|
| |
|
(ii) | is not reflected in amount B, |
| |
(iii) | is not the subject of an income deduction, and |
| |
(iv) | is not a contribution paid by E under the relevant scheme but |
| |
nevertheless becomes (directly or indirectly) part of the sums |
| |
held for the purposes of the relevant scheme. |
| 5 |
(2) | In sub-paragraph (1)(b) “relevant provision” means— |
| |
(a) | paragraph 23, 24 or 25 above (as the case may be); |
| |
(b) | a relevant charging provision (as defined in paragraph 26 above) as |
| |
applied in relation to the asset-backed arrangement for amounts |
| |
arising on or before the completion day; |
| 10 |
(c) | paragraph 27 above (if applicable). |
| |
(3) | No amount is to be included in amount B by virtue of sub-paragraph (2)(c) |
| |
so far as it is reflected in an amount included in amount B by virtue of sub- |
| |
| |
(4) | In sub-paragraph (1) “income deduction” means a deduction to which any |
| 15 |
| |
(a) | in calculating income for tax purposes, or |
| |
(b) | from total income or total profits. |
| |
(5) | Sub-paragraph (6) applies if the section which would have applied as |
| |
mentioned in paragraph 18(1)(d) above is section 196B of FA 2004. |
| 20 |
(6) | The payment referred to in sub-paragraph (1)(c) is the payment (if any) |
| |
which the borrower, or a person connected with the borrower, makes to the |
| |
lender, or a person connected with the lender, in order to acquire— |
| |
| |
(b) | any asset substituted for the security under the asset-backed |
| 25 |
| |
(7) | Sub-paragraph (8) applies if the section which would have applied as |
| |
mentioned in paragraph 18(1)(d) above is section 196D or 196F of FA 2004. |
| |
(8) | The payment referred to in sub-paragraph (1)(c) is the payment (if any) |
| |
which E, or a person connected with E, makes to the lender, or a person |
| 30 |
connected with the lender, in order to reverse the relevant change in relation |
| |
| |
(9) | Amount C is to be taken to be nil if— |
| |
(a) | on or before the completion day, a commitment (whether or not |
| |
legally enforceable and whether or not subject to any conditions) is |
| 35 |
given (directly or indirectly) to a relevant person, and |
| |
| |
(i) | is a commitment to secure that a person receives money or |
| |
| |
(ii) | is linked (directly or indirectly) to the making of the payment |
| 40 |
| |
(10) | In sub-paragraph (9)(a) “relevant person” means— |
| |
| |
(b) | a person connected with E; |
| |
(c) | a person acting (directly or indirectly) at the direction or request, or |
| 45 |
with the agreement, of E or a person connected with E; |
| |
|
| |
|
| |
|
(d) | a person chosen (directly or indirectly) by E or a person connected |
| |
| |
(e) | a person within a class of person chosen (directly or indirectly) by E |
| |
or a person connected with E; |
| |
| 5 |
(11) | But “relevant person” does not include— |
| |
(a) | the persons who from time to time are the trustees of the relevant |
| |
| |
(b) | the persons who from time to time are the persons controlling the |
| |
management of the relevant scheme, |
| 10 |
| in their capacity as such. |
| |
30 (1) | This paragraph applies if amount A exceeds the sum of amounts B and C. |
| |
(2) | The amount of the excess is treated as follows as relevant— |
| |
(a) | for corporation tax purposes, the amount is treated as if it were a |
| |
profit which E has in respect of E’s loan relationships chargeable to |
| 15 |
corporation tax under section 299 of CTA 2009 for E’s accounting |
| |
period in which the beginning of the completion day falls, or |
| |
(b) | for income tax purposes, the amount is treated as if it were an |
| |
amount of income of E chargeable to income tax under Chapter 8 of |
| |
Part 5 of ITTOIA 2005 for the tax year in which the beginning of the |
| 20 |
| |
31 | If the sum of amounts B and C exceeds amount A— |
| |
(a) | E is to be treated as having paid a contribution under the relevant |
| |
scheme in respect of any individual of an amount equal to the excess, |
| |
(b) | the contribution is to be treated as having been paid at the beginning |
| 25 |
of the completion day, and |
| |
(c) | E is to be given relief as provided for by section 196 of FA 2004 |
| |
| |
| |
Other provision relating to finance arrangements |
| 30 |
Chapter 5B of Part 13 of ITA 2007 |
| |
32 | Chapter 5B of Part 13 of ITA 2007 (finance arrangements) is amended as |
| |
| |
33 | In section 809BZA (type 1 finance arrangements: definition) after subsection |
| |
| 35 |
“(2A) | For the purposes of subsection (2)(c) it does not matter if an |
| |
entitlement of the lender or a person connected with the lender is |
| |
subject to any condition.” |
| |
34 (1) | Section 809BZF (type 2 finance arrangements: definition) is amended as |
| |
| 40 |
(2) | In subsection (2)(b) after “transferor” insert “or a person connected with the |
| |
| |
|
| |
|
| |
|
(3) | After subsection (2) insert— |
| |
“(2A) | For the purposes of subsection (2)(e) it does not matter if any |
| |
determination of the share in the partnership’s profits of the person |
| |
involved in the relevant change as mentioned is subject to any |
| |
| 5 |
35 | In section 809BZH (type 2 finance arrangements: certain tax consequences |
| |
not to have effect) after “transferor” (wherever occurring) insert “or the |
| |
person connected with the transferor”. |
| |
36 | In section 809BZJ (type 3 finance arrangements: definition) after subsection |
| |
| 10 |
“(2A) | For the purposes of subsection (2)(d) it does not matter if any |
| |
determination of the share in the partnership’s profits of the person |
| |
involved in the relevant change as mentioned is subject to any |
| |
| |
Chapter 2 of Part 16 of CTA 2010 |
| 15 |
37 | Chapter 2 of Part 16 of CTA 2010 (finance arrangements) is amended as |
| |
| |
38 | In section 758 (type 1 finance arrangements: definition) after subsection (2) |
| |
| |
“(2A) | For the purposes of subsection (2)(c) it does not matter if an |
| 20 |
entitlement of the lender or a person connected with the lender is |
| |
subject to any condition.” |
| |
39 (1) | Section 763 (type 2 finance arrangements: definition) is amended as follows. |
| |
(2) | In subsection (2)(b) after “transferor” insert “or a person connected with the |
| |
| 25 |
(3) | After subsection (2) insert— |
| |
“(2A) | For the purposes of subsection (2)(e) it does not matter if any |
| |
determination of the share in the partnership’s profits of the person |
| |
involved in the relevant change as mentioned is subject to any |
| |
| 30 |
40 | In section 765 (type 2 finance arrangements: certain tax consequences not to |
| |
have effect) after “transferor” (wherever occurring) insert “or the person |
| |
connected with the transferor”. |
| |
41 | In section 767 (type 3 finance arrangements: definition) after subsection (2) |
| |
| 35 |
“(2A) | For the purposes of subsection (2)(d) it does not matter if any |
| |
determination of the share in the partnership’s profits of the person |
| |
involved in the relevant change as mentioned is subject to any |
| |
| |
| 40 |
42 (1) | Subject to what follows, the amendments made by paragraphs 32 to 41 |
| |
above have effect in relation to arrangements whenever made. |
| |
|
| |
|
| |
|
(2) | In relation to arrangements made before 21 March 2012, an amount is by |
| |
virtue of the amendments— |
| |
(a) | to be charged to tax, or |
| |
(b) | to be brought into account in calculating any income for tax purposes |
| |
or deducted from any income for tax purposes, |
| 5 |
| only if the amount arises on or after 21 March 2012. |
| |
(3) | The amendments have no effect for the purposes of section 196J(4) of FA |
| |
2004 inserted by paragraph 1 above. |
| |
(4) | The amendments have no effect for the purposes of section 196C(2)(b), |
| |
196E(2)(b) or 196G(2)(b) of FA 2004 inserted by paragraph 15 above if the |
| 10 |
asset-backed arrangement is made before 21 March 2012. |
| |
| |
| |
| |
| |
| 15 |
| |
1 (1) | For the purposes of this Schedule, a person makes a “qualifying gift” if the |
| |
person makes a gift in the circumstances described in sub-paragraph (2). |
| |
(2) | The circumstances are— |
| |
(a) | the person offers to give pre-eminent property to be held for the |
| 20 |
benefit of the public or the nation, |
| |
(b) | the person is legally and beneficially entitled to the property and the |
| |
property is not owned jointly (or in common) with others, |
| |
(c) | the offer is made in accordance with a scheme set up by the Secretary |
| |
of State for the purposes of this Schedule, |
| 25 |
(d) | the offer is registered in accordance with the scheme, |
| |
(e) | the offer, or a part of the offer, is accepted in accordance with the |
| |
| |
(f) | the gift is made pursuant to the offer, or the part of the offer, |
| |
| 30 |
| |
(a) | “the agreed terms” means the terms on which acceptance is agreed, |
| |
as recorded in the manner prescribed by the scheme, and |
| |
(b) | “the offer registration date” means the date when the offer was |
| |
registered in accordance with the scheme. |
| 35 |
|
| |
|
| |
|
| |
Income tax and capital gains tax |
| |
| |
2 (1) | This Part applies to an individual’s liability to income tax and capital gains |
| |
| 5 |
(2) | It does not apply to any liability arising as a trustee or personal |
| |
| |
(3) | Subject to sub-paragraph (2)— |
| |
(a) | a reference in this Part to an individual’s “tax liability” is to the |
| |
individual’s liability to income tax and capital gains tax, and |
| 10 |
(b) | references to an amount of or on account of “tax” are to be read |
| |
| |
| |
3 (1) | If an individual (“N”) makes a qualifying gift, a portion of N’s tax liability |
| |
for each relevant tax year is to be treated as satisfied, as if N had paid that |
| 15 |
portion when it became due (or on the offer registration date, if the portion |
| |
became due before that date). |
| |
(2) | A “relevant tax year” is a tax year identified in the agreed terms as a tax year |
| |
to which this paragraph is to apply. |
| |
(3) | Up to 5 tax years may be identified in the agreed terms, but each one must |
| 20 |
| |
(a) | the tax year in which the offer registration date falls, or |
| |
(b) | one of the 4 tax years following that tax year. |
| |
The portion treated as satisfied |
| |
4 (1) | The portion of N’s tax liability for a relevant tax year that is to be treated as |
| 25 |
satisfied is an amount equal to the smaller of— |
| |
(a) | the tax reduction figure allocated to that tax year, and |
| |
(b) | the amount of N’s tax liability for that tax year less any portion of |
| |
that amount that is treated as satisfied in consequence of any |
| |
qualifying gift made by N on a previous occasion. |
| 30 |
(2) | The amount determined under sub-paragraph (1) may be nil. |
| |
(3) | The tax reduction figure allocated to a tax year is such part of the total tax |
| |
reduction figure as is expressed in the agreed terms to be allocated to that tax |
| |
| |
(4) | The figures allocated to the relevant tax years must in total add up to no |
| 35 |
more than the total tax reduction figure. |
| |
(5) | “The total tax reduction figure” is 30% of the value set out in the agreed |
| |
terms as the agreed value of the property forming the subject of the |
| |
| |
(6) | The Treasury may by order substitute a different percentage for the |
| 40 |
percentage specified for the time being in sub-paragraph (5). |
| |
|
| |
|
| |
|
Order in which benefit is applied |
| |
5 (1) | If the tax reduction figure allocated to a relevant tax year is less than the |
| |
amount determined under paragraph 4(1)(b) for that tax year, the benefit of |
| |
paragraph 3(1) is to be applied to N’s tax liability in the order specified in the |
| |
| 5 |
(2) | If no order is specified, the order is— |
| |
(a) | first, to N’s liability to income tax for that year, and |
| |
(b) | then, to N’s liability to capital gains tax for that year. |
| |
Effect of basic rule on interest and penalties |
| |
6 (1) | This paragraph explains the effect of paragraph 3(1) as regards late payment |
| 10 |
interest and late payment penalties. |
| |
(2) | The effect is that liability to pay amounts specified in sub-paragraph (3) |
| |
ceases when the qualifying gift is made, as if the liability had never arisen. |
| |
| |
(a) | any late payment interest that accrued on the relevant portion during |
| 15 |
the negotiation period, and |
| |
(b) | any late payment penalty to which N became liable in the negotiation |
| |
period for failing to pay the relevant portion (together with any |
| |
interest on such a penalty). |
| |
(4) | “The relevant portion” is the portion of N’s tax liability for a relevant tax |
| 20 |
year that is treated under paragraph 3 as satisfied. |
| |
(5) | In determining for the purposes of sub-paragraph (2) whether or to what |
| |
| |
(a) | late payment interest accruing on an amount of or on account of N’s |
| |
tax liability for the relevant tax year is attributable to the relevant |
| 25 |
| |
(b) | a late payment penalty incurred for failing to pay an amount of or on |
| |
account of N’s tax liability for the relevant tax year is attributable to |
| |
| |
| any attribution or apportionment is to be done in the way that maximises the |
| 30 |
relief obtained by N by virtue of this paragraph. |
| |
(6) | “The negotiation period” is the period— |
| |
(a) | beginning with the offer registration date, and |
| |
(b) | ending with the day on which the qualifying gift is made. |
| |
(7) | Nothing in this paragraph affects any late payment interest that accrued, or |
| 35 |
any late payment penalty to which N became liable, before the offer |
| |
| |
Changes to N’s tax liability |
| |
7 (1) | If the amount of N’s tax liability for a relevant tax year is revised at any time, |
| |
the portion of that liability that is treated under paragraph 3(1) as satisfied is |
| 40 |
| |
(2) | But nothing in this paragraph permits any revision of the agreed terms. |
| |
|
| |
|
| |
|
| |
8 | If a qualifying gift is set aside or declared void after it is made— |
| |
(a) | the portion of N’s tax liability for each relevant tax year that is |
| |
treated as satisfied ceases to be treated as satisfied, |
| |
(b) | the effect described in paragraph 6 is negated, and |
| 5 |
(c) | N is required to pay the portion due for each relevant tax year, |
| |
together with any late payment interest and late payment penalties |
| |
in respect of it, by the later of— |
| |
(i) | the end of the period of 30 days beginning with the day on |
| |
which the gift was set aside or declared void, and |
| 10 |
(ii) | the day by which N would have been required to pay those |
| |
amounts but for this Schedule. |
| |
Suspension pending negotiations |
| |
9 (1) | An individual who makes an offer in the circumstances described in |
| |
paragraph 1 (a “potential donor”) may make a request under this paragraph |
| 15 |
| |
(a) | the offer is registered in accordance with the scheme, |
| |
(b) | the offer includes a proposal (“the donor proposal”) of what should |
| |
| |
(c) | the potential donor will be required to pay an amount of or on |
| 20 |
account of tax for a relevant tax year by a certain date, and |
| |
(d) | the negotiations are not expected to conclude before that date |
| |
(referred to as “the due date”). |
| |
(2) | For the purposes of this paragraph, the negotiations “conclude” when— |
| |
(a) | a qualifying gift is made pursuant to the offer, |
| 25 |
(b) | the offer is withdrawn by the potential donor, or |
| |
(c) | the offer is rejected. |
| |
(3) | A request under this paragraph is a request that the potential donor’s |
| |
obligation to pay the amount by the due date be suspended until the |
| |
| 30 |
(4) | But the running total of amounts for which suspension may be requested |
| |
under this paragraph in respect of the same offer and the same relevant tax |
| |
year must not exceed the proposed tax reduction figure for that tax year. |
| |
(5) | “The proposed tax reduction figure” for a tax year is the amount shown in |
| |
the donor proposal as the proposed tax reduction figure for that year. |
| 35 |
(6) | A request under this paragraph— |
| |
(a) | must be made in writing to HMRC at least 45 days before the due |
| |
| |
(b) | must be accompanied by a copy of the donor proposal and such |
| |
other information as an officer of Revenue and Customs may |
| 40 |
| |
(7) | In considering whether or to what extent to agree to a request, HMRC must |
| |
have regard to all the circumstances of the case (including, for example, the |
| |
creditworthiness of the potential donor). |
| |
(8) | HMRC may impose conditions with respect to the suspension. |
| 45 |
|
| |
|