Finance (No. 2) Bill

Session 2012 - 13
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Finance (No. 2) Bill

Finance (No. 2) Bill
Schedule 45 — Controlled foreign companies
585

(9C)
But subsection (9B) does not apply to a loan if the repayment of the
loan within the 48 hours occurs under, or is connected (directly or
indirectly) with, an arrangement the main purpose, or one of the
main purposes, of which is to ensure that subsection (9) does not
apply because of—
5
(a)
the loan, or
(b)
any other debt which a member of the CFC group incurs (or
is expected to incur) in the United Kingdom.
(9D)
This subsection applies to a loan if—
(a)
there is an issue of shares which meets the requirements of
10
subsection (7)(c)(i) to (iii),
(b)
the loan was made before the issue of shares but with the
expectation that it would be repaid by the member out of
funds deriving (directly or indirectly) from the issue of
shares,
15
(c)
the loan is repaid by the member out of such funds within the
period of 6 months beginning with the day on which the loan
was made, and
(d)
the loan—
(i)
was made by a person who was not a member of the
20
CFC group, and
(ii)
was not made (wholly or partly nor directly or
indirectly) out of funds or other assets provided by a
member of the CFC group.”
20    (1)
Section 371IE (matched interest) is amended as follows.
25
      (2)
In subsection (1)(d)(ii) after “include” insert “some or all of”.
      (3)
After subsection (7) insert—
“(7A)
In subsection (6) the reference to the leftover profits is to those profits
so far as they would be included in the relevant finance profits (see
section 314A(1)(d)).”
30
Commencement and transitional provision
21
The amendments made by this Schedule are treated as having come into
force on 1 January 2013.
22    (1)
Section 371CE of TIOPA 2010 (as amended by paragraph 17 above) applies
for accounting periods of CFCs beginning before 20 March 2013 with the
35
modifications set out in this paragraph.

References below to subsections are to subsections of section 371CE.
Accounting periods ending before 20 March 2013
      (2)
For accounting periods ending before 20 March 2013, subsection (4) applies
as if paragraph (b) were omitted.
40
Accounting periods ending on or after 20 March 2013
      (3)
The following sub-paragraphs apply for accounting periods ending on or
after 20 March 2013.

Finance (No. 2) Bill
Schedule 46 — Proceeds of crime: powers of officers of Revenue and Customs
586

      (4)
A notice may be given under subsection (2)(b) even though the requirement
of subsection (2)(a) is not met.
      (5)
If a notice is given under subsection (2)(b) in a case where the requirement
of subsection (2)(a) is not met, the CFC’s trading finance profits are to be
apportioned on a just and reasonable basis between—
5
(a)
the part of the accounting period falling before 20 March 2013
(“period A”), and
(b)
the remaining part of the accounting period (“period B”).
      (6)
So far as the CFC’s trading finance profits are apportioned to period A, they
are to be treated as non-trading finance profits if the CFC is a group treasury
10
company in period A (and subsection (3) applies to them accordingly).
      (7)
For the purpose of determining if the CFC is a group treasury company in
period A, subsection (4) applies—
(a)
as if references to the accounting period were to period A, and
(b)
as if paragraph (b) were omitted.
15
      (8)
So far as the CFC’s trading finance profits are apportioned to period B, they
are to be treated as non-trading finance profits if the CFC is a group treasury
company in period B (and subsection (3) applies to them accordingly).
      (9)
For the purpose of determining if the CFC is a group treasury company in
period B, subsection (4) applies as if references to the accounting period
20
were to period B.
Schedule 46
Section 221

Proceeds of crime: powers of officers of Revenue and Customs
Proceeds of Crime Act 2002
1
The Proceeds of Crime Act 2002 is amended in accordance with paragraphs
25
2 to 20.
2     (1)
Section 289 (searches) is amended as follows.
      (2)
In subsections (1), (1A)(a) and (2), for “a customs officer” substitute “an
officer of Revenue and Customs”.
      (3)
In subsections (1C) and (1D), for “customs officer” substitute “officer of
30
Revenue and Customs”.
      (4)
After subsection (5)(b) insert—
“(ba)
are exercisable by an officer of Revenue and Customs only so
far as the officer is exercising a function relating to a matter
other than an excluded matter,”.
35
      (5)
After subsection (5) insert—
“(5A)
The reference in subsection (5)(ba) to an excluded matter is to a
matter specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7,
10, 12 and 14 to 30 of Schedule 1 to, the Commissioners for Revenue
and Customs Act 2005.”
40

Finance (No. 2) Bill
Schedule 46 — Proceeds of crime: powers of officers of Revenue and Customs
587

3
In section 290 (prior approval for search)—
(a)
in subsection (4)(a), for “a customs officer, a customs officer”
substitute “an officer of Revenue and Customs, such an officer”, and
(b)
in subsection (6), for “customs officer” substitute “officer of Revenue
and Customs”.
5
4
In section 291(2) (report on exercise of powers), for “customs officer”
substitute “officer of Revenue and Customs”.
5
In section 292 (code of practice)—
(a)
in subsection (1), for “customs officers” substitute “officers of
Revenue and Customs”, and
10
(b)
in subsection (6), for “a customs officer” substitute “an officer of
Revenue and Customs”.
6     (1)
Section 294 (seizure of cash) is amended as follows.
      (2)
In subsections (1) and (2), for “A customs officer” substitute “An officer of
Revenue and Customs”.
15
      (3)
After subsection (2) insert—
“(2A)
The powers conferred by this section are exercisable by an officer of
Revenue and Customs only so far as the officer is exercising a
function relating to a matter other than an excluded matter.
(2B)
But the powers may be exercised by the officer in reliance on a
20
suspicion that relates to an excluded matter.
(2C)
The reference in subsection (2A) to an excluded matter is to a matter
specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7, 10, 12
and 14 to 30 of Schedule 1 to, the Commissioners for Revenue and
Customs Act 2005.”
25
7
In section 295(1) (detention of seized cash), for “customs officer” substitute
“officer of Revenue and Customs”.
8
In section 296(2) (interest on cash), for “customs officer” substitute “officer of
Revenue and Customs”.
9
In section 297(4) (release of detained cash), for “A customs officer” substitute
30
“An officer of Revenue and Customs”.
10
In section 302(6) (compensation), for “a customs officer” substitute “an
officer of Revenue and Customs”.
11
In section 351(5) (person making application to vary or discharge order)—
(a)
for “a customs officer” substitute “an officer of Revenue and
35
Customs”, and
(b)
for “customs officer” substitute “officer of Revenue and Customs”.
12    (1)
Section 352 (search and seizure warrants) is amended as follows.
      (2)
In subsection (5)—
(a)
omit paragraph (a), and
40
(b)
in paragraph (c), at the end insert “, a confiscation investigation or a
money laundering investigation”.
      (3)
In subsection (7), omit “(a) or”.

Finance (No. 2) Bill
Schedule 46 — Proceeds of crime: powers of officers of Revenue and Customs
588

13    (1)
Section 353 (requirements where production order not available) is
amended as follows.
      (2)
In subsection (10)—
(a)
omit paragraph (a), and
(b)
in paragraph (c), at the end insert “, a confiscation investigation or a
5
money laundering investigation”.
      (3)
In subsection (11), omit “(a) or”.
14    (1)
Section 369 (customer information orders: supplementary provisions) is
amended as follows.
      (2)
In subsection (5)—
10
(a)
for “a customs officer” substitute “an officer of Revenue and
Customs”, and
(b)
for “customs officer” substitute “officer of Revenue and Customs”.
      (3)
In subsection (7), for “a customs officer” substitute “an officer of Revenue
and Customs”.
15
15
In section 375(4) (account monitoring orders: supplementary provisions)—
(a)
for “a customs officer” substitute “an officer of Revenue and
Customs”, and
(b)
for “customs officer” substitute “officer of Revenue and Customs”.
16
After section 375 insert—
20
“Officers of Revenue and Customs
375A
Restriction on exercise of certain powers conferred on officers of
Revenue and Customs
(1)
This section applies to the powers conferred on an officer of Revenue
and Customs which are exercisable in connection with—
25
(a)
a production order made or to be made in relation to a
confiscation investigation or a money laundering
investigation,
(b)
a search and seizure warrant issued or to be issued in relation
to a confiscation investigation or a money laundering
30
investigation,
(c)
a customer information order, and
(d)
an account monitoring order.
(2)
The powers are exercisable by the officer only so far as the officer is
exercising a function relating to a matter other than an excluded
35
matter.
(3)
The reference in subsection (2) to an excluded matter is to a matter
specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7, 10, 12
and 14 to 30 of Schedule 1 to, the Commissioners for Revenue and
Customs Act 2005.”
40
17
In section 377(1) (persons subject to code of practice), for paragraph (e)
substitute—
“(e)
officers of Revenue and Customs.”

Finance (No. 2) Bill
Schedule 46 — Proceeds of crime: powers of officers of Revenue and Customs
589

18
In section 378 (officers)—
(a)
in subsection (1), for paragraph (d) substitute—
“(d)
an officer of Revenue and Customs.”,
(b)
in subsections (2)(c) and (6)(b), for “a customs officer” substitute “an
officer of Revenue and Customs”, and
5
(c)
in subsection (4), for paragraph (c) substitute—
“(c)
an officer of Revenue and Customs.”
19
After section 408 insert—
“Officers of Revenue and Customs
408A
Restriction on exercise of certain powers conferred on officers of
10
Revenue and Customs
(1)
This section applies to the powers conferred on an officer of Revenue
and Customs which are exercisable in connection with—
(a)
a production order made or to be made in relation to a
confiscation investigation or a money laundering
15
investigation,
(b)
a search warrant issued or to be issued in relation to a
confiscation investigation or a money laundering
investigation,
(c)
a customer information order, and
20
(d)
an account monitoring order.
(2)
The powers are exercisable by the officer only so far as the officer is
exercising a function relating to a matter other than an excluded
matter.
(3)
The reference in subsection (2) to an excluded matter is to a matter
25
specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7, 10, 12
and 14 to 30 of Schedule 1 to, the Commissioners for Revenue and
Customs Act 2005.”
20
In section 412 (interpretation), in the entry relating to the meaning of
references to a “constable”, for “a customs and excise officer” substitute “an
30
officer of Revenue and Customs”.
Commissioners for Revenue and Customs Act 2005
21
In Schedule 2 to the Commissioners for Revenue and Customs Act 2005
(restrictions on functions of Commissioner and officers), omit—
(a)
paragraphs 13 and 13A, and
35
(b)
the italic heading immediately preceding those paragraphs.
Relationship of provisions of 2005 Act with provisions of 2002 Act
22
Nothing in section 6 or 7 of the Commissioners for Revenue and Customs
Act 2005 (initial functions) restricts the functions in connection with which
officers of Revenue and Customs may exercise a power under—
40
(a)
Chapter 3 of Part 5 of the Proceeds of Crime Act 2002 (as amended
by this Schedule), or
(b)
Chapters 2 and 3 of Part 8 of that Act (as so amended).

Finance (No. 2) Bill
Schedule 47 — Corporation tax: deferral of payment of exit charge
590

Consequential amendments
23
In section 80(1) and (3) of the Serious Crime Act 2007 (amendment of
sections 352(5) and 353(10) of the Proceeds of Crime Act 2002), omit
paragraph (a) and the word “and” at the end of that paragraph.
24
In Schedule 7 to the Policing and Crime Act 2009 (minor and consequential
5
amendments), omit paragraph 116.
Schedule 47
Section 226

Corporation tax: deferral of payment of exit charge
Amendments of TMA 1970
1
TMA 1970 is amended in accordance with paragraphs 2 to 6.
10
2
After section 59F insert—
“59FA
Exit charge payment plans
(1)
Schedule 3ZB contains provisions about exit charge payment plans
in accordance with which companies may defer payment of certain
corporation tax.
15
(2)
Parts 1 and 2 of the Schedule each make provision about the
circumstances in which an exit charge payment plan may be entered
into, and about determining the amount of corporation tax that may
be deferred—
(a)
see Part 1 in relation to a company which ceases to be resident
20
in the United Kingdom, and
(b)
see Part 2 in relation to a company which is not resident in the
United Kingdom but which carries on, or has carried on, a
trade in the United Kingdom through a permanent
establishment there.
25
(3)
Part 3 of the Schedule contains provision about—
(a)
entering into an exit charge payment plan,
(b)
the effect of such a plan,
(c)
the content of such a plan, and
(d)
the methods in accordance with which tax deferred under
30
such a plan may be paid.”
3
Immediately before section 59G insert—
“Managed payment plans”.
4     (1)
Section 109B (provision for securing payment by company of outstanding
tax) is amended as follows.
35
      (2)
In subsection (1), at the end insert “, subject to subsection (5A).”
      (3)
In subsection (4)(b), at the end insert “(which may include a proposal to
enter into an exit charge payment plan in accordance with Schedule 3ZB).”

Finance (No. 2) Bill
Schedule 47 — Corporation tax: deferral of payment of exit charge
591

      (4)
After subsection (5) insert—
“(5A)
Condition D does not apply to the extent that payment of the tax is
to be secured by the company entering into an exit charge payment
plan in accordance with Schedule 3ZB.”
5     (1)
Section 109E (liability of other persons for unpaid tax) is amended as
5
follows.
      (2)
After subsection (1) insert—
“(1A)
The reference in subsection (1)(b) to the time when tax becomes
payable is a reference to—
(a)
in a case where an exit charge payment plan has been entered
10
into in accordance with Schedule 3ZB in respect of the tax, the
time when the tax becomes payable under the plan, and
(b)
in any other case, the time when the tax becomes payable in
accordance with section 59D or 59E.”
      (3)
In subsection (2), for “the time when the amount of the tax is finally
15
determined” substitute “the relevant time”.
      (4)
After subsection (2) insert—
“(2A)
In subsection (2) the “relevant time” means—
(a)
in a case where an exit charge payment plan has been entered
into in accordance with Schedule 3ZB in respect of the tax, the
20
later of—
(i)
the first day after the period of 12 months beginning
immediately after the migration accounting period
(as defined in Part 1 or 2 of Schedule 3ZB, as the case
may be), and
25
(ii)
the date on which the tax is payable under the plan,
and
(b)
in any other case, the time when the amount of the tax is
finally determined.”
6
After Schedule 3ZA insert—
30
“Schedule 3ZB
Exit charge payment plans
Part 1
company ceasing to be resident in UK
Circumstances in which exit charge payment plan may be entered into
35
1     (1)
This Part of this Schedule and Part 3 of this Schedule apply where
an eligible company—
(a)
ceases to be resident in the United Kingdom,
(b)
on ceasing to be so resident, becomes resident in another
EEA state, and
40
(c)
is liable to pay qualifying corporation tax in respect of the
migration accounting period.