59F (arrangements for paying tax on behalf of group members) in subsection (6) for paragraph (b) and the “and” after it substitute—
.

ICTA

14In ICTA omit Chapter 4 of Part 17 (controlled foreign companies).

FA 1998

15FA 1998 is amended as follows.
16In section 32 (unrelieved surplus advance corporation tax) for subsection (5) substitute—
17
1 Schedule 18 (company tax returns) is amended as follows.
2 In paragraph 1 for “section 747(4)(a) of the Taxes Act 1988 (tax on profits of controlled foreign company)” substitute “ step 5 in section 371BC(1) of the Taxation (International and Other Provisions) Act 2010 (controlled foreign companies) ”.
3 In paragraph 8(1), in the third step, for paragraph 2 substitute—

FA 2000

18Schedule 22 to FA 2000 (tonnage tax) is amended as follows.
19
1 Paragraph 54 is amended as follows.
2 In sub-paragraph (1)—
a for “under section 747 of the Taxes Act 1988” substitute “ at step 5 in section 371BC(1) of the Taxation (International and Other Provisions) Act 2010 (“TIOPA 2010”) ”,
b for “controlled foreign company” (in both places) substitute “ CFC ”, and
c at the end insert “ ; and, accordingly, the tonnage tax company is not to be a chargeable company for the purposes of Part 9A of TIOPA 2010 in relation to the CFC's accounting period in question. ”
3 For sub-paragraphs (2) to (5) substitute—
20
1 Paragraph 57 is amended as follows.
2 In sub-paragraph (1)(b) for the words from “controlled” to the end substitute “ CFC apportioned to the company at step 3 in section 371BC(1) of the Taxation (International and Other Provisions) Act 2010. ”
3 For sub-paragraph (4) substitute—

FA 2002

21In FA 2002 omit section 90 (controlled foreign companies and treaty non-resident companies).

ITA 2007

22
1 Section 725 of ITA 2007 (transfer of assets abroad: reduction in amount charged where controlled foreign company involved) is amended as follows.
2 For subsection (1) substitute—
3 In subsection (2)—
a for “controlled foreign company's” (in both places) substitute “CFC's”, and
b in the definition of “CA” for “chargeable amount” substitute “ CFC's chargeable profits for that accounting period so far as apportioned to chargeable companies at step 3 in section 371BC(1) of TIOPA 2010 ”.
4 For subsection (3) substitute—

FA 2007

23
1 Paragraph 3 of Schedule 11 to FA 2007 (technical provision made by insurers) is amended as follows.
2 In sub-paragraph (1) for paragraph (b) and the “or” after it substitute—
.
3 In sub-paragraph (2) for paragraph (b) substitute—

CTA 2009

24CTA 2009 is amended as follows.
25In section A1 (overview of the Corporation Tax Acts) in subsection (2)—
a omit paragraph (b), and
b before paragraph (k) (as inserted by paragraph 136 of Schedule 16 to this Act) insert—
.
26In section 486D (disguised interest: arrangement with no tax avoidance purpose) omit subsections (5) and (6).
27
1 Section 486E (disguised interest: excluded shares) is amended as follows.
2 In subsection (7)(c) for “relevant controlled foreign company” substitute “ CFC within the meaning of Part 9A of TIOPA 2010 ”.
3 For subsections (9) and (10) substitute—
4 Omit subsection (11).
28In section 521E (unallowable purpose) omit subsections (5) and (6).
29Omit section 870 (intangible fixed assets: assumptions to be made in the case of a controlled foreign company) and the cross-heading before it.
30In Chapter 2 of Part 9A (exemption of distributions received by small companies) after section 931C insert—
31In section 931E (distributions from controlled companies) for subsections (3) to (5) substitute—

FA 2009

32Part 2 of Schedule 16 to FA 2009 (amendment of exempt activities exemption) is amended as follows.
33In paragraph 12—
a in sub-paragraph (2) omit paragraph (b) and the “and” before it, and
b after sub-paragraph (2) insert—
34Omit paragraph 15.
35In paragraph 16—
a in paragraph (a) after “2009” insert “ but before 1 January 2013 ”, and
b omit paragraph (b) and the “and” before it.
36In the cross-heading before paragraph 17 for “during three years before 1 July 2012” substitute “ from 1 July 2009 ”.

CTA 2010

37CTA 2010 is amended as follows.
F4838. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
1 Section 938M (group mismatch schemes: controlled foreign companies) is amended as follows.
2 In subsection (1) for the words from the beginning to “company” substitute “ Section 371SL(1) of TIOPA 2010 (assumption that a CFC ”.
3 In subsection (2)—
a for “chargeable profits” substitute “ assumed taxable total profits ”, and
b for “Chapter 4 of Part 17 of ICTA” substitute “ Part 9A of TIOPA 2010 ”.
40In section 1139 (definition of “tax advantage”) in subsection (2) —
a omit the “or” after paragraph (d), and
b after paragraph (d) insert—
.

TIOPA 2010

41TIOPA 2010 is amended as follows.
42
1 Section 179 (compensating payment if advantaged person is controlled foreign company) is amended as follows.
2 For subsection (1) substitute—
3 In subsection (2) for “controlled foreign company” substitute “ CFC ”.
4 In subsection (3)—
a in paragraph (a) for “companies mentioned in subsection (1)(c)” substitute “ chargeable companies on which a sum is charged ”, and
b in paragraph (b) for “tax chargeable under section 747(4) of ICTA” substitute “ the CFC charge ”.
5 For subsection (4) substitute—
F7043. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F7044. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F7045. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Insurance Companies (Reserve) (Tax) Regulations 1996 (S.I. 1996/2991)

46The Insurance Companies (Reserve) (Tax) Regulations 1996 (S.I. 1996/2991) are amended as follows.
47
1 Regulation 8A is amended as follows.
2 In paragraph (1)—
a in sub-paragraph (a) for “controlled foreign company” substitute “ CFC (within the meaning of Part 9A of the Taxation (International and Other Provisions) Act 2010) ”, and
b in sub-paragraph (b) for “controlled foreign company” substitute “ CFC ”.
3 In paragraph (4)—
a for “controlled foreign company's” substitute “CFC's”, and
b for “the company” substitute “ the CFC ”.
48In regulation 8B for “controlled foreign company” substitute “ CFC (within the meaning of Part 9A of the Taxation (International and Other Provisions) Act 2010) ”.

PART 4  Commencement provision

Commencement provision relating to controlled foreign companies etc

49
1 The CFC charge is charged in relation to accounting periods of CFCs beginning on or after 1 January 2013.
2 The first accounting period of a company which is a CFC at the beginning of 1 January 2013 begins at that time.
3 Sub-paragraph (2) is subject to paragraph 50 below.
4 This paragraph is to be read as if contained in Part 9A of TIOPA 2010.
50
1 The repeal of Chapter 4 of Part 17 of ICTA by paragraph 14 above has no effect for accounting periods within the meaning of that Chapter (see section 751) beginning before 1 January 2013.
2 Sub-paragraphs (3) and (4) apply to a company which—
a has an accounting period within the meaning of Chapter 4 of Part 17 of ICTA beginning before 1 January 2013 but ending on or after that date, and
b is not, at the end of 31 December 2012, a life assurance subsidiary.
3 The company is not to have an accounting period within the meaning of Part 9A of TIOPA 2010 before its accounting period mentioned in sub-paragraph (2)(a) ends.
4 If the company is a CFC immediately after the end of its accounting period mentioned in sub-paragraph (2)(a), its first accounting period within the meaning of Part 9A of TIOPA 2010 begins at that time.
5 Sub-paragraph (6) applies to a company which—
a apart from sub-paragraph (6), would have an accounting period within the meaning of Chapter 4 of Part 17 of ICTA beginning before 1 January 2013 but ending on or after that date, and
b is, at the end of 31 December 2012, a life assurance subsidiary.
6 The company's accounting period mentioned in sub-paragraph (5)(a) ends at the end of 31 December 2012 (and, accordingly, paragraph 49(2) above applies in relation to the company if it is a CFC at the beginning of 1 January 2013).
7 “Life assurance subsidiary” means a company in which a life assurance company has a relevant interest as determined in accordance with Chapter 15 of Part 9A of TIOPA 2010.
8 “Life assurance company” means a company carrying on life assurance business within the meaning of Part 2 of this Act (see section 56).
9 The amendments made by paragraphs 11, 12, 13, 16, 17, 19, 20, 21, 22, 23, 25, 26, 27(2) and (4), 28, 29, 38, 39, 42, 47 and 48 above are to be ignored so far as appropriate in consequence of the sub-paragraphs above.
51The amendment made by paragraph 27(3) above has no effect for relevant periods beginning before 1 January 2013 (and the relevant provisions of Chapter 4 of Part 17 of ICTA continue to have effect accordingly notwithstanding the repeal of that Chapter by paragraph 14 above).
52The amendment made by paragraph 30 above has no effect in relation to dividends or other distributions received before 1 January 2013.
53The amendment made by paragraph 31 above has no effect in relation to dividends or other distributions received before 1 January 2013 (and the relevant provisions of Chapter 4 of Part 17 of ICTA continue to have effect accordingly notwithstanding the repeal of that Chapter by paragraph 14 above).
54The amendments made by paragraphs 33 to 36 above are treated as having come into force on 30 June 2012.

Commencement provision relating to foreign permanent establishments

55
1 The amendments made by paragraphs 3, 5 and 9 above come into force on 1 January 2013; but the amendment made by paragraph 5(3) above has no effect in relation to elections made before that date.
2 The amendments made by paragraphs 4 and 6 to 8 above have effect for relevant accounting periods beginning on or after 1 January 2013.

PART 5  Transitional provision

First accounting periods

56
1 This paragraph applies in relation to a CFC the first accounting period of which is determined in accordance with paragraph 49(2) or 50(4) above.
2 For the purposes of sections 371SD(6), 371SK(3) and 371SM(3) of TIOPA 2010, assume that the CFC became a CFC at the time mentioned in paragraph 49(2) or 50(4) (as the case may be).

Elections under section 9A of CTA 2010

57
1 This paragraph applies if—
a during a company's accounting period within the meaning of Chapter 4 of Part 17 of ICTA a notice is given in relation to the company under paragraph 4(2C) of Schedule 24 to ICTA,
b as a result of that, the company is to be assumed under paragraph 4(2C) of Schedule 24 to ICTA to have made an election under section 9A of CTA 2010,
c the assumed election—
i does not cease to have effect before the end of the company's last accounting period within the meaning of Chapter 4 of Part 17 of ICTA to begin before 1 January 2013, and
ii apart from the repeal of that Chapter by paragraph 14 above, would not have ceased to have effect at the end of that period, and
d the company is a CFC immediately after the end of its last accounting period mentioned in paragraph (c) and its first accounting period within the meaning of Part 9A of TIOPA 2010 begins at that time accordingly.
2 In the application of Part 9A of TIOPA 2010 in relation to the company as a CFC, the assumption mentioned in sub-paragraph (1)(b) is to continue to be made as if it were required to be made by section 371SH(2) of TIOPA 2010.

Exempt periods

58
1 This paragraph applies if—
a there is an exempt period in relation to a company under Part 3A of Schedule 25 to ICTA (cases in which section 747(3) of ICTA does not apply) which begins before 1 January 2013,
b the exempt period—
i does not end before the end of the company's last accounting period within the meaning of Chapter 4 of Part 17 of ICTA to begin before 1 January 2013, and
ii apart from the repeal of that Chapter by paragraph 14 above, would not have ended at the end of that period, and
c the company is a CFC immediately after the end of its last accounting period mentioned in paragraph (b) and its first accounting period within the meaning of Part 9A of TIOPA 2010 begins at that time accordingly.
2 The remainder of the exempt period is to be treated as an exempt period of the company for the purposes of Chapter 10 of Part 9A of TIOPA 2010.
3 The remainder of the exempt period is to be determined in accordance with paragraph 15F of Schedule 25 to ICTA and, for this purpose, assume that Chapter 4 of Part 17 of ICTA continues to apply in relation to the company as if that Chapter had not been repealed by paragraph 14 above; and section 371JD of TIOPA 2010 is to be ignored accordingly.
4 Section 371JB of TIOPA 2010 applies in relation to the exempt period as if subsection (1)(b) and (c) were omitted.
5 Section 371JE of TIOPA 2010 applies in relation to the exempt period as if subsection (1)(b) were omitted.
6 Section 371JF of TIOPA 2010 does not affect the application of the exempt period exemption or section 371JE of TIOPA 2010 by virtue of this paragraph.

Designer rate tax provisions

59
1 The Controlled Foreign Companies (Designer Rate Tax Provisions) Regulations 2000 (S.I. 2000/3158) are to have effect for the purposes of section 371ND of TIOPA 2010 as if they had been made by the HMRC Commissioners under that section.
2 The power of the HMRC Commissioners to make regulations under that section includes power to revoke or amend the 2000 Regulations for the purposes of that section.

SCHEDULE 21 

Relief in respect of decommissioning expenditure

Section 183

Restriction of relief available in respect of decommissioning expenditure

1Part 8 of CTA 2010 (oil activities) is amended as follows.
2In section 330 (supplementary charge in respect of ring fence trades), at the end of subsection (2) insert—
3After section 330 insert—
4In section 7 of FA 2011 (increase in rate of supplementary charge), in subsection (6), at the end insert—

Extension of loss relief available in respect of decommissioning expenditure

5
1 In Chapter 2 of Part 4 of CTA 2010 (relief for trade losses), section 40 (ring fence trades: extension of periods for which relief may be given) is amended as follows.
2 In subsection (1)(b), for the words from “for which” to the end substitute “ for which any allowances under section 164 or 403 of CAA 2001 are made to the company in respect of decommissioning expenditure ”.
3 In subsection (3)—
a for “the allowance” substitute “ the sum of the allowances ”, and
b for “that allowance” substitute “ that amount ”.
4 After that subsection insert—

Application

6
1 The amendments made by this Schedule have effect in relation to expenditure incurred in connection with decommissioning carried out on or after 21 March 2012.
2 In sub-paragraph (1) “decommissioning” means anything falling within any of paragraphs (a) to (e) of section 330C(1) of CTA 2010 (as inserted by this Schedule).

SCHEDULE 22 

Reduction of supplementary charge for certain oil fields

Section 184

Amendments of Chapter 7 of Part 8 of CTA 2010

1In Part 8 of CTA 2010 (oil activities), Chapter 7 (reduction of supplementary charge for certain new oil fields) is amended as follows.
I652In section 334 (company's pool of field allowances), for “new oil fields” substitute “ eligible oil fields ”.
I663
1 Section 337 (initial licensee to hold a field allowance) is amended as follows.
2 In subsection (1)—
a for “an initial licensee in a new oil field” substitute “ a licensee in an additionally-developed oil field or a new oil field (an “eligible oil field”) on the authorisation day ”, and
b at the end insert “ (and accordingly may hold more than one field allowance for the field at the same time) ”.
3 In subsection (2), omit “initial”.
4 The heading of that section becomes “ Licensee to hold field allowance ”.
I674In section 338 (holding a field allowance on acquisition of equity share), for “a new oil field” substitute “ an eligible oil field ”.
I685In section 339 (unactivated amount of field allowance), in subsections (1) and (3), for “a new oil field” substitute “ an eligible oil field ”.
I696
1 Section 340 (introduction to section 341) is amended as follows.
2 In subsection (1), for “a new oil field” substitute “ an eligible oil field ”.
3 In subsection (5), for “the new oil field” substitute “ the field ”.
I707
1 Section 341 (activation of field allowance) is amended as follows.
2 In subsection (1), for “the new oil field” substitute “ the eligible oil field ”.
3 After subsection (3) insert—
I718In section 342 (introduction to sections 343 and 344), in subsections (1) and (6), for “a new oil field” substitute “ an eligible oil field ”.
I729In section 343 (reference periods), in subsection (3), for “the new oil field” substitute “ the eligible oil field ”.
I7310
1 Section 344 (activation of field allowance) is amended as follows.
2 In subsection (1), for “the new oil field” substitute “ the eligible oil field ”.
3 In subsection (4), for “the new oil field” substitute “ the field ”.
4 After that subsection insert—
I7411
1 Section 345 (introduction to sections 346 and 347) is amended as follows.
2 In subsection (2)—
a for “a new oil field” substitute “ an eligible oil field ”, and
b for “the new oil field” substitute “ the field ”.
3 In subsections (3) and (4), for “the new oil field” substitute “ the field ”.
4 In subsection (6), for “a new oil field” substitute “ an eligible oil field ”.
I7512
1 Section 346 (reduction of field allowance if equity disposed of) is amended as follows.
2 In subsection (1), for “the new oil field” (in the first place it occurs) substitute “ the eligible oil field ”.
3 In the definitions of “E1” and “E2”, for “the new oil field” substitute “ the field ”.
I7613
1 Section 347 (acquisition of field allowance if equity acquired) is amended as follows.
2 In subsection (1), for “the new oil field” substitute “ the eligible oil field ”.
3 In subsection (2)—
a for “the new oil field” (in the first place it occurs) substitute “ the eligible oil field ”, and
b for “the new oil field” (in the second place it occurs) substitute “ the field ”.
4 In subsection (4), for “the new oil field” substitute “ the field ”.
14
1 Section 349 (orders) is amended as follows.
2 In subsection (1), before “qualifying oil fields” insert “ additionally-developed oil fields or ”.
3 In subsection (2), for “new oil field” (in both places) substitute “ eligible oil field ”.
4 After subsection (2) insert—
5 For subsection (3) substitute—
15Before section 350 insert—
16
1 Section 357 (other definitions) is amended as follows.
I772 For the definition of “authorisation day” substitute—
.
3 After that definition insert—
.
I774 Omit the definition of “initial licensee”.
I775 In the definition of “relevant income”, for “a new oil field” substitute “ an eligible oil field ”.
I7817The heading of the Chapter becomes “ REDUCTION OF SUPPLEMENTARY CHARGE FOR ELIGIBLE OIL FIELDS ”.

Consequential amendments

I7918
1 Part 8 of CTA 2010 (oil activities) is amended as follows.
2 In section 270 (overview of Part)—
a in subsection (7), for “certain new oil fields” substitute “ eligible oil fields ”, and
b in subsection (8), for paragraph (c) substitute—
3 In section 330 (supplementary charge in respect of ring fence trades), in subsection (5), for “certain new oil fields” substitute “ eligible oil fields ”.
I8019
1 Schedule 4 to CTA 2010 (index of defined expressions) is amended as follows.
2 At the appropriate place insert—
;
.
3 Omit the entry relating to “initial licensee (in Chapter 7 of Part 8)”.
I8120In section 63 of FA 2011 (reduction of supplementary charge for new oil fields), omit subsection (3).

Commencement

21
1 The amendments made by paragraphs 14, 15 and 16(3) come into force on the day on which this Act is passed.
2 The other amendments made by this Schedule come into force in accordance with provision contained in an order made by the Treasury.
3 An order made under sub-paragraph (2) may—
a make different provision for different purposes;
b provide for such amendments to have effect in relation to times before the order is made.
22
1 The Commissioners for Her Majesty's Revenue and Customs may by order make any incidental, supplemental, consequential, transitional or saving provision in consequence of the amendments made by this Schedule.
2 An order under this paragraph may—
a amend, repeal or revoke any provision made by or under CTA 2010;
b include provision having effect in relation to times before it is made, provided that it does not increase any person's liability to tax.

SCHEDULE 23 

Air passenger duty

Section 190

PART 1  Northern Ireland long haul rates of duty from 1 November 2011 to 31 March 2012

1In section 30 of FA 1994 (air passenger duty: rates of duty) after subsection (4A) insert—
2In article 3 of the Air Passenger Duty (Connected Flights) Order 1994 (S.I. 1994/1821) for “section 30(6), or section 31(3),” substitute “ Chapter 4 of Part 1 ”.
3The amendments made by this Part of this Schedule have effect in relation to the carriage of passengers beginning on or after 1 November 2011 but before 1 April 2012.

PART 2  Rates of duty from 1 April 2012

4
1 Section 30 of FA 1994 (air passenger duty: rates of duty) is amended as follows.
2 In subsection (2)—
a in paragraph (a) for “£12” substitute “ £13 ”, and
b in paragraph (b) for “£24” substitute “ £26 ”.
3 In subsection (3)—
a in paragraph (a) for “£60” substitute “ £65 ”, and
b in paragraph (b) for “£120” substitute “ £130 ”.
4 In subsection (4)—
a in paragraph (a) for “£75” substitute “ £81 ”, and
b in paragraph (b) for “£150” substitute “ £162 ”.
5 In subsection (4A)—
a in paragraph (a) for “£85” substitute “ £92 ”, and
b in paragraph (b) for “£170” substitute “ £184 ”.
6 After subsection (4A) insert—
5In article 3 of the Air Passenger Duty (Connected Flights) Order 1994 (S.I. 1994/1821) for “section 30(6), or section 31(3),” substitute “ Chapter 4 of Part 1 ”.
6The amendments made by this Part of this Schedule have effect in relation to the carriage of passengers beginning on or after 1 April 2012.

PART 3  Devolution of Northern Ireland long haul rates of duty

7Chapter 4 of Part 1 of FA 1994 (air passenger duty) is amended as follows.
8
1 Section 30 (rates of duty) is amended as follows.
2 After subsection (1) insert—
3 Omit subsections (4B) to (4D) (as inserted by paragraph 4(6) above).
4 The amendments made by this paragraph have effect in relation to the carriage of passengers beginning on or after the relevant day as defined in section 30A of FA 1994 (as inserted by paragraph 9 below).
9After section 30 insert—
10
1 Section 33 (registration of aircraft operators) is amended as follows.
2 After subsection (2) insert—
3 In subsection (3)(b) after “passengers” insert “ or, if the Commissioners have decided to keep a register under section 33A below, that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers apart from the carriage of chargeable passengers to which section 30A above applies ”.
4 In subsection (4) after “registered” (in both places) insert “ under this section ”.
5 In subsection (7) after “section” insert “ or section 33A below ”.
11After section 33 insert—
12In section 34 (fiscal representatives) in subsection (5)—
a omit “under section 33 above”, and
b in paragraph (a) for “that section” substitute “ section 33 or 33A above ”.
13After section 41 insert—
14In section 44 of CRCA 2005 (payment into Consolidated Fund) after subsection (2)(c) insert—
.
15In column 2 of the Table in paragraph 1 of Schedule 41 to FA 2008 (penalties for failure to notify), in the entry relating to air passenger duty, after “33(4)” insert “ or 33A(4) ”.

PART 4  Other provision

16Chapter 4 of Part 1 of FA 1994 (air passenger duty) is amended as follows.
17In section 28 (introduction to air passenger duty) for subsection (3) substitute—
18
1 Section 29 (chargeable aircraft) is amended as follows.
2 For subsection (1) substitute—
3 In subsection (2) for “ten” (wherever occurring) substitute “ 5.7 ”.
4 Omit subsection (3).
19After section 29 insert—
20In section 30 (rate of duty) before subsection (5) insert—
21In section 30A (as inserted by paragraph 9 above) after subsection (5) insert—
22
1 Section 43 (interpretation) is amended as follows.
2 In subsection (1) for the definition of “passenger” substitute—
3 After subsection (1) insert—
23The amendments made by this Part of this Schedule have effect in relation to the carriage of passengers beginning on or after 1 April 2013.

SCHEDULE 24 

Machine games duty

Section 191

PART 1 Imposition of duty

The duty

1A duty of excise, to be known as machine games duty, is to be charged on the playing of dutiable machine games in the United Kingdom.

Dutiable machine games

2
1 A “machine game” is a game (whether of skill or chance or both) played on a machine for a prize.
2 A machine game is “dutiable” if—
a the prize or at least one of the prizes that can be won from playing the game on the machine is or includes cash, and
b the maximum amount of cash that a player can win from playing the game on the machine exceeds the lowest charge payable for playing the game on the machine.
3 “Cash” means money or anything that may reasonably be considered to equate to money, including—
a anything that can be used in the same way as if it were money, and
b anything that allows a person to obtain money on demand or otherwise represents a promise to pay a person money on demand.
4 The things mentioned in sub-paragraph (3) include—
a anything of an intangible nature (such as points), and
b anything that a person has as a result of the taking of any step by someone else (such as the crediting of an account).
5 If an adult would reasonably assume that a machine game satisfies the tests in sub-paragraph (2)(a) and (b) (taking into account the way in which the game is presented and all the other circumstances of the case), the game is taken to be a dutiable machine game, whether or not it does in fact satisfy those tests.
6 In identifying for the purposes of this paragraph the lowest charge payable for playing a game, any offer that waives or permits a player to pay less than the charge that the player would be required to pay without the offer is disregarded.
7 Paragraph 3 makes further provision about what counts as a dutiable machine game for the purposes of this Schedule.
3
1 A game that would otherwise be a dutiable machine game does not count as one if—
a it involves betting on future real events,
b bingo duty is charged on the playing of it,
c lottery duty is charged on the taking of a ticket or chance in it, or
d it is a real game of chance and playing it—
i amounts to dutiable gaming for the purposes of section 10 of FA 1997, or
ii would do so but for subsection (3), (3B) or (4) of that section.
2 A “real game of chance” is a game of chance (within the meaning of Part 3 of FA 2014) that is non-virtual.
3 A game consisting of several stages counts as a dutiable machine game if—
a at least one stage would (if played on its own) be a dutiable machine game, or
b the stages (taken together) amount to a dutiable machine game.
4 If more than one game can be played on a given machine, each game is to be considered separately in deciding whether it is a dutiable machine game.
4The Treasury may by order specify criteria to be taken into account in deciding—
a whether a particular game (or class of game) falls within the definitions in paragraph 2(1) and (2), and
b what counts as a single go at playing a particular game (or class of game).

Types of machine

5
1 Machines are divided into three types for the purposes of machine games duty.
2 A machine is a “type 1 machine” if it can be demonstrated that—
a the highest charge payable for playing a dutiable machine game on the machine does not exceed 20p, and
b the maximum amount of cash that can be won from playing a dutiable machine game on the machine does not exceed £10.
3 A machine is a “type 2 machine” if—
a it is not a type 1 machine, and
b it can be demonstrated that the highest charge payable for playing a dutiable machine game on the machine does not exceed £5.
4 Any other machine is a “type 3 machine”.
5 The Treasury may by order substitute for a sum for the time being specified in sub-paragraph (2)(a) or (b) or (3)(b) such higher sum as may be specified in the order.

How the duty is charged

6
1 Machine games duty is charged on a taxable person's total net takings in an accounting period for each type of machine.
2 The amount of the duty is found by—
a applying the lower rate to the person's total net takings in the accounting period for type 1 machines,
b applying the standard rate to the person's total net takings in the accounting period for type 2 machines,
c applying the higher rate to the person's total net takings in the accounting period for type 3 machines, and
d aggregating the results.
3 This is subject to paragraph 10 (negative amounts of duty).
4 The person's “total net takings” in the accounting period for a type of machine are the sum of the person's net takings in the period for all the relevant machines of that type.
5 The person's “net takings” in the period for each relevant machine are determined in accordance with paragraphs 7 and 8.
6 If any of the relevant machines changes type during the accounting period—
a the net takings in the part of the period before the change and the net takings in the part after the change are to be allocated separately in calculating the person's total net takings in the period for each type of machine, and
b if it is not possible to identify the part of a period to which an amount relates, the amount is to be apportioned on a just and reasonable basis.
7 For the meaning of “relevant machine” in relation to a taxable person and an accounting period, see paragraph 50.

Net takings per machine

7
1 A taxable person's net takings in an accounting period for a relevant machine are—
a the takings, less
b the payouts.
2 The takings are the charges that become due at any material time from players for playing dutiable machine games on that machine (irrespective of when the games are played or the prizes are paid out).
3 The payouts are the prizes (whether cash or non-cash) that are paid out at any material time to players as a result of playing dutiable machine games on that machine (irrespective of when the games are played or the charges become due).
4 Sub-paragraph (3) does not include prizes paid out to—
a a person who is a registrable person in respect of the premises where the machine is located,
b a representative or employee of such a person at those premises, or
c a person acting for or at the direction of a person within paragraph (a).
5 Sub-paragraph (3) does not include prizes paid out unlawfully (for example, a prize paid out to a child or young person in breach of a condition attached to an operating licence by virtue of section 83(1)(b) of the Gambling Act 2005).
6 If it is not reasonably practicable to attribute charges and prizes to dutiable machine games or to apportion them between dutiable machine games and other games or other activities, any attribution or apportionment is to be done on a just and reasonable basis.
7 “Material time” means any time in the accounting period when the person is liable for machine games duty in respect of the machine.
8 The Commissioners may by regulations make provision about the point in time at which a charge is taken to become due, or a prize is taken to be paid out, for the purposes of this paragraph.
9 If a machine game is played in pursuance of an offer that permits the player to pay nothing or less than the charge that the player would be required to pay without the offer, the charge (if any) is treated as becoming due when the player plays the game.
10 A prize that is paid out using a system involving redemption tickets, points or anything similar is taken to be paid out when the prize is redeemed (rather than when the means of redemption is issued or communicated to the winner).
11 Sub-paragraphs (9) and (10) do not limit the power in sub-paragraph (8).
8
1 In calculating the takings and the payouts under paragraph 7, the following amounts are to be left out of account—
a amounts arising from playing dutiable machine games on a domestic occasion, and
b amounts arising in any other circumstances specified by the Treasury by order.
2 The power in sub-paragraph (1)(b)—
a may be exercised generally or in relation to particular cases or kinds of case, and
b may include provision requiring specified conditions to be met before amounts are left out of account.

The rates

9
1 The lower rate is 5%.
2 The standard rate is 20%.
3 The higher rate is 25%.
4 If a rate changes during an accounting period—
a the old rate is to be applied to the person's total net takings in the part of the period before the change, and
b the new rate is to be applied to the person's total net takings in the part of the period after the change.
5 If it is not possible to identify for the purposes of sub-paragraph (4) the part of the period to which an amount relates, it is to be apportioned on a just and reasonable basis.

Negative amounts of duty

10
1 If the calculation of the amount of machine games duty for which a taxable person is liable for an accounting period results in a negative amount (“amount X”)—
a the amount of machine games duty for which that person is liable for that period is treated as nil, and
b the amount of duty for which that person is liable for the next accounting period is to be reduced by amount X.
2 Sub-paragraph (1) applies to an accounting period whether or not amount X results wholly or partly from the previous application of that sub-paragraph.
3 Subject to any reduction required by sub-paragraph (1)(b), the person is not entitled to any repayment or refund of machine games duty in respect of amount X.

Who is liable

11
1 A person is liable for machine games duty in respect of a machine at any time if at the time—
a the person is responsible for the premises where the machine is located (see paragraph 12),
b the machine is available there for use by others for playing dutiable machine games on it, and
c the machine is not an excluded dual-use machine (see paragraph 13).
2 If, at any time, there is more than one person who satisfies sub-paragraph (1)(a) to (c) in respect of a machine, each of them is jointly and severally liable for the duty.
3 A person who is liable for machine games duty in accordance with this paragraph is referred to as a “taxable person”.

Responsible for premises

12
1 This paragraph sets out who is “responsible” for premises for the purposes of paragraph 11.
2 If a person is registered in respect of premises, that person is responsible for the premises.
3 A person is “registered” at any time in respect of premises if at the time there is an entry in force for that person in the MGD register in respect of those premises.
4 If no-one is registered in respect of premises, any person who is a registrable person in respect of the premises or a representative of such a person is responsible for the premises.
5 Paragraphs 20 to 24 make further provision about registration and registrable persons.

Excluded dual-use machines

13
1 A machine is an “excluded dual-use machine” if—
a it is capable of being used both for playing machine games and for some other purpose that is not related to playing machine games, and
b condition A or B is met.
2 Condition A is that the machine is not designed, adapted or presented in such a way as to—
a facilitate its use for playing dutiable machine games, or
b draw attention to the possibility of its use for playing such games.
3 Condition B is that the machine is so designed, adapted or presented but the person mentioned in paragraph 11(1) does not know, and could not reasonably be expected to know, that it is.
4 References to a machine being “adapted” include a machine to which anything has been done, including the installation of computer software on it.
5 The Commissioners may by order specify criteria to be taken into account in deciding whether a machine falls within the definition in sub-paragraph (1).
6 The Treasury may by order amend this paragraph.

Accounting periods

14
1 An accounting period for machine games duty is a period of 3 consecutive months.
2 The first day of an accounting period is such day as HMRC may direct.
3 A direction under sub-paragraph (2) may apply generally or only to a particular case or class of case.
4 HMRC may agree with a registered person to make either or both of the following changes for the purposes of that person's liability to machine games duty—
a to treat specified periods (whether longer or shorter than 3 months) as accounting periods,
b to begin accounting periods on days other than those applying by virtue of sub-paragraph (2).
5 HMRC may by direction make transitional arrangements for periods (whether of 3 months or otherwise) to be treated as accounting periods where—
a a person becomes or ceases to be registered, or
b an agreement under sub-paragraph (4) begins or ends.
6 If there is reason to believe that a person who is liable for machine games duty may not discharge that liability as it falls due from time to time—
a HMRC may by direction specify shorter periods to be treated as accounting periods for the purposes of that person's liability to machine games duty,
b any such direction continues to have effect until it is withdrawn by HMRC (unless otherwise specified in the direction), and
c withdrawal of a direction does not prevent the giving of further directions in respect of the same person.

Valuing prizes

15
1 This paragraph applies in valuing prizes for the purposes of this Schedule (including in determining the maximum amount of cash that can be won from playing a machine game).
2 The value of a prize includes any portion that—
a represents a refund of the charge payable for playing the game, or
b is calculated by reference to the amount of any such charge.
3 The value of a prize in the form of something that is reasonably considered to equate to money is equal to the amount of money to which the thing is reasonably considered to equate.
4 For a prize in the form of a currency other than sterling or in the form of something that is reasonably considered to equate to such a currency—
a the value of the prize is, in relation to any day, the sterling equivalent of that currency determined by reference to the London closing rate for that currency for the previous day, and
b for the purposes of paragraph 7(3), the day in relation to which the value is assessed is the last day of the relevant accounting period.
5 The value of a prize other than cash depends on the person (“A”) from whom the person paying out the prize (“B”) obtained it—
a if A was not connected with B when B obtained the prize from A, the value is the cost to B of obtaining the prize from A,
b if A was connected with B when B obtained the prize from A, the value is the smaller of—
i the cost to B of obtaining the prize from A, and
ii the amount that it would have cost B, at the time B obtained the prize, to obtain it from a person not connected with B.
6 Whether A is connected with B is to be determined in accordance with section 1122 of CTA 2010.
7 If the value of a prize other than cash cannot reasonably be determined in accordance with sub-paragraph (5), the value of the prize is such amount as is just and reasonable.
8 For the purposes of sub-paragraph (5), an amount paid by way of value added tax on the acquisition of a thing is to be treated as part of its cost (whether or not the amount is taken into account for the purpose of a credit or refund).
9 The Commissioners may by regulations make further provision about the way in which prizes are to be valued for the purposes of this Schedule.
10 This paragraph applies to a part of a prize as it applies to a whole prize, and references to a prize are to be read accordingly.

Valuing charges

16
1 This paragraph applies in determining for the purposes of this Schedule the amount of a charge (or the highest or lowest charge) payable or due for playing a machine game.
2 If the amount of a charge in money's worth cannot be determined, it is assumed to be such amount as is just and reasonable.
3 If a composite charge is payable or due for the opportunity to play a machine game more than once, the amount of the charge payable or due for each individual go is to be determined on a just and reasonable basis.
4 If a composite charge is payable or due for the opportunity to play a machine game and for something else, the amount of the charge payable or due for playing the game is to be determined on a just and reasonable basis.
5 The Commissioners may by regulations make further provision about the way in which the amount of charges is to be determined for the purposes of this Schedule.
6 Sub-paragraph (7) applies if—
a a dutiable machine game is played in pursuance of an offer that permits the player to pay nothing or less than the charge that the player would have been required to pay without the offer,
b the offer was made available to the player by way of winnings from an activity in respect of which another duty of excise or value added tax is charged, and
c the value of the offer is deductible in calculating the amount of that other duty or value added tax payable in respect of that activity.
7 The amount of the charge due from the player for playing the dutiable machine game is taken for the purposes of paragraph 7 to be the amount that the player would have been required to pay without the offer.
8 Regulations under sub-paragraph (5) may include provision extending or modifying the circumstances in which sub-paragraph (7) applies.

Collection and management

17The Commissioners are responsible for the collection and management of machine games duty.

Returns

18
1 The Commissioners may make regulations requiring registrable persons to make returns to HMRC in respect of relevant machines.
2 Regulations under this paragraph may in particular make provision about—
a liability to make a return,
b timing,
c form,
d content,
e method of making (including provision requiring returns to be made electronically),
f declarations,
g authentication, and
h when a return is to be treated as made.

Assessment and payment

19
1 The Commissioners may make regulations about payment of machine games duty.
2 The regulations may in particular make provision about—
a timing,
b instalments,
c methods of payment (including provision requiring payments to be made electronically),
d when payment is to be treated as made, and
e the process and effect of assessments by HMRC of amounts due.
3 Subject to regulations under this paragraph, section 12 of FA 1994 (assessment) applies in relation to liability to pay machine games duty.

Registration

20
1 The Commissioners must maintain a register of those responsible for premises where relevant machines are located.
2 The register is to be known as the MGD register.
3 A person must not make a relevant machine available for use by others for playing dutiable machine games on it unless a registrable person (whether that person or someone else) is registered in respect of the premises where the machine is located.
4 Paragraph 21 identifies who is a registrable person in respect of premises.
5 This paragraph does not apply in relation to a relevant machine if it is reasonable to expect that the only takings and the only payouts in respect of the machine would be amounts that would be left out of account by virtue of paragraph 8.

Registrable persons

21
1 If a person holds a relevant licence or permit in respect of premises, that person is a registrable person in respect of those premises.
2 But if the premises are leased to a person (“T”) for the purposes of an activity for which an alcohol licence is required and the alcohol licence in respect of the premises is held by someone else, T (and not the licence-holder) is a registrable person in respect of those premises.
3 If the premises are a stall at a travelling fair, each of the following is a registrable person in respect of the premises—
a the holder of the stall, and
b the person in charge of the fair.
4 For premises not falling within any of the preceding sub-paragraphs, each person listed in sub-paragraph (5) is a registrable person in respect of the premises.
5 The persons are—
a a person required to hold a relevant licence or permit in respect of the premises,
b an owner, lessee or occupier of the premises,
c a person who is responsible to the owner, lessee or occupier for the management of the premises,
d a person who is responsible for controlling the use of machines that are made available on the premises for use by others for playing dutiable machine games on them, and
e a person who is responsible for controlling the admission of persons to the premises or for providing persons resorting to the premises with goods or services.
6 “Relevant licence or permit” is defined in paragraph 22.
7 “Alcohol licence” means—
a a premises licence issued under Part 3 of the Licensing Act 2003 that authorises the supply of alcohol for consumption on the licensed premises,
b a premises licence issued under Part 3 of the Licensing (Scotland) Act 2005, except where such a licence only applies to the sale of alcohol for consumption off the premises, and
c a licence issued under the Licensing (Northern Ireland) Order 1996 (S.I. 1996/3158 (N.I. 22)), except where such a licence only applies to the sale of intoxicating liquor by retail for consumption off the premises.
8 “Travelling fair” means a fair—
a consisting wholly or principally of the provision of amusements,
b provided wholly or principally by persons who travel from place to place for the purpose of providing such fairs, and
c held at a place no part of which has been used for the provision of such a fair on more than 27 days in the same calendar year.
22
1 A “relevant licence or permit” is—
a a licence issued under Part 8 of the Gambling Act 2005,
b a family entertainment centre gaming machine permit as defined in section 247 of that Act,
c a club gaming permit as defined in section 271 of that Act,
d a club machine permit as defined in section 273 of that Act,
e a prize gaming permit as defined in section 289 of that Act,
f an on-premises alcohol licence or a relevant Scottish licence as defined, in each case, in section 277 of that Act but only if a licence or permit listed above is not held in respect of the same premises,
g a club premises certificate granted under Part 4 of the Licensing Act 2003 but only if a licence or permit listed above is not held in respect of the same premises,
h a certificate of registration within the meaning of the Betting, Gaming Lotteries and Amusements (Northern Ireland) Order 1985 (S.I. 1985/1204 (N.I. 11)),
i a bookmaking office licence within the meaning of that Order,
j a bingo club licence within the meaning of that Order,
k an amusement permit within the meaning of that Order,
l a certificate of registration within the meaning of the Registration of Clubs (Northern Ireland) Order 1996 (S.I. 1996/3159 (N.I. 23)), or
m a licence issued under the Licensing (Northern Ireland) Order 1996 (S.I. 1996/3158 (N.I. 22)) but only if a licence, permit or certificate listed above is not held in respect of the same premises.
2 In sub-paragraph (1), “listed above” means listed in any of the preceding provisions of that sub-paragraph.
3 The Treasury may by order amend this paragraph to add to, vary or restrict the list in sub-paragraph (1).

Compulsory registration

23
1 Sub-paragraph (2) applies if—
a it appears to HMRC that a relevant machine is being made available by anyone at premises for use by others for playing dutiable machine games on it, and
b no-one is registered in respect of the premises.
2 HMRC may give a notice under this paragraph to any person they believe to be a registrable person in respect of the premises.
3 The notice is referred to as a “registration notice”.
4 A person to whom a registration notice is given may appeal to an appeal tribunal against the notice.
5 The appeal may be made on either or both of the following grounds—
a that the person is not a registrable person in respect of the premises,
b that relevant machines are not being made available at the premises for use by others for playing dutiable machine games on them.
6 The appeal must be made within the period of 30 days beginning with the date of the registration notice.
7 If—
a no appeal is made within that period, or
b an appeal made within that period is dismissed or withdrawn,
HMRC may proceed to register the person in respect of the premises (unless another person has since become registered in respect of them).
8 Registration under this paragraph is treated as made with effect from the date of the registration notice.

Procedure for registration, de-registration etc

24
1 The Commissioners may make regulations about registration.
2 Regulations under this paragraph may in particular make provision about—
a the procedure for applying for registration (including provision requiring applications to be made electronically),
b the timing of applications,
c the information to be provided,
d the giving of registration notices and the making of appeals against them,
e the procedure for compulsory registration under paragraph 23,
f notification of changes to the register,
g de-registration, and
h re-registration after a person ceases to be registered.
3 The regulations may permit HMRC to make registration, or continued registration, subject to conditions.
4 Those conditions may in particular require—
a the provision of security for the payment of machine games duty, and
b (in the case of a foreign person) the appointment of a United Kingdom representative with responsibility for discharging liability to machine games duty.
5 In sub-paragraph (4) “foreign person” means a person who—
a in the case of an individual, is not usually resident in the United Kingdom,
b in the case of a body corporate, does not have an established place of business in the United Kingdom, and
c in any other case, does not include an individual who is usually resident in the United Kingdom.
6 The regulations may include provision for the registration of groups of persons; and may provide for the modification of the provisions of this Part of this Schedule in their application to groups.
7 The modifications may, for example, include a modification ensuring that, where a representative member of a group is registered in place of the members, each member will be jointly and severally liable for the duty payable by the representative member on behalf of the group.

Publication of register

25
1 The MGD register is to contain such details of those who are entered on the register and of the premises in respect of which they are registered as the Commissioners think fit.
2 The Commissioners may publish the register (or a part of it).
3 If they choose not to publish it or they choose to publish only a part of it, the Commissioners must nonetheless make arrangements for the provision of a copy of an entry in the register (or the unpublished part of it) to a member of the public on request.
4 But the Commissioners may refuse a request under sub-paragraph (3) if the person making the request does not pay a fee specified by the Commissioners.
5 The fee must not exceed the reasonable cost (including any indirect cost) of meeting the request.

Profit-sharers

26
1 Sub-paragraph (2) applies if—
a it appears to HMRC that machine games duty may be chargeable in respect of a machine,
b no-one is registered in respect of the premises where the machine is located, and
c either—
i HMRC do not know the identity of any of those responsible for the premises (see paragraph 12), or
ii HMRC do know the identity of one or more such persons but none of them is in the United Kingdom.
2 HMRC may give a notice under this paragraph to any person they believe to be beneficially entitled to a share of the machine's takings.
3 The notice must inform the person to whom it is given (“P”) that P will become liable to pay a share of the duty in accordance with this paragraph unless, within the specified period—
a P provides HMRC with sufficient information to identify a person in the United Kingdom who is responsible for the premises, or
b P satisfies HMRC that, when P became beneficially entitled to a share of the machine's takings, P took all reasonable steps to ascertain that a registrable person was registered in respect of the premises.
4 The specified period is—
a such period of 30 days or more as is specified in the notice, or
b such other period as may be agreed between HMRC and P.
5 If P fails to satisfy sub-paragraph (3)(a) or (b) within the specified period, HMRC may assess to the best of their judgement an amount equal to P's share of the machine games duty that would have been due in respect of the machine for an accounting period on the assumptions set out in sub-paragraph (6).
6 The assumptions are—
a that P had been liable for machine games duty in respect of the machine in the accounting period in accordance with paragraph 11,
b that the machine had been the only machine in respect of which P was so liable, and
c that the dutiable machine games in respect of which P is beneficially entitled to a share of the takings had been the only dutiable machine games played on the machine.
7 P's share is a percentage equal to the share of the machine's takings to which P is beneficially entitled.
8 An assessment under this paragraph may relate to more than one machine, more than one set of premises and more than one accounting period.
9 But it may not relate to a period that began more than 4 years before the date of the assessment.
10 An amount assessed under this paragraph is deemed to be an amount of machine games duty assessed under section 12 of FA 1994 and due from P in accordance with regulations under paragraph 19 of this Schedule.
11 P is not entitled to any repayment from HMRC of an amount assessed under this paragraph if HMRC subsequently identify a person responsible for the premises.
12 But if, after P has paid such an amount, HMRC make an assessment under section 12 of FA 1994 of an amount of machine games duty due from another person in respect of the same takings from the same machine for the same accounting period, account must be taken in that assessment of the amount paid by P.

Reviews and appeals

27
1 The decisions mentioned in sub-paragraph (2) are to be treated as if they were listed in subsection (2) of section 13A of FA 1994 (customs and excise reviews and appeals: meaning of “relevant decision”) and, accordingly, as if they were relevant decisions for the purposes mentioned in subsection (1) of that section.
2 The decisions are—
a a decision of HMRC to refuse a request for an agreement under paragraph 14,
b a decision to give a direction under that paragraph,
c a decision not to give such a direction,
d a decision of HMRC under regulations by virtue of paragraph 24(2),
e a decision of HMRC about security by virtue of paragraph 24(4)(a), and
f a decision of HMRC about the appointment of a United Kingdom representative by virtue of paragraph 24(4)(b).

Interest

28
1 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 machine games duty.
2 Interest charged under section 101 of that Act on an amount of machine games duty (or an amount enforceable as if it were machine games duty) may be enforced as if it were an amount of machine games duty payable by the person liable for the amount on which the interest is charged.

Penalties and enforcement

29In Schedule 24 to FA 2007 (penalties for errors), in the Table in paragraph 1, after the entry relating to remote gaming duty insert—
30In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing), in the Table in paragraph 1, after the entry relating to remote gaming duty insert—
31In Schedule 55 to FA 2009 (penalty for failure to make returns etc), in the Table in paragraph 1, after item 28 insert—
.
32In that Schedule, in each of the following provisions, for “28” substitute “ 29 ”
a paragraph 2(1)(b),
b paragraph 13A(1), and
c paragraph 13F(1).
33In Schedule 56 to FA 2009 (penalty for failure to make payments on time), in the Table in paragraph 1, after item 11M insert—
.
34In that Schedule, in each of the following provisions, for “11M” substitute “ 11N ”
a items 17A, 23 and 24 of the Table in paragraph 1,
b paragraph 2(c),
c paragraph 3(1)(b),
d paragraph 8A(1), and
e paragraph 8F(1).
35
1 Contravention of a provision mentioned in sub-paragraph (2) attracts a penalty under section 9 of FA 1994 (penalties) and also attracts daily penalties under that section.
2 The provisions are—
a any provision of regulations made under paragraph 18,
b any provision of regulations made under paragraph 19,
c paragraph 20(3), and
d any provision of regulations made under paragraph 24.

Forfeiture

36
1 A machine is liable to forfeiture if—
a an officer of Revenue and Customs finds it on any premises,
b the officer is satisfied that it is being, has been or is about to be made available on the premises for use by others for playing dutiable machine games on it, and
c condition A or B is met.
2 Condition A is that—
a no-one is registered in respect of the premises, and
b there is a serious risk that any machine games duty chargeable in respect of the machine would not be paid.
3 Condition B is that the officer is satisfied that an amount of machine games duty has become due and payable in respect of the machine, but has not been paid.

Offences

37
1 A person commits an offence if the person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion (by that person or any other person) of any machine games duty.
2 A person guilty of an offence under this paragraph is liable—
a on conviction on indictment, to imprisonment for a term not exceeding 14 years or a fine, or both;
b on summary conviction, to imprisonment for a term not exceeding 12 months the general limit in a magistrates’ court or a fine not exceeding the maximum amount, or both.
3 The maximum amount is the greater of—
a £20,000, and
b three times the duty or other amount that is unpaid or the payment of which is sought to be avoided.
4 In the application of this paragraph—
a in England and Wales, in relation to an offence committed before 2 May 2022, or
b in Northern Ireland,
the reference in sub-paragraph (2)(b) to 12 months the general limit in a magistrates’ court is to be read as a reference to 6 months.
5 Section 27 of BGDA 1981 (offences by bodies corporate) has effect for the purposes of any offence under this paragraph as it has effect for the purposes of the offence mentioned in that section.

Protection of officers

38Section 31 of BGDA 1981 applies in relation to machine games duty as it applies in relation to bingo duty.

Orders and regulations

39
1 This paragraph applies to orders and regulations under this Part of this Schedule.
2 Orders and regulations—
a may make provision that applies generally or only for specified purposes,
b may make different provision for different purposes, and
c may include transitional provision and savings.
3 Regulations may confer a discretion on HMRC.
4 Orders and regulations are to be made by statutory instrument.
5 For the purposes of making an order under paragraph 8(1)(b)—
a the statutory instrument containing the order must be laid before the House of Commons, and
b the order ceases to have effect at the end of the period of 28 days beginning with the day on which it was made unless, during that period, it is approved by a resolution of the House of Commons.
6 In reckoning the 28-day period, no account is to be taken of any time during which—
a Parliament is dissolved or prorogued, or
b the House of Commons is adjourned for more than 4 days.
7 An order ceasing to have effect by virtue of sub-paragraph (5)(b) does not affect—
a anything previously done under the order, or
b the making of a new order.
8 A statutory instrument containing an order under paragraph 13(6) or 22(3) may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.
9 Subject to sub-paragraphs (5) and (8), a statutory instrument containing an order or regulations is subject to annulment in pursuance of a resolution of the House of Commons.

Transitional provision

40
1 The Commissioners may by notice direct that regulations under paragraph 24 (procedure for registration, de-registration etc) are to apply in relation to the period before the go-live date with the modifications specified in the notice.
2 A notice under sub-paragraph (1) must be published by the Commissioners.
3 For a person who, on the go-live date, is responsible for premises where a relevant machine is located, the first accounting period is to be the period beginning with that day and ending with—
a the day before the day on which the next accounting period is to begin by virtue of a direction given under paragraph 14(2), or
b such other day as is necessary to give effect to an agreement made under paragraph 14(4).

Consequential amendments

41
1 Section 1(1) of CEMA 1979 (interpretation) is amended as follows.
2 In the definition of “the revenue trade provisions of the customs and excise Acts”, at the end insert—
.
3 In the definition of “revenue trader”, in paragraph (a)—
a omit “or” at the end of sub-paragraph (ic),
b after that sub-paragraph insert—
, and
c in sub-paragraph (ii), for “or (ic)” substitute “ , (ic) or (id) ”.
42
1 For section 118BC of that Act (inspection powers: gaming duty) substitute—
2 In section 118G of that Act (offences under Part 9A), in subsection (1), for “or section 118B” substitute “ , 118B or 118BC(4) ”.
43In section 2 of BGDA 1981 (bookmakers: general bets), in subsection (2), omit paragraph (d).
44
1 Section 26H of BGDA 1981 (exemptions from remote gaming duty) is amended as follows.
2 After subsection (2A) insert—
3 In subsection (3), before paragraph (b) insert—
.
45In Schedule A1 to BGDA 1981 (betting duties: double taxation relief), in paragraph 7, after paragraph (c) insert—
.
46In Schedule 4B to BGDA 1981 (remote gaming duty: double taxation relief), in paragraph 7, after paragraph (c) insert—
.
47In section 12 of FA 1994 (assessment to excise duty), in subsection (2)(c), after “1997” insert “ or Part 1 of Schedule 24 to the Finance Act 2012 ”.
48In section 10 of FA 1997 (gaming duty), for subsection (3AA) substitute—
49In section 7 of the Borders, Citizenship and Immigration Act 2009 (Customs revenue functions of the director), in subsection (2)(e)—
a omit “and” at the end of sub-paragraph (vi), and
b at the end of sub-paragraph (vii) insert
.

Interpretation

50In this Part of this Schedule—
  • “appeal tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal;
  • “cash” has the meaning given in paragraph 2 (and “non-cash” is to be read accordingly);
  • “charge”, in relation to a game, means a charge or deduction in money or money's worth, however it is described or levied and whether it becomes due before or after the game is played;
  • “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;
  • “dutiable machine game” has the meaning given in paragraph 2, subject to paragraphs 3 and 4;
  • “game” does not include a sport;
  • “the go-live date” is defined in paragraph 66(5);
  • “HMRC” means Her Majesty's Revenue and Customs;
  • “machine” means any apparatus that uses or applies mechanical power, electrical power or both;
  • “machine game” has the meaning given in paragraph 2;
  • “MGD register” has the meaning given in paragraph 20;
  • “money” means money in sterling or any other currency;
  • “payouts” means prizes paid out to players as a result of playing dutiable machine games on a machine;
  • “the payouts”, in relation to a particular taxable person and accounting period, has the meaning given in paragraph 7;
  • “premises” includes any place, any means of transport and any stall or other moveable structure;
  • “prize”, in relation to a game—
    1. means a prize in the form of cash or non-cash (or both), however it is described or paid out and whether it is a prize provided by a person making the game available or is winnings of money staked, but
    2. a benefit consisting of nothing more than the opportunity to play the game again does not count as a prize;
  • “registered” has the meaning given in paragraph 12 (and “registration” is to be read accordingly);
  • “registrable person” has the meaning given in paragraph 21;
  • “relevant machine” means—
    1. a machine in respect of which machine games duty is or will be chargeable, or
    2. in relation to a particular taxable person and accounting period, a machine in respect of which that person is liable for machine games duty in that period;
  • “representative” means a personal representative, trustee in bankruptcy, receiver or liquidator or any other person acting in a representative capacity;
  • “specified” includes described;
  • “takings” means charges due from players for playing dutiable machine games on a machine;
  • “the takings”, in relation to a particular taxable person and accounting period, has the meaning given in paragraph 7;
  • “taxable person” has the meaning given in paragraph 11;
  • “total net takings” has the meaning given in paragraph 6;
  • “United Kingdom” includes the territorial sea of the United Kingdom.
51
1 This Part of this Schedule is to be read in accordance with this paragraph.
2 A person “plays” a game if the person participates in the game—
a whether or not there are other participants in the game, and
b whether or not a computer generates images or data taken to represent the actions of other participants in the game.
3 A reference to the charge (or the lowest or highest charge) payable for playing a machine game—
a is a reference to the charge (or the lowest or highest charge) payable for a single go at playing the game, and
b includes any charge that entitles the person paying it to play a machine game or to play it at a reduced rate (even if the charge is ostensibly a charge for something else).
4 A reference to “paying” a charge is to be read, in the case of a charge in money's worth, as a reference to the provision of the thing, or performance of the service, in money's worth.
5 A reference to a prize (or the maximum amount of cash) that can be won from playing a machine game is a reference to a prize (or the maximum amount of cash) that can be won from a single go at playing the game.
6 A reference to “paying out” a prize is to be read, in the case of a prize in money's worth, as a reference to the provision of the thing, or performance of the service, in money's worth.
7 A reference to the premises where a machine is located or made available includes, in the case of a portable machine, the premises where the machine is issued to those wanting to play dutiable machines games on it.
52The imposition or payment of machine games duty does not make lawful anything that is otherwise unlawful.

PART 2 Removal of amusement machine licence duty

Amendment of BGDA 1981

53The following provisions of BGDA 1981 are omitted—
a sections 21 to 26,
b section 26H(3)(a),
c section 26N(3) and (4), and
d Schedules 4 and 4A.
54
1 Part 3 of that Act (general) is amended as follows.
2 In section 27 (offences by bodies corporate), for the words from “section 24” to “Schedule 4” substitute “ paragraph 13(1) or (3) or 14(1) of Schedule 1 or paragraph 16 of Schedule 3 ”.
3 In section 31 (protection of officers), for “remote gaming duty or the duty on amusement machine licences” substitute “ or remote gaming duty ”.
4 In section 33 (interpretation), in subsection (2), for “remote gaming duty or the duty on amusement machine licences” substitute “ or remote gaming duty ”.

Amendment of other enactments

55In section 102 of CEMA 1979, in subsection (3)(a), omit “or an amusement machine licence”.
56In section 10 of FA 1997 (gaming duty), omit subsection (3A).
57In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing), in the Table in paragraph 1, omit the entry relating to amusement machine licence duty.
58In section 7 of the Borders, Citizenship and Immigration Act 2009 (Customs revenue functions of the director), in subsection (2)(e), omit sub-paragraph (i).

Transitional provision and savings

59
1 If a licence granted under section 21 of BGDA 1981 is to expire on or after the go-live date, the holder of the licence is entitled to repayment of an amount of duty.
2 That amount is the difference between—
a the amount of duty actually paid on the licence before the go-live date in accordance with section 23 of that Act, and
b the amount (if less) determined in accordance with sub-paragraph (3).
3 The amount is to be determined as follows—
  • Step 1 Calculate the amount of duty that would have been paid if the period for which the licence was granted had been the number of complete months beginning with the date on which the licence was granted and ending immediately before the go-live date. The day immediately following the end of that period of complete months is referred to as “day X”.
  • Step 2 Add to the amount calculated under Step 1 an amount representing the duty payable for the period of days beginning with day X and ending with the day before the go-live date. The duty payable for each such day in that period is to be calculated as 1/365th of the amount of duty payable for a licence of 12 months for a machine of the relevant category.
4 If—
a duty is being paid on the licence in accordance with arrangements made under paragraph 7A of Schedule 4 to BGDA 1981 (payment of duty by instalments), and
b the amount of duty actually paid on the licence before the go-live date in accordance with section 23 of that Act is less than the amount determined in accordance with sub-paragraph (3),
the difference between those amounts is to be treated under that Act as unpaid duty.
5 If a person entitled to a repayment of more than £10 under this paragraph has not received the repayment within the period of 90 days beginning with the go-live date—
a the person may give notice to HMRC of that fact,
b the Commissioners must pay interest to the person on the amount of the repayment for the period from the end of that 90-day period until the day on which the repayment is made, and
c any such interest accrues at the rate under section 197 of FA 1996 (rates of interest) that is applicable for Parts 2 and 3 of Schedule 3 to FA 2001 (excise duty payment by Commissioners in case of error or delay).
60
1 If a licence granted or to be granted under section 21 of BGDA 1981 would expire within the period of 30 days ending with the go-live date, a person may apply—
a for the licence to be treated as extended for the necessary period, or
b for a new amusement machine licence to be treated as granted in its place under Schedule 4 to that Act for the necessary period.
2 The necessary period is the period from expiry of the licence until immediately before the go-live date.
3 An application under this paragraph may be made before or after the licence is granted but, if made after the licence is granted, it must be made before the day on which the licence is to expire.
4 The application must be made to HMRC in such form and manner as HMRC may require.
5 HMRC must grant the application once it has received payment of an amount of duty payable on the licence (or new licence) in respect of the necessary period.
6 The amount of duty payable in respect of the necessary period is to be the sum of the amounts payable for each day in that period, each such amount being 1/365th of the duty payable for a licence of 12 months for a machine of the relevant category.
7 Schedule 4 to BGDA 1981 and any regulations made under that Schedule apply (subject to any modifications specified by the Commissioners in a notice published for the purposes of this paragraph) to an amount of duty payable in accordance with this paragraph as to an amount of duty payable in accordance with section 23 of that Act.
8 Nothing in this paragraph affects the operation of that Act with respect to the provision of amusement machines in the necessary period in a case where no application is made under this paragraph or an application is not granted.
9 But if a default licence is granted under Schedule 4A to BGDA 1981 for the necessary period, the amount of duty that may be assessed under paragraph 4 of that Schedule is limited to the amount that would have been payable if an application had been made for a licence under this paragraph.
61
1 This paragraph applies to licences to be granted under section 21 of BGDA 1981 on or after 2 January 2013 (a “final month licence”).
2 Section 21(3) of that Act has effect as if—
a the requirement to grant amusement machine licences for a period of one or more whole months were omitted, and
b the power to grant amusement machine licences for a period not exceeding 12 months were a power to grant such licences for a period ending with a day that is no later than the day before the go-live date.
3 The requirement in section 21(4) of that Act to grant special amusement machine licences for a period of 12 months has effect in relation to a final month licence as if it were a requirement to grant a licence for the period beginning with the date of grant and ending with the day before the go-live date.
4 The amount of duty payable on a final month licence is to be calculated in the manner described in paragraph 60(6).
5 The Commissioners may by notice direct that Schedules 4 and 4A to BGDA 1981 and any regulations made under those Schedules are to apply to a final month licence with such modifications as may be specified in the notice.
6 A notice under sub-paragraph (5) must be published by the Commissioners.
62
1 The enactments repealed by this Part of this Schedule continue to have effect on and after the go-live date in relation to the provision of amusement machines before that date.
2 Enactments continuing to have effect by virtue of sub-paragraph (1) are to be read with any necessary modifications.
3 Without prejudice to the generality of sub-paragraph (2), paragraph 4 of Schedule 4A to BGDA 1981 (assessment of amount equivalent to duty) is to be read as if the reference in sub-paragraph (3) to the due date were a reference to the day before the go-live date.

PART 3 VAT exemption

Amendment of VATA 1994

63For section 23 of VATA 1994 substitute—
64
1 In Part 2 of Schedule 9 to that Act (exemptions: the groups), the provisions of Group 4 are amended as follows.
2 After Item 1 insert—
3 In Note (1)—
a for “Item 1 does” substitute “ Items 1 and 1A do ”, and
b omit paragraph (d) and the word “or” immediately preceding that paragraph.
4 After Note (1) insert—
5 Accordingly—
a in Part 2 of Schedule 9, in the heading of Group 4, after “GAMING” insert “ , DUTIABLE MACHINE GAMES ”, and
b in Part 1 of that Schedule, in the Index, for “Betting, gaming and lotteries” substitute “ Betting, gaming, dutiable machine games and lotteries ”.
65
1 Paragraph 9 of Schedule 11 to that Act (administration, collection and enforcement) is amended as follows.
2 For paragraph (a) substitute—
.
3 In paragraph (b), for “subsection (2) of that section” substitute “ section 23(3) ”.
4 Accordingly, in the heading immediately before paragraph 9, for “gaming machines” substitute “ machines on which relevant machine games are played ”.

PART 4 Miscellaneous

Application

66
1 The provisions of this Schedule have effect as follows.
2 Part 1 has effect in relation to the playing of machine games on or after 1 February 2013 (and Schedules 55 and 56 to FA 2009, as amended by Part 1 of this Schedule, are taken to have come into force for the purposes of machine games duty on that date).
3 Part 2 has effect in relation to the provision of amusement machines on or after 1 February 2013.
4 Part 3 has effect in relation to supplies made on or after that date.
5 A reference in this Schedule to the “go-live date” is to 1 February 2013.
67
1 The Treasury may by regulations make transitional or saving provision in connection with the removal of amusement machine licence duty and the introduction of machine games duty.
2 The power in sub-paragraph (1) is without prejudice to—
a the provision made by Part 2 of this Schedule, and
b any power in this Schedule apart from this paragraph to make transitional or saving provision in connection with the matters mentioned in sub-paragraph (1).
3 Regulations under this paragraph are to be made by statutory instrument.
4 A statutory instrument containing regulations under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.

SCHEDULE 25 

Remote gambling: double taxation relief

Section 194

Unilateral relief

1BGDA 1981 is amended as follows.
2After section 5D insert—
3After section 8 insert—
4After section 10 insert—
5After section 26I insert—
6In section 33 (interpretation)—
a in subsection (1), after the definition of “the Commissioners” insert—
, and
b after subsection (1A) insert—
7Before Schedule 1 insert—
8
1 Schedule 1 (betting duties) is amended as follows.
2 In paragraph 2, after sub-paragraph (4) insert—
3 In paragraph 2A, after sub-paragraph (3) insert—
9After Schedule 4A insert—

Consequential amendments

10In section 13A(2) of FA 1994 (meaning of “relevant decision”), after paragraph (g) insert—
.
11
1 The Table in paragraph 1 of Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing) is amended as follows.
2 In the second column of the entry for general betting duty, for “paragraph 4(1) to (3) of Schedule 1 to BGDA 1981” substitute “ paragraph 8(2) of Schedule A1 to BGDA 1981 (obligation to notify reduction etc in qualifying foreign tax) or paragraph 4(1) to (3) of Schedule 1 to that Act ”.
3 In the second column of the entry for pool betting duty, for “paragraphs 4(2) and 5(1) of Schedule 1 to BGDA 1981” substitute “ paragraph 8(2) of Schedule A1 to BGDA 1981 (obligation to notify reduction etc in qualifying foreign tax) or paragraphs 4(2) and 5(1) of Schedule 1 to that Act ”.
4 In the second column of the entry for remote gaming duty, for “to register under regulations under section 26J of BGDA 1981” substitute “ to notify under paragraph 8(2) of Schedule 4B to BGDA 1981 (reduction etc in qualifying foreign tax) and obligation to register under regulations under section 26J of that Act ”.

Commencement

12The amendments made by this Schedule have effect in relation to accounting periods ending on or after 1 April 2012 (and, accordingly, the first reconciliation period begins with the first accounting period in relation to which the amendments have effect).

SCHEDULE 26 

Categorisation of supplies

Section 196

PART 1  Zero-rated supplies

Introductory

1Part 2 of Schedule 8 of VATA 1994 (zero-rating) is amended as follows.

Food

2
1 Group 1 (food) is amended as follows.
2 After excepted item 4 insert—
3 In Note (3), omit the words from “and for the purposes of paragraph (b) above” to the end.
4 After that Note insert—

Protected buildings

I13
1 Group 6 (protected buildings) is amended as follows.
2 Omit items 2 and 3 (approved alterations and building materials).
3 In Note (3), for “(12) to (14) and (22) to (24)” substitute “ and (12) to (14) ”.
4 For Note (4) substitute—
5 In Note (5), in paragraphs (a), (b) and (c) omit “or other supply”.
6 Omit Notes (6) to (11).

Caravans

I824
1 Group 9 (caravans and houseboats) is amended as follows.
2 For item 1 substitute—
3 In item 3 for “5(3)” substitute “ 5(4) ”.
4 In the Note for “item 3” substitute “ item 4 ”.

PART 2  Exempt supplies

Land: self storage and facilities to supply hairdressing services

5
1 In Part 2 of Schedule 9 to VATA 1994 (exemptions), Group 1 (land) is amended as follows.
2 In item 1, after paragraph (k) insert—
.
3 In that item, omit “and” at the end of paragraph (m) and after that paragraph insert—
.
4 In that item, in paragraph (n), for “(m)” substitute “ (ma) ”.
5 After Note (15) insert—
6 After Note (16) insert—

PART 3  Supplies chargeable at reduced rate

I836
1 Schedule 7A to VATA 1994 (charge at reduced rate) is amended as follows.
2 In Part 1 (index to reduced-rate supplies of goods and services), at the appropriate place insert—
.
3 In Part 2 (the groups), at the end insert—

PART 4  Commencement and transitional provision

7
1 Subject to sub-paragraphs (2) and (3), the amendments made by this Schedule come into force on 1 October 2012.
2 Paragraphs 4 and 6 come into force on 6 April 2013.
3 Paragraph 3(2) to (6) comes into force, in relation to relevant supplies, on 1 October 2015.
4 A supply is “relevant” if it is—
a a supply of any services, other than excluded services, which is made—
i in the course of an approved alteration of a protected building, and
ii pursuant to a written contract entered into, or a relevant consent applied for, before 21 March 2012, or
b a supply of building materials which is made—
i to a person to whom the supplier is supplying services within paragraph (a) which include the incorporation of the materials into the building (or its site) in question, and
ii pursuant to a written contract entered into, or a relevant consent applied for, before 21 March 2012.
5 In relation to supplies made on or after 1 October 2012 but before 1 October 2015, Group 6 has effect as if, for the purposes of item 1 of that Group, a protected building were also regarded as substantially reconstructed if sub-paragraph (6) or (7) applies.
6 This sub-paragraph applies if at least three-fifths of the works carried out to effect the reconstruction (measured by reference to cost) are of such a nature that the supply of services (other than excluded services), materials and other items to carry out the works would, if supplied by a taxable person, be relevant supplies.
7 This sub-paragraph applies if—
a at least 10% (measured by reference to cost) of the reconstruction of the protected building was completed before 21 March 2012, and
b at least three-fifths of the works carried out to effect the reconstruction (measured by reference to cost) are of such a nature that the supply of services (other than excluded services), materials and other items to carry out the works would, if supplied by a taxable person, be relevant supplies but for the requirement for a written contract to have been entered into or relevant consent to have been applied for before that date.
8 For the purposes of sub-paragraph (4), works carried out that are not within the scope of the written contract entered into, or the relevant consent applied for, as it stood immediately before 21 March 2012, are not a supply made pursuant to that contract or relevant consent.
9 In this paragraph—
  • “excluded services” means the services of an architect, surveyor or other person acting as consultant or in a supervisory capacity;
  • “Group 6” means Group 6 of Part 2 of Schedule 8 to VATA 1994 (protected buildings);
  • “relevant consent” means—
    1. in the case of an ecclesiastical building to which section 60 of the Planning (Listed Buildings and Conservation Areas) Act 1990 applies, consent for the approved alterations by a competent body with the authority to approve alterations to such buildings, or
    2. in any other case, consent under any provision of—
      1. Part 1 of the Planning (Listed Buildings and Conservation Areas) Act 1990,
      2. Part 1 of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997,
      3. Part 5 of the Planning (Northern Ireland) Order 1991,
      4. Part 1 of the Ancient Monuments and Archaeological Areas Act 1979, or
      5. Part 2 of the Historic Monuments and Archaeological Objects (Northern Ireland) Order 1995.
10 The Notes of Group 6 apply in relation to this paragraph as they apply in relation to that Group, except that in applying Notes (9), (10) and (11), references to item 2 are to be read as references to sub-paragraph (4) of this paragraph.

SCHEDULE 27 

Anti-forestalling charge to VAT

Section 196

PART 1  Anti-forestalling charge to VAT

Introductory

1In this Schedule—
  • “date of the VAT change” means 1 October 2012;
  • “pre-change supply” means a supply of a description specified in paragraph 3 which—
    1. is treated as taking place before the date of the VAT change, and
    2. if it had been treated as taking place on that date, would have been charged to VAT at the standard rate as a result of the amendments made by Schedule 26.

The charge

2
1 There is an anti-forestalling charge to value added tax on any pre-change supply which—
a is treated as taking place on or after 21 March 2012, and
b is a supply linked to the post-change period (see paragraph 4).
2 “Chargeable pre-change supply” means a supply to which sub-paragraph (1) applies.
3 An anti-forestalling charge to value added tax under this Schedule is to be treated for all purposes as if it were value added tax charged in accordance with VATA 1994.

The supplies

3
1 The descriptions of supplies are—
a the supply, in the course of an approved alteration of a protected building, of any services, other than the services of an architect, surveyor or any person acting as consultant or in a supervisory capacity,
b the supply of building materials to a person to whom the supplier is supplying services within paragraph (a) which include the incorporation of the materials into the building (or its site),
c the grant of facilities for the self storage of goods, or
d the grant of a right to receive a supply within paragraph (c).
2 The Notes to Group 6 in Schedule 8 to VATA 1994 have effect for the purposes of sub-paragraph (1)(a) and (b) as they had effect for the purposes of items 1 to 3 of that Group on 21 March 2012.
3 For the purposes of this Schedule a right to receive a supply includes—
a any option to receive that supply, and
b any interest deriving from such an option.

Supplies linked to the post-change period

4
1 A supply of services within paragraph 3(1)(a) or (c) is linked to the post-change period if, and to the extent that, the services are carried out or provided on or after the date of the VAT change.
2 A supply of goods within paragraph 3(1)(b) is linked to the post-change period if, and to the extent that, the goods are incorporated into the building concerned (or its site) on or after that date.
3 A supply within paragraph 3(1)(d) is linked to the post-change period if, and to the extent that, the services to which the grant relates are carried out or provided on or after that date.

Power to modify this Schedule

5
1 The Treasury may by order modify this Schedule for the purposes of preventing an anti-forestalling charge from arising, in the circumstances specified in the order, in relation to any description of supplies specified in the order.
2 An order under this paragraph may contain provision having retrospective effect.
3 An order under this paragraph is to be made by statutory instrument.
4 A statutory instrument containing an order under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.

PART 2  Liability and amount

Liability

6
1 An anti-forestalling charge under this Schedule on a chargeable pre-change supply—
a is a liability of the supplier (subject to sub-paragraph (2)), and
b becomes due on the date of the VAT change (rather than at the time of supply).
2 If, on the date on which the anti-forestalling charge becomes due, the person who would be liable to pay the charge under sub-paragraph (1)—
a is not a taxable person, but
b is treated as a member of a group under sections 43A to 43D of VATA 1994,
the anti-forestalling charge is a liability of the representative member of the group.

Amount

7
1 The amount of the anti-forestalling charge on a chargeable pre-change supply is the amount of VAT that would be chargeable on the supply if it were subject to VAT at 20%.This is subject to any reduction under sub-paragraph (2).
2 If the chargeable pre-change supply is not wholly linked to the post-change period, the anti-forestalling charge is the relevant proportion of that amount.
3 The relevant proportion is—
P W
where—
P is so much of the consideration for the chargeable supply as is attributable, on a just and reasonable basis, to that part of the supply (or, in the case of a grant of a right, that part of the supply to which the right relates) which is linked to the post-change period;
W is the whole of the consideration for the chargeable pre-change supply.

PART 3  Administration and interpretation

Person ceasing to be taxable person before anti-forestalling charge due

8
1 This paragraph applies if, on the date on which an anti-forestalling charge under this Schedule becomes due (“the due date”), the person who is liable to pay the charge under paragraph 6 is not a taxable person.
2 The anti-forestalling charge must be accounted for by that person in accordance with VATA 1994 (and regulations made under that Act) as if it were VAT due in the last period for which the person was required to make a return by or under VATA 1994.
3 If an amount assessed as due by way of an anti-forestalling charge under this Schedule would (in the absence of this sub-paragraph) carry interest from a date earlier than the due date, it is to be treated as only carrying interest from the due date.

Adjustment of contracts following the VAT change

9
1 This paragraph applies where—
a a contract for the supply of goods or services is made before the date of the VAT change, and
b there is an anti-forestalling charge under this Schedule on the supply.
2 The consideration for the supply is to be increased by an amount equal to the anti-forestalling charge, unless the contract provides otherwise.

Invoices

10Regulations under paragraph 2A of Schedule 11 to VATA 1994 (VAT invoices) may make provision about the provision, replacement or correction of invoices in connection with an anti-forestalling charge under this Schedule.

Interpretation: general

11
1 Expressions used in this Schedule and in VATA 1994 have the same meaning in this Schedule as in that Act.
2 In this Schedule “treated as taking place” means treated as taking place for the purposes of the charge to VAT.

SCHEDULE 28 

Non-established taxable persons

Section 203

New Schedule 1A

1In VATA 1994, after Schedule 1 insert—

Other amendments of VATA 1994

2VATA 1994 is amended as follows.
3In section 7 (place of supply of goods), in subsection (4)(c)(ii), after “Schedule 1” insert “ or 1A ”.
4In section 54 (farmers etc), in subsection (2), after “Schedule 1” insert “ or is, has become or has ceased to be liable to be registered under Schedule 1A ”.
5In section 55 (customers to account for tax on supplies of gold etc), in subsection (1)—
a for “Schedule 1” substitute “ Schedules 1 and 1A ”, and
b for “that Schedule” substitute “ Schedule 1 ”.
6In section 55A (customers to account for tax on supplies of goods or services of a kind used in missing trader intra-community fraud), in subsection (3), for “Schedule 1” substitute “ Schedules 1 and 1A ”.
7In section 69 (breaches of regulatory provisions), in subsection (1)(a), after “Schedule 1,” insert “ paragraph 7 of Schedule 1A, ”.
8In section 73 (failure to make returns etc), in subsection (3)(b), after “Schedule 1,” insert “ paragraph 9 or 11 of Schedule 1A, ”.
9In section 74 (interest on VAT recovered or recoverable by assessment), in subsection (1)(c), after “Schedule 1,” insert “ under paragraph 13 of Schedule 1A, ”.
10In section 77 (assessments: time limits and supplementary assessments), in subsection (4C), after paragraph (a) insert—
.
11
1 Paragraph 1 of Schedule 1 (registration in respect of taxable supplies) is amended as follows.
2 In sub-paragraph (1)—
a in paragraph (a), after “if” insert “ the person is UK-established and ”, and
b in paragraph (b), after “if” insert “ the person is UK-established and ”.
3 In sub-paragraph (2), for “and the transferee is not registered under this Act at the time of the transfer” substitute “ , the transferee is UK-established at the time of the transfer and the transferee is not registered under this Act at that time ”.
4 After sub-paragraph (2) insert—
5 In sub-paragraph (4)(a), after “below,” insert “ paragraph 11 of Schedule 1A, ”.
6 In sub-paragraph (5), after “below,” insert “ paragraph 11 of Schedule 1A, ”.
7 At the end insert—
12In paragraph 3 of that Schedule, at the end of paragraph (b) insert
13Accordingly, in the heading of that Schedule, at the end insert “ : uk establishment ”.
F10114. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F10215. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16In paragraph 1 of Schedule 3A (registration in respect of disposals of assets for which a VAT repayment is claimed)—
a in sub-paragraph (1), after “Schedule 1,” insert “ 1A, ”, and
b in sub-paragraph (2), after “Schedule 1,” insert “ paragraph 11 of Schedule 1A, ”.
F10317. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amendments of other Acts

18In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing), in the Table in paragraph 1, after the entry for the obligations under Schedule 1 to VATA 1994 insert the following entry—

Application

19The amendments made by this Schedule have effect in relation to supplies made or to be made on or after 1 December 2012.

SCHEDULE 29 

Administration of VAT

Section 204

1VATA 1994 is amended as follows.
2
1 Section 18B (fiscally warehoused goods: relief) is amended as follows.
F1042 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 In subsection (2)(d) omit “in such form as the Commissioners may by regulations specify”.
4 After subsection (2) insert—
3
1 Section 18C (warehouses and fiscal warehouses: services) is amended as follows.
2 In subsection (1)(c) omit “, in such a form as the Commissioners may by regulations specify,”.
3 After subsection (1) insert—
4In section 35(2) (refund of VAT to persons constructing certain buildings), for the words following paragraph (c) substitute—
5
1 Section 39(3) (repayment of VAT to those in business overseas) is amended as follows.
2 Before paragraph (a) insert—
.
3 For paragraph (c) substitute—
6
1 Section 48 (VAT representatives) is amended as follows.
2 For subsection (1B)(c) substitute—
3 After subsection (4) insert—
7In section 54(6)(a) (farmers etc)—
a omit “the form and manner in which”, and
b for “is to be made” substitute “ to be made in the form and manner specified in the regulations or by the Commissioners in accordance with the regulations ”.
8In Schedule 1 (registration in respect of taxable supplies), in paragraph 17 (notifications)—
a after “form” insert “ and manner ”, and
b for “as the Commissioners may by regulations prescribe” substitute “ as may be specified in regulations or by the Commissioners in accordance with regulations. ”
F1059. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F10610. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11In Schedule 3A (registration in respect of disposals of assets for which a VAT repayment is claimed), in paragraph 8 (notifications)—
a after “form” insert “ and manner ”, and
b for “as the Commissioners may by regulations prescribe” substitute “ as may be specified in regulations or by the Commissioners in accordance with regulations. ”
12
1 Paragraph 2 of Schedule 11 (accounting for VAT and payment of VAT) is amended as follows.
2 In sub-paragraph (1) (keeping accounts and making returns), insert at the end “ or by the Commissioners in accordance with the regulations. ”
F1073 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 In sub-paragraph (3A) (statements containing particulars of certain supplies)—
a for paragraph (b) substitute—
, and
b for “prescribed” substitute “ so specified ”.
5 In sub-paragraph (3B) (notification of certain events), for “determined by the Commissioners in accordance with powers conferred by the regulations” substitute “ by the Commissioners in accordance with the regulations ”.
F1086 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1097 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13In consequence of the amendments made by this Schedule—
a in FA 1996, omit section 30(2), and
b in FA 2009, omit section 77(2)(d).

SCHEDULE 30 

Climate change levy

Section 207

PART 1  Reduced-rate supplies on or after 1 April 2011: deemed supply

1
1 In paragraph 45A(2)(b) of Schedule 6 to FA 2000 (reduced-rate supplies: deemed supply) for “80” substitute “ 65 ”.
2 The amendment made by this paragraph has effect in relation to a deemed supply if the actual supply in question was treated as taking place on or after 1 April 2011.

PART 2  Taxable supplies on or after 1 April 2012 for use in recycling processes

2Schedule 6 to FA 2000 (climate change levy) is amended as follows.
3In paragraph 4(2)(b) (definition of taxable supply) for “45A” substitute “ 43B ”.
4In paragraph 5(3) (taxable supplies: deemed supplies of electricity) for “45A” substitute “ 43B ”.
5In paragraph 6(2A) (taxable supplies: deemed supplies of gas) for “45A” substitute “ 43B ”.
6In paragraph 14(3A)(a) (use of electricity in an “exemption-retaining” way) for “, 18 and 18A” substitute “ and 18 ”.
7Omit paragraph 18A (exemption: supply for use in recycling processes).
8In paragraph 34 (time of supply of commodities other than gas and electricity: deemed supplies)—
a in sub-paragraph (1)(b), for “45A” substitute “ 43B ”, and
b in sub-paragraph (4), for “45A” substitute “ 43B ”.
9In paragraph 39(1)(c) (regulations as to time of supply) for “45A” substitute “ 43B ”.
10In paragraph 42 (amount payable by way of levy)—
a in sub-paragraph (1)—
i in paragraph (a) after “supply” (in the second place it occurs) insert “ or a supply for use in scrap metal recycling ”,
ii in paragraph (c) for “were not a reduced-rate supply.” substitute “ were a supply to which paragraph (a) applies; ”, and
iii after paragraph (c) insert—
, and
b after that sub-paragraph insert—
11Before the cross-heading before paragraph 44 insert—
12Omit paragraph 45A (reduced-rate supplies: deemed supply).
13After paragraph 62(1)(c) (tax credits) insert—
.
14In paragraph 101(2)(a) (penalty for incorrect notification)—
a in sub-paragraph (ii) omit “, 18A”,
b omit the “or” after sub-paragraph (ii), and
c before sub-paragraph (iv) insert—
.
15In paragraph 146(3) (regulations subject to affirmative resolution procedure) omit “18A,”.
16In paragraph 147 (interpretation)—
a in the definition of “prescribed”, omit “, 18A”, and
b insert at the appropriate place—
.
17Omit section 188 of FA 2003 (climate change levy: exemption for fuel used in recycling process).
18
1 FA 2011 is amended as follows.
2 In section 79 (which provides for a lower rate of climate change levy for Northern Ireland gas supplies treated as taking place before 1 November 2013), in subsection (2)—
a omit the “and” after paragraph (b), and
b after that paragraph insert—
.
3 Omit section 80 (power to suspend exemption for supplies used in recycling process).
19The amendments made by paragraphs 2 to 18 have effect in relation to supplies of taxable commodities so far as the commodities are actually supplied on or after 1 April 2012.

PART 3  Rates of climate change levy for supplies on or after 1 April 2013

20In paragraph 42(1) of Schedule 6 to FA 2000 (amount payable by way of levy) (as amended by paragraph 10(a) above)—
a before paragraph (c) insert—
,
b in paragraph (c), for “a” (in the first place it occurs) substitute “ any other ”, and
c for the table substitute—
.
21In paragraph 43B(1) of Schedule 6 to FA 2000 (supplies for use in scrap metal recycling and reduced-rate supplies: deemed supply) (as inserted by paragraph 11 above), for paragraph (b) substitute—
.
22In section 79 of FA 2011 (which provides for a lower rate of climate change levy for Northern Ireland gas supplies treated as taking place before 1 November 2013), in subsection (3)(a), for “£0.00062” substitute “ £0.00064 ”.
23The amendments made by paragraphs 20 to 22 have effect in relation to supplies treated as taking place on or after 1 April 2013.

SCHEDULE 31 

Climate change levy: climate change agreements

Section 207

1Schedule 6 to FA 2000 (climate change levy) is amended as follows.
2In paragraph 44(1)(a), (2A) and (2C) (definition of “reduced-rate” supply) for “Secretary of State” substitute “ Administrator ”.
3In paragraph 45(1) (variation of certificates under paragraph 44) for “Secretary of State” substitute “ Administrator ”.
4In paragraph 45B(2) and (6) (removal of reduced rate) for “Secretary of State” (wherever occurring) substitute “ Administrator ”.
5In the cross-heading before paragraph 47 omit “with Secretary of State”.
6In paragraph 47(1) (definition of “climate change agreement”: direct agreements)—
a in paragraph (a), for “Secretary of State” substitute “ Administrator ”,
b omit the “and” after paragraph (f),
c in paragraph (g)—
i for “five-yearly” substitute “ seven-yearly ”, and
ii after “Secretary of State” insert “ or the Administrator ”, and
d after paragraph (g) insert
7
1 Paragraph 48 (definition of “climate change agreement”: combination of umbrella and underlying agreements) is amended as follows.
2 In sub-paragraph (3)(c)—
a for “five-yearly” substitute “ seven-yearly ”, and
b after “Secretary of State” insert “ or the Administrator ”.
3 In sub-paragraph (4)—
a in paragraph (a), for “Secretary of State” substitute “ Administrator ”,
b omit the “and” after paragraph (c), and
c after paragraph (d) insert
4 In sub-paragraph (5)—
a for paragraph (b) substitute—
,
b omit paragraph (c),
c omit the “and” after paragraph (d), and
d after paragraph (e) insert
8
1 Paragraph 49 (supplemental provision relating to climate change agreements) is amended as follows.
2 In sub-paragraph (3) for “Secretary of State” (wherever occurring) substitute “ Administrator ”.
3 In sub-paragraph (7) for “paragraphs 47 and 48 and this paragraph” substitute “ this Part of this Schedule ”.
4 In sub-paragraph (8)—
a for “Secretary of State” substitute “ Administrator ”,
b after paragraph (a) insert “ or ”, and
c omit paragraph (c) and the “or” before it.
9After paragraph 52 insert—
10In paragraph 137(1) (disclosure of information) after paragraph (f) insert—
.
11The amendments made by this Schedule have no effect in relation to climate change agreements entered into with the Secretary of State before the day on which this Act is passed.

SCHEDULE 32 

Climate change levy: supplies subject to the carbon price support rates and combined heat and power stations

Section 207

PART 1 Main provision

F6Amendments to Schedule 6 to FA 2000

F61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F62. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F64. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F66. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F68. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F69. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F610. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F611. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F612. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F613. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F614. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F615. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F616. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6Provision relating to Schedule 20 to FA 2011

F617. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F618. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6Commencement

F619. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6PART 2 Carbon price support rates from 1 April 2014

20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 3  Electricity produced in combined heat and power stations

21
1 Paragraph 20A of Schedule 6 to FA 2000 (climate change levy: exemption in relation to electricity produced in combined heat and power stations) is amended as follows.
2 In sub-paragraph (1)—
a omit the “and” after paragraph (c), and
b after paragraph (d) insert
3 In sub-paragraph (4)(a)—
a in sub-paragraph (i), after “station” insert “ before 1 April 2013 ”, and
b in sub-paragraph (ii), after “station”, in the first place it occurs, insert “ before 1 April 2013 ”.
22
1 The following repeals are made in consequence of paragraph 21.
2 In Schedule 6 to FA 2000—
a in paragraph 5(3), omit “20B(6)(a),”,
b omit paragraphs 20A and 20B,
c in paragraph 24(2)—
i omit “or 20A,”
ii omit “or in combined heat and power stations”, and
iii omit “or 20B”, and
d omit paragraph 149A.
3 Omit sections 123 and 124 of FA 2002.
4 Omit section 193(3) and (5) of FA 2003.
5 The repeals made by this paragraph come into force on the day appointed by the Treasury by order made by statutory instrument.

SCHEDULE 33 

Inheritance tax: gifts to charities etc

Section 209

Reduced rate of inheritance tax

1After Schedule 1 to IHTA 1984 insert—

Consequential amendments

2IHTA 1984 is amended as follows in consequence of paragraph 1.
3In section 7 (rates), in subsection (1), after “(4) and (5) below” insert “ and to Schedule 1A ”.
4In section 33 (amount of charge under section 32), after subsection (2) insert—
5In section 78 (conditionally exempt occasion), in subsection (3), for “33(3)” substitute “ 33(2ZA) ”.
6In section 128 (rate of charge: woodlands)—
a the existing provisions become subsection (1) of that section, and
b after that subsection insert—
7After section 141 insert—
8In Schedule 4 (maintenance funds for historic buildings etc), in paragraph 14, after sub-paragraph (2) insert—

Instruments of variation to be notified to charities etc

9In section 142 of IHTA 1984 (alteration of dispositions taking effect on death), after subsection (3) insert—

Commencement

10
1 The Schedule inserted by paragraph 1 has effect in cases where D's death occurs on or after 6 April 2012 (and the amendments made by paragraphs 3 to 8 are to be read accordingly).
2 The amendment made by paragraph 9 has effect in cases where the person's death occurs on or after 6 April 2012.

SCHEDULE 34 

Bank levy

Section 211

Introductory

1Schedule 19 to FA 2011 (bank levy) is amended as follows.

Rates 2012

2In paragraph 6 (steps for determining the amount of the bank levy), in sub-paragraph (2)—
a for “0.039%” substitute “ 0.044% ”, and
b for “0.078%” substitute “ 0.088% ”.
3In paragraph 7 (special provision for chargeable periods falling wholly or partly before 1 January 2012), in sub-paragraph (2)—
a for “0.039%” substitute “ 0.044% ”, and
b for “0.078%” substitute “ 0.088% ”.
4The amendments made by paragraphs 2 and 3 are treated as having come into force on 1 January 2012.

Rates from 2013

F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
1 In paragraph 7 (special provision for chargeable periods falling wholly or partly before 1 January 2012) for sub-paragraphs (1) and (2) substitute—
F182 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7The amendments made by paragraph 6 come into force on 1 January 2013.

Joint ventures

8
1 Paragraph 43 (calculation of chargeable equity and liabilities where relevant group has an interest in a joint venture) is amended as follows.
2 In sub-paragraph (1), for paragraphs (d) and (e) substitute
3 For sub-paragraph (2) substitute—
9In paragraph 44 (chargeable equity and liabilities of joint venture: prevention of double charge), in sub-paragraph (7)(b), for the words from “liabilities for” to “27(2)(a)” substitute “ taken into account in calculating the chargeable equity and liabilities of V (or where sub-paragraph (6) applies, A) ”.”
10The amendments made by paragraphs 8 and 9 have effect in relation to chargeable periods ending on or after 1 January 2012.

Double taxation relief

11
1 In paragraph 66 (double taxation arrangements), after sub-paragraph (9) insert—
2 After paragraph 67 insert—
3 Accordingly, the italic heading before paragraph 68 is omitted.

Transitional provision

12
1 This paragraph applies where—
a an amount of the bank levy is treated as if it were an amount of corporation tax chargeable on an entity (“E”) for an accounting period of E,
b the chargeable period in respect of which the amount of the bank levy is charged falls (or partly falls) on or after 1 January 2012, and
c under the Instalment Payment Regulations, one or more instalment payments, in respect of the total liability of E for the accounting period, were treated as becoming due and payable before the commencement date (“pre-commencement instalment payments”).
2 Paragraphs 2 to 10 are to be ignored for the purpose of determining the amount of any pre-commencement instalment payment.
3 If there is at least one instalment payment, in respect of the total liability of E for the accounting period, which under the Instalment Payment Regulations is treated as becoming due and payable on or after the commencement date (“post-commencement instalment payments”), the amount of that instalment payment, or the first of them, is to be increased by the adjustment amount.
4 If there are no post-commencement instalment payments, a further instalment payment, in respect of the total liability of E for the accounting period, of an amount equal to the adjustment amount is to be treated as becoming due and payable at the end of the period of 30 days beginning with the commencement date.
5 “The adjustment amount” is the difference between—
a the aggregate amount of the pre-commencement instalments determined in accordance with sub-paragraph (2), and
b the aggregate amount of those instalment payments determined ignoring sub-paragraph (2) (and so taking account of paragraphs 2 to 10).
6 In the Instalment Payment Regulations—
a in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13, references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those Regulations are to be read as including a reference to sub-paragraphs (1) to (5) (and in regulation 7(2) “the regulation in question”, and in regulation 8(2) “that regulation”, are to be read accordingly), and
b in regulation 9(3), the reference to those Regulations is to be read as including a reference to sub-paragraphs (1) to (5).
7 In section 59D of TMA 1970 (general rule as to when corporation tax is due and payable), in subsection (5), the reference to section 59E is to be read as including a reference to this paragraph.
8 In this paragraph—
  • “the chargeable period” is to be construed in accordance with paragraph 4 or (as the case may be) 5 of Schedule 19 to FA 2011;
  • “the commencement date” means the day on which this Act is passed;
  • “the Instalment Payment Regulations” means the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175);
and references to the total liability of E for an accounting period are to be construed in accordance with regulation 2(3) of the Instalment Payment Regulations.

SCHEDULE 35 

Stamp duty land tax: higher rate for certain transactions

Section 214

Introductory

1Part 4 of FA 2003 (stamp duty land tax) is amended in accordance with paragraphs 2 to 9.

Higher rate of tax: main provisions

2
1 Section 55 (amount of tax chargeable: general) is amended as follows.
2 In subsection (1), after “chargeable transaction” insert “ to which this section applies ”.
3 After that subsection insert—
F354 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 In subsection (5), for “74” substitute “ 74(2) and (3) ”.
F366 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3After section 55 insert—
4After Schedule 4 insert—

Higher rate of tax: exercise of collective rights by tenants of flats

5
1 Section 74 (exercise of collective rights by tenants of flats) is amended as follows.
2 After subsection (1) insert—
F373 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minor and consequential amendments

6
1 Section 109 (general power to vary Part 4 of FA 2003 by regulations) is amended as follows.
2 After subsection (2) insert—
3 In subsection (3)—
a for “subsection (2)(b),” substitute “ subsections (2)(b) and (2A), ”,
b omit the “or” at the end of paragraph (a), and
c after that paragraph insert—
.
7
1 Schedule 5 (amount of tax chargeable: rent) is amended as follows.
2 In paragraph 9—
a in sub-paragraph (4)—
i after “section 55” insert “ or 74(1A) ”, and
ii after “Schedule” (in the second place it occurs) insert “ 4A or ”, and
b in sub-paragraph (5)—
i for “that section” substitute “ section 55 ”, and
ii after “Schedule” (in the second place it occurs) insert “ 6B ”.
3 In paragraph 9A(1), for “where there is chargeable consideration other than rent.” substitute
8In paragraph 2(4) of Schedule 6B (transfers involving multiple dwellings)—
a omit the “or” at the end of paragraph (a), and
b after that paragraph insert—
.
9
1 Schedule 15 (partnerships) is amended as follows.
2 In paragraphs 11(2C) and 19(2C), in the substituted sub-paragraph (4)—
a after “section 55” insert “ or 74(1A) ”, and
b after “Schedule” (in the second place it occurs) insert “ 4A or ”.
3 In paragraph 30(2)—
a for “either or both” substitute “ one or more ”, and
b after paragraph (a) insert—
.

Application of amendments

10
1 Except as mentioned in sub-paragraph (2), the amendments made by this Schedule have effect in relation to any land transaction of which the effective date is on or after 21 March 2012.
2 Those amendments do not have effect in relation to any transaction that is—
a effected in pursuance of a contract entered into and substantially performed before 21 March 2012,
b effected in pursuance of a contract entered into before that date and not excluded by sub-paragraph (3), or
c excepted by sub-paragraph (4).
3 A transaction effected in pursuance of a contract entered into before 21 March 2012 is excluded by this sub-paragraph if—
a there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 21 March 2012,
b 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
c 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.
4 A transaction treated as occurring under paragraph 17(2) or 17A(4) of Schedule 15 to FA 2003 (partnerships) is excepted by this sub-paragraph if the effective date of the land transfer referred to in sub-paragraph (1)(a) of the paragraph concerned is before 21 March 2012.

C15SCHEDULE 36 

Agreement between UK and Switzerland

Section 218

PART 1 Introduction

The Agreement and the Joint Declaration

1In this Schedule—
a “the Agreement” means the agreement signed on 6 October 2011 between the United Kingdom and the Swiss Confederation on co-operation in the area of taxation, as amended by a protocol signed by them on 20 March 2012 and by a mutual agreement signed by them on 18 April 2012 implementing article XVIII of that protocol,
b “the Joint Declaration” means the joint declaration (concerning a tax finality payment) forming an integral part of that protocol,
c “the start date” is the date on which the Agreement enters into force in accordance with its terms (see Article 44), and
d references to a numbered Article are to the Article of that number in the Agreement.

PART 2 The past

Taxes affected

2
1 The taxes affected by this Part are—
a income tax,
b capital gains tax,
c inheritance tax, and
d VAT.
2 Accordingly, this Part affects—
a amounts of income on which income tax is charged,
b chargeable gains,
c the value of property forming part of the value transferred by a chargeable transfer, and
d the value of supplies on which VAT is charged.
3 An amount falling within one (or more) of those descriptions is referred to as a “taxable amount” and, in relation to such an amount, “tax” means whichever of the taxes mentioned in sub-paragraph (1) is (or are) charged on it.

Application of this Part

3
1 This Part applies if—
a a one-off payment is levied in accordance with Part 2 of the Agreement,
b a certificate is issued under Article 9(4) to a person (“P”) in respect of that payment, and
c the certificate is approved by P or considered approved by virtue of that Article.
2 The certificate is referred to in this Part as “the Part 2 certificate”.

Qualifying amounts

4
1 The Part 2 certificate applies to taxable amounts in respect of which the conditions in sub-paragraph (2) are met.
2 The conditions are—
a P is liable to tax on the amount,
b the amount is untaxed,
c the taxable event took place before the start date, and
d the necessary link with the certificate can be demonstrated.
3 The necessary link is—
a in a case falling within Article 9(3) (non-UK domiciled individuals opting for self-assessment method), that the amount is included in the omitted taxable base by reference to which the one-off payment was calculated, and
b in any other case, that the amount forms part of or is represented by the assets comprised in the relevant capital by reference to which the one-off payment was calculated (referred to in the Agreement as Cr).
4 For the purposes of sub-paragraph (3)(b), amounts are assumed to be attributed to assets in the way that produces the most beneficial outcome for P.
5 Paragraph 11 makes further provision about the interpretation of sub-paragraph (2).
6 Amounts to which the Part 2 certificate applies in accordance with this paragraph are referred to in this Part as “qualifying amounts”.

Eligibility for clearance

5
1 The effect of the Part 2 certificate depends on whether P is eligible for clearance.
2 P is “eligible for clearance” if—
a none of the circumstances listed in Article 9(13)(a) to (e) apply (tax investigations etc), and
b Article 12(1) does not apply (wrongful behaviour in relation to non-UK domiciled status).
3 Otherwise, P is “not eligible for clearance”.

Effect if P eligible for clearance

6
1 This paragraph sets out the effect of the Part 2 certificate if P is eligible for clearance.
2 P ceases to be liable to tax on qualifying amounts.
3 Sub-paragraph (2) does not apply to a qualifying amount if—
a the amount was held in the United Kingdom,
b at some point during the period beginning with 6 October 2011 and ending immediately before the start date, it ceased to be held in the United Kingdom, and
c after that point (but before the start date) it began to be held in Switzerland.
4 Instead, such part of the one-off payment as is attributable (on a just and reasonable basis) to the qualifying amount is to be treated as if it were a credit allowable against the tax due from P taking account of that amount.
5 The meaning of tax due “taking account of” an amount is explained in Part 5 of this Schedule.
6 The form in which a qualifying amount was held in the United Kingdom is irrelevant (so references in sub-paragraph (3) to the amount include an asset representing the amount).
7 The total qualifying amounts to which sub-paragraphs (2) and (4) can apply as a result of the Part 2 certificate is limited to X.
8 If the total exceeds X, the particular qualifying amounts to which those sub-paragraphs apply are assumed to be those that would produce the most beneficial outcome for P.
9 X is—
a in a case falling within Article 9(3), the value of the omitted taxable base by reference to which the one-off payment was calculated, and
b in any other case, the value shown in the Part 2 certificate as the value of the relevant capital (Cr).

Ceasing to be liable to tax

7
1 The result of “ceasing to be liable” to tax on a qualifying amount depends on the tax (or taxes) in respect of which the amount is untaxed.
2 For income tax or capital gains tax, the result is that the amount is no longer liable to be brought into account in assessing the income tax or capital gains tax due from P for the tax year in which the amount would otherwise be liable to be brought into account.
3 For inheritance tax, the result is that any inheritance tax due from P in respect of the chargeable transfer and attributable to the property whose value is included in the amount is no longer due from P.
4 For VAT, the result is that P is no longer required to account for output tax on the amount in determining the VAT payable by P for the prescribed accounting period in which P would otherwise be required to account for output tax on the amount.
5 But—
a ceasing to be liable to tax on a qualifying amount does not affect P's liability to tax on any other amount, and
b P's liability to tax on any other amount remains what it would have been, had the qualifying amount been brought into account in calculating that liability.
6 Accordingly, if the qualifying amount were ever to be brought into account and it were found that the tax assessed on any other amount should have been higher as a result, P would remain liable for the extra tax due on that other amount and for any associated ancillary charge.
7 For the purposes of sub-paragraphs (5) and (6), the qualifying amount is assumed to form the top slice of the total sum on which P is liable to tax.

Effect if P not eligible for clearance

8
1 This paragraph sets out the effect of the Part 2 certificate if P is not eligible for clearance.
2 The one-off payment is to be treated as if it were a credit allowable against the tax due from P taking account of qualifying amounts.
3 The one-off payment is to be applied for the purposes of sub-paragraph (2)—
a in the order specified in sub-paragraph (4), and
b subject to that, in the way that produces the most beneficial outcome for P.
4 The order is—
a first, for VAT,
b then, for income tax,
c then, for capital gains tax, and
d finally, for inheritance tax.

Interest, penalties etc

9
1 Where, by virtue of this Part, P ceases to be liable to tax on a qualifying amount, P also ceases to be liable to any ancillary charge directly connected with that amount.
2 Where, by virtue of this Part, all or part of a one-off payment is treated as if it were a credit allowable against the tax due from P taking account of a qualifying amount, the credit may also be used to offset any ancillary charge directly connected with that amount.
3 Sub-paragraph (4) applies in the case of a qualifying amount that is part only of—
a an amount of income on which income tax is charged,
b a chargeable gain,
c the value of property forming part of the value transferred by a chargeable transfer, or
d the value of a supply on which VAT is charged.
4 The amount of any ancillary charge directly connected with that qualifying amount is determined by apportioning the ancillary charge directly connected with the income, gain or value on a just and reasonable basis.

Repayments

10Nothing in this Part entitles any person to a repayment or refund of tax, save for any repayment or refund to which P may be entitled by virtue of paragraph 6(4) or 8(2) if the credit allowable under that paragraph exceeds the total amount of tax against which the credit is allowable.

Paragraph 4: supplementary provision

11
1 This paragraph explains how paragraph 4(2) is to be read for each description of taxable amount.
2 For income and chargeable gains—
a the reference to P being “liable to tax” includes a case where P would be so liable if the income or gain were to be remitted to the United Kingdom,
b “the taxable event” takes place when the income arises or the gain accrues (whether or not, in a remittance basis case, it is remitted to the United Kingdom), and
c the income or gain is “untaxed” if it has not been brought into account in an assessment to income tax or, as the case may be, capital gains tax for the tax year in which it is required to be brought into account.
3 For the value of property forming part of the value transferred by a chargeable transfer—
a “the taxable event” takes place when the chargeable transfer is made (or, in the case of a potentially exempt transfer, when death occurs), and
b the value of the property is “untaxed” if it has not been brought into account in determining the value transferred by the chargeable transfer.
4 For the value of supplies on which VAT is charged—
a “the taxable event” takes place when P makes the supply, and
b the value of the supply is “untaxed” if output tax on the supply has not been accounted for in determining the VAT payable by P for the prescribed accounting period in which P is required to account for output tax on the supply.
5 Paragraph 4(2)(a) is not satisfied in a case where P is liable to tax only because the liability has been transferred to P as a result of action taken by HMRC (for example, as a result of a notice given under section 77A of VATA 1994 or a direction given under regulation 81 of the Income Tax (PAYE) Regulations 2003 (S.I. 2003/2682)).

Refund of one-off payment

12If a one-off payment is refunded by HMRC in accordance with Article 15(3), this Part ceases to apply with respect to that payment.

PART 3 The future: income tax and capital gains tax

Taxes affected

13The taxes affected by this Part are—
a income tax, and
b capital gains tax.

Application of this Part

14
1 This Part applies if—
a a sum is levied under Article 19 on an amount of income or a gain of a person, and
b a certificate is issued to the person under Article 30(1) in respect of the levying of that sum (or sums that include that sum).
2 This Part also applies if—
a a retention is made under EUSA from an amount of income or a gain of a person,
b a tax finality payment, as contemplated by the Joint Declaration, is made on the same income or gain, and
c a certificate is issued to the person under the Joint Declaration in respect of the making of that payment (or payments that include that payment).
3 In this Part—
a the person is referred to as “P”,
b the certificate is referred to as “the relevant certificate”,
c the amount of income, or the gain, is referred to as “the cleared amount”,
d the account or deposit (within the meaning of the Agreement) to which the certificate relates (or to which certificates relate that include the certificate) is referred to as “the underlying account”, and
e the sum levied under Article 19 on the cleared amount or, as the case may be, the tax finality payment made on it is referred to as “the transferred sum”.

Effect of relevant certificate

15
1 The effect of the relevant certificate depends on whether P makes an election under paragraph 16 in respect of the underlying account for the applicable year.
2 “The applicable year” is the tax year for which P is liable to income tax or, as the case may be, capital gains tax on the cleared amount.
3 If P makes an election, the transferred sum is to be treated as if it were a credit allowable against the income tax or, as the case may be, capital gains tax due from P for the applicable year.
4 If P does not make an election, P ceases to be liable to income tax or, as the case may be, capital gains tax on the cleared amount.
5 Sub-paragraph (4) is to be read in accordance with paragraph 7.
6 Where P ceases to be liable to tax on the cleared amount, P also ceases to be liable to any ancillary charge directly connected with that amount.

Election

16
1 P may make an election under this paragraph in respect of the underlying account for a tax year if all the affected amounts are included in full in a return (or amended return) made by P under Part 2 of TMA 1970 for that tax year.
2 In relation to a tax year, an amount is an “affected amount” if—
a a certificate is issued to P under Article 30(1) or the Joint Declaration in respect of the levying of a sum, or the making of a tax finality payment, on that amount,
b the account or deposit to which the certificate relates is the underlying account, and
c the amount is required to be brought into account in assessing the income tax or capital gains tax due from P for that tax year.
3 An election under this paragraph must be made in the return or amended return in which the affected amounts are included.
4 An election may only be made under this paragraph if it is accompanied by all the relevant certificates relating to the underlying account.
5 For the purposes of paragraph 15, P is treated as making an election under this paragraph in respect of the underlying account for a tax year if a claim is made under Part 3 of TIOPA 2010 (double taxation relief for special withholding tax) in relation to any of the affected amounts.
6 Section 143 of TIOPA 2010 (taking account of special withholding tax in calculating income or gains) applies with any necessary modifications in relation to a tax finality payment as it applies in relation to special withholding tax.

Other credits to be allowed first

17Other than a credit allowed under Part 3 of TIOPA 2010, any credit for foreign tax allowed under that Act against the income tax or, as the case may be, capital gains tax due from P for the applicable year is to be allowed before effect is given to paragraph 15(3).

Repayments

18
1 Sub-paragraph (2) applies if the amount of a credit allowable under paragraph 15(3) exceeds the amount of income tax or, as the case may be, capital gains tax due from P for the applicable year (before set-off).
2 The excess is to be set against any amount of the other tax (income tax or capital gains tax) due from P for that year.
3 Nothing in this Part entitles any person to a repayment or refund of tax, save for any repayment to which P may be entitled as a result of paragraph 15(3) if, in relation to a credit allowable under that paragraph, there is any remaining balance after applying—
a sub-paragraph (2), and
b section 138(4)(a) or 140(5)(a) of TIOPA 2010, if applicable to the cleared amount.

Relationship with special withholding tax rules

19The Joint Declaration does not count for the purposes of section 136(6)(b) of TIOPA 2010 (definition of “special withholding tax”) as a corresponding provision of international arrangements.

PART 4 The future: inheritance tax

Taxes affected

20This Part affects inheritance tax.

Application of this Part

21
1 This Part applies if—
a an amount is withheld under Article 32(2) in respect of relevant assets of a deceased person (“P”), and
b a certificate is issued under Article 32(6) in respect of the withholding of that amount.
2 The certificate is referred to in this Part as “the Article 32 certificate”.
3 The relevant assets in relation to which the Article 32 certificate is issued are referred to as “the cleared assets”.
4 Any reference in this Part to “the chargeable transfer” is to the transfer made (under section 4 of IHTA 1984) on P's death.

Effect of Article 32 certificate

22
1 The cleared assets are to be treated as if they were excluded property in determining the value of P's estate immediately before P's death.
2 As a result, any ancillary charge directly connected with those assets is also extinguished.
3 But—
a treating the cleared assets as if they were excluded property does not affect any liability to inheritance tax on the rest of P's estate, and
b that liability remains what it would have been, had the cleared assets not been treated as excluded property.
4 Accordingly, if the cleared assets were ever to be included in an account or further account under section 216 or 217 of IHTA 1984 in respect of the chargeable transfer and it were found that the inheritance tax charged on the value of the property in P's estate other than the cleared assets should have been higher, the extra tax charged on the value of that other property remains due, together with any associated ancillary charge.
5 For the purposes of sub-paragraphs (3) and (4), the value of the cleared assets is assumed to form the highest part of the value transferred by the chargeable transfer.

Election in respect of Article 32 certificates

23
1 This paragraph applies if the cleared assets for each of the Article 32 certificates issued in respect of P's death are included in full in an account or further account delivered in respect of P's death under section 216 or 217 of IHTA 1984 within the time permitted for delivering such an account or further account.
2 The person who delivers the account or further account may elect to disapply paragraph 22.
3 An election under this paragraph must be made in writing at the same time as the account or further account in which all the cleared assets are included, and signed by each person delivering the account or further account.
4 An election may only be made under this paragraph if it is accompanied by each of the Article 32 certificates.
5 If an election is made under this paragraph—
a paragraph 22 does not apply to the cleared assets for any of the Article 32 certificates issued in respect of P's death, and
b the amounts withheld under Article 32(2) are instead to be treated as if they were credits allowable against the inheritance tax due on the value transferred by the chargeable transfer (calculated with the value of all those cleared assets brought into account).

Repayments

24Nothing in this Part entitles any person to a repayment or refund of tax, save for any repayment to which a person may be entitled as a result of paragraph 23 if the credit allowable under that paragraph exceeds the inheritance tax due from the person on the value transferred by the chargeable transfer.

PART 5 General provisions

Information exchange

25No obligation of secrecy (whether imposed by statute or otherwise) prevents HMRC from disclosing information pursuant to a request made by virtue of Article 36 (reciprocity measures of the United Kingdom).

Amounts recoverable as if they were VAT

26
1 Part 2 of this Schedule applies to amounts otherwise recoverable under paragraph 5(3) of Schedule 11 to VATA 1994 as a debt due to the Crown (amounts shown on invoices as VAT etc) in the same way as it applies to VAT.
2 But in the application of Part 2 to such amounts—
a a reference to the value of a supply on which VAT is charged is a reference to the value of the supply shown in the invoice mentioned in paragraph 5(2) of that Schedule,
b “the taxable event” takes place when the invoice is issued,
c the value of the supply shown in the invoice is “untaxed” if the amount otherwise recoverable under paragraph 5(3) of that Schedule has not been recovered, and
d “ceasing to be liable” to tax on the value of that supply means that the amount otherwise recoverable is no longer recoverable.

Transfers to HMRC under Agreement

26A
1 Income or chargeable gains of a person are to be treated as not remitted to the United Kingdom if conditions A to D are met.
2 Condition A is that (but for sub-paragraph (1)) the income or gains would be regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom.
3 Condition B is that the money is brought to the United Kingdom pursuant to a transfer made to HMRC in accordance with the Agreement.
4 Condition C (which applies only if the money brought to the United Kingdom is a sum levied under Article 19(2)(b)) is that the sum was levied within the period of 45 days beginning with the day on which the amount derived from the income or gain in question was remitted as mentioned in Article 19(2)(b).
5 Condition D is that the transfer is made in relation to a tax year in which section 809B, 809D or 809E of ITA 2007 (application of remittance basis) applies to the person.
6 Sub-paragraph (1) does not apply in relation to money brought to the United Kingdom if or to the extent that—
a paragraph 18(2), or section 138(4)(a) or 140(5)(a) of TIOPA 2010, is applied in relation to it (set-off against other tax liabilities), or
b it is repaid or refunded by HMRC.
26B
1 This paragraph applies if—
a but for paragraph 26A(1), income or chargeable gains would have been regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom, and
b section 809Q of ITA 2007 (transfers from mixed funds) would have applied in determining the amount that would have been so remitted.
2 The bringing of the money to the United Kingdom counts as an offshore transfer for the purposes of section 809R(4) of ITA 2007 (composition of mixed fund).

General interpretation

27
1 In this Schedule—
  • “ancillary charge” means any interest, penalty, surcharge or other ancillary charge;
  • “assessment”, in relation to a tax, includes a determination and also includes an amended assessment or determination (and “assess” is to be read accordingly);
  • “chargeable gain” means a gain that is a chargeable gain for the purposes of TCGA 1992;
  • “chargeable transfer” has the meaning given in section 2 of IHTA 1984;
  • “EUSA” means the agreement dated 26 October 2004 between the European Community and the Swiss Confederation providing for measures equivalent to those laid down in Council Directive 2003/48/EC on taxation on savings income in the form of interest payments;
  • “HMRC” means Her Majesty's Revenue and Customs;
  • “qualifying amount” is defined in paragraph 4;
  • “remitted to the United Kingdom” means remitted to the United Kingdom within the meaning of Chapter A1 of Part 14 of ITA 2007;
  • “the value transferred”, in relation to a chargeable transfer, has the meaning given in section 3 of IHTA 1984;
  • “taxable amount” is defined in paragraph 2;
  • “VAT” means value added tax charged in accordance with VATA 1994.
2 An expression used in relation to a tax has the same meaning as in enactments relating to that tax.
3 A reference to a person being “liable” includes being liable jointly with others.
4 A reference to the most beneficial outcome for P is a reference to the most beneficial outcome for P with respect to P's liability to tax.
5 A reference to the tax due “taking account of” a qualifying amount is—
a if the amount is an amount of income or a chargeable gain, a reference to the income tax or capital gains tax due for the tax year in which the amount is required to be brought into account (calculated with that amount brought into account),
b if the amount is the value of property forming part of the value transferred by a chargeable transfer, a reference to the inheritance tax due on the value transferred by the chargeable transfer (calculated with that amount brought into account),
c if the amount is the value of a supply on which VAT is charged, a reference to the VAT payable for the prescribed accounting period in which output tax on the supply is required to be brought into account (calculated with that output tax brought into account), and
d if the amount is the value of a supply to which Part 2 applies by virtue of paragraph 26, a reference to the amount otherwise recoverable under paragraph 5(3) of Schedule 11 to VATA 1994 in respect of that supply.

SCHEDULE 37 

International military headquarters, EU forces, etc

Section 220

FA 1960

1
1 Section 74A of FA 1960 (visiting forces and allied headquarters: stamp duty land tax exemptions) is amended as follows.
2 In subsection (4)—
a for “allied”, in the first place, substitute “ international military ”, and
b omit paragraph (c).
3 In subsection (5)—
a omit paragraph (a),
b in paragraph (b), after “Council” insert “ made for giving effect to an international agreement ”, and
c in paragraph (c), after “detachment of” insert “ a ”.
4 Accordingly, in the heading for that section for “allied” substitute “international military”.

IHTA 1984

2In section 6 of IHTA 1984 (excluded property), in subsection (4), after “section 155(1)” insert “ or (5A) ”.
3
1 Section 155 of that Act (visiting forces and allied headquarters: residence, etc) is amended as follows.
2 In subsection (4) for “allied” substitute “ international military ”.
3 After subsection (5) insert—
4 In subsection (6), at the end insert—

ITEPA 2003

4
1 Section 303 of ITEPA 2003 (visiting forces and staff of designated allied headquarters: relief from income tax) is amended as follows.
2 In subsection (2)(a) for “allied” substitute “ international military ”.
3 After subsection (4) insert—
4 In subsection (6)—
a omit the “and” before the definition of “designated”, and
b after that definition insert
5 Accordingly, in the heading for that section for “and staff of designated allied headquarters” substitute “ etc ”.

ITA 2007

5
1 Section 833 of ITA 2007 (visiting forces and staff of designated allied headquarters: residence, etc) is amended as follows.
2 In subsection (2), in paragraph (a) for “allied” substitute “ international military ”.
3 After that subsection insert—
4 In subsection (3), for “This section also applies to an individual who—” substitute “ An individual is within this subsection if the individual— ”.
5 After that subsection insert—
6 In subsection (7)—
a omit the “and” before the definition of “designated”, and
b after that definition insert
7 Accordingly, in the heading for that section for “and staff of designated allied headquarters” substitute “ etc ”.

C13C14C19C20SCHEDULE 38 

Tax agents: dishonest conduct

Section 223

PART 1  Introduction

Overview

I91This Schedule is arranged as follows—
a this Part explains who is a tax agent and what it means to engage in dishonest conduct,
b Part 2 sets out the process for establishing whether someone is engaging in or has engaged in dishonest conduct,
c Part 3 confers power on HMRC to obtain relevant documents,
d Part 4 sets out sanctions for engaging in dishonest conduct,
e Part 5 provides for assessment of and appeals against penalties, and
f Parts 6 and 7 contain miscellaneous provisions and consequential amendments.

Tax agent

I102
1 A “tax agent” is an individual who, in the course of business, assists other persons (“clients”) with their tax affairs.
2 Individuals can be tax agents even if they (or the organisations for which they work) are appointed—
a indirectly, or
b at the request of someone other than the client.
3 Assistance with a client's tax affairs includes—
a advising a client in relation to tax, and
b acting or purporting to act as agent on behalf of a client in relation to tax.
4 Assistance with a client's tax affairs also includes assistance with any document that is likely to be relied on by HMRC to determine a client's tax position.
5 Assistance given for non-tax purposes counts as assistance with a client's tax affairs if it is given in the knowledge that it will be, or is likely to be, used by a client in connection with the client's tax affairs.

Dishonest conduct

I113
1 An individual “engages in dishonest conduct” if, in the course of acting as a tax agent, the individual does something dishonest with a view to bringing about a loss of tax revenue.
2 It does not matter whether a loss is actually brought about.
3 Nor does it matter whether the individual is acting on the instruction of clients.
4 A loss of tax revenue would be brought about for these purposes if clients were to—
a account for less tax than they are required to account for by law,
b obtain more tax relief than they are entitled to obtain by law,
c account for tax later than they are required to account for it by law, or
d obtain tax relief earlier than they are entitled to obtain it by law.
5 “Tax” is defined in Part 6 of this Schedule.
6 “Tax relief” includes—
a any exemption from or deduction or credit against or in respect of tax, and
b any repayment of tax.
7 A reference in this paragraph to doing something dishonest includes—
a dishonestly omitting to do something, and
b advising or assisting a client to do something that the individual knows to be dishonest.

PART 2  Establishing dishonest conduct

Conduct notice

I124
1 This paragraph applies if HMRC determine that an individual is engaging in or has engaged in dishonest conduct.
2 An authorised officer (or an officer of Revenue and Customs with the approval of an authorised officer) may notify the individual of that determination.
3 The notice must state the grounds on which the determination was made.
4 For the effect of notifying the individual, see paragraphs 7(2) and 29(2).
5 A notice under this paragraph is referred to as a “conduct notice”.
6 In relation to a conduct notice, a reference to “the determination” is to the determination forming the subject of the notice.

Appeal against determination

I135
1 An individual to whom a conduct notice is given may appeal against the determination.
2 Notice of appeal must be given—
a in writing to the officer who gave the conduct notice, and
b within the period of 30 days beginning with the day on which the conduct notice was given.
3 It must state the grounds of appeal.
4 On an appeal that is notified to the tribunal, the tribunal may confirm or set aside the determination.
5 Subject to this paragraph, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to income tax.
6 Setting aside a determination does not prevent a further conduct notice being given in respect of the same conduct if further evidence emerges.

Offence of concealment etc in connection with conduct notice

I146
1 A person (“P”) commits an offence if, after a relevant event has occurred, P—
a conceals, destroys or otherwise disposes of a material document, or
b arranges for the concealment, destruction or disposal of a material document.
2 A “relevant event” occurs if—
a a conduct notice is given to an individual, or
b an individual is informed by an officer of Revenue and Customs that a conduct notice will be or is likely to be given to the individual.
3 A “material document” is any document that could be sought under paragraph 8 as a result of the giving of the conduct notice.
4 If P acts after the event described in sub-paragraph (2)(a), no offence is committed if P acts—
a after the determination has been set aside,
b more than 4 years after the conduct notice was given, or
c without knowledge of that event.
5 If P acts before that event but after the event described in sub-paragraph (2)(b), no offence is committed if P acts—
a more than 2 years after the individual was, or was last, so informed, or
b without knowledge of the event described in sub-paragraph (2)(b).
6 P acts without knowledge of an event if P—
a is not the individual with respect to whom the event has occurred, and
b does not know, and could not reasonably be expected to know, that the event has occurred.
7 A person guilty of an offence under this paragraph is liable—
a on summary conviction, to a fine not exceeding the statutory maximum, and
b on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine, or both.

C12C11 PART 3  Power to obtain tax agent's files etc

Circumstances in which power is exercisable

I15C12C117
1 The power in paragraph 8 is exercisable only in case A or case B and only with the approval of the tribunal.
2 Case A is where a conduct notice has been given to an individual and either—
a the time allowed for giving notice of appeal against the determination has expired without any such notice being given, or
b notice of appeal against the determination was given within that time, but the appeal has been withdrawn or the determination confirmed.
3 Case B is where—
a an individual has been convicted of an offence relating to tax that involves fraud or dishonesty,
b the offence was committed after the individual became a tax agent (whether or not the individual was still a tax agent when it was committed and regardless of the capacity in which it was committed),
c either—
i the time allowed for appealing against the conviction has expired without any such appeal being brought, or
ii an appeal against the conviction was brought within that time, but the appeal has been withdrawn or the conviction upheld, and
d no more than 12 months have elapsed since the date on which paragraph (c) was satisfied.
4 For the purposes of this paragraph, a determination or conviction that is appealed is not considered to have been confirmed or upheld until—
a the time allowed for bringing any further appeal has expired, or
b if a further appeal is brought within that time, that further appeal has been withdrawn or determined.
5 In this Schedule, a reference to “the tax agent” is—
a in a case falling within case A, a reference to the individual mentioned in sub-paragraph (2), and
b in a case falling within case B, a reference to the individual mentioned in sub-paragraph (3).
6 It does not matter whether the individual is still a tax agent when the power in paragraph 8 is to be exercised.

File access notice

I16C12C118
1 Subject to paragraph 7, an officer of Revenue and Customs may by notice in writing require any person mentioned in sub-paragraph (2) to provide relevant documents.
2 The persons are—
a the tax agent, and
b any other person the officer believes may hold relevant documents.
3 “Relevant documents” is defined in paragraph 9.
4 A notice under this paragraph is referred to as a “file access notice”.
5 The person to whom a file access notice is given is referred to as “the document-holder”.

Relevant documents

I17C12C119
1 “Relevant documents” means the tax agent's working papers (whenever acting as a tax agent) and any other documents received, created, prepared or used by the tax agent for the purposes of or in the course of assisting clients with their tax affairs.
2 It does not matter who owns the papers or other documents.
3 The reference in sub-paragraph (1) to clients—
a includes former clients, and
b is not limited to the clients with respect to whom the tax agent is engaging in or has engaged in dishonest conduct.

Content of notice

I18C12C1110
1 A file access notice may require the provision of—
a particular relevant documents specified in the notice, or
b all relevant documents in the document-holder's possession or power.
2 A file access notice does not need to identify the clients of the tax agent.
3 A file access notice addressed to anyone other than the tax agent must name the tax agent.

Compliance

I19C12C1111A file access notice may require documents to be provided—
a within such period,
b by such means and in such form, and
c to such person and at such place,
as is reasonably specified in the notice or in a document referred to in the notice.
I20C12C1112Unless otherwise specified in the notice, a file access notice may be complied with by providing copies of the relevant documents.

Approval by tribunal

I21C12C1113
1 The tribunal may not approve the giving of a file access notice unless—
a the application for approval is made by or with the agreement of an authorised officer,
b the tribunal is satisfied that the case falls within case A or case B (see paragraph 7),
c the tribunal is satisfied that, in the circumstances, the officer giving the notice is justified in doing so,
d the document-holder and (where different) the tax agent have been told that relevant documents are to be required and given a reasonable opportunity to make representations to an officer of Revenue and Customs, and
e the tribunal has been given a summary of any representations so made.
2 Nothing in sub-paragraph (1) requires the tribunal to determine whether an individual is engaging in or has engaged in dishonest conduct.
3 A decision by the tribunal under this paragraph is final (despite the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007).

Documents not in person's possession or power

I22C12C1114A file access notice only requires the document-holder to provide a document if it is in the document-holder's possession or power.

Types of information

I23C12C1115
1 A file access notice does not require the document-holder to provide—
a parts of a document that contain information relating to the conduct of a pending appeal relating to tax, or
b journalistic material (as defined in section 13 of the Police and Criminal Evidence Act 1984).
2 A file access notice does not require the document-holder to provide personal records (as defined in section 12 of the Police and Criminal Evidence Act 1984).
3 But a file access notice may require the document-holder to provide documents that are personal records, omitting any information whose inclusion (whether alone or with other information) makes the original documents personal records.

Old documents

I24C12C1116
1 A file access notice does not require the document-holder to provide a relevant document if—
a the whole of the document originated before the back-stop day, and
b no part of it has a bearing on tax periods ending on or after that day.
2 “The back-stop day” is the first day of the period of 20 years ending with the day on which the file access notice is given.

Power to copy documents

I26C12C1118If a document is provided pursuant to a file access notice, an officer of Revenue and Customs may take copies of or make extracts from the document.

Power to retain documents

I27C12C1119
1 If a document is provided pursuant to a file access notice, HMRC may retain the document for a reasonable period if an officer of Revenue and Customs thinks it necessary to do so.
2 While a document is retained—
a the document-holder may, if the document is reasonably required for any purpose, request a copy of it, and
b an officer of Revenue and Customs must comply with such a request without charge.
3 The retention of a document under this paragraph is not to be regarded as breaking any lien claimed on the document.
4 If a document retained under this paragraph is lost or damaged, the Commissioners are liable to compensate the owner of the document for any expenses reasonably incurred in replacing or repairing the document.

Appeal against file access notice

I28C12C1120
1 If the document-holder is a person other than the tax agent, the document-holder may appeal against the file access notice, or any requirement in it, on the ground that it would be unduly onerous to comply with the notice or requirement.
2 Notice of appeal must be given—
a in writing to the officer by whom the file access notice was given, and
b within the period of 30 days beginning with the day on which the file access notice was given.
3 It must state the grounds of appeal.
4 On an appeal that is notified to the tribunal, the tribunal may confirm, vary or set aside the file access notice or a requirement in it.
5 If the tribunal confirms or varies the notice or a requirement in it, the document-holder must comply with the notice or requirement—
a within such period as is specified by the tribunal, or
b if the tribunal does not specify a period, within such period as is reasonably specified in writing by an officer of Revenue and Customs following the tribunal's decision.
6 A decision by the tribunal under this paragraph is final (despite the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007).
7 Subject to this paragraph, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to income tax.

Offence of concealment etc in connection with file access notice

I29C12C1121
1 A person (“P”) commits an offence if P—
a conceals, destroys or otherwise disposes of a required document, or
b arranges for the concealment, destruction or disposal of a required document.
2 A “required document” is a document within sub-paragraph (3) or sub-paragraph (4).
3 A document is within this sub-paragraph if at the time when P acts—
a P is required to provide the document by a file access notice, and
b either—
i the notice has not been complied with, or
ii it has been complied with, but P has been notified in writing by an officer of Revenue and Customs that P must continue to preserve the document (and the notification has not been withdrawn).
4 A document is within this sub-paragraph if at the time when P acts—
a P is not required to provide the document by a file access notice,
b P has been informed by an officer of Revenue and Customs that P will be or is likely to be so required, and
c no more than 6 months have elapsed since P was, or was last, so informed.
5 A person guilty of an offence under this paragraph is liable—
a on summary conviction, to a fine not exceeding the statutory maximum, and
b on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine, or both.

Penalty for failure to comply

I30C12C1122
1 A person who fails to comply with a file access notice is liable to a penalty of £300.
2 Failing to comply with a file access notice also includes—
a concealing, destroying or otherwise disposing of a required document, or
b arranging for any such concealment, destruction or disposal.
3 “Required document” has the same meaning as in paragraph 21.

Daily penalty for failure to comply

I31C12C1123If the failure continues after notification of a penalty under paragraph 22 has been issued, the person is liable to a further penalty, for each subsequent day on which the failure continues, of an amount not exceeding £60 for each such day.

Failure to comply with time limit

I32C12C1124A failure to do anything required to be done within a limited period of time does not give rise to liability to a penalty under paragraph 22 or 23 if the thing was done within such further time (if any) as an officer of Revenue and Customs may have allowed.

Reasonable excuse

I33C12C1125
1 Liability to a penalty under paragraph 22 or 23 does not arise if the person satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that there is a reasonable excuse for the failure.
2 For the purposes of this paragraph—
a an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person's control,
b if the person relies on another person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure,
c if the person had a reasonable excuse for the failure but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

PART 4  Sanctions for dishonest conduct

Penalty for dishonest conduct

I3426
1 An individual who engages in dishonest conduct is liable to a penalty.
2 Subject to paragraph 27, the penalty to which the individual is liable is to be—
a no less than £5,000, and
b no more than £50,000.
3 In assessing the amount of the penalty, regard must be had to—
a whether the individual disclosed the dishonest conduct,
b whether that disclosure was prompted or unprompted,
c the quality of that disclosure, and
d the quality of the individual's compliance with any file access notice in connection with the dishonest conduct.
4 An individual “discloses” dishonest conduct by—
a telling HMRC about it,
b giving HMRC reasonable help in identifying the client or clients concerned and in quantifying the loss of tax revenue (if any) brought about by it, and
c allowing HMRC access to records for the purpose of ensuring that any such loss is recovered or otherwise properly accounted for.
5 A disclosure is “unprompted” if it is made at a time when the individual has no reason to believe that HMRC have discovered or are about to discover the dishonest conduct.
6 Otherwise, a disclosure is “prompted”.
7 In relation to disclosure or compliance, “quality” includes timing, nature and extent.

Special reduction

I3527
1 This paragraph applies if HMRC propose to assess an individual to a penalty under paragraph 26 of £5,000.
2 If they think it right because of special circumstances, HMRC may take one or more of the following steps—
a reduce the penalty to an amount below £5,000 (which may be nil),
b stay the penalty, or
c agree a compromise in relation to proceedings for the penalty.
3 “Special circumstances” does not include—
a ability to pay, or
b the fact that a loss of tax revenue from a client is balanced by an over-payment by another person (whether or not a client).

Power to publish details

I3628
1 The Commissioners may publish information about an individual if the individual incurs a penalty under paragraph 26.
2 The information that may be published is—
a the individual's name (including any trading name, previous name or pseudonym),
b the individual's address,
c the nature of any business carried on by the individual,
d the amount of the penalty,
e the periods or times to which the dishonest conduct relates,
f any other information the Commissioners consider it appropriate to publish in order to make clear the individual's identity, and
g the link (if there is one) between the dishonest conduct and any inaccuracy, failure or action as a result of which information is published under section 94 of FA 2009 (which relates to deliberate tax defaulters).
3 No information may be published under this paragraph if the penalty incurred by the individual is £5,000 or less.
4 Subsections (5) to (9) and (11) of section 94 of FA 2009 apply to publishing information about an individual under this paragraph as they apply to publishing information about a person under that section.
5 If, in acting as a tax agent, the individual works or worked for an organisation, sub-paragraph (2)(f) includes power to publish such information about that organisation as the Commissioners consider appropriate in order to make clear the individual's identity.
6 Before publishing information about the organisation, the Commissioners must—
a inform the organisation that they are considering doing so, and
b afford the organisation reasonable opportunity to make representations about whether it should be published.

PART 5  Penalties: assessment etc

Assessment of penalties

I3729
1 If a person becomes liable to a penalty under Part 3 or 4 of this Schedule, HMRC may assess the penalty.
2 But, in the case of a penalty under Part 4, they may only do so if a conduct notice has been given to the person and either—
a the time allowed for giving notice of appeal against the determination has expired without notice of appeal being given, or
b notice of appeal against the determination was given within the time allowed, but the appeal has been withdrawn or the determination confirmed.
3 Paragraph 7(4) applies for the purposes of sub-paragraph (2)(b).
4 If HMRC assess a penalty, they must notify the person.
I3830
1 HMRC may not assess a penalty under this Schedule after the applicable deadline.
2 For a penalty under Part 3, the applicable deadline is the end of the period of 12 months beginning with the day on which the person became liable to the penalty.
3 For a penalty under Part 4, the applicable deadline is the end of the period of 12 months beginning with the later of—
a the first day on which HMRC may assess the penalty (see paragraph 29(2)), and
b day X.
4 If a loss of tax revenue is brought about by the dishonest conduct, day X is—
a the day immediately following the end of the appeal period for the assessment or determination of the tax revenue lost (or, if more than one client is involved, the end of the last such period), or
b if there is no such assessment or determination, the day on which the amount of tax revenue lost is ascertained.
5 Otherwise, day X is the day on which HMRC ascertain that no loss of tax revenue has been brought about by the dishonest conduct.
6 In sub-paragraph (4), “appeal period” means the period during which—
a an appeal could be brought, or
b an appeal that has been brought has not been withdrawn or determined.

Appeal against penalty

I3931
1 A person may appeal against a decision of HMRC—
a that a penalty is payable under Part 3 of this Schedule, or
b as to the amount of a penalty payable under Part 3 or 4 of this Schedule.
2 Notice of appeal must be given—
a in writing to HMRC, and
b before the end of the period of 30 days beginning with the day on which notification of the penalty was issued.
3 It must state the grounds of appeal.
4 On an appeal under sub-paragraph (1)(a) that is notified to the tribunal, the tribunal may confirm or cancel the decision.
5 On an appeal under sub-paragraph (1)(b) that is notified to the tribunal, the tribunal may—
a confirm the decision, or
b substitute for the decision another decision that HMRC had power to make.
6 If, in the case of an appeal against a penalty under Part 4, the tribunal substitutes its decision for HMRC's, the tribunal may rely on paragraph 27 (special reduction)—
a to the same extent as HMRC (which may mean applying the same reduction as HMRC to a different starting point), or
b to a different extent, but only if the tribunal thinks that HMRC's decision in respect of the application of that paragraph was flawed (when considered in the light of the principles applicable in proceedings for judicial review).
7 Subject to this paragraph and paragraph 32, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to income tax.

Enforcement of penalty

I4032
1 A penalty under this Schedule must be paid—
a before the end of the period of 30 days beginning with the day on which notification of the penalty was issued, or
b if a notice of appeal under paragraph 31 is given, before the end of the period of 30 days beginning with the day on which the appeal is withdrawn or determined.
2 A penalty under this Schedule may be enforced as if it were income tax charged in an assessment and due and payable.

Double jeopardy

I4133A person is not liable to a penalty under this Schedule in respect of anything in respect of which the person has been convicted of an offence.
I4234
1 A person is not liable to a penalty under this Schedule in respect of anything in respect of which the person is personally liable to a penalty under—
a Schedule 24 to FA 2007 (penalties for errors),
b Schedule 41 to FA 2008 (penalties for failure to notify etc), or
c Schedule 55 to FA 2009 (penalties for failure to make a return etc), or
d Schedule 24 (penalties for failure to make returns etc) or Schedule 25 (penalties for deliberately withholding information) to FA 2021.
2 Sub-paragraph (1) applies where, for example, the person is personally liable by virtue of section 48(3) of VATA 1994 (VAT representatives).

Power to change amount of penalties

I4335
1 If it appears to the Treasury that there has been a change in the value of money since the last relevant day, they may by regulations substitute for the sums for the time being specified in paragraphs 22(1), 23, 26(2), 27(1) and (2)(a) and 28(3) such other sums as appear to them to be justified by the change.
2 “Relevant day”, in relation to a specified sum, means—
a the day on which this Act is passed, and
b each day on which the power conferred by sub-paragraph (1) has been exercised in relation to that sum.
3 Regulations under this paragraph do not apply to a failure or conduct that began before the day on which they come into force.
4 The power to make regulations under this paragraph is exercisable by statutory instrument.
5 A statutory instrument containing regulations under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.

PART 6  Miscellaneous provision and interpretation

Application of provisions of TMA 1970

I4436Subject to the provisions of this Schedule, the following provisions of TMA 1970 apply for the purposes of this Schedule as they apply for the purposes of the Taxes Acts—
a section 108 (responsibility of company officers),
b section 114 (want of form), and
c section 115 (delivery and service of documents).

Tax

I4537
1 “Tax” means—
a income tax,
b capital gains tax,
c corporation tax,
d construction industry deductions,
e VAT,
f insurance premium tax,
g inheritance tax,
h stamp duty land tax,
i stamp duty reserve tax,
j petroleum revenue tax,
k aggregates levy,
l climate change levy,
la apprenticeship levy,
m landfill tax, and
n any duty of excise other than vehicle excise duty.
2 “Construction industry deductions” means construction industry deductions under Chapter 3 of Part 3 of FA 2004.
3 “Corporation tax” includes an amount assessable or chargeable as if it were corporation tax.
4 “VAT” means—
a value added tax charged in accordance with VATA 1994,
b amounts recoverable under paragraph 5(2) of Schedule 11 to that Act (amounts shown on invoices as VAT), and
c amounts treated as VAT by virtue of regulations under section 54 of that Act (farmers etc).

General interpretation

I4638In this Schedule—
  • “appointed” includes engaged;
  • “client” (except in paragraph 17)—
    1. has the meaning given in paragraph 2(1), and
    2. in relation to a particular tax agent, means a client of that tax agent;
  • “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;
  • “conduct notice” has the meaning given in paragraph 4;
  • “the document-holder” has the meaning given in paragraph 8;
  • “document” includes a copy of a document (see also section 114 of FA 2008);
  • “file access notice” has the meaning given in paragraph 8;
  • “HMRC” means Her Majesty's Revenue and Customs;
  • “organisation” includes any person or firm carrying on a business;
  • “specify” includes describe;
  • “tax period” means a tax year, accounting period or other period in respect of which tax is charged;
  • “the tribunal” means the First-tier Tribunal or, where determined by or under the Tribunal Procedure Rules, the Upper Tribunal.
I4739
1 A reference in this Schedule to clients of a tax agent (or to a tax agent's clients) is a reference to the persons whom the agent assists with their tax affairs.
2 Sub-paragraph (1) applies even if—
a the agent works for an organisation, and
b it is the organisation that is appointed to give the assistance.
I4840A loss of tax revenue is taken for the purposes of this Schedule to be (or to be capable of being) brought about by dishonest conduct despite the fact that the loss can be recovered or properly accounted for (following discovery of the conduct or otherwise).
I4941A reference in this Schedule to working for an organisation includes being a partner or member of an organisation.
I5042A reference in a provision of this Schedule to an authorised officer is to an officer of Revenue and Customs who is, or is a member of a class of officers who are, authorised by the Commissioners for the purposes of that provision.

Relationship with other enactments

I5143Nothing in this Schedule limits—
a any liability a person may have under any other enactment in respect of conduct in respect of which a person is liable to a penalty under this Schedule, or
b any power a person may have under any other enactment to obtain relevant documents.

PART 7  Consequential provisions

TMA 1970

I5244TMA 1970 is amended as follows.
I5345Omit—
a section 20A (power to call for papers of tax accountant),
b section 20B (restrictions on powers under section 20A), and
c section 99 (assisting in preparation of incorrect return etc).
I5446
1 Section 20BB (falsification etc of documents) is amended as follows.
2 In subsection (1)—
a for “subsections (2) to (4)” substitute “ subsections (2) and (3) ”,
b in paragraph (a), omit “a notice under section 20A above or”,
c at the end of that paragraph, omit “or”, and
d omit paragraph (b).
3 In subsection (2)—
a in paragraph (a), omit “, the inspector”,
b at the end of that paragraph, insert “ or ”,
c at the end of paragraph (b), omit “or”, and
d omit paragraph (c).
4 In subsection (3), for the words from “the notice is given” to the end substitute “ the order is made, unless before the end of that period an officer of Revenue and Customs has notified the person in writing that the order has not been complied with to the officer's satisfaction ”.
5 Omit subsection (4).
I5547In section 20D (interpretation of sections 20 to 20CC)—
a in subsection (1), for “sections 20A and 20BA” substitute “ section 20BA ”, and
b omit subsection (2).
I5648In section 103 (time limits for penalties)—
a omit subsection (3), and
b in subsection (4), for “neither subsection (1) nor subsection (3) above applies” substitute “ subsection (1) does not apply ”.
I5749In section 103ZA (disapplication of sections 100 to 103)—
a omit “or” at the end of paragraph (e), and
b at the end of paragraph (f) insert
I5850In section 118 (interpretation), in the definition of “tax”, omit the words from “except that” to the end.

OTA 1975

I5951In Schedule 2 to OTA 1975 (management and collection of petroleum revenue tax), in the Table in paragraph 1(1), omit the entry relating to section 99 of TMA 1970.

IHTA 1984

I6052In section 247 of IHTA 1984 (provision of incorrect information), omit subsection (4).

Social Security Contributions and Benefits Act 1992

I6153In section 16 of the Social Security Contributions and Benefits Act 1992 (applications of Income Tax Acts and destination of Class 4 contributions), in subsection (1)(c), after “2009” insert “ and of Schedule 38 to the Finance Act 2012 ”.
I6254In paragraph 7B of Schedule 1 to that Act (collection of contributions other than through PAYE system), the reference in sub-paragraph (5A) to Part 10 of TMA 1970 includes a reference to this Schedule.

Social Security Contributions and Benefits (Northern Ireland) Act 1992

I6355In paragraph 7B of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (collection of contributions other than through PAYE system), the reference in sub-paragraph (5A) to Part 10 of TMA 1970 includes a reference to this Schedule.

Social Security Administration Act 1992

I756In section 110ZA of the Social Security Administration Act 1992 (Class 1, 1A, 1B or 2 contributions: powers to call for documents etc), after subsection (2) insert—

Social Security Administration (Northern Ireland) Act 1992

I857In section 104ZA of the Social Security Administration (Northern Ireland) Act 1992 (Class 1, 1A, 1B or 2 contributions: powers to call for documents etc), after subsection (2) insert—

FA 2003

I6458
1 FA 2003 is amended as follows.
2 In section 93 (information powers)—
a in subsection (2), omit the entries relating to Parts 3 and 4 of Schedule 13, and
b omit subsections (3) to (6).
3 Omit section 96 (penalty for assisting in preparation of incorrect return etc).
4 In Schedule 13 (stamp duty land tax: information powers)—
a omit Parts 3 and 4, and
b for paragraph 53 substitute—

SCHEDULE 39 

Repeal of miscellaneous reliefs etc

Section 227

PART 1  Stamp duty and stamp duty land tax

Nationalisation schemes

1
1 Section 52 of FA 1946 (exemption from stamp duty of documents connected with nationalisation schemes) is repealed.
2 In consequence of the provision made by sub-paragraph (1)—
a section 67 of that Act (short title, construction, etc) is repealed,
b in section 41(1) of the Transport Act 1962 (exemptions from stamp duty), omit the words from “, or in section fifty-two” to “schemes),”, and
c in section 160(1) of the Transport Act 1968 (stamp duty), omit the words from “or in section 52” to “schemes)”.

Visiting forces and allied headquarters

2Section 74 of FA 1960 (visiting forces and allied headquarters: stamp duty exemptions) is repealed.

Shared ownership transactions

3
1 The following provisions are repealed—
a section 97 of FA 1980,
b section 108 of FA 1981, and
c section 54 of FA 1987.
2 In consequence of the provision made by sub-paragraph (1), omit the following provisions—
a in Schedule 2 to the Housing (Consequential Provisions) Act 1985, paragraph 43;
b in FA 1988, section 142(1);
c in Schedule 14 to FA 1999, paragraph 6.

Instruments subject to duty of fixed amount

4
1 Section 87 of FA 1985 (certificates) is amended as follows.
2 Omit subsection (2) (power to exempt instruments chargeable to stamp duty of a fixed amount).
3 In subsection (5), omit “or Treasury (as the case may be)”.

Acquisitions

5
1 The following provisions are repealed—
a section 76 of FA 1986 (rate of stamp duty payable on acquisitions), and
b section 113 of, and Schedule 35 to, FA 2002 (withdrawal of relief for company acquisitions).
2 In consequence of the provision made by sub-paragraph (1), omit the following provisions—
a in section 98(5) of TMA 1970, in the Table—
i in the first column, the entry relating to paragraph 11 of Schedule 35 to FA 2002, and
ii in the second column, the entry relating to paragraph 7 of that Schedule;
b in Schedule 14 to FA 1999, paragraph 15;
c in section 127 of FA 2000, subsection (4);
d in FA 2002, section 112;
e in FA 2003—
i section 127, and
ii in Schedule 19, paragraph 6(3);
f in Schedule 21 to the Legal Services Act 2007, paragraph 136;
g in Schedule 1 to CTA 2010, paragraphs 196, 372 and 376.

Transfers to registered social landlords

6
1 Section 130 of FA 2000 (transfers to registered social landlords etc) is repealed.
2 In consequence of the provision made by sub-paragraph (1), in section 131 of that Act (relief for certain instruments executed before 28 July 2000), omit subsection (1)(b).

Land in disadvantaged areas

7
1 Sections 92 to 92B of, and Schedule 30 to, FA 2001 (exemption for land in disadvantaged areas) are repealed.
2 In consequence of the provision made by sub-paragraph (1), omit the following provisions—
a in FA 2002, section 110;
b in Schedule 9 to FA 2005, paragraphs 2, 3 and 5;
c in Schedule 1 to CTA 2010, paragraph 366.
3 Despite the repeal of section 92 of FA 2001, any regulations made under subsection (4) of that section continue to have effect for the purposes of section 72DA of the Insolvency Act 1986 (exception from prohibition of appointment of administrative receiver in respect of urban regeneration projects).
8
1 Section 57 of, and Schedule 6 to, FA 2003 (disadvantaged areas relief) are repealed.
2 In consequence of the provision made by sub-paragraph (1), omit the following provisions—
a in section 360C of CAA 2001, subsection (2)(b) (and the “or” before it);
b in FA 2003—
i section 112(2),
ii in Schedule 15, paragraph 26, and
iii in paragraph 18A of Schedule 17A, sub-paragraph (5)(b) (and the “or” before it);
c in FA 2004, section 298(5);
d in FA 2005—
i section 96, and
ii in Schedule 9, paragraphs 1 and 4;
e in FA 2008—
i section 95(6),
ii in Schedule 30, paragraph 6, and
iii in Schedule 31, paragraphs 4 and 9;
f in Schedule 22 to FA 2011, paragraph 4.
3 In Schedule 15 to FA 2003, in paragraph 25(2), for “paragraphs 26 to 28” substitute “ paragraphs 27 and 28 ”.

Leases granted by registered social landlords

9
1 In Part 5 of FA 2003 (stamp duty), the following provisions are repealed—
a section 128 (exemption of certain leases granted by registered social landlords);
b section 129 (relief for certain leases granted before section 128 had effect);
c in section 130 (registered social landlords: treatment of certain leases granted between 1 January 1990 and 27 March 2000), subsections (3) to (6) and (9).
2 In consequence of the provision made by sub-paragraph (1), in Schedule 4 to CRCA 2005, omit paragraphs 125 to 127.

Application and transitional provision

10
1 The amendments made by paragraphs 1 to 5, 6(1), 7 and 9(1)(a) of this Schedule have effect in relation to instruments executed on or after 6 April 2013.
2 The amendments made by—
a paragraphs 6(2) and 9(1)(b) of this Schedule, and
b paragraph 9(1)(c) and (2) of this Schedule, so far as relating to the repeal of section 129 of FA 2003,
have effect in relation to instruments stamped on or after 6 April 2013.
3 The amendments made by paragraph 9(1)(c) and (2), so far as not relating to that repeal, come into force on 6 April 2013.
4 The amendments made by paragraph 8 of this Schedule have effect in relation to transactions of which the effective date is on or after 6 April 2013.
5 This paragraph is subject to paragraphs 11 and 12.
11The amendments made by paragraph 7 do not have effect in relation to an instrument giving effect to a contract entered into on or before 16 March 2005, unless—
a the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or
b the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or assignation) or further contract made after that date.
12
1 The amendments made by paragraph 8 do not have effect in relation to—
a any transaction that is effected in pursuance of a contract entered into and substantially performed on or before 16 March 2005, or
b (subject to sub-paragraph (2)) any other transaction that is effected in pursuance of a contract entered into on or before that date.
2 The exclusion by sub-paragraph (1)(b) of transactions effected in pursuance of any contract entered into on or before 16 March 2005 does not apply if—
a there is any variation of the contract or assignment of rights under the contract after that date,
b the transaction is effected in consequence of the exercise after that date of any option, right of pre-emption or similar right, or
c after that date there is an assignment, 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.
13
1 Any claim for relief under Schedule 6 to FA 2003 (disadvantaged areas relief) which is made in respect of a transaction of which the effective date is on or before 5 April 2013 must be made before 6 May 2014.
2 Sub-paragraph (1) applies—
a whether or not the claim is made in a land transaction return or an amendment of such a return, and
b whether the effective date of the transaction is before or after the day on which this Act comes into force.

PART 2  Repeal of harbour reorganisation scheme reliefs

14Section 45 of FA 1966 (harbour reorganisation schemes: stamp duty) is repealed.
15Section 221 of TCGA 1992 (harbour reorganisation schemes: transfer of assets) is repealed.
16Sections 991 to 995 of CTA 2010 (harbour reorganisation schemes) are repealed.
17In consequence of the provision made by paragraph 15—
a in section 288(3A)(a) of TCGA 1992, for “221” substitute “ 220 ”, and
b in Schedule 1 to CTA 2010, omit paragraph 251.
18
1 The amendment made by paragraph 14 has effect in relation to instruments executed on or after 1 April 2013.
2 The amendments made by paragraphs 15 to 17 have effect in relation to any transfer occurring on or after 1 April 2013.

PART 3  Payments relating to reductions in pool betting duty

19
1 Section 126 of FA 1990 (capital allowances and IHT: pools payments for football ground improvements) is repealed.
2 Accordingly, the following are also repealed—
a paragraph 72 of Schedule 2 to CAA 2001;
b paragraph 416 of Schedule 1 to ITTOIA 2005.
3 The repeals made by this paragraph—
a for corporation tax purposes, have effect in relation to payments made on or after 1 April 2013,
b for income tax purposes, have effect in relation to payments made on or after 6 April 2013, and
c for inheritance tax purposes, come into force on 6 April 2013 (and have effect in relation to payments whenever made).
20
1 Section 121 of FA 1991 (inheritance tax: pools payments to support games etc) is repealed.
2 The repeal made by this paragraph comes into force on 6 April 2013 (and has effect in relation to payments whenever made).
21
1 In ITTOIA 2005, the following provisions are repealed—
a section 162 (deductions in respect of payments by persons liable to pool betting duty);
b section 748 (exemption for payments by persons liable to pool betting duty).
2 Accordingly, section 683(4)(g) of that Act is also repealed.
3 The repeals made by this paragraph have effect in relation to payments made on or after 6 April 2013.
22
1 In CTA 2009, the following provisions are repealed—
a section 138 (deductions in respect of payments by companies liable to pool betting duty);
b section 978 (exemption for payments by persons liable to pool betting duty).
2 Accordingly, section 976(1)(b) of that Act (and the “and” before it) are also repealed.
3 The repeals made by this paragraph have effect in relation to payments made on or after 1 April 2013.

PART 4  Life assurance

Abolition of income tax relief for life assurance premiums under section 266 of ICTA

23Section 266 of ICTA (income tax relief for life assurance premiums paid by eligible individuals) applies in relation to a premium or part of a premium only if the premium or part of a premium—
a becomes due and payable before 6 April 2015, and
b is actually paid before 6 July 2015.
24No claim for relief may be made under paragraph 6 of Schedule 14 to ICTA (provisions ancillary to section 266) after 5 April 2016.
25
1 The Income Tax (Life Assurance Premium Relief) Regulations 1978 (S.I. 1978/1159) (“the 1978 Regulations”) have effect in accordance with this paragraph.
2 Subject to sub-paragraph (3), an annual claim for the financial year of a life office must be made no later than—
a the end of the six-year period allowed by regulation 9(1), or
b if earlier, the end of the relevant 6-month period,
and regulation 9(8) has effect accordingly.
3 An annual claim which a life office is required to make under regulation 9(2) must be made no later than—
a the end of the one-year period specified in regulation 9(2), or
b if earlier, the end of the relevant 6-month period,
and regulation 9(6) has effect accordingly.
4 In sub-paragraphs (2) and (3) “the relevant 6-month period” means the period of 6 months after the end of the life office's first financial year to end after 5 April 2015.
5 The Board must decide all claims made under the 1978 Regulations no later than 5 April 2017.
6 Terms used in this paragraph have the same meaning as they have in the 1978 Regulations.
26
1 In this paragraph—
a “the 1980 Regulations” means the Friendly Societies (Life Assurance Premium Relief) (Change of Rate) Regulations 1980 (S.I. 1980/1947), and
b terms have the same meaning as they have in the 1980 Regulations.
2 This paragraph applies in relation to a friendly society which has adopted the prescribed scheme or an approved scheme in accordance with the provisions of the 1977 Regulations.
3 The prescribed scheme or the approved scheme, and the 1977 Regulations and the 1980 Regulations, have effect in relation to the friendly society on the following basis.
4 That basis is—
a paragraph 23 above does not remove any person's entitlement to relief under section 266 of ICTA but does change the authorised percentage to 0%,
b the effective date in relation to that change is 6 April 2015,
c as well as having effect in relation to gross contributions due and payable on or after 6 April 2015, that change has effect in relation to gross contributions due and payable before that date so far as they are actually paid on or after 6 July 2015 (and, in particular, regulations 3(1) and 4(1) of the 1980 Regulations are to be read accordingly), and
d a resolution under regulation 3(1) of the 1980 Regulations may be passed in relation to that change at any time before 6 April 2015.
5 For regulation 5 of the 1980 Regulations substitute—
6 For regulation 8 of the 1980 Regulations substitute—
27
1 In this paragraph—
a “the 1980 Regulations” means the Industrial Assurance (Life Assurance Premium Relief) (Change of Rate) Regulations 1980 (S.I. 1980/1948), and
b terms have the same meaning as they have in the 1980 Regulations.
2 This paragraph applies in relation to an industrial assurance company or collecting society which has adopted the prescribed scheme or an approved scheme in accordance with the provisions of the 1977 Regulations.
3 The prescribed scheme or the approved scheme, and the 1977 Regulations and the 1980 Regulations, have effect in relation to the industrial assurance company or collecting society on the following basis.
4 That basis is—
a paragraph 23 above does not remove any person's entitlement to relief under section 266 of ICTA but does change the authorised percentage to 0%,
b the effective date in relation to that change is 6 April 2015,
c as well as having effect in relation to gross premiums due and payable on or after 6 April 2015, that change has effect in relation to gross premiums due and payable before that date so far as they are actually paid on or after 6 July 2015 (and, in particular, regulations 3(1) and 4(1) of the 1980 Regulations are to be read accordingly), and
d a resolution under regulation 3(1) of the 1980 Regulations may be passed in relation to that change at any time before 6 April 2015.
5 For regulation 5 of the 1980 Regulations substitute—
6 For regulation 8 of the 1980 Regulations substitute—
28
1 The following repeals are made in consequence of the provision made by paragraph 23 above.
ActProvision repealed
ICTASections 266, 266A and 274.
Section 824(2D)(b) and (3)(ad).
Schedule 14.
In paragraph 8 of Schedule 15, the words from “but” (in the second place it occurs) to the end.
FA 1988Section 29.
Paragraph 9 of Schedule 3.
FA 1996Section 167(5) and (6).
Paragraph 11 of Schedule 18.
Paragraph 20 of Schedule 20.
ITEPA 2003Paragraphs 36 and 119 of Schedule 6.
FA 2004Paragraphs 9 and 10 of Schedule 35.
ITA 2007Section 811(6)(e) and the “and” before it.
Paragraph 232 of Schedule 1.
FA 2009Paragraphs 3 to 5 of Schedule 1.
Paragraph 9D of Schedule 54.
2 In section 989 of ITA 2007 (definitions for the purposes of the Income Tax Acts) for the definition of “qualifying policy” substitute—
.
3 The amendments made by sub-paragraphs (1) and (2) come into force on the day appointed by the Treasury by order made by statutory instrument.
4 An order under sub-paragraph (3) may make transitional provision and savings.
5 A statutory instrument containing an order under sub-paragraph (3) is subject to annulment in pursuance of a resolution of the House of Commons.
29
1 This paragraph applies if—
a a policy which is a qualifying policy (within the meaning of the Income Tax Acts) is varied or another policy is substituted for such a policy, and
b the variation or substitution is made for the sole purpose of dealing with the consequences of the restrictions placed on relief under section 266 of ICTA by virtue of paragraph 23 above.
2 In the case of a variation, the variation does not itself affect the policy's status as a qualifying policy.
3 In the case of a substitution, the new policy is to be a qualifying policy.
30
1 In this paragraph “relevant variation” means a variation made for the sole purpose of dealing with the consequences of the restrictions placed on relief under section 266 of ICTA by virtue of paragraph 23 above.
2 A relevant variation of a policy is not to be treated as a variation for the purposes of—
a paragraph 8(1) or (4) of Schedule 14 to ICTA, or
b section 485(6) of ITTOIA 2005 (disregard of certain events in relation to qualifying policies).
3 A relevant variation of a policy or contract does not itself cause the breaching of a limit set out in—
a section 460(2)(c)(iii) or 464 of ICTA, or
b section 155(3) (so far as relating to contracts made before 14 March 1984) or 160 of this Act.

Removal of claw-backs on relief given under section 266 of ICTA

31
1 In ICTA omit sections 268 to 272 (which provide for the “claw-back” of income tax relief given under section 266 of ICTA).
2 In consequence of the provision made by sub-paragraph (1), omit—
a section 824(2D)(a) of ICTA,
b paragraph 11 of Schedule 35 to FA 2004,
c paragraph 123 of Schedule 1 to ITTOIA 2005, and
d paragraph 21 of Schedule 39 to FA 2008.
3 The amendments made by this paragraph have effect in relation to events occurring in relation to policies on or after 6 April 2015.

Abolition of income tax relief relating to certain payments made for benefit of family members etc

32
1 In Chapter 6 of Part 8 of ITA 2007 omit section 459 (which provides income tax relief in relation to certain payments made by individuals for the benefit of family members).
2 In ITA 2007—
a in sections 26(1)(a) and 27(5) omit “section 459 of this Act or section 273 of ICTA (payments for benefit of family members),”,
b in section 423(5)—
i after paragraph (b) insert “ and ”, and
ii omit paragraph (d) (and the “and” before it),
c in section 460—
i omit subsection (1)(b) (and the “or” before it), and
ii in subsection (4) for “, 458 or 459” substitute “ or 458 ”,
d in section 809G(2)(c) for “, 458 or 459” substitute “ or 458 ”, and
e omit section 811(6)(d) (but not the “and” after it).
3 Section 609 of ITEPA 2003 (annuities for the benefit of dependants) is amended as follows.
4 In subsection (1), for the words from the second “which” to the end substitute
.
5 After subsection (2) insert—
6 The amendments made by this paragraph have effect for the tax year 2013-14 and subsequent tax years.

PART 5  Capital allowances

Safety at sports grounds

33The following provisions of Part 2 of CAA 2001 (plant and machinery allowances) are repealed—
a section 30 (safety at designated sports grounds),
b section 31 (safety at regulated stands at sports grounds), and
c section 32 (safety at other sports grounds).
34
1 In consequence of the provision made by paragraph 33, CAA 2001 is amended as follows.
2 In section 23(2) (expenditure unaffected by sections 21 and 22), omit—
a the entry relating to section 30,
b the entry relating to section 31, and
c the entry relating to section 32.
3 In section 27 (application of Part 2 to thermal insulation, safety measures, etc)—
a in subsection (1)(a), for “any of sections 28 to 33” substitute “ section 28 or 33 ”, and
b in the heading, for “, safety measures, etc” substitute “ and personal security ”,
and, in the italic heading before that section, for “, safety measures, etc” substitute “ and personal security ”.
35The amendments made by paragraphs 33 and 34 have effect—
a for corporation tax purposes, in relation to expenditure incurred on or after 1 April 2013, and
b for income tax purposes, in relation to expenditure incurred on or after 6 April 2013.

Flat conversion allowances

36Part 4A of CAA 2001 (flat conversion allowances) does not apply—
a for corporation tax purposes, in relation to expenditure incurred on or after 1 April 2013, and
b for income tax purposes, in relation to expenditure incurred on or after 6 April 2013.
37Part 4A of CAA 2001 is repealed.
38
1 In consequence of the provision made by paragraph 37, CAA 2001 is amended as follows.
2 In section 1(2) (allowances for which Act provides), omit paragraph (ca).
3 In section 2(3) (giving effect to capital allowances), omit the entry relating to section 393T.
4 In section 567(1) (sales treated as being for alternative amount: introductory), omit “4A,”.
5 In section 570(1) (elections under section 569: supplementary), omit “or 4A”.
6 In section 570A(1) (avoidance affecting proceeds of balancing event), omit “4A,”.
7 In section 573(1) (transfers treated as sales), omit “, 4A”.
8 In Part 2 of Schedule 1 (list of defined expressions), omit the entries for the following defined expressions—
  • “balancing adjustment (in Part 4A)”,
  • “balancing event (in Part 4A)”,
  • “dwelling (in Part 4A)”,
  • “flat (in Part 4A)”,
  • “lease and related expressions (in Part 4A)”,
  • “proceeds from a balancing event (in Part 4A)”,
  • “qualifying building (in Part 4A)”,
  • “qualifying flat (in Part 4A)”,
  • “relevant interest (in Part 4A)”, and
  • “residue of qualifying expenditure (in Part 4A)”.
9 In Part 2 of that Schedule, in the entry for “sale, transfers under Parts 3A, 4A and 10 treated as”, omit “, 4A”.
39In consequence of the provision made by paragraphs 37 and 38, the following provisions are repealed—
a in FA 2001, section 67 and Schedule 19,
b in ITTOIA 2005, paragraphs 559 and 560 of Schedule 1, and
c in CTA 2009, paragraphs 505 to 507 of Schedule 1.
40
1 The amendments made by paragraphs 37 to 39 have effect—
a for corporation tax purposes, in relation to chargeable periods beginning on or after 1 April 2013, and
b for income tax purposes, in relation to chargeable periods beginning on or after 6 April 2013.
2 But see also—
a paragraph 41 (which deals with the case of a company's chargeable period for corporation tax purposes straddling 1 April 2013), and
b paragraph 42 (which saves the continued operation of certain provisions).
41
1 This paragraph applies if, for corporation tax purposes, the chargeable period of a company begins before, and ends on or after, 1 April 2013.
2 The company is entitled only to the relevant proportion of any writing-down allowance for that chargeable period to which it would, but for this paragraph, have been entitled under section 393J of CAA 2001.
3 The relevant proportion is—
A B
where—
A is the number of days in the chargeable period falling before 1 April 2013, and
B is the number of days in the chargeable period.
42
1 Nothing in paragraph 37 or 40(1) is to affect the operation of—
a section 393I of CAA 2001 (withdrawal of allowance if flat not qualifying flat or if relevant interest sold before flat first let), or
b sections 393M to 393P of CAA 2001 (balancing adjustments),
for chargeable periods beginning on or after the relevant date in relation to expenditure incurred before that date.
2 The relevant date is—
a for corporation tax purposes, 1 April 2013, and
b for income tax purposes, 6 April 2013.

PART 6  Mineral leases or agreements

Income tax

43
1 The following provisions of ITTOIA 2005 (which provide for income tax relief in relation to mineral royalties) are repealed—
a section 157 (mineral royalties included as receipts of a trade),
b section 319 (mineral royalties included as receipts of a UK property business), and
c sections 340 to 343 (mineral royalties receivable in connection with mines, quarries and other concerns).
2 In consequence of the provision made by sub-paragraph (1)—
a in ITTOIA 2005—
i in section 337, omit the entry relating to section 340 (and the “and” before that entry), and
ii in section 339, omit subsection (3), and
b in CRCA 2005, in Schedule 4, omit paragraph 132(3)(a).
3 The amendments made by this paragraph have effect in relation to mineral royalties which a person is entitled to receive on or after 6 April 2013.

Corporation tax on income

44
1 The following provisions of CTA 2009 (which provide for corporation tax relief on income in relation to mineral royalties) are repealed—
a section 135 (mineral royalties included as receipts of a trade),
b section 258 (mineral royalties included as receipts of a UK property business), and
c sections 273 to 276 (mineral royalties receivable in connection with mines, quarries and other concerns).
2 In consequence of the provision made by sub-paragraph (1)(c), in section 272 of CTA 2009, omit subsection (3).
3 The amendments made by this paragraph have effect in relation to mineral royalties which a company is entitled to receive on or after 1 April 2013.

Chargeable gains

45
1 Section 201 of TCGA 1992 (mineral leases: royalties) is repealed.
2 In consequence of the provision made by sub-paragraph (1), in section 203 of TCGA 1992—
a in subsection (1), for “sections 201 and 202” substitute “ section 202 ”, and
b in the heading, for “sections 201 and 202” substitute “ section 202 ”.
3 The amendments made by this paragraph have effect—
a for the purposes of capital gains tax, in relation to mineral royalties which a person is entitled to receive on or after 6 April 2013, and
b for the purposes of corporation tax in respect of chargeable gains, in relation to mineral royalties which a company is entitled to receive on or after 1 April 2013.
46
1 Section 202 of TCGA 1992 (mineral leases: capital losses) is amended as follows.
2 In subsection (1)—
a after “currency of a mineral lease or agreement” insert “ entered into before the relevant date ”, and
b after “in relation to a mineral lease or agreement” insert “ entered into before that date ”.
3 After that subsection insert—
4 In subsection (3), after “termination of a mineral lease or agreement” insert “ entered into before the relevant date ”.
47In section 203 of TCGA 1992 (provisions supplementary to sections 201 and 202), in subsection (1), for “as they apply for the interpretation of Chapter 7 of Part 4 of CTA 2009” substitute “ (despite their repeal by paragraph 44(1)(c) of Schedule 39 to the Finance Act 2012) ”.

PART 7  Miscellaneous

Deeply discounted securities: incidental expenses

48
1 In section 455 of ITTOIA 2005 (listed securities held since 26 March 2003: calculating the profit or loss on disposals)—
a in subsection (1), after “incurred” insert “ before 6 April 2015 ”, and
b in subsection (3)(b), after “incurred” insert “ before 6 April 2015 ”.
2 The amendments made by this paragraph have effect for the tax year 2015-16 and subsequent tax years.

Grants for giving up agricultural land

49
1 Section 249 of TCGA 1992 (grants for giving up agricultural land) is repealed.
2 Accordingly, the italic heading before that section becomes “ Woodlands ”.
3 The amendments made by this paragraph have effect in relation to disposals made on or after 6 April 2013.

Reduction for meal vouchers

50
1 Section 89 of ITEPA 2003 (reduction for meal vouchers) is repealed.
2 Accordingly, in that Act—
a in section 87 (benefit of non-cash voucher treated as earnings), omit subsection (6), and
b in Schedule 7 (transitionals and savings), omit paragraph 18.
3 The amendments made by this paragraph have effect for the tax year 2013-14 and subsequent tax years.

Black beer

51
1 ALDA 1979 is amended as follows.
2 In section 1 (alcoholic liquors dutiable under ALDA 1979)—
a in subsection (3), omit from “, but” to the end of the subsection, and
b in subsection (5), omit “black beer,”.
3 In section 4(1) (interpretation), omit the definition of “black beer”.
4 In section 55(5)(b) (made-wine: exception to requirement for excise licence), omit “or black beer”.
5 The amendments made by sub-paragraphs (2) and (3) come into force on 1 April 2013.
6 The amendment made by sub-paragraph (4) has effect in relation to the use on or after 1 April 2013 of ingredients that include black beer.

Angostura bitters

52
1 In ALDA 1979, omit—
a section 1(7) (angostura bitters deemed not to be spirits), and
b section 6 (power to exempt angostura bitters from duty).
2 In Schedule 5 to FA 1994 (decisions subject to review and appeal), omit paragraph 3(1)(a).
3 The amendments made by this paragraph come into force on 1 April 2013.

Tax reserve certificates

53
1 The following provisions are repealed—
a section 750 of ITTOIA 2005 (interest from tax reserve certificates);
b section 1283 of CTA 2009 (interest from tax reserve certificates).
2 In consequence of the provision made by sub-paragraph (1), in section 369 of ITTOIA 2005 (charge to tax on interest), in subsection (3)(e), omit “tax reserve certificates,”.
3 The repeals made by sub-paragraphs (1)(a) and (2) have effect in relation to tax reserve certificates redeemed on or after 6 April 2013.
4 The repeal made by sub-paragraph (1)(b) has effect in relation to tax reserve certificates redeemed on or after 1 April 2013.

Tax assessors

54
1 Section 62(2) and (3) of FA 1946 (compensation for former land tax assessors and income tax assessors, etc) is repealed.
2 In consequence of the provision made by sub-paragraph (1), in Schedule 2 to the Pensions (Increase) Act 1971 (official pensions), in paragraph 34, omit “or section 62 of the Finance Act 1946”.
3 The amendments made by this paragraph come into force on 6 April 2013.

Footnotes

  1. P1
    Sch. 14 para. 36(1) power exercised: 1.4.2012 appointed by S.I. 2013/587, art. 2
  2. I1
    Sch. 26 para. 3(1) in force at Royal Assent and Sch. 26 para. 3(2)-(6) in force in relation to relevant supplies at 1.10.2015, see Sch. 26 para. 7(3)
  3. I2
    Sch. 7 para. 7(2) in force at 19.7.2012 for the purposes of the amendment made by that sub-paragraph by S.I. 2012/1896, art. 2(a)
  4. I3
    Sch. 7 para. 11 in force at 19.7.2012 for the purposes of the amendments made by that paragraph by S.I. 2012/1896, art. 2(b)
  5. I4
    Sch. 7 para. 29 in force at 19.7.2012 for the purposes of the amendment made by that paragraph by S.I. 2012/1896, art. 2(d)
  6. I5
    Sch. 8 para. 6(2) in force at 19.7.2012 for the purposes of the amendment made by that sub-paragraph by S.I. 2012/1901, art. 2(a)
  7. I6
    Sch. 8 para. 8 in force at 19.7.2012 for the purposes of the amendments made by that paragraph by S.I. 2012/1901, art. 2(b)
  8. C1
    S. 57 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 5, 6 (with regs. 1(2), 2)
  9. C2
    S. 63 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 7 (with regs. 1(2), 2)
  10. C3
    S. 66 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 8 (with regs. 1(2), 2)
  11. C4
    S. 67 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 9 (with regs. 1(2), 2)
  12. C5
    S. 97 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 10 (with regs. 1(2), 2)
  13. C6
    S. 98 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 11 (with regs. 1(2), 2)
  14. C7
    S. 114 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 12 (with regs. 1(2), 2)
  15. C8
    S. 115 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 13 (with regs. 1(2), 2)
  16. C9
    S. 172 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 14 (with regs. 1(2), 2)
  17. C10
    S. 174 modified (31.12.2012) by The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 (S.I. 2012/3008), regs. 1(1), 15 (with regs. 1(2), 2)
  18. F1
    Words in Sch. 17 para. 20(a) inserted (31.12.2012) by The Insurance Companies (Transitional Provisions) Regulations 2012 (S.I. 2012/3009), regs. 1(1), 16(a)
  19. F2
    Words in Sch. 17 para. 20(b) inserted (31.12.2012) by The Insurance Companies (Transitional Provisions) Regulations 2012 (S.I. 2012/3009), regs. 1(1), 16(b)
  20. F3
    Sch. 36 paras. 26A, 26B and cross-heading inserted (retrospective to 1.1.2013) by Finance Act 2013 (c. 29), s. 221(1)(2)
  21. F4
    Sch. 34 para. 5 omitted (retrospective to 1.1.2013) by virtue of Finance Act 2013 (c. 29), s. 202(4)(a)(5) (with s. 202(6)-(13))
  22. F5
    Word in Sch. 34 para. 7 substituted (retrospective to 1.1.2013) by Finance Act 2013 (c. 29), s. 202(4)(b)(5) (with s. 202(6)-(13))
  23. F6
    Sch. 32 Pts. 1, 2 omitted (retrospective to 26.3.2013) by virtue of Finance Act 2013 (c. 29), Sch. 42 para. 1(2)(b)(3)
  24. I7
    Sch. 38 para. 56 in force at 1.4.2013 by S.I. 2013/279, art. 2
  25. I8
    Sch. 38 para. 57 in force at 1.4.2013 by S.I. 2013/279, art. 2
  26. C11
    Sch. 38 Pt. 3 applied (E.W.S.) by 1992 c. 5, s. 110ZA(2A) (as inserted (1.4.2013) by Finance Act 2012 (c. 14), Sch. 38 para. 56; S.I. 2013/279, art. 2)
  27. C12
    Sch. 38 Pt. 3 applied (N.I.) by 1992 c. 8, s. 104ZA(2A) (as inserted (1.4.2013) by Finance Act 2012 (c. 14), Sch. 38 para. 57; S.I. 2013/279, art. 2)
  28. I9
    Sch. 38 para. 1 in force at 1.4.2013 by S.I. 2013/279, art. 2
  29. I10
    Sch. 38 para. 2 in force at 1.4.2013 by S.I. 2013/279, art. 2
  30. I11
    Sch. 38 para. 3 in force at 1.4.2013 by S.I. 2013/279, art. 2
  31. I12
    Sch. 38 para. 4 in force at 1.4.2013 by S.I. 2013/279, art. 2
  32. I13
    Sch. 38 para. 5 in force at 1.4.2013 by S.I. 2013/279, art. 2
  33. I14
    Sch. 38 para. 6 in force at 1.4.2013 by S.I. 2013/279, art. 2
  34. I15
    Sch. 38 para. 7 in force at 1.4.2013 by S.I. 2013/279, art. 2
  35. I16
    Sch. 38 para. 8 in force at 1.4.2013 by S.I. 2013/279, art. 2
  36. I17
    Sch. 38 para. 9 in force at 1.4.2013 by S.I. 2013/279, art. 2
  37. I18
    Sch. 38 para. 10 in force at 1.4.2013 by S.I. 2013/279, art. 2
  38. I19
    Sch. 38 para. 11 in force at 1.4.2013 by S.I. 2013/279, art. 2
  39. I20
    Sch. 38 para. 12 in force at 1.4.2013 by S.I. 2013/279, art. 2
  40. I21
    Sch. 38 para. 13 in force at 1.4.2013 by S.I. 2013/279, art. 2
  41. I22
    Sch. 38 para. 14 in force at 1.4.2013 by S.I. 2013/279, art. 2
  42. I23
    Sch. 38 para. 15 in force at 1.4.2013 by S.I. 2013/279, art. 2
  43. I24
    Sch. 38 para. 16 in force at 1.4.2013 by S.I. 2013/279, art. 2
  44. I25
    Sch. 38 para. 17 in force at 1.4.2013 by S.I. 2013/279, art. 2
  45. I26
    Sch. 38 para. 18 in force at 1.4.2013 by S.I. 2013/279, art. 2
  46. I27
    Sch. 38 para. 19 in force at 1.4.2013 by S.I. 2013/279, art. 2
  47. I28
    Sch. 38 para. 20 in force at 1.4.2013 by S.I. 2013/279, art. 2
  48. I29
    Sch. 38 para. 21 in force at 1.4.2013 by S.I. 2013/279, art. 2
  49. I30
    Sch. 38 para. 22 in force at 1.4.2013 by S.I. 2013/279, art. 2
  50. I31
    Sch. 38 para. 23 in force at 1.4.2013 by S.I. 2013/279, art. 2
  51. I32
    Sch. 38 para. 24 in force at 1.4.2013 by S.I. 2013/279, art. 2
  52. I33
    Sch. 38 para. 25 in force at 1.4.2013 by S.I. 2013/279, art. 2
  53. I34
    Sch. 38 para. 26 in force at 1.4.2013 by S.I. 2013/279, art. 2
  54. I35
    Sch. 38 para. 27 in force at 1.4.2013 by S.I. 2013/279, art. 2
  55. I36
    Sch. 38 para. 28 in force at 1.4.2013 by S.I. 2013/279, art. 2
  56. I37
    Sch. 38 para. 29 in force at 1.4.2013 by S.I. 2013/279, art. 2
  57. I38
    Sch. 38 para. 30 in force at 1.4.2013 by S.I. 2013/279, art. 2
  58. I39
    Sch. 38 para. 31 in force at 1.4.2013 by S.I. 2013/279, art. 2
  59. I40
    Sch. 38 para. 32 in force at 1.4.2013 by S.I. 2013/279, art. 2
  60. I41
    Sch. 38 para. 33 in force at 1.4.2013 by S.I. 2013/279, art. 2
  61. I42
    Sch. 38 para. 34 in force at 1.4.2013 by S.I. 2013/279, art. 2
  62. I43
    Sch. 38 para. 35 in force at 1.4.2013 by S.I. 2013/279, art. 2
  63. I44
    Sch. 38 para. 36 in force at 1.4.2013 by S.I. 2013/279, art. 2
  64. I45
    Sch. 38 para. 37 in force at 1.4.2013 by S.I. 2013/279, art. 2
  65. I46
    Sch. 38 para. 38 in force at 1.4.2013 by S.I. 2013/279, art. 2
  66. I47
    Sch. 38 para. 39 in force at 1.4.2013 by S.I. 2013/279, art. 2
  67. I48
    Sch. 38 para. 40 in force at 1.4.2013 by S.I. 2013/279, art. 2
  68. I49
    Sch. 38 para. 41 in force at 1.4.2013 by S.I. 2013/279, art. 2
  69. I50
    Sch. 38 para. 42 in force at 1.4.2013 by S.I. 2013/279, art. 2
  70. I51
    Sch. 38 para. 43 in force at 1.4.2013 by S.I. 2013/279, art. 2
  71. I52
    Sch. 38 para. 44 in force at 1.4.2013 by S.I. 2013/279, art. 2 (with art. 3)
  72. I53
    Sch. 38 para. 45 in force at 1.4.2013 by S.I. 2013/279, art. 2 (with art. 3)
  73. I54
    Sch. 38 para. 46 in force at 1.4.2013 by S.I. 2013/279, art. 2 (with art. 3)
  74. I55
    Sch. 38 para. 47 in force at 1.4.2013 by S.I. 2013/279, art. 2 (with art. 3)
  75. I56
    Sch. 38 para. 48 in force at 1.4.2013 by S.I. 2013/279, art. 2
  76. I57
    Sch. 38 para. 49 in force at 1.4.2013 by S.I. 2013/279, art. 2
  77. I58
    Sch. 38 para. 50 in force at 1.4.2013 by S.I. 2013/279, art. 2
  78. I59
    Sch. 38 para. 51 in force at 1.4.2013 by S.I. 2013/279, art. 2
  79. I60
    Sch. 38 para. 52 in force at 1.4.2013 by S.I. 2013/279, art. 2
  80. I61
    Sch. 38 para. 53 in force at 1.4.2013 by S.I. 2013/279, art. 2
  81. I62
    Sch. 38 para. 54 in force at 1.4.2013 by S.I. 2013/279, art. 2
  82. I63
    Sch. 38 para. 55 in force at 1.4.2013 by S.I. 2013/279, art. 2
  83. I64
    Sch. 38 para. 58 in force at 1.4.2013 by S.I. 2013/279, art. 2
  84. I65
    Sch. 22 para. 2 in force at 1.4.2013 for the purposes of the amendment made by that paragraph by S.I. 2013/744, art. 2
  85. I66
    Sch. 22 para. 3 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  86. I67
    Sch. 22 para. 4 in force at 1.4.2013 for the purposes of the amendment made by that paragraph by S.I. 2013/744, art. 2
  87. I68
    Sch. 22 para. 5 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  88. I69
    Sch. 22 para. 6 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  89. I70
    Sch. 22 para. 7 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  90. I71
    Sch. 22 para. 8 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  91. I72
    Sch. 22 para. 9 in force at 1.4.2013 for the purposes of the amendment made by that paragraph by S.I. 2013/744, art. 2
  92. I73
    Sch. 22 para. 10 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  93. I74
    Sch. 22 para. 11 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  94. I75
    Sch. 22 para. 12 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  95. I76
    Sch. 22 para. 13 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  96. I77
    Sch. 22 para. 16(2)(4)(5) in force at 1.4.2013 for the purposes of the amendments made by those sub-paragraphs by S.I. 2013/744, art. 2
  97. I78
    Sch. 22 para. 17 in force at 1.4.2013 for the purposes of the amendment made by that paragraph by S.I. 2013/744, art. 2
  98. I79
    Sch. 22 para. 18 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  99. I80
    Sch. 22 para. 19 in force at 1.4.2013 for the purposes of the amendments made by that paragraph by S.I. 2013/744, art. 2
  100. I81
    Sch. 22 para. 20 in force at 1.4.2013 for the purposes of the amendment made by that paragraph by S.I. 2013/744, art. 2
  101. F7
    Words in s. 139(1) substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636), art. 1(2), Sch. para. 16(2)(a)(i)
  102. F8
    Words in s. 139(1) substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636), art. 1(2), Sch. para. 16(2)(a)(ii)
  103. F9
    Words in s. 139(1) substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636), art. 1(2), Sch. para. 16(2)(b)
  104. F10
    Words in s. 139(4) inserted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636), art. 1(2), Sch. para. 16(3)(a)
  105. F11
    Words in s. 139(4) omitted (1.4.2013) by virtue of The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636), art. 1(2), Sch. para. 16(3)(b)
  106. C13
    Sch. 38 applied by S.I. 2009/470, reg. 33(1) (as substituted (6.4.2013) by The Education (Student Loans) (Repayment) (Amendment) Regulations 2013 (S.I. 2013/607), regs. 1(1), 9)
  107. C14
    Sch. 38 applied (with application in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment and Application of Schedule 38 to the Finance Act 2012) Regulations 2013 (S.I. 2013/622), regs. 1, 41
  108. I82
    Sch. 26 para. 4 in force at 6.4.2013 see Sch. 26 para. 7(2)
  109. I83
    Sch. 26 para. 6 in force at 6.4.2013 see Sch. 26 para. 7(2)
  110. C15
    Sch. 36 applied (with modifications) (19.4.2013) by The Small Charitable Donations Regulations 2013 (S.I. 2013/938), regs. 1, 6
  111. C16
    S. 13 modified (17.7.2013) by Finance Act 2013 (c. 29), Sch. 45 para. 159
  112. F12
    Words in s. 78(3) omitted (with effect in accordance with Sch. 15 paras. 28, 29 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 15 para. 26(2)
  113. F13
    Sch. 16 para. 190 omitted (with effect in accordance with Sch. 15 paras. 28, 29 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 15 para. 26(3)
  114. F14
    Sch. 17 para. 22(3) inserted (30.9.2013) by The Insurance Companies (Amendment to Schedule 17 to the Finance Act 2012 (Transitional Provision)) Regulations 2013 (S.I. 2013/2244), regs. 1(1), 2(2) (with reg. 1(2))
  115. F15
    Sch. 16 paras. 220-223 omitted (1.1.2014) by virtue of Finance Act 2013 (c. 29), Sch. 1 para. 52, Sch. 29 para. 50(4)
  116. F16
    S. 22 omitted (1.1.2014) by virtue of Finance Act 2013 (c. 29), Sch. 1 para. 52, Sch. 29 para. 50(2)
  117. F17
    Word in s. 78(3) substituted (1.1.2014) by Finance Act 2013 (c. 29), Sch. 1 para. 52, Sch. 29 para. 50(3)
  118. F18
    Sch. 34 para. 6(2) omitted (1.1.2014) by virtue of Finance Act 2013 (c. 29), s. 203(7)(8)
  119. F19
    S. 74(1)(f) omitted (6.4.2014) by virtue of The Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819), regs. 1(3), 40(a) (with reg. 32)
  120. F20
    Word in s. 74(1) omitted (6.4.2014) by virtue of The Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819), regs. 1(3), 40(b) (with reg. 32)
  121. F21
    S. 74(1)(k) and word inserted (6.4.2014) by The Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819), regs. 1(3), 40(c) (with reg. 32)
  122. F22
    Sch. 14 para. 32A inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 118(1)
  123. F23
    Sch. 24 para. 5 and cross-heading substituted (with effect in accordance with s. 124(6) of the amending Act) by Finance Act 2014 (c. 26), s. 124(2)
  124. F24
    Sch. 24 para. 9 and cross-heading substituted (with effect in accordance with s. 124(6) of the amending Act) by Finance Act 2014 (c. 26), s. 124(4)
  125. F25
    S. 102(5) omitted (with effect in accordance with Sch. 1 para. 22 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 1 para. 18
  126. F26
    S. 221(4A) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 295(3)
  127. F27
    Words in s. 221(1) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 295(2)
  128. F28
    Sch. 24 para. 6(2) substituted (with effect in accordance with s. 124(6) of the amending Act) by Finance Act 2014 (c. 26), s. 124(3)
  129. F29
    Sch. 7 para. 24(3) repealed (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 154, Sch. 7 (with Sch. 5)
  130. F30
    Sch. 8 para. 22(3) repealed (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 154, Sch. 7 (with Sch. 5)
  131. F31
    Words in Sch. 24 para. 3(2) substituted (1.12.2014) by Finance Act 2014 (c. 26), s. 198(2)(c), Sch. 28 para. 31(2) (with Sch. 29)
  132. F32
    Words in Sch. 24 para. 37(5) substituted (1.12.2014) by Finance Act 2014 (c. 26), s. 198(2)(c), Sch. 28 para. 31(3) (with Sch. 29)
  133. F33
    Words in Sch. 24 para. 38 substituted (1.12.2014) by Finance Act 2014 (c. 26), s. 198(2)(c), Sch. 28 para. 31(4) (with Sch. 29)
  134. F34
    S. 213(1) omitted (with effect in accordance with s. 2(2) of the amending Act) by virtue of Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 21(c)(i) (with s. 2(3)-(6))
  135. F35
    Sch. 35 para. 2(4) omitted (with effect in accordance with s. 2(2) of the amending Act) by virtue of Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 21(c)(ii) (with s. 2(3)-(6))
  136. F36
    Sch. 35 para. 2(6) omitted (with effect in accordance with s. 2(2) of the amending Act) by virtue of Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 21(c)(ii) (with s. 2(3)-(6))
  137. F37
    Sch. 35 para. 5(3) omitted (with effect in accordance with s. 2(2) of the amending Act) by virtue of Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 21(c)(ii) (with s. 2(3)-(6))
  138. F38
    Sum in Sch. 24 para. 37(3)(a) substituted (E.W.) (12.3.2015) for words by The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Fines on Summary Conviction) Regulations 2015 (S.I. 2015/664), reg. 1(1), Sch. 2 para. 13 (with reg. 5(1))
  139. F39
    Sch. 3 para. 2(2)-(4) omitted (with effect in accordance with s. 27(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 27(4)
  140. F40
    Sch. 6 para. 11 omitted (with effect in accordance with Sch. 5 para. 21 of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 5 para. 20(1)
  141. F41
    Sch. 6 para. 13 omitted (with effect in accordance with Sch. 5 para. 21 of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 5 para. 20(1)
  142. F42
    Sch. 6 para. 15 omitted (with effect in accordance with Sch. 6 para. 23(2) of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 22(1)
  143. F43
    Sch. 6 para. 17 omitted (with effect in accordance with Sch. 6 para. 23(2) of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 22(1)
  144. F44
    Sch. 7 para. 16 omitted (with effect in accordance with Sch. 5 para. 23 of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 5 para. 20(2)
  145. F45
    Sch. 8 para. 9 omitted (with effect in accordance with Sch. 6 para. 23(3) of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 22(2)
  146. F46
    Sch. 8 para. 14 omitted (with effect in accordance with Sch. 6 para. 23(3) of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 22(3)
  147. F47
    Sch. 8 para. 21(2)(3) repealed (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 21
  148. F48
    Sch. 20 para. 38 omitted (with effect in accordance with s. 36(3)-(5) of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), s. 36(2)(b)
  149. F49
    Sch. 7 para. 12 omitted (with effect in accordance with Sch. 5 para. 23 of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), Sch. 5 para. 20(2)
  150. F50
    Word in s. 129(8)(a) inserted (with effect in accordance with reg. 1 of the amending S.I.) by The Insurance Companies (Amendment to Section 129 of, and Schedule 17 to, the Finance Act 2012) Regulations 2015 (S.I. 2015/1959), regs. 1, 2(2)
  151. F51
    Word in s. 129(8)(b) inserted (with effect in accordance with reg. 1 of the amending S.I.) by The Insurance Companies (Amendment to Section 129 of, and Schedule 17 to, the Finance Act 2012) Regulations 2015 (S.I. 2015/1959), regs. 1, 2(2)
  152. F52
    Words in s. 129(8) substituted (with effect in accordance with reg. 1 of the amending S.I.) by The Insurance Companies (Amendment to Section 129 of, and Schedule 17 to, the Finance Act 2012) Regulations 2015 (S.I. 2015/1959), regs. 1, 2(3)
  153. F53
    Word in Sch. 17 para. 13(4)(a) substituted (with effect in accordance with reg. 1 of the amending S.I.) by The Insurance Companies (Amendment to Section 129 of, and Schedule 17 to, the Finance Act 2012) Regulations 2015 (S.I. 2015/1959), regs. 1, 3(2)
  154. F54
    Sch. 17 para. 13(5) substituted (with effect in accordance with reg. 1 of the amending S.I.) by The Insurance Companies (Amendment to Section 129 of, and Schedule 17 to, the Finance Act 2012) Regulations 2015 (S.I. 2015/1959), regs. 1, 3(3)
  155. F55
    Sch. 17 para. 35A inserted (with effect in accordance with reg. 1 of the amending S.I.) by The Insurance Companies (Amendment to Section 129 of, and Schedule 17 to, the Finance Act 2012) Regulations 2015 (S.I. 2015/1959), regs. 1, 4
  156. I84
    S. 26 has effect as specified by The Finance Act 2012, Sections 26 and 30 (Abolition of Relief for Equalisation Reserves) (Specified Day) Order 2015 (S.I. 2015/1999), art. 2
  157. I85
    S. 30(2) has effect as specified by The Finance Act 2012, Sections 26 and 30 (Abolition of Relief for Equalisation Reserves) (Specified Day) Order 2015 (S.I. 2015/1999), art. 2
  158. C17
    S. 26(4)-(8) applied (with modifications) (1.1.2016) by The Lloyds Underwriters (Transitional Equalisation Reserves) (Tax) Regulations 2015 (S.I. 2015/1983), regs. 1, 3, 4
  159. C18
    S. 27 applied (with modifications) (1.1.2016) by The Lloyds Underwriters (Transitional Equalisation Reserves) (Tax) Regulations 2015 (S.I. 2015/1983), regs. 1, 3, 4
  160. C19
    Sch. 38 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 24(2)
  161. C20
    Sch. 38 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 43(1)
  162. F56
    Words in s. 88(6) substituted (with effect in accordance with s. 67(5) of the amending Act) by Finance Act 2016 (c. 24), s. 67(3)
  163. F57
    Words in s. 126(2) substituted (with effect in accordance with s. 67(5) of the amending Act) by Finance Act 2016 (c. 24), s. 67(4)
  164. F58
    Word in s. 169(2) omitted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 1 para. 70
  165. F59
    Sch. 3 para. 7 omitted (with effect in accordance with s. 47(15) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 47(14)(a)
  166. F60
    Sch. 3 para. 16(2) omitted (with effect in accordance with s. 47(15) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 47(14)(a)
  167. F61
    Sch. 3 para. 17 omitted (with effect in accordance with s. 47(15) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 47(14)(a)
  168. F62
    Sch. 3 para. 31(2) omitted (with effect in accordance with s. 47(15) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 47(14)(a)
  169. F63
    Sch. 38 para. 37(1)(la) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 115 (with s. 117)
  170. F64
    Words in s. 73 substituted (with effect in accordance with s. 67(5) of the amending Act) by Finance Act 2016 (c. 24), s. 67(2)(a)
  171. F65
    Words in s. 73 inserted (with effect in accordance with s. 67(5) of the amending Act) by Finance Act 2016 (c. 24), s. 67(2)(b)
  172. F66
    Sch. 3 paras. 12-14 omitted (with effect in accordance with s. 47(15) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 47(14)(a)
  173. F67
    Sch. 3 paras. 20-30 omitted (with effect in accordance with s. 47(15) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 47(14)(a)
  174. C21
    S. 137 applied by 1992 c. 12, Sch. 7AC para. 30A(1) (as inserted (with effect in accordance with s. 28(7) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 28(5))
  175. C22
    S. 103 applied by 2010 c. 4, s. 269ZE(10) (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 16)
  176. F68
    Words in s. 124 heading inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 25(2)
  177. F69
    Sch. 5 repealed (with effect in accordance with Sch. 5 para. 26(1) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 11(2)(c)(i)
  178. F70
    Sch. 20 paras. 43-45 repealed (with effect in accordance with Sch. 5 para. 26(1) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 11(2)(c)(iii)
  179. F71
    Ss. 124A-124E inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 26
  180. F72
    S. 31 repealed (with effect in accordance with Sch. 5 para. 26(1) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 11(2)(c)(i)
  181. F73
    Words in s. 78(5) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 184
  182. F74
    Words in s. 93(2) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 185
  183. F75
    Words in s. 104(3) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 186(a)
  184. F76
    Words in s. 104(4) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 186(b)
  185. F77
    Words in s. 104(5)(a) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 186(c)
  186. F78
    Words in s. 124(1) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 25(3)
  187. F79
    S. 125(4) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 187
  188. F80
    S. 126(1A)-(1E) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 188(2)
  189. F81
    Words in s. 126(2) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 188(3)(a)
  190. F82
    Word in s. 126(2) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 188(3)(b)
  191. F83
    S. 127(3)(za) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 189(a)
  192. F84
    S. 127(3)(ca) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 189(b)
  193. F85
    Sch. 16 para. 242 repealed (with effect in accordance with Sch. 5 para. 26(1) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 11(2)(c)(ii)
  194. F86
    Sch. 16 para. 243(a) repealed (with effect in accordance with Sch. 5 para. 26(1) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 11(2)(c)(ii)
  195. C23
    Ss. 124A-124E: power to amend conferred by 2010 c. 4, s. 269ZQ (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 16)
  196. C24
    S. 124B restricted by 2010 c. 4, s. 676BC (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 76)
  197. C25
    Sch. 7 para. 22 excluded (15.3.2018) by Finance Act 2018 (c. 3), s. 15
  198. C26
    Sch. 8 para. 18 excluded (15.3.2018) by Finance Act 2018 (c. 3), s. 15
  199. C27
    Sch. 8 para. 19 excluded (15.3.2018) by Finance Act 2018 (c. 3), s. 15
  200. F87
    S. 45(2) repealed (with effect in accordance with s. 33(5) of the amending Act) by Finance Act 2019 (c. 1), s. 33(2)(c)(ix)(a)
  201. F88
    S. 45(3) repealed (with effect in accordance with s. 33(5) of the amending Act) by Finance Act 2019 (c. 1), s. 33(2)(c)(ix)(a)
  202. F89
    Words in s. 124(5) omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 17
  203. F90
    Words in s. 124A(5) omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 18
  204. F91
    Words in s. 124C(6) omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 19
  205. F92
    S. 124D omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 20
  206. F93
    S. 124E omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 20
  207. F94
    Sch. 16 para. 106 repealed (with effect in accordance with s. 33(5) of the amending Act) by Finance Act 2019 (c. 1), s. 33(2)(c)(ix)(b)
  208. F95
    Words in s. 78(3) inserted (5.7.2019) by The Capital Allowances (Structures and Buildings Allowances) Regulations 2019 (S.I. 2019/1087), regs. 1, 10
  209. F96
    S. 93(6) inserted (1.4.2020 in relation to accounting periods beginning on or after that date) by Finance Act 2020 (c. 14), Sch. 4 paras. 41, 42 (with Sch. 4 paras. 43-46)
  210. F97
    Words in s. 95 substituted (1.4.2020 in relation to accounting periods beginning on or after that date) by Finance Act 2020 (c. 14), Sch. 4 paras. 15, 42 (with Sch. 4 paras. 43-46)
  211. F98
    S. 65(2)(b) omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 21(2)(a) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)
  212. F99
    S. 65(2)(c) omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 21(2)(a) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)
  213. F100
    Words in s. 65(3)(b) omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 21(2)(b) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)
  214. F101
    Sch. 28 para. 14 repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(i) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  215. F102
    Sch. 28 para. 15 repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(i) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  216. F103
    Sch. 28 para. 17 repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(i) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  217. F104
    Sch. 29 para. 2(2) repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  218. F105
    Sch. 29 para. 9 repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  219. F106
    Sch. 29 para. 10 repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  220. F107
    Sch. 29 para. 12(3) repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  221. F108
    Sch. 29 para. 12(6) repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  222. F109
    Sch. 29 para. 12(7) repealed (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 132(j)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)
  223. F110
    S. 102(5) inserted (with effect in accordance with Sch. 1 para. 34 of the amending Act) by Finance Act 2021 (c. 26), Sch. 1 para. 32
  224. F111
    Words in Sch. 24 para. 37(4)(a) substituted (28.4.2022) by The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500), regs. 1(2), 5(1), Sch. Pt. 1
  225. F112
    S. 216(5) omitted (1.7.2022) by virtue of Health and Care Act 2022 (c. 31), s. 186(6), Sch. 7 para. 14; S.I. 2022/734, reg. 2(a), Sch. (with regs. 13, 29, 30)
  226. F113
    S. 216(6) omitted (1.7.2022) by virtue of Health and Care Act 2022 (c. 31), s. 186(6), Sch. 7 para. 14; S.I. 2022/734, reg. 2(a), Sch. (with regs. 13, 29, 30)
  227. F114
    Word in s. 128 heading inserted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(h)(i), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  228. F115
    Words in s. 76 omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(a)(i), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  229. F116
    Words in s. 76 omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(a)(ii), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  230. F117
    Words in s. 77(2)(a) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(b)(i), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  231. F118
    S. 77(3) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(b)(ii), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  232. F119
    Words in s. 78(3) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(c)(i), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  233. F120
    Words in s. 78(4)(a) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(c)(ii), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  234. F121
    S. 79 omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 2, 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  235. F122
    S. 80 omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(d), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  236. F123
    S. 81(5) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(e), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  237. F124
    Words in s. 82(2) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(f), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  238. F125
    S. 108(3)(b) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(g), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  239. F126
    S. 128(2)-(4) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(h)(ii), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  240. F127
    Sch. 16 para. 210(3) omitted (with effect in relation to accounting periods of companies beginning on or after 1.1.2023 of the commencing S.I.) by virtue of Finance Act 2022 (c. 3), Sch. 5 paras. 3(2)(i), 4; S.I. 2022/1164, reg. 2(1) (with reg. 2(2))
  241. F128
    S. 189 omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 9 para. 6(5) (with savings and transitional provisions in 2020 c. 26, Sch. 2 para. 7(7)-(9); S.I. 2020/1642, reg. 4(c)
  242. F129
    Words in Sch. 24 para. 37(2)(b) substituted (E.W.) (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1
  243. F130
    Words in Sch. 24 para. 37(4) substituted (E.W.) (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1
  244. F131
    S. 130A inserted (retrospective to 15.12.2022 and with effect in accordance with s. 30(2)-(4) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 30(1)
  245. C28
    S. 65 modified (with effect in accordance with Sch. 3 paras. 30-36 of the amending Act) by 2010 c. 8, s. 94(3) (as inserted by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 28(1))
  246. F132
    S. 92(5)(aa) inserted (with effect in accordance with s. 31(4) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 31(2)(a)
  247. F133
    Words in s. 92(5)(b) inserted (with effect in accordance with s. 31(4) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 31(2)(b)
  248. F134
    Words in s. 92(6) inserted (with effect in accordance with s. 31(4) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 31(3)
  249. F135
    Word in Sch. 24 para. 37(2)(a) substituted (22.2.2024) by Finance Act 2024 (c. 3), s. 32(1) (with s. 32(6))
  250. F136
    Word in Sch. 38 para. 34(1) omitted (1.1.2023 for specified purposes, 6.4.2024 for specified purposes) by virtue of Finance Act 2021 (c. 26), s. 118(2), Sch. 27 para. 41(a); S.I. 2022/1278, reg. 2(3)(4)(e); S.I. 2024/440, reg. 2
  251. F137
    Sch. 38 para. 34(1)(d) and word inserted (1.1.2023 for specified purposes, 6.4.2024 for specified purposes) by Finance Act 2021 (c. 26), s. 118(2), Sch. 27 para. 41(b); S.I. 2022/1278, reg. 2(3)(4)(e); S.I. 2024/440, reg. 2
  252. F138
    Words in s. 102(3) substituted (for the tax year 2027-28 and subsequent tax years) by Finance Act 2026 (c. 11), s. 6(8), Sch. 1 para. 54