Finance (No. 4) Bill

Session 2010 - 12
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Other Bills before Parliament

Finance (No. 4) Bill

Finance (No. 4) Bill
Schedule 11 — Expenditure on plant and machinery for use in designated assisted areas
290

(b)
the Community Guidelines on State Aid for Rescuing and
Restructuring Firms in Difficulty (2004/C 244/02),
(c)
Council Regulation (EC) No 104/2000,
(d)
Directive 2006/12/EC of the European Parliament and of the
Council, or
5
(e)
the Treaty on the Functioning of the European Union.
45N
Effect of plant or machinery subsequently being primarily for use
outside designated assisted areas
(1)
Expenditure on the provision of plant or machinery is to be treated
as never having been first-year qualifying expenditure under section
10
45K if, at any relevant time—
(a)
the primary use to which the plant and machinery is put is
other than in an area which was a designated assisted area
within the meaning of section 45K at the time the expenditure
was incurred, or
15
(b)
the plant or machinery is held for use otherwise than
primarily in an area which was such a designated assisted
area at that time.
(2)
“Relevant time” means a time which—
(a)
falls within the relevant period, and
20
(b)
is a time when the plant or machinery is owned by—
(i)
the person who incurred the expenditure, or
(ii)
a person who is, or at any time in that period has been,
connected with that person.
(3)
“The relevant period” means the period of 5 years beginning with—
25
(a)
the day on which the plant or machinery in question is first
brought into use for the purposes of a qualifying activity
carried on by the company, or
(b)
if earlier, the day on which it is first held for such use.
(4)
All such assessments and adjustments of assessments are to be made
30
as are necessary to give effect to subsection (1).
(5)
If a person who has made a return becomes aware that, after making
it, anything in it has become incorrect because of the operation of this
section, that person must give notice to an officer of Revenue and
Customs specifying how the return needs to be amended.
35
(6)
The notice must be given within 3 months beginning with the day on
which the person first became aware that anything in the return had
become incorrect because of the operation of this section.”
4
In section 46 (general exclusions applying to first-year qualifying
expenditure), in subsection (1), at the appropriate place in the list insert—
40

“section 45K
(expenditure on plant and

machinery for use in designated

assisted areas).”

5     (1)
Section 52 (first-year allowances) is amended as follows.

Finance (No. 4) Bill
Schedule 11 — Expenditure on plant and machinery for use in designated assisted areas
291

      (2)
In subsection (3), at the appropriate place in the Table insert—

“Expenditure
100%”

qualifying

under section

45K

5

(expenditure

on plant and

machinery for

use in

designated

10

assisted areas)

      (3)
In subsection (5)—
(a)
omit the “and” at the end of the entry for section 212T, and
(b)
after that entry insert—
“section 212U (cap on first-year allowances: expenditure
15
on plant and machinery for use in designated assisted
areas), and”.
6
In section 52A (prevention of double relief) for the words after “not”
substitute “claim—
(a)
an annual investment allowance and a first-year allowance in
20
respect of the same expenditure, or
(b)
first-year allowances under two or more of the provisions
listed in section 39 in respect of the same expenditure.”
7     (1)
In Chapter 16B (cap on first-year allowances: zero-emission goods vehicles),
after section 212T insert—
25
“212U
Cap on first-year allowances: expenditure on plant and machinery for
use in designated assisted areas
(1)
A section 45K allowance is not available in respect of expenditure
(“the current expenditure”) incurred by a person (“the investor”) in
respect of a particular designated assisted area—
30
(a)
if section 45K allowances have previously been made to any
person in respect of P&M expenditure of 125 million euros
incurred in respect of that area and on the same single
investment project as the current expenditure, or
(b)
(where paragraph (a) does not apply) if, and to the extent
35
that, the aggregate of—
(i)
the P&M expenditure incurred by any person in
respect of that area, and on the same single
investment project as the current expenditure, in
respect of which section 45K allowances have
40
previously been made, and
(ii)
the current expenditure,

exceeds 125 million euros.
(2)
For the purposes of subsection (1), any reference to P&M
expenditure incurred in respect of a designated assisted area is a
45

Finance (No. 4) Bill
Schedule 12 — Foreign income and gains
Part 1 — Increased remittance basis charge
292

reference to expenditure incurred on the provision of plant or
machinery for use primarily in that area.
(3)
For the purposes of subsection (1), expenditure incurred in a
currency other than the euro is to be converted into its equivalent in
euros using the spot rate of exchange for the day on which the
5
expenditure is incurred.
(4)
The Treasury may by regulations increase the amount specified in
subsection (1)(a) and (b).
(5)
In this section—
“designated assisted area” has the meaning given by section
10
45K;
“section 45K allowance” means a first-year allowance in respect
of expenditure that is first-year qualifying expenditure under
section 45K;
“single investment project” has the same meaning as in
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Commission Regulation (EC) No 800/2008 (General block
exemption Regulation).”
      (2)
Accordingly, in the heading for that Chapter omit “: zero-emission goods
vehicles”.
8
The amendments made by this Schedule have effect for chargeable periods
20
ending on or after 1 April 2012.
Schedule 12
Section 47

Foreign income and gains
Part 1
Increased remittance basis charge
25
Increased charge
1
Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.
2     (1)
Section 809C (claim for remittance basis by long-term UK resident:
nomination of foreign income and gains to which section 809H(2) is to
apply) is amended as follows.
30
      (2)
In subsection (1), for paragraph (b) substitute—
“(b)
meets the 12-year residence test or the 7-year residence test
for that year.”
      (3)
After that subsection insert—
“(1A)
An individual meets the 12-year residence test for a tax year if the
35
individual has been UK resident in at least 12 of the 14 tax years
immediately preceding that year.
(1B)
An individual meets the 7-year residence test for a tax year if the
individual—
(a)
does not meet the 12-year residence test for that year, but
40

Finance (No. 4) Bill
Schedule 12 — Foreign income and gains
Part 1 — Increased remittance basis charge
293

(b)
has been UK resident in at least 7 of the 9 tax years
immediately preceding that year.”
      (4)
In subsection (4), for “£30,000” substitute “—
(a)
for an individual who meets the 12-year residence test for
that year, £50,000;
5
(b)
for an individual who meets the 7-year residence test for that
year, £30,000.”
3     (1)
Section 809H (claim for remittance basis by long-term UK resident: charge)
is amended as follows.
      (2)
In subsection (1), for paragraph (c) substitute—
10
“(c)
the individual meets the 12-year residence test or the 7-year
residence test for the relevant tax year.”
      (3)
After that subsection insert—
“(1A)
See section 809C(1A) and (1B) for when an individual meets the 12-
year residence test or the 7-year residence test for a tax year.”
15
      (4)
In subsection (4), for “£30,000”, in each place it occurs, substitute “the
applicable amount”.
      (5)
After subsection (5A) insert—
“(5B)
“The applicable amount” is—
(a)
if the individual meets the 12-year residence test for the
20
relevant tax year, £50,000;
(b)
if the individual meets the 7-year residence test for the
relevant tax year, £30,000.”
4
For section 809V substitute—
“809V
Money paid to the Commissioners
25
“(1)
Subsection (2) applies to income or chargeable gains of an individual
if—
(a)
the income or gains would (but for subsection (2)) be
regarded as remitted to the United Kingdom by virtue of the
bringing of money to the United Kingdom,
30
(b)
the money is brought to the United Kingdom by way of one
or more direct payments to the Commissioners, and
(c)
the payments are made in relation to a tax year to which
section 809H applies as regards the individual.
(2)
The income or chargeable gains are to be treated as not remitted to
35
the United Kingdom to the extent that the payments do not exceed
the applicable amount (as defined in section 809H).
(3)
Subsection (2) does not apply to payments if or to the extent that they
are repaid by the Commissioners.”
Application of Part 1
40
5
The amendments made by this Part of this Schedule have effect for the tax
year 2012-13 and subsequent tax years.

Finance (No. 4) Bill
Schedule 12 — Foreign income and gains
Part 2 — Remittance for investment purposes
294

Part 2
Remittance for investment purposes
Relief for investments
6
For the italic heading preceding section 809V substitute “Relief for money used
to pay tax etc”.
5
7
After section 809V insert—
“Business investment relief
809VA
Money or other property used to make investments
(1)
Subsection (2) applies if—
(a)
a relevant event occurs,
10
(b)
but for subsection (2), income or chargeable gains of an
individual would be regarded as remitted to the United
Kingdom by virtue of that event, and
(c)
the individual makes a claim for relief under this section.
(2)
The income or gains are to be treated as not remitted to the United
15
Kingdom.
(3)
A “relevant event” occurs if money or other property—
(a)
is used by a relevant person to make a qualifying investment,
or
(b)
is brought to or received in the United Kingdom in order to
20
be used by a relevant person to make a qualifying
investment.
(4)
Subsection (1)(b) includes a case where income or gains would be
treated under section 809Y as remitted to the United Kingdom by
virtue of the relevant event.
25
(5)
Subsection (2) applies by virtue of subsection (3)(b) to the extent only
that the investment is made within the period of 45 days beginning
with the day on which the money or other property is brought to or
received in the United Kingdom.
(6)
Where some but not all of the money or other property is used to
30
make the investment within that 45-day period, the part of the
income or gains to which subsection (2) applies is to be determined
on a just and reasonable basis.
(7)
Subsection (2) does not apply if the relevant event occurs, or the
investment is made, as part of or as a result of a scheme or
35
arrangement the main purpose or one of the main purposes of which
is the avoidance of tax.
(8)
A claim for relief under this section must be made on or before the
first anniversary of the 31 January following the tax year in which the
income or gains would, but for subsection (2), be regarded as
40
remitted to the United Kingdom by virtue of the relevant event.