Session 2012 - 13
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Finance Bill


Finance Bill
Schedule 14 — Gifts to the nation
Part 2 — Income tax and capital gains tax

355

 

10    (1)  

Suspension under paragraph 9 of a potential donor’s obligation to pay an

amount of or on account of tax stops the donor from becoming liable to late

payment penalties for or in connection with the failure to pay that amount

by the due date.

      (2)  

But it does not stop late payment interest from accruing on that amount from

5

the due date.

      (3)  

HMRC may by notice in writing to the potential donor withdraw its

agreement to the suspension with effect from such date, before conclusion of

the negotiations, as may be specified in the notice.

      (4)  

If it does so, the potential donor must pay the amount, together with any late

10

payment interest that has accrued on it since the due date, by the end of the

period of 30 days beginning with the date specified in the notice.

      (5)  

The last day of that 30-day period is to be treated for the purposes of any

enactment relating to late payment penalties as the date on or before which

the amount must be paid.

15

      (6)  

Paragraph 11 explains what happens once the negotiations conclude

(depending on the outcome of the negotiations).

Conclusion of negotiations

11    (1)  

This paragraph applies if a potential donor’s obligation to pay an amount of

or on account of tax remains suspended under paragraph 9 when the

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negotiations conclude (within the meaning of that paragraph).

      (2)  

The potential donor must pay the amount, together with any late payment

interest that has accrued on it since the due date, within the period of 30 days

beginning with the day on which the negotiations concluded.

      (3)  

The last day of that 30-day period is to be treated for the purposes of any

25

enactment relating to late payment penalties as the date on or before which

the amount must be paid.

      (4)  

But if the negotiations conclude because a qualifying gift is made pursuant

to the offer or a part of the offer—

(a)   

sub-paragraph (2) is to be read subject to paragraph 3(1) (and its

30

effect as described in paragraph 6), and

(b)   

accordingly, the potential donor is only required to pay so much as

is not treated as satisfied under paragraph 3(1).

      (5)  

If the negotiations conclude in relation to a part only of the offer—

(a)   

this paragraph is to be given effect as far as reasonably practicable in

35

relation to that part, and

(b)   

on receipt of a revised copy of the donor proposal, HMRC may give

effect to paragraph 9 in relation to the part of the offer that remains

under negotiation.

 
 

Finance Bill
Schedule 14 — Gifts to the nation
Part 3 — Corporation tax

356

 

Part 3

Corporation tax

Taxes affected

12    (1)  

This Part applies to a company’s liability to corporation tax.

      (2)  

A reference in this Part to a company’s “tax liability” is to the company’s

5

liability to corporation tax.

      (3)  

References to an amount of or on account of “tax” are to be read accordingly.

The basic rule

13    (1)  

If a company (“C”) makes a qualifying gift, a portion of C’s tax liability for

the relevant accounting period is to be treated as satisfied, as if C had paid

10

that portion when it became due (or on the offer registration date, if the

portion became due before that date).

      (2)  

“The relevant accounting period” is the accounting period of C’s in which

the offer registration date falls.

The portion treated as satisfied

15

14    (1)  

The portion of C’s tax liability for the relevant accounting period that is to

be treated as satisfied is an amount equal to the smaller of—

(a)   

the tax reduction figure, and

(b)   

the amount of C’s tax liability for that period less any portion of that

amount that is treated as satisfied in consequence of any qualifying

20

gift made by C on a previous occasion.

      (2)  

The amount determined under sub-paragraph (1) may be nil.

      (3)  

The tax reduction figure is—

(a)   

20% of the value set out in the agreed terms as the agreed value of the

property forming the subject of the qualifying gift, or

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(b)   

such lower figure as may be specified in the agreed terms as the tax

reduction figure.

      (4)  

The Treasury may by order substitute a different percentage for the

percentage specified for the time being in sub-paragraph (3)(a).

Effect of basic rule on interest and penalties

30

15    (1)  

This paragraph explains the effect of paragraph 13 as regards late payment

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.

      (3)  

The amounts are—

35

(a)   

any late payment interest that accrued on the relevant portion during

the negotiation period, and

(b)   

any late payment penalty to which C became liable in the negotiation

period for failing to pay the relevant portion (together with any

interest on such a penalty).

40

 
 

Finance Bill
Schedule 14 — Gifts to the nation
Part 3 — Corporation tax

357

 

      (4)  

“The relevant portion” is the portion of C’s tax liability for the relevant

accounting period that is treated under paragraph 13 as satisfied.

      (5)  

In determining for the purposes of sub-paragraph (2) whether or to what

extent—

(a)   

late payment interest accruing on an amount of or on account of C’s

5

tax liability for the relevant accounting period is attributable to the

relevant portion, or

(b)   

a late payment penalty incurred for failing to pay an amount of or on

account of C’s tax liability for the relevant accounting period is

attributable to the relevant portion,

10

           

any attribution or apportionment is to be done in the way that maximises the

relief obtained by C 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.

15

      (7)  

Nothing in this paragraph affects any late payment interest that accrued, or

any late payment penalty to which C became liable, before the offer

registration date.

Changes to C’s tax liability

16    (1)  

If the amount of C’s tax liability for the relevant accounting period is revised

20

at any time, the portion of that liability that is treated under paragraph 13 as

satisfied is to be re-calculated.

      (2)  

But nothing in this paragraph permits any revision of the agreed terms.

Gifts set aside etc

17         

If a qualifying gift is set aside or declared void after it is made—

25

(a)   

the portion of C’s tax liability for the relevant accounting period

treated as satisfied ceases to be treated as satisfied,

(b)   

the effect described in paragraph 15 is negated, and

(c)   

C is required to pay the portion due, together with any late payment

interest and late payment penalties in respect of it, by the later of—

30

(i)   

the end of the period of 30 days beginning with the day on

which the gift was set aside or declared void, and

(ii)   

the day by which C would have been required to pay those

amounts but for this Schedule.

Suspension pending negotiations

35

18    (1)  

A company that makes an offer in the circumstances described in paragraph

1 (a “potential donor”) may make a request under this paragraph if—

(a)   

the offer is registered in accordance with the scheme,

(b)   

the offer includes a proposal (“the donor proposal”) of what should

be in the agreed terms,

40

(c)   

the potential donor will be required to pay an amount of or on

account of tax for the relevant accounting period by a certain date,

and

 
 

Finance Bill
Schedule 14 — Gifts to the nation
Part 3 — Corporation tax

358

 

(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,

(b)   

the offer is withdrawn by the potential donor, or

5

(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

negotiations conclude.

      (4)  

But the running total of amounts for which suspension may be requested

10

under this paragraph in respect of the same offer must not exceed the

proposed tax reduction figure.

      (5)  

“The proposed tax reduction figure” is the amount shown in the donor

proposal as the proposed tax reduction figure.

      (6)  

A request under this paragraph—

15

(a)   

must be made in writing to HMRC at least 45 days before the due

date, and

(b)   

must be accompanied by a copy of the donor proposal and such

other information as an officer of Revenue and Customs may

reasonably require.

20

      (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.

19    (1)  

Suspension under paragraph 18 of a potential donor’s obligation to pay an

25

amount of or on account of tax stops the donor from becoming liable to late

payment penalties for or in connection with the failure to pay that amount

by the due date.

      (2)  

But it does not stop late payment interest from accruing on that amount from

the due date.

30

      (3)  

HMRC may by notice in writing to the potential donor withdraw its

agreement to the suspension with effect from such date, before conclusion of

the negotiations, as may be specified in the notice.

      (4)  

If it does so, the potential donor must pay the amount, together with any late

payment interest that has accrued on it since the due date, by the end of the

35

period of 30 days beginning with the date specified in the notice.

      (5)  

The last day of that 30-day period is to be treated for the purposes of any

enactment relating to late payment penalties as the date on or before which

the amount must be paid.

      (6)  

Paragraph 20 explains what happens once the negotiations conclude

40

(depending on the outcome of the negotiations).

 
 

Finance Bill
Schedule 14 — Gifts to the nation
Part 4 — General provision

359

 

Conclusion of negotiations

20    (1)  

This paragraph applies if a potential donor’s obligation to pay an amount of

or on account of tax remains suspended under paragraph 18 when the

negotiations conclude (within the meaning of that paragraph).

      (2)  

The potential donor must pay the amount, together with any late payment

5

interest that has accrued on it since the due date, within the period of 30 days

beginning with the day on which the negotiations concluded.

      (3)  

The last day of that 30-day period is to be treated for the purposes of any

enactment relating to late payment penalties as the date on or before which

the amount must be paid.

10

      (4)  

But if the negotiations conclude because a qualifying gift is made pursuant

to the offer or a part of the offer—

(a)   

sub-paragraph (2) is to be read subject to paragraph 13 (and its effect

as described in paragraph 15), and

(b)   

accordingly, the potential donor is only required to pay so much as

15

is not treated as satisfied under paragraph 13.

      (5)  

If the negotiations conclude in relation to a part only of the offer—

(a)   

this paragraph is to be given effect as far as reasonably practicable in

relation to that part, and

(b)   

on receipt of a revised copy of the donor proposal, HMRC may give

20

effect to paragraph 18 in relation to the part of the offer that remains

under negotiation.

Part 4

General provision

Orders

25

21    (1)  

An order under Part 2 or 3 of this Schedule is to be made by statutory

instrument.

      (2)  

It may include transitional and saving provisions.

      (3)  

A statutory instrument containing an order under Part 2 or 3 of this Schedule

is subject to annulment in pursuance of a resolution of the House of

30

Commons.

Pre-eminent property

22    (1)  

In this Schedule, “pre-eminent property” means—

(a)   

any picture, print, book, manuscript, work of art, scientific object or

other thing that the relevant Minister is satisfied is pre-eminent for

35

its national, scientific, historic or artistic interest,

(b)   

any collection or group of pictures, prints, books, manuscripts,

works of art, scientific objects or other things if the relevant Minister

is satisfied that the collection or group, taken as a whole, is pre-

eminent for its national, scientific, historic or artistic interest, or

40

(c)   

any object that is or has been kept in a significant building if it

appears to the relevant Minister desirable for the object to remain

associated with the building.

 
 

Finance Bill
Schedule 14 — Gifts to the nation
Part 4 — General provision

360

 

      (2)  

A “significant building” is any building falling within section 230(3)(a) to (d)

of IHTA 1984 (acceptance of property in lieu of tax).

      (3)  

“National interest” includes interest within any part of the United Kingdom.

      (4)  

In determining whether an object or collection or group of objects is pre-

eminent, regard is to be had to any significant association of the object,

5

collection or group with a particular place.

The relevant Minister

23    (1)  

For the purposes of paragraph 22, “the relevant Minister” is—

(a)   

for items with a purely Scottish interest, the Scottish Ministers,

(b)   

for items with some Scottish interest but with no Northern Irish

10

interest and no Welsh interest, the Secretary of State and the Scottish

Ministers concurrently,

(c)   

for items with a purely Northern Irish interest, the Northern Ireland

Department of Culture, Arts and Leisure,

(d)   

for items with some Northern Irish interest but with no Scottish

15

interest and no Welsh interest, the Secretary of State and the

Northern Ireland Department of Culture, Arts and Leisure

concurrently,

(e)   

for items with a purely Welsh interest, the Welsh Ministers,

(f)   

for items with some Welsh interest but with no Scottish interest and

20

no Northern Irish interest, the Secretary of State and the Welsh

Ministers concurrently, and

(g)   

for any other items, the Secretary of State.

      (2)  

If an item within sub-paragraph (1)(g) has more than one devolved interest,

the Secretary of State must consult the appropriate Minister for each such

25

interest before making a decision under paragraph 22 affecting the item.

      (3)  

An item has a purely Scottish interest if—

(a)   

it is located in Scotland, and

(b)   

the offer contains—

(i)   

no wish about where the item is to be displayed, or

30

(ii)   

a wish that it is to be displayed in Scotland.

      (4)  

An item has some Scottish interest if it does not have a purely Scottish

interest but—

(a)   

it is located in Scotland, or

(b)   

the offer contains a wish that it is to be displayed in Scotland.

35

      (5)  

An item has no Scottish interest if it does not have a purely Scottish interest

and it does not have some Scottish interest.

      (6)  

References to items with a purely Northern Irish or purely Welsh interest, to

items with some Northern Irish or some Welsh interest and to items with no

Northern Irish interest or no Welsh interest are to be read in accordance with

40

sub-paragraphs (3) to (5), but replacing references to Scotland with

references to Northern Ireland or, as the case may be, Wales.

      (7)  

A “devolved interest” is some Scottish interest, some Northern Irish interest

or some Welsh interest.

      (8)  

“The appropriate Minister” is—

45

 
 

Finance Bill
Schedule 14 — Gifts to the nation
Part 5 — Related changes

361

 

(a)   

if the item has some Scottish interest, the Scottish Ministers,

(b)   

if the item has some Northern Irish interest, the Northern Ireland

Department of Culture, Arts and Leisure, and

(c)   

if the item has some Welsh interest, the Welsh Ministers.

      (9)  

“Item” means an object or collection or group of objects.

5

General interpretation

24         

In this Schedule—

“the Commissioners” means the Commissioners for Her Majesty’s

Revenue and Customs;

“company” has the meaning given in section 992 of ITA 2007;

10

“corporation tax” includes any amount assessable or chargeable as if it

were corporation tax;

“HMRC” means Her Majesty’s Revenue and Customs;

“late payment interest” means interest under section 101 of FA 2009, or

under or by virtue of Part 9 of TMA 1970, on amounts payable to

15

HMRC;

“late payment penalty” means a penalty under Schedule 56 to FA 2009.

25         

Nothing in this Schedule is to give rise to any right or expectation that an

offer made as mentioned in paragraph 1 will be accepted.

Part 5

20

Related changes

IHTA 1984

26         

IHTA 1984 is amended as follows.

27         

In section 25 (gifts for national purposes etc), after subsection (2) insert—

“(3)   

A transfer of value is an exempt transfer to the extent that the value

25

transferred by it is attributable to property that is being transferred

in the circumstances described in paragraph 1 of Schedule 14 to the

Finance Act 2012 (gifts to the nation).”

28         

In section 26A (potentially exempt transfer of property subsequently held

for national purposes etc), in paragraph (b), after “below” insert “or in the

30

circumstances described in paragraph 1 of Schedule 14 to the Finance Act

2012 (gifts to the nation)”.

29    (1)  

Section 32 (conditionally exempt transfers: chargeable events) is amended as

follows.

      (2)  

In subsection (3), for “subsections (4) and (5)” substitute “subsections (4),

35

(4A) and (5)”.

      (3)  

After subsection (4) insert—

“(4A)   

A death or disposal is not a chargeable event with respect to any

property if—

(a)   

in the case of a death, a person who became beneficially

40

entitled to the property on the death disposes of it in the

circumstances described in paragraph 1 of Schedule 14 to the

 
 

 
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Revised 9 May 2012