(1) Subsection (2) has effect if—
(a) a particular time (“T”) is the time when a company (“C”) is first within the charge to corporation tax by virtue of subsection (2)(a) of section 5 of CTA 2009 (territorial scope of charge),
(b) immediately before time T, C was within the charge to corporation tax as a result of carrying on the relevant trade in the United Kingdom through a permanent establishment in the United Kingdom, and
(c) expenses which the company has incurred for the purposes of the trade meet the conditions in subsection (3) and (4).
“The relevant trade” means the trade of dealing in or developing UK land mentioned in subsection (2)(a) of section 5 of CTA 2009.
(2) Section 61 of CTA 2009 (pre-trading expenses) has effect in relation to those expenses as if the company had started to carry on the relevant trade at time T.
(3) The condition in this subsection is that—
(a) no deduction would be allowed for the expenses in calculating the profits of the relevant trade for corporation tax purposes (ignoring subsection (2)), but
(b) a deduction would be allowed for them (in accordance with sections 41 and section 61 of CTA 2009) if the company had not been within the charge to corporation tax in respect of the relevant trade immediately before time T.
(4) The condition in this subsection is that no relief has been obtained for the expenses under the law of any country or territory outside the United Kingdom.
81 Commencement and transitional provision: sections 76, 77 and 80
(1) The amendments made by sections 76, 77 and 80 have effect in relation to disposals on or after 5 July 2016.
(2) In subsection (1) of section 5A of CTA 2009 (tax avoidance in relation to section 5(2A) of that Act) “arrangement” does not include an arrangement (as defined in section 5A(6) of that Act) entered into before 16 March 2016.
(3) In subsection (1) of section 356OK of CTA 2010 (tax avoidance in relation to Part 8ZB of CTA 2010) “arrangement” does not include an arrangement (as defined in section 356OP of that Act) entered into before 16 March 2016.
(4) Subsection (6) applies if—
(a) a person disposes of a relevant asset to a person who is associated with that person at the relevant time,
(b) the disposal is made on or after 16 March 2016 and before 5 July 2016, and
(c) a company obtains a relevant tax advantage as a result of the disposal.
(5) In subsection (4) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (6) has effect accordingly, regardless of anything in section 6(1) of TIOPA 2010).
(6) The tax advantage is to be counteracted by means of adjustments.
(7) Adjustments for the purposes of subsection (6) may be made (whether by an officer of Revenue and Customs or by the company) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.
(8) In subsection (4)(c) “relevant tax advantage” means a tax advantage in relation to tax to which the company in question is charged or chargeable (or would, if the tax advantage were not obtained, be charged or chargeable)—
(a) by virtue of section 5(2A) of CTA 2009, or
(b) in respect of amounts treated as profits of a trade by virtue of Part 8ZB of CTA 2010.
(9) For the purposes of this section, where any property is disposed of under a contract, the time at which the disposal is made is the time the contract is made (and not, if different, the time at which the property is conveyed or transferred).
(10) In subsection (9) “contract” includes a conditional contract.
(11) In this section—
“arrangement” includes any scheme, agreement or understanding (whether or not legally enforceable);
“disposal” is to be interpreted in accordance with section 356OQ of CTA 2010;
“relevant asset” means land, or property deriving the whole or part of its value from land;
“tax advantage” has the meaning given by section 1139 of CTA 2010.
(12) For the purposes of this section a person (“A”) is “associated” with another person (“B”) if—
(a) A is connected with B by virtue of any of subsections (5) to (7) of section 1122 of CTA 2010 (read in accordance with section 1123 of that Act), or
(b) A is related to B.
(13) In subsection (12) “related to” is to be interpreted in accordance with section 356OT of CTA 2010.
(14) In subsection (4) “the relevant time”—
(a) in a case within subsection (8)(a), means the time of the disposal mentioned in subsection (4)(a).
(b) in a case within subsection (8)(b), means any time in the period beginning when the activities of the project began and ending 6 months after the disposal mentioned in section 356OB(1) or 356OD(1) of CTA 2010.
(15) In subsection (14) “the project” means (as the case requires) the project described in section 356OB(9) of CTA 2010 or the activities mentioned in section 356OD(2)(a) of that Act.
82 Commencement and transitional provision: sections 78 and 79
(1) The amendments made by sections 78 and 79 have effect in relation to disposals on or after 5 July 2016.
(2) In subsection (1) of section 6A of ITA 2007 (tax avoidance arrangements in relation to section 6(1A) of that Act) “arrangement” does not include an arrangement (as defined in section 6A(7) of that Act) entered into before 16 March 2016.
(3) In subsection (1) of section 517K of ITA 2007 (tax avoidance in relation to Part 9A of that Act) “arrangement” does not include an arrangement (as defined in section 517Q of that Act) entered into before 16 March 2016.
(4) Subsection (6) applies if—
(a) a person disposes of a relevant asset to a person who is associated with that person at the relevant time,
(b) the disposal is made on or after 16 March 2016 and before 5 July 2016, and
(c) a person obtains a relevant tax advantage as a result of the disposal.
(5) In subsection (4) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (6) has effect accordingly, regardless of anything in section 6(1) of TIOPA 2010).
(6) The tax advantage is to be counteracted by means of adjustments.
(7) Adjustments for the purposes of subsection (6) may be made (whether by an officer of Revenue and Customs or by the person) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.
(8) In subsection (4)(c) “relevant tax advantage” means a tax advantage in relation to tax to which the person in question is charged or chargeable (or would, if the tax advantage were not obtained, be charged or chargeable)—
(a) by virtue of section 6(1A) of ITTOIA 2005, or
(b) in respect of amounts treated as profits of a trade by virtue of Part 9A of ITA 2007.
(9) For the purposes of this section, where any property is disposed of under a contract, the time at which the disposal is made is the time the contract is made (and not, if different, the time at which the property is conveyed or transferred).
(10) In subsection (9) “contract” includes a conditional contract.
(11) In this section—
“arrangement” includes any scheme, agreement or understanding (whether or not legally enforceable);
“disposal” is to be interpreted in accordance with section 517R of ITA2007;
“relevant asset” means land, or property deriving the whole or part of its value from land;
“tax advantage” has the same meaning as in section 6A of ITTOIA 2005.
(12) For the purposes of this section a person (“A”) is “associated” with another person (“B”) if—
(a) A is connected with B by virtue of any of subsections (2) to (4) of section 993 of ITA 2007 (read in accordance with section 994 of that Act), or
(b) A is related to B.
(13) In subsection (12) “related to” is to be interpreted in accordance with section 517U of ITA 2007.
(14) In subsection (4), “the relevant time”—
(a) in a case within subsection (8)(a), means the time when the disposal was made,
(b) in a case within subsection (8)(b), means any time in the period beginning when the activities of the project began and ending 6 months after the disposal mentioned in section 517B(1) or 517D(1) of ITA 2007.
(15) In subsection (14) “the project” means (as the case requires) the project described in section 517B(9) of ITA 2007 or the activities mentioned in section 517D(2)(a) of that Act.
(1) Section 4 of TCGA 1992 (rates of capital gains tax) is amended as set out in subsections (2) to (12).
(2) In subsection (1) after “entrepreneurs' relief)” insert “and section 169VC (rate in case of claim for investors' relief)”.
(3) In subsection (2)—
(a) after “section” insert “ and section 4BA ”, and
(b) for the words from “in respect” to the end substitute—
(a) in respect of upper rate gains accruing to a person in a tax year, is 18%, and
(b) in respect of gains accruing to a person in a tax year which are not upper rate gains, is 10%.
(4) After subsection (2) insert—
(2A) In this section “upper rate gains” means—
(a) residential property gains (see section 4BB),
(b) NRCGT gains (see section 14D), and
(c) carried interest gains (see subsections (12) and (13)).
(5) For subsection (3) substitute—
(3) The rate of capital gains tax in respect of gains accruing in a tax year to the trustees of a settlement or the personal representatives of a deceased person—
(a) in respect of upper rate gains, is 28%, and
(b) in respect of gains which are not upper rate gains, is 20%.
(6) In subsection (4), for the words from the second “in respect” to the end substitute—
(a) in respect of upper rate gains accruing to the individual in the tax year, is 28%, and
(b) in respect of gains accruing to the individual in the tax year which are not upper rate gains, is 20%.
(7) In subsection (5) for “28%” substitute “ (subject to section 4BA) 20% ”.
(8) For subsection (6) substitute—
(6) Subsection (6A) applies for the purposes of subsection (5) where—
(a) there is an excess as mentioned in that subsection (“the higher-rate excess”), and
(b) the amount on which the individual is chargeable to capital gains tax for the tax year includes any special rate gains, that is, gains which are—
(i) chargeable to capital gains tax at the rate in section 169N(3), or
(ii) chargeable to capital gains tax at the rate in section 169VC(2).
(6A) Where this subsection applies—
(a) if the total amount of the special rate gains exceeds the unused part of the individual's basic rate band, the higher-rate excess is to be treated as reduced by the amount by which the special rate gains exceed that unused part;
(b) if not, the higher-rate excess is to be treated as consisting of gains other than the special rate gains.
(9) In subsection (7) for “The reference in subsection (5)” substitute “ Any reference in this section ”.
(10) In subsection (9) after “this section” insert “ and section 4BA ”.
(11) In subsection (10) after “and (5)” insert “ and section 4BA(1) ”.
(12) After subsection (11) insert—
(12) In subsection (2A)(c) “carried interest gains” means—
(a) gains treated as accruing under section 103KA(2) or (3), and
(b) gains accruing to an individual as a result of carried interest arising to the individual where—
(i) the individual performs investment management services directly or indirectly in respect of an investment scheme under arrangements not involving a partnership,
(ii) the carried interest arises to the individual under the arrangements, and
(iii) the carried interest does not constitute a co-investment repayment or return.
(13) For the purposes of subsection (12)(b)—
(a) “carried interest”, in relation to any arrangements, has the same meaning as in section 809EZB of ITA 2007 (see sections 809EZC and 809EZD of that Act);
(b) carried interest “arises” to an individual if it arises to him or her for the purposes of Chapter 5E of Part 13 of ITA 2007;
(c) “arrangements”, “investment management services” and “investment scheme” have the same meanings as in that Chapter (see sections 809EZA(6) and 809EZE of that Act);
(d) “co-investment repayment or return” has the same meaning as in section 103KA.
(13) In section 4A of TCGA 1992 (special cases), in subsection (5) after “and (5)” insert “ and section 4BA(1) ”.
(14) After section 4B of TCGA 1992 insert—
Rates, and use of unused basic rate band, in certain cases
4BA (1) This section applies where an individual is chargeable to capital gains tax in respect of gains accruing in a tax year and—
(a) no income tax is chargeable at the higher rate, the Welsh higher rate or the dividend upper rate in respect of the income of the individual for the tax year,
(b) the amount on which the individual is chargeable to capital gains tax for the tax year (“the chargeable gains amount”) exceeds the unused part of the individual's basic rate band, and
(c) all or part of the chargeable gains amount consists of upper rate gains.
(2) In the following provisions of this section “the available gains” means the gains on which the individual is chargeable to capital gains tax for the tax year, excluding any special rate gains.
(3) The available gains not used by the individual under subsection (4) are to be charged to capital gains tax—
(a) to the extent that they consist of upper rate gains, at the rate in section 4(4)(a);
(b) to the extent that they consist of gains which are not upper rate gains, at the rate in section 4(5).
(4) The individual may, subject to subsection (5) (which limits the overall amount that can be used under this subsection)—
(a) use any of the available gains that are upper rate gains to be charged at the rate in section 4(2)(a);
(b) use any of the available gains that are not upper rate gains to be charged at the rate in section 4(2)(b).
(5) The total amount of gains used under subsection (4) must equal the qualifying amount.
(6) The “qualifying amount” is the unused part of the individual's basic rate band less the total amount of any special rate gains.
(7) If special rate gains are included in the chargeable gains amount, subsection (4) applies only if the unused part of the individual's basic rate band exceeds the total amount of the special rate gains.
(8) In this section—
“upper rate gains” has the same meaning as in section 4;
“special rate gains” has the same meaning as in section 4(6);
“the unused part of the individual's basic rate band” has the same meaning as in section 4.
Residential property gain or loss
4BB (1) For the purposes of the charge to capital gains tax, a residential property gain or loss is a gain or loss which accrues on the disposal of a residential property interest.
(2) But a residential property gain or loss does not accrue on a non-resident CGT disposal.
(3) In this Act “disposal of a residential property interest” means—
(a) a disposal of a UK residential property interest, or
(b) a disposal of a non-UK residential property interest.
(4) Schedule B1 gives the meaning in this Act of “disposal of a UK residential property interest”.
(5) Schedule BA1 gives the meaning in this Act of “disposal of a non-UK residential property interest”.
(6) See section 57C and Schedule 4ZZC for how to compute—
(a) the residential property gain or loss accruing on the disposal of a residential property interest, and
(b) the gain or loss accruing on the disposal of a residential property interest which is not a residential property gain or loss.
(15) Schedule 11 inserts Schedule BA1 in TCGA 1992 and makes related amendments.
(16) Schedule 12 inserts section 57C and Schedule 4ZZC in TCGA 1992 and makes related amendments.
(17) The amendments made by this section and Schedules 11 and 12 have effect in relation to gains accruing on or after 6 April 2016.
(18) In relation to a time before the tax year appointed under section 14(3)(b) of the Wales Act 2014 in relation to the provision inserted by section 9(14) of that Act, subsection (1) of section 4BA of TCGA 1992 (inserted by subsection (14) of this section) has effect as if the words “, the Welsh higher rate” were omitted.
(19) In relation to a time before the tax year appointed under section 13(15) of the Scotland Act 2016, subsection (1) of section 4BA of TCGA 1992 (inserted by subsection (14) of this section) has effect as if before “or the dividend upper rate” there were inserted “ , the Scottish higher rate ”.
(1) Section 169K of TCGA 1992 (disposal associated with relevant material disposal) is amended as follows.
(2) In subsection (1)—
(a) in paragraph (a), after “A1,” insert “ A1A, ”, and
(b) in paragraph (b), for “and C” substitute “ , C and D ”.
(3) After subsection (1A) insert—
(1AA) Condition A1A is that P makes a material disposal of business assets which consists of the disposal of the whole of P's interest in the assets of a partnership, and—
(a) that interest is an interest of less than 5%,
(b) P holds at least a 5% interest in the partnership's assets throughout a continuous period of at least 3 years in the 8 years ending with the date of the disposal, and
(c) at the date of the disposal, no partnership purchase arrangements exist.
(1AB) Subject to subsection (6A), for the purposes of conditions A1 and A1A, in relation to the disposal of an interest in the assets of a partnership, “partnership purchase arrangements” means arrangements (other than the material disposal itself) under which P or a person connected with P is entitled to acquire any interest in, or increase that person's interest in, the partnership (including a share of the profits or assets of the partnership or an interest in such a share).
(4) In subsection (1E), in the words before paragraph (a)—
(a) at the beginning insert “ Subject to subsection (6A), ”, and
(b) after “means arrangements” insert “ (other than the material disposal itself) ”.
(5) After subsection (3A) insert—
(3AA) Subject to subsection (6A), for the purposes of condition B, in relation to a disposal mentioned in that condition and a partnership, “partnership purchase arrangements” means arrangements under which P or a person connected with P is entitled to acquire any interest in, or increase that person's interest in, the partnership (including a share of the profits or assets of the partnership or an interest in such a share), but does not include any arrangements in connection with a material disposal in relation to which condition A1 or A1A is met.
(6) In subsection (3B), for “arrangements” to the end substitute “ share purchase arrangements ”.
(7) After subsection (3B) insert—
(3BA) Subject to subsection (6A), for the purposes of condition B, in relation to a disposal mentioned in that condition and company A, “share purchase arrangements” means arrangements under which P or a person connected with P is entitled to acquire shares in or securities of—
(a) company A, or
(b) a company which is a member of a trading group of which company A is a member,
but does not include any arrangements in connection with a material disposal in relation to which condition A2 or A3 is met.
(8) In subsection (3C), for “(3B)” substitute “ (3BA) ”.
(9) After subsection (4) insert—
(4A) Condition D is that the disposal mentioned in condition B is of an asset which P owns throughout the period of 3 years ending with the date of that disposal.
(10) Omit subsection (6).
(11) Before subsection (7) insert—
(6A) For the purposes of this section, in relation to a material disposal of business assets and a disposal mentioned in condition B, arrangements are not partnership purchase arrangements or share purchase arrangements if they were made before both disposals and without regard to either of them.
(12) In subsection (9), after “entitled to share in the” insert “ capital ”.
(13) The amendments made by subsections (2)(a), (3) to (8) and (10) to (12) have effect in relation to disposals made on or after 18 March 2015.
(14) The amendments made by subsections (2)(b) and (9) have effect in relation to disposals of assets which are acquired on or after 13 June 2016.
(1) Section 169LA of TCGA 1992 (relevant business assets: goodwill transferred to a related party etc) is amended as follows.
(2) In subsection (1)—
(a) at the beginning insert “ Subject to subsection (1A), ”,
(b) at the end of paragraph (a) insert “ and ”,
(c) after paragraph (a) insert—
(aa) immediately after the disposal—
(i) P and any relevant connected person together own 5% or more of the ordinary share capital of C or of any company which is a member of a group of companies of which C is a member, or
(ii) P and any relevant connected person together hold 5% or more of the voting rights in C or in any company which is a member of a group of companies of which C is a member.
, and
(d) omit paragraphs (b) and (c).
(3) After subsection (1) insert—
(1A) Where—
(a) subsection (1)(aa) applies by virtue of P's ownership, or any relevant connected person's ownership, of C's ordinary share capital, and
(b) the conditions mentioned in subsection (1B) are met,
subsection (4) does not apply.
(1B) The conditions referred to in subsection (1A)(b) are—
(a) P and any relevant connected person dispose of C's ordinary share capital to another company (“A”) such that, immediately before the end of the relevant period, neither P nor any relevant connected person own any of C's ordinary share capital, and
(b) where A is a close company, immediately before the end of the relevant period—
(i) P and any relevant connected person together own less than 5% of the ordinary share capital of A or of any company which is a member of a group of companies of which A is a member, and
(ii) P and any relevant connected person together hold less than 5% of the voting rights in A or in any company which is a member of a group of companies of which A is a member.
(1C) In subsection (1B) “the relevant period” means the period of 28 days beginning with the date of the qualifying business disposal, or such longer period as the Commissioners for Her Majesty's Revenue and Customs may by notice allow.
(4) Omit subsections (2) and (3).
(5) In subsection (5), omit the words from “(including” to the end.
(6) In subsection (7), omit paragraph (b) and the “or” at the end of paragraph (a).
(7) In subsection (8)—
(a) after the definition of “arrangements” insert—
“group” is to be construed in accordance with section 170;
(b) for the definition of “associate”, “control”, “major interest” and “participator” substitute—
“relevant connected person” means—
(a) a company connected with P, and
(b) trustees connected with P.
(8) In the heading, for “related party etc” substitute “ close company ”.
(9) The amendments made by this section have effect in relation to disposals made on or after 3 December 2014.
86 Entrepreneurs' relief: “trading company” and “trading group”
Schedule 13 contains provision about the meaning of “trading company” and “trading group” for the purposes of Chapter 3 of Part 5 of TCGA 1992 (entrepreneurs' relief).
88 Employee shareholder shares: limit on exemption
(1) Section 236B of TCGA 1992 (exemption for employee shareholder shares) is amended in accordance with subsections (2) and (3).
(2) After subsection (1) insert—
(1A) Where a gain accrues to a person (“P”) on the first disposal of a post-16 March 2016 exempt employee shareholder share (the “relevant disposal”), subsection (1) applies only to so much of the gain as, when added to the total amount of previous potentially chargeable gains, does not exceed £100,000.
(1B) For the purposes of subsection (1A), “previous potentially chargeable gain” means a gain accruing to P on the first disposal of a post-16 March 2016 exempt employee shareholder share at any time before the relevant disposal.
(1C) Where a single transaction disposes of more than one post-16 March 2016 exempt employee shareholder share, the reference in subsection (1A) to the first disposal of a share is to be treated as a reference to the disposal of all of the post-16 March 2016 exempt employee shareholder shares first disposed of by that transaction.
(3) After subsection (3) insert—
(3A) In this section, “post-16 March 2016 exempt employee shareholder share” means an exempt employee shareholder share acquired in consideration of an employee shareholder agreement entered into after 16 March 2016.
(4) Section 236F of TCGA 1992 (reorganisation of share capital involving employee shareholder shares) is amended in accordance with subsections (5) and (6).
(5) After subsection (1) insert—
(1A) Subsection (1B) applies where—
(a) an exempt employee shareholder share (“the original EES share”) is held by a person (“P”) before, and is concerned in, a reorganisation, and
(b) the original EES share is disposed of on the reorganisation.
(1B) P is to be treated as if the original EES share were disposed of for consideration of an amount determined in accordance with subsections (1D) to (1H) (the “relevant amount”).
(1C) In this section “notional gain” means the gain, if any, that would accrue to P if the original EES share were disposed of on the reorganisation for consideration of an amount equal to the market value of the share.
(1D) Subsections (1E) to (1G) apply where a notional gain would accrue to P on the disposal of the original EES share.
(1E) Where the whole of the notional gain would be a chargeable gain by virtue of section 236B(1A), the relevant amount is the amount that would secure that on the disposal neither a gain nor a loss would accrue to P.
(1F) Where part (but not the whole) of the notional gain would be a chargeable gain by virtue of section 236B(1A), the relevant amount is the maximum amount, not exceeding the market value of the share, that would secure that on the disposal no chargeable gain would accrue to P.
(1G) Where no part of the notional gain would be a chargeable gain by virtue of section 236B(1A), the relevant amount is equal to the market value of the original EES share at the time of the disposal.
(1H) Where no notional gain would accrue to P on the disposal of the original EES share, the relevant amount is the amount that would secure that on the disposal neither a gain nor a loss would accrue to P.
(1I) In determining for the purposes of this section whether any part of a notional gain is a chargeable gain by virtue of section 236B(1A), subsection (1B) is to be disregarded.
(1J) Where more than one original EES share is disposed of by P on a reorganisation, references in this section to the disposal of the original EES share are to be treated as references to the disposal of all of the original EES shares disposed of on the reorganisation.
(1K) In this section “reorganisation” has the same meaning as in section 127.
(6) In subsection (2) for “reference in subsection (1) to section 127 includes” substitute “ references in this section to section 127 include ”.
(7) Section 58 of TCGA 1992 (spouses and civil partners) is amended in accordance with subsections (8) and (9).
(8) In subsection (2)(c) after “disposal is” insert “ a relevant disposal ”.
(9) After subsection (2) insert—
(3) For the purposes of subsection (2) a disposal of exempt employee shareholder shares is a “relevant disposal” if (apart from this section)—
(a) a gain would accrue on the disposal, and
(b) no part of the gain would be a chargeable gain.
(4) Subsection (5) applies where the disposal is of exempt employee shareholder shares and (apart from this section)—
(a) a gain would accrue on the disposal, and
(b) part (but not the whole) of the gain would be a chargeable gain by virtue of section 236B(1A).
(5) Where this subsection applies, subsection (1) has effect in relation to the disposal as if—
(a) for “such amount as” there were substituted “ the maximum amount, not exceeding the market value of the asset, that ”, and
(b) for “neither a gain nor a loss” there were substituted “ no chargeable gain ”.
(10) The amendments made by this section have effect in relation to disposals made after 16 March 2016.
89 Employee shareholder shares: disguised fees and carried interest
(1) In section 236B of TCGA 1992 (exemption for employee shareholder shares), after subsection (2) insert—
(2A) Subsection (1) does not apply in relation to a gain accruing on a disposal where the proceeds of the disposal, in relation to any individual, constitute—
(a) a disguised fee for the purposes of Chapter 5E of Part 13 of ITA 2007 (see section 809EZA(3) of that Act), or
(b) carried interest within the meaning given by section 809EZC of that Act.
(2) The amendment made by this section has effect in relation to gains accruing on or after 6 April 2016.
90 Disposals of UK residential property by non-residents etc
(1) In Schedule 4ZZA to TCGA 1992 (relevant high value disposals: gains and losses), in paragraph 2(1), for “paragraph 6” substitute “ paragraph 6A ”.
(2) In Schedule 4ZZB to TCGA 1992 (non-resident CGT disposals: gains and losses), in paragraph 17—
(a) omit sub-paragraph (2), and
(b) in sub-paragraph (3), omit the words from “If” to “applies”.
(3) The amendment made by subsection (1) has effect in relation to disposals made on or after 6 April 2015.
(4) The amendment made by subsection (2) has effect in relation to disposals made on or after 26 November 2015.
In TMA 1970, after section 12ZB (NRCGT return) insert—
Elective NRCGT return
12ZBA (1) A person is not required to make and deliver an NRCGT return under section 12ZB(1), but may do so, in circumstances to which this section applies.
(2) The circumstances to which this section applies are where the disposal referred to in section 12ZB(1) is—
(a) a disposal on or after 6 April 2015 where, by virtue of any of the no gain/no loss provisions, neither a gain nor a loss accrues, or
(b) the grant of a lease on or after 6 April 2015 which is—
(i) for no premium,
(ii) to a person who is not connected with the grantor, and
(iii) under a bargain made at arm's length.
(3) For the purposes of subsection (2)—
“connected” is to be construed in accordance with section 286 of 1992 Act;
“no gain/no loss provisions” has the meaning given by section 288(3A) of the 1992 Act;
“lease” and premium” have the meanings given by paragraph 10 of Schedule 8 to the 1992 Act.
(4) The Treasury may by regulations made by statutory instrument add or remove circumstances to which this section applies.
(5) Regulations under subsection (4) may—
(a) amend this section or any other enactment;
(b) make consequential provision.
(6) A statutory instrument containing regulations under subsection (4) is subject to annulment in pursuance of a resolution of the House of Commons.
(7) Paragraph 1 of Schedule 55 to the Finance Act 2009 (penalty for late returns) does not apply in relation to an NRCGT return which is made and delivered by virtue of this section.
92 Addition of CGT to Provisional Collection of Taxes Act 1968
In section 1 of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions affecting income tax etc), in subsection (1), after “income tax,” insert “ capital gains tax, ”.
Schedule 15 contains provision in connection with the increased nil-rate band provided for by section 8D of IHTA 1984 (extra nil-rate band on death if interest in home goes to descendants etc).
(1) IHTA 1984 is amended as follows.
(2) In the italic heading before section 10, at the end insert “ (and omissions that do not give rise to deemed dispositions) ”.
(3) In section 12(2G) (interpretation of section 12(2ZA)), in the definition of “entitled”, for “166(2)” substitute “ 167(1A), or section 166(2), ”.
(4) After section 12 insert—
Pension drawdown fund not used up: no deemed disposition
12A (1) Where a person has a drawdown fund, section 3(3) above does not apply in relation to any omission that results in the fund not being used up in the person's lifetime.
(2) For the purposes of subsection (1) above, a person has a drawdown fund if the person has—
(a) a member's drawdown pension fund,
(b) a member's flexi-access drawdown fund,
(c) a dependant's drawdown pension fund,
(d) a dependant's flexi-access drawdown fund,
(e) a nominee's flexi-access drawdown fund, or
(f) a successor's flexi-access drawdown fund, and
in respect of a money purchase arrangement under a registered pension scheme.
(3) For the purposes of subsection (1) above, a person also has a drawdown fund if sums or assets held for the purposes of a money purchase arrangement under a corresponding scheme would, if that scheme were a registered pension scheme, be the person's—
(a) member's drawdown pension fund,
(b) member's flexi-access drawdown fund,
(c) dependant's drawdown pension fund,
(d) dependant's flexi-access drawdown fund,
(e) nominee's flexi-access drawdown fund, or
(f) successor's flexi-access drawdown fund,
in respect of the arrangement.
(4) In this section—
“corresponding scheme” means—
a qualifying non-UK pension scheme (see section 271A below), or
a section 615(3) scheme that is not a registered pension scheme;
“money purchase arrangement” has the same meaning as in Part 4 of the Finance Act 2004 (see section 152 of that Act);
“member's drawdown pension fund”, “member's flexi-access drawdown fund”, “dependant's drawdown pension fund”, “dependant's flexi-access drawdown fund”, “nominee's flexi-access drawdown fund” and “successor's flexi-access drawdown fund” have the meaning given, respectively, by paragraphs 8, 8A, 22, 22A, 27E and 27K of Schedule 28 to that Act.
(5) The amendment made by subsection (4)—
(a) so far as relating to a fund within the new section 12A(2)(a) or (c) (drawdown pension funds), or to a fund within the new section 12A(3) that corresponds to a fund within the new section 12A(2)(a) or (c)—
(i) has effect where the person who has the fund dies on or after 6 April 2011, and
(ii) is to be treated as having come into force on 6 April 2011, and
(b) so far as relating to a fund mentioned in the new section 12A(2)(b), (d), (e) or (f) (flexi-access drawdown funds), or to a fund within the new section 12A(3) that corresponds to a fund within the new section 12A(2)(b), (d), (e) or (f)—
(i) has effect where the person who has the fund dies on or after 6 April 2015, and
(ii) is to be treated as having come into force on 6 April 2015.
(6) Where an amount paid by way of—
(a) inheritance tax, or
(b) interest on inheritance tax,
is repayable as a result of the amendment made by subsection (4), section 241(1) of IHTA 1984 applies as if the last date for making a claim for repayment of the amount were 5 April 2020 if that is later than what would otherwise be the last date for that purpose.
95 Inheritance tax: victims of persecution during Second World War era
(1) After section 153 of IHTA 1984 insert—
Payments to victims of persecution during Second World War era
Qualifying payments
153ZA (1) This section applies where a qualifying payment has at any time been received by a person (“P”), or by the personal representatives of P.
(2) The tax chargeable on the value transferred by the transfer made on P's death (the “value transferred”) is to be reduced by an amount equal to—
(a) the relevant percentage of the amount of the qualifying payment, or
(b) if lower, the amount of tax that would, apart from this section, be chargeable on the value transferred.
(3) In subsection (2) “relevant percentage” means the percentage specified in the last row of the third column of the Table in Schedule 1.
(4) For the purposes of this section, a “qualifying payment” is a payment that meets Condition A, B or C.
(5) Condition A is that the payment—
(a) is of a kind specified in Part 1 of Schedule 5A, and
(b) is made to a person, or the personal representatives of a person, who was—
(i) a victim of National-Socialist persecution, or
(ii) the spouse or civil partner of a person within sub-paragraph (i).
(6) Condition B is that the payment is of a kind listed in Part 2 of Schedule 5A.
(7) Condition C is that the payment—
(a) is of a kind specified in regulations made by the Treasury, and
(b) is made to a person, or the personal representatives of a person, who was—
(i) held as a prisoner of war, or a civilian internee, during the Second World War, or
(ii) the spouse or civil partner of a person within sub-paragraph (i).
(8) The Treasury may by regulations add a payment of a specified kind to the list in Part 1 of Schedule 5A.
(9) Regulations under this section are to be made by statutory instrument.
(10) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.
(2) After Schedule 5 to IHTA 1984 insert—
SCHEDULE 5A
Qualifying payments: victims of persecution during Second World War era
Section 153ZA
PART 1 Compensation payments
1 A payment of a fixed amount from the German foundation known as “Remembrance, Responsibility and Future” (Stiftung EVZ) in respect of a person who was a slave or forced labourer.
2 A payment of a fixed amount in accordance with the arrangements made under the Swiss Bank Settlement (Holocaust Victim Assets Litigation) in respect of the slave or forced labourers qualifying for compensation under the Remembrance, Responsibility and Future scheme.
3 A payment of a fixed amount from the Hardship Fund established by the Government of the Federal Republic of Germany.
4 A payment of a fixed amount from the National Fund of the Republic of Austria for Victims of National-Socialism under the terms of the scheme as at June 1995.
5 A payment of a fixed amount in respect of a slave or forced labourer from the Austrian Reconciliation Fund.
6 A payment of a fixed amount by the Swiss Refugee Programme in accordance with the arrangements made under the Swiss Bank Settlement (Holocaust Victim Assets Litigation) in respect of refugees.
7 A payment of a fixed amount under the foundation established in the Netherlands and known as the Dutch Maror Fund (Stichting Maror-Gelden Overheid).
8 A one-off payment of a fixed amount from the scheme established by the Government of the French Republic and known as the French Orphan Scheme.
9 A payment of a fixed amount from the Child Survivor Fund established by the Government of the Federal Republic of Germany.
PART 2 Ex-gratia payments
10 A payment of a fixed amount made from the scheme established by the United Kingdom Government and known as the Far Eastern Prisoners of War Ex Gratia Scheme.
(3) The amendments made by this section have effect in relation to deaths occurring on or after 1 January 2015.
96 Inheritance tax: gifts for national purposes etc
(1) The Schedule 3 IHTA approval function is transferred to the Treasury.
(2) The “Schedule 3 IHTA approval function” is the function of approval conferred by Schedule 3 to IHTA 1984 in the entry beginning “Any other similar national institution” (and which was initially conferred on the Treasury but, along with other functions, transferred to the Commissioners of Inland Revenue under section 95 of FA 1985).
(3) Subsection (1) does not affect any approval given under Schedule 3 to IHTA 1984 before this Act is passed.
(4) In Schedule 3 to IHTA 1984 (gifts for national purposes, etc), in the entry beginning “Any museum”, after “and is” insert “ or has been ”.
97 Estate duty: objects of national, scientific, historic or artistic interest
(1) Section 40 of FA 1930 and section 2 of the Finance Act (Northern Ireland) 1931 (exemption from death duties of objects of national etc interest), so far as continuing to have effect, have effect as if after subsection (2) there were inserted—
(2A) In the event of the loss of any objects to which this section applies, estate duty shall become chargeable on the value of those objects in respect of the last death on which the objects passed at the rate appropriate to the principal value of the estate passing on that death upon which estate duty is leviable, and with which the objects would have been aggregated if they had not been objects to which this section applies.
(2B) Where subsection (2A) applies, any owner of the objects—
(a) shall be accountable for the estate duty, and
(b) shall deliver an account for the purposes thereof.
(2C) The account under subsection (2B)(b) must be delivered within the period of one month beginning with—
(a) in the case of a loss occurring before the coming into force of subsection (2A)—
(i) the coming into force of subsection (2A), or
(ii) if later, the date when the owner became aware of the loss;
(b) in the case of a loss occurring after the coming into force of subsection (2A)—
(i) the date of the loss, or
(ii) if later, the date when the owner became aware of the loss.
This is subject to subsection (2E).
(2D) Subsection (2E) applies if—
(a) no account has been delivered under subsection (2B),
(b) the Commissioners for Her Majesty's Revenue and Customs have by notice required an owner of the objects to confirm that the objects have not been lost,
(c) the owner has not so confirmed by the end of—
(i) the period of three months beginning with the day on which the notice was sent, or
(ii) such longer period as the Commissioners may allow, and
(d) the Commissioners are satisfied that the objects are lost.
(2E) Where this subsection applies—
(a) the objects are to be treated as lost for the purposes of subsection (2A) on the day on which the Commissioners are satisfied as specified in subsection (2D)(d), and
(b) the account under subsection (2B)(b) must be delivered within the period of one month beginning with that date.
(2F) The reference in subsection (2A) to the value of objects is to their value at the time they are lost (or treated as lost).
(2G) Subsection (2A) does not apply in relation to a loss notified to the Commissioners before the coming into force of that subsection.
(2H) In this section “owner”, in relation to any objects, means a person who, if the objects were sold, would be entitled to receive (whether for their own benefit or not) the proceeds of sale or any income arising therefrom.
(2I) In this section references to the loss of objects include their theft or destruction; but do not include a loss which the Commissioners are satisfied was outside the owner's control.
(2) Section 48 of FA 1950, so far as continuing to have effect, has effect as if—
(a) after subsection (3) there were inserted—
(3A) But where the value of any objects is chargeable with estate duty under subsection (2A) of the said section forty (loss of objects), no estate duty shall be chargeable under this section on that value.
;
(b) after subsection (4) there were inserted—
(5) Where any objects are lost (within the meaning of the said section forty) after becoming chargeable with estate duty under this section in respect of any death, the value of those objects shall not be chargeable with estate duty under subsection (2A) of the said section forty.
(3) Section 39 of FA 1969, so far as continuing to have effect, has effect as if—
(a) in subsection (1)—
(i) after “subsection (2)” there were inserted “ or (2A) ”;
(ii) after “other disposal” there were inserted “ or loss ”;
(b) in subsection (2), after “subsection (2)” there were inserted “ , (2A) ”;
(c) in subsection (3)—
(i) after “subsection (2)” there were inserted “ , (2A) ”;
(ii) for the words from “the amount” to the end there were substituted “ the amount in respect of which estate duty is chargeable under the said subsection ”.
(4) Section 6 of the Finance Act (Northern Ireland) 1969, so far as continuing to have effect as originally enacted, has effect as if—
(a) in subsection (1)—
(i) after “subsection (2)” there were inserted “ or (2A) ”;
(ii) after “sale” there were inserted “ or loss ”;
(b) in subsection (2)—
(i) for “sale” there were substituted “ event ”;
(ii) after “subsection (2)” there were inserted “ or (2A) ”;
(c) in subsection (3)—
(i) for “sale” there were substituted “ event ”;
(ii) after “subsection (2)” there were inserted “ or (2A) ”;
(iii) for “the amount of the proceeds of sale” there were substituted “ the amount in respect of which estate duty is chargeable under the said subsection ”.
(5) Section 6 of the Finance Act (Northern Ireland) 1969, so far as continuing to have effect as amended by Article 7 of the Finance (Northern Ireland) Order 1972 (S.I. 1972/1100 (N.I.11)) (deaths occurring after the making of that Order), has effect as if—
(a) in subsection (1)—
(i) after “subsection (2)” there were inserted “ or (2A) ”;
(ii) after “sale” there were inserted “ or loss ”;
(b) in subsection (2), after “subsection (2)” there were inserted “ or (2A) ”;
(c) in subsection (3)—
(i) in the opening words, after “subsection (2)” there were inserted “ or (2A) ”;
(ii) in paragraphs (a) and (b), after “otherwise than on sale” there were inserted “ or at the time of the loss ”.
(6) In section 35 of IHTA 1984 (conditional exemption on death before 7th April 1976), in subsection (2), for paragraphs (a) and (b) substitute—
(a) tax shall be chargeable under section 32 or 32A (as the case may be), or
(b) tax shall be chargeable under Schedule 5,
.
(7) In Schedule 6 to IHTA 1984 (transition from estate duty), in paragraph 4 (objects of national etc interest left out of account on death)—
(a) in sub-paragraph (2), for paragraphs (a) and (b) substitute—
(a) tax shall be chargeable under section 32 or 32A of this Act (as the case may be), or
(b) estate duty shall be chargeable under those provisions,
as the Board may elect,
, and
(b) in sub-paragraph (4), after “40(2)” insert “ or (2A) ”.
(8) Subsections (6) and (7) have effect in relation to a chargeable event where the conditionally exempt transfer referred to in section 35(2) of or paragraph 4(2) of Schedule 6 to IHTA 1984 occurred after 16 March 2016.
(1) A tax called apprenticeship levy is to be charged in accordance with this Part.
(2) The Commissioners are responsible for the collection and management of apprenticeship levy.
(1) Apprenticeship levy is charged if—
(a) a person has a pay bill for a tax year, and
(b) the relevant percentage of that pay bill exceeds the amount of the person's levy allowance (if any) for that tax year.
(2) The amount charged for the tax year is equal to—
N
−
A
where—
N is the relevant percentage of the pay bill for the tax year, and
A is the amount of the levy allowance (if any) to which the person is entitled for the tax year.
(3) The person mentioned in subsection (1) is liable to pay the amount charged.
(4) Except so far as section 103 provides otherwise, a person who has a pay bill for a tax year is entitled to a levy allowance for the tax year.
(5) The amount of the levy allowance is £15,000 (except where section 101 or 102 provides otherwise).
(6) For the purposes of this section the “relevant percentage” is 0.5%.
(1) A person has a pay bill for a tax year if, in the tax year—
(a) the person is the secondary contributor in relation to payments of earnings to, or for the benefit of, one or more employed earners, and
(b) in consequence, the person incurs liabilities to pay secondary Class 1 contributions.
(2) The amount of the person's pay bill for the tax year is equal to the total amount of the earnings in respect of which the liabilities mentioned in subsection (1)(b) are incurred.
(3) For the purposes of this section a person is treated as incurring, in respect of any earnings, any liabilities which the person would incur but for the condition in section 6(1)(b) of the Contributions and Benefits Act.
(4) The Treasury may by regulations provide for persons specified in certificates in force under section 120(4) of the Social Security Contributions and Benefits Act 1992 (employment at sea: continental shelf operations) to be treated for the purposes of this section as the secondary contributor in relation to payments of earnings to which the certificate relates and as liable to pay secondary Class 1 contributions to which the certificate relates.
(5) For the purposes of this section—
(a) references to “payments of earnings” are to be interpreted as they would be interpreted for the purposes of determining liability to pay secondary Class 1 contributions under the Contributions and Benefits Act;
(b) the amount of any earnings is to be calculated in the same manner and on the same basis as for the purpose of calculating the liabilities mentioned in subsection (1)(b).
(6) In this section references to liability to pay secondary Class 1 contributions are to liability to pay secondary Class 1 contributions under Part 1 of the Contributions and Benefits Act (including a case where the amount of a liability to pay a secondary Class 1 contribution is £0).
(1) Two or more companies which are not charities form a “company unit” for a tax year (and are the “members” of that unit) if—
(a) they are connected with one another at the beginning of the tax year, and
(b) each of them is entitled to a levy allowance for the tax year.
(2) The members of a company unit must determine what amount of levy allowance each of them is to be entitled to for the tax year (and the determination must comply with subsections (3) and (4)).
But see subsections (6) and (11).
(3) A member's levy allowance for a tax year may be zero (but not a negative amount).
(4) The total amount of the levy allowances to which the members of a company unit are entitled for a tax year must equal £15,000.
(5) A determination made under subsection (2) (with respect to a tax year) cannot afterwards be altered by the members concerned (but this does not prevent the correction of a failure to comply with subsection (4)).
(6) If subsection (8) applies—
(a) HMRC must determine in accordance with subsection (7) what amount of levy allowance each of the relevant members (see subsection (8)(a)) of the unit concerned is to be entitled to for the tax year, and
(b) accordingly subsection (2) is treated as never having applied in relation to that company unit and that tax year.
(7) The determination is to be made by multiplying the amount of levy allowance set out in each relevant return (see subsection (8)(a)) by—
15,000
T
where T is the total of the amounts of levy allowance set out in the relevant returns.
The result is, in each case, the amount of the levy allowance to which the relevant member in question is entitled for the tax year (but amounts may be rounded up or down where appropriate provided that subsection (4) is complied with).
(8) This subsection applies if—
(a) HMRC is aware—
(i) that two or more members of a company unit (“the relevant members”) have made apprenticeship levy returns (“the relevant returns”) on the basis mentioned in subsection (9), and
(ii) that those returns, together, imply that the total mentioned in subsection (4) is greater than £15,000,
(b) HMRC has notified the relevant members in writing that HMRC is considering taking action under subsection (6), and
(c) the remedial action specified in the notice has not been taken within the period specified in the notice.
(9) The basis in question is that the member making the return is entitled to a levy allowance (whether or not of zero) for the tax year concerned.
(10) If any member of the company unit mentioned in subsection (8)(a) is not a relevant member, that member is entitled to a levy allowance of zero for the tax year.
(11) If subsection (13) applies—
(a) HMRC must determine in accordance with subsection (12) what amount of levy allowance each of the members of the unit concerned is to be entitled to for the tax year, and
(b) accordingly subsection (2) is treated as never having applied in relation to that company unit and that tax year.
(12) Each member of the unit is to be entitled to a levy allowance for the tax year equal to—
15,000
N
where N is the number of the members of the company unit for the tax year.
Amounts determined in accordance with the formula in this subsection may be rounded up or down where appropriate provided that subsection (4) is complied with.
(13) This subsection applies if—
(a) the total amount paid by the members of a company unit in respect of apprenticeship levy for a tax year or any period in a tax year is less than the total of the amounts due and payable by them for the tax year or other period concerned,
(b) either the members of the unit have made no apprenticeship levy returns for any period in the tax year concerned or the returns that have been made do not contain sufficient information to enable HMRC to determine how the whole of the £15,000 mentioned in subsection (4) is to be used by the members of the unit for the tax year,
(c) HMRC has notified all the members of the unit in writing that HMRC is considering taking action under subsection (11), and
(d) the remedial action specified in the notice has not been taken within the period specified in the notice.
(14) Subsection (4) is to be taken into account in calculating the total of the amounts due and payable as mentioned in subsection (13)(a).
(15) The Commissioners may by regulations provide that in circumstances specified in the regulations the members of a company unit may alter a determination made under subsection (2) (despite subsection (5)).
(16) In this section “apprenticeship levy return” means a return under regulations under section 105(4).
(17) Part 1 of Schedule 1 to the National Insurance Contributions Act 2014 (rules for determining whether companies are “connected” with one another) applies for the purposes of subsection (1) as it applies for the purposes of section 3(1) of that Act.
(18) In this Part “company” has the meaning given by section 1121(1) of CTA 2010 and includes a limited liability partnership.
(19) See section 102 for the meaning of “charity”.
(1) Two or more charities form a “charities unit” for a tax year (and are the “members” of that unit) if—
(a) they are connected with one another at the beginning of the tax year, and
(b) each of them is entitled to a levy allowance for the tax year.
(2) The members of a charities unit must determine what amount of levy allowance each of them is to be entitled to for the tax year (and the determination must comply with subsections (3) and (4)).
But see subsections (6) and (11).
(3) A member's levy allowance for a tax year may be zero (but not a negative amount).
(4) The total amount of the levy allowances to which the members of a charities unit are entitled for a tax year must equal £15,000.
(5) A determination made under subsection (2) (with respect to a tax year) cannot afterwards be altered by the members concerned (but this does not prevent the correction of a failure to comply with subsection (4)).
(6) If subsection (8) applies—
(a) HMRC must determine in accordance with subsection (7) what amount of levy allowance each of the relevant members (see subsection (8)(a)) of the unit concerned is to be entitled to for the tax year, and
(b) accordingly subsection (2) is treated as never having applied in relation to that charities unit and that tax year.
(7) The determination is to be made by multiplying the amount of levy allowance set out in each relevant return (see subsection (8)(a)) by—
15,000
T
where T is the total of the amounts of levy allowance set out in the relevant returns.
The result is, in each case, the amount of the levy allowance to which the relevant member in question is entitled for the tax year (but amounts may be rounded up or down where appropriate provided that subsection (4) is complied with).
(8) This subsection applies if—
(a) HMRC is aware—
(i) that two or more members of a charities unit (“the relevant members”) have made apprenticeship levy returns (“the relevant returns”) on the basis mentioned in subsection (9), and
(ii) that those returns, together, imply that the total mentioned in subsection (4) is greater than £15,000,
(b) HMRC has notified the relevant members in writing that HMRC is considering taking action under subsection (6), and
(c) the remedial action specified in the notice has not been taken within the period specified in the notice.
(9) The basis in question is that the member making the return is entitled to a levy allowance (whether or not of zero) for the tax year concerned.
(10) If any member of the charities unit mentioned in subsection (8)(a) is not a relevant member, that member is entitled to a levy allowance of zero for the tax year.
(11) If subsection (13) applies—
(a) HMRC must determine in accordance with subsection (12) what amount of levy allowance each of the members of the unit concerned is to be entitled to for the tax year, and
(b) accordingly subsection (2) is treated as never having applied in relation to that charities unit and that tax year.
(12) Each member of the unit is to be entitled to a levy allowance for the tax year equal to—
15,000
N
where N is the number of the members of the charities unit for the tax year.
Amounts determined in accordance with the formula in this subsection may be rounded up or down where appropriate provided that subsection (4) is complied with.
(13) This subsection applies if—
(a) the total amount paid by the members of a charities unit in respect of apprenticeship levy for a tax year or any period in a tax year is less than the total of the amounts due and payable by them for the tax year or other period concerned,
(b) either the members of the unit have made no apprenticeship levy returns for any period in the tax year concerned or the returns that have been made do not contain sufficient information to enable HMRC to determine how the whole of the £15,000 mentioned in subsection (4) is to be used by the members of the unit for the tax year,
(c) HMRC has notified all the members of the unit in writing that HMRC is considering taking action under subsection (11), and
(d) the remedial action specified in the notice has not been taken within the period specified in the notice.
(14) Subsection (4) is to be taken into account in calculating the total of the amounts due and payable as mentioned in subsection (13)(a).
(15) The Commissioners may by regulations provide that in circumstances specified in the regulations the members of a charities unit may alter a determination made under subsection (2) (despite subsection (5)).
(16) In this section “apprenticeship levy return” means a return under regulations under section 105(4).
(17) In this Part “charity” means—
(a) a charity within the meaning of Part 1 of Schedule 6 to FA 2010;
(b) the Trustees of the National Heritage Memorial Fund;
(c) the Historic Buildings and Monuments Commission for England;
(d) a registered club within the meaning of Chapter 9 of Part 13 of CTA 2010 (community amateur sports clubs).
(18) Subsection (17) is subject to section 118(5).
(19) See sections 118 and 119 for provision about the meaning of “connected” in subsection (1).
(1) For the purposes of this section “avoidance arrangements” are arrangements the main purpose, or one of the main purposes, of which is to secure that a person—
(a) benefits, or further benefits, from an entitlement to a levy allowance for a tax year, or
(b) otherwise obtains an advantage in relation to apprenticeship levy.
(2) Subsection (3) applies where, in consequence of avoidance arrangements within subsection (1)(a) or (b), a person incurs a liability to pay secondary Class 1 contributions in a particular tax year (as opposed to another tax year).
(3) If the person would (apart from this subsection) obtain an advantage in relation to apprenticeship levy as a result of incurring the liability at the time mentioned in subsection (2), section 100 has effect as if the liability had been incurred when it would have been incurred but for the avoidance arrangements.
(4) Subsection (6) applies where (apart from this section) a person (“P”)—
(a) would be in a position to use or make greater use of a levy allowance for a tax year, in consequence of avoidance arrangements within subsection (1)(a), or
(b) would otherwise obtain an advantage in relation to apprenticeship levy in consequence of avoidance arrangements within subsection (1)(a).
(5) But subsection (6) only applies so far as the advantage in relation to apprenticeship levy cannot be counteracted under subsection (3).
(6) P is not entitled to a levy allowance for the tax year.
(7) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
(8) In this section a reference to “an advantage in relation to apprenticeship levy” includes a reference to—
(a) repayment or increased repayment of apprenticeship levy,
(b) avoidance or reduction of a charge, or an assessment, to the levy,
(c) avoidance of a possible assessment to the levy,
(d) deferral of a payment of, or advancement of a repayment of, the levy, and
(e) avoidance of an obligation to account for the levy.
(9) Sections 101 and 102 are to be ignored for the purpose of determining under subsection (4) what the position would be apart from this section.
(10) In subsection (2) the reference to “a particular tax year” is to be read as including a reference to the period of 12 months beginning with 6 April 2016.
104 Application of other regimes to apprenticeship levy
(1) In section 318(1) of FA 2004 (disclosure of tax avoidance schemes: interpretation), in the definition of “tax”, after paragraph (d) insert—
(da) apprenticeship levy,
.
(2) In section 206(3) of FA 2013 (taxes to which the general anti-abuse rule applies), after paragraph (da) insert—
(db) apprenticeship levy,
.
(3) Part 4 of FA 2014 (follower notices and accelerated payments) is amended in accordance with subsections (4) and (5).
(4) In section 200 (meaning of “relevant tax”), after paragraph (c) insert—
(ca) apprenticeship levy,
.
(5) In section 203 (meaning of “tax appeal”), after paragraph (e) insert—
(ea) an appeal under section 114 of FA 2016 (apprenticeship levy: appeal against an assessment),
.
(6) Part 5 of FA 2014 (promoters of tax avoidance schemes) is amended in accordance with subsections (7) and (8).
(7) In section 253(6) (duty to notify the Commissioners: meaning of “tax return”), after paragraph (d) insert—
(da) a return under regulations made under section 105 of FA 2016 (apprenticeship levy);
.
(8) In section 283(1) (interpretation), in the definition of “tax”, after paragraph (d) insert—
(da) apprenticeship levy,
.
(1) The Commissioners may by regulations make provision about the assessment, payment, collection and recovery of apprenticeship levy.
(2) Regulations under subsection (1) may include—
(a) provision which applies, with or without modifications, provisions of PAYE regulations;
(b) provision for combining any arrangements under the regulations with arrangements under PAYE regulations.
(3) Regulations under subsection (1) may—
(a) require payments to be made on account of apprenticeship levy;
(b) determine periods (“tax periods”) by reference to which payments are to be made;
(c) make provision about the times at which payments are to be made and methods of payment;
(d) require the amounts payable by reference to tax periods to be calculated (and levy allowance to be taken into account) in the manner and on the basis determined by or under the regulations;
(e) make provision for dealing with cases where such calculations lead to overpayment of levy (by repayment or otherwise);
(f) make other provision about the recovery of overpayments of levy.
(4) Regulations under subsection (1) may make provision requiring persons to make returns, including provision about—
(a) the periods by reference to which returns are to be made,
(b) the information to be included in returns,
(c) timing, and
(d) the form of, and method of making, returns.
(5) Regulations under subsection (1) may—
(a) authorise HMRC to assess to the best of their judgement amounts payable by a person in respect of apprenticeship levy;
(b) make provision about the treatment of amounts so assessed, including provision for treating such amounts as apprenticeship levy payable by the person;
(c) make provision about the process of assessments.
(6) Regulations under subsection (1) may make, in relation to amounts of apprenticeship levy which have been repaid to a person and ought not to have been repaid, any provision which may be made in relation to apprenticeship levy payable by a person.
(7) Where—
(a) a repayment of apprenticeship levy has been increased in accordance with section 102 of FA 2009 (repayment interest), and
(b) the whole or part of the repayment has been paid to any person but ought not to have been paid to the person,
any amount by which the repayment paid to the person ought not to have been increased is to be treated for the purposes of regulations made by virtue of subsection (6) as if it were an amount of apprenticeship levy repaid to the person which ought not to have been repaid.
(8) Regulations under subsection (1) may make provision for enabling the repayment or remission of interest under section 101 of FA 2009.
(9) The provision that may be made under subsection (1) includes—
(a) provision for the making of decisions (other than relevant assessments) by HMRC as to any matter required to be decided for the purposes of the regulations and for appeals against such decisions;
(b) provision for appeals with respect to matters arising under the regulations which would otherwise not be the subject of an appeal;
(c) provision for the way in which any matters provided for by the regulations are to be proved.
(10) In subsection (9) “relevant assessment” means an assessment of amounts payable by a person in respect of apprenticeship levy.
(11) Regulations under subsection (1) must not affect any right of appeal to the tribunal which a person would have apart from the regulations.
(12) In this section (except where the context requires otherwise) references to payments are to payments of, or on account of, apprenticeship levy.
(1) Regulations under section 105(1) may make corresponding provision for the recovery of amounts in respect of apprenticeship levy from persons other than the person liable to pay the amounts by virtue of section 99(3).
(2) In subsection (1) “corresponding provision” means provision which corresponds to provision made by regulations under the Contributions and Benefits Act for secondary Class 1 contributions in respect of any earnings to be recovered from a person other than the secondary contributor.
(1) Regulations under section 105(1) may make provision—
(a) for authorising or requiring relevant service providers to supply to HMRC information about payments of apprenticeship levy with respect to which their service is provided, or any information the Commissioners may request about features of the service provided or to be provided with respect to particular payments of apprenticeship levy;
(b) for requiring clients to provide relevant service providers with information about payments of apprenticeship levy;
(c) for prohibiting or restricting the disclosure, otherwise than to HMRC, of information by a person to whom it was supplied pursuant to a requirement imposed under paragraph (b);
(d) for conferring power on the Commissioners to specify by directions circumstances in which provision made by virtue of paragraph (a) or (b) is not to apply in relation to a payment;
(e) for requiring relevant service providers to take steps for facilitating the meeting by clients of obligations imposed under paragraph (b);
(f) for requiring compliance with any directions the Commissioners may give—
(i) specifying, or further specifying, steps for the purposes of paragraph (e), or
(ii) specifying information that a person making payments of apprenticeship levy must provide about the method by which the payments are made.
(2) Directions made under the regulations may make different provision for different cases or different classes of case.
(3) In this section—
“client”, in relation to a relevant service provider, means a person to whom that relevant service provider provides or is to provide a service with respect to a payment of apprenticeship levy;
“payment of apprenticeship levy” includes a payment on account of apprenticeship levy;
“relevant service provider” means a person who provides or is to provide with respect to payments of apprenticeship levy a service that is specified, or of a description specified, by the regulations.
(1) The general rule is that no assessment under regulations under section 105 may be made more than 4 years after the end of the tax year to which it relates.
(2) An assessment on a person in a case of loss of apprenticeship levy brought about carelessly by the person may be made at any time not more than 6 years after the end of the tax year to which it relates.
(3) An assessment on a person in a case falling within subsection (4) may be made at any time not more than 20 years after the end of the tax year to which it relates.
(4) A case falls within this subsection if it involves a loss of apprenticeship levy—
(a) brought about deliberately by the person,
(b) attributable to arrangements in respect of which the person has failed to comply with an obligation under section 309, 310 or 313 of FA 2004 (obligation of parties to tax avoidance schemes to provide information to HMRC), or
(c) attributable to arrangements which were expected to give rise to a tax advantage in respect of which the person was under an obligation to notify the Commissioners under section 253 of FA 2014 (duty to notify Commissioners of promoter reference number) but failed to do so.
(5) An assessment made by virtue of section 105(6) (amounts of levy repaid which ought not to have been repaid etc) is not out of time as a result of subsection (1) if it is made before the end of the tax year following that in which the amount assessed was repaid or paid (as the case may be).
(6) Subsections (2), (3) and (5) do not limit one another's application.
(7) An objection to the making of an assessment on the ground that the time limit for making it has expired may only be made on an appeal against the assessment.
(8) In subsections (2) and (4) references to a loss brought about by a person include a loss brought about by another person acting on behalf of that person.
109 No deduction in respect of levy to be made from earnings
(1) A person (“P”) must not—
(a) make from any payment of earnings any deduction in respect of apprenticeship levy for which P (or any other person) is liable,
(b) otherwise recover the cost, or any part of the cost, of P's (or any other person's) liability to apprenticeship levy from any person who is or has been a relevant earner, or
(c) enter into any agreement with any person to do anything prohibited by paragraph (a) or (b).
(2) In this section “relevant earner” means an earner in respect of whom P is or has been liable to pay any secondary Class 1 contributions under Part 1 of the Contributions and Benefits Act.
(1) The following provisions of Part 6 of TMA 1970 apply in relation to apprenticeship levy as they apply in relation to income tax—
(a) section 60 (issue of demand notes and receipts);
(b) section 61 (distraint by collectors: Northern Ireland);
(c) sections 65 to 68 (court proceedings).
(2) See also Chapter 5 of Part 7 of FA 2008 (which makes general provision about payment and enforcement).
(1) The Commissioners may by regulations require persons—
(a) to keep for purposes connected with apprenticeship levy records of specified matters, and
(b) to preserve the records for a specified period.
(2) A duty under regulations under this section to preserve records may be discharged—
(a) by preserving them in any form and by any means, or
(b) by preserving the information contained in them in any form and by any means, subject to any conditions or exceptions specified in writing by the Commissioners.
(3) In this section “specified” means specified or described in the regulations.
(1) Schedule 24 to FA 2007 (penalties for errors) is amended in accordance with subsections (2) to (4).
(2) In the Table in paragraph 1, after the entry relating to accounts in connection with a partnership return insert—
Apprenticeship levy | Return under regulations under section 105 of FA 2016.
(3) In paragraph 13—
(a) in sub-paragraph (1ZA), after “CIS returns,” insert “ or for two or more penalties relating to apprenticeship levy returns, ”;
(b) in sub-paragraph (1ZD), after the entry relating to “a CIS return” insert—
“an apprenticeship levy return” means a return under regulations under section 105 of FA 2016;
.
(4) In paragraph 21C, after “capital gains tax)” insert “ and amounts payable on account of apprenticeship levy ”.
(5) Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended in accordance with subsections (6) to (8).
(6) In the Table in paragraph 1, after item 4 insert—
4A | Apprenticeship levy | Return under regulations under section 105 of FA 2016
(7) In paragraph 6B, after “item 4” insert “ or 4A ”.
(8) In the italic heading before paragraph 6B, at the end insert “ and apprenticeship levy ”.
(9) Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended in accordance with subsections (10) to (15).
(10) In the Table in paragraph 1, after item 4 insert—
4A | Apprenticeship levy | Amount payable under regulations under section 105 of FA 2016 | The date determined by or under regulations under section 105 of FA 2016
(11) In paragraph 3(1)—
(a) in paragraph (b) after “within” insert “ item 4A or ”;
(b) after paragraph (c) insert—
(ca) an amount in respect of apprenticeship levy falling within item 4A which is payable by virtue of regulations under section 106 of FA 2016 (recovery from third parties).
(12) In paragraph 5(1), for “or 4” substitute “ , 4 or 4A ”.
(13) In paragraph 5(2), for “or (c)” substitute “ , (c) or (ca). ”
(14) In paragraph 6(2), after paragraph (b) insert—
(ba) a payment under regulations under section 105 of FA 2016 of an amount in respect of apprenticeship levy payable in relation to the tax year;
.
(15) In the italic heading before paragraph 5, at the end insert “ etc. ”.
(16) The amendments made by subsections (1) to (4) of this section come into force in accordance with provision made by the Treasury by regulations.
(17) In subsections (2) and (4) of section 106 of FA 2009 (penalties for failure to make returns: commencement etc) references to Schedule 55 to that Act have effect as references to that Schedule as amended by subsections (5) to (8) of this section.
(18) Schedule 56 to FA 2009, as amended by this section, is taken to come into force for the purposes of apprenticeship levy on the date on which this Act is passed.
(1) An appeal may be brought against an assessment of apprenticeship levy or other amounts under regulations under section 105.
(2) Notice of appeal must be given—
(a) in writing,
(b) within the period of 30 days beginning with the date on which notice of the assessment was given,
(c) to the officer of Revenue and Customs by whom notice of the assessment was given.
(3) Part 5 of TMA 1970 (appeals and other proceedings) applies in relation to an appeal under this section as it applies in relation to an appeal against an assessment to income tax.
In section 1 of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions), in subsection (1), after “diverted profits tax,” insert “ the apprenticeship levy, ”.
118 Charities which are “connected” with one another
(1) Two charities are connected with one another for the purposes of section 102(1) if—
(a) they are connected with one another in accordance with section 993 of ITA 2007 (meaning of “connected persons”), and
(b) their purposes and activities are the same or substantially similar.
(2) In the application of section 993 of ITA 2007 for the purposes of subsection (1)(a)—
(a) a charity which is a trust is to be treated as if it were a company (and accordingly a person), including in this subsection;
(b) a charity which is a trust has “control” of another person if the trustees (in their capacity as trustees of the charity) have, or any of them has, control of the person;
(c) a person (other than a charity regulator) has “control” of a charity which is a trust if—
(i) the person is a trustee of the charity and some or all of the powers of the trustees of the charity could be exercised by the person acting alone or by the person acting together with any other persons who are trustees of the charity and who are connected with the person,
(ii) the person, alone or together with other persons, has power to appoint or remove a trustee of the charity, or
(iii) the person, alone or together with other persons, has any power of approval or direction in relation to the carrying out by the trustees of any of their functions.
(3) For the purposes of section 102(1) a charity which is a trust is also connected with another charity which is a trust if at least half of the trustees of one of the charities are—
(a) trustees of the other charity,
(b) persons who are connected with persons who are trustees of the other charity, or
(c) a combination of both,
and the charities' purposes and activities are the same or substantially similar.
(4) In determining if a person is connected with another person for the purposes of subsection (2)(c)(i) or (3)(b), apply section 993 of ITA 2007 with the omission of subsection (3) of that section (and without the modifications in subsection (2) above).
(5) If a charity (“A”) controls a company (“B”) which, apart from this subsection, would not be a charity—
(a) B is to be treated as if it were a charity for the purposes of this Part, and
(b) A and B are connected with one another for the purposes of section 102(1).
(6) In subsection (5) “control” has the same meaning as in Part 10 of CTA 2010 (see sections 450 and 451 of that Act) (and a limited liability partnership is to be treated as a company for the purposes of that Part as applied by this subsection).
(7) For this purpose, where under section 450 of that Act “C” is a limited liability partnership, subsection (3) of that section has effect as if before (a) there were inserted—
(za) rights to a share of more than half the assets, or of more than half the income, of C,
.
119 Connection between charities: further provision
(1) This section applies if—
(a) a charity (“A”) is connected with another charity (“B”) for the purposes of section 102(1), and
(b) B is connected with another charity (“C”) for the purposes of section 102(1).
(2) A and C are also connected with one another for the purposes of section 102(1) (if that would not otherwise be the case).
(3) In subsection (1)—
(a) in paragraph (a) the reference to a charity being connected with another charity for the purposes of section 102(1) is to that charity being so connected by virtue of section 118 or this section, and
(b) in paragraph (b) the reference to a charity being connected with another charity for the purposes of section 102(1) is to that charity being so connected by virtue of section 118.