Finance Bill

Session 2012 - 13
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Finance Bill

Finance Bill
Schedule 14 — Gifts to the nation
Part 5 — Related changes
362

Finance Act 2012 (gifts to the nation) within 3 years of the
death, or
(b)
in the case of a disposal, the disposal is made in the
circumstances described in paragraph 1 of that Schedule,

and a death or disposal of the property after such a disposal as is
5
mentioned in paragraph (a) or (b) is not a chargeable event with
respect to the property unless there has again been a conditionally
exempt transfer of it after that disposal.”
30    (1)
Section 32A (associated properties) is amended as follows.
      (2)
After subsection (5) insert—
10
“(5A)
The death of a person beneficially entitled to property, or the
disposal of property, is not a chargeable event if—
(a)
in the case of a death, a person who became beneficially
entitled to the property on the death disposes of it in the
circumstances described in paragraph 1 of Schedule 14 to the
15
Finance Act 2012 (gifts to the nation) within 3 years of the
death, or
(b)
in the case of a disposal, the disposal is made in the
circumstances described in paragraph 1 of that Schedule.”
      (3)
In subsection (7), after “(5)(a) or (b)” insert “or (5A)(a) or (b)”.
20
31
In section 33 (amount of charge under section 32), in subsection (6)—
(a)
for “section 32(4)” substitute “section 32(4) or (4A)”, and
(b)
for “section 32A(5)”, in both places it appears, substitute “section
32A(5) or (5A)”.
32
In section 34 (reinstatement of transferor’s cumulative total), in subsection
25
(4)—
(a)
for “section 32(4)” substitute “section 32(4) or (4A)”, and
(b)
for “section 32A(5)”, in both places it appears, substitute “section
32A(5) or (5A)”.
Estate duty etc
30
33    (1)
This paragraph applies if a person makes a qualifying gift and as a result—
(a)
estate duty becomes chargeable under section 40 of FA 1930
(exemption from death duties of objects of national etc interest), or
(b)
tax becomes chargeable under Schedule 5 to IHTA 1984 (conditional
exemption: deaths before 7 April 1976).
35
      (2)
Despite any other enactment, the amount of duty or tax that becomes so
chargeable as a result of the gift is to be limited to the amount (if any) by
which A exceeds B.
      (3)
For these purposes—
“A” is the amount of duty or tax that becomes so chargeable as a result
40
of the gift (absent this paragraph), and
“B” is what that amount would be if the effective rate at which the duty
or tax is charged were the highest rate specified in column 3 of the
Table in Schedule 1 to IHTA 1984.

Finance Bill
Schedule 14 — Gifts to the nation
Part 6 — Commencement
363

      (4)
References in this paragraph to the amount of duty or tax that becomes so
chargeable are to the amount before applying any credit allowable against it
under section 33(7) of IHTA 1984.
      (5)
Nothing in this paragraph entitles a person to any repayment of inheritance
tax if the amount of any such credit exceeds the amount (if any) chargeable
5
in accordance with sub-paragraph (2).
      (6)
In the application of this paragraph to Northern Ireland, for the reference to
section 40 of FA 1930 substitute a reference to section 2 of the Finance Act
(Northern Ireland) 1931.
TCGA 1992
10
34
In section 258 of TCGA 1992 (works of art etc), before subsection (2) insert—
“(1A)
A gain is not a chargeable gain if it accrues on a disposal made in the
circumstances described in paragraph 1 of Schedule 14 to the Finance
Act 2012 (gifts to the nation).”
ITA 2007
15
35
In Chapter A1 of Part 14 of ITA 2007 (income tax: remittance basis), after
section 809YD (inserted by Schedule 12 to this Act) insert—
“809YE
Exception to section 809Y: gifts to the nation
(1)
Section 809Y(1) does not apply to property if—
(a)
it ceases to be exempt property in the second case mentioned
20
in that section, and
(b)
by no later than the time when it ceases to be exempt
property, it has been donated in the circumstances described
in paragraph 1 of Schedule 14 to FA 2012 (gifts to the nation).
(2)
Where section 809Y(1) does not apply to property by virtue of this
25
section, the property is to continue to be treated as not remitted to the
United Kingdom even though it no longer meets any of the relevant
rules.”
Part 6
Commencement
30
36    (1)
Parts 2 and 3 of this Schedule have effect in relation to liabilities for tax years
and accounting periods beginning on or after such day as the Treasury may
by order appoint.
      (2)
The power of the Treasury under sub-paragraph (1) includes power to
appoint a day that is earlier than the day on which the order is made, but no
35
earlier than 1 April 2012.
      (3)
An order under this paragraph is to be made by statutory instrument.

Finance Bill
Schedule 15 — Relief in respect of gift aid and other income
364

Schedule 15
Section 51

Relief in respect of gift aid and other income
Claims by charitable trusts etc
1     (1)
In Part 10 of ITA 2007 (special rules about charitable trusts etc), section 538A
(claims in relation to gift aid relief) is amended as follows.
5
      (2)
Before subsection (1) insert—
“(A1)
This section applies to claims for—
(a)
repayment of income tax treated as having been paid by
virtue of section 520(4) (gift aid relief: income tax treated as
paid by trustees of charitable trust), or
10
(b)
repayment of income tax deducted at source from income to
which any of the following applies—
(i)
section 532 (exemption for savings and investment
income),
(ii)
section 533 (exemption for public revenue dividends),
15
(iii)
section 536 (exemption for certain miscellaneous
income), or
(iv)
section 537 (exemption for income from estates in
administration).”
      (3)
In subsection (1)—
20
(a)
before “applies” insert “also”, and
(b)
for the words after “tax” substitute “by virtue of—
(a)
section 521(4) (gifts entitling donor to gift aid relief:
charitable trusts), or
(b)
any of the provisions mentioned in subsection
25
(A1)(b).”
      (4)
Accordingly, in the heading, after “relief” insert “etc”.
Claims by charitable companies etc
2
Part 11 of CTA 2010 (charitable companies etc) is amended as follows.
3     (1)
In Chapter 2 (gifts and other payments), section 477A (claims in relation to
30
gift aid relief) is amended as follows.
      (2)
Before subsection (1) insert—
“(A1)
This section applies to claims for repayment of income tax treated as
having been paid by virtue of—
(a)
section 471 (gifts qualifying for gift aid relief: charitable
35
companies), or
(b)
section 475 (gifts qualifying for gift aid relief: eligible
bodies).”
      (3)
In subsection (1), before “applies” insert “also”.

Finance Bill
Schedule 15 — Relief in respect of gift aid and other income
365

4
In Chapter 3 (other exemptions), after section 491 insert—
“Claims
491A
Claims in relation to certain reliefs
(1)
Subsections (2) to (5) of section 477A (claims in relation to gift aid
relief) apply to—
5
(a)
claims for amounts to be exempt from tax by virtue of a
provision listed in subsection (2), and
(b)
claims for repayment of income tax deducted at source from
income which is exempt from tax by virtue of such a
provision,
10

as they apply to claims to which that section applies.
(2)
The provisions are—
(a)
section 486 (investment income and non-trading profits from
loan relationships),
(b)
section 487 (public revenue dividends),
15
(c)
section 488 (certain miscellaneous income), and
(d)
section 489 (income from estates in administration).”
Community amateur sports clubs: gift aid and other income
5
Chapter 9 of Part 13 of CTA 2010 (special types of company etc: community
amateur sports clubs) is amended as follows.
20
6
After section 661C insert—
“Gifts qualifying for gift aid relief
661D
Tax treatment of gifts qualifying for gift aid relief
(1)
This section applies if a gift is made to a registered club by an
individual and the gift is a qualifying donation for the purposes of
25
Chapter 2 of Part 8 of ITA 2007 (gift aid).
(2)
The club is treated as receiving, under deduction of income tax at the
basic rate for the tax year in which the gift is made, a gift of an
amount equal to the grossed up amount of the gift.
(3)
The income tax treated as deducted is treated as income tax paid by
30
the club.
(4)
The grossed up amount of the gift is treated as an amount in respect
of which the club is chargeable to corporation tax, under the charge
to corporation tax on income.

But this is subject to section 664 (exemption for interest and gift aid
35
income).
(5)
References in this section to the grossed up amount of the gift are to
the amount of the gift grossed up by reference to the basic rate for the
tax year in which the gift is made.”

Finance Bill
Schedule 15 — Relief in respect of gift aid and other income
366

7
After section 665 insert—
“Claims
665A
Claims in relation to interest and gift aid income
(1)
This section applies to—
(a)
claims for repayment of income tax treated as having been
5
paid by virtue of section 661D (tax treatment of gifts
qualifying for gift aid relief),
(b)
claims for amounts to be exempt from tax by virtue of section
664 (exemption for interest and gift aid income), and
(c)
claims for repayment of income tax deducted at source from
10
interest income (within the meaning of that section) which is
exempt from tax by virtue of that section.
(2)
A claim to which this section applies may be made—
(a)
to an officer of Revenue and Customs, or
(b)
by being included in the claimant’s company tax return.
15
(3)
In this section—
“free-standing claim” means a claim made as mentioned in
subsection (2)(a), and
“tax return claim” means a claim made as mentioned in
subsection (2)(b).
20
(4)
The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make provision—
(a)
limiting the number of free-standing claims that may be
made by a person in a tax year, or
(b)
requiring a claim for an amount below an amount specified
25
in the regulations to be made as a tax return claim.
(5)
The regulations may make different provision for different cases or
purposes.”
8
In consequence of the provision made by paragraph 6, in section 413 of ITA
2007 (overview of gift aid relief), after subsection (5) insert—
30
“(6)
For related reliefs for community amateur sports clubs see Chapter 9
of Part 13 of CTA 2010.”
Treatment of income tax deducted or repaid
9
In section 59B of TMA 1970 (payment of income tax and capital gains tax), in
subsection (7), at the end insert—
35

“But such a reference does not include income tax repaid on a claim
for repayment of income tax which—
(a)
is treated as having been paid by virtue of section 520(4) of
ITA 2007 (gift aid relief: income tax treated as paid by trustees
of charitable trust), or
40
(b)
has been deducted at source from income to which section
532, 533, 536 or 537 of that Act (certain sources of income
exempt from income tax) applies.”

Finance Bill
Schedule 15 — Relief in respect of gift aid and other income
367

10    (1)
Section 967 of CTA 2010 (set-off of income tax deductions against
corporation tax: payments received by UK resident companies) is amended
as follows.
      (2)
After subsection (4) insert—
“(5)
The reference in subsection (1) to a payment received by a company
5
does not include a reference to a payment which is exempt from tax
by virtue of any of the following—

section 472 (gifts qualifying for gift aid relief: charitable
companies);

section 475 (gifts qualifying for gift aid relief: eligible bodies);
10

section 664 (exemption for interest and gift aid income:
community amateur sports clubs).”
      (3)
In subsection (5) (as inserted by sub-paragraph (2)), after the entry for
section 475 insert—

“section 486 (investment income and non-trading profits
15
from loan relationships);

section 487 (public revenue dividends);

section 488 (certain miscellaneous income);

section 489 (income from estates in administration);”.
Administration of claims under ITA 2007
20
11    (1)
Section 42 of TMA 1970 (procedure for making claims etc) is amended as
follows.
      (2)
In subsection (2), for “and (3ZA)” substitute “to (3ZB)”.
      (3)
In subsection (3ZA), for the words from “by virtue of” to the end substitute
“by virtue of—
25
(a)
section 521(4) of ITA 2007 (gifts entitling donor to gift aid
relief: charitable trusts),
(b)
section 532 of that Act (exemption for savings and investment
income),
(c)
section 533 of that Act (exemption for public revenue
30
dividends),
(d)
section 536 of that Act (exemption for certain miscellaneous
income), or
(e)
section 537 of that Act (exemption for income from estates in
administration).”
35
      (4)
After subsection (3ZA) insert—
“(3ZB)
Subsection (2) also does not apply in relation to any claim for
repayment of an amount of income tax which—
(a)
is treated as having been paid by virtue of section 520(4) of
ITA 2007 (gift aid relief: income tax treated as paid by trustees
40
of charitable trust), or
(b)
has been deducted at source from income to which any of the
provisions mentioned in paragraphs (b) to (e) of subsection
(3ZA) applies.”

Finance Bill
Schedule 15 — Relief in respect of gift aid and other income
368

12
In consequence of the amendments made by paragraph 11, in Schedule 8 to
FA 2010 omit paragraph 4(2).
Administration of claims under CTA 2010
13
Schedule 18 to FA 1998 (company tax returns, assessments and related
matters) is amended as follows.
5
14    (1)
Paragraph 9 (claims that cannot be made without a return) is amended as
follows.
      (2)
In sub-paragraph (2), at the end insert—

“This is subject to sub-paragraphs (2A) and (2B).”
      (3)
For sub-paragraph (2A) substitute—
10
   “(2A)
This paragraph does not apply to a claim by a company for
repayment of income tax treated as having been paid by virtue
of—
(a)
section 471 of the Corporation Tax Act 2010 (gifts
qualifying for gift aid relief: charitable companies),
15
(b)
section 475 of that Act (gifts qualifying for gift aid relief:
eligible bodies), or
(c)
section 661D of that Act (gifts qualifying for gift aid relief:
community amateur sports clubs).
     (2B)
This paragraph also does not apply to a claim by a company for
20
repayment of income tax deducted at source from income which
is exempt from tax by virtue of—
(a)
section 486 of the Corporation Tax Act 2010 (investment
income and non-trading profits from loan relationships),
(b)
section 487 of that Act (public revenue dividends),
25
(c)
section 488 of that Act (certain miscellaneous income),
(d)
section 489 of that Act (income from estates in
administration), or
(e)
section 664 of that Act (interest and gift aid income:
community amateur sports clubs).”
30
15    (1)
Paragraph 57 (claims or elections affecting a single accounting period) is
amended as follows.
      (2)
In sub-paragraph (1), at the end insert—

“This is subject to sub-paragraphs (1A) to (1C).”
      (3)
For sub-paragraph (1A) substitute—
35
   “(1A)
This paragraph does not apply to a claim by a company for
repayment of income tax treated as having been paid by virtue
of—
(a)
section 471 of the Corporation Tax Act 2010 (gifts
qualifying for gift aid relief: charitable companies),
40
(b)
section 475 of that Act (gifts qualifying for gift aid relief:
eligible bodies), or
(c)
section 661D of that Act (gifts qualifying for gift aid relief:
community amateur sports clubs).