Source: http://www.legislation.gov.uk/ukpga/2013/29/enacted
Timestamp: 2014-12-20 08:55:37
Document Index: 181602150

Matched Legal Cases: ['ART 1', 'art 8', 'art 4', 'art 1', 'art 1', 'art 1', 'art 8', 'art 8', 'art 2', 'art 4', 'art 13', 'art 17', 'art 9', 'art 9', 'art 17', 'art 9', 'art 17', 'art 5', 'art 22', 'art 22', 'art 22', 'art 22', 'art 14', 'art 14', 'art 22', 'art 12', 'art 12', 'art 12', 'art 12', 'art 12', 'art 7', 'art 2', 'art 2', 'art 1', 'art 6', 'art 5', 'art 5', 'art 8', 'art 4', 'art 2', 'art 2', 'art 11', 'art 2', 'art 2', 'art 2', 'art 5', 'ART 2', 'art 3', 'art 8', 'art 5', 'art 5', 'art 1', 'art 2', 'art 5', 'ART 3', 'art 4', 'art 4']

Skip to main contentSkip to navigationlegislation.gov.ukThe National ArchivesHelpSite MapAccessibilityContact UsCymraegHomeAbout UsBrowse LegislationNew LegislationChanges To LegislationSearch LegislationSearch LegislationTitle: (or keywords in the title)Year:Number:Type:All Legislation (excluding draft)All Primary Legislation UK Public General Acts UK Local Acts Acts of the Scottish Parliament Acts of the National Assembly for Wales Measures of the National Assembly for Wales Church Measures Acts of the Northern Ireland Assembly Acts of the Old Scottish Parliament Acts of the English Parliament Acts of the Old Irish Parliament Acts of the Parliament of Great Britain Northern Ireland Orders in Council Measures of the Northern Ireland Assembly Acts of the Northern Ireland ParliamentAll Secondary Legislation UK Statutory Instruments Wales Statutory Instruments Scottish Statutory Instruments Northern Ireland Statutory Rules Church Instruments UK Ministerial Orders UK Statutory Rules and OrdersAll Draft Legislation UK Draft Statutory Instruments Scottish Draft Statutory Instruments Northern Ireland Draft Statutory RulesAll Impact Assessments UK Impact AssessmentsSearchAdvanced SearchFinance Act 2013You are here:2013 c. 29Whole ActTable of ContentsContentExplanatory NotesMore ResourcesPreviousNextPlain ViewPrint OptionsWhat VersionLatest available (Revised)Original (As enacted)Advanced FeaturesShow Explanatory Notes for Sections Opening OptionsOpen whole ActOpen Act without schedulesOpen Schedules onlyMore ResourcesOriginal Print PDFView moreStatus:This is the original version (as it was originally enacted).Finance Act 20132013 CHAPTER 29An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public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.[17th July 2013]Most Gracious Sovereign
PART 1Income Tax, Corporation Tax and Capital Gains TaxCHAPTER 1Charges, rates etcIncome tax1Charge for 2013-14Income tax is charged for the tax year 2013-14.
2Personal allowance for 2013-14 for those born after 5 April 1948(1)For the tax year 2013-14 the amount specified in section 35(1) of ITA 2007 (personal allowance for those born after 5 April 1948) is replaced with “£9,440”.
3Basic rate limit for 2013-14(1)For the tax year 2013-14 the amount specified in section 10(5) of ITA 2007 (basic rate limit) is replaced with “£32,010”.
Corporation tax4Charge and main rate for financial year 2014(1)Corporation tax is charged for the financial year 2014.
5Small profits rate and fractions for financial year 2013(1)For the financial year 2013 the small profits rate is—
(a)the standard fraction is 3/400ths, and
6Main rate for financial year 2015(1)For the financial year 2015 the rate of corporation tax is 20% on profits of companies other than ring fence profits.
(2)In subsection (1) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).
Capital allowances7Temporary increase in annual investment allowance(1)In relation to expenditure incurred during the period of two years beginning with 1 January 2013, section 51A of CAA 2001 (entitlement to annual investment allowance) has effect as if in subsection (5) for “£25,000” there were substituted “£250,000”.
(2)Schedule 1 contains provision about chargeable periods which straddle 1 January 2013 or 1 January 2015.
CHAPTER 2Income tax: generalExemptions and reliefs8London Anniversary Games(1)An accredited competitor who performs an Anniversary Games activity is not liable to income tax in respect of any income arising from the activity if the non-residence condition is met.
(2)The following are Anniversary Games activities—
(a)competing at the Anniversary Games, and
(b)any activity that is performed during the games period the main purpose of which is to support or promote the Anniversary Games.
(a)the accredited competitor is non-UK resident for the tax year 2013-14, or
(b)the accredited competitor is UK resident for the tax year 2013-14 but the year is a split year as respects the competitor and the activity is performed in the overseas part of the year.
“the Anniversary Games” means the British Athletics London Anniversary Games held at the Olympic Stadium in London in July 2013;
(a)beginning with 21 July 2013, and
(b)ending with 29 July 2013;
(6)This section is treated as having come into force on 6 April 2013.
9Glasgow Commonwealth Games(1)An accredited competitor who performs a Commonwealth Games activity is not liable to income tax in respect of any income arising from the activity if the non-residence condition is met.
(2)The following are Commonwealth Games activities—
(a)competing at the Glasgow Commonwealth Games, and
(b)any activity that is performed during the games period the main purpose of which is to support or promote the Glasgow Commonwealth Games or any future Commonwealth Games.
(a)the accredited competitor is non-UK resident for the tax year in which the Commonwealth Games activity is performed, or
(b)the accredited competitor is UK resident for the tax year in which the activity is performed but the year is a split year as respects the competitor and the activity is performed in the overseas part of the year.
“accredited competitor” means a person to whom a Glasgow 2014 accreditation card in the athletes’ category has been issued by the company named Glasgow 2014 Limited which was incorporated on 11 June 2007;
(a)beginning with 4 March 2014, and
(b)ending with 3 September 2014;
“the Glasgow Commonwealth Games” means the Commonwealth Games held in Scotland in 2014;
10Expenses of elected representatives(1)After section 293A of ITEPA 2003 insert—
“293BUK travel expenses of other elected representatives(1)No liability to income tax arises in respect of a payment to which this section applies if it is expressed to be made in respect of relevant UK travel expenses.
(a)made to members of the Scottish Parliament under section 81(2) of the Scotland Act 1998,
(b)made to members of the National Assembly for Wales under section 20(2) of the Government of Wales Act 2006 or to a member of the Welsh Assembly Government under section 53(2) of that Act, or
(c)made to members of the Northern Ireland Assembly under section 47(2) of the Northern Ireland Act 1998.
(3)In this section “relevant UK travel expenses” means expenses necessarily incurred on journeys of the following kinds within the United Kingdom—
(a)journeys within subsection (4) made by the member that are necessary for the performance of his or her duties as a member;
(b)if the member shares caring responsibilities with a spouse or partner, journeys made by the spouse or partner between the constituency or region and the member’s parliamentary home.
(4)The journeys referred to in subsection (3)(a) are those—
(a)between the constituency or region and the Parliament or Assembly to which the member belongs,
(b)between the constituency or region and the member’s parliamentary home, or
(c)within the constituency or region, but not excluded by subsection (5).
(5)A journey is excluded if—
(a)in the case of a member who has only one local office, it is between the member’s local home and that office, and
(b)in any other case, it is between the member’s local home and the principal local office.
“constituency or region”, in relation to a member, means the constituency or region which the member represents and the area within 20 miles of the boundary of that constituency or region;
“local office”, in relation to a member, means an office which is situated in the constituency or region and occupied by the member for the purposes of performing duties as a member;
“the member’s local home” means a residence of the member situated in the constituency or region;
“the member’s parliamentary home” means the member’s only or main residence in the area comprising—
(a)the main site of the Parliament or Assembly to which the member belongs, and
(b)the area within 20 miles of that site;
“principal local office”, in relation to a member, means the local office most frequently occupied by the member for the purposes of performing duties as a member.
(7)A person has “caring responsibilities” if the person—
(a)has parental responsibility for a dependent child aged under 17 or for a child aged 17 or 18 who is in full-time education, or
(b)is the primary carer for a family member in receipt of—
(i)attendance allowance,
(ii)disability living allowance at the middle or highest rate for personal care,
(iii)the daily living component of personal independence payment, or
(iv)constant attendance allowance at or above the maximum rate with an industrial injuries disablement benefit, or the basic (full day) rate with a war disablement pension.
(8)The Treasury may by order amend the definition of “caring responsibilities” in subsection (7).”
(2)The amendment made by this section has effect in relation to payments made on or after 6 April 2013.
11Exemption from income tax of contributions to pension schemes(1)In Chapter 9 of Part 4 of ITEPA 2003 (exemptions from income tax for pension provision), in section 308 (exemption of contributions to registered pension scheme), at the end insert “in respect of the employee”.
12Childcare exemptions: meaning of disabled child(1)In section 318B of ITEPA 2003 (childcare: meaning of “disabled” etc), in subsection (3)(a), after “allowance” insert “or personal independence payment”.
13Income tax exemption for universal credit(1)In section 677(1) of ITEPA 2003 (UK social security benefits wholly exempt from tax), in Part 1 of Table B (benefits payable under primary legislation), insert at the appropriate place—
“Universal creditWRA 2012Part 1Any provision made for Northern Ireland which corresponds to Part 1 of WRA 2012”.(2)The amendment made by this section has effect for the tax year 2013-14 and subsequent tax years.
14Tax advantaged employee share schemesSchedule 2 amends the SIP code, the SAYE code, the CSOP code and the EMI code.
15Abolition of tax relief for patent royalties(1)Chapter 4 of Part 8 of ITA 2007 (reliefs: annual payments and patent royalties) is amended in accordance with subsections (2) and (3).
(2)In section 448 (relief for individuals), in subsection (1)(b) omit “or 903(5)” and “and patent royalties”.
(3)In section 449 (relief for other persons), in subsection (1)(b) omit “or 903(6)” and “and patent royalties”.
(4)Accordingly, that Act is amended as follows—
(a)in section 2 (overview of Act), in subsection (8)(c) omit “and patent royalties”,
(b)in section 24 (reliefs deductible at Step 2), in subsection (1)(b) omit “and patent royalties”, and
(c)in the heading for Chapter 4 of Part 8 of that Act omit “AND PATENT ROYALTIES”.
(5)The amendments made by this section have effect in relation to payments made on or after 5 December 2012.
16Limit on income tax reliefsSchedule 3 contains provision limiting the deductions which may be made at Step 2 of the calculation in section 23 of ITA 2007 (calculation of income tax liability).
Trade profits17Cash basis for small businessesSchedule 4 contains provision enabling the profits of a trade, profession or vocation to be calculated on the cash basis.
18Deductions allowable at a fixed rateSchedule 5 contains provision enabling persons carrying on a trade, profession or vocation to claim deductions for certain expenses at a fixed rate.
Other provisions19Employment income: duties performed in the UK and overseasSchedule 6 contains provision about employment income in cases where duties are performed in the UK and overseas.
20Remittance basis: exempt propertySchedule 7 contains provision about the application of the remittance basis in relation to exempt property.
21Payments on account(1)ITA 2007 is amended as follows.
(2)In section 809K (sections 809L to 809Z6: introduction), in subsection (2)(e), for “809V” substitute “809UA”.
(3)Before section 809V (but after the italic heading) insert—
“809UAMoney used for payments on account(1)Subsection (2) applies to income or chargeable gains of an individual if—
(b)the money is brought to the United Kingdom by way of direct payments to the Commissioners on account of income tax,
(c)the tax year (“tax year 2”) in respect of which the payments on account are made is a tax year for which section 809H (remittance basis charge for long-term UK resident) does not apply as respects the individual, and
(d)that section applied as respects the individual for the previous tax year (“tax year 1”).
(2)The relevant amount of income or chargeable gains is to be treated as not remitted to the United Kingdom if money equal to the relevant amount is taken offshore by—
(a)the 15 March following the end of tax year 2, or
(b)such later date as the Commissioners may allow on a claim made by the individual.
(3)A claim under subsection (2)(b)—
(a)may be made only if the individual has made and delivered a return under section 8 of TMA 1970 for tax year 2 and reasonably expects to receive from the Commissioners a repayment of tax paid in respect of that tax year, and
(b)may be made no later than the 5 April following the end of tax year 2.
(4)Money that is taken offshore in accordance with subsection (2) is to be treated as having the same composition of kinds of income and capital as the money used to make the payments on account.
(5)In this section “the relevant amount” means the lower of the following—
(a)the amount brought to the United Kingdom as mentioned in subsection (1)(b), and
(b)the applicable amount (as defined in section 809H) for tax year 1.”
(4)In section 809Z9(11) (taking proceeds etc offshore or investing them: modification of general provisions)—
(a)for “section 809VB(2) but in that case” substitute “sections 809UA(2) and 809VB(2), but in those cases”, and
(b)at the beginning of paragraph (b) insert “in the case of section 809VB(2),”.
(5)The amendments made by this section have effect in relation to payments on account made in respect of the tax year 2012-13 and subsequent tax years.
22Arrangements made by intermediaries(1)In Chapter 8 of Part 2 of ITEPA 2003 (application of provisions to workers under arrangements made by intermediaries), in section 49 (engagements to which Chapter applies), for subsection (1)(c) substitute—
“(c)the circumstances are such that—
(ii)the worker is an office-holder who holds that office under the client and the services relate to the office.”
(2)This section has effect for the tax year 2013-14 and subsequent tax years.
23Taxable benefit of cars: the appropriate percentage(1)Section 139 of ITEPA 2003 (car with CO2 figure: the appropriate percentage) is amended in accordance with subsections (2) to (6).
(2)In subsection (2), after “the relevant threshold” omit “for the year”.
(3)For subsection (2)(a) substitute—
“(a)if the car’s CO2 emissions figure does not exceed 50 grams per kilometre driven, 5%,
(aa)if the car’s CO2 emissions figure exceeds 50 grams per kilometre driven but does not exceed 75 grams per kilometre driven, 9%, and”.
(4)In subsection (2)(b), for “11%” substitute “13%”.
(a)after “the relevant threshold” omit “for the year”, and
(b)for “12%” substitute “14%”.
(a)after “the relevant threshold” (in both places) omit “for the year”, and
(b)in paragraph (b), for “35%” substitute “37%”.
(7)Section 140 of that Act (car without CO2 figure: the appropriate percentage) is amended in accordance with subsections (8) to (11).
(8)In the Table in subsection (2), for “35%” substitute “37%”.
(9)For subsection (3)(a) substitute—
“(a)5% if the car cannot in any circumstances emit CO2 by being driven, and”.
(10)In subsection (3)(b), for “35%” substitute “37%”.
(11)Omit subsection (3A).
24Gains from contracts for life insurance etcSchedule 8 amends Chapter 9 of Part 4 of ITTOIA 2005 (gains from contracts for life insurance etc).
25Qualifying insurance policiesSchedule 9 amends Schedule 15 to ICTA (qualifying insurance policies) and makes other provision relating to qualifying policies under Schedule 15 to ICTA.
26Transfer of assets abroadSchedule 10 amends Chapter 2 of Part 13 of ITA 2007 (tax avoidance: transfer of assets abroad).
27Payments of interestSchedule 11 contains provision in connection with the payment of interest for the purposes of income tax.
28Disguised interestSchedule 12 contains provision about returns which are economically equivalent to interest.
CHAPTER 3Corporation tax: generalLosses, other reliefs and deductions29Restriction on surrender of losses: controlled foreign company cases(1)Section 105 of CTA 2010 (restriction on surrender of losses etc within section 99(1)(d) to (g)) is amended as follows.
(2)In subsection (2), for “the surrendering company’s gross profits of the surrender period” substitute “the profit-related threshold”.
(3)In subsection (3), for “those gross profits” substitute “the profit-related threshold”.
“(3A)The profit-related threshold” is the sum of—
(a)the surrendering company’s gross profits of the surrender period, and
(b)where chargeable profits of a CFC for an accounting period ending in the surrender period are apportioned to the surrendering company in accordance with step 3 in subsection (1) of 371BC of TIOPA 2010 and the surrendering company is in relation to that accounting period of the CFC a chargeable company for the purposes of step 4 in that subsection, the total of the chargeable profits so apportioned.
(a)an accounting period of a CFC ending in the surrender period is one to which (because of paragraph 50 of Schedule 20 of FA 2012) the repeal of Chapter 4 of Part 17 of ICTA does not apply,
(b)chargeable profits of the CFC for that accounting period are apportioned to the surrendering company in accordance with sections 747(3) and 752 of ICTA, and
(c)the surrendering company is not prevented by section 747(5) of ICTA from being chargeable to tax in respect of the CFC for that accounting period,
the profit-related threshold also includes the total of the chargeable profits so apportioned.”
“CFC” has the same meaning as in Part 9A of TIOPA 2010, except that in subsection (3B) it means a controlled foreign company as defined by section 747(2) of ICTA;
“chargeable profits”, in relation to a CFC, is to be read in accordance with section 371BA(3) of TIOPA 2010, except that in subsection (3B) it is to be read in accordance with section 747(6) of ICTA.”
(6)The amendments made by this section have effect where the surrender period of the surrendering company ends on or after 20 March 2013, but subject to the following.
(7)For the purposes of section 105(3A)(b) and (3B)(b) of CTA 2010, chargeable profits do not include—
(a)chargeable profits for an accounting period within the meaning of Part 9A of TIOPA 2010 ending before 20 March 2013, or
(b)chargeable profits for an accounting period within the meaning of Chapter 4 of Part 17 of ICTA ending before that date.
(a)an accounting period within the meaning of Part 9A of TIOPA 2010, or
(b)an accounting period within the meaning of Chapter 4 of Part 17 of ICTA,
falls partly before and partly on or after 20 March 2013.
(9)For the purposes of section 105 of CTA 2010, the chargeable profits of the CFC for that period, so far as apportioned to the surrendering company as mentioned in subsection (3A)(b) or (3B)(b) of that section (as the case requires), are to be further apportioned on a just and reasonable basis between the two parts of the period, and the chargeable profits referred to in subsection (3A)(b) or (3B)(b) are not to include the chargeable profits apportioned to the part ending before 20 March 2013.
30Loss relief surrenderable by non-UK resident established in EEA state(1)Section 107 of CTA 2010 (surrender of losses etc) is amended as follows.
“(1A)If the surrendering company is established in the EEA (within the meaning of section 134A), it may surrender a loss or other amount under this Chapter only so far as conditions A and B are met.
Subsection (6A) imposes restrictions on a surrender under this subsection.”
(3)In subsection (2) for “The” substitute “In any other case, the”.
“(6A)A loss or other amount may not be surrendered by virtue of subsection (1A) if and to the extent that it, or any amount brought into account in calculating it, corresponds to, or is represented in, amounts within subsection (6B).
(6B)An amount is within this subsection if, for the purposes of non-UK tax chargeable under the law of a territory, the amount is (in any period) deducted from or otherwise allowed against non-UK profits of any person.”
(5)In subsection (7), after “subsection (6)” insert “or (6B)”.
(6)The amendments made by this section have effect in relation to accounting periods beginning on or after 1 April 2013.
(7)But for this purpose an accounting period beginning before, and ending on or after, 1 April 2013 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.
(8)An apportionment for the purposes of subsection (7) must be made in accordance with section 1172 of CTA 2010 (time basis) or, if that method produces a result that is unjust or unreasonable, on a just and reasonable basis.
31Arrangements for transfers of companies(1)In section 156 of CTA 2010 (definition of “arrangements” for purposes of sections 154 to 155B, etc)—
(a)in subsection (2), in paragraph (b), after “include” insert “—
(i)”,(b)at the end of that paragraph insert “, or
(ii)a condition or requirement imposed by, or agreed with, a Minister of the Crown, the Scottish Ministers, a Northern Ireland department or a statutory body.”, and
“(2A)In subsection (2) “statutory body” means a body (other than a company as defined by section 1(1) of the Companies Act 2006) established by or under a statutory provision for the purpose of carrying out functions conferred on it by or under a statutory provision, except that the Treasury may, by order, specify that a body is or is not to be a statutory body for this purpose.”
(2)In sections 154(3) and 155(3) of that Act (arrangements for transfers), for “154A” substitute “155A”.
(3)In section 188 of that Act (other definitions for Part 5), in subsection (1), after ““company”” insert “(except in section 156(2A)”.
(4)The amendments made by this section have effect in relation to accounting periods ending on or after 1 April 2013.
32Change in company ownership: company reconstructions(1)For section 676 of CTA 2010 (disallowance of trading losses where company reconstruction without a change of ownership) substitute—
“676Company reconstructions(1)Subsection (2) applies if, before the change in ownership—
(a)a trade carried on by another company (“the predecessor company”) is transferred to the company, and
(b)the transfer is a transfer to which Chapter 1 of Part 22 applies (transfers of trade without a change of ownership).
(2)In determining any relief available to the company by virtue of section 944(3) (carry forward of trading losses in successor company), this Chapter applies as if—
(a)references to a trade carried on by the company included the trade as carried on by the predecessor company or by any predecessor of that company, and
(b)any loss sustained by the predecessor company or any predecessor of that company had been sustained by the company.
(3)Subsection (4) applies if, after the change in ownership—
(a)a trade carried on by the company is transferred to another company (“the successor company”), and
(b)the transfer is a transfer to which Chapter 1 of Part 22 applies.
(a)any relief available to the company under section 45 (carry forward of trading losses), or
(b)any relief available to the successor company or any successor of that company by virtue of section 944(3),
this Chapter applies as if references to a trade carried on by the company included the trade as carried on by the successor company or by any successor of that company.
(5)For the purposes of this section a company (“company A”) is a predecessor of another company (“company B”), and company B is a successor of company A, if the first or second condition is met.
(6)The first condition is that Chapter 1 of Part 22 applies in relation to company A and company B as respectively the predecessor and the successor within the meaning of that Chapter.
(a)Chapter 1 of Part 22 applies in relation to company A and a third company (“company C”) as respectively the predecessor and the successor within the meaning of that Chapter, and
(b)company C is (whether by virtue of the first condition or this condition) a predecessor of company B.”
(2)The amendment made by this section has effect in relation to changes in ownership that occur on or after 20 March 2013.
33Change in company ownership: shell companiesSchedule 13—
(a)inserts into Part 14 of CTA 2010 (change in company ownership) a new Chapter 5A (shell companies: restrictions on relief), and
(b)makes consequential provision.
34Transfer of deductionsSchedule 14—
(a)inserts into CTA 2010 a new Part 14A (transfer of deductions), and
35R&D expenditure creditsSchedule 15 contains provision about R&D expenditure credits.
36Relief for television production and video games development(1)Schedule 16 contains provision about television production.
(2)Schedule 17 contains provision about video games development.
(3)Schedule 18 contains consequential amendments.
Exemption from charge37Health service bodies: exemptionIn section 986 of CTA 2010 (exemption from corporation tax: meaning of “health service body”), insert the following entries at the appropriate places in the table—
“a clinical commissioning groupsection 1I of the National Health Service Act 2006”“Health and Social Care Information Centresection 252 of the Health and Social Care Act 2012”“National Health Service Commissioning Boardsection 1H of the National Health Service Act 2006”“National Institute for Health and Care Excellencesection 232 of the Health and Social Care Act 2012”.38Chief constables etc (England and Wales): exemption(1)In Chapter 8 of Part 22 of CTA 2010 (exemptions), after section 987 insert—
“Police987AChief constables etc (England and Wales)The following are not liable to corporation tax—
(a)a chief constable of a police force maintained under section 2 of the Police Act 1996;
(b)the Commissioner of Police of the Metropolis.”
(2)The amendment made by this section is treated as having come into force on 16 January 2012, but, in relation to any time before 22 November 2012, section 987A of CTA 2010 has effect as if paragraph (a) were omitted.
Other provisions39Real estate investment trusts: UK REITs which invest in other UK REITsSchedule 19 amends Part 12 of CTA 2010 (real estate investment trusts).
40Corporation tax relief for employee share acquisitions etc(1)Chapter 6 of Part 12 of CTA 2009 (relief for employee share acquisitions: relationship between relief under Part 12 and other reliefs) is amended as follows.
(2)For section 1038 substitute—
“1038Exclusion of other deductions(1)Subsection (2) applies if relief is or, apart from condition 2 in section 1009(1), would be available under this Part.
(2)Except as provided for by this Part, for the purpose of calculating any company’s profits for corporation tax purposes for any accounting period, no deduction is allowed—
(7)“Employee share scheme” means a scheme or arrangement for enabling shares to be acquired because of persons’ employment.
(8)In a case in which relief is or, apart from condition 2 in section 1009(1), would be available under Chapter 5 by virtue of section 1030(2), subsection (2) does not disallow deductions in relation to the provision of the convertible securities.”
(3)After section 1038 insert—
“1038AExclusion of deductions for share options: shares not acquired(1)Subsection (2) applies if—
(a)a person obtains an option to acquire shares and the requirements of section 1015(1)(a) to (c) are met in relation to the obtaining of the option, or
(b)so far as not covered by paragraph (a), a person obtains an option to acquire shares and the obtaining of the option is connected with an option previously obtained in a case covered by paragraph (a) or this paragraph.
(2)For the purpose of calculating any company’s profits for corporation tax purposes for any accounting period, no deduction is allowed in relation to—
(a)the option, or
(b)any matter connected with the option,
unless the shares are acquired pursuant to the option.
(3)For the purposes of subsection (2) it does not matter if the accounting period in question falls wholly before or after the time at which the option is obtained.
(4)In a case in which the shares would be acquired under an employee share scheme, the deductions disallowed by subsection (2) include (in particular) deductions for amounts paid or payable by the employing company in relation to the participation of the employee in the scheme.
(5)But subsection (2) does not disallow deductions for—
(6)“Employee share scheme” means a scheme or arrangement for enabling shares to be acquired because of persons’ employment.
(7)Subsection (2) does not disallow deductions for—
(a)amounts on which the employee is subject to a charge under ITEPA 2003,
(b)amounts on which the employee would have been subject to a charge under ITEPA 2003 had the employee been a UK employee at all material times, or
(c)if the employee has died, amounts on which the employee would have been subject to a charge under ITEPA 2003 had the employee been alive.
(8)“UK employee” is to be read in accordance with section 1017(4).”
(4)For the purposes of the following subsections—
“pre-20 March 2013 relevant accounting period” means an accounting period which begins before 20 March 2013 but ends on or after that date, and
“relevant accounting period” means an accounting period which ends on or after 20 March 2013.
(5)The amendment made by subsection (2) above has effect for the purpose of disallowing deductions for relevant accounting periods.
For this purpose, it does not matter if the acquisition of shares which gives rise, or would give rise, to the relief under Part 12 of CTA 2009 occurs before a company’s first relevant accounting period.
(6)But the amendment made by subsection (2) above has no effect for the purpose of disallowing a deduction for a pre-20 March 2013 relevant accounting period where the acquisition of shares which gives rise, or would give rise, to the relief under Part 12 of CTA 2009 occurs before 20 March 2013.
(7)The amendment made by subsection (3) above has effect for the purpose of disallowing deductions for relevant accounting periods.
For this purpose, it does not matter if the option is obtained before a company’s first relevant accounting period.
(8)But the amendment made by subsection (3) above has no effect for the purpose of disallowing a deduction for a pre-20 March 2013 relevant accounting period where—
(a)the option is obtained before 20 March 2013, and
(b)before that date, an event (for example, the lapse or cancellation of the option) occurs in consequence of which the shares cannot be acquired pursuant to the option.
41Derivative contracts: property total return swaps etc(1)Chapter 7 of Part 7 of CTA 2009 (chargeable gains arising in relation to derivative contracts) is amended as follows.
(2)In section 643 (contracts relating to land or certain tangible movable property)—
(a)in subsection (1), for “and C” substitute “, C and D”, and
“(4A)Condition D is that no two or more of the parties to the derivative contract are connected persons.”
(3)In section 650 (property based total return swaps)—
(a)in subsection (1), for “to F” substitute “to H”, and
“(8)Condition G is that no two or more of the parties to the derivative contract are connected persons.
(9)Condition H is that the securing of a tax advantage is neither the main purpose, nor one of the main purposes, for which the company is a party to the derivative contract.
(4)In section 659 (meaning of “relevant credits” and “relevant debits”), after subsection (4) insert—
“(4A)But if the derivative contract has effect such that the return arising from the contract, so far as calculated by reference to that index, is calculated by reference to a percentage (“the capped percentage”) which is closer to zero than the full percentage change in that index over that period (or which is zero even though there has been a change in that index), for the purposes of subsection (4) R% is the capped percentage.”
(5)The amendments made by this section have effect in relation to accounting periods beginning on or after 5 December 2012.
(6)But, for the purposes of subsection (5), an accounting period beginning before, and ending on or after, 5 December 2012 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.
42Corporation tax: tax mismatch schemesSchedule 20 contains provision about tax mismatch schemes.
43Tier two capital(1)CTA 2010 is amended as follows.
(2)In section 162 (meaning of “normal commercial loan”), after subsection (1) insert—
“(1A)For those purposes, “normal commercial loan” also includes any loan which is not a normal commercial loan by virtue of subsection (1) but is such a loan by virtue of section 164A(1) (loan forming part of tier two capital).”
(3)After section 164 insert—
“164ALoan forming part of tier two capital(1)A loan is a normal commercial loan by virtue of this subsection if it—
(a)was made to a bank or a parent undertaking of a bank, and
(b)forms part of the tier two capital resources of the bank or parent undertaking.
(2)Subsection (1) does not apply in the case of any loan if there are arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage for any person as a result of the application of that subsection in respect of that loan.
(a)“bank” has the meaning given by section 1120,
(b)“tax advantage” has the meaning given by section 1139,
(c)“parent undertaking” is to be read in accordance with section 420 of FISMA 2000, and
(d)the reference to tier two capital resources is to be read in accordance with the PRA Handbook made by the Prudential Regulation Authority (as that Handbook has effect from time to time).
(4)In relation to any time before 1 April 2013, the reference in subsection (3)(d) to the PRA Handbook is to be read as a reference to the Handbook of Rules and Guidance made by the Financial Services Authority (as that Handbook had effect at the time in question).”
(4)In section 1029(1) (overview), after paragraph (c) insert—
“(ca)section 1032A (payment in respect of tier two capital),”.
(5)After section 1032 insert—
“Tier two capital1032APayment in respect of tier two capital(1)A payment made in respect of tier two securities is not a distribution for the purposes of the Corporation Tax Acts.
(2)Subsection (1) does not apply in the case of any tier two securities if there are arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage for any person as a result of the application of that subsection in respect of those securities.
(a)“tier two securities” means securities (other than shares) issued by a bank or a parent undertaking of a bank that form part of the tier two capital resources of the bank or parent undertaking,
(b)“bank” has the meaning given by section 1120,
(c)“tax advantage” has the meaning given by section 1139,
(d)“parent undertaking” is to be read in accordance with section 420 of FISMA 2000, and
(e)the reference to tier two capital resources is to be read in accordance with the PRA Handbook made by the Prudential Regulation Authority (as that Handbook has effect from time to time).
(4)In relation to any time before 1 April 2013, the reference in subsection (3)(e) to the PRA Handbook is to be read as a reference to the Handbook of Rules and Guidance made by the Financial Services Authority (as that Handbook had effect at the time in question).”
(6)The amendments made by this section are treated as having come into force on 26 October 2012.
44Financing costs and income: group treasury companies(1)In section 316 of TIOPA 2010 (group treasury companies) for subsections (2) to (8) substitute—
“(2)A company is a group treasury company in the relevant period if—
(a)it is a member of the worldwide group,
(b)it undertakes treasury activities for the worldwide group in the relevant period (whether or not it also undertakes other activities),
(c)at least 90% of the relevant income of the company for the relevant period is group treasury revenue, and
(d)it makes an election in respect of the relevant period for the purposes of this section.
(3)Subsection (4) applies if throughout the relevant period—
(a)all or substantially all of the activities undertaken by a group treasury company consist of treasury activities undertaken by it for the worldwide group, and
(b)all or substantially all of the assets and liabilities of the company relate to such activities.
(4)Where this subsection applies, the relevant amount, and all other amounts that are relevant amounts in respect of the group treasury company and the relevant period, are treated as not being a financing expense amount or a financing income amount of the group treasury company.
(5)If subsection (4) does not apply, those relevant amounts are treated as not being a financing expense amount or a financing income amount of the group treasury company only to the extent that they relate to treasury activities undertaken by the company for the worldwide group.
(6)For the purposes of subsection (5) the extent to which amounts relate to the matters mentioned is to be determined on a just and reasonable basis.
(7)An election under this section must be made within 3 years after the end of the relevant period.”
(2)The amendment made by this section has effect in relation to periods of account of the worldwide group beginning on or after 11 December 2012.
45Condition for company to be an “investment trust”(1)In section 1158(2) of CTA 2010 (condition A for a company to be an “investment trust”), for “the business of the company consists of” substitute “all, or substantially all, of the business of the company is”.
(2)The amendment made by this section has effect in relation to accounting periods beginning on or after 1 January 2012.
46Community amateur sports clubsSchedule 21 contains provision about community amateur sports clubs.
CHAPTER 4Pensions47Lifetime allowance charge: power to amend the transitional provision in Part 2 of Schedule 18 to FA 2011 etc(1)Part 2 of Schedule 18 to FA 2011 (lifetime allowance charge: commencement and transitional provision relating to changes made for the tax year 2012-13 and onwards) is amended as follows.
(c)in sub-paragraph (11) after “(5)(a)” insert “and (c)(i)”.
“15(1)The Commissioners for Her Majesty’s Revenue and Customs may by regulations amend paragraph 14.
(b)the provision must not increase any person’s liability to tax.
16(1)The Commissioners for Her Majesty’s Revenue and Customs may by regulations make provision specifying how any notice required to be given to an officer of Revenue and Customs under paragraph 14 is to be given.
48Lifetime allowance charge: new standard lifetime allowance for the tax year 2014-15 and subsequent tax years(1)Section 218 of FA 2004 (standard lifetime allowance etc) is amended as follows.
(3)In subsection (3) for “the tax year 2012-13” substitute “the tax year 2014-15”.
49Annual allowance: new annual allowance for the tax year 2014-15 and subsequent tax years(1)Section 228 of FA 2004 (annual allowance) is amended as follows.
(3)In subsection (2) for “2011-12” substitute “2014-15”.
50Drawdown pensions and dependants’ drawdown pensions(1)In section 165 of FA 2004 (pension rules), in subsection (1), in pension rule 5, for “100%” substitute “120%”.
(2)In section 167 of that Act (pension death benefit rules), in subsection (1), in pension death benefit rule 4, for “100%” substitute “120%”.
(a)in paragraph 90(2)(a), after “year” insert “beginning before 26 March 2013 and”,
(c)in paragraph 98(2)(a), after “year” insert “beginning before 26 March 2013 and”, and
51Bridging pensions(1)FA 2004 is amended as follows.
(2)In paragraph 2 of Schedule 28 (pension rules: meaning of scheme pension)—
(a)in sub-paragraph (4)(c)—
(i)for the words from “not earlier” to “65” substitute “during the permitted period”, and
(ii)after “which” insert “together with any previous reductions of the kind referred to in this paragraph (c)”, and
(b)after sub-paragraph (4A) insert—
“(4B)In sub-paragraph (4)(c) “the permitted period” means the period beginning with the day on which the member reaches the age of 60 and ending with the day on which the member reaches the age of 65 or, if later, reaches pensionable age.”
52Abolition of contracting out of state second pension: consequential amendments etc(1)FA 2004 is amended as follows.
(3)In that section, omit subsection (6) (which treats certain amounts recovered by individual’s employer as contributions paid by individual).
“(2A)In sub-paragraph (2) the reference to the member’s contributions includes—
(b)any amount paid by the Commissioners for Her Majesty’s Revenue and Customs under section 42A(3) of the Pension Schemes Act 1993 or section 38A(3) of the Pension Schemes (Northern Ireland) Act 1993 (rebates), and
(c)any amount recovered by the member’s employer under regulations falling within sub-paragraph (2B) in respect of minimum payments made to the scheme in relation to any period before 6 April 2012.
53Overseas pension schemes: general(1)In section 150(8) of FA 2004 (meaning of “recognised overseas pension scheme”), for the words from “which” to the end substitute “which satisfies any requirements prescribed for the purposes of this subsection by regulations made by the Commissioners for Her Majesty’s Revenue and Customs.”
(3)In subsection (2)(c), for “any prescribed information requirements imposed on the scheme manager” substitute “any requirements imposed under subsection (4)”.
(a)for “the Inland Revenue has” substitute “the Commissioners have”,
(c)in paragraph (b), for “the failure” substitute “that condition being met”.
(a)a requirement imposed by regulations under subsection (4), or
(b)a requirement imposed by virtue of Part 1 of Schedule 36 to FA 2008 (powers to obtain information and documents).”
54Overseas pension schemes: information and inspection powers(1)Part 6 of Schedule 36 to FA 2008 (information and inspection powers: special cases) is amended as follows.
“““scheme manager”, in relation to a pension scheme, has the meaning given by section 169(3) of FA 2004.”
CHAPTER 5Other provisionsEmployee shareholder shares55Employee shareholder sharesSchedule 23 contains—
Seed enterprise investment scheme56SEIS: income tax relief(1)ITA 2007 is amended as follows.
(2)In section 29 (tax reductions: supplementary), in subsection (4B), after the entry for Chapter 1 of Part 5 insert—
(3)In section 32 (liability not dealt with in the calculation), after the entry for section 235 insert—
“under section 257G (withdrawal or reduction of SEIS relief),”.
(4)In section 257DG (the control and independence requirement), for subsection (2) substitute—
“(2)The independence element of the requirement is that—
(a)the issuing company must not at any time in period A (ignoring any on-the-shelf period) be within subsection (2A), and
(b)no arrangements must be in existence at any time in period A by virtue of which the issuing company could be within that subsection (whether during period A or otherwise).
(2A)The issuing company is within this subsection at any time if it is under the control of any other company (or of another company and any other person connected with that other company).
(2B)In subsection (2)(a) “on-the-shelf period” means a period during which the issuing company—
(b)has not begun to carry on, or make preparations for carrying on, any trade or business.”
(5)The amendments made by subsections (2) and (3) have effect for the tax year 2013-14 and subsequent tax years.
(6)The amendment made by subsection (4) has effect in relation to shares issued on or after 6 April 2013.
57SEIS: re-investment relief(1)Schedule 5BB to TCGA 1992 (seed enterprise investment scheme: re-investment) is amended as follows.
(2)In paragraph 1 (SEIS re-investment relief)—
(i)in paragraph (a), after “the tax year 2012-13” insert “or the tax year 2013-14 (the year in question being referred to in this Schedule as “the relevant year”)”, and
(ii)in paragraph (b), for “that year” substitute “the relevant year”,
(b)in sub-paragraph (3)(a), for “tax year 2012-13” substitute “relevant year”, and
“(5)The relevant percentage of the available SEIS expenditure is to be set against a corresponding amount of the original gain.
(5A)In sub-paragraph (5)—
“the available SEIS expenditure” means so much of the SEIS expenditure as—
(a)is specified in the claim,
(b)is unused, and
(c)does not exceed so much of the original gain as is unmatched;
“the relevant percentage” means—
(a)if the relevant year is the tax year 2012-13, 100%, and
(b)if the relevant year is the tax year 2013-14, 50%.”
(3)In paragraph 2 (restrictions on relief under paragraph 1)—
(a)in sub-paragraph (1), for “tax year 2012-13” substitute “relevant year”, and
(i)for “tax year 2012-13” substitute “relevant year”, and
(ii)for “that tax year” substitute “that year”.
(4)In paragraph 5 (removal or reduction of relief) in sub-paragraph (2) for “2012-13” substitute “in which the shares were issued”.
(5)Accordingly, in section 150G of TCGA (which introduces Schedule 5BB), for “tax year 2012-13” substitute “tax years 2012-13 and 2013-14”.
Disincorporation58Disincorporation relief(1)A claim for relief under this section (“disincorporation relief”) may be made where—
(a)a company transfers its business to some or all of the shareholders of the company,
(b)the transfer of the business is a qualifying business transfer (see section 59), and
(c)the business transfer date falls within the period of 5 years beginning with 1 April 2013.
(2)As to the consequences of a claim for disincorporation relief being made, see—
sections 162B and 162C of TCGA 1992;
section 849A of CTA 2009.
(3)In this section and sections 59 to 61 “the business transfer date”, in relation to the transfer of a business, is the date on which the business is transferred.
For this purpose, where the business is transferred under a contract—
(a)the date on which the business is transferred is to be determined in accordance with section 28 of TCGA 1992, and
(b)if the business in question is transferred by more than one contract, then for the purposes of that section the contract under which the business is transferred is to be taken to be the contract under which the goodwill of the business is transferred.
(4)This section and sections 59 and 60 apply to a transfer of a business with a business transfer date of 1 April 2013 or a later date.
59Qualifying business transfer(1)The transfer of a business from a company to some or all of the shareholders of the company is a qualifying business transfer for the purposes of section 58 if conditions A to E are met.
(2)Condition A is that the business is transferred as a going concern.
(3)Condition B is that the business is transferred together with all of the assets of the business, or together with all of those assets other than cash.
(4)Condition C is that the total market value of the qualifying assets of the business included in the transfer does not exceed £100,000.
(5)Condition D is that all of the shareholders to whom the business is transferred are individuals.
(6)Condition E is that each of those shareholders held shares in the company throughout the period of 12 months ending with the business transfer date.
(7)For the purposes of condition D, the reference to individuals includes an individual acting as a member of a partnership, but does not include an individual acting as a member of a limited liability partnership.
(8)Section 60 of TCGA 1992 (nominees and bare trustees) applies for the purposes of this section as it applies for the purposes of that Act.
(9)In this section “market value”, in relation to an asset, means the price which the asset might reasonably be expected to fetch on a sale in the open market.
(10)In this section a “qualifying asset” means—
(a)goodwill, or
(b)an interest in land which is not held as trading stock.
60Making a claim(1)A claim for disincorporation relief under section 58—
(a)is to be made jointly by the company and all of the shareholders to whom the business is transferred, and
(2)Any claim for disincorporation relief must be made within the period of 2 years beginning with the business transfer date.
61Effect of disincorporation relief(1)In Part 5 of TCGA 1992 (transfer of business assets), in Chapter 1 (general provisions), after section 162A insert—
“Transfer of business from company to shareholders162BDisincorporation relief: assets (including pre-FA 2002 goodwill)(1)This section applies where—
(2)The disposal and acquisition of any qualifying asset of the business included in the transfer is to be deemed to be for a consideration equal to the lower of—
(a)the sums allowable under section 38 as a deduction in the computation of the gain accruing to the company on the disposal of the asset in question, and
(b)the market value of the asset.
(3)In subsection (2) a “qualifying asset” means—
(4)But subsection (2) does not apply to the goodwill of the business if section 162C applies to it.
162CDisincorporation relief: post-FA 2002 goodwill(1)This section applies where—
(b)a claim for disincorporation relief in respect of the transfer has been made under section 58 of the Finance Act 2013, and
(c)section 849A of CTA 2009 (disincorporation relief: transfer values for post-FA 2002 goodwill) applies to the transfer of the goodwill of the business.
(2)The acquisition of the goodwill of the business is deemed to be for a consideration equal to the value at which the goodwill is treated as transferred by virtue of section 849A of CTA 2009.”
(2)In Part 8 of CTA 2009 (intangible fixed assets), Chapter 13 (transactions between related parties) is amended as follows.
(3)In section 844 (overview of Chapter), in subsection (2) for “849” substitute “849A”.
(4)In section 845 (transfer between company and related party treated as at market value), in subsection (4) (exceptions to basic rule)—
(a)omit the “and” at the end of paragraph (ca), and
(e)section 849A (disincorporation relief: transfer values for post-FA 2002 goodwill).”
(5)After section 849 insert—
“849ADisincorporation relief: transfer values for post-FA 2002 goodwill(1)This section applies where—
(7)In this section market value has the meaning given in section 845(5).”
(6)The amendments made by this section have effect in relation to a transfer of a business with a business transfer date of 1 April 2013 or a later date.
Capital gains62Attribution of gains to members of non-resident companies(1)TCGA 1992 is amended as follows.
(2)In subsection (4) of section 13 (members to whom rule for attributing gains to members of non-resident companies does not apply), for “one tenth” substitute “one quarter”.
(3)In subsection (5) of that section (cases where rule for attributing gains to members of non-resident companies does not apply), after the “or” at the end of paragraph (b) insert—
“(ca)a chargeable gain accruing on the disposal of an asset used, and used only, for the purposes of economically significant activities carried on by the company wholly or mainly outside the United Kingdom, or
(cb)a chargeable gain accruing to the company on a disposal of an asset where it is shown that neither—
(i)the disposal of the asset by the company, nor
(ii)the acquisition or holding of the asset by the company,
formed part of a scheme or arrangements of which the main purpose, or one of the main purposes, was avoidance of liability to capital gains tax or corporation tax, or”.
“13ASection 13(5): interpretation(1)For the purposes of section 13(5)(b) a disposal of an asset is to be regarded as a disposal of an asset used for the purposes of a trade carried on wholly outside the United Kingdom by a company if—
(a)the asset is accommodation, or an interest or right in accommodation, which is situated outside the United Kingdom, and
(2)For the purposes of subsection (1)(b) each of the following is “a relevant period”—
(b)if the company has been the beneficial owner of the accommodation (or interest or right) for a period longer than 36 months, the period of 12 months ending with the date of the disposal and each of the preceding periods of 12 months throughout which the company has been the beneficial owner of the accommodation (or interest or right).
(3)The reference in subsection (1)(b) to the commercial letting of furnished holiday accommodation is to be read in accordance with Chapter 6 of Part 4 of CTA 2009, but—
(a)as if sections 266, 268 and 268A were omitted, and
(b)as if, in section 267(1), the reference to an accounting period were a reference to a relevant period as defined by subsection (2) above.
(4)For the purposes of section 13(5)(ca) activities carried on by a company are “economically significant activities” if they are activities which consist of the provision by the company of goods or services to others on a commercial basis and involve—
(a)the use of staff in numbers, and with competence and authority,
(b)the use of premises and equipment, and
(c)the addition of economic value, by the company, to those to whom the goods or services are provided,
commensurate with the size and nature of those activities.
(5)In subsection (4) “staff” means employees, agents or contractors of the company.”
(5)The amendments made by this section have effect in relation to disposals made on or after 6 April 2012.
(6)But, in the case of a disposal made on or after that date but before 6 April 2013, a person to whom a part of a chargeable gain or allowable loss would (but for the amendments made by this section) have accrued on the disposal may make an election in writing for section 13 of TCGA 1992 to apply in relation to the disposal without those amendments.
(7)An election under subsection (6) in respect of a disposal must be made—
(a)in the case of a person within the charge to capital gains tax, within 4 years from the end of the tax year in which the disposal was made, and
(b)in the case of a person within the charge to corporation tax, within 4 years from the end of the accounting period in which the disposal was made.
63Heritage maintenance settlements(1)In section 169D of TCGA 1992 (gifts to settlor-interested settlements etc: exceptions to sections 169B and 169C), in subsection (1), after “elected” insert “, or could have elected,”.
(2)The amendment made by this section has effect for the tax year 2012-13 and subsequent tax years.
64EMI options and entrepreneurs’ relief etcSchedule 24 makes provision for capital gains tax purposes in connection with shares acquired under options which are qualifying options under the EMI code.
65Charge on certain high value disposals by companies etcSchedule 25 contains provision for a new capital gains tax charge on gains accruing to companies etc on certain high value disposals.
66Currency used in tax calculations: chargeable gains and losses(1)Chapter 4 of Part 2 of CTA 2010 (currency) is amended as follows.
(2)In section 5 (basic rule: sterling to be used), after subsection (2) insert—
“(3)See section 9C for provision about the application of subsection (1) so far as it relates to calculating chargeable gains.”
(3)After section 9B insert—
“9CChargeable gains and losses of companies(1)This section applies if—
(a)a company disposes of an asset which is a ship, an aircraft, shares or an interest in shares, and
(b)at any time beginning with the company’s acquisition of the asset (or, if earlier, the time allowable expenditure was first incurred in respect of the asset) and ending with the disposal, the company’s relevant currency is not sterling.
(2)A company’s relevant currency at any time is its functional currency at that time, subject to subsection (3).
(3)If, at any time—
(a)a company is a UK resident investment company, and
(b)the company has a designated currency (see sections 9A and 9B) which is different from its functional currency,
the company’s relevant currency at that time is that designated currency.
(4)If the relevant currency of the company at the time of the disposal is not sterling, the chargeable gain or loss accruing to the company on the disposal must be calculated as follows—
Calculate the chargeable gain or loss in the relevant currency of the company at the time of the disposal.
Translate the amount of the chargeable gain or loss into sterling by reference to the spot rate of exchange on the day of the disposal.
(5)In any case, subsections (6) to (10) apply for the purposes of calculating the chargeable gain or loss.
(6)Where any allowable expenditure is incurred in a currency which is not the company’s relevant currency at the time it is incurred, that expenditure is to be translated into that relevant currency by reference to the spot rate of exchange for the day on which it is incurred.
(7)Where, at any time after any allowable expenditure is incurred but before the asset is disposed of, there is a change in the company’s relevant currency, that expenditure is to be translated (or, if it has previously been translated under this section, further translated) into the relevant currency of the company immediately following the change, by reference to the spot rate of exchange for the day of the change.
(8)Any amount of consideration for the disposal which is given in a currency other than the company’s relevant currency is to be translated into that relevant currency by reference to the spot rate of exchange on the day of disposal.
(9)For the purposes of subsections (6) and (7)—
(a)any translation of expenditure under subsection (6) is to be done before any translation of the expenditure under subsection (7), and
(b)if subsection (7) applies as a result of more than one change in the company’s relevant currency, it is to be applied in relation to each change in the order the changes were made (with the earliest first).
(10)Where, by virtue of any enactment, the company was at any time treated for the purposes of corporation tax on chargeable gains as acquiring the asset—
(a)for a consideration of such amount as would secure that neither a gain nor a loss would accrue to the person disposing of the asset, or
(b)for a consideration equal to the market value of the asset,
for the purposes of this section that allowable expenditure is treated as incurred by the company at that time.
(11)For the purposes of this section, a reference to a ship or aircraft includes a reference to the benefit of a contract—
(a)to which section 67 of CAA 2001 applies, and
(b)which relates to plant or machinery which is a ship or aircraft.
“allowable expenditure” means expenditure which, immediately before the disposal, was attributable to the asset under section 38(1)(a) to (c) of TCGA 1992;
“interest in shares” has the same meaning as in Schedule 7AC to TCGA 1992 (see paragraph 29 of that Schedule);
“shares” includes stock.”
(4)The amendments made by this section come into force in accordance with provision made by the Treasury by order.
Capital allowances67Allowances for energy-saving plant and machinery: Northern Ireland(1)Section 45AA of CAA 2001 (section 45A exclusion: payments under Energy Act 2008 schemes) is amended as follows.
(a)in paragraph (a), after “(feed-in tariffs)” insert “, or under a corresponding scheme having effect in Northern Ireland,”, and
(b)in paragraph (b), after “of that Act” insert “or section 113 of the Energy Act 2011”.
(3)In subsection (5), for “subsection (6)” substitute “subsections (5A) and (6)”.
“(5A)Except as provided by subsection (6), in the case of expenditure incurred on plant or machinery used or for use in Northern Ireland, the relevant date is—
(b)for income tax purposes, 6 April 2013.”
(5)In the heading, for “payments under Energy Act 2008 schemes” substitute “feed-in tariffs and renewable heat incentives”.
68Cars with low carbon dioxide emissions(1)In section 45D of CAA 2001 (first year qualifying expenditure on cars with low carbon dioxide emissions)—
(a)in subsection (1)(a), for “2013” substitute “2015”, and
(b)in subsection (4), for “110” substitute “95”.
(2)In section 46 of that Act (general exclusions), in subsection (5) omit “section 45D,”.
(3)In section 104AA of that Act (special rate expenditure: meaning of “main rate car”), in subsection (4) for “160” substitute “130”.
(4)Accordingly, in section 77 of FA 2008 omit—
(5)The amendments made by subsections (1)(b), (2) and (4)(b) have effect in relation to expenditure incurred on or after 1 April 2013.
(6)The amendment made by subsection (3) has effect in relation to expenditure incurred on or after the relevant date.
(7)But in relation to expenditure incurred on the hiring of a car—
(a)for a period of hire which begins before the relevant date, and
(b)under a contract entered into before that date,
section 49(1A) of ITTOIA 2005 and section 57(1A) of CTA 2009 apply on or after the relevant date as if the amendment made by subsection (3) did not have effect.
(8)“The relevant date” means—
(a)in the case of income tax, 6 April 2013, and
(b)in the case of corporation tax, 1 April 2013.
69Gas refuelling stations: extension of time limit for capital allowanceIn section 45E(1)(a) of CAA 2001 (time limit for incurring of expenditure qualifying for first-year allowance), for “2013” substitute “2015”.
70First-year allowance to be available for ships and railway assets(1)In section 46(2) of CAA 2001 (general exclusions from first-year allowance), omit—
(a)general exclusion 3 (ships), and
(b)general exclusion 4 (railway assets),
and the italicised headings preceding them.
(2)The amendments made by this section have effect for expenditure incurred on or after 1 April 2013.
71Restrictions on buying capital allowancesSchedule 26 contains provision amending Chapter 16A of Part 2 of CAA 2001 (restrictions on allowance buying).
72Hire cars for disabled persons(1)In section 268D of CAA 2001 (hire cars for disabled persons), in subsection (2), after paragraph (a) insert—
“(aa)personal independence payment under the Welfare Reform Act 2012, or the corresponding provision having effect in Northern Ireland, because of entitlement to the mobility component,
(ab)armed forces independence payment under a scheme established under section 1 of the Armed Forces (Pensions and Compensation) Act 2004,”.
(2)The amendment made by this section has effect in relation to expenditure incurred on or after 1 April 2013.
73Contribution allowances: plant and machinery(1)Section 538 of CAA 2001 (contribution allowances: plant and machinery) is amended as follows.
(2)In subsection (1), omit the “and” at the end of paragraph (a) and after that paragraph insert—
“(aa)C’s contribution is to expenditure on the provision of plant or machinery, and”.
(a)in paragraph (a), for “asset provided by means of C’s contribution” substitute “plant or machinery”,
(b)in paragraph (b), for “asset” substitute “plant or machinery”, and
(i)for “asset” substitute “plant or machinery”, and
(ii)after “times” insert “plant or machinery”.
(4)The amendments made by this section have effect in relation to expenditure pooled, and to claims made, on or after 29 May 2013 (“the commencement date”).
(5)In relation to such expenditure and claims, when determining for the purposes of section 536(3)(a) of CAA 2001 whether an allowance can be made under Chapter 2 of Part 11 of that Act, the amendments made by this section are to be treated as always having had effect.
(6)Nothing in this section applies to a claim by a person for a contribution allowance under Part 2 of CAA 2001 in respect of a contribution made before the commencement date.
(a)expenditure which a person has been regarded as having incurred (despite section 532(1) of CAA 2001) by virtue of section 536(1) of that Act has been pooled by virtue of section 53 of that Act—
(i)on or after 1 January 2013 but before the commencement date, or
(ii)before 1 January 2013 in circumstances where no claim was made in respect of the expenditure before that date, and
(b)had the amendments made by this section had effect at the time the expenditure was incurred, that person would not have been regarded as having incurred that expenditure (“the relevant expenditure”).
(8)Part 2 of CAA 2001 has effect as if an event had occurred as a result of which the person is required to bring into account as a disposal receipt under that Part, for the chargeable period in which the commencement date falls, a disposal value of an amount equal to E-A.
E is the amount of the relevant expenditure, and
A is the total amount of writing-down allowances made in respect of the relevant expenditure.
(10)For the purpose of calculating A, the total amount of writing-down allowances made in respect of expenditure on an item of plant or machinery is to be determined as if that item were the only item of plant or machinery in relation to which Chapter 5 of Part 2 of CAA 2001 had effect.
(11)The event mentioned in subsection (8) is not to be regarded as a disposal event for the purposes of section 60(3) of CAA 2001.
Miscellaneous74Community investment tax reliefSchedule 27 makes provision about community investment tax relief.
75Lease premium reliefSchedule 28 makes provision in relation to relief for lease premiums.
76Manufactured payments: stock lending arrangements(1)Section 596 of ITA 2007 (deemed manufactured payments: stock lending arrangements) is amended in accordance with subsections (2) and (3).
“(1)This section applies if conditions A to C are met.
(1A)Condition A is that there is a stock lending arrangement in respect of securities.
(1B)Condition B is that a dividend or interest on the securities is paid, as a result of the arrangement, to a person other than the person who is the lender under the arrangement.
(1C)Condition C is that—
(a)no provision is made for securing that the lender receives payments representative of the dividend or interest, or
(b)provision is made for securing that the lender receives—
(i)payments representative of the dividend or interest, and
(ii)another benefit in respect of the dividend or interest (including the release of the whole or part of any liability to pay an amount).”
“(a)were required, under the arrangement—
(i)in a case falling within paragraph (a) of subsection (1C), to pay the lender an amount representative of the dividend or interest, or
(ii)in a case falling within paragraph (b) of that subsection, to pay the lender an amount representative of the dividend or interest but deducting from that amount any payment mentioned in sub-paragraph (i) of that paragraph on which tax has been, or is to be, charged, and”.
(4)Section 812 of CTA 2010 (deemed manufactured payments: stock lending arrangements) is amended in accordance with subsections (5) to (7).
(6)In subsection (2), for paragraph (a) substitute—
“(7)This section has effect regardless of section 358 of CTA 2009 (exclusion of credits on release of connected companies debts) or any other provision of Part 5 of that Act (loan relationships) which prevents a credit from being brought into account.”
(8)The amendments made by this section have effect in relation to cases in which a dividend or interest is paid, or is treated as paid, on or after 5 December 2012.
77Manufactured payments: generalSchedule 29 contains provision for, and in connection with, the application of the Tax Acts to manufactured payment relationships and payments representative of dividends and interest.
78Relationship between rules prohibiting and allowing deductions(1)In section 31 of ITTOIA 2005 (trade profits: relationship between rules prohibiting and allowing deductions)—
“(1A)But, if the relevant permissive rule would allow a deduction in calculating the profits of a trade in respect of an amount which arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements, that rule—
(b)is subject to any relevant prohibitive rule in this Part (and to the provisions mentioned in subsection (1)(b)).”, and”
“(4)In this section “relevant tax avoidance arrangements” means arrangements—
“Arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).”
(2)In section 274 of ITTOIA 2005 (property businesses: relationship between rules prohibiting and allowing deductions)—
“(1A)But, if the relevant permissive rule would allow a deduction in calculating the profits of a property business in respect of an amount which arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements, that rule—
“(3A)In this section “relevant tax avoidance arrangements” means arrangements—
(a)to which the person carrying on the property business is a party, and
(3)In section 51 of CTA 2009 (trade profits: relationship between rules prohibiting and allowing deductions)—
(b)is subject to any relevant prohibitive rule (and to the provisions mentioned in subsection (1)(b)).”, and
(4)In section 214 of CTA 2009 (property businesses: relationship between rules prohibiting and allowing deductions)—
(a)to which the company carrying on the property business is a party, and
(5)The amendments made by this section have effect in relation to deductions in respect of amounts which arise directly or indirectly in consequence of, or otherwise in connection with—
(a)arrangements which are entered into on or after 21 December 2012, or
79Close companiesSchedule 30 (which makes provision about close companies) has effect.
PART 2OilDecommissioning relief agreements80Decommissioning relief agreements(1)There are to be paid out of money provided by Parliament any sums which a Minister of the Crown is liable to pay under a decommissioning relief agreement.
81Meaning of “decommissioning expenditure”(1)In section 80 “decommissioning expenditure” means expenditure incurred in connection with—
82Annual report(1)For each financial year the Treasury must prepare a report containing the information in subsection (2).
83Effect of claim on PRT(1)This section applies where a sum is payable to a company (“the claimant”) under a decommissioning relief agreement.
(2)Subsection (3) applies where the reference amount is calculated by reference to what the claimant’s assessable profit in any chargeable period would be if any expenditure incurred by it were used to reduce its profit in a particular way (rather than in any way that it has in fact been used).
(a)the expenditure is treated as having been used to reduce the claimant’s profit in that way (rather than in any way that it has in fact been used), and
(4)Subsection (5) applies where the reference amount is calculated by reference to what any other company’s assessable profit in any chargeable period would be if any expenditure incurred by the claimant—
(b)were used to reduce the other company’s profit in a particular way.
84Terminal losses accruing by virtue of another’s default(1)This section applies where—
85Claims under agreement not to affect oil allowance(1)This section applies where—
Decommissioning security settlements86Removal of IHT charges in respect of decommissioning security settlements(1)In Chapter 3 of Part 3 of IHTA 1984 (settled property: settlements without interests in possession etc), section 58 (relevant property) is amended as follows.
87Loan relationships arising from decommissioning security settlements(1)In Part 8 of CTA 2010 (oil activities), after section 287 insert—
“287ARestriction where debits or credits relate to decommissioning security settlement(1)No debits or credits are to be brought into account for the purposes of Part 5 of CTA 2009 (loan relationships) in respect of a company’s loan relationship so far as the loan relationship is in respect of property comprised in a decommissioning security settlement.
(2)In section 464 of CTA 2009 (priority of Part 5 for corporation tax purposes), in subsection (3)(e), for “and 287” substitute “to 287A”.
Decommissioning expenditure etc88Decommissioning expenditure taken into account for PRT purposes(1)Section 330B of CTA 2010 (decommissioning expenditure taken into account for PRT purposes) is amended as follows.
(c)an amount equal to the appropriate fraction of the used-up amount of that expenditure is added under section 330A(2) in calculating the participator’s adjusted ring fence profits for an accounting period.”
“(2)In calculating for the purposes of section 330(1) the amount of the participator’s adjusted ring fence profits for the accounting period, there is to be deducted the amount given by—
RP × AF × D
(c)in the definition of “the PRT difference”, for “subsection (1)” substitute “subsection (1)(a)”.
(5)In subsection (4), for “subsection (1)” substitute “subsection (1)(a)”.
89Miscellaneous amendments relating to decommissioning(1)Part 1 of Schedule 31 contains provision about expenditure on and under abandonment guarantees and abandonment expenditure.
(2)Part 2 of Schedule 31 contains provision about calculating the profits of a ring fence trade carried on by a person who incurs expenditure on meeting another person’s decommissioning liabilities.
Capital allowances90Expenditure on decommissioning onshore installations(1)Section 163 of CAA 2001 (meaning of “general decommissioning expenditure”) is amended as follows.
91Expenditure on decommissioning certain redundant plant or machinery(1)In section 164 of CAA 2001 (general decommissioning expenditure incurred before cessation of ring fence trade), after subsection (1B) insert—
(a)an offshore installation,
(b)a submarine pipeline, or
(c)a relevant onshore installation;
92Expenditure on site restoration(1)Part 5 of CAA 2001 (mineral extraction allowances) is amended as follows.
(a)in subsections (1)(a) and (6)(a), before “mineral extraction trade” insert “relevant”;
(d)the heading of section 416 becomes “Non-ring fence trades: expenditure on restoration within 3 years of ceasing to trade”.
“416ZARing fence trades: expenditure on site restoration(1)If—
(a)the whole of the expenditure on the restoration (not just the net cost) is not deductible in calculating the person’s income for any tax purposes, and
(b)none of the amounts subtracted to produce the net cost is to be treated as the person’s income for any tax purposes.
416ZB“Notional accounting period”(1)For the purposes of section 416ZA “notional accounting period”, in relation to a person (“the former trader”) who has ceased to carry on a ring fence trade, means each of the following periods—
(b)in any other case, such person or body as the Commissioners for Her Majesty’s Revenue and Customs may specify.
(c)does not make up general accounts for the whole of the former trader’s activities,
(7)If the Commissioners for Her Majesty’s Revenue and Customs are of the opinion, on reasonable grounds, that a date determined by the former trader for the purposes of subsection (6) is inappropriate, the Commissioners may by notice direct that the accounting date of such other of the trades referred to in that subsection as appears to the Commissioners to be appropriate is to be used instead.
(6)In section 416B (first-year qualifying expenditure), in subsection (2), at the end insert “(within the meaning of section 403)”.
(8)In section 40 (ring fence trades: extension of periods for which relief may be given), in subsection (1)(b), for “403” substitute “by virtue of section 416ZA”.
(a)after “416” insert “or 416ZA”, and
(b)for the words from “restoration” to “trade” substitute “site restoration”.
93Restrictions on allowances for certain oil-related expenditureSchedule 32 contains provision in connection with restrictions on allowances for certain oil-related expenditure.
PART 3Annual tax on enveloped dwellingsThe charge to tax94Charge to tax(1)A tax (called “annual tax on enveloped dwellings”) is to be charged in accordance with this Part.
(2)Tax is charged in respect of a chargeable interest if on one or more days in a chargeable period—
(a)the interest is a single-dwelling interest and has a taxable value of more than £2 million, and
(b)a company, partnership or collective investment scheme meets the ownership condition with respect to the interest.
(3)The tax is charged for the chargeable period concerned.
(4)A company meets the ownership condition with respect to a single-dwelling interest on any day on which the company is entitled to the interest (otherwise than as a member of a partnership or for the purposes of a collective investment scheme).
(5)A partnership meets the ownership condition with respect to a single-dwelling interest on any day on which a member of the partnership that is a company is entitled to the interest (as a member of the partnership).
(6)A collective investment scheme meets the ownership condition with respect to a single-dwelling interest on any day on which the interest is held for the purposes of the scheme.
(7)If a company is jointly entitled to a chargeable interest (as a member of a partnership or otherwise), then regardless of whether the company is entitled as a joint tenant or tenant in common (or, in Scotland, as a joint owner or owner in common) the ownership condition is regarded as met in relation to the whole chargeable interest.
(8)The chargeable periods are—
(a)the period beginning with 1 April 2013 and ending with 31 March 2014, and
(9)See also section 95.
95Entitlement to interests(1)In this Part “entitled” means beneficially entitled—
(a)whether solely or jointly with another person, and
(b)whether as a member of a partnership or otherwise.
(2)References in this Part to entitlement to a single-dwelling interest (or any other chargeable interest) do not include—
(a)entitlement in the capacity of a trustee or personal representative, or
(b)entitlement as a beneficiary under a settlement.
(3)Subsection (1)(b) does not apply where the contrary is specified.
(4)In this section “settlement” has the same meaning as in Part 4 of FA 2003 (see paragraph 1 of Schedule 16 to that Act).
96Person liable(1)The chargeable person is liable to pay tax charged under this Part.
(2)“The chargeable person” means—
(a)in relation to tax charged by virtue of section 94(4), the company;
(b)in relation to tax charged by virtue of section 94(5), the responsible partners.
(3)In relation to tax charged by virtue of section 94(6) “the chargeable person” means—
(a)if the collective investment scheme is a unit trust scheme, the trustee of the scheme;
(b)if the collective investment scheme is an open-ended investment company, the body corporate referred to in section 236(2) of the Financial Services and Markets Act 2000;
(c)in relation to an EEA UCITS which is not an open-ended investment company or unit trust scheme, the management company for that UCITS;
(d)in any other case, the person who has day-to-day control over the management of the property subject to the scheme.
(4)The liability of the responsible partners to pay tax charged on them under this Part is joint and several.
(5)References in this section to “the responsible partners” are to all the persons who are members of the partnership concerned on the first day in the chargeable period on which the partnership meets the ownership condition with respect to the single-dwelling interest.
(6)Tax charged under this Part is said to be “charged on” the chargeable person (and that person is said to be “chargeable to” the tax).
97Liability of persons jointly entitled(1)Subsection (2) applies if—
(a)a company is within the charge for a chargeable period with respect to a single-dwelling interest by virtue of section 96(2)(a), and
(b)one or more other persons are jointly entitled to the interest on the first day in that period on which the company is within the charge with respect to it.
(2)The company and the other person or persons are jointly and severally liable for the tax charged for that period with respect to the interest (whether or not those other persons are also within the charge with respect to the interest on the day in question).
(a)a company that is a member of a partnership is entitled (as a member of the partnership) to a single-dwelling interest on a day in a chargeable period, and
(b)as a result, the responsible partners are within the charge with respect to the interest for the period.
(4)If, on the first day in the chargeable period on which the responsible partners are within the charge a person (“P”) who is not one of the responsible partners is jointly entitled to the chargeable interest, P and the responsible partners are jointly and severally liable for the tax charged for the period with respect to the interest (whether or not P is also within the charge with respect to the interest on the day in question).
98Collective investment schemes: liability for and collection of tax(1)Subsection (2) applies where tax is charged for a chargeable period with respect to a single-dwelling interest by virtue of section 94(6).
(2)The persons who are major participants in the scheme on the first day of the chargeable period on which the chargeable person is within the charge with respect to the interest are jointly and severally liable with the chargeable person for the tax charged.
(3)Subsection (2) does not permit the recovery from a major participant of an amount exceeding the market value of the participant’s holding in the scheme.
(4)The reference in subsection (3) to a participant’s holding in a collective investment scheme is to the interests or rights by virtue of which the participant takes part in the scheme.
(5)Tax chargeable by virtue of section 94(6) may be recovered from the depositary (if any) of a collective investment scheme, but only up to the amount or value of any money or other property subject to the scheme that has been entrusted to the depositary for safekeeping.
(6)The depositary—
(a)may retain out of any money entrusted to it as mentioned in subsection (5) enough money to pay that tax, and
(b)is entitled to be fully reimbursed by the participants in the scheme (by that method or another) for amounts recovered under subsection (5).
(a)“depositary”, in relation to a collective investment scheme (other than a unit trust scheme), has the meaning given by section 237(2) of the Financial Services and Markets Act 2000;
(b)“major participant”, in relation to a collective investment scheme, is to be read in accordance with section 136(5);
(c)“participant”, in relation to a collective investment scheme, is to be read in accordance with section 235 of the Financial Services and Markets Act 2000.
(8)For the purposes of this Part “market value” is to be determined as for the purposes of TCGA 1992 (see, particularly, section 272 of that Act).
99Amount of tax chargeable(1)The amount of tax charged for a chargeable period with respect to a single-dwelling interest is stated in subsection (2) or (3).
(2)If the chargeable person is within the charge with respect to the single-dwelling interest on the first day of the chargeable period, the amount of tax charged is equal to the annual chargeable amount.
(3)Otherwise, the amount of tax charged is equal to the relevant fraction of the annual chargeable amount.
(4)The annual chargeable amount for a single-dwelling interest and a chargeable period is determined in accordance with the following table, by reference to the taxable value of the interest on the relevant day.
Annual chargeable amountTaxable value of the interest on the relevant day£15,000More than £2 million but not more than £5 million.£35,000More than £5 million but not more than £10 million.£70,000More than £10 million but not more than £20 million.£140,000More than £20 million.(5)The “relevant day” is—
(a)for the purposes of subsection (2), the first day of the chargeable period;
(b)for the purposes of subsection (3), the first day in the chargeable period on which the chargeable person is within the charge with respect to the interest.
(6)The relevant fraction is—
“N” is the number of days from (and including) the relevant day to the end of the chargeable period;
“Y” is the number of days in the chargeable period.
(a)section 100 (interim relief), and
(b)section 106 (adjustment of amount chargeable).
100Interim relief(1)Where tax is charged for a chargeable period with respect to a single-dwelling interest, the chargeable person may claim relief before the end of the chargeable period if—
(a)one or more days in the period is relievable with respect to the interest (by virtue of any of sections 133 to 150),
(b)one or more days in the chargeable period (after the first day in the period on which the chargeable person is within the charge with respect to the interest) are days on which the chargeable person is not within the charge with respect to the interest, or
(c)the taxable value of the single-dwelling interest on the first day in the chargeable period on which the chargeable person is within the charge with respect to the interest is higher than its taxable value on a later day in the chargeable period on which the chargeable person remains within the charge with respect to the interest.
(2)Relief under this section is called “interim relief”, and must be claimed—
(a)in an annual tax on enveloped dwellings return, or
(b)by amending such a return.
(3)Where interim relief is claimed under this section, section 163(1) (payment of tax by filing date for annual tax on enveloped dwellings return) has effect as if the amount of tax charged with respect to the single-dwelling interest were the sum of amounts A and B.
(4)Amount A is the total of all the daily amounts for days in the pre-claim period on which the chargeable person is within the charge with respect to the single-dwelling interest, other than days that are relievable with respect to the single-dwelling interest.
(5)Amount B is zero if—
(a)the day of the claim is relievable with respect to the single-dwelling interest by virtue of any of sections 133 to 150, or
(b)the chargeable person is not within the charge with respect to the single-dwelling interest on the day of the claim.
(6)Otherwise, amount B is the appropriate fraction of the annual chargeable amount for the single-dwelling interest.
For this purpose the annual chargeable amount is determined (under section 99(4)) on the basis that the day of the claim is the relevant day.
(7)In subsection (6) “appropriate fraction” means—
“X” is the number of days in the period beginning with the day of the claim and ending at the end of the chargeable period, and
“day of the claim” means the day on which the return mentioned in subsection (2)(a), or notice of the amendment made under subsection (2)(b), is delivered to HMRC;
“pre-claim period” means the period—
(a)beginning with the first day in the chargeable period mentioned in subsection (1) on which the chargeable person is within the charge with respect to the single-dwelling interest, and
(b)ending with the day before the day of the claim.
(9)See sections 105 and 106 for provision about the adjustment of the amount of tax charged.
101Indexation of annual chargeable amounts(1)If the consumer prices index for September in 2013 or any later year (“the later year”) is higher than it was for the previous September, section 99(4) applies in relation to chargeable periods beginning on or after 1 April in the year after the later year with the following amendments.
(2)For each of the annual chargeable amounts stated in the table in section 99(4) (as it applies in relation to chargeable periods beginning in the previous 12 months) there is substituted the indexed amount.
(3)“The indexed amount” is found by—
(a)increasing the previous amount by the same percentage increase as the percentage increase in the consumer prices index, and
(b)rounding down the result to the nearest multiple of £50.
(4)In this section “consumer prices index” means the all items consumer prices index published by the Statistics Board.
(5)The Treasury must, before 1 April 2014 and before each subsequent 1 April, make an order stating the amounts that by virtue of this section are to be the annual chargeable amounts for chargeable periods beginning on or after that date.
102Taxable value(1)The taxable value of a single-dwelling interest on any day (“the relevant day”) is equal to its market value at the end of the latest day that—
(a)falls on or before that day, and
(b)is a valuation date in the case of that interest.
(2)Each of the following is a valuation date in the case of any single-dwelling interest—
(a)1 April 2012;
(b)each 1 April falling 5 years, or a multiple of 5 years, after 1 April 2012.
(3)The following are also valuation dates in the case of any single-dwelling interest to which a company is entitled on the relevant day (otherwise than as a member of a partnership)—
(a)the effective date of any substantial acquisition by the company of a chargeable interest in or over the dwelling concerned;
(b)the effective date of any substantial disposal of part (but not the whole) of the single-dwelling interest.
(4)The following are also valuation dates in the case of any single-dwelling interest to which a company is entitled on the relevant day as a member of a partnership—
(a)the effective date of any substantial acquisition as a result of which a chargeable interest in or over the dwelling concerned became an asset of the partnership,
(5)The following are also valuation dates in the case of any single-dwelling interest that is on the relevant day held for the purposes of a collective investment scheme—
(a)the effective date of any substantial acquisition, made for the purposes of the scheme, of a chargeable interest in or over the dwelling concerned;
(6)In this section references to a disposal of part of a single-dwelling interest include the grant of a chargeable interest out of the single-dwelling interest.
(7)The grant of an option does not count as the grant of a chargeable interest for the purposes of subsection (6).
103Section 102: “substantial” acquisitions and disposals(1)For the purposes of section 102—
(a)the acquisition of a chargeable interest in a dwelling is a “substantial acquisition” only if the chargeable consideration for the acquisition is £40,000 or more;
(b)the disposal of part (but not the whole) of a single-dwelling interest is a “substantial disposal” only if the chargeable consideration for the acquisition of the chargeable interest by the person acquiring it is £40,000 or more.
(2)If the acquisition mentioned in subsection (1)(a) is a transaction between persons who are connected with each other or not acting at arm’s length, subsection (1)(a) applies as if the reference to the chargeable consideration for the acquisition were to the market value of the chargeable interest acquired.
(3)If the disposal mentioned in subsection (1)(b) is a transaction between persons who are connected with each other or not acting at arm’s length, subsection (1)(b) applies as if the reference to the chargeable consideration for the acquisition in question were to the market value of the part of the single-dwelling interest disposed of.
(4)The chargeable consideration for the acquisition mentioned in subsection (1)(a) is taken to include the chargeable consideration for any linked acquisition of a chargeable interest in or over the same dwelling.
(5)The chargeable consideration for the transaction mentioned in subsection (1)(b) is taken to include the chargeable consideration for any linked disposal of part (but not the whole) of the single-dwelling interest concerned.
(6)For the purposes of subsection (2) the market value of the chargeable interest acquired is taken to be the sum of the market values of that chargeable interest and any chargeable interest in or over the same dwelling that is acquired in a linked transaction.
(7)For the purposes of subsection (3) the market value of the part of the single-dwelling interest disposed of is taken to be the sum of the market values of that chargeable interest and any chargeable interest in or over the same dwelling that is disposed of in a linked transaction.
(8)For the purposes of this section two or more transactions are “linked” if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them.
(9)In this section “chargeable consideration”, “purchaser” and “vendor” have the same meaning as in Part 4 of FA 2003.
(10)In this section references to a disposal of part of a single-dwelling interest include the grant of a chargeable interest out of the single-dwelling interest.
104No double chargeTax in respect of a given single-dwelling interest is charged only once for any chargeable day even if more than one person is “the chargeable person” with respect to the tax charged.
Adjustment of amount charged105“Adjusted chargeable amount”(1)In relation to a person on whom tax is charged for a chargeable period with respect to a single-dwelling interest, the “adjusted chargeable amount” is the total of the daily amounts for all the days in the period on which the chargeable person is within the charge with respect to the interest.
(2)The daily amount for any such day (“the actual day”) is—
“Y” is the number of days in the chargeable period;
“A” is the annual chargeable amount for the single-dwelling interest, determined (under section 99(4)) on the basis that the actual day is the relevant day.
106Adjustment of amount chargeable(1)Where tax is charged for a chargeable period with respect to a single-dwelling interest and the adjusted chargeable amount is greater than the initial charged amount, the amount of tax charged is taken to be increased to the adjusted chargeable amount.
(2)In this section “the initial charged amount” means the amount of tax charged under section 99 for the period in respect of the interest.
(a)tax is charged for a chargeable period with respect to a single-dwelling interest,
(b)the adjusted chargeable amount is less than the initial charged amount, and
(c)a claim for relief is made under this subsection.
(4)The amount of tax charged for the period with respect to the interest is taken to be reduced (at the end of the chargeable period) to the adjusted chargeable amount.
(5)Relief under subsection (3) must be claimed—
(b)by amending an annual tax on enveloped dwellings return.
(6)The claim must be delivered by the end of the chargeable period following the one to which the claim relates.
(7)Relief under subsection (3) may be given by repayment of tax or otherwise.
(8)See also section 160 (return of adjusted amount chargeable); and see section 163(2) for provision about payment of additional tax by reference to the adjusted chargeable amount.
Chargeable interests and “single-dwelling interest”107Chargeable interests(1)In this Part “chargeable interest” means—
(2)Where two or more persons are jointly entitled to a chargeable interest the chargeable interest is not regarded, for the purposes of this Part, as consisting of separate interests corresponding to the shares (if any) that those persons have by virtue of their joint entitlement.
(3)An exempt interest is not a chargeable interest for the purposes of this Part.
(4)The following are exempt interests—
(c)in England and Wales or Northern Ireland, a tenancy at will.
(5)In subsection (4) “security interest” means an interest or right (other than a rentcharge) held for the purpose of securing the payment of money or the performance of any other obligation.
(6)In the application of this Part in Scotland the reference in subsection (5) to a rentcharge is to be read as a reference to a feu duty or a payment mentioned in section 56(1) of the Abolition of Feudal Tenure etc (Scotland) Act 2000 (asp 5).
(7)The Treasury may by regulations provide that any other description of interest or right in or over a dwelling is an exempt interest.
108Meaning of “single-dwelling interest”(1)References in this Part to a “single-dwelling interest” are to be read in accordance with this section.
(2)A chargeable interest that is exclusively in or over land consisting (on any day) of a single dwelling is a single-dwelling interest (on that day).
(3)Where a person is entitled to a chargeable interest that is exclusively in or over land consisting (on any day) of two or more single dwellings—
(a)provisions referring to a “single-dwelling interest” operate as if the person had (on that day) a separate chargeable interest in or over each dwelling, and
(b)the chargeable interest in or over each dwelling is therefore a single-dwelling interest.
(4)Where a person is entitled to a chargeable interest in or over land that on any day consists of one or more single dwellings and non-residential land—
(a)provisions referring to a “single-dwelling interest” operate as if the person had (on that day) a separate chargeable interest in or over each dwelling and a further separate chargeable interest in or over the non-residential land, and
(5)A single-dwelling interest is referred to as a single-dwelling interest “in” the dwelling concerned.
(6)A single-dwelling interest in one dwelling is distinct from any single-dwelling interest in another dwelling, even if the dwellings stand successively on the same land.
(a)“non-residential land” means land that is not a dwelling or part of a dwelling;
(b)references to a dwelling include a part of a dwelling.
109Different interests held in the same dwelling(1)Subsection (2) applies if on one or more days in a chargeable period—
(a)a company is entitled to two or more single-dwelling interests in the same dwelling, or
(b)two or more single-dwelling interests in the same dwelling are held for the purposes of the same collective investment scheme.
(2)This Part has effect with respect to that chargeable period as if those separate interests constituted just one single-dwelling interest, the taxable value of which on any day is the sum of the taxable values of the separate interests.
(3)In calculating the taxable values of the separate interests for the purposes of subsection (2), the market value of each interest is determined, under the provisions of TCGA 1992 applied by section 98(8), on the assumption that the other interest or interests are placed on the open market with that interest (on the valuation date appropriate to that interest).
110Interests held by connected persons(1)If on any day a company (“C”) is entitled to a single-dwelling interest in a dwelling and another person (“P”) who is connected with C is entitled to a different single-dwelling interest in the same dwelling, this Part has effect—
(a)in relation to C as if C were on that day entitled to P’s single-dwelling interest as well as C’s single-dwelling interest, and
(b)(if P is a company) in relation to P as if P were on that day entitled to C’s single-dwelling interest as well as P’s single-dwelling interest.
(2)This subsection provides for an exception to subsection (1).
Where P is an individual, C is not treated on the day in question as entitled to P’s single-dwelling interest unless on that day C is entitled to a single-dwelling interest in the dwelling that is a freehold or leasehold interest with a taxable value of more than £500,000.
(3)If on any day a single-dwelling interest (“the scheme interest”) is held for the purposes of a collective investment scheme and a person (“P”) who is connected with the scheme is entitled to a different single-dwelling interest in the same dwelling, this Part has effect—
(a)in relation to the scheme, as if both those separate interests were on that day held for the purposes of the scheme, and
(b)(if P is a company) in relation to P as if P were on that day entitled to the scheme interest as well as P’s single-dwelling interest.
(4)If on any day a single-dwelling interest in a dwelling is held for the purposes of a collective investment scheme (“the first scheme”) and another interest in the same dwelling is held for the purposes of another collective investment scheme (“the second scheme”) that is connected with the first scheme, this Part has effect—
(a)in relation to the first scheme, as if both the interests were held on that day for the purposes of that scheme, and
(b)in relation to the second scheme, as if both interests were held on that day for the purposes of that scheme.
(a)section 97, for provision about the liability to tax of persons treated under this section (read with section 104) as jointly entitled to a single-dwelling interest;
(b)paragraph 55 of Schedule 33, for provision about returns in cases involving joint entitlement.
(6)The provisions mentioned in subsection (5) are to be read as including corresponding provision for cases where the same single-dwelling interest is treated under this section as held—
(a)for the purposes of different collective investment schemes, or
(b)by a company and for the purposes of a collective investment scheme.
(a)the reference to a freehold interest is to the interest of the owner;
(b)the reference to a leasehold interest is to a tenant’s right over or interest in property subject to a lease.
111Different interests held in the same dwelling: effect of reliefs etc(1)References in section 110 to a person do not include—
(a)a public body, as defined in section 153,
(b)a body listed in section 154(2) (bodies established for national purposes).
(2)Subsections (1) to (4) of section 110 do not apply in relation to a single-dwelling interest if—
(a)the day in question is relievable with respect to that interest by virtue of section 150 (providers of social housing),
(b)by virtue of section 151 (charitable companies) the ownership condition is regarded as not met with respect to the interest on that day, or
(c)the taxable value of the interest on that day is taken to be zero by virtue of section 155 (dwelling conditionally exempt from inheritance tax).
(3)Subsection (4) applies where the separate interests (the “relevant interests”) that under section 110 (or that section and section 109) are treated as constituting, on a day, just one single-dwelling interest (“the combined interest”) include—
(a)a freehold or leasehold interest, and
(b)a leasehold interest (“the inferior interest”) granted out of that interest.
(4)If the inferior interest is the most inferior relevant interest, the combined interest, and the dwelling itself (where relevant), are regarded for the purposes of the relevant relieving provisions as being exploited, on the day mentioned in subsection (3), in the way the inferior interest is exploited on that day.
(5)If the inferior interest is an interest in part only (“the sub-let part”) of the land that is the subject-matter of the combined interest, subsection (4) has effect in relation to the combined interest only so far as that interest relates to the sub-let part.
(6)In this section “the relevant relieving provisions” means sections 132 to 150.
(7)The inferior interest counts as “the most inferior relevant interest” if no relevant interest (see subsection (3)) is a leasehold interest granted out of it.
(8)In this section the reference to a leasehold interest includes the interest of a lessee under an agreement for a lease.
(b)the reference to a leasehold interest is to a tenant’s right over or interest in property subject to a lease;