(1) In this Part (except where the contrary is indicated, expressly or by implication), expressions which are also used in Part 1 of the Contributions and Benefits Act have the same meaning as in that Part.
(2) In this Part—
“charity” has the meaning given by section 102(17) and (18);
“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;
“company” has the meaning given by section 101(18);
“the Contributions and Benefits Act” means the Social Security Contributions and Benefits Act 1992 or (as the case requires) the Social Security Contributions and Benefits (Northern Ireland) Act 1992;
“HMRC” means Her Majesty's Revenue and Customs;
“tax year” means the 12 months beginning with 6 April in 2017 or any subsequent year;
“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.
(1) Regulations under this Part—
(a) may make different provision for different purposes;
(b) may include incidental, consequential, supplementary or transitional provision.
(2) Regulations under this Part are to be made by statutory instrument.
(3) A statutory instrument containing regulations under this Part is subject to annulment in pursuance of a resolution of the House of Commons.
(4) Subsection (3) does not apply to a statutory instrument containing only regulations under section 113(16).
122 VAT: power to provide for persons to be eligible for refunds
In Part 2 of VATA 1994 (reliefs, exemptions and repayments), after section 33D insert—
Power to extend refunds of VAT to other persons
33E (1) This section applies where—
(a) VAT is chargeable on—
(i) the supply of goods or services to a specified person,
(ii) the acquisition of any goods from another member State by a specified person, or
(iii) the importation of any goods from a place outside the member States by a specified person, and
(b) the supply, acquisition or importation is not for the purpose of—
(i) any business carried on by the person, or
(ii) a supply by the person which, by virtue of section 41A, is treated as a supply in the course or furtherance of a business.
(2) If and to the extent that the Treasury so direct, the Commissioners shall, on a claim made by the specified person at such time and in such form and manner as the Commissioners may determine, refund to the person the amount of the VAT so chargeable.
This is subject to subsection (3) below.
(3) A specified person may not make a claim under subsection (2) above unless it has been agreed with the Treasury that, in the circumstances specified in the agreement, the amount of the person's funding is to be reduced by all or part of the amount of the VAT so chargeable.
(4) A claim under subsection (2) above in respect of a supply, acquisition or importation must be made on or before the relevant day.
(5) The “relevant day” is—
(a) in the case of a person who is registered, the last day on which the person may make a return under this Act for the prescribed accounting period containing the last day of the financial year in which the supply is made or the acquisition or importation takes place;
(b) in the case of a person who is not registered, the last day of the period of 3 months beginning immediately after the end of the financial year in which the supply is made or the acquisition or importation takes place.
(6) Subsection (7) applies where goods or services supplied to, or acquired or imported by, a specified person otherwise than for the purpose of—
(a) any business carried on by the person, or
(b) a supply falling within subsection (1)(b)(ii) above,
cannot be conveniently distinguished from goods or services supplied to, or acquired or imported by, the person for such a purpose.
(7) The amount to be refunded under this section is such amount as remains after deducting from the whole of the VAT chargeable on any supply to, or acquisition or importation by, the specified person such proportion of that VAT as appears to the Commissioners to be attributable to the carrying on of the business or (as the case may be) the making of the supply.
(8) In this section, “specified person” means a person specified in an order made by the Treasury.
(9) An order under subsection (8) may make transitional provision or savings.
(10) References in this section to VAT do not include any VAT which, by virtue of an order under section 25(7), is excluded from credit under section 25.
(1) Section 48 of VATA 1994 (VAT representatives) is amended in accordance with subsections (2) to (11).
(2) In the heading, at the end insert “ and security ”.
(3) In subsection (1)—
(a) for “Where” substitute “ Subsection (1ZA) applies where ”,
(b) in paragraph (c) after “residence” insert “ or permanent address ”, and
(c) omit the words after paragraph (c).
(4) After subsection (1) insert—
(1ZA) The Commissioners may direct the person to secure that there is a UK-established person who is—
(a) appointed to act on the person's behalf in relation to VAT, and
(b) registered against the name of the person in accordance with any regulations under subsection (4).
(5) In subsection (1B) for paragraphs (a) and (b) substitute—
(a) section 87 of the Finance Act 2011 (mutual assistance for recovery of taxes etc) and Schedule 25 to that Act;
(b) section 173 of the Finance Act 2006 (international tax enforcement arrangements);
.
(6) In subsection (2)—
(a) in paragraph (a), for the words from “required” to “VAT” substitute “ given a direction under subsection (1ZA) ”,
(b) in paragraph (b) for “that subsection” substitute “ subsection (1) ”, and
(c) in the words after paragraph (b), for “another” substitute “ a UK-established ”.
(7) In subsection (2A) for “(1)” substitute “ (1ZA) ”.
(8) In subsection (4)—
(a) omit the “and” at the end of paragraph (a), and
(b) after paragraph (b) insert—
(c) give the Commissioners power to refuse to register a person as a VAT representative, or to cancel a person's registration as a VAT representative, in such circumstances as may be specified in the regulations.
(9) In subsection (7) for the words from the beginning to the first “him” substitute “ The Commissioners may require a person in relation to whom the conditions specified in paragraphs (a), (b) and (c) of subsection (1) are satisfied ”.
(10) After subsection (7A) insert—
(7B) A direction under subsection (1ZA)—
(a) may specify a time by which it (or any part of it) must be complied with;
(b) may be varied;
(c) continues to have effect (subject to any variation) until it is withdrawn or the conditions specified in subsection (1) are no longer satisfied.
(7C) A requirement under subsection (7)—
(a) may specify a time by which it (or any part of it) must be complied with;
(b) may be varied;
(c) continues to have effect (subject to any variation) until it is withdrawn.
(11) After subsection (8) insert—
(8A) For the purposes of subsections (1ZA) and (2)—
(a) a person is UK-established if the person is established, or has a fixed establishment, in the United Kingdom, and
(b) an individual is also UK-established if the person's usual place of residence or permanent address is in the United Kingdom.
(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
124 VAT: joint and several liability of operators of online marketplaces
(1) VATA 1994 is amended in accordance with subsections (2) to (4).
(2) After section 77A insert—
Joint and several liability: operators of online marketplaces
77B (1) This section applies where a person (“P”) who is not UK-established—
(a) makes taxable supplies of goods through an online marketplace, and
(b) fails to comply with any requirement imposed on P by or under this Act (whether or not it relates to those supplies).
(2) The Commissioners may give the person who is the operator of the online marketplace (“the operator”) a notice—
(a) stating that, unless the operator secures the result mentioned in subsection (3), subsection (5) will apply, and
(b) explaining the effect of subsection (5).
(3) The result referred to in subsection (2)(a) is that P does not offer goods for sale through the online marketplace at any time between—
(a) the end of such period as may be specified in the notice, and
(b) the notice ceasing to have effect.
(4) If the operator does not secure the result mentioned in subsection (3), subsection (5) applies.
(5) The operator is jointly and severally liable to the Commissioners for the amount of VAT payable by P in respect of all taxable supplies of goods made by P through the online marketplace in the period for which the notice has effect.
(6) A notice under subsection (2) (“the liability notice”) has effect for the period beginning with the day after the day on which it is given, and ending—
(a) with the day specified in a notice given by the Commissioners under subsection (7), or
(b) in accordance with subsection (8).
(7) The Commissioners may at any time give the operator a notice stating that the period for which the liability notice has effect ends with the day specified in the notice.
(8) If the person to whom the liability notice is given ceases to be the operator of the online marketplace, the liability notice ceases to have effect at the end of—
(a) the day on which the person ceases to be the operator, or
(b) (if later) the day on which the person notifies the Commissioners that the person is no longer the operator.
(9) In this section—
“online marketplace” means a website, or any other means by which information is made available over the internet, through which persons other than the operator are able to offer goods for sale (whether or not the operator also does so);
“operator”, in relation to an online marketplace, means the person who controls access to, and the contents of, the online marketplace.
(10) For the purposes of this section a person is “UK-established” if the person is established in the United Kingdom within the meaning of Article 10 of Implementing Regulation (EU) No 282/2011.
(11) The Treasury may by regulations provide that supplies made or goods offered for sale in circumstances specified in the regulations are, or are not, to be treated for the purposes of this section as having been made or offered through an online marketplace.
(12) The Treasury may by regulations amend this section so as to alter the meaning of—
“online marketplace”,
“operator”, and
“UK-established”.
Joint and several liability under section 77B: assessments
77C (1) The Commissioners may assess the amount of VAT due from the operator of an online marketplace by virtue of section 77B to the best of their judgment and notify it to the operator.
(2) Subject to subsections (3) to (6), an assessment may be made for such period or periods as the Commissioners consider appropriate.
(3) An assessment for any month may not be made after the end of—
(a) 2 years after the end of that month, or
(b) (if later) one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of an assessment for that month, comes to their knowledge.
(4) Subsection (5) applies if, after the Commissioners have made an assessment for a period, evidence of facts sufficient in the opinion of the Commissioners to justify the making of a further assessment for that period comes to their knowledge.
(5) The Commissioners may, no later than one year after that evidence comes to their knowledge, make a further assessment for that period (subject to subsection (6)).
(6) An assessment or further assessment for a month may not be made more than 4 years after the end of the month.
(7) An amount which has been assessed and notified to a person under this section is deemed to be an amount of VAT due from the person and may be recovered accordingly (unless, or except to the extent that, the assessment is subsequently withdrawn or reduced).
(8) Subsection (7) is subject to the provisions of this Act as to appeals.
(9) Expressions used in this section and in section 77B have the same meaning in this section as in section 77B.
Joint and several liability under section 77B: interest
77D (1) If an amount assessed under section 77C is not paid before the end of the period of 30 days beginning with the day on which notice of the assessment is given, the amount assessed carries interest from the day on which the notice of assessment is given until payment.
(2) Interest under this section is payable at the rate applicable under section 197 of the Finance Act 1996.
(3) Where the operator of an online marketplace is liable for interest under this section the Commissioners may assess the amount due and notify it to the operator.
(4) A notice of assessment under this section must specify a date (not later than the date of the notice) to which the interest is calculated.
(5) A further assessment or assessments may be made under this section in respect of any interest accrued after that date.
(6) An amount of interest assessed and notified to the operator of an online marketplace under this section is recoverable as if it were VAT due from the operator (unless, or except to the extent that, the assessment is withdrawn or reduced).
(7) Interest under this section is to be paid without any deduction of income tax.
(8) Expressions used in this section and in section 77B have the same meaning in this section as in section 77B.
(3) In section 83(1) (appeals) after paragraph (ra) insert—
(rb) an assessment under section 77C or the amount of such an assessment;
.
(4) In section 84 (further provision relating to appeals)—
(a) in subsection (3) after “(ra)” insert “ , (rb) ”, and
(b) in subsection (5) after “83(1)(p)” insert “ or (rb) ”.
In Schedule 6 to FA 2010 (charities etc), in paragraph 2(2) (jurisdiction condition: meaning of “a relevant UK court”), after paragraph (c) (and on a new line) insert “ (and, for enactments relating to value added tax, includes the High Court of the Isle of Man). ”
(1) VATA 1994 is amended as follows.
(2) In Schedule 7A (reduced rate)—
(a) in Part 1 (index), omit the entry relating to women's sanitary products;
(b) in Part 2 (the Groups), omit Group 4 (women's sanitary products).
(3) In Schedule 8 (zero-rating), in Part 1 (index), at the end insert—
Women's sanitary products | Group 19
.
(4) In Schedule 8, in Part 2 (the Groups), after Group 18 insert—
Group 19 - women's sanitary products
Item No.
1 The supply of women's sanitary products.
NOTES
(1) In this Group “women's sanitary products” means women's sanitary products of any of the following descriptions—
(a) subject to Note (2), products that are designed, and marketed, as being solely for use for absorbing, or otherwise collecting, lochia or menstrual flow;
(b) panty liners, other than panty liners that are designed as being primarily for use as incontinence products;
(c) sanitary belts.
(2) Note (1)(a) does not include protective briefs or any other form of clothing.
(5) The amendments made by this section have effect in relation to supplies made, and acquisitions and importations taking place, on or after such day as the Treasury may by regulations made by statutory instrument appoint.
(6) The date appointed under subsection (5) must not be after the later of—
(a) 1 April 2017, and
(b) the earliest date that may be appointed consistently with the United Kingdom's EU obligations.
127 SDLT: calculating tax on non-residential and mixed transactions
(1) Section 55 of FA 2003 (general rules on calculating the amount of stamp duty land tax chargeable) is amended in accordance with subsections (2) to (7).
(2) In subsection (1) for “, (1C) and (2)” substitute “ and (1C) ”.
(3) In subsection (1B)—
(a) omit the words from “the relevant land” to “and”,
(b) in Step 1—
(i) for “Table A” substitute “ the appropriate table ”,
(ii) for “that Table” substitute “ the appropriate table ”,
(iii) at the end insert—
“The “appropriate table” is—
(a) Table A, if the relevant land consists entirely of residential property, and
(b) Table B, if the relevant land consists of or includes land that is not residential property.
, and
(c) after Table A insert—
Table B: Non-residential or mixed
Relevant consideration | Percentage
So much as does not exceed £150,000 | 0%
So much as exceeds £150,000 but does not exceed £250,000 | 2%
The remainder (if any) | 5%
.
(4) In subsection (1C)—
(a) omit the words from “the relevant land” to “and” (in the first place it occurs),
(b) in Step 1—
(i) for “Table A” substitute “ the appropriate table ”,
(ii) for “that Table” substitute “ the appropriate table ”,
(iii) at the end insert—
“The “appropriate table” is—
(a) Table A, if the relevant land consists entirely of residential property, and
(b) Table B, if the relevant land consists of or includes land that is not residential property.
(5) Omit subsection (2).
(6) In subsection (3)—
(a) in the words before paragraph (a), for “subsections (1B) and (2)” substitute “ subsection (1B) ”, and
(b) in paragraph (b) omit “, subject as follows”.
(7) In subsection (4)—
(a) in the words before paragraph (a), for the words from “subsections (1C)” to “linked transactions” substitute “ subsection (1C) ”, and
(b) in paragraph (a) for “those” substitute “ the linked ”.
(8) Schedule 5 to FA 2003 (rules on calculating the amount of stamp duty land tax chargeable in respect of transactions for which the consideration consists of or includes rent) is amended in accordance with subsections (9) to (11).
(9) In paragraph 2(3) (calculation of tax chargeable in respect of rent) in Table B (bands and percentages for non-residential or mixed property) for the final entry substitute—
Over £150,000 but not over £5 million | 1%
Over £5 million | 2%
(10) In paragraph 9 (tax chargeable in respect of consideration other than rent: general), in sub-paragraph (1), omit “(but see paragraph 9A)”.
(11) Omit paragraph 9A (calculation of tax chargeable in respect of consideration other than rent: 0% band) and the cross-heading preceding it.
(12) The amendments made by this section have effect in relation to any land transaction of which the effective date is, or is after, 17 March 2016.
(13) But those amendments do not have effect in relation to a transaction if the purchaser so elects and either—
(a) the transaction is effected in pursuance of a contract entered into and substantially performed before 17 March 2016, or
(b) the transaction is effected in pursuance of a contract entered into before that date and is not excluded by subsection (15).
(14) An election under subsection (13)—
(a) must be included in the land transaction return made in respect of the transaction or in an amendment of that return, and
(b) must comply with any requirements specified by the Commissioners for Her Majesty's Revenue and Customs as to its form or the manner of its inclusion.
(15) A transaction effected in pursuance of a contract entered into before 17 March 2016 is excluded by this subsection if—
(a) there is any variation of the contract, or assignment of rights under the contract, on or after 17 March 2016,
(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
(c) on or after that date there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
(16) In this section—
“land transaction return”, in relation to a transaction, means the return under section 76 of FA 2003 in respect of that transaction;
“purchaser” has the same meaning as in Part 4 of that Act (see section 43(4) of that Act);
“substantially performed”, in relation to a contract, has the same meaning as in that Part (see section 44(5) of that Act).
128 SDLT: higher rates for additional dwellings etc
(1) FA 2003 is amended in accordance with subsections (2) to (4).
(2) In section 55 (amount of tax chargeable: general) after subsection (4) insert—
(4A) Schedule 4ZA (higher rates for additional dwellings and dwellings purchased by companies) modifies this section as it applies for the purpose of determining the amount of tax chargeable in respect of certain transactions involving major interests in dwellings.
(3) After Schedule 4 insert—
SCHEDULE 4ZA
Stamp duty land tax: higher rates for additional dwellings and dwellings purchased by companies
PART 1 Higher rates
1 (1) In its application for the purpose of determining the amount of tax chargeable in respect of a chargeable transaction which is a higher rates transaction, section 55 (amount of tax chargeable: general) has effect with the modification in sub-paragraph (2).
(2) In subsection (1B) of section 55, for Table A substitute—
Table A: Residential
Relevant consideration | Percentage
So much as does not exceed £125,000 | 3%
So much as exceeds £125,000 but does not exceed £250,000 | 5%
So much as exceeds £250,000 but does not exceed £925,000 | 8%
So much as exceeds £925,000 but does not exceed £1,500,000 | 13%
The remainder (if any) | 15%
PART 2 Meaning of “higher rates transaction”
Meaning of “higher rates transaction” etc
2 (1) This paragraph explains how to determine whether a chargeable transaction is a “higher rates transaction” for the purposes of paragraph 1.
(2) In the case of a transaction where there is only one purchaser, determine whether the transaction falls within any of paragraphs 3 to 7; if it does fall within any of those paragraphs it is a “higher rates transaction” (otherwise it is not).
(3) In the case of a transaction where there are two or more purchasers—
(a) take one of the purchasers and determine, having regard to that purchaser only, whether the transaction falls within any of paragraphs 3 to 7, and
(b) do the same with each of the other purchasers.
If the transaction falls within any of those paragraphs when having regard to any one of the purchasers it is a “higher rates transaction” (otherwise it is not).
(4) For the purposes of this Schedule any term of years absolute or leasehold estate is not a “major interest” if its term does not exceed 7 years on the date of its grant.
Single dwelling transactions
3 (1) A chargeable transaction falls within this paragraph if—
(a) the purchaser is an individual,
(b) the main subject-matter of the transaction consists of a major interest in a single dwelling (“the purchased dwelling”), and
(c) Conditions A to D are met.
(2) Condition A is that the chargeable consideration for the transaction is £40,000 or more.
(3) Condition B is that on the effective date of the transaction the purchased dwelling—
(a) is not subject to a lease upon which the main subject-matter of the transaction is reversionary, or
(b) is subject to such a lease but the lease has an unexpired term of no more than 21 years.
(4) Condition C is that at the end of the day that is the effective date of the transaction—
(a) the purchaser has a major interest in a dwelling other than the purchased dwelling,
(b) that interest has a market value of £40,000 or more, and
(c) that interest is not reversionary on a lease which has an unexpired term of more than 21 years.
(5) Condition D is that the purchased dwelling is not a replacement for the purchaser's only or main residence.
(6) For the purposes of sub-paragraph (5) the purchased dwelling is a replacement for the purchaser's only or main residence if—
(a) on the effective date of the transaction (“the transaction concerned”) the purchaser intends the purchased dwelling to be the purchaser's only or main residence,
(b) in another land transaction (“the previous transaction”) whose effective date was during the period of three years ending with the effective date of the transaction concerned, the purchaser or the purchaser's spouse or civil partner at the time disposed of a major interest in another dwelling (“the sold dwelling”),
(c) at any time during that period of three years the sold dwelling was the purchaser's only or main residence, and
(d) at no time during the period beginning with the effective date of the previous transaction and ending with the effective date of the transaction concerned has the purchaser or the purchaser's spouse or civil partner acquired a major interest in any other dwelling with the intention of it being the purchaser's only or main residence.
(7) For the purposes of sub-paragraph (5) the purchased dwelling may become a replacement for the purchaser's only or main residence if—
(a) on the effective date of the transaction (“the transaction concerned”) the purchaser intended the purchased dwelling to be the purchaser's only or main residence,
(b) in another land transaction whose effective date is during the period of three years beginning with the day after the effective date of the transaction concerned, the purchaser or the purchaser's spouse or civil partner disposes of a major interest in another dwelling (“the sold dwelling”), and
(c) at any time during the period of three years ending with the effective date of the transaction concerned the sold dwelling was the purchaser's only or main residence.
4 A chargeable transaction falls within this paragraph if—
(a) the purchaser is not an individual,
(b) the main subject-matter of the transaction consists of a major interest in a single dwelling, and
(c) Conditions A and B in paragraph 3 are met.
Multiple dwelling transactions
5 (1) A chargeable transaction falls within this paragraph if—
(a) the purchaser is an individual,
(b) the main subject-matter of the transaction consists of a major interest in two or more dwellings (“the purchased dwellings”), and
(c) at least two of the purchased dwellings meet conditions A, B and C.
(2) A purchased dwelling meets condition A if the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to the purchased dwelling is £40,000 or more.
(3) A purchased dwelling meets condition B if on the effective date of the transaction the purchased dwelling—
(a) is not subject to a lease upon which the main subject-matter of the transaction is reversionary, or
(b) is subject to such a lease but the lease has an unexpired term of no more than 21 years.
(4) A purchased dwelling meets condition C if it is not subsidiary to any of the other purchased dwellings.
(5) One of the purchased dwellings (“dwelling A”) is subsidiary to another of the purchased dwellings (“dwelling B”) if—
(a) dwelling A is situated within the grounds of, or within the same building as, dwelling B, and
(b) the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to dwelling B is equal to, or greater than, two thirds of the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to the following combined—
(i) dwelling A,
(ii) dwelling B, and
(iii) each of the other purchased dwellings (if any) which are situated within the grounds of, or within the same building as, dwelling B.
6 (1) A chargeable transaction falls within this paragraph if—
(a) the purchaser is an individual,
(b) the main subject-matter of the transaction consists of a major interest in two or more dwellings (“the purchased dwellings”),
(c) only one of the purchased dwellings meets conditions A, B and C,
(d) the purchased dwelling which meets those conditions is not a replacement for the purchaser's only or main residence, and
(e) at the end of the day that is the effective date of the transaction—
(i) the purchaser has a major interest in a dwelling other than one of the purchased dwellings,
(ii) that interest has a market value of £40,000 or more, and
(iii) that interest is not reversionary on a lease which has an unexpired term of more than 21 years.
(2) Sub-paragraphs (2) to (5) of paragraph 5 apply for the purposes of sub-paragraph (1)(c) of this paragraph as they apply for the purposes of sub-paragraph (1)(c) of that paragraph.
(3) Sub-paragraphs (6) and (7) of paragraph 3 apply for the purposes of sub-paragraph (1)(d) of this paragraph as they apply for the purposes of sub-paragraph (5) of that paragraph.
7 (1) A chargeable transaction falls within this paragraph if—
(a) the purchaser is not an individual,
(b) the main subject-matter of the transaction consists of a major interest in two or more dwellings (“the purchased dwellings”), and
(c) at least one of the purchased dwellings meets conditions A and B.
(2) Sub-paragraphs (2) and (3) of paragraph 5 apply for the purposes of sub-paragraph (1)(c) of this paragraph as they apply for the purposes of sub-paragraph (1)(c) of that paragraph.
PART 3 Supplementary provisions
Further provision in connection with paragraph 3(6) and (7)
8 (1) This paragraph applies where by reason of paragraph 3(7) a chargeable transaction (“the transaction concerned”) ceases to be a higher rates transaction for the purposes of paragraph 1.
(2) The land transaction (“the subsequent transaction”) by reference to which the condition in paragraph 3(7)(b) was met may not be taken into account for the purposes of paragraph 3(6)(b) in determining whether any other chargeable transaction is a higher rates transaction.
(3) A land transaction return in respect of the transaction concerned may be amended, to take account of its ceasing to be a higher rates transaction, at any time within whichever of the following periods expires later—
(a) the period of 3 months beginning within the effective date of the subsequent transaction, and
(b) the period of 12 months beginning with the filing date for the return.
(4) Where a land transaction return in respect of the transaction concerned is amended to take account of its ceasing to be a higher rates transaction (and not for any other reason), paragraph 6(2A) of Schedule 10 (notice of amendment of return to be accompanied by the contract for the transaction etc) does not apply in relation to the amendment.
Spouses and civil partners purchasing alone
9 (1) Sub-paragraph (2) applies in relation to a chargeable transaction if—
(a) the purchaser (or one of them) is married or in a civil partnership on the effective date,
(b) the purchaser and the purchaser's spouse or civil partner are living together on that date, and
(c) the purchaser's spouse or civil partner is not a purchaser in relation to the transaction.
(2) The transaction is to be treated as being a higher rates transaction for the purposes of paragraph 1 if it would have been a higher rates transaction had the purchaser's spouse or civil partner been a purchaser.
(3) Persons who are married to, or are civil partners of, each other are treated as living together for the purposes of this paragraph if they are so treated for the purposes of the Income Tax Acts (see section 1011 of the Income Tax Act 2007).
Settlements and bare trusts
10 (1) Sub-paragraph (3) applies in relation to a land transaction if—
(a) the main subject-matter of the transaction consists of a major interest in one or more dwellings,
(b) the purchaser (or one of them) is acting as trustee of a settlement, and
(c) under the terms of the settlement a beneficiary will be entitled to—
(i) occupy the dwelling or dwellings for life, or
(ii) income earned in respect of the dwelling or dwellings.
(2) Sub-paragraph (3) also applies in relation to a land transaction if—
(a) the main subject-matter of the transaction consists of a term of years absolute in a dwelling, and
(b) the purchaser (or one of them) is acting as a trustee of a bare trust.
(3) Where this sub-paragraph applies in relation to a land transaction the beneficiary of the settlement or bare trust (rather than the trustee) is to be treated for the purposes of this Schedule as the purchaser (or as one of them).
(4) Paragraphs 3(3) and 4 of Schedule 16 (trustees to be treated as the purchaser) have effect subject to sub-paragraph (3).
11 (1) Sub-paragraph (3) applies where—
(a) a person is a beneficiary under a settlement,
(b) a major interest in a dwelling forms part of the trust property, and
(c) under the terms of the settlement, the beneficiary is entitled to—
(i) occupy the dwelling for life, or
(ii) income earned in respect of the dwelling.
(2) Sub-paragraph (3) also applies where—
(a) a person is a beneficiary under a bare trust, and
(b) a term of years absolute in a dwelling forms part of the trust property.
(3) Where this sub-paragraph applies—
(a) the beneficiary is to be treated for the purposes of this Schedule as holding the interest in the dwelling, and
(b) if the trustee of the settlement or bare trust disposes of the interest, the beneficiary is to be treated for the purposes of this Schedule as having disposed of it.
12 (1) This paragraph applies where, by reason of paragraph 10 or 11 or paragraph 3(1) of Schedule 16, the child of a person (“P”) would (but for this paragraph) be treated for the purposes of this Schedule as—
(a) being the purchaser in relation to a land transaction,
(b) holding an interest in a dwelling, or
(c) having disposed of an interest in a dwelling.
(2) Where this paragraph applies—
(a) P and any spouse or civil partner of P are to be treated for the purposes of this Schedule as being the purchaser, holding the interest or (as the case may be) having disposed of the interest, and
(b) the child is not to be so treated.
(3) But sub-paragraph (2)(a) does not apply in relation to a spouse or civil partner of P if the two of them are not living together.
(4) Sub-paragraph (3) of paragraph 9 applies for the purposes of this paragraph as it applies for the purposes of that paragraph.
(5) “Child” means a person under the age of 18.
13 (1) This paragraph applies in relation to a land transaction if—
(a) the main subject-matter of the transaction consists of a major interest in one or more dwellings,
(b) the purchaser (or one of them) is acting as trustee of a settlement,
(c) that purchaser is an individual, and
(d) under the terms of the settlement a beneficiary is not entitled to—
(i) occupy the dwelling or dwellings for life, or
(ii) income earned in respect of the dwelling or dwellings.
(2) In determining whether the transaction falls within paragraph 4 or paragraph 7—
(a) if the purchaser mentioned in sub-paragraph (1) is the only purchaser, ignore paragraph (a) of those paragraphs, and
(b) if that purchaser is not the only purchaser, ignore paragraph (a) of those paragraphs when having regard to that purchaser.
Partnerships
14 (1) Sub-paragraph (2) applies in relation to a chargeable transaction whose subject-matter consists of a major interest in one or more dwellings if—
(a) the purchaser (or one of them) is a partner in a partnership, but
(b) the purchaser does not enter into the transaction for the purposes of the partnership.
(2) For the purposes of determining whether the transaction falls within paragraph 3 or 6 any major interest in any other dwelling that is held by or on behalf of the partnership for the purposes of a trade carried on by the partnership is not to be treated as held by or on behalf of the purchaser.
(3) Paragraph 2(1)(a) of Schedule 15 (chargeable interests held by partnerships treated as held by the partners) has effect subject to sub-paragraph (2).
Alternative finance arrangements
15 (1) This paragraph applies in relation to a chargeable transaction which is the first transaction under an alternative finance arrangement entered into between a person and a financial institution.
(2) The person (rather than the institution) is to be treated for the purposes of this Schedule as the purchaser in relation to the transaction.
(3) In this paragraph—
“alternative finance arrangement” means an arrangement of a kind mentioned in section 71A(1) or 73(1);
“financial institution” has the meaning it has in those sections (see section 73BA);
“first transaction”, in relation to an alternative finance arrangement, has the meaning given by section 71A(1)(a) or (as the case may be) section 73(1)(a)(i).
Major interests in dwellings inherited jointly
16 (1) This paragraph applies where by virtue of an inheritance—
(a) a person (“P”) becomes jointly entitled with one or more other persons to a major interest in a dwelling, and
(b) P's beneficial share in the interest does not exceed 50% (see sub-paragraph (4)).
(2) P is not to be treated for the purposes of paragraph 3(4)(a) or 6(1)(e) as having the major interest at any time during the period of three years beginning with the date of the inheritance.
(3) But if at any time during that period of three years P becomes the only person beneficially entitled to the whole of the interest or P's beneficial share in the interest exceeds 50% P is, from that time, to be treated as having the major interest for the purposes of paragraph 3(4)(a) and 6(1)(e) (subject to any disposal by P).
(4) P's share in the interest exceeds 50% if—
(a) P is beneficially entitled as a tenant in common or coparcener to more than half the interest,
(b) P and P's spouse or civil partner taken together are beneficially entitled as tenants in common or coparceners to more than half the interest, or
(c) P and P's spouse or civil partner are beneficially entitled as joint tenants to the interest and there is no more than one other joint tenant who is so entitled.
(5) In this section “inheritance” means the acquisition of an interest in or towards satisfaction of an entitlement under or in relation to the will of a deceased person, or on the intestacy of a deceased person.
Dwellings outside England, Wales and Northern Ireland
17 (1) In the provisions of this Schedule specified in sub-paragraph (3), references to a “dwelling” include references to a dwelling situated in a country or territory outside England, Wales and Northern Ireland.
(2) In the application of those provisions in relation to a dwelling situated in a country or territory outside England, Wales and Northern Ireland—
(a) references to a “major interest” in the dwelling are to an equivalent interest in the dwelling under the law of that country or territory,
(b) references to persons being beneficially entitled as joint tenants, tenants in common or coparceners to an interest in the dwelling are to persons having an equivalent entitlement to the interest in the dwelling under the law of that country or territory,
(c) references to a “land transaction” in relation to the dwelling are to the acquisition of an interest in the dwelling under the law of that country or territory,
(d) references to the “effective date” of a land transaction in relation to the dwelling are to the date on which the interest in the dwelling is acquired under the law of that country or territory,
(e) references to “inheritance” are to the acquisition of an interest from a deceased person's estate in accordance with the laws of that country or territory concerning the inheritance of property.
(3) The provisions of this Schedule referred to in sub-paragraphs (1) and (2) are—
(a) paragraph 3(4), (6)(b), (c) and (d) and (7)(b) and (c),
(b) paragraph 6(1)(e),
(c) paragraph 11,
(d) paragraph 14(2), and
(e) paragraph 16.
(4) Where the child of a person (“P”) has an interest in a dwelling which is situated in a country or territory outside England, Wales and Northern Ireland, P and any spouse or civil partner of P are to be treated for the purposes of this Schedule as having that interest.
(5) But sub-paragraph (4) does not apply in relation to a spouse or civil partner of P if the two of them are not living together.
(6) Sub-paragraph (3) of paragraph 9 applies for the purposes of sub-paragraph (5) of this paragraph as it applies for the purposes of that paragraph.
What counts as a dwelling
18 (1) This paragraph sets out rules for determining what counts as a dwelling for the purposes of this Schedule.
(2) A building or part of a building counts as a dwelling if—
(a) it is used or suitable for use as a single dwelling, or
(b) it is in the process of being constructed or adapted for such use.
(3) Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on that land) is taken to be part of that dwelling.
(4) Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.
(5) The main subject-matter of a transaction is also taken to consist of or include an interest in a dwelling if—
(a) substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,
(b) the main subject-matter of the transaction consists of or includes an interest in a building, or a part of a building, that is to be constructed or adapted under the contract for use as a single dwelling, and
(c) construction or adaptation of the building, or part of a building, has not begun by the time the contract is substantially performed.
(6) In sub-paragraph (5)—
“contract” includes any agreement;
“relevant deeming provision” means any of sections 44 to 45A or paragraph 5(1) or (2) of Schedule 2A or paragraph 12A of Schedule 17A;
“substantially performed” has the same meaning as in section 44.
(7) A building or part of a building used for a purpose specified in section 116(2) or (3) is not used as a dwelling for the purposes of sub-paragraph (2) or (5).
(8) Where a building or part of a building is used for a purpose mentioned in sub-paragraph (7), no account is to be taken for the purposes of sub-paragraph (2) of its suitability for any other use.
Power to modify this Schedule
19 (1) The Treasury may by regulations amend or otherwise modify this Schedule for the purpose of preventing certain chargeable transactions from being higher rates transactions for the purposes of paragraph 1.
(2) The provision which may be included in regulations under this paragraph by reason of section 114(6)(c) includes incidental or consequential provision which may cause a chargeable transaction to be a higher rates transaction for the purposes of paragraph 1.
(4) In paragraph 5 of Schedule 6B (relief for transfers involving multiple dwellings) after sub-paragraph (6) insert—
(6A) In the application of sub-paragraph (1), account is to be taken of paragraph 1 of Schedule 4ZA if the relevant transaction is a higher rates transaction for the purposes of that paragraph.
(5) The amendments made by this section have effect in relation to any land transaction of which the effective date is, or is after, 1 April 2016.
(6) But those amendments do not have effect in relation to a transaction—
(a) effected in pursuance of a contract entered into and substantially performed before 26 November 2015, or
(b) effected in pursuance of a contract entered into before that date and not excluded by subsection (7).
(7) A transaction effected in pursuance of a contract entered into before 26 November 2015 is excluded by this subsection if—
(a) there is any variation of the contract, or assignment of rights under the contract, on or after 26 November 2015,
(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
(c) on or after that date there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
(8) Subsection (9) applies in relation to a land transaction of which the effective date is or is before 26 November 2018.
(9) In its application for the purpose of determining whether a land transaction to which this subsection applies is a higher rates transaction, paragraph 3(6) of Schedule 4ZA to FA 2003 has effect with the following modifications—
(a) in paragraph (b) for “during the period of three years ending with” substitute “ the same as or before ”,
(b) in paragraph (c) for the words from “during” to “paragraph (b)” substitute “ before the effective date of the transaction concerned ”.
(10) Paragraph 15 of Schedule 4ZA to FA 2003 does not apply in relation to a land transaction of which the effective date is, or is before, the date on which this Act is passed if the effect of its application would be that the transaction is a higher rates transaction for the purposes of paragraph 1 of that Schedule.
129 SDLT higher rate: land purchased for commercial use
(1) Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended in accordance with subsections (2) to (4).
(2) In paragraph 5—
(a) in sub-paragraph (1)—
(i) after paragraph (a) insert—
(aa) use as business premises for the purposes of a qualifying property rental business (other than one which gives rise to income consisting wholly or mainly of excluded rents);
(ab) use for the purposes of a relievable trade;
;
(ii) for paragraph (b) substitute—
(b) development or redevelopment and—
(i) resale in the course of a property development trade, or
(ii) exploitation falling within paragraph (a) or use falling within paragraph (aa) or (ab);
;
(b) in sub-paragraph (2), for “the dwelling” substitute “ a dwelling on the land ”;
(c) in sub-paragraph (3), at the appropriate place insert—
“relievable trade” means a trade that is run on a commercial basis and with a view to profit.
(3) In paragraph 5G, in sub-paragraph (3)(c) for “the dwelling” substitute “ any dwelling on the land ”.
(4) In paragraph 6D(3)(b), for “the dwelling” substitute “ any dwelling on the land concerned ”.
(5) The amendments made by this section have effect in relation to any land transaction of which the effective date is on or after 1 April 2016.
130 SDLT higher rate: acquisition under regulated home reversion plan
(1) Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended as follows.
(2) After paragraph 5C insert—
Acquisition under a regulated home reversion plan
5CA (1) Paragraph 3 does not apply to a chargeable transaction if (and so far as) the purchaser—
(a) is an authorised plan provider, and
(b) acquires the subject-matter of the chargeable transaction as a plan provider.
(2) For the purposes of this paragraph the purchaser acquires the subject-matter of the chargeable transaction “as a plan provider” so far as the purchaser acquires it under a regulated home reversion plan which the purchaser enters into as plan provider.
(3) In this paragraph—
“authorised plan provider” means a person authorised under the Financial Services and Markets Act 2000 to carry on in the United Kingdom the regulated activity specified in article 63B(1) of the Regulated Activities Order (entering into regulated home reversion plan as plan provider);
“the Regulated Activities Order” means the Financial Services and Markets (Regulated Activities) Order 2001 (S.I. 2001/544);
“regulated home reversion plan” means an arrangement which is a regulated home reversion plan for the purposes of Chapter 15A of Part 2 of the Regulated Activities Order.
(4) In this section references to entering into a regulated home reversion plan “as plan provider” are to be interpreted as if the references were in the Regulated Activities Order.
(3) After paragraph 5I insert—
5IA (1) This paragraph applies where relief under paragraph 5CA (acquisition under a regulated home reversion plan) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.
(2) The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction the purchaser holds the higher threshold interest otherwise than for the purposes of the regulated home reversion plan (as defined in paragraph 5CA).
(3) But sub-paragraph (2) does not apply if—
(a) after ceasing to hold the higher threshold interest for the purposes of the regulated home reversion plan, the purchaser sells the higher threshold interest without delay (except so far as delay is justified by commercial considerations or cannot be avoided), and
(b) at no time when the higher threshold interest is held by the purchaser as mentioned in sub-paragraph (2) is the dwelling (or any part of the dwelling) occupied by a non-qualifying individual.
(4) In this paragraph—
“the dwelling” means the dwelling to which the relief under paragraph 5CA relates;
“non-qualifying individual” is to be interpreted in accordance with paragraph 5A.
(4) The amendments made by this section have effect in relation to any land transaction of which the effective date is on or after 1 April 2016.
131 SDLT higher rate: properties occupied by certain employees etc
(1) Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended as follows.
(2) In paragraph 5D (dwellings for occupation by certain employees etc)—
(a) in sub-paragraph (1), for “trade” substitute “ business ”;
(b) in sub-paragraph (2)(b) for “trade” substitute “ business ”;
(c) for sub-paragraph (4) substitute—
(4) Relievable business” means a trade or property rental business that is run on a commercial basis and with a view to profit.
(3) The heading before paragraph 5D becomes “ Dwellings for occupation by certain employees etc of a relievable business ”.
(4) After paragraph 5E insert—
Acquisition by management company of flat for occupation by caretaker
5EA (1) Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in or over a flat which—
(a) is one of at least three flats contained in the same premises, and
(b) is acquired by a tenants' management company for the purpose of making the flat available for use as caretaker accommodation.
(2) For the purposes of this paragraph a tenants' management company makes a flat available for use “as caretaker accommodation” if it makes it available to an individual for use as living accommodation in connection with the individual's employment as caretaker of the premises.
(3) In relation to the acquisition of a flat, a company is a “tenants' management company” if—
(a) the tenants of two or more other flats contained in the premises are members of the company, and
(b) the company owns, or it is intended that the company will acquire, the freehold of the premises;
but a company which carries on a relievable business is not a tenants' management company.
(4) In this paragraph “premises” means premises constituting the whole or part of a building.
(5) After paragraph 5J insert—
5JA (1) This paragraph applies where relief under paragraph 5EA (acquisition by management company of flat for occupation by caretaker) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.
(2) The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction the purchaser holds the higher threshold interest otherwise than for the purpose of making the flat available for use as caretaker accommodation.
(3) For the purposes of this paragraph a tenants' management company makes a flat available for use “as caretaker accommodation” if it makes it available to an individual for use as living accommodation in connection with the individual's employment as caretaker of the premises.
(6) In paragraph 5E (meaning of “qualifying partner”, “qualifying employee” etc)—
(a) in sub-paragraph (1) for “trade” substitute “ business ”;
(b) in sub-paragraph (2) for “qualifying trade” substitute “ relievable business ”;
(c) in sub-paragraph (4)—
(i) in the words before paragraph (a), for “trade” substitute “ relievable business ”;
(ii) in paragraph (a)(i), for “trade” substitute “ relievable business ”.
(7) In paragraph 5J (withdrawal of relief under paragraph 5D), in sub-paragraph (3)—
(a) in paragraph (a), for the words from “trade” to the end substitute “ relievable business ”;
(b) in paragraph (c), for the words from “trade” to the end substitute “ relievable business ”.
(8) In paragraph 6G (withdrawal of relief under paragraph 5D in cases involving alternative finance arrangements), in sub-paragraph (4)—
(a) in paragraph (a), for “qualifying trade” substitute “ relievable business ”;
(b) in paragraph (c) for “trade” substitute “ relievable business ”.
(9) In paragraph 9 (interpretation), at the appropriate place insert—
“relievable business” has the meaning given by paragraph 5D(4).
(10) The amendments made by this section have effect in relation to any land transaction of which the effective date is on or after 1 April 2016.
132 SDLT: minor amendments of section 55 of FA 2003
In section 55 of FA 2003 (general rules on calculating the amount of stamp duty land tax chargeable), in subsection (5)—
(a) for “74(2) and (3)” substitute “ 74(1B) ”, and
(b) for “rate” substitute “ amount ”.
Schedule 16 contains provision about—
(a) the stamp duty land tax treatment of co-ownership authorised contractual schemes, and
(b) relief from stamp duty land tax for certain acquisitions by such schemes and by property authorised investment funds.
(1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.
(2) After section 144 insert—
Regulated home reversion plans
144A (1) A day in a chargeable period is relievable in relation to a single dwelling interest held by a person (“P”) who is an authorised plan provider if—
(a) P has, as plan provider, entered into a regulated home reversion plan relating to the single dwelling interest, and
(b) the occupation condition is met on that day.
(2) If no qualifying termination event has occurred, the “occupation condition” is that a person who was originally entitled to occupy the dwelling (or any part of it) under the regulated home reversion plan is still entitled to do so.
(3) If a qualifying termination event has occurred, the “occupation condition” is that—
(a) the single dwelling interest is being held with the intention that it will be sold without delay (except so far as delay is justified by commercial considerations or cannot be avoided), and
(b) no non-qualifying individual is permitted to occupy the dwelling (or any part of it).
(4) In this section—
“authorised plan provider” means a person authorised under the Financial Services and Markets Act 2000 to carry on in the United Kingdom the regulated activity specified in article 63B(1) of the Regulated Activities Order (entering into regulated home reversion plan as plan provider);
“qualifying termination event” is to be interpreted in accordance with article 63B of the Regulated Activities Order;
“the Regulated Activities Order” means the Financial Services and Markets (Regulated Activities) Order 2001 (S.I. 2001/544);
“regulated home reversion plan” means an arrangement which is a regulated home reversion plan for the purposes of Chapter 15A of Part 2 of the Regulated Activities Order (but see also subsection (6)).
(5) In this section references to entering into a regulated home reversion plan “as plan provider” are to be interpreted as if the references were in the Regulated Activities Order (but see also subsection (6)).
(6) For the purposes of this section—
(a) an arrangement which P entered into before 6 April 2007 is treated for the purposes of this section as a regulated home reversion plan entered into by P as plan provider if that arrangement would have been so treated for the purposes of article 63B(1) of the Regulated Activities Order had P entered into that arrangement on the day mentioned in subsection (1);
(b) an arrangement in relation to which P acquired rights or obligations before 6 April 2007 is treated for the purposes of this section as a regulated home reversion plan entered into by P as plan provider if that arrangement would have been so treated for the purposes of article 63B(1) of the Regulated Activities Order had P acquired those rights or obligations on the day mentioned in subsection (1).
(7) Section 136 (meaning of “non-qualifying individual”) applies in relation to this section as in relation to sections 133 and 135.
(3) In section 116 (dwelling in grounds of another dwelling), in the list in subsection (6), at the appropriate place insert— “ section 144A (regulated home reversion plans); ”.
(4) In section 117 (dwellings in the same building), in the list in subsection (5), at the appropriate place insert— “ section 144A (regulated home reversion plans); ”.
(5) In section 132 (effect of reliefs under sections 133 to 150), in the list in subsection (3), at the appropriate place insert— “ section 144A (regulated home reversion plans); ”.
(6) In section 159A (relief declaration returns), in the table in subsection (9), at the appropriate place insert—
144A (regulated home reversion plans) | 5A
.
(7) The amendments made by this section have effect for chargeable periods beginning on or after 1 April 2016.
135 ATED: properties occupied by certain employees etc
(1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.
(2) Section 145 (occupation by certain employees or partners) is amended in accordance with subsections (3) to (5).
(3) In subsection (1)—
(a) in paragraph (b), after “qualifying trade” insert “ or qualifying property rental business ”;
(b) in paragraph (d) for “trade” substitute “ qualifying trade or qualifying property rental business ”.
(4) After subsection (4) insert—
(5) For the meaning of “qualifying property rental business” see section 133(3).
(5) The heading of that section becomes “ Occupation by employees or partners of a qualifying trade or property rental business ”.
(6) In section 146 (meaning of “qualifying employee” and “qualifying partner” in section 145)—
(a) in subsection (1), after “trade” insert “ or property rental business ”;
(b) in subsection (2)—
(i) in the words before paragraph (a), after “qualifying trade” insert “ or qualifying property rental business ”, and
(ii) in paragraph (a)(i), after “trade” insert “ or (as the case may be) property rental business ”.
(7) After section 147 insert—
Caretaker flat owned by management company
147A (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if the dwelling in question is a flat in relation to which the conditions in subsection (2) are met.
(2) The conditions are that on that day—
(a) a company (“the management company”) holds the single-dwelling interest for the purpose of making the flat available as caretaker accommodation,
(b) the flat is contained in premises which also contain two or more other flats,
(c) the tenants of at least two of the other flats in the premises are members of the management company,
(d) the management company owns the freehold of the premises, and
(e) the management company is not carrying on a trade or property rental business.
(3) For the purposes of subsection (2), the management company makes a flat available “as caretaker accommodation” if it makes it available to an individual for use as living accommodation in connection with the individual's employment as caretaker of the premises.
(4) In this section “premises” means premises constituting the whole or part of a building.
(8) In section 116 (dwelling in grounds of another dwelling), in the list in subsection (6)—
(a) in the entry relating to section 145, for “certain employees or partners” substitute “ employees or partners of a qualifying trade or property rental business ”;
(b) at the appropriate place insert— “ section 147A (caretaker flat owned by management company); ”.
(9) In section 117 (dwellings in the same building), in the list in subsection (5)—
(a) in the entry relating to section 145, for “certain employees or partners” substitute “ employees or partners of a qualifying trade or property rental business ”;
(b) at the appropriate place insert— “ section 147A (caretaker flat owned by management company); ”.
(10) In section 132 (effect of reliefs under sections 133 to 150), in the list in subsection (3)—
(a) in the entry relating to section 145, for “certain employees or partners” substitute “ employees or partners of a qualifying trade or property rental business ”;
(b) at the appropriate place insert— “ section 147A (caretaker flat owned by management company); ”.
(11) In section 159A (relief declaration returns), in the table in subsection (9), in the entry relating to section 145, for “(dwellings used for trade purposes: occupation by certain employees or partners)” substitute “ or 147A (occupation by certain employees etc) ”.
(12) The amendments made by this section have effect for chargeable periods beginning on or after 1 April 2016.
136 ATED: alternative property finance - land in Scotland
(1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.
(2) Section 157 (land sold to financial institution and leased to person) is amended in accordance with subsections (3) to (6).
(3) In subsection (1)—
(a) in paragraph (a), omit “or section 72 of that Act (land in Scotland sold to financial institution and leased to person)”;
(b) in paragraph (b), after “transaction” insert “ is in England, Wales or Northern Ireland and ”.
(4) In subsection (7)—
(a) in the definition of “the first transaction” omit “or (as the case requires) 72”;
(b) in the definition of “the second transaction” omit “or (as the case requires) 72”.
(5) Omit subsection (10).
(6) The heading of that section becomes “ Land in England, Wales or Northern Ireland sold to financial institution and leased to person ”.
(7) After section 157 insert—
Land in Scotland sold to financial institution and leased to person
157A (1) This section applies where Conditions A and B are met.
(2) Condition A is that arrangements are entered into between a person (“the lessee”) and a financial institution under which the institution—
(a) purchases a major interest in land (“the first transaction”),
(b) grants to the lessee out of that interest a lease (if the interest acquired is the interest of the owner) or a sub-lease (if the interest acquired is the tenant's right over or interest in a property subject to a lease) (“the second transaction”), and
(c) enters into an agreement under which the lessee has a right to require the institution to transfer the major interest purchased by the institution under the first transaction.
(3) Condition B is that the land in which the institution purchases a major interest under the first transaction is in Scotland and consists of or includes one or more dwellings or parts of a dwelling.
(4) If the lessee is a company, this Part has effect in relation to times when the arrangements are in operation (see subsection (5)) as if—
(a) the interest held by the financial institution as mentioned in subsection (5)(b) were held by the lessee (and not by the financial institution), and
(b) the lease or sub-lease granted under the second transaction had not been granted.
(5) The reference in subsection (4) to times when the arrangements are in operation is to times when—
(a) the lessee holds the interest granted to it under the second transaction, and
(b) the interest purchased under the first transaction is held by a financial institution.
(6) A company treated under subsection (4)(a) as holding an interest at a particular time is treated as holding it as a member of a partnership if at the time in question the company holds the interest granted to it under the second transaction as a member of the partnership (and this Part has effect accordingly in relation to the other members of the partnership).
(7) In relation to times when the arrangements operate for the benefit of a collective investment scheme (see subsection (8)), this Part has effect as if—
(a) the interest held by the financial institution as mentioned in subsection (8)(b) were held by the lessee for the purposes of a collective investment scheme (and were not held by the financial institution), and
(b) the lease or sub-lease granted under the second transaction had not been granted.
(8) The reference in subsection (7) to times when the arrangements operate for the benefit of a collective investment scheme is to times when—
(a) the lessee holds the interest granted to it under the second transaction for the purposes of a collective investment scheme, and
(b) the interest purchased under the first transaction is held by a financial institution.
(9) In this section “financial institution” has the same meaning as in section 71A of FA 2003 (see section 73BA of that Act).
(10) References in this section to a “major interest” in land are to—
(a) ownership of land, or
(b) the tenant's right over or interest in land subject to a lease.
(11) Where the lessee is an individual, references in subsections (7) and (8) to the lessee are to be read, in relation to times after the death of the lessee, as references to the lessee's personal representatives.
(8) The amendments made by this section have effect for chargeable periods beginning on or after 1 April 2016.
137 Stamp duty: acquisition of target company's share capital
(1) Section 77 of FA 1986 (acquisition of target company's share capital) is amended as follows.
(2) In subsection (3), omit the “and” at the end of paragraph (g) and after paragraph (h) insert
, and
(i) at the time the instrument mentioned in subsection (1) is executed there are no disqualifying arrangements, within the meaning given by section 77A, in existence.
(3) In subsection (3A) for “(3)” substitute “ (3)(b) to (h) ”.
(4) In subsection (4) after “this section” insert “ and section 77A ”.
(5) After section 77 of FA 1986 insert—
Disqualifying arrangements
77A (1) This section applies for the purposes of section 77(3)(i).
(2) Arrangements are “disqualifying arrangements” if it is reasonable to assume that the purpose, or one of the purposes, of the arrangements is to secure that—
(a) a particular person obtains control of the acquiring company, or
(b) particular persons together obtain control of that company.
(3) But neither of the following are disqualifying arrangements—
(a) the arrangements for the issue of shares in the acquiring company which is the consideration for the acquisition mentioned in section 77(3);
(b) any relevant merger arrangements.
(4) In subsection (3) “relevant merger arrangements” means arrangements for the issue of shares in the acquiring company to the shareholders of a company (“company B”) other than the target company (“company A”) in a case where—
(a) that issue of shares to the shareholders of company B would be the only consideration for the acquisition by the acquiring company of the whole of the issued share capital of company B,
(b) the conditions in section 77(3)(c) and (e) would be met in relation to that acquisition (if that acquisition were made in accordance with the arrangements), and
(c) the conditions in paragraphs (f) to (h) of section 77(3) would be met in relation to that acquisition if—
(i) that acquisition were made in accordance with the arrangements, and
(ii) the shares in the acquiring company issued as consideration for the acquisition of the share capital of company A were ignored for the purposes of those paragraphs;
and in section 77(3)(e) to (h) and (3A) as they apply by virtue of this subsection, references to the target company are to be read as references to company B.
(5) Where—
(a) arrangements within any paragraph of subsection (3) are part of a wider scheme or arrangement, and
(b) that scheme or arrangement includes other arrangements which—
(i) fall within subsection (2), and
(ii) do not fall within any paragraph of subsection (3),
those other arrangements are disqualifying arrangements despite anything in subsection (3).
(6) In this section—
“the acquiring company” has the meaning given by section 77(1);
“arrangements” includes any agreement, understanding or scheme (whether or not legally enforceable);
“control” is to be read in accordance with section 1124 of the Corporation Tax Act 2010;
“the target company” has the meaning given by section 77(1).
(6) The amendments made by this section have effect in relation to any instrument executed on or after 29 June 2016 (and references to arrangements in any provision inserted by this section include arrangements entered into before that date).
138 Stamp duty: transfers to depositaries or providers of clearance services
(1) Part 3 of FA 1986 (stamp duty) is amended as follows.
(2) In section 67 (depositary receipts)—
(a) in subsection (2), for the words from “1.5% of” to the end substitute
1.5% of—
(a) the amount or value of the consideration for the sale to which the instrument gives effect, or
(b) where subsection (2A) applies—
(i) the amount or value of the consideration for the sale to which the instrument gives effect, or
(ii) if higher, the value of the securities at the date the instrument is executed.
,
(b) after subsection (2) insert—
(2A) This subsection applies where the instrument transferring the securities is executed pursuant to—
(a) the exercise of an option to buy or to sell the securities, and
(b) either—
(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (6), (7) or (8), or
(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
, and
(c) in subsection (3), for “In any other case” substitute “ If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) ”.
(3) In section 69 (depositary receipts: supplementary), in subsection (4), for “section 67(3)” substitute “ section 67(2)(b)(ii) and (3) ”.
(4) In section 70 (clearance services)—
(a) in subsection (2), for the words from “1.5% of” to the end substitute
1.5% of—
(a) the amount or value of the consideration for the sale to which the instrument gives effect, or
(b) where subsection (2A) applies—
(i) the amount or value of the consideration for the sale to which the instrument gives effect, or
(ii) if higher, the value of the securities at the date the instrument is executed.
,
(b) after subsection (2) insert—
(2A) This subsection applies where the instrument transferring the securities is executed pursuant to—
(a) the exercise of an option to buy or to sell the securities, and
(b) either—
(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (6), (7) or (8), or
(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
, and
(c) in subsection (3), for “In any other case” substitute “ If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) ”.
(5) In section 72 (clearance services: supplementary), in subsection (2), for “section 70(3)” substitute “ section 70(2)(b)(ii) and (3) ”.
(6) The amendments made by this section have effect in relation to an instrument which transfers securities pursuant to the exercise of an option where—
(a) the option was granted on or after 25 November 2015, and
(b) the option was exercised on or after 23 March 2016.
139 SDRT: transfers to depositaries or providers of clearance services
(1) Part 4 of FA 1986 (stamp duty reserve tax) is amended as follows.
(2) In section 93 (depositary receipts)—
(a) in subsection (4)(b), for the words from “worth,” to the end substitute
worth—
(i) the amount or value of the consideration, or
(ii) where subsection (4A) applies, the amount or value of the consideration or, if higher, the value of the securities;
, and
(b) after subsection (4) insert—
(4A) This subsection applies where the transfer of the securities is pursuant to—
(a) the exercise of an option to buy or to sell the securities, and
(b) either—
(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (2) or (3), or
(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
(3) In section 94 (depositary receipts: supplementary), in subsection (4), for “section 93(4)(c)” substitute “ section 93(4)(b)(ii) and (c) ”.
(4) In section 96 (clearance services)—
(a) in subsection (2)(b), for the words from “worth,” to the end substitute
worth—
(i) the amount or value of the consideration, or
(ii) where subsection (2A) applies, the amount or value of the consideration or, if higher, the value of the securities;
,
(b) after subsection (2) insert—
(2A) This subsection applies where the transfer of the securities is pursuant to—
(a) the exercise of an option to buy or to sell the securities, and
(b) either—
(i) a term of the option which provides for the securities to be transferred to A or (as the case may be) to the person whose business is or includes holding chargeable securities as nominee for A, or
(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
, and
(c) in subsection (10), for “subsection (2)(c)” substitute “ subsection (2)(b)(ii) and (c) ”.
(5) The amendments made by this section have effect in relation to a transfer pursuant to the exercise of an option where—
(a) the option was granted on or after 25 November 2015, and
(b) the option was exercised on or after 23 March 2016.
(1) In section 1(2) of OTA 1975 (rate of petroleum revenue tax) for “35” substitute “ 0 ”.
(2) In paragraph 17 of Schedule 2 to that Act (cap on interest on repayments of tax), in sub-paragraph (5)(b) omit the words from “if that” to the end.
(3) In paragraph 2 of Schedule 19 to FA 1982 (duty to pay instalments based on amount of tax payable in previous chargeable period), after sub-paragraph (4) insert—
(4A) In sub-paragraph (1) the reference to any chargeable period for an oil field ending on or after 30th June 1983 does not include a chargeable period ending on 31st December 2015.
(4) The amendment made by subsection (1) has effect with respect to chargeable periods ending after 31 December 2015.
(1) In section 51(2)(b) of FA 1994 (standard rate of insurance premium tax), for “9.5 per cent” substitute “ 10 per cent ”.
(2) The amendment made by subsection (1) has effect in relation to a premium falling to be regarded for the purposes of Part 3 of FA 1994 as received under a taxable insurance contract by an insurer on or after 1 October 2016.
(3) The amendment made by subsection (1) does not have effect in relation to a premium which—
(a) is in respect of a contract made before 1 October 2016, and
(b) falls to be regarded for the purposes of Part 3 of FA 1994 as received under the contract by the insurer before 1 February 2017 by virtue of regulations under section 68 of that Act (special accounting schemes).
(4) Subsection (3) does not apply in relation to a premium which—
(a) is an additional premium under a contract,
(b) falls to be regarded for the purposes of Part 3 of FA 1994 as received under the contract by the insurer on or after 1 October 2016 by virtue of regulations under section 68 of that Act, and
(c) is in respect of a risk which was not covered by the contract before that date.
(5) In the application of sections 67A to 67C of FA 1994 (announced increase in rate) in relation to the increase made by this section—
(a) the announcement for the purposes of sections 67A(1) and 67B(1) is to be taken to have been made on 16 March 2016,
(b) the date of the change is 1 October 2016, and
(c) the concessionary date is 1 February 2017.
(1) Section 42 of FA 1996 (amount of landfill tax) is amended as follows.
(2) In subsection (1)(a) (standard rate), for “£84.40” substitute “ £86.10 ”.
(3) In subsection (2) (reduced rate for certain disposals)—
(a) for “£84.40” substitute “ £86.10 ”, and
(b) for “£2.65” substitute “ £2.70 ”.
(4) The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2017.
(1) Section 42 of FA 1996 (amount of landfill tax) (as amended by section 142) is amended as follows.
(2) In subsection (1)(a) (standard rate), for “£86.10” substitute “ £88.95 ”.
(3) In subsection (2) (reduced rate for certain disposals)—
(a) for “£86.10” substitute “ £88.95 ”, and
(b) for “£2.70” substitute “ £2.80 ”.
(4) The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2018.
144 CCL: abolition of exemption for electricity from renewable sources
(1) In Schedule 6 to FA 2000 (climate change levy), in paragraph 19(1) (exemption for electricity from renewable sources)—
(a) in paragraph (c), omit the final “and”;
(b) after paragraph (d) insert
, and
(e) the electricity is actually supplied before 1 April 2018.
(2) In that Schedule omit the following—
(a) in paragraph 5(3), “20(6)(a),”;
(b) paragraphs 19 and 20;
(c) paragraph 24(2).
(3) The repeals made by subsection (2) come into force on the day appointed by the Treasury by regulations made by statutory instrument.
(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy) for the table substitute—
TABLE
Taxable commodity supplied | Rate at which levy payable if supply is not a reduced-rate supply
Electricity | £0.00568 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility | £0.00198 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state | £0.01272 per kilogram
Any other taxable commodity | £0.01551 per kilogram
.
(2) The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2017.
(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy) for the table substitute—
TABLE
Taxable commodity supplied | Rate at which levy payable if supply is not a reduced-rate supply
Electricity | £0.00583 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility | £0.00203 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state | £0.01304 per kilogram
Any other taxable commodity | £0.01591 per kilogram
.
(2) The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2018.
(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy) for the table substitute—
TABLE
Taxable commodity supplied | Rate at which levy payable if supply is not a reduced-rate supply
Electricity | £0.00847 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility | £0.00339 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state | £0.02175 per kilogram
Any other taxable commodity | £0.02653 per kilogram
.
(2) The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2019.
(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy)—
(a) in paragraph (ba) (reduced-rate supplies of electricity), for “10” substitute “ 7 ”;
(b) in paragraph (c) (other reduced-rate supplies), for “35” substitute “ 22 ”.
(2) The amendments made by this section have effect in relation to supplies treated as taking place on or after 1 April 2019.
(1) In section 30 of FA 1994 (air passenger duty: rates of duty) in subsection (4A) (long haul rates of duty)—
(a) in paragraph (a), for “£71” substitute “ £73 ”, and
(b) in paragraph (b), for “£142” substitute “ £146 ”.
(2) The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2016.
151 VED: extension of old vehicles exemption from 1 April 2017
(1) Paragraph 1A of Schedule 2 to VERA 1994 (exemption for old vehicles) is amended as follows.
(2) In sub-paragraph (1) for the words from “if” to the end substitute “ during the period of 12 months beginning with 1 April in any year if it was constructed more than 40 years before 1 January in that year. ”
(3) After that sub-paragraph insert—
(1A) But nothing in sub-paragraph (1) has the effect that a nil licence is required to be in force in respect of a vehicle while a vehicle licence is in force in respect of it.
(4) The amendments made by this section come into force on 1 April 2017.
(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—
TABLE
Part of gross gaming yield | Rate
The first £2,370,500 | 15 per cent
The next £1,634,000 | 20 per cent
The next £2,861,500 | 30 per cent
The next £6,040,000 | 40 per cent
The remainder | 50 per cent
.
(2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2016.
(1) Schedule 17 contains provision relating to fuel duties.
(2) Part 1 of the Schedule provides for charging excise duty on aqua methanol.
(3) Part 2 of the Schedule contains miscellaneous amendments.
(4) Part 3 of the Schedule makes provision about commencement.
(1) For the table in Schedule 1 to TPDA 1979 substitute—
TABLE
1. Cigarettes | An amount equal to 16.5% of the retail price plus £196.42 per thousand cigarettes
2. Cigars | £245.01 per kilogram
3. Hand-rolling tobacco | £198.10 per kilogram
4. Other smoking tobacco and chewing tobacco | £107.71 per kilogram
.
(2) The amendment made by this section is treated as having come into force at 6pm on 16 March 2016.
(1) ALDA 1979 is amended as follows.
(2) In section 62(1A)(a) (rate of duty on sparkling cider of a strength exceeding 5.5%) for “£264.61” substitute “ £268.99 ”.
(3) For Part 1 of the table in Schedule 1 substitute—
PART 1 Wine or Made-wine of a Strength Not Exceeding 22%
Description of wine or made-wine | Rates of duty per hectolitre £
Wine or made-wine of a strength not exceeding 4% | £85.60
Wine or made-wine of a strength exceeding 4% but not exceeding 5.5% | £117.72
Wine or made-wine of a strength exceeding 5.5% but not exceeding 15% and not being sparkling | £277.84
Sparkling wine or sparkling made-wine of a strength exceeding 5.5% but less than 8.5% | £268.99
Sparkling wine or sparkling made-wine of a strength of at least 8.5% but not exceeding 15% | £355.87
Wine or made-wine of a strength exceeding 15% but not exceeding 22% | £370.41
.
(4) The amendments made by this section are treated as having come into force on 21 March 2016.
156 General anti-abuse rule: provisional counteractions
(1) In Part 5 of FA 2013 (general anti-abuse rule), after section 209 insert—
Effect of adjustments specified in a provisional counteraction notice
209A (1) Adjustments made by an officer of Revenue and Customs which—
(a) are specified in a provisional counteraction notice given to a person by the officer (and have not been cancelled: see sections 209B to 209E),
(b) are made in respect of a tax advantage that would (ignoring this Part) arise from tax arrangements that are abusive, and
(c) but for section 209(6)(a), would have effected a valid counteraction of that tax advantage under section 209,
are treated for all purposes as effecting a valid counteraction of the tax advantage under that section.
(2) A “provisional counteraction notice” is a notice which—
(a) specifies adjustments (the “notified adjustments”) which the officer reasonably believes may be required under section 209(1) to counteract a tax advantage that would (ignoring this Part) arise to the person from tax arrangements;
(b) specifies the arrangements and the tax advantage concerned, and
(c) notifies the person of the person's rights of appeal with respect to the notified adjustments (when made) and contains a statement that if an appeal is made against the making of the adjustments—
(i) no steps may be taken in relation to the appeal unless and until the person is given a notice referred to in section 209F(2), and
(ii) the notified adjustments will be cancelled if HMRC fails to take at least one of the actions mentioned in section 209B(4) within the period specified in section 209B(2).
(3) It does not matter whether the notice is given before or at the same time as the making of the adjustments.
(4) In this section “adjustments” includes adjustments made in any way permitted by section 209(5).
Notified adjustments: 12 month period for taking action if appeal made
209B (1) This section applies where a person (the “taxpayer”) to whom a provisional counteraction notice has been given appeals against the making of the notified adjustments.
(2) The notified adjustments are to be treated as cancelled with effect from the end of the period of 12 months beginning with the day on which the provisional counteraction notice is given unless an action mentioned in subsection (4) is taken before that time.
(3) For the purposes of subsection (2) it does not matter whether the action mentioned in subsection (4)(c), (d) or (e) is taken before or after the provisional counteraction notice is given (but if that action is taken before the provisional counteraction notice is given subsection (5) does not have effect).
(4) The actions are—
(a) an officer of Revenue and Customs notifying the taxpayer that the notified adjustments are cancelled;
(b) an officer of Revenue and Customs giving the taxpayer written notice of the withdrawal of the provisional counteraction notice (without cancelling the notified adjustments);
(c) a designated HMRC officer giving the taxpayer a notice under paragraph 3 of Schedule 43 which—
(i) specifies the arrangements and the tax advantage which are specified in the provisional counteraction notice, and
(ii) specifies the notified adjustments (or lesser adjustments) as the counteraction that the officer considers ought to be taken (see paragraph 3(2)(c) of that Schedule);
(d) a designated HMRC officer giving the taxpayer a pooling notice or a notice of binding under Schedule 43A which—
(i) specifies the arrangements and the tax advantage which are specified in the provisional counteraction notice, and
(ii) specifies the notified adjustments (or lesser adjustments) as the counteraction that the officer considers ought to be taken;
(e) a designated HMRC officer giving the taxpayer a notice under paragraph 1(2) of Schedule 43B which—
(i) specifies the arrangements and the tax advantage which are specified in the provisional counteraction notice, and
(ii) specifies the notified adjustments (or lesser adjustments) as the counteraction that the officer considers ought to be taken.
(5) In a case within subsection (4)(c), (d) or (e), if—
(a) the notice under paragraph 3 of Schedule 43, or
(b) the pooling notice or notice of binding, or
(c) the notice under paragraph 1(2) of Schedule 43B,
(as the case may be) specifies lesser adjustments the officer must modify the notified adjustments accordingly.
(6) The officer may not take the action in subsection (4)(b) unless the officer was authorised to make the notified adjustments otherwise than under this Part.
(7) In this section “lesser adjustments” means adjustments which assume a smaller tax advantage than was assumed in the provisional counteraction notice.
Notified adjustments: case within section 209B(4)(c)
209C (1) This section applies if the action in section 209B(4)(c) (notice to taxpayer of proposed counteraction of tax advantage) is taken.
(2) If the matter is not referred to the GAAR Advisory Panel, the notified adjustments are to be treated as cancelled with effect from the date of the designated HMRC officer's decision under paragraph 6(2) of Schedule 43 unless the notice under paragraph 6(3) of Schedule 43 states that the adjustments are not to be treated as cancelled under this section.
(3) A notice under paragraph 6(3) of Schedule 43 may not contain the statement referred to in subsection (2) unless HMRC would have been authorised to make the adjustments if the general anti-abuse rule did not have effect.
(4) If the taxpayer is given a notice under paragraph 12 of Schedule 43 which states that the specified tax advantage is not to be counteracted under the general anti-abuse rule, the notified adjustments are to be treated as cancelled unless that notice states that those adjustments are not to be treated as cancelled under this section.
(5) A notice under paragraph 12 of Schedule 43 may not contain the statement referred to in subsection (4) unless HMRC would have been authorised to make the adjustments if the general anti-abuse rule did not have effect.
(6) If the taxpayer is given a notice under paragraph 12 of Schedule 43 stating that the specified tax advantage is to be counteracted—
(a) the notified adjustments are confirmed only so far as they are specified in that notice as adjustments required to give effect to the counteraction, and
(b) so far as they are not confirmed, the notified adjustments are to be treated as cancelled.
Notified adjustments: case within section 209B(4)(d)
209D (1) This section applies if the action in section 209B(4)(d) (pooling notice or notice of binding) is taken.
(2) If the taxpayer is given a notice under paragraph 8(2) or 9(2) of Schedule 43A which states that the specified tax advantage is not to be counteracted under the general anti-abuse rule, the notified adjustments are to be treated as cancelled, unless that notice states that those adjustments are not to be treated as cancelled under this section.
(3) A notice under paragraph 8(2) or 9(2) of Schedule 43A may not contain the statement referred to in subsection (2) unless HMRC would have been authorised to make the adjustments if the general anti-abuse rule did not have effect.
(4) If the taxpayer is given a notice under paragraph 8(2) or 9(2) of Schedule 43A stating that the specified tax advantage is to be counteracted—
(a) the notified adjustments are confirmed only so far as they are specified in that notice as adjustments required to give effect to the counteraction, and
(b) so far as they are not confirmed, the notified adjustments are to be treated as cancelled.
Notified adjustments: case within section 209B(4)(e)
209E (1) This section applies if the action in section 209B(4)(e) (notice of proposal to make generic referral) is taken.
(2) If the notice under paragraph 1(2) of Schedule 43B is withdrawn, the notified adjustments are to be treated as cancelled unless the notice of withdrawal states that the adjustments are not to be treated as cancelled under this section.
(3) The notice of withdrawal may not contain the statement referred to in subsection (2) unless HMRC was authorised to make the notified adjustments otherwise than under this Part.
(4) If the taxpayer is given a notice under paragraph 8(2) of Schedule 43B, which states that the specified tax advantage is not to be counteracted under the general anti-abuse rule, the notified adjustments are to be treated as cancelled, unless that notice states that those adjustments are not to be treated as cancelled under this section.
(5) A notice under paragraph 8(2) of Schedule 43B may not contain the statement referred to in subsection (4) unless HMRC was authorised to make the adjustments otherwise than under this Part.
(6) If the taxpayer is given a notice under paragraph 8(2) of Schedule 43B stating that the specified tax advantage is to be counteracted—
(a) the notified adjustments are confirmed only so far as they are specified in that notice as adjustments required to give effect to the counteraction, and
(b) so far as they are not confirmed, the notified adjustments are to be treated as cancelled.
Appeals against provisional counteractions: further provision
209F (1) Subsections (2) to (5) have effect in relation to an appeal by a person (“the taxpayer”) against the making of adjustments which are specified in a provisional counteraction notice.
(2) No steps after the initial notice of appeal are to be taken in relation to the appeal unless and until the taxpayer is given—
(a) a notice under section 209B(4)(b),
(b) a notice under paragraph 6(3) of Schedule 43 (notice of decision not to refer matter to GAAR advisory panel) containing the statement described in section 209C(2) (statement that adjustments are not to be treated as cancelled),
(c) a notice under paragraph 12 of Schedule 43,
(d) a notice under paragraph 8(2) or 9(2) of Schedule 43A, or
(e) a notice under paragraph 8 of Schedule 43B,
in respect of the tax arrangements concerned.
(3) The taxpayer has until the end of the period mentioned in subsection (4) to comply with any requirement to specify the grounds of appeal.
(4) The period mentioned in subsection (3) is the 30 days beginning with the day on which the taxpayer receives the notice mentioned in subsection (2).
(5) In subsection (2) the reference to “steps” does not include the withdrawal of the appeal.
(2) In section 214(1) of FA 2013 (interpretation of Part 5), at the appropriate place insert—
“notified adjustments”, in relation to a provisional counteraction notice, has the meaning given by section 209A(2);
“provisional counteraction notice” has the meaning given by section 209A(2);
.
(3) The amendments made by this section have effect in relation to tax arrangements (within the meaning of Part 5 of FA 2013) entered into at any time (whether before or on or after the day on which this Act is passed).
157 General anti-abuse rule: binding of tax arrangements to lead arrangements
(1) Part 5 of FA 2013 (general anti-abuse rule) is amended in accordance with subsections (2) to (11).
(2) After Schedule 43 insert—
SCHEDULE 43A
Procedural requirements: pooling notices and notices of binding
Pooling notices
1 (1) This paragraph applies where a person has been given a notice under paragraph 3 of Schedule 43 in relation to any tax arrangements (the “lead arrangements”) and the condition in sub-paragraph (2) is met.
(2) The condition is that the period of 45 days mentioned in paragraph 4(1) of Schedule 43 has expired but no notice under paragraph 12 of Schedule 43 or paragraph 8 of Schedule 43B has yet been given in respect of the matter.
(3) If a designated HMRC officer considers—
(a) that a tax advantage has arisen to another person (“R”) from tax arrangements that are abusive,
(b) that those tax arrangements (“R's arrangements”) are equivalent to the lead arrangements, and
(c) that the advantage ought to be counteracted under section 209,
the officer may give R a notice (a “pooling notice”) which places R's arrangements in a pool with the lead arrangements.
(4) There is one pool for any lead arrangements, so all tax arrangements placed in a pool with the lead arrangements (as well as the lead arrangements themselves) are in one and the same pool.
(5) Tax arrangements which have been placed in a pool do not cease to be in the pool except where that is expressly provided for by this Schedule (regardless of whether or not the lead arrangements or any other tax arrangements remain in the pool).
(6) The officer may not give R a pooling notice if R has been given in respect of R's arrangements a notice under paragraph 3 of Schedule 43.
Notice of proposal to bind arrangements to counteracted arrangements
2 (1) This paragraph applies where a counteraction notice has been given to a person in relation to any tax arrangements (the “counteracted arrangements”) which are in a pool created under paragraph 1.
(2) If a designated HMRC officer considers—
(a) that a tax advantage has arisen to another person (“R”) from tax arrangements that are abusive,
(b) that those tax arrangements (“R's arrangements”) are equivalent to the counteracted arrangements, and
(c) that the advantage ought to be counteracted under section 209,
the officer may give R a notice (a “notice of binding”) in relation to R's arrangements.
(3) The officer may not give R a notice of binding if R has been given in respect of R's arrangements a notice under—
(a) paragraph 1, or
(b) paragraph 3 of Schedule 43.
(4) In this paragraph “counteraction notice” means a notice such as is mentioned in sub-paragraph (2) of paragraph 12 of Schedule 43 or sub-paragraph (3) of paragraph 8 of Schedule 43B (notice of final decision to counteract).
3 (1) The decision whether or not to give R a pooling notice or notice of binding must be taken, and any notice must be given, as soon as is reasonably practicable after HMRC becomes aware of the relevant facts.
(2) A pooling notice or notice of binding must—
(a) specify the tax arrangements in relation to which the notice is given and the tax advantage,
(b) explain why the officer considers R's arrangements to be equivalent to the lead arrangements or the counteracted arrangements (as the case may be),
(c) explain why the officer considers that a tax advantage has arisen to R from tax arrangements that are abusive,
(d) set out the counteraction that the officer considers ought to be taken, and
(e) explain the effect of—
(i) paragraphs 4 to 10,
(ii) subsection (9) of section 209, and
(iii) section 212A.
(3) A pooling notice or notice of binding may set out steps that R may (subject to subsection (9) of section 209) take to avoid the proposed counteraction.
Corrective action by a notified taxpayer
4 (1) If a person to whom a pooling notice or notice of binding has been given takes the relevant corrective action in relation to the tax arrangements and tax advantage specified in the notice before the beginning of the closed period mentioned in section 209(9), the person is to be treated for the purposes of paragraphs 8 and 9 and Schedule 43B (generic referral of tax arrangements) as not having been given the notice in question (and accordingly the tax arrangements in question are no longer in the pool).
(2) For the purposes of this Schedule the “relevant corrective action” is taken if (and only if) the person takes the steps set out in sub-paragraphs (3) and (4).
(3) The first step is that—
(a) the person amends a return or claim to counteract the tax advantage specified in the pooling notice or notice of binding, or
(b) if the person has made a tax appeal (by notifying HMRC or otherwise) on the basis that the tax advantage specified in the pooling notice or notice of binding arises from the tax arrangements specified in that notice, the person takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing that advantage.
(4) The second step is that the person notifies HMRC—
(a) that the first step has been taken, and
(b) of any additional amount which has or will become due and payable in respect of tax by reason of the first step being taken.
(5) Where a person takes the first step described in sub-paragraph (3)(b), HMRC may proceed as if the person had not taken the relevant corrective action if the person fails to enter into the written agreement.
(6) In determining the additional amount which has or will become due and payable in respect of tax for the purposes of sub-paragraph (4)(b), it is to be assumed that, where the person takes the necessary action as mentioned in sub-paragraph (3)(b), the agreement is then entered into.
(7) No enactment limiting the time during which amendments may be made to returns or claims operates to prevent the person taking the first step mentioned in sub-paragraph (3)(a) before the tax enquiry is closed.
(8) No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (9), against an amendment made by a closure notice in respect of a tax enquiry to the extent that the amendment takes into account an amendment made by the taxpayer to a return or claim in taking the first step mentioned in sub-paragraph (3)(a).
(9) The provisions are—
(a) paragraph 35(1)(b) of Schedule 33,
(b) section 31(1)(b) or (c) of TMA 1970,
(c) paragraph 9 of Schedule 1A to TMA 1970,
(d) paragraph 34(3) of Schedule 18 to FA 1998, and
(e) paragraph 35(1)(b) of Schedule 10 to FA 2003.
Corrective action by lead taxpayer
5 If the person mentioned in paragraph 1(1) takes the relevant corrective action (as defined in paragraph 4A of Schedule 43) before the end of the period of 75 days beginning with the day on which the notice mentioned in paragraph 1(1) was given to that person, the lead arrangements are treated as ceasing to be in the pool.
Opinion notices and right to make representations
6 (1) Sub-paragraph (2) applies where—
(a) a pooling notice is given to a person in relation to any tax arrangements, and
(b) an opinion notice (or opinion notices) under paragraph 11(2) of Schedule 43 about another set of tax arrangements in the pool (“the referred arrangements”) is subsequently given to a designated HMRC officer.
(2) The officer must give the person a pooled arrangements opinion notice.
(3) No more than one pooled arrangements opinion notice may be given to a person in respect of the same tax arrangements.
(4) Where a designated HMRC officer gives a person a notice of binding, the officer must, at the same time, give the person a bound arrangements opinion notice.
7 (1) In relation to a person who is, or has been, given a pooling notice, “pooled arrangements opinion notice” means a written notice which—
(a) sets out a report prepared by HMRC of any opinion of the GAAR Advisory Panel about the referred arrangements,
(b) explains the person's right to make representations falling within sub-paragraph (3), and
(c) sets out the period in which those representations may be made.
(2) In relation to a person who is given a notice of binding “bound arrangements opinion notice” means a written notice which—
(a) sets out a report prepared by HMRC of any opinion of the GAAR Advisory Panel about the counteracted arrangements (see paragraph 2(1)),
(b) explains the person's right to make representations falling within sub-paragraph (3), and
(c) sets out the period in which those representations may be made.
(3) A person who is given a pooled arrangements opinion notice or a bound arrangements opinion notice has 30 days beginning with the day on which the notice is given to make representations in any of the following categories—
(a) representations that no tax advantage has arisen to the person from the arrangements to which the notice relates;
(b) representations as to why the arrangements to which the notice relates are or may be materially different from—
(i) the referred arrangements (in the case of a pooled arrangements opinion notice), or
(ii) the counteracted arrangements (in the case of a bound arrangements opinion notice).
(4) In sub-paragraph (3)(b) references to “arrangements” include any circumstances which would be relevant in accordance with section 207 to a determination of whether the tax arrangements in question are abusive.
Notice of final decision
8 (1) This paragraph applies where—
(a) any tax arrangements have been placed in a pool by a notice given to a person under paragraph 1, and
(b) a designated HMRC officer has given a notice under paragraph 12 of Schedule 43 in relation to any other arrangements in the pool (the “referred arrangements”).
(2) The officer must, having considered any opinion of the GAAR Advisory Panel about the referred arrangements and any representations made under paragraph 7(3) in relation to the arrangements mentioned in sub-paragraph (1)(a), give the person a written notice setting out whether the tax advantage arising from those arrangements is to be counteracted under the general anti-abuse rule.
9 (1) This paragraph applies where—
(a) a person has been given a notice of binding under paragraph 2, and
(b) the period of 30 days for making representations under paragraph 7(3) has expired.
(2) A designated HMRC officer must, having considered any opinion of the GAAR Advisory Panel about the counteracted arrangements and any representations made under paragraph 7(3) in relation to the arrangements specified in the notice of binding, give the person a written notice setting out whether the tax advantage arising from the arrangements specified in the notice of binding is to be counteracted under the general anti-abuse rule.
10 If a notice under paragraph 8(2) or 9(2) states that a tax advantage is to be counteracted, it must also set out—
(a) the adjustments required to give effect to the counteraction, and
(b) if relevant, any steps the person concerned is required to take to give effect to it.
“Equivalent arrangements”
11 (1) For the purposes of paragraph 1, tax arrangements are “equivalent” to one another if they are substantially the same as one another having regard to—
(a) their substantive results,
(b) the means of achieving those results, and
(c) the characteristics on the basis of which it could reasonably be argued, in each case, that the arrangements are abusive tax arrangements under which a tax advantage has arisen to a person.
Notices may be given on assumption that tax advantage does arise
12 (1) A designated HMRC officer may give a notice, or do anything else, under this Schedule where the officer considers that a tax advantage might have arisen to the person concerned.
(2) Accordingly, any notice given by a designated HMRC officer under this Schedule may be expressed to be given on the assumption that a tax advantage does arise (without conceding that it does).
Power to amend
13 (1) The Treasury may by regulations amend this Schedule (apart from this paragraph).
(2) Regulations under sub-paragraph (1) may include—
(a) any amendment of this Part that is appropriate in consequence of an amendment by virtue of sub-paragraph (1);
(b) transitional provision.
(3) Regulations under sub-paragraph (1) are to be made by statutory instrument.
(4) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of the House of Commons.
(3) After Schedule 43A insert—
SCHEDULE 43B
Procedural requirements: generic referral of tax arrangements
Notice of proposal to make generic referral of tax arrangements
1 (1) Sub-paragraph (2) applies if—
(a) pooling notices given under paragraph 1 of Schedule 43A have placed one or more sets of tax arrangements in a pool with the lead arrangements,
(b) the lead arrangements (see paragraph 1(1) of Schedule 43A) have ceased to be in the pool, and
(c) no referral under paragraph 5 or 6 of Schedule 43 has been made in respect of any arrangements in the pool.
(2) A designated HMRC officer may determine that, in respect of each of the tax arrangements that are in the pool, there is to be given (to the person to whom the pooling notice in question was given) a written notice of a proposal to make a generic referral to the GAAR Advisory Panel in respect of the arrangements in the pool.
(3) Only one determination under sub-paragraph (2) may be made in relation to any one pool.
(4) The persons to whom those notices are given are “the notified taxpayers”.
(5) A notice given to a person (“T”) under sub-paragraph (2) must—
(a) specify the arrangements (the “specified arrangements”) and the tax advantage (the “specified advantage”) to which the notice relates,
(b) inform T of the period under paragraph 2 for making a proposal.
2 (1) T has 30 days beginning with the day on which the notice under paragraph 1 is given to propose to HMRC that it—
(a) should give T a notice under paragraph 3 of Schedule 43 in respect of the arrangements to which the notice under paragraph 1 relates, and
(b) should not proceed with the proposal to make a generic referral to the GAAR Advisory Panel in respect of those arrangements.
(2) If a proposal is made in accordance with sub-paragraph (1) a designated HMRC officer must consider it.
Generic referral
3 (1) This paragraph applies where a designated HMRC officer has given notices to the notified taxpayers in accordance with paragraph 1(2).
(2) If none of the notified taxpayers has made a proposal under paragraph 2 by the end of the 30 day period mentioned in that paragraph, the officer must make a referral to the GAAR Advisory Panel in respect of the notified taxpayers and the arrangements which are specified arrangements in relation to them.
(3) If at least one of the notified taxpayers makes a proposal in accordance with paragraph 2, the designated HMRC officer must, after the end of that 30 day period, decide whether to—
(a) give a notice under paragraph 3 of Schedule 43 in respect of one set of tax arrangements in the relevant pool, or
(b) make a referral to the GAAR Advisory Panel in respect of the tax arrangements in the relevant pool.
(4) A referral under this paragraph is a “generic referral”.
4 (1) If a generic referral is made to the GAAR Advisory Panel, the designated HMRC officer must at the same time provide it with—
(a) a general statement of the material characteristics of the specified arrangements, and
(b) a declaration that—
(i) the statement under paragraph (a) is applicable to all the specified arrangements, and
(ii) as far as HMRC is aware, nothing which is material to the GAAR Advisory Panel's consideration of the matter has been omitted.
(2) The general statement under sub-paragraph (1)(a) must—
(a) contain a factual description of the tax arrangements;
(b) set out HMRC's view as to whether the tax arrangements accord with established practice (when the arrangements were entered into);
(c) explain why it is the designated HMRC officer's view that a tax advantage of the nature described in the statement and arising from tax arrangements having the characteristics described in the statement would be a tax advantage arising from arrangements that are abusive;
(d) set out any matters the designated officer is aware of which may suggest that any view of HMRC or the designated HMRC officer expressed in the general statement is not correct;
(e) set out any other matters which the designated officer considers are required for the purposes of the exercise of the GAAR Advisory Panel's functions under paragraph 6.
5 If a generic referral is made the designated HMRC officer must at the same time give each of the notified taxpayers a notice which—
(a) specifies that a generic referral is being made, and
(b) is accompanied by a copy of the statement given to the GAAR Advisory Panel in accordance with paragraph 4(1)(a).
Decision of GAAR Advisory Panel and opinion notices
6 (1) If a generic referral is made to the GAAR Advisory Panel under paragraph 3, the Chair must arrange for a sub-panel consisting of 3 members of the GAAR Advisory Panel (one of whom may be the Chair) to consider it.
(2) The sub-panel must produce—
(a) one opinion notice stating the joint opinion of all the members of the sub-panel, or
(b) two or three opinion notices which taken together state the opinions of all the members.
(3) The sub-panel must give a copy of the opinion notice or notices to the designated HMRC officer.
(4) An opinion notice is a notice which states that in the opinion of the members of the sub-panel, or one or more of those members—
(a) the entering into and carrying out of tax arrangements such as are described in the general statement under paragraph 4(1)(a) is a reasonable course of action in relation to the relevant tax provisions,
(b) the entering into or carrying out of such tax arrangements is not a reasonable course of action in relation to the relevant tax provisions, or
(c) it is not possible, on the information available, to reach a view on that matter,
and the reasons for that opinion.
(5) In forming their opinions for the purposes of sub-paragraph (4) members of the sub-panel must—
(a) have regard to all the matters set out in the statement under paragraph 4(1)(a),
(b) assume (unless the contrary is stated in the statement under paragraph 4(1)(a)) that the tax arrangements do not form part of any other arrangements,
(c) have regard to the matters mentioned in paragraphs (a) to (c) of section 207(2), and
(d) take account of subsections (4) to (6) of section 207.
(6) For the purposes of the giving of an opinion under this paragraph, the arrangements are to be assumed to be tax arrangements.
(7) In this Part, a reference to any opinion of the GAAR Advisory Panel in respect of a generic referral of any tax arrangements is a reference to the contents of any opinion notice given in relation to a generic referral in respect of the arrangements.
Notice of right to make representations
7 (1) Where a designated HMRC officer is given an opinion notice (or opinion notices) under paragraph 6, the officer must give each of the notified taxpayers a copy of the opinion notice (or notices) and a written notice which—
(a) explains the notified taxpayer's right to make representations falling within sub-paragraph (2), and
(b) sets out the period in which those representations may be made.
(2) A notified taxpayer (“T”) who is given a notice under sub-paragraph (1) has 30 days beginning with the day on which the notice is given to make representations in any of the following categories—
(a) representations that no tax advantage has arisen from the specified arrangements;
(b) representations that T has already been given a notice under paragraph 6 of Schedule 43A in relation to the specified arrangements;
(c) representations that any matter set out in the statement under paragraph 4(1)(a) is materially inaccurate as regards the specified arrangements (having regard to all circumstances which would be relevant in accordance with section 207 to a determination of whether the tax arrangements in question are abusive).
Notice of final decision after considering opinion of GAAR Advisory Panel
8 (1) A designated HMRC officer who has received a copy of a notice or notices under paragraph 6(3) in respect of a generic referral must consider the case of each notified taxpayer in accordance with sub-paragraph (2).
(2) The officer must, having considered—
(a) any opinion of the GAAR Advisory Panel about the matters referred to it, and
(b) any representations made by the notified taxpayer under paragraph 7,
give to the notified taxpayer a written notice setting out whether the specified advantage is to be counteracted under the general anti-abuse rule.
(3) If the notice states that a tax advantage is to be counteracted, it must also set out—
(a) the adjustments required to give effect to the counteraction, and
(b) if relevant, any steps that the taxpayer is required to take to give effect to it.
Notices may be given on assumption that tax advantage does arise
9 (1) A designated HMRC officer may give a notice, or do anything else, under this Schedule where the officer considers that a tax advantage might have arisen to the person concerned.
(2) Accordingly, any notice given by a designated HMRC officer under this Schedule may be expressed to be given on the assumption that a tax advantage does arise (without conceding that it does).
Power to amend
10 (1) The Treasury may by regulations amend this Schedule (apart from this paragraph).
(2) Regulations under sub-paragraph (1) may include—
(a) any amendment of this Part that is appropriate in consequence of an amendment by virtue of sub-paragraph (1);
(b) transitional provision.
(3) Regulations under sub-paragraph (1) are to be made by statutory instrument.
(4) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of the House of Commons.
(4) In section 209 (counteracting tax advantages), in subsection (6)(a), after “Schedule 43” insert “ , 43A or 43B ”.
(5) In section 210 (consequential relieving adjustments), in subsection (1)(b), after “Schedule 43,” insert “ paragraph 8 or 9 of Schedule 43A or paragraph 8 of Schedule 43B, ”.
(6) In section 211 (proceedings before a court or tribunal), in subsection (2)(b), for the words from “Panel” to the end substitute
Panel given—
(i) under paragraph 11 of Schedule 43 about the arrangements or any tax arrangements which are, as a result of a notice under paragraph 1 or 2 of Schedule 43A, the referred or (as the case may be) counteracted arrangements in relation to the arrangements, or
(ii) under paragraph 6 of Schedule 43B in respect of a generic referral of the arrangements.
(7) Section 214 (interpretation of Part 5) is amended in accordance with subsections (8) to (10).
(8) Renumber section 214 as subsection (1) of section 214.
(9) In subsection (1) (as renumbered), at the appropriate places insert—
“designated HMRC officer” has the meaning given by paragraph 2 of Schedule 43;”.
.
“notice of binding” has the meaning given by paragraph 2(2) of Schedule 43A;
“pooling notice” has the meaning given by paragraph 1(4) of Schedule 43A;
“tax appeal” has the meaning given by paragraph 1A of Schedule 43;
“tax enquiry” has the meaning given by section 202(2) of FA 2014.
(10) After subsection (1) insert—
(2) In this Part references to any “opinion of the GAAR Advisory Panel” about any tax arrangements are to be interpreted in accordance with paragraph 11(5) of Schedule 43.
(3) In this Part references to tax arrangements which are “equivalent” to one another are to be interpreted in accordance with paragraph 11 of Schedule 43A.
(11) In Schedule 43 (general anti-abuse rule: procedural requirements), in paragraph 6, after sub-paragraph (2) insert—
(3) The officer must, as soon as reasonably practicable after deciding whether or not the matter is to be referred to the GAAR Advisory Panel, give the taxpayer written notice of the decision.
(12) Section 10 of the National Insurance Contributions Act 2014 (GAAR to apply to national insurance contributions) is amended in accordance with subsections (13) to (16).
(13) In subsection (4), at the end insert “ , paragraph 8 or 9 of Schedule 43A to that Act (pooling of tax arrangements: notice of final decision) or paragraph 8 of Schedule 43B to that Act (generic referral of arrangements: notice of final decision) ”.
(14) After subsection (6) insert—
(6A) Where, by virtue of this section, a case falls within paragraph 4A of Schedule 43 to the Finance Act 2013 (referrals of single schemes: relevant corrective action) or paragraph 4 of Schedule 43A to that Act (pooled schemes: relevant corrective action)—
(a) the person (“P”) mentioned in sub-paragraph (1) of that paragraph takes the “relevant corrective action” for the purposes of that paragraph if (and only if)—
(i) in a case in which the tax advantage in question can be counteracted by making a payment to HMRC, P makes that payment and notifies HMRC that P has done so, or
(ii) in any case, P takes all necessary action to enter into an agreement in writing with HMRC for the purpose of relinquishing the tax advantage, and
(b) accordingly, sub-paragraphs (2) to (8) of that paragraph do not apply.
(15) In subsection (11)—
(a) for “and HMRC” substitute “, “HMRC” and “tax advantage””;
(b) after “2013” insert “ (as modified by this section) ”.
(16) After subsection (11) insert—
(12) See section 10A for further modifications of Part 5 of the Finance Act 2013.
(17) After section 10 of the National Insurance Contributions Act 2014 insert—
Application of GAAR in relation to penalties
10A (1) For the purposes of this section a penalty under section 212A of the Finance Act 2013 is a “relevant NICs-related penalty” so far as the penalty relates to a tax advantage in respect of relevant contributions.
(2) A relevant NICs-related penalty may be recovered as if it were an amount of relevant contributions which is due and payable.
(3) Section 117A of the Social Security Administration Act 1992 or (as the case may be) section 111A of the Social Security Administration (Northern Ireland) Act 1992 (issues arising in proceedings: contributions etc) has effect in relation to proceedings before a court for recovery of a relevant NICs-related penalty as if the assessment of the penalty were a NICs decision as to whether the person is liable for the penalty.
(4) Accordingly, paragraph 5(4)(b) of Schedule 43C to the Finance Act 2013 (assessment of penalty to be enforced as if it were an assessment to tax) does not apply in relation to a relevant NICs-related penalty.
(5) In the application of Schedule 43C to the Finance Act 2013 in relation to a relevant NICs-related penalty, paragraph 9(5) has effect as if the reference to an appeal against an assessment to the tax concerned were to an appeal against a NICs decision.
(6) In paragraph 8 of that Schedule (aggregate penalties), references to a “relevant penalty provision” include—
(a) any provision mentioned in sub-paragraph (5) of that paragraph, as applied in relation to any class of national insurance contributions by regulations (whenever made);
(b) section 98A of the Taxes Management Act 1970, as applied in relation to any class of national insurance contributions by regulations (whenever made);
(c) any provision in regulations made by the Treasury under which a penalty can be imposed in respect of any class of national insurance contributions.
(7) The Treasury may by regulations—
(a) disapply, or modify the effect of, subsection (6)(a) or (b);
(b) modify paragraph 8 of Schedule 43C to the Finance Act 2013 as it has effect in relation to a relevant penalty provision by virtue of subsection (6)(b) or (c).
(8) Section 175(3) to (5) of SSCBA 1992 (various supplementary powers) applies to a power to make regulations conferred by subsection (7).
(9) Regulations under subsection (7) must be made by statutory instrument.
(10) A statutory instrument containing regulations under subsection (7) is subject to annulment in pursuance of a resolution of either House of Parliament.
(11) In this section “NICs decision” means a decision under section 8 of the Social Security Contributions (Transfer of Functions, etc) Act 1999 or Article 7 of the Social Security Contributions (Transfer of Functions, etc) (Northern Ireland) Order 1999 (SI 1999/671).
(12) In this section “relevant contributions” means the following contributions under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992—
(a) Class 1 contributions;
(b) Class 1A contributions;
(c) Class 1B contributions;
(d) Class 2 contributions which must be paid but in relation to which section 11A of the Act in question (application of certain provisions of the Income Tax Acts in relation to Class 2 contributions under section 11(2) of that Act) does not apply.
(18) Section 219 of FA 2014 (circumstances in which an accelerated payment notice may be given) is amended in accordance with subsections (19) and (20).
(19) In subsection (4), after paragraph (c) insert—
(d) a notice has been given under paragraph 8(2) or 9(2) of Schedule 43A to FA 2013 (notice of final decision after considering Panel's opinion about referred or counteracted arrangements) in relation to the asserted advantage or part of it and the chosen arrangements (or is so given at the same time as the accelerated payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel about the other arrangements (see subsection (8)) was as set out in paragraph 11(3)(b) of Schedule 43 to FA 2013;
(e) a notice under paragraph 8(2) of Schedule 43B to FA 2013 (GAAR: generic referral of tax arrangements) has been given in relation to the asserted advantage or part of it and the chosen arrangements (or is so given at the same time as the accelerated payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel which considered the generic referral in respect of those arrangements under paragraph 6 of Schedule 43B to FA 2013 was as set out in paragraph 6(4)(b) of that Schedule.
(20) After subsection (7) insert—
(8) In subsection (4)(d) “other arrangements” means—
(a) in relation to a notice under paragraph 8(2) of Schedule 43A to FA 2013, the referred arrangements (as defined in that paragraph);
(b) in relation to a notice under paragraph 9(2) of that Schedule, the counteracted arrangements (as defined in paragraph 2 of that Schedule).
(21) In section 220 of FA 2014 (content of notice given while a tax enquiry is in progress)—
(a) in subsection (4)(c), after “219(4)(c)” insert “ , (d) or (e) ”;
(b) in subsection (5)(c), after “219(4)(c)” insert “ , (d) or (e) ”;
(c) in subsection (7), for the words from “under” to the end substitute
under—
(a) paragraph 12 of Schedule 43 to FA 2013,
(b) paragraph 8 or 9 of Schedule 43A to that Act, or
(c) paragraph 8 of Schedule 43B to that Act,
as the case may be.
(22) Section 287 of FA 2014 (Code of Practice on Taxation for Banks) is amended in accordance with subsections (23) to (25).
(23) In subsection (4), after “(5)” insert “ or (5A) ”.
(24) In subsection (5)(b), after “Schedule” insert “ or paragraph 8 or 9 of Schedule 43A to that Act ”.
(25) After subsection (5) insert—
(5A) This subsection applies to any conduct—
(a) in relation to which there has been given—
(i) an opinion notice under paragraph 6(4)(b) of Schedule 43B to FA 2013 (GAAR advisory panel: opinion that such conduct unreasonable) stating the joint opinion of all the members of a sub-panel arranged under that paragraph, or
(ii) one or more such notices stating the opinions of at least two members of such a sub-panel, and
(b) in relation to which there has been given a notice under paragraph 8 of that Schedule (HMRC final decision on tax advantage) stating that a tax advantage is to be counteracted.
(5B) For the purposes of subsection (5), any opinions of members of the GAAR advisory panel which must be considered before a notice is given under paragraph 8 or 9 of Schedule 43A to FA 2013 (opinions about the lead arrangements) are taken to relate to the conduct to which the notice relates.
(26) In Schedule 32 to FA 2014 (accelerated payments and partnerships), paragraph 3 is amended in accordance with subsections (27) and (28).
(27) In sub-paragraph (5), after paragraph (c) insert—
(d) the relevant partner in question has been given a notice under paragraph 8(2) or 9(2) of Schedule 43A to FA 2013 (notice of final decision after considering Panel's opinion about referred or counteracted arrangements) in respect of any tax advantage resulting from the asserted advantage or part of it and the chosen arrangements (or is given such a notice at the same time as the partner payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel about the other arrangements (see sub-paragraph (7)) was as set out in paragraph 11(3)(b) of Schedule 43 to FA 2013;
(e) the relevant partner in question has been given a notice under paragraph 8(2) of Schedule 43B to FA 2013 (GAAR: generic referral of arrangements) in respect of any tax advantage resulting from the asserted advantage or part of it and the chosen arrangements (or is given such a notice at the same time as the partner payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel which considered the generic referral in respect of those arrangements was as set out in paragraph 6(4)(b) of that Schedule.
(28) After sub-paragraph (6) insert—
(7) Other arrangements” means—
(a) in relation to a notice under paragraph 8(2) of Schedule 43A to FA 2013, the referred arrangements (as defined in that paragraph);
(b) in relation to a notice under paragraph 9(2) of that Schedule, the counteracted arrangements (as defined in paragraph 2 of that Schedule).
(29) In Schedule 34 to FA 2014 (promoters of tax avoidance schemes: threshold conditions), in paragraph 7—
(a) in paragraph (a), at the end insert “ (referrals of single schemes) or are in a pool in respect of which a referral has been made to that Panel under Schedule 43B to that Act (generic referrals), ”;
(b) in paragraph (b)—
(i) for “in relation to the arrangements” substitute “ in respect of the referral ”;
(ii) after “11(3)(b)” insert “ or (as the case may be) 6(4)(b) ”;
(c) in paragraph (c)(i) omit “paragraph 10 of”.
(30) The amendments made by this section have effect in relation to tax arrangements (within the meaning of Part 5 of FA 2013) entered into at any time (whether before or on or after the day on which this Act is passed).
(1) Part 5 of FA 2013 (general anti-abuse rule) is amended as follows.
(2) After section 212 insert—
Penalty
212A (1) A person (P) is liable to pay a penalty if—
(a) P has been given a notice under—
(i) paragraph 12 of Schedule 43,
(ii) paragraph 8 or 9 of Schedule 43A, or
(iii) paragraph 8 of Schedule 43B,
stating that a tax advantage arising from particular tax arrangements is to be counteracted,
(b) a tax document has been given to HMRC on the basis that the tax advantage arises to P from those arrangements,
(c) that document was given to HMRC—
(i) by P, or
(ii) by another person in circumstances where P knew, or ought to have known, that the other person gave the document on the basis mentioned in paragraph (c), and
(d) the tax advantage has been counteracted by the making of adjustments under section 209.
(2) The penalty is 60% of the value of the counteracted advantage.
(3) Schedule 43C—
(a) gives the meaning of “the value of the counteracted advantage”, and
(b) makes other provision in relation to penalties under this section.
(4) In this section “tax document” means any return, claim or other document submitted in compliance (or purported compliance) with any provision of, or made under, an Act.
(5) In this section the reference to giving a tax document to HMRC is to be interpreted in accordance with paragraph 11(g) and (h) of Schedule 43C.
(3) After Schedule 43B insert—
SCHEDULE 43C
Penalty under section 212A: supplementary provision
Value of the counteracted advantage: introduction
1 Paragraphs 2 to 4 set out how to calculate the “value of the counteracted advantage” for the purposes of section 212A.
Value of the counteracted advantage: basic rule
2 (1) The “value of the counteracted advantage” is the additional amount due or payable in respect of tax as a result of the counteraction mentioned in section 212A(1)(c).
(2) The reference in sub-paragraph (1) to the additional amount due and payable includes a reference to—
(a) an amount payable to HMRC having erroneously been paid by way of repayment of tax, and
(b) an amount which would be repayable by HMRC if the counteraction were not made.
(3) The following are ignored in calculating the value of the counteracted advantage—
(a) group relief, and
(b) any relief under section 458 of CTA 2010 (relief in respect of repayment etc of loan) which is deferred under subsection (5) of that section.
(4) For the purposes of this paragraph consequential adjustments under section 210 are regarded as part of the counteraction in question.
(5) If the counteraction affects the person's liability to two or more taxes, the taxes concerned are to be considered together for the purpose of determining the value of the counteracted advantage.
(6) This paragraph is subject to paragraphs 3 and 4.
Value of counteracted advantage: losses
3 (1) To the extent that the tax advantage mentioned in section 212A(1)(b) (“the tax advantage”) resulted in the wrong recording of a loss for the purposes of direct tax and the loss has been wholly used to reduce the amount due or payable in respect of tax, the value of the counteracted advantage is determined in accordance with paragraph 2.
(2) To the extent that the tax advantage resulted in the wrong recording of a loss for purposes of direct tax and the loss has not been wholly used to reduce the amount due or payable in respect of tax, the value of the counteracted advantage is—
(a) the value under paragraph 2 of so much of the tax advantage as results (or would in the absence of the counteraction result) from the part (if any) of the loss which was used to reduce the amount due or payable in respect of tax, plus
(b) 10% of the part of the loss not so used.
(3) Sub-paragraphs (1) and (2) apply both—
(a) to a case where no loss would have been recorded but for the tax advantage, and
(b) to a case where a loss of a different amount would have been recorded (but in that case sub-paragraphs (1) and (2) apply only to the difference between the amount recorded and the true amount).
(4) To the extent that the tax advantage creates or increases (or would in the absence of the counteraction create or increase) an aggregate loss recorded for a group of companies—
(a) the value of the counteracted advantage is calculated in accordance with this paragraph, and
(b) in applying paragraph 2 in accordance with sub-paragraphs (1) and (2), group relief may be taken into account (despite paragraph 2(3)).
(5) To the extent that the tax advantage results (or would in the absence of the counteraction result) in a loss, the value of it is nil where, because of the nature of the loss or the person's circumstances, there was no reasonable prospect of the loss being used to support a claim to reduce a tax liability (of any person).
Value of counteracted advantage: deferred tax
4 (1) To the extent that the tax advantage mentioned in section 212A is a deferral of tax, the value of the counteracted advantage is—
(a) 25% of the amount of the deferred tax for each year of the deferral, or
(b) a percentage of the amount of the deferred tax, for each separate period of deferral of less than a year, equating to 25% per year,
or, if less, 100% of the amount of the deferred tax.
(2) This paragraph does not apply to a case to the extent that paragraph 3 applies.
Assessment of penalty
5 (1) Where a person is liable for a penalty under section 212A, HMRC must assess the penalty.
(2) Where HMRC assess the penalty, HMRC must—
(a) notify the person who is liable for the penalty, and
(b) state in the notice a tax period in respect of which the penalty is assessed.
(3) A penalty under this paragraph must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.
(4) An assessment—
(a) is to be treated for procedural purposes as if it were an assessment to tax,
(b) may be enforced as if it were an assessment to tax, and
(c) may be combined with an assessment to tax.
(5) An assessment of a penalty under this paragraph must be made before the end of the period of 12 months beginning with—
(a) the end of the appeal period for the assessment which gave effect to the counteraction mentioned in section 212A(1)(b), or
(b) if there is no assessment within paragraph (a), the date (or the latest of the dates) on which that counteraction becomes final.
(6) The reference in sub-paragraph (5)(b) to the counteraction becoming final is to be interpreted in accordance with section 210(8).
Alteration of assessment of penalty
6 (1) After notification of an assessment has been given to a person under paragraph 5(2), the assessment may not be altered except in accordance with this paragraph or paragraph 7, or on appeal.
(2) A supplementary assessment may be made in respect of a penalty if an earlier assessment operated by reference to an underestimate of the value of the counteracted advantage.
(3) An assessment may be revised as necessary if it operated by reference to an overestimate of the value of the counteracted advantage.
Revision of assessment following consequential relieving adjustment
7 (1) Sub-paragraph (2) applies where a person—
(a) is notified under section 210(7) of a consequential adjustment relating to a counteraction under section 209, and
(b) an assessment to a penalty in respect of that counteraction of which the person has been notified under paragraph 5(2) does not take account of that consequential adjustment.
(2) HMRC must make any alterations of the assessment that appear to HMRC to be just and reasonable in connection with the consequential amendment.
(3) Alterations under this paragraph may be made despite any time limit imposed by or under an enactment.
Aggregate penalties
8 (1) Sub-paragraph (3) applies where—
(a) two or more penalties are incurred by the same person and fall to be determined by reference to an amount of tax to which that person is chargeable,
(b) one of those penalties is incurred under section 212A, and
(c) one or more of the other penalties are incurred under a relevant penalty provision.
(2) But sub-paragraph (3) does not apply if section 212(2) of FA 2014 (follower notices: aggregate penalties) applies in relation to the amount of tax in question.
(3) The aggregate of the amounts of the penalties mentioned in subsection (1)(b) and (c), so far as determined by reference to that amount of tax, must not exceed—
(a) the relevant percentage of that amount, or
(b) in a case where at least one of the penalties is under paragraph 5(2)(b) of, or sub-paragraph (3)(b), (4)(b) or (5)(b) of paragraph 6 of, Schedule 55 to FA 2009, £300 (if greater).
(4) In the application of section 97A of TMA 1970 (multiple penalties) no account shall be taken of a penalty under section 212A.
(5) “Relevant penalty provision” means—
(a) Schedule 24 to FA 2007 (penalties for errors),
(b) Schedule 41 to FA 2008 (penalties: failure to notify etc),
(c) Schedule 55 to FA 2009 (penalties for failure to make returns etc), or
(d) Part 5 of Schedule 18 to FA 2016 (penalty under serial tax avoidance regime).
(6) “The relevant percentage” means—
(a) 200% in a case where at least one of the penalties is determined by reference to the percentage in—
(i) paragraph 4(4)(c) of Schedule 24 to FA 2007,
(ii) paragraph 6(4)(a) of Schedule 41 to FA 2008, or
(iii) paragraph 6(3A)(c) of Schedule 55 to FA 2009,
(b) 150% in a case where paragraph (a) does not apply and at least one of the penalties is determined by reference to the percentage in—
(i) paragraph 4(3)(c) of Schedule 24 to FA 2007,
(ii) paragraph 6(3)(a) of Schedule 41 to FA 2008, or
(iii) paragraph 6(3A)(b) of Schedule 55 to FA 2009,
(c) 140% in a case where neither paragraph (a) nor paragraph (b) applies and at least one of the penalties is determined by reference to the percentage in—
(i) paragraph 4(4)(b) of Schedule 24 to FA 2007,
(ii) paragraph 6(4)(b) of Schedule 41 to FA 2008, or
(iii) paragraph 6(4A)(c) of Schedule 55 to FA 2009,
(d) 105% in a case where at none of paragraphs (a), (b) and (c) applies and at least one of the penalties is determined by reference to the percentage in—
(i) paragraph 4(3)(b) of Schedule 24 to FA 2007,
(ii) paragraph 6(3)(b) of Schedule 41 to FA 2008, or
(iii) paragraph 6(4A)(b) of Schedule 55 to FA 2009, and
(e) in any other case, 100%.
Appeal against penalty
9 (1) A person may appeal against—
(a) the imposition of a penalty under section 212A, or
(b) the amount assessed under paragraph 5.
(2) An appeal under sub-paragraph (1)(a) may only be made on the grounds that the arrangements were not abusive or there was no tax advantage to be counteracted.
(3) An appeal under sub-paragraph (1)(b) may only be made on the grounds that the assessment was based on an overestimate of the value of the counteracted advantage (whether because the estimate was made by reference to adjustments which were not just and reasonable or for any other reason).
(4) An appeal under this paragraph must be made within the period of 30 days beginning with the day on which notification of the penalty is given under paragraph 5(2).
(5) An appeal under this paragraph is to be treated in the same way as an appeal against an assessment to the tax concerned (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC's review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal).
(6) Sub-paragraph (5) does not apply—
(a) so as to require a person to pay a penalty before an appeal against the assessment of the penalty is determined, or
(b) in respect of any other matter expressly provided for by this Part.
(7) On an appeal against the penalty the tribunal may affirm or cancel HMRC's decision.
(8) On an appeal against the amount of the penalty the tribunal may—
(a) affirm HMRC's decision, or
(b) substitute for HMRC's decision another decision that HMRC has power to make.
(9) In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of sub-paragraph (5)).
Mitigation of penalties
10 (1) The Commissioners may in their discretion mitigate a penalty under section 212A, or stay or compound any proceedings for such a penalty.
(2) They may also, after judgment, further mitigate or entirely remit the penalty.
Interpretation
11 In this Schedule—
(a) a reference to an “assessment” to tax is to be interpreted, in relation to inheritance tax, as a reference to a determination;
(b) “direct tax” means—
(i) income tax,
(ii) capital gains tax,
(iii) corporation tax (including any amount chargeable as if it were corporation tax or treated as corporation tax),
(iv) petroleum revenue tax, and
(v) diverted profits tax;
(c) a reference to a loss includes a reference to a charge, expense, deficit and any other amount which may be available for, or relied on to claim, a deduction or relief;
(d) a reference to a repayment of tax includes a reference to allowing a credit against tax or to a payment of a corporation tax credit;
(e) “corporation tax credit” means—
(i) an R&D tax credit under Chapter 2 or 7 of Part 13 of CTA 2009,
(ii) an R&D expenditure credit under Chapter 6A of Part 3 of CTA 2009,
(iii) a land remediation tax credit or life assurance company tax credit under Chapter 3 or 4 respectively of Part 14 of CTA 2009,
(iv) a film tax credit under Chapter 3 of Part 15 of CTA 2009,
(v) a television tax credit under Chapter 3 of Part 15A of CTA 2009,
(vi) a video game tax credit under Chapter 3 of Part 15B of CTA 2009,
(vii) a theatre tax credit under section 1217K of CTA 2009,
(viii) an orchestra tax credit under Chapter 3 of Part 15D of CTA 2009, or
(ix) a first-year tax credit under Schedule A1 to CAA 2001;
(f) “tax period” means a tax year, accounting period or other period in respect of which tax is charged;
(g) a reference to giving a document to HMRC includes a reference to communicating information to HMRC in any form and by any method (whether by post, fax, email, telephone or otherwise),
(h) a reference to giving a document to HMRC includes a reference to making a statement or declaration in a document.
(4) In section 209 (counteracting the tax advantages), after subsection (7) insert—
(8) Where a matter is referred to the GAAR Advisory Panel under paragraph 5 or 6 of Schedule 43, the taxpayer (as defined in paragraph 3 of that Schedule) must not make any GAAR-related adjustments in relation to the taxpayer's tax affairs in the period (the “closed period”) which—
(a) begins with the 31st day after the end of the 45 day period mentioned in paragraph 4(1) of that Schedule, and
(b) ends immediately before the day on which the taxpayer is given the notice under paragraph 12 of Schedule 43 (notice of final decision after considering opinion of GAAR Advisory Panel).
(9) Where a person has been given a pooling notice or a notice of binding under Schedule 43A in relation to any tax arrangements, the person must not make any GAAR-related adjustments in the period (“the closed period”) that—
(a) begins with the 31st day after that on which that notice is given, and
(b) ends—
(i) in the case of a pooling notice, immediately before the day on which the person is given a notice under paragraph 8(2) or 9(2) of Schedule 43A, or a notice under paragraph 8(2) of Schedule 43B, in relation to the tax arrangements (notice of final decision after considering opinion of GAAR Advisory Panel), or
(ii) in the case of a notice of binding, with the 30th day after the day on which the notice is given.
(10) In this section “GAAR-related adjustments” means—
(a) for the purposes of subsection (8), adjustments which give effect (wholly or in part) to the proposed counteraction set out in the notice under paragraph 3 of Schedule 43;
(b) for the purposes of subsection (9), adjustments which give effect (wholly or partly) to the proposed counteraction set out in the notice of pooling or binding (as the case may be).
(5) Schedule 43 (general anti-abuse rule: procedural requirements) is amended in accordance with subsections (6) to (9).
(6) After paragraph 1 insert—
Meaning of “tax appeal”
1A In this Part “tax appeal” means—
(a) an appeal under section 31 of TMA 1970 (income tax: appeals against amendments of self-assessment, amendments made by closure notices under section 28A or 28B of that Act, etc), including an appeal under that section by virtue of regulations under Part 11 of ITEPA 2003 (PAYE),
(b) an appeal under paragraph 9 of Schedule 1A to TMA 1970 (income tax: appeals against amendments made by closure notices under paragraph 7(2) of that Schedule, etc),
(c) an appeal under section 705 of ITA 2007 (income tax: appeals against counteraction notices),
(d) an appeal under paragraph 34(3) or 48 of Schedule 18 to FA 1998 (corporation tax: appeals against amendment of a company's return made by closure notice, assessments other than self-assessments, etc),
(e) an appeal under section 750 of CTA 2010 (corporation tax: appeals against counteraction notices),
(f) an appeal under section 222 of IHTA 1984 (appeals against HMRC determinations) other than an appeal made by a person against a determination in respect of a transfer of value at a time when a tax enquiry is in progress in respect of a return made by that person in respect of that transfer,
(g) an appeal under paragraph 35 of Schedule 10 to FA 2003 (stamp duty land tax: appeals against amendment of self-assessment, discovery assessments, etc),
(h) an appeal under paragraph 35 of Schedule 33 to FA 2013 (annual tax on enveloped dwellings: appeals against amendment of self-assessment, discovery assessments, etc),
(i) an appeal under paragraph 14 of Schedule 2 to the Oil Taxation Act 1975 (petroleum revenue tax: appeal against assessment, determination etc),
(j) an appeal under section 102 of FA 2015 (diverted profits tax: appeal against charging notice etc),
(k) an appeal under section 114 of FA 2016 (apprenticeship levy: appeal against an assessment), or
(l) an appeal against any determination of—
(i) an appeal within paragraphs (a) to (k), or
(ii) an appeal within this paragraph.
(7) In paragraph 3(2)(e), for “of paragraphs 5 and 6” substitute
of—
(i) paragraphs 5 and 6, and
(ii) sections 209(8) and (9) and 212A.
(8) After paragraph 4 insert—
Corrective action by taxpayer
4A (1) If the taxpayer takes the relevant corrective action before the beginning of the closed period mentioned in section 209(8), the matter is not to be referred to the GAAR Advisory Panel.
(2) For the purposes of this Schedule the “relevant corrective action” is taken if (and only if) the taxpayer takes the steps set out in sub-paragraphs (3) and (4).
(3) The first step is that—
(a) the taxpayer amends a return or claim to counteract the tax advantage specified in the notice under paragraph 3, or
(b) if the taxpayer has made a tax appeal (by notifying HMRC or otherwise) on the basis that the tax advantage specified in the notice under paragraph 3 arises from the tax arrangements specified in that notice, the taxpayer takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing that advantage.
(4) The second step is that the taxpayer notifies HMRC—
(a) that the taxpayer has taken the first step, and
(b) of any additional amount which has or will become due and payable in respect of tax by reason of the first step being taken.
(5) Where the taxpayer takes the first step described in sub-paragraph (3)(b), HMRC may proceed as if the taxpayer had not taken the relevant corrective action if the taxpayer fails to enter into the written agreement.
(6) In determining the additional amount which has or will become due and payable in respect of tax for the purposes of sub-paragraph (4)(b), it is to be assumed that, where the taxpayer takes the necessary action as mentioned in sub-paragraph (3)(b), the agreement is then entered into.
(7) No enactment limiting the time during which amendments may be made to returns or claims operates to prevent the taxpayer taking the first step mentioned in sub-paragraph (3)(a) before the tax enquiry is closed (whether or not before the specified time).
(8) No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (9), against an amendment made by a closure notice in respect of a tax enquiry to the extent that the amendment takes into account an amendment made by the taxpayer to a return or claim in taking the first step mentioned in sub-paragraph (3)(a).
(9) The provisions are—
(a) section 31(1)(b) or (c) of TMA 1970,
(b) paragraph 9 of Schedule 1A to TMA 1970,
(c) paragraph 34(3) of Schedule 18 to FA 1998,
(d) paragraph 35(1)(b) of Schedule 10 to FA 2003, and
(e) paragraph 35(1)(b) of Schedule 33 to FA 2013.
(9) Before paragraph 5 (but after the heading “Referral to GAAR Advisory Panel”) insert—
4B Paragraphs 5 and 6 apply if the taxpayer does not take the relevant corrective action (see paragraph 4A) by the beginning of the closed period mentioned in section 209(8).
(10) In section 103ZA of TMA 1970 (disapplication of sections 100 to 103 in the case of certain penalties)—
(a) omit “or” at the end of paragraph (g), and
(b) after paragraph (g) insert
(ga) section 212A of the Finance Act 2013 (general anti-abuse rule), or
(11) In section 212 of FA 2014 (follower notices: aggregate penalties) (as amended by Schedule 18), in subsection (4)—
(a) omit “or” at the end of paragraph (c), and
(b) after paragraph (d) insert
, or
(e) section 212A of FA 2013 (general anti-abuse rule).
(12) FA 2015 is amended in accordance with subsections (13) and (14).
(13) In section 120 (penalties in connection with offshore matters and offshore transfers), in subsection (1), omit “and” before paragraph (c) and after paragraph (c) insert—
, and
(d) Schedule 43C to FA 2013 (as amended by FA 2016).
(14) In Schedule 20 to that Act, after paragraph 19 insert—
General anti-abuse rule: aggregate penalties
20 (1) In Schedule 43C to FA 2013 (general anti-abuse rule: supplementary provision about penalty), sub-paragraph (6) of paragraph 8 is amended as follows.
(2) After paragraph (b) insert—
(ba) 125% in a case where neither paragraph (a) nor paragraph (b) applies and at least one of the penalties is determined by reference to the percentage in—
(i) paragraph 4(2)(c) of Schedule 24 to FA 2007,
(ii) paragraph 6(2)(a) of Schedule 41 to FA 2008,
(iii) paragraph 6(3A)(a) of Schedule 55 to FA 2009,
.
(3) In sub-paragraph (c) for “neither paragraph (a) nor paragraph (b) applies” substitute “none of paragraphs (a) to (ba) applies.
(4) In sub-paragraph (d) for “none of paragraphs (a), (b) and (c) applies” substitute “none of paragraphs (a) to (c) applies
.
(15) The amendments made by this section have effect in relation to tax arrangements (within the meaning of Part 5 of FA 2013) entered into on or after the day on which this Act is passed.
Schedule 18 contains provision about the issue of warning notices to, and further sanctions for, persons who incur a relevant defeat in relation to arrangements.