Finance Bill

Session 2012 - 13
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Finance Bill

Finance Bill
Part 7 — Value added tax
116

(a)
provision for a notification required by virtue of that sub-
paragraph to contain such particulars relating to the notified
arrival of the means of transport and any VAT chargeable on
its acquisition or importation as may be specified in the
regulations or by the Commissioners in accordance with the
5
regulations,
(b)
provision for such a notification to be given by a person who
is not the relevant person and is so specified, or is of a
description so specified,
(c)
provision for such a notification to contain a declaration,
10
given in such form and by such person as may be so specified,
as to the information contained in the notification, and
(d)
supplementary, incidental, consequential or transitional
provision (including provision amending any provision
made by or under this Act or any other enactment).
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     (5C)
Subsection (3) of section 97 (orders subject to Commons approval)
applies to a statutory instrument containing any regulations made
by virtue of sub-paragraph (5A) which amend an enactment as it
applies to an order within subsection (4) of that section.
     (5D)
For the purposes of sub-paragraph (5A)—
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“means of transport” has the same meaning as it has in this Act
in the expression “new means of transport” (see section 95);
“relevant person”, in relation to the arrival of a means of
transport in the United Kingdom, means—
(a)
where the means of transport has been acquired in the
25
United Kingdom from another member State, the
person who so acquires it,
(b)
where it has been imported from a place outside the
member States, the person liable to pay VAT on the
importation, and
30
(c)
in any other case—
(i)
the owner of the means of transport at the
time of its arrival in the United Kingdom, or
(ii)
where it is subject to a lease or hire agreement,
the lessee or hirer of the means of transport at
35
that time.”
201
Non-established taxable persons
Schedule 27 contains provision about non-established taxable persons.
202
Administration of VAT
Schedule 28 contains provision about the administration of VAT.
40

Finance Bill
Part 8 — Other taxes
117

Part 8
Other taxes
Landfill tax
203
Standard rate of landfill tax
(1)
In section 42(1)(a) and (2) of FA 1996 (amount of landfill tax) for “£64”
5
substitute “£72”.
(2)
The amendments made by this section have effect in relation to disposals made
(or treated as made) on or after 1 April 2013.
204
Landfill sites in Scotland
The following provisions are to be treated as having come into force, in so far
10
as they extend to Scotland, on 21 March 2000—
(a)
paragraph 19 of Schedule 2 to the Pollution Prevention and Control Act
1999 (which inserts paragraph (ba) into section 66 of FA 1996 (landfill
sites)), and
(b)
section 6(1) of the Pollution Prevention and Control Act 1999, so far as
15
relating to paragraph 19 of that Schedule.
Climate change levy
205
Climate change levy
The following Schedules amend, or make amendments connected with,
Schedule 6 to FA 2000 (climate change levy)—
20
(a)
Schedule 29 (reduced-rate supplies, rates etc);
(b)
Schedule 30 (climate change agreements);
(c)
Schedule 31 (supplies subject to the carbon price support rates and
combined heat and power stations).
Inheritance tax
25
206
Indexation of rate bands
(1)
Section 8 of IHTA 1984 (indexation of rate bands) is amended as follows.
(2)
In subsection (1), for “retail prices index for the month of September in 1993 or
any later year” substitute “consumer prices index for the month of September
in any year”.
30
(3)
In subsection (2), for “retail prices index” substitute “consumer prices index”.
(4)
For subsection (3) substitute—
“(3)
In this section, “consumer prices index” means the all items consumer
prices index published by the Statistics Board.”
(5)
The amendments made by this section have effect for the purposes of
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chargeable transfers made on or after 6 April 2015.

Finance Bill
Part 8 — Other taxes
118

207
Gifts to charities etc
Schedule 32 contains provision for a lower rate of inheritance tax to be charged
on transfers made on death that include sufficient gifts to charities or registered
clubs.
208
Settled excluded property: effect of certain arrangements
5
(1)
IHTA 1984 is amended as follows.
(2)
In section 48 (settled property: excluded property)—
(a)
in subsection (3), for “subsection (3B)” substitute “subsections (3B) and
(3D)”, and
(b)
after subsection (3C) insert—
10
“(3D)
Where—
(a)
one or more persons enter into arrangements,
(b)
in the course of the arrangements, an individual
domiciled in the United Kingdom acquires, or becomes
able to acquire, (directly or indirectly) an interest in
15
property comprised in a settlement (“the relevant settled
property”),
(c)
ignoring this subsection, the relevant settled property
would be excluded property by virtue of subsection
(3)(a), and
20
(d)
there is a relevant reduction in the value of the
individual’s estate,

from the time paragraphs (a) to (d) are first satisfied, the
relevant settled property is not excluded property by virtue of
subsection (3)(a).
25
(3E)
For the purposes of subsection (3D)—
(a)
an individual has an interest in property comprised in a
settlement if—
(i)
the property, or any derived property, is or will
or may become payable to, or applicable for the
30
benefit of, the individual or the individual’s
spouse or civil partner in any circumstances
whatsoever, or
(ii)
the individual or the individual’s spouse or civil
partner enjoys a benefit deriving (directly or
35
indirectly) from the property or any derived
property, and
(b)
a “relevant reduction” in the value of the individual’s
estate occurs—
(i)
if and when the value of the individual’s estate
40
first becomes less than it would have been in the
absence of the arrangements, and
(ii)
on each subsequent occasion when the value of
that estate becomes less than it would have been
in the absence of the arrangements and that
45
difference in value is greater than the sum of any
previous relevant reductions.

Finance Bill
Part 8 — Other taxes
119

(3F)
In subsections (3D) and (3E)—
“arrangements” includes any scheme, transaction or series
of transactions, agreement or understanding, whether
or not legally enforceable, and any associated
operations;
5
“derived property”, in relation to any property, means—
(a)
income from that property,
(b)
property directly or indirectly representing—
(i)
proceeds of that property, or
(ii)
proceeds of income from that property,
10
or
(c)
income from property which is derived property
by virtue of paragraph (b).”
(3)
After section 74 insert—
“74A
Settled property ceasing to be excluded property
15
(1)
This section applies where by virtue of section 48(3D), property
comprised in a settlement ceases to be excluded property.
(2)
In determining whether this section applies, section 48(3D) is to apply
as if section 48(3B) applied only where the interest in possession
mentioned in section 48(3B)(a) falls within section 5(1B).
20
(3)
For the purposes of this section and section 74B—
(a)
“the arrangements” means the arrangements mentioned in
section 48(3D),
(b)
“the individual” means the individual mentioned in section
48(3D)(b),
25
(c)
“relevant reduction” has the meaning given by section
48(3E)(b),
(d)
the amount of a relevant reduction is—
(i)
in the case of a reduction within section 48(3E)(b)(i), the
difference between the value of the estate and its value
30
in the absence of the arrangements, and
(ii)
in the case of a reduction within section 48(3E)(b)(ii), the
amount by which the difference in value mentioned in
that provision exceeds the sum of any previous relevant
reductions, and
35
(e)
“the relevant time” means—
(i)
the time the relevant reduction occurs, or
(ii)
if later, the time section 48(3D)(a) to (d) is first satisfied.
(4)
Subsection (6) applies if all or a part of a relevant reduction (“amount
A”) is attributable to the value of the individual’s section 49(1) property
40
being less than it would have been in the absence of the arrangements.
(5)
“The individual’s section 49(1) property” means settled property to
which the individual is treated as beneficially entitled under section
49(1) by reason of the individual being beneficially entitled to an
interest in possession in the property.
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(6)
Where this subsection applies—

Finance Bill
Part 8 — Other taxes
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(a)
a part of that interest in possession is deemed, for the purposes
of section 52, to come to an end at the relevant time, and
(b)
that section applies in relation to the coming to an end of that
part as if the reference in subsection (4)(a) of that section to a
corresponding part of the whole value of the property in which
5
the interest in possession subsists were a reference to amount A.
(7)
Subsection (8) applies to so much (if any) of a relevant reduction as is
not amount A (“amount B”).
(8)
Tax is to be charged as if the individual had made a transfer of value at
the relevant time and the value transferred by it had been equal to
10
amount B.
74B
Section 74A: supplementary provision
(1)
A transfer of value arising by virtue of section 74A is to be taken to be
a transfer which is not a potentially exempt transfer.
(2)
For the purposes of section 74A—
15
(a)
when determining the value transferred by a transfer of value
arising by virtue of that section, no account is to be taken of
section 3(2),
(b)
nothing in section 10(1) applies to prevent such a transfer, and
(c)
nothing in sections 102 to 102C of the Finance Act 1986 applies
20
in relation to such a transfer.
(3)
Where, ignoring this subsection, a transfer of value would arise by
virtue of section 74A (“the current transfer”), the value transferred by a
relevant related transfer is to be treated as reducing the value
transferred by the current transfer.
25

But this subsection does not apply if and to the extent that the relevant
related transfer has already been applied to reduce another transfer of
value arising by virtue of that section.
(4)
“Relevant related transfer” means—
(a)
where the arrangements consist of a series of operations, any
30
transfer of value constituted by one or more of those operations
which occur before or at the same time as the current transfer,
other than a transfer of value arising by virtue of section 74A,
and
(b)
where the arrangements consist of a single operation, any
35
transfer of value which arises from that operation, other than a
transfer of value arising by virtue of section 74A.
(5)
Section 268(3) does not apply to a transfer of value arising by virtue of
section 74A.
(6)
Where—
40
(a)
a transfer of value has arisen by virtue of section 74A,
(b)
in the course of the arrangements the individual acquires an
interest in possession in settled property, and
(c)
section 5(1B) applies to the interest in possession so that it forms
part of the individual’s estate,
45

this Act has effect as if that transfer of value had never arisen.
(7)
In this section “operation” includes an omission.”

Finance Bill
Part 8 — Other taxes
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(4)
In section 201 (liability for tax: settled property), after subsection (4) insert—
“(4A)
Where a charge to tax arises—
(a)
under or by virtue of section 74A, or
(b)
under section 64 or 65 in respect of property which, by virtue of
section 48(3D), has ceased to be excluded property,
5

subsection (1) of this section has effect as if the persons listed in that
subsection included the individual mentioned in section 48(3D)(b).”
(5)
The amendments made by this section are treated as having come into force on
21 March 2012, and, subject to subsection (6), have effect in relation to
arrangements entered into before, or on or after, that day.
10
(6)
In a case where the arrangements were entered into before 21 March 2012—
(a)
no transfer of value arises by virtue of section 74A of IHTA 1984, and
(b)
if paragraphs (a) to (d) of subsection (3D) of section 48 of that Act were
first satisfied before 21 March 2012, that subsection is to be read as if for
“from the time paragraphs (a) to (d) are first satisfied” there were
15
substituted “on and after 21 March 2012”.
Bank levy
209
The bank levy
Schedule 33 contains provision about the bank levy.
Stamp duty land tax, stamp duty reserve tax and stamp duty
20
210
Prevention of avoidance: subsales etc
(1)
In section 45 of FA 2003 (contract and conveyance: effect of transfer of rights),
after subsection (1) insert—
“(1A)
The reference in subsection (1)(b) to an assignment, subsale or other
transaction does not include the grant or assignment of an option.”
25
(2)
The amendment made by this section has effect in relation to grants or
assignments of options on or after 21 March 2012.
211
Rate in respect of residential property where consideration over £2m
(1)
In section 55(2) of FA 2003 (amount of SDLT chargeable), in Table A (bands and
percentages for residential property), for the final entry (cases where
30
consideration is more than £1,000,000 to be chargeable at 5%) substitute—

“More than £1,000,000 but not
5%

more than £2,000,000

More than £2,000,000
7%”.

(2)
The amendment made by this section has effect in relation to any land
35
transaction of which the effective date is on or after 22 March 2012.

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Part 8 — Other taxes
122

(3)
But that amendment does not have effect in relation to any transaction—
(a)
effected in pursuance of a contract entered into and substantially
performed before 22 March 2012, or
(b)
effected in pursuance of a contract entered into before that date and not
excluded by subsection (4).
5
(4)
A transaction effected in pursuance of a contract entered into before 22 March
2012 is excluded by this subsection if—
(a)
there is any variation of the contract, or assignment (or assignation) of
rights under the contract, on or after 22 March 2012,
(b)
the transaction is effected in consequence of the exercise on or after that
10
date of any option, right of pre-emption or similar right, or
(c)
on or after that date there is an assignment (or assignation), subsale or
other transaction relating to the whole or part of the subject-matter of
the contract as a result of which a person other than the purchaser
under the contract becomes entitled to call for a conveyance.
15
212
Higher rate for certain transactions
Schedule 34 contains provision about the amount of tax chargeable on certain
transactions involving higher threshold interests in dwellings.
213
Disclosure of stamp duty land tax avoidance schemes
In section 308 of FA 2004 (duties of promoter), after subsection (5) insert—
20
“(6)
The Treasury may by regulations provide for this section to apply with
modifications in relation to proposals or arrangements that—
(a)
enable, or might be expected to enable, a person to obtain an
advantage in relation to stamp duty land tax, and
(b)
are of a description specified in the regulations.”
25
214
Health service bodies
(1)
In Part 4 of FA 2003 (stamp duty land tax), after section 67 insert—
“67A
Acquisitions by certain health service bodies
(1)
A land transaction is exempt from charge if the purchaser is any of the
following—
30
(a)
the National Health Service Commissioning Board;
(b)
a clinical commissioning group established under section 14D
of the National Health Service Act 2006;
(c)
an NHS foundation trust;
(d)
a Local Health Board established under section 11 of the
35
National Health Service (Wales) Act 2006;
(e)
a National Health Service trust established under section 18 of
that Act;
(f)
a Health and Social Services trust established under the Health
and Personal Social Services (Northern Ireland) Order 1991.
40
(2)
Any relief under this section must be claimed in a land transaction
return or an amendment of such a return.”