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(b) to be used or enjoyed in any other way that would count as
remitting income or gains to the United Kingdom.

(3) If—

(a) the thing required to be taken offshore or invested is money,
5and

(b) it is paid temporarily into an account pending satisfaction of
the provision,

the provision is satisfied only if the money actually taken offshore or
invested is taken from the same account.

(4) 10If the thing required to be taken offshore or invested is something in
money’s worth, the provision may be satisfied—

(a) by taking the thing offshore or investing it, or

(b) by taking offshore or investing money or other property of
the equivalent value.

(5) 15“The equivalent value” is the market value of the thing in money’s
worth, assessed as at the date of the sale or other disposal in relation
to which the provision is triggered.

(6) If the consideration for a disposal is deemed under section 809Z8(4),
the provision may be satisfied by taking offshore or investing money
20or other property of a value equal to—

(a) the amount of the deemed consideration, less

(b) any agency fees (within the meaning of section 809Z8) that
are deducted before the actual consideration is paid or
otherwise made available to or for the benefit of a relevant
25person.

(7) Subsections (4)(b) and (6) do not apply in the case of other property
of the equivalent value if the other property is—

(a) exempt property under section 809X,

(b) consideration for the disposal of any such exempt property,
30or

(c) consideration for the disposal of all or part of the holding (see
section 809VC) relating to a qualifying investment.

(8) Money or other property taken offshore or invested in accordance
with subsection (4)(b) or (6) is to be treated for the purposes of this
35Chapter—

(a) as deriving from the thing required to be taken offshore or
invested, and

(b) as having the same composition of kinds of income and
capital as that thing.

(9) 40A provision to which this section applies may be satisfied—

(a) by taking the whole thing offshore or investing the whole
thing, or

(b) by taking one part offshore and investing the other part.

(10) References in this section to something being “invested” are to
45something being used by a relevant person to make a qualifying
investment.

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(11) The provisions to which this section applies include section 809VB(2)
but in that case—

(a) disregard references in this section to investment, and

(b) the assessment date for the purposes of subsection (5) is the
5date of the relevant event (see section 809VA(3)(b)).

809Z10 General interpretation

In this Chapter—

20Application of Part 2

17 The amendments made by this Part of this Schedule have effect where the
relevant event (as defined in section 809VA of ITA 2007) or the ceasing to be
exempt property (as defined in section 809Y of that Act) occurs on or after 6
April 2012.

25Part 3 Sales of exempt property

Relief from deemed remittance rule

18 After section 809Y of ITA 2007 (property that ceases to be exempt property
treated as remitted) insert—

809YA 30 Exception to section 809Y: proceeds taken offshore or invested

(1) Section 809Y(1) does not apply to property if—

(a) it ceases to be exempt property because the whole of it is sold
whilst it is in the United Kingdom, and

(b) conditions A to F are met.

(2) 35Condition A is that the sale is to a person other than a relevant
person.

(3) Condition B is that the sale is by way of a bargain made at arm’s
length.

(4) Condition C is that, once the sale is completed, no relevant person—

(a) 40has any interest in the property,

(b) is able or entitled to benefit from the property by virtue of any
interest, right or arrangement, or

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(c) has any right (whether conditional or unconditional) to
acquire any interest mentioned in paragraph (a) or ability or
entitlement mentioned in paragraph (b).

(5) Condition D is that the whole of the disposal proceeds are released
5(whether in one go or in instalments) on or before the final deadline.

(6) “The final deadline” is the first anniversary of the 5 January
following the tax year in which the property ceases to be exempt
property (within the meaning of section 809Y).

(7) Condition E is that—

(a) 10the whole of the disposal proceeds are taken offshore or used
by a relevant person to make a qualifying investment within
the period of 45 days beginning with the day on which the
proceeds are released, or

(b) if the disposal proceeds are paid in instalments, each
15instalment is taken offshore or used by a relevant person to
make a qualifying investment within the period of 45 days
beginning with the day on which the instalment is released.

(8) But if any of the disposal proceeds are released in the period of 45
days ending with the final deadline, Condition E is satisfied, as
20respects those proceeds, only if they are taken offshore or used by a
relevant person to make a qualifying investment on or before the
final deadline.

(9) Condition F is that, if Condition E is satisfied wholly or in part by
using disposal proceeds to make a qualifying investment, the
25remittance basis user makes a claim for relief under section 809YC(2)
on or before the first anniversary of the 31 January following the tax
year in which the property is sold.

(10) For the purposes of this section, proceeds or instalments are
“released” on the day on which they first become available for use by
30or for the benefit of any relevant person.

(11) This section does not apply if the sale is made as part of or as a result
of a scheme or arrangement the main purpose or one of the main
purposes of which is the avoidance of tax.

809YB Condition E: supplementary

(1) 35An officer of Revenue and Customs may agree in a particular case to
extend any period within which disposal proceeds (or instalments)
must be taken offshore or used by a relevant person to make a
qualifying investment in order to satisfy Condition E.

(2) The power to agree to an extension is exercisable only in exceptional
40circumstances and only if the remittance basis user requests such an
extension.

809YC Effect of disapplying section 809Y

(1) This section has effect if section 809Y(1) does not apply to property
by virtue of section 809YA.

(2) 45The income and gains treated under section 809X as not remitted to
the United Kingdom continue to be treated after the sale as not

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remitted to the United Kingdom even though the property has
ceased to be exempt property.

(3) But nothing in subsection (2) prevents anything done in relation to
any part of the disposal proceeds after that part is taken offshore (or
used to make a qualifying investment) from counting as a remittance
5of the underlying income or gains to the United Kingdom at the time
when the thing is done.

(4) Treat the disposal proceeds as containing or deriving from an
amount of each kind of income and gain mentioned in section
809Q(4)(a) to (h) equal to the amount of that kind of income or gain
10contained in the exempt property when it was brought to, or
received or used in, the United Kingdom (as mentioned in section
809X).

(5) Where Condition E was met by using the disposal proceeds to make
a qualifying investment—

(a) 15the business investment provisions apply to the income and
gains that continue, by virtue of subsection (2), to be treated
as not remitted as they apply to income or gains that are
treated under section 809VA(2) as not remitted, and

(b) if the investment was made using more than just the disposal
20proceeds, treat only the part of the investment made using
the disposal proceeds as “the investment” for the purposes of
those provisions.

809YD Chargeable gains accruing on sales of exempt property

(1) This section applies to an individual (“P”) if—

(a) 25a chargeable gain (but not a loss) accrues to a person on a sale
of exempt property,

(b) but for section 809YA, section 809Y(1) would have applied to
the property by virtue of the sale, and

(c) P is either—

(i) 30the person to whom the gain accrues, or

(ii) a person to whom a part of the gain is treated as
accruing under section 13 of TCGA 1992 (members of
non-resident companies).

(2) The relevant UK gain is to be treated for the purposes of this Chapter
35as if—

(a) it were a foreign chargeable gain of P, and

(b) in the case of section 809E, it were not part of P’s UK income
and gains.

(3) Accordingly, if section 809F applies to P for the applicable tax year
40and P is not domiciled in the United Kingdom in that year, the
relevant UK gain is charged in accordance with section 12 of TCGA
1992 as if it were a foreign chargeable gain.

(4) The relevant UK gain is—

(a) in a case falling within subsection (1)(c)(i), the gain accruing
45to P,

(b) in a case falling within subsection (1)(c)(ii), the part of the
gain treated as accruing to P.

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(5) The applicable tax year is —

(a) if section 10A of TCGA 1992 (temporary non-residents)
applies in P’s case and the relevant UK gain is within
subsection (2) of that section, the year of return as defined in
5that section,

(b) otherwise, the tax year in which the relevant UK gain accrues.

(6) In applying this Chapter to the relevant UK gain—

(a) treat the amount of any gains mentioned in section 809Q(4)(e)
contained in the disposal proceeds by virtue of section
10809YC(4) as increased by the amount of the relevant UK gain,

(b) disregard section 809U, and

(c) anything done in relation to any part of the disposal proceeds
before the part is taken offshore or used to make a qualifying
investment (or both) does not count as a remittance to the
15United Kingdom of any of the relevant UK gain.

(7) The relevant UK gain is to be treated for the purposes of the
following provisions of TCGA 1992 as if it fell within the definition
of foreign chargeable gains in section 12(4) of that Act—

(a) section 10A,

(b) 20section 12,

(c) section 14A, and

(d) sections 16ZB to 16ZD.

(8) This section has effect despite section 14A(2) of TCGA 1992.

(9) This section does not apply with respect to a chargeable gain if P
25gives notice to Her Majesty’s Revenue and Customs under this
subsection.

(10) A notice under subsection (9)—

(a) must be in writing and must identify the gain in question,

(b) must be given on or before the first anniversary of the 31
30January following the applicable tax year, and

(c) may not be revoked after that first anniversary.

Application of Part 3

19 The amendment made by this Part of this Schedule has effect in relation to
exempt property that is sold on or after 6 April 2012 (including property sold
35pursuant to a contract entered into before that date so long as the contract
only becomes unconditional on or after that date).

Part 4 Nominated income

Disapplication of ordering rules

20 (1) 40Section 809I of ITA 2007 (remittance basis charge: income and gains treated
as remitted) is amended as follows.

(2) In subsection (1)—

(a) omit “and” at the end of paragraph (a), and

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(b) at the end of paragraph (b) insert “, and

(c) the £10 test is met for that year.

(3) In subsection (3), after “earlier tax year” insert “(each such year for which the
individual has made a nomination under that section being referred to as a
5“nomination year”)”.

(4) After subsection (4) insert—

(5) The £10 test is met for the tax year mentioned in subsection (1)(a)
(“year X”) if, taking each nomination year separately, the cumulative
total as respects at least one nomination year exceeds £10.

(6) 10In relation to a nomination year—

(a) “the cumulative total” means the sum, for all the tax years in
aggregate up to and including year X, of the amounts of
relevant income and gains remitted to the United Kingdom in
those tax years from that nomination year, and

(b) 15“relevant income and gains” means the income and
chargeable gains nominated by the individual under section
809C for that nomination year.

Application of Part 4

21 The amendments made by this Part of this Schedule have effect for
20determining whether section 809I of ITA 2007 applies for the tax year 2012-
13 or any subsequent tax year.

Section 48

SCHEDULE 13 Employer asset-backed pension contributions etc

Part 1 25Denial of relief for contributions paid during period 29 November 2011 to 21
February 2012

1 In Chapter 4 of Part 4 of FA 2004 (registered pension schemes: tax reliefs and
exemptions) after section 196A insert—

196B Employer asset-backed contributions: denial of relief (1)

(1) 30An employer (“E”) is not to be given relief in respect of a contribution
(“E’s contribution”) paid by E under a registered pension scheme if
conditions A, B and C are met.

(2) Condition A is that—

(a) under an arrangement (“the asset-backed arrangement”)—

(i) 35a person (“the borrower”) receives money or another
asset (“the advance”) from another person (“the
lender”),

(ii) the borrower, or a person connected with the
borrower, makes a disposal of an asset (“the

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security”) to or for the benefit of the lender or a person
connected with the lender, and

(iii) the lender, or a person connected with the lender, is
entitled to payments in respect of the security,

(b) the borrower is E or a person connected with E, and

(c) 5the advance is (wholly or partly) paid or provided by the
lender out of E’s contribution (directly or indirectly),

and the case is not one in relation to which either condition A in
section 196C or condition A in section 196D is met.

(3) For the purposes of subsection (2)(a)(iii) it does not matter if an
10entitlement of the lender, or a person connected with the lender, is
subject to any condition.

(4) Condition B is that the asset-backed arrangement is not a structured
finance arrangement.

(5) Condition C is that it is reasonable to suppose that the amount of one
15or more of the payments mentioned in subsection (2)(a)(iii) has been,
or is to be, determined (wholly or partly) on the basis that, in essence,
the whole or a part of the advance represents a loan which is (wholly
or partly) to be repaid by way of one or more of those payments.

(6) For the purposes of subsection (5) it does not matter—

(a) 20that the repayment of the loan might be subject to any
condition, or

(b) that the accounts of any person do not record a financial
liability in respect of the whole or a part of the advance or that
the whole or a part of the advance is not otherwise treated as
25representing a loan for the purposes of the accounts of any
person,

but, subject to that, all relevant circumstances are to be taken into
account in order to get to the essence of the matter.

(7) For the purposes of this section—

(a) 30the borrower and the lender are not connected with one
another if that would otherwise be the case,

(b) if the borrower is not E, references to a person connected with
the borrower include a person connected with E who would
not otherwise be connected with the borrower, and

(c) 35“loan” includes any advance of money.

196C Employer asset-backed contributions: denial of relief (2)

(1) An employer (“E”) is not to be given relief in respect of a contribution
(“E’s contribution”) paid by E under a registered pension scheme if
conditions A and B are met.

(2) 40Condition A is that—

(a) under an arrangement (“the asset-backed arrangement”) a
person (“the transferor”) makes a disposal of an asset (“the
security”) to a partnership,

(b) the transferor is E or a person connected with E,

(c) 45the transferor, or a person connected with the transferor, is a
member of the partnership immediately after the disposal
(whether or not a member immediately before it),

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(d) under the asset-backed arrangement the partnership receives
money or another asset (“the advance”) from a person (“the
lender”) other than the transferor,

(e) the advance is (wholly or partly) paid or provided by the
5lender out of E’s contribution (directly or indirectly),

(f) there is a relevant change in relation to the partnership (see
section 196E), and

(g) under the asset-backed arrangement the share in the
partnership’s profits of the person involved in the relevant
10change (see section 196E) is determined by reference (wholly
or partly) to payments in respect of the security.

(3) If the transferor is not E, for the purposes of this section references to
a person connected with the transferor include a person connected
with E who would not otherwise be connected with the transferor.

(4) 15For the purposes of subsection (2)(g) 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
condition.

(5) Condition B is that the asset-backed arrangement is not a structured
20finance arrangement.

196D Employer asset-backed contributions: denial of relief (3)

(1) An employer (“E”) is not to be given relief in respect of a contribution
(“E’s contribution”) paid by E under a registered pension scheme if
conditions A and B are met.

(2) 25Condition A is that—

(a) a partnership holds an asset (“the security”) at any time
before an arrangement (“the asset-backed arrangement”) is
made,

(b) under the asset-backed arrangement the partnership receives
30money or another asset (“the advance”) from another person
(“the lender”),

(c) the advance is (wholly or partly) paid or provided by the
lender out of E’s contribution (directly or indirectly),

(d) there is a relevant change in relation to the partnership (see
35section 196E), and

(e) under the asset-backed arrangement the share in the
partnership’s profits of the person involved in the relevant
change (see section 196E) is determined by reference (wholly
or partly) to payments in respect of the security.

(3) 40For 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
condition.

(4) Condition B is that the asset-backed arrangement is not a structured
45finance arrangement.

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196E What is a “relevant change in relation to the partnership” etc?

(1) For the purposes of sections 196C and 196D there is a relevant change
in relation to the partnership if condition X or Y is met.

(2) Condition X is that, in connection with the asset-backed
5arrangement, the lender or a person connected with the lender
becomes a member of the partnership at any time.

(3) Condition Y is that—

(a) in connection with the asset-backed arrangement, there is at
any time a change in a member’s share in the partnership’s
10profits, and

(b) the member is the lender or a person connected with the
lender or a person who in connection with the asset-backed
arrangement becomes at any time connected with the lender.

(4) For the purposes of subsections (2) and (3) an event occurs in
15connection with the asset-backed arrangement if it occurs directly or
indirectly in consequence of it or otherwise in connection with it.

(5) For the purposes of sections 196C and 196D references to the person
involved in the relevant change are—

(a) if it is condition X that is met, to the lender or the person
20connected with the lender (as the case may be), and

(b) if it is condition Y that is met, to the member of the
partnership in whose share in the partnership’s profits there
is a change.

196F Employer asset-backed contributions: anti-avoidance

(1) 25This section applies if—

(a) an employer (“E”) pays a contribution (“E’s contribution”)
under a registered pension scheme,

(b) conditions A and C in section 196B are met or condition A in
section 196C or 196D is met,

(c) 30the asset-backed arrangement is a structured finance
arrangement and, accordingly, condition B in section 196B,
196C or 196D (as the case may be) is not met,

(d) at any time (“the relevant time”) E, or a person connected
with E, enters into an arrangement (“the avoidance
35arrangement”), and

(e) the main purpose, or one of the main purposes, of E or the
person connected with E in entering into the avoidance
arrangement is to secure that the total amount of the relevant
payments will be less than the amount of E’s contribution.

(2) 40If the relevant time is the same as the time at which the advance is
received or earlier, section 196B, 196C or 196D (as the case may be)
applies in relation to E’s contribution as if condition B in that section
were met.

(3) Otherwise, the amount of the relevant financial liability as at the
45relevant time 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

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chargeable to corporation tax under section 299 of CTA 2009
for E’s accounting period in which the relevant time 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
5the relevant time falls.

(4) The amount treated as profit or income by subsection (3)(a) or (b) is
not to exceed the total amount of relief given in respect of E’s
contribution.

(5) For the purposes of this section—

(a) 10“the advance” and “the asset-backed arrangement” have the
same meaning as in section 196B, 196C or 196D (as the case
may be),

(b) “the relevant financial liability” means the financial liability
mentioned in section 809BZA(3), 809BZF(3) or 809BZJ(3) of
15ITA 2007 or section 758(3), 763(3) or 767(3) of CTA 2010 (as
the case may be) in respect of the advance,

(c) “the relevant payments” means the payments which reduce
that liability as so mentioned, and

(d) the amount of the relevant financial liability as at the relevant
20time is to be determined in accordance with generally
accepted accounting practice.

196G Employer asset-backed contributions: reduction of financial liability
under structured finance arrangement

(1) This section applies if—

(a) 25an employer (“E”) pays a contribution (“E’s contribution”)
under a registered pension scheme,

(b) conditions A and C in section 196B are met or condition A in
section 196C or 196D is met,

(c) the asset-backed arrangement is a structured finance
30arrangement and, accordingly, condition B in section 196B,
196C or 196D (as the case may be) is not met, and

(d) there occurs an event (“the relevant event”)—

(i) which is not the making of a relevant payment, but

(ii) by virtue of which, in accordance with generally
35accepted accounting practice, the amount of the
relevant financial liability is reduced to nil or in part.

(2) If the relevant financial liability is reduced to nil, Chapter 5B of Part
13 of ITA 2007 or Chapter 2 of Part 16 of CTA 2010 (as the case may
be) is no longer to apply in relation to the asset-backed arrangement
40from when the relevant event occurs.

(3) But no person is, by virtue of subsection (2), to be placed in a position
which is more advantageous than the position in which the person
would have been had this section never applied; and, in order to give
effect to this principle, such assessments to tax or adjustments to any
45assessment to tax as are just and reasonable are to be made.

(4) In any case, the amount of the reduction of the relevant financial
liability mentioned in subsection (1)(d) is treated as follows as
relevant—

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