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Finance (No. 3) BillPage 50

(2) A person may elect that subsection (1) is not to have effect in relation to that
person.

(3) An election under subsection (2)—

(a) is to be made by notice in writing to an officer of Revenue and Customs,

(b) 5may not be made after the end of the period of 30 days beginning with
the day on which this Act is passed, and

(c) is irrevocable.

(4) In this section—

(5) Nothing in this section affects the commencement of the second order
15otherwise than as provided for by this section.

90 Machine games duty

The Commissioners for Her Majesty’s Revenue and Customs may incur
expenditure in preparing for the introduction of a new duty to be charged in
respect of games played on machines.

91 20Redundant reliefs

Schedule 26 contains provision repealing redundant reliefs.

Part 9 Final provisions

92 Interpretation

(1) 25In this Act—

(2) In this Act—

93 Short title

This Act may be cited as the Finance Act 2011.

Finance (No. 3) BillPage 52

SCHEDULES

Section 15

SCHEDULE 1 New high strength beer duty

High strength beer duty

1 5In Part 3 of ALDA 1979 (beer), after section 36H insert—

Charge of excise duty: high strength beer

37 High strength beer duty

(1) A duty of excise is charged on high strength beer—

(a) imported into the United Kingdom, or

(b) 10produced in the United Kingdom,

on or after 1 October 2011.

(2) “High strength beer” means beer which is of a strength exceeding 7.5
per cent.

(3) The duty charged by subsection (1) is referred to in this Act as “high
15strength beer duty”.

(4) High strength beer duty is charged at £4.64 per hectolitre per cent of
alcohol in the beer.

(5) Subject to the provisions of this Act—

(a) the high strength beer duty on beer produced in, or imported
20into, the United Kingdom is to be charged and paid, and

(b) the amount chargeable in respect of any such duty is to be
determined and becomes due,

in accordance with regulations under section 49 and with any
regulations under section 1 of the Finance (No. 2) Act 1992.

25Consequential amendments in ALDA 1979

2 ALDA 1979 is amended as follows.

3 In section 4 (interpretation), in subsection (1) insert at the appropriate
places—

4 (1) Section 36 (beer: charge of excise duty) is amended as follows.

Finance (No. 3) BillPage 53

(2) After subsection (1) insert—

(1ZAA) The duty charged by subsection (1) is referred to in this Act as
“general beer duty”.

(3) In subsection (1AA), for “the duty” substitute “general beer duty”.

(4) 5In subsection (1A), after “No” insert “general beer”.

(5) In subsection (2)(a), for “the duty” substitute “general beer duty”.

(6) For the heading substitute “General beer duty”.

5 In section 36B (interpretation of provisions relating to small brewery beer),
in subsection (5), after “rate of” insert “general beer”.

6 (1) 10Section 36D (rate of duty for small brewery beer from singleton breweries)
is amended as follows.

(2) In subsection (2), after “rate of” insert “general beer”.

(3) In the heading, after “Rate of” insert “general beer”.

7 (1) Section 36F (rate of duty for small brewery beer from co-operated breweries)
15is amended as follows.

(2) In subsection (2), after “rate of” insert “general beer”.

(3) In the heading, after “Rate of” insert “general beer”.

8 (1) Section 36G (assessments where incorrectly low rate of duty applied) is
amended as follows.

(2) 20In subsection (1)(a), for “duty is charged by section 36 above” substitute
“general beer duty is charged”.

(3) In subsection (2)(a), for “duty is charged by section 36 above” substitute
“general beer duty is charged”.

(4) In subsection (3)(a), for “duty charged on the beer by section 36 above” (in
25both places) substitute “general beer duty charged on the beer”.

(5) In subsection (4)—

(a) for “duty charged” substitute “general beer duty charged”, and

(b) in paragraph (a), for “the duty” substitute “that duty”.

9 In section 36H (power to vary reduced rate provisions), in subsection (1) for
30“excise duty” substitute “general beer duty”.

10 In section 41 (exemption from duty of beer produced for private
consumption), for “The duty on beer produced in the United Kingdom shall
not be” substitute “Neither general beer duty on beer produced in the United
Kingdom, nor high strength beer duty on beer so produced, is”.

11 35In section 49 (beer regulations), in subsection (1)—

(a) for “the duty” (in the first place it occurs) substitute “general beer
duty or high strength beer duty”, and

(b) for “the duty” (in the second place it occurs) substitute “any duty”.

12 In section 49A (drawback allowable to registered brewer), in subsection (2)
40for “the excise” substitute “any excise”.

Finance (No. 3) BillPage 54

Section 26

SCHEDULE 2 Employment income provided through third parties

Main provision

1 After Part 7 of ITEPA 2003 insert—

5 Part 7A Employment income provided through third parties

CHAPTER 1 Application etc
Application
554A Application of Chapter 2

(1) 10Chapter 2 applies if—

(a) a person (“A”) is an employee, or a former or prospective
employee, of another person (“B”),

(b) there is an arrangement (“the relevant arrangement”) to
which A is a party or which otherwise (wholly or partly)
15covers or relates to A,

(c) it is reasonable to suppose that, in essence—

(i) the relevant arrangement, or

(ii) the relevant arrangement so far as it covers or relates
to A,

20is (wholly or partly) a means of providing, or is otherwise
concerned (wholly or partly) with the provision of, rewards
or recognition or loans in connection with A’s employment,
or former or prospective employment, with B,

(d) a relevant step is taken by a relevant third person, and

(e) 25it is reasonable to suppose that, in essence—

(i) the relevant step is taken (wholly or partly) in
pursuance of the relevant arrangement, or

(ii) there is some other connection (direct or indirect)
between the relevant step and the relevant
30arrangement.

(2) In this Part “relevant step” means a step within section 554B, 554C or
554D.

(3) Subsection (1) is subject to subsection (4) and sections 554E to 554Y.

(4) Chapter 2 does not apply by reason of a relevant step within section
35554B taken on or after A’s death.

(5) In subsection (1)(b) and (c)(ii) references to A include references to
any person linked with A.

(6) For the purposes of subsection (1)(c) it does not matter if the relevant
arrangement does not include details of the steps which will or may

Finance (No. 3) BillPage 55

be taken in connection with providing, in essence, rewards or
recognition or loans as mentioned (for example, details of any sums
of money or assets which will or may be involved or details of how
or when or by whom or in whose favour any step will or may be
5taken).

(7) In subsection (1)(d) “relevant third person” means—

(a) A acting as a trustee,

(b) B acting as a trustee, or

(c) any person other than A and B.

(8) 10If B is a company and is a member of a group of companies at the
time the relevant step is taken, in subsection (7) references to B are to
be read as including references to any other company which is a
member of that group at that time.

(9) If B is a limited liability partnership, in subsection (7) references to B
15are to be read as including references to any company which is a
wholly-owned subsidiary (as defined in section 1159(2) of the
Companies Act 2006) of B at the time the relevant step is taken.

(10) Neither subsection (8) nor subsection (9) applies if there is a
connection (direct or indirect) between the relevant step and a tax
20avoidance arrangement.

(11) For the purposes of subsection (1)(e)

(a) the relevant step is connected with the relevant arrangement
if (for example) the relevant step is taken (wholly or partly) in
pursuance of an arrangement at one end of a series of
25arrangements with the relevant arrangement being at the
other end, and

(b) it does not matter if the person taking the relevant step is
unaware of the relevant arrangement.

(12) For the purposes of subsection (1)(c) and (e) in particular, all relevant
30circumstances are to be taken into account in order to get to the
essence of the matter.

Relevant steps
554B Relevant steps: earmarking etc of sum of money or asset

(1) A person (“P”) takes a step within this section if—

(a) 35a sum of money or asset held by or on behalf of P is
earmarked (however informally) by P with a view to a later
relevant step being taken by P or any other person (on or
following the meeting of any condition or otherwise) in
relation to—

(i) 40that sum of money or asset, or

(ii) any sum of money or asset which may arise or derive
(directly or indirectly) from it, or

(b) a sum of money or asset otherwise starts being held by or on
behalf of P, specifically with a view, so far as P is concerned,
45to a later relevant step being taken by P or any other person
(on or following the meeting of any condition or otherwise)
in relation to—

Finance (No. 3) BillPage 56

(i) that sum of money or asset, or

(ii) any sum of money or asset which may arise or derive
(directly or indirectly) from it.

(2) For the purposes of subsection (1)(a) and (b) it does not matter—

(a) 5if details of the later relevant step have not been worked out
(for example, details of the sum of money or asset which will
or may be the subject of the step or details of how or when or
by whom or in whose favour the step will or may be taken),

(b) if any condition which would have to be met before the later
10relevant step is taken might never be met, or

(c) if A, or any person linked with A, has no legal right to have a
relevant step taken in relation to any sum of money or asset
mentioned in subsection (1)(a)(i) or (ii) or (b)(i) or (ii) (as the
case may be).

(3) 15For the purposes of subsection (1)(b) it does not matter whether or
not the sum of money or asset in question has previously been held
by or on behalf of P on a basis which is different to that mentioned in
subsection (1)(b).

554C Relevant steps: payment of sum, transfer of asset etc

(1) 20A person (“P”) takes a step within this section if P—

(a) pays a sum of money to a relevant person,

(b) transfers an asset to a relevant person,

(c) takes a step by virtue of which a relevant person acquires an
asset within subsection (4),

(d) 25makes available a sum of money or asset for use, or makes it
available under an arrangement which permits its use—

(i) as security for a loan made or to be made to a relevant
person, or

(ii) otherwise as security for the meeting of any liability,
30or the performance of any undertaking, which a
relevant person has or will have, or

(e) grants to a relevant person a lease of any premises the
effective duration of which is likely to exceed 21 years.

(2) In subsection (1) “relevant person”—

(a) 35means A or a person chosen by A or within a class of person
chosen by A, and

(b) includes, if P is taking a step on A’s behalf or otherwise at A’s
direction or request, any other person.

(3) In subsection (2) references to A include references to any person
40linked with A.

(4) The following assets are within this subsection—

(a) securities,

(b) interests in securities, and

(c) securities options,

45as defined in section 420 for the purposes of Chapters 1 to 5 of Part 7;
and in subsection (1)(c) “acquires” is to be read in accordance with
section 421B(2)(a).

Finance (No. 3) BillPage 57

(5) For the purposes of subsection (1)(d)

(a) references to making a sum of money or asset available are
references to making it available in any way, however
informal,

(b) 5it does not matter if the relevant person has no legal right to
have the sum of money or asset used as mentioned, and

(c) it does not matter if the sum of money or asset is not actually
used as mentioned.

(6) Subsections (7) and (8) apply for the purpose of determining the
10likely effective duration of a lease of any premises granted to a
relevant person (“the original lease”) for the purposes of subsection
(1)(e).

(7) If there are circumstances which make it likely that the original lease
will be extended for any period, the effective duration of the original
15lease is to be determined on the assumption that the original lease
will be so extended.

(8) Further, if—

(a) A is, or is likely to become, entitled to a later lease, or the
grant of a later lease, of the same premises, or

(b) 20it is otherwise likely that A will be granted a later lease of the
same premises,

the original lease is to be treated as continuing until the end of the
later lease (and subsection (7) also applies for the purpose of
determining the duration of the later lease).

(9) 25In subsection (8)

(a) references to A include references to—

(i) any person linked with A, and

(ii) the person to whom the original lease was granted
where the original lease was not granted to A or any
30person linked with A, and

(b) references to the same premises include references to any
premises which include the whole or part of the same
premises.

(10) In this section “lease” and “premises” have the same meaning as they
35have in Chapter 4 of Part 3 of ITTOIA 2005.

554D Relevant steps: making asset available

(1) A person (“P”) takes a step within this section if, without transferring
the asset to the relevant person, P—

(a) at any time, makes an asset available for a relevant person to
40benefit from in a way which is substantially similar to the
way in which the relevant person would have been able to
benefit from the asset had the asset been transferred to the
relevant person at that time, or

(b) at or after the end of the relevant period, makes an asset
45available for a relevant person to benefit from.

(2) If—

(a) before the end of the relevant period, P makes available an
asset for a relevant person to benefit from, and

Finance (No. 3) BillPage 58

(b) at the end of the relevant period, P continues to make the
asset available for the relevant person to benefit from,

P is treated as taking a step within this section by virtue of subsection
(1)(b) at the end of the relevant period.

(3) 5For the purposes of subsections (1) and (2)

(a) references to making an asset available are references to
making it available in any way, however informal,

(b) it does not matter if the relevant person has no legal right to
benefit from the asset, and

(c) 10it does not matter if the relevant person does not actually
benefit from the asset.

(4) In subsections (1) and (2) “the relevant period” means the period of
two years starting with the day on which A’s employment with B
ceases.

(5) 15In subsections (1) and (2) “relevant person”—

(a) means A or a person chosen by A or within a class of person
chosen by A, and

(b) includes, if P is taking a step on A’s behalf or otherwise at A’s
direction or request, any other person.

(6) 20In subsection (5) references to A include references to any person
linked with A.

(7) The following factors (among others) may be taken into account in
determining whether a step within this section is taken by virtue of
subsection (1)(a)

(a) 25any limitations on the way in which the relevant person may
benefit from the asset,

(b) the period over which the asset is being made available and
(if relevant) the extent to which that period covers the
expected remaining useful life of the asset,

(c) 30the extent to which the relevant person has, or is to have, a
say over the disposal of the asset, and

(d) the extent to which the relevant person may benefit from any
proceeds arising from the disposal of the asset or otherwise
have a say in the way the proceeds are used.

35Exclusions
554E Exclusions: steps under certain schemes etc

(1) Chapter 2 does not apply by reason of a relevant step if the step is
taken under any of the following—

(a) an approved SIP (within the meaning of Chapter 6 of Part 7),

(b) 40an approved SAYE option scheme (within the meaning of
Chapter 7 of Part 7),

(c) an approved CSOP scheme (within the meaning of Chapter 8
of Part 7),

(d) an arrangement the sole purpose of which is the provision of
45excluded benefits (as defined in section 393B(3)),

Finance (No. 3) BillPage 59

(e) an arrangement the sole purpose of which is the making of
payments which are to be disregarded in the calculation
mentioned in regulation 25 of the Social Security
(Contributions) Regulations 2001 (S.I. 2001/1004S.I. 2001/1004) by virtue of
5paragraph 12 of Part 10 of Schedule 3 to those Regulations (as
that paragraph has effect by virtue of regulation 2(3) of the
Social Security (Contributions) (Amendment No. 9)
Regulations 2007 (S.I. 2007/2905S.I. 2007/2905)),

(f) a pension scheme set up by a government outside the United
10Kingdom for the benefit of its employees or primarily for
their benefit,

(g) a registered pension scheme, or

(h) an arrangement the sole purpose of which is the making of
payments (within the meaning of Chapter 3 of Part 4 of FA
152004 (see section 161(2) of that Act))—

(i) to which section 161(4) of FA 2004 applies in relation
to a registered pension scheme (or a registered
pension scheme which has been wound up), and

(ii) which are authorised in relation to that scheme by
20section 160(1) of FA 2004.

(2) Subject to subsection (4), subsection (3) applies to a relevant step
taken by a person (“P”) if—

(a) the relevant step is not taken under an arrangement
mentioned in subsection (1)(a) to (c), and

(b) 25there is no connection (direct or indirect) between the
relevant step and a tax avoidance arrangement.

(3) Chapter 2 does not apply by reason of the relevant step if the step is
taken solely for the purpose of—

(a) acquiring or holding shares—

(i) 30to be awarded under an approved SIP, or

(ii) to be provided pursuant to options granted under an
approved SAYE option scheme or an approved CSOP
scheme, or

(b) providing shares pursuant to—

(i) 35an award of shares under an approved SIP, or

(ii) an option granted under an approved SAYE option
scheme or an approved CSOP scheme.

(4) Subsection (3) does not apply to the relevant step if, immediately
before or after the step is taken—

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