Finance (No. 3) Bill (HC Bill 200)

(e) 25the early step is not chargeable to income tax by virtue of Schedule
34 to FA 2004 in whole or in part.

(2) For the purposes of sub-paragraph (1)(a) section 554C(1)(d) of ITEPA 2003 is
to be read as if the words “or makes it available under an arrangement which
permits its use” were omitted.

(3) 30In this paragraph “readily convertible asset” means anything mentioned in
section 702(1)(a) to (c) of ITEPA 2003 (ignoring section 702(3)).

(4) Subject to what follows, Chapter 2 of Part 7A of ITEPA 2003 is to apply by
reason of the early step; and the amendments made by this Schedule have
effect accordingly.

(5) 35In determining the tax year for which the employment income of A counts
for the purposes of section 554Z2(1) of ITEPA 2003, the early step is treated
as having been taken on 6 April 2012; but otherwise Chapter 2 of Part 7A of
that Act applies by reference to when the early step was actually taken.

(6) The amount which (apart from this sub-paragraph) would count as
40employment income of A is to be reduced to nil if—

(a) before 6 April 2012 the readily convertible asset has been returned to
P, and

(b) as at that date the asset is not being used to secure the payment of the
sum of money (or any part of it),

45and the Tax Acts are to apply in relation to the early step as if Chapter 2 of
Part 7A of ITEPA 2003 had never applied by reason of it, with any
adjustments that need to be made to any assessment to tax being made
accordingly.

(7) Section 554Z5 of ITEPA 2003 does not apply in relation to the early step and,
in the application of that section in relation to any other relevant step
(whenever taken), the early step is to be ignored.

(8) Section 554Z8 of ITEPA 2003 applies in relation to the early step as if
5subsection (6)(b) were omitted.

(9) Section 554Z12 of ITEPA 2003 does not apply in relation to the early step.

(10) For the purposes of section 695A(3)(a) of ITEPA 2003 (as inserted by
paragraph 31 of this Schedule), the early step is treated as having been taken
on 6 April 2012.

(11) 10For the purposes of section 41(1A) of ITTOIA 2005 (as inserted by paragraph
38(3) of this Schedule), the early step is treated as having been taken on 6
April 2012; and for the purpose of determining whether section 41(1A) of
that Act applies, section 41(1) is to be read as substituted by paragraph 38(2)
of this Schedule.

(12) 15For the purposes of section 1293(1A) of CTA 2009 (as inserted by paragraph
47(3) of this Schedule), the early step is treated as having been taken on 6
April 2012; and for the purpose of determining whether section 1293(1A) of
that Act applies, section 1293(1) is to be read as substituted by paragraph
47(2) of this Schedule.

55 (1) 20For the purpose of determining whether Chapter 2 of Part 7A of ITEPA 2003
would have applied by reason of the early step as mentioned in paragraph
53(1)(b) or 54(1)(d), section 554G of ITEPA 2003 is to be read—

(a) as if subsection (1)(a) were omitted, and

(b) as if the definition contained in sub-paragraph (2) applied for the
25purposes of the reference to a group of companies in subsection
(4)(d) instead of section 554Z(5) of ITEPA 2003.

(2) The definition referred to in sub-paragraph (1)(b) is—

• ““group of companies” means a company and any other
  companies of which it has control (as defined in section 995
  30of ITA 2007)”.

(3) For the purpose of determining whether Chapter 2 of Part 7A of ITEPA 2003
would have applied by reason of the early step, Chapter 1 of that Part is to
be read as if section 554N(13) to (16) were omitted.

(4) If, by virtue of section 554O of ITEPA 2003, Chapter 2 of Part 7A of that Act
35would not have applied by reason of the early step, section 554O(3) and (4)
have effect in relation to the car loan.

(5) But, for this purpose, if the repayment date is before 6 April 2012, in section
section 554O(3) and (4) references to the repayment date are to be read as
references to 6 April 2012.

56 (1) 40This paragraph applies for the purposes of section 554Q of ITEPA 2003 in a
case in which—

(a) the relevant step mentioned in subsection (2)(a) of that section was
taken before 6 April 2011, and

(b) the requirement of subsection (2)(b) of that section would have been
45met had Part 7A of ITEPA 2003 had effect in relation to relevant steps
within section 554B of that Act taken before that date.