Finance (No. 2) Bill

Session 2012 - 13
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Finance (No. 2) Bill

Finance (No. 2) Bill
Part 2 — Oil
52

(ii)
ends with the day on which the first termination event
subsequently occurs.
(2)
But there are to be no notional accounting periods after the end of the
post-cessation period (see subsection (4)).
(3)
“Termination event”, in relation to a notional accounting period, means
5
each of the following—
(a)
the end of the period of 12 months beginning with the first day
of the notional accounting period,
(b)
the occurrence of an accounting date of the former trader or, if
there is a period for which the former trader does not make up
10
accounts, the end of that period (but see subsections (6) and (7)),
and
(c)
the end of the post-cessation period.
(4)
“The post-cessation period” means the period that—
(a)
begins with the day following the last day on which the former
15
trader carried on the ring fence trade, and
(b)
ends with the day on which the appropriate authority is
satisfied that the restoration of the relevant site has been
completed.
(5)
In subsection (4) “the appropriate authority” means—
20
(a)
in the case of restoration falling within section 416ZA(7)(c), the
Secretary of State, and
(b)
in any other case, such person or body as the Commissioners for
Her Majesty’s Revenue and Customs may specify.
(6)
If the former trader—
25
(a)
carries on more than one trade,
(b)
makes up accounts of any of them to different dates, and
(c)
does not make up general accounts for the whole of the former
trader’s activities,

subsection (3)(b) applies with reference to the accounting date of such
30
one of the trades as the former trader may determine.
(7)
If the Commissioners for Her Majesty’s Revenue and Customs are of
the opinion, on reasonable grounds, that a date determined by the
former trader for the purposes of subsection (6) is inappropriate, the
Commissioners may by notice direct that the accounting date of such
35
other of the trades referred to in that subsection as appears to the
Commissioners to be appropriate is to be used instead.
(8)
Expressions used in this section and in section 416ZA have the same
meaning in this section as they do in that section.”
(6)
In section 416B (first-year qualifying expenditure), in subsection (2), at the end
40
insert “(within the meaning of section 403)”.
(7)
Part 4 of CTA 2010 (loss relief) is amended as follows.
(8)
In section 40 (ring fence trades: extension of periods for which relief may be
given), in subsection (1)(b), for “403” substitute “by virtue of section 416ZA”.
(9)
In section 43 (claim period in case of ring fence or mineral extraction trades), in
45
subsection (1)(b)—

Finance (No. 2) Bill
Part 3 — Annual tax on enveloped dwellings
53

(a)
after “416” insert “or 416ZA”, and
(b)
for the words from “restoration” to “trade” substitute “site restoration”.
(10)
The amendments made by this section have effect in relation to expenditure
incurred on restoration carried out on or after the day on which this Act is
passed.
5
90
Restrictions on allowances for certain oil-related expenditure

Schedule 30 contains provision in connection with restrictions on allowances
for certain oil-related expenditure.
Part 3
Annual tax on enveloped dwellings
10
The charge to tax
91
Charge to tax
(1)
A tax (called “annual tax on enveloped dwellings”) is to be charged in
accordance with this Part.
(2)
Tax is charged in respect of a chargeable interest if on one or more days in a
15
chargeable period—
(a)
the interest is a single-dwelling interest and has a taxable value of more
than £2 million, and
(b)
a company, partnership or collective investment scheme meets the
ownership condition with respect to the interest.
20
(3)
The tax is charged for the chargeable period concerned.
(4)
A company meets the ownership condition with respect to a single-dwelling
interest on any day on which the company is entitled to the interest (otherwise
than as a member of a partnership or for the purposes of a collective
investment scheme).
25
(5)
A partnership meets the ownership condition with respect to a single-dwelling
interest on any day on which a member of the partnership that is a company is
entitled to the interest (as a member of the partnership).
(6)
A collective investment scheme meets the ownership condition with respect to
a single-dwelling interest on any day on which the interest is held for the
30
purposes of the scheme.
(7)
If a company is jointly entitled to a chargeable interest (as a member of a
partnership or otherwise), then regardless of whether the company is entitled
as a joint tenant or tenant in common (or, in Scotland, as a joint owner or owner
in common) the ownership condition is regarded as met in relation to the
35
whole chargeable interest.
(8)
The chargeable periods are—
(a)
the period beginning with 1 April 2013 and ending with 31 March 2014,
and
(b)
each subsequent period of 12 months beginning with 1 April.
40

Finance (No. 2) Bill
Part 3 — Annual tax on enveloped dwellings
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(9)
See also section 92 (references to beneficial entitlement include beneficial
entitlement jointly with another person).
92
Entitlement to interests
(1)
In this Part “entitled” means beneficially entitled—
(a)
whether solely or jointly with another person, and
5
(b)
whether as a member of a partnership or otherwise.

This is subject to subsection (2).
(2)
References in this Part to entitlement to a single-dwelling interest (or any other
chargeable interest) do not include—
(a)
entitlement in the capacity of a trustee or personal representative, or
10
(b)
entitlement as a beneficiary under a settlement.
(3)
Subsection (1)(b) does not apply where the contrary is specified.
(4)
In this section “settlement” has the same meaning as in Part 4 of FA 2003 (see
paragraph 1 of Schedule 16 to that Act).
93
Person liable
15
(1)
The chargeable person is liable to pay tax charged under this Part.
(2)
“The chargeable person” means—
(a)
in relation to tax charged by virtue of section 91(4), the company;
(b)
in relation to tax charged by virtue of section 91(5), the responsible
partners.
20
(3)
In relation to tax charged by virtue of section 91(6) “the chargeable person”
means—
(a)
if the collective investment scheme is a unit trust scheme, the trustee of
the scheme;
(b)
if the collective investment scheme is an open-ended investment
25
company, the body corporate referred to in section 236(2) of the
Financial Services and Markets Act 2000;
(c)
in relation to an EEA UCITS which is not an open-ended investment
company or unit trust scheme, the management company for that
UCITS;
30
(d)
in any other case, the person who has day-to-day control over the
management of the property subject to the scheme.
(4)
The liability of the responsible partners to pay tax charged on them under this
Part is joint and several.
(5)
Reference in this section to “the responsible partners” are to all the persons who
35
are members of the partnership concerned on the first day in the chargeable
period on which the partnership meets the ownership condition with respect
to the single-dwelling interest.
(6)
Tax charged under this Part is said to be “charged on” the chargeable person
(and that person is said to be “chargeable to” the tax).
40

Finance (No. 2) Bill
Part 3 — Annual tax on enveloped dwellings
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94
Liability of persons jointly entitled
(1)
Subsection (2) applies if—
(a)
a company is within the charge for a chargeable period with respect to
a single-dwelling interest by virtue of section 93(2)(a), and
(b)
one or more other persons are jointly entitled to the interest on the first
5
day in that period on which the company is within the charge with
respect to it.
(2)
The company and the other person or persons are jointly and severally liable
for the tax charged for that period with respect to the interest (whether or not
those other persons are also within the charge with respect to the interest on
10
the day in question).
(3)
Subsection (4) applies if—
(a)
a company that is a member of a partnership is entitled (as a member
of the partnership) to a single-dwelling interest on a day in a chargeable
period, and
15
(b)
as a result, the responsible partners are within the charge with respect
to the interest for the period.
(4)
If, on the first day in the chargeable period on which the responsible partners
are within the charge a person (“P”) who is not one of the responsible partners
is jointly entitled to the chargeable interest, P and the responsible partners are
20
jointly and severally liable for the tax charged for the period with respect to the
interest (whether or not P is also within the charge with respect to the interest
on the day in question).
95
Collective investment schemes: liability for and collection of tax
(1)
Subsection (2) applies where tax is charged for a chargeable period with
25
respect to a single-dwelling interest by virtue of section 91(6).
(2)
The persons who are major participants in the scheme on the first day of the
chargeable period on which the chargeable person is within the charge with
respect to the interest are jointly and severally liable with the chargeable
person for the tax charged.
30
(3)
Subsection (2) does not permit the recovery from a major participant of an
amount exceeding the market value of the participant’s holding in the scheme.
(4)
The reference in subsection (3) to a participant’s holding in a collective
investment scheme is to the interests or rights by virtue of which the
participant takes part in the scheme.
35
(5)
Tax chargeable by virtue of section 91(6) may be recovered from the depositary
(if any) of a collective investment scheme, but only up to the amount or value
of any money or other property subject to the scheme that has been entrusted
to the depositary for safekeeping.
(6)
The depositary—
40
(a)
may retain out of any money entrusted to it as mentioned in subsection
(5) enough money to pay that tax, and
(b)
is entitled to be fully reimbursed by the participants in the scheme (by
that method or another) for amounts recovered under subsection (5).
(7)
In this section—
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Finance (No. 2) Bill
Part 3 — Annual tax on enveloped dwellings
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(a)
“depositary”, in relation to a collective investment scheme (other than
a unit trust scheme), has the meaning given by section 237(2) of the
Financial Services and Markets Act 2000;
(b)
“major participant”, in relation to a collective investment scheme, is to
be read in accordance with 134(4);
5
(c)
“participant”, in relation to a collective investment scheme, is to be read
in accordance with section 235 of the Financial Services and Markets
Act 2000.
(8)
For the purposes of this Part “market value” is to be determined as for the
purposes of TCGA 1992 (see, particularly, section 272 of that Act).
10
96
Amount of tax chargeable
(1)
The amount of tax charged for a chargeable period with respect to a single-
dwelling interest is stated in subsection (2) or (3).
(2)
If the chargeable person is within the charge with respect to the single-
dwelling interest on the first day of the chargeable period, the amount of tax
15
charged is equal to the annual chargeable amount.
(3)
Otherwise, the amount of tax charged is equal to the relevant fraction of the
annual chargeable amount.
(4)
The annual chargeable amount for a single-dwelling interest and a chargeable
period is determined in accordance with the following table, by reference to the
20
taxable value of the interest on the relevant day.

Annual chargeable amount
Taxable value of the interest on the

relevant day

£15,000
More than £2 million but not

more than £5 million.

25

£35,000
More than £5 million but not

more than £10 million.

£70,000
More than £10 million but not

more than £20 million.

£140,000
More than £20 million.

30
(5)
The “relevant day” is—
(a)
for the purposes of subsection (2), the first day of the chargeable period;
(b)
for the purposes of subsection (3), the first day in the chargeable period
on which the chargeable person is within the charge with respect to the
interest.
35
(6)
The relevant fraction is—

where—

“N” is the number of days from (and including) the relevant day to the end of
the chargeable period;

Finance (No. 2) Bill
Part 3 — Annual tax on enveloped dwellings
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“Y” is the number of days in the chargeable period.
(7)
See also—
(a)
section 97 (interim relief), and
(b)
section 103 (adjustment of amount chargeable).
97
Interim relief
5
(1)
Where tax is charged for a chargeable period with respect to a single-dwelling
interest, the chargeable person may claim relief before the end of the
chargeable period if—
(a)
one or more days in the period is relievable with respect to the interest
(by virtue of any of sections 131 to 150),
10
(b)
one or more days in the chargeable period (after the first day in the
period on which the chargeable person is within the charge with
respect to the interest) is a day on which the chargeable person is not
within the charge with respect to the interest, or
(c)
the taxable value of the single-dwelling interest on the first day in the
15
chargeable period on which the chargeable person is within the charge
with respect to the interest is higher than its taxable value on any later
day in the chargeable period on which the chargeable person remains
within the charge with respect to the interest.
(2)
Relief under this section is called “interim relief”, and must be claimed—
20
(a)
in an annual tax on enveloped dwellings return, or
(b)
by amending such a return.
(3)
Where interim relief is claimed under this section, section 161(1) (payment of
tax by filing date for annual tax on enveloped dwellings return) has effect as if
the amount of tax charged with respect to the single-dwelling interest were the
25
sum of amounts A and B.
(4)
Amount A is the total of all the daily amounts for days in the pre-claim period
on which the chargeable person is within the charge with respect to the single-
dwelling interest, other than days that are relievable with respect to the single-
dwelling interest.
30
(5)
Amount B is zero if—
(a)
the day of the claim is relievable with respect to the single-dwelling
interest by virtue of any of sections 131 to 150, or
(b)
the chargeable person is not within the charge with respect to the
single-dwelling interest on the day of the claim.
35
(6)
Otherwise, amount B is the appropriate fraction of the annual chargeable
amount for the single-dwelling interest.

For this purpose the annual chargeable amount is determined (under section
96(4)) on the basis that the day of the claim is the relevant day.
(7)
In subsection (6) “appropriate fraction” means—
40

where—

“X” is the number of days in the period beginning with the day of the claim and
ending at the end of the chargeable period, and

“Y” is the number of days in the chargeable period.

Finance (No. 2) Bill
Part 3 — Annual tax on enveloped dwellings
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(8)
In this section—
“day of the claim” means the day on which the return mentioned in
subsection (2)(a), or notice of the amendment made under subsection
(2)(b), is delivered to HMRC;
“pre-claim period” means the period—
5
(a)
beginning with the first day in the chargeable period mentioned
in subsection (1) on which the chargeable person is within the
charge with respect to the single-dwelling interest, and
(b)
ending with the day before the day of the claim.
(9)
See sections 102 and 103 for provision about the adjustment of the amount of
10
tax charged.
98
Indexation of annual chargeable amounts
(1)
If the consumer prices index for September in 2013 or any later year (“the later
year”) is higher than it was for the previous September, section 96(4) applies in
relation to chargeable periods beginning on or after the 1 April in the year after
15
the later year with the following amendments.
(2)
For each of the annual chargeable amounts stated in the table in section 96(4)
(as it applies in relation to chargeable periods beginning in the previous 12
months) there is substituted the indexed amount.
(3)
“The indexed amount” is found by—
20
(a)
increasing the previous amount by the same percentage increase as the
percentage increase in the consumer prices index, and
(b)
rounding down the result to the nearest multiple of £50.
(4)
In this section “consumer prices index” means the all items consumer prices
index published by the Statistics Board.
25
(5)
The Treasury must, before 1 April 2014 and before each subsequent 1 April,
make an order stating the amounts that by virtue of this section are to be the
annual chargeable amounts for chargeable periods beginning on or after that
date.
99
Taxable value
30
(1)
The taxable value of a single-dwelling interest on any day (“the relevant day”)
is equal to its market value at the end of the latest day that—
(a)
falls on or before that day, and
(b)
is a valuation date in the case of that interest.
(2)
Each of the following is a valuation date in the case of any single-dwelling
35
interest—
(a)
1 April 2012;
(b)
each 1 April falling 5 years, or a multiple of 5 years, after 1 April 2012.
(3)
The following are also valuation dates in the case of any single-dwelling
interest to which a company is entitled on the relevant day (otherwise than as
40
a member of a partnership)—
(a)
the effective date of any substantial acquisition by the company of a
chargeable interest in or over the dwelling concerned;