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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

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(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

15

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.

 
 

 
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Revised 28 March 2012