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(c) for securing that a supply of information that is
authorised by regulations under paragraph (a) is not
treated as breaching any obligation of confidence
owed in respect of the information by the person
5supplying it;

(d) for prohibiting or restricting the disclosure, otherwise
than to Her Majesty’s Revenue and Customs, of
information by a person to whom it was supplied
pursuant to a requirement imposed by virtue of
10subsection (4ZB);

(e) for requiring a person who provides, or is to provide,
a relevant payment service to take steps (including
any steps that may be specified, or further specified,
in accordance with item 8A(b)) for facilitating the
15meeting by persons making payments of obligations
imposed by virtue of subsection (4ZB)., and

(b) after item 8 insert—

8A Provision requiring compliance with any directions the
Commissioners may give—

(a) 20about the form and manner in which any information
is to be provided under the regulations;

(b) specifying, or further specifying, steps for the
purposes of item 4ZA(e);

(c) specifying information that a person making
25payments of or on account of PAYE income must
provide about the method by which the payments are
made.

(3) After subsection (3B) insert—

(3C) References in items 4ZA and 8A of the above list to directions include
30directions making different provision for different cases.

(4) After subsection (4) insert—

(4ZA) Item 8A in the above list does not prejudice the power of the
Commissioners under subsection (1) to make provision in PAYE
regulations about the matters mentioned in that item.

(4ZB) 35The persons to whom PAYE information regulations may require
information to be supplied include, in the case of information about a
payment, a person who provides, or is to provide, with respect to the
payment a service such as is mentioned in item 4ZA(a) in the above list.

(4ZC) In subsection (4ZB) “PAYE information regulations” means PAYE
40regulations that require information to be supplied for any purpose
authorised by subsections (1) and (2).

High value residential property or dwellings

224 New tax on ownership of high-value residential properties or dwellings

The Commissioners for Her Majesty’s Revenue and Customs may incur
45expenditure in preparing for the introduction of a new tax to be charged in

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respect of high-value residential properties or dwellings owned otherwise than
by individuals.

Miscellaneous reliefs etc

225 Repeals of miscellaneous reliefs etc

Schedule 38 contains repeals of miscellaneous reliefs etc.

5Part 10 Final provisions

226 Interpretation

(1) In this Act—

(2) In this Act—

227 Short title

This Act may be cited as the Finance Act 2012.

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SCHEDULES

Section 8

SCHEDULE 1 High income child benefit charge

The high income child benefit charge

1 5In Part 10 of ITEPA 2003 (social security benefits), after Chapter 7 insert—

CHAPTER 8 High income child benefit charge

681B High income child benefit charge

(1) A person (“P”) is liable to a charge to income tax for a tax year if—

(a) P’s adjusted net income for the year exceeds £50,000, and

(b) 10one or both of conditions A and B are met.

(2) The charge is to be known as a “high income child benefit charge”.

(3) Condition A is that—

(a) P is entitled to an amount in respect of child benefit for a
week in the tax year, and

(b) 15there is no other person who is a partner of P throughout the
week and has an adjusted net income for the year which
exceeds that of P.

(4) Condition B is that—

(a) a person (“Q”) other than P is entitled to an amount in respect
20of child benefit for a week in the tax year,

(b) Q is a partner of P throughout the week, and

(c) P has an adjusted net income for the year which exceeds that
of Q.

681C The amount of the charge

(1) 25The amount of the high income child benefit charge to which a
person (“P”) is liable for a tax year is the appropriate percentage of
the total of—

(a) any amounts in relation to which condition A is met, and

(b) any amounts in relation to which condition B is met.

30For conditions A and B, see section 681B.

(2) “The appropriate percentage” is—

(a) 100%, or

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(b) if less, the percentage determined by the formula—


Where—

ANI is P’s adjusted net income for the tax year;

5L is £50,000;

X is £100.

(3) If—

(a) the total of the amounts mentioned in paragraphs (a) and (b)
of subsection (1), or the amount of the charge determined
10under that subsection, is not a whole number of pounds, or

(b) the percentage determined under subsection (2)(b) is not a
whole number,

it is to be rounded down to the nearest whole number.

681D Extension of charge in cases where child not living with claimant

(1) 15This section applies where—

(a) a person (“R”) is entitled to an amount in respect of child
benefit for a child for a week in a tax year by virtue of section
143(1)(b) of SSCBA 1992 or section 139(1)(b) of SSCB(NI)A
1992 (persons contributing to the cost of providing for a
20child),

(b) neither R, nor any person who is a partner of R throughout
that week, is liable for a charge to income tax in respect of that
amount under section 681B, and

(c) there is another person (“S”) who, for the purposes of section
25143(1)(a) of SSCBA 1992 or section 139(1)(a) of SSCB(NI)A
1992 (persons with whom child is living), is a person who has
the child living with him or her in that week.

(2) Section 681B applies as if S were entitled to the amount of child
benefit mentioned in subsection (1)(a).

(3) 30Where there is more than one person to whom subsection (1)(c)
applies in relation to an amount of child benefit for a week,
subsection (2) applies only to the one with the highest adjusted net
income for the tax year.

(4) For the purposes of subsection (1)(a), an amount of child benefit to
35which R is entitled for a week is to be ignored if—

(a) the period (which includes that week) for which R is entitled
to child benefit by virtue of section 143(1)(b) of SSCBA 1992
or section 139(1)(b) of SSCB(NI)A 1992 in respect of the same
child does not exceed 52 weeks, and

(b) 40R is entitled to child benefit in respect of the child for the
week immediately before and the week immediately after
that period by virtue of section 143(1)(a) of SSCBA 1992 or
section 139(1)(a) of SSCB(NI)A 1992.

(5) In this section “child” means—

(a) 45a child within the meaning of section 142 of SSCBA 1992 or
section 138 of SSCB(NI)A 1992, or

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(b) a qualifying young person within the meaning of either of
those sections.

681E Special cases

(1) The following amounts are to be disregarded for the purposes of this
5Chapter—

(a) amounts to which a person is entitled but in respect of which
an election under section 13A of the Social Security
Administration Act 1992 or section 11A of the Social Security
Administration (Northern Ireland) Act 1992 (election for
10payment of child benefit not to be made if high income child
benefit charge would be triggered) has effect;

(b) amounts to which a person is entitled by virtue of section
145A of SSCBA 1992 or section 141A of SSCB(NI)A 1992
(entitlement to child benefit after death of child or qualifying
15young person).

(2) Subsection (3) applies if—

(a) a person (“T”) is entitled to an amount in respect of child
benefit for a week in a tax year or is treated as so entitled by
virtue of section 681D(2),

(b) 20two or more other persons are partners of T throughout the
week, and

(c) two or more of those persons would, apart from subsection
(3), each be liable to a charge under section 681B(1) in relation
to that amount.

(3) 25Only one of those persons is liable, namely the person with the
highest adjusted net income for the tax year.

681F Alteration of income limit etc by Treasury order

(1) The Treasury may by order—

(a) substitute another amount for the amount for the time being
30specified in section 681B(1)(a) and defined as “L” in section
681C(2), or

(b) substitute another amount for the amount defined as “X” in
section 681C(2).

(2) An order under this section has effect for tax years beginning after
35the order is made.

(3) A statutory instrument containing an order under this section which
increases any person’s liability to income tax may not be made unless
a draft of it has been laid before and approved by a resolution of the
House of Commons.

681G 40Meaning of “partner”

(1) For the purposes of this Chapter a person is a “partner” of another
person at any time if any of conditions A to D is met at that time.

(2) Condition A is that the persons are a man and a woman who are
married to each other and are neither—

(a) 45separated under a court order, nor

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(b) separated in circumstances in which the separation is likely
to be permanent.

(3) Condition B is that the persons are a man and a woman who are not
married to each other but are living together as husband and wife.

(4) 5Condition C is that the persons are two men, or two women, who are
civil partners of each other and are neither—

(a) separated under a court order, nor

(b) separated in circumstances in which the separation is likely
to be permanent.

(5) 10Condition D is that the persons are two men, or two women, who are
not civil partners of each other but are living together as if they were
civil partners.

681H Other interpretation provisions

(1) This section applies for the purposes of this Chapter.

(2) 15“Adjusted net income” of a person for a tax year means the person’s
adjusted net income for that tax year as determined under section 58
of ITA 2007.

(3) “Week” means a period of 7 days beginning with a Monday; and a
week is in a tax year if (and only if) the Monday with which it begins
20is in the tax year.

Consequential amendments

2 In section 7 of TMA 1970 (notice of liability to income tax and capital gains
tax), in subsection (3), for the words from “his total income” to the end
substitute “—

(a) 25the person’s total income consists of income from sources
falling within subsections (4) to (7) below,

(b) the person has no chargeable gains, and

(c) the person is not liable to a high income child benefit charge.

3 After section 13 of the Social Security Administration Act 1992 insert—

13A 30Election not to receive child benefit

(1) A person (“P”) who is entitled to child benefit in respect of one or
more children may elect for all payments of the benefit to which P is
entitled not to be made.

(2) An election may be made only if P reasonably expects that, in the
35absence of the election, P or another person would be liable to a high
income child benefit charge in respect of the payments to which the
election relates made for weeks in the first tax year.

(3) An election has effect in relation to payments made for weeks
beginning after the election is made.

(4) 40But where entitlement to child benefit is backdated, an election may
have effect in relation to payments for weeks beginning in the period
of three months ending immediately before the claim for the benefit
was made.

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(5) An election may be revoked.

(6) A revocation has effect in relation to payments made for weeks
beginning after the revocation is made.

(7) But if—

(a) 5P makes an election which results in all payments, in respect
of child benefit, to which P is entitled for one or more weeks
in a tax year not being paid, and

(b) had no election been made, neither P nor any other person
would have been liable to a high income child benefit charge
10in relation to the payments,

P may, no later than two years after the end of the tax year, revoke
the election so far as it relates to the payments.

(8) Subsections (2) to (7) are subject to directions under subsection (9).

(9) The Commissioners for Her Majesty’s Revenue and Customs may
15give directions as to—

(a) the form of elections and revocations under this section, the
manner in which they are to be made and the time at which
they are to be treated as made, and

(b) the circumstances in which, if child benefit is not being paid
20to a person at the full rate or the Commissioners are satisfied
that there are doubts as to a person’s entitlement to child
benefit for a child, an election or revocation is not to have
effect or its effect is to be postponed.

(10) For the purposes of this section—

4 After section 11 of the Social Security Administration (Northern Ireland) Act
1992 insert—

11A Election not to receive child benefit

(1) A person (“P”) who is entitled to child benefit in respect of one or
35more children may elect for all payments of the benefit to which P is
entitled not to be made.

(2) An election may be made only if P reasonably expects that, in the
absence of the election, P or another person would be liable to a high
income child benefit charge in respect of the payments to which the
40election relates made for weeks in the first tax year.

(3) An election has effect in relation to payments made for weeks
beginning after the election is made.

(4) But where entitlement to child benefit is backdated, an election may
have effect in relation to payments for weeks beginning in the period
45of three months ending immediately before the claim for the benefit
was made.

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(5) An election may be revoked.

(6) A revocation has effect in relation to payments made for weeks
beginning after the revocation is made.

(7) But if—

(a) 5P makes an election which results in all payments, in respect
of child benefit, to which P is entitled for one or more weeks
in a tax year not being paid, and

(b) had no election been made, neither P nor any other person
would have been liable to a high income child benefit charge
10in relation to the payments,

P may, no later than two years after the end of the tax year, revoke
the election so far as it relates to the payments.

(8) Subsections (2) to (7) are subject to directions under subsection (9).

(9) The Commissioners for Her Majesty’s Revenue and Customs may
15give directions as to—

(a) the form of elections and revocations under this section, the
manner in which they are to be made and the time at which
they are to be treated as made, and

(b) the circumstances in which, if child benefit is not being paid
20to a person at the full rate or the Commissioners are satisfied
that there are doubts as to a person’s entitlement to child
benefit for a child, an election or revocation is not to have
effect or its effect is to be postponed.

(10) For the purposes of this section—

5 (1) ITEPA 2003 is amended as follows.

(2) In section 1 (overview of contents of Act)—

(a) in subsection (1)(c), after “see” insert “Chapters 1 to 7 of”, and

(b) in subsection (3), after paragraph (a) insert—

(aa) 35makes provision for the high income child benefit
charge (see Chapter 8 of Part 10),.

(3) In section 655 (structure of Part 10), in subsection (1), at the end insert—

Chapter 8 makes provision for the high income child benefit
charge.

(4) 40In section 684 (PAYE regulations), in subsection (2), after Item 2 insert—

(5) In section 685 (tax tables), in subsection (2)(b), after “2” insert “, 2ZA”.

(6) 10In section 717 (orders and regulations made by Treasury or Commissioners),
in subsection (4), after “companies)” insert “or to which section 681F(3)
(variation of income limit etc for high income child benefit charge: orders
increasing liability to tax) applies”.

(7) In Part 2 of Schedule 1 (index of defined expressions), insert at the
15appropriate places—

adjusted net income (in Chapter 8 of Part 10) section 681H
“partner (in Chapter 8 of Part 10) section 681G
20“week (in Chapter 8 of Part 10) section 681H

6 (1) ITA 2007 is amended as follows.

(2) In section 1 (overview of the Income Tax Acts), in subsection (1)(a), after
“social security income” insert “and makes provision for the high income
25child benefit charge”.

(3) In section 30 (additional tax), in subsection (1), after “section 809ZO (tainted
charity donations by trustees: charge to tax),” insert—

Chapter 8 of Part 10 of ITEPA 2003 (high income child benefit
charge),.

30Commencement

7 (1) The amendments made by this Schedule have effect for the tax year 2012-13
and subsequent tax years.

(2) In relation to the tax year 2012-13, references in section 681B of ITEPA 2003
(as inserted by paragraph 1) to an amount to which a person is entitled in
35respect of child benefit for a week in the tax year do not include any amount
to which the person is entitled in respect of child benefit for a week
beginning before 7 January 2013.

(3) In sub-paragraph (2), “week” means a period of 7 days beginning with a
Monday.

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Section 19

SCHEDULE 2 Profits arising from the exploitation of patents etc

Part 1 Amendments of CTA 2010

1 (1) 5In CTA 2010, after Part 8 insert—

Part 8A Profits arising from the exploitation of patents etc

CHAPTER 1 Reduced corporation tax rate for profits from patents etc
357A Election for special treatment of profits from patents etc

(1) 10A company may elect that any relevant IP profits of a trade of the
company for an accounting period for which it is a qualifying
company are chargeable at a lower rate of corporation tax.

(2) An election under subsection (1) is to be given effect by allowing a
deduction to be made in calculating for corporation tax purposes the
15profits of the trade for the period.

(3) The amount of the deduction is—


where—

(4) The special IP rate of corporation tax is 10%.

(5) Chapter 2 specifies when a company is a qualifying company.

(6) Chapter 3 makes provision for determining the relevant IP profits or
25relevant IP losses of a trade.

(7) Chapter 4 makes provision for an alternative way of determining the
relevant IP profits or losses of a trade known as “streaming”.

(8) Chapter 5 makes provision in relation to the relevant IP losses of a
trade.

(9) 30Chapter 6 contains anti-avoidance provisions.

(10) Chapter 7 contains supplementary provision.

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