|
| |
|
(2) | The company may defer payment of some or all of the qualifying |
| |
corporation tax if it enters into an exit charge payment plan in |
| |
respect of it in accordance with this Schedule. |
| |
(3) | The company may enter into an exit charge payment plan only if |
| |
conditions A to C are met. |
| 5 |
(4) | Condition A is that before the end of the period of 9 months |
| |
beginning immediately after the migration accounting period— |
| |
(a) | an application to enter into the exit charge payment plan is |
| |
made to Her Majesty’s Revenue and Customs, and |
| |
(b) | the application contains details of all the matters which are |
| 10 |
required by Part 3 of this Schedule to be specified in the |
| |
| |
(5) | Condition B is that on ceasing to be resident in the United |
| |
Kingdom, the company carries on a business in an EEA state. |
| |
(6) | Condition C is that, on becoming resident in the other EEA state, |
| 15 |
the company is not treated as resident in a territory outside the |
| |
European Economic Area for the purposes of any double taxation |
| |
| |
| |
“double taxation arrangements” means arrangements which |
| 20 |
are made by two or more territories with a view to |
| |
affording relief from double taxation and which have |
| |
effect at the time when the company ceases to be resident |
| |
| |
“eligible company” means a company that has a right to |
| 25 |
freedom of establishment protected by Article 49 of the |
| |
Treaty on the functioning of the European Union or |
| |
established by Article 31 of the Agreement on the |
| |
| |
(8) | In this Part of this Schedule— |
| 30 |
(a) | references to the migration accounting period are to— |
| |
(i) | in a case where an accounting period comes to an |
| |
end on the company ceasing to be resident in the |
| |
United Kingdom, that accounting period, and |
| |
(ii) | in a case not falling within sub-paragraph (i), the |
| 35 |
accounting period during which the company |
| |
ceases to be resident in the United Kingdom, |
| |
(b) | references to a Part 1 company are to a company in relation |
| |
to which this Part of this Schedule applies, and |
| |
(c) | references to Part 3 of this Schedule are to Part 3 of this |
| 40 |
Schedule as it applies to a Part 1 company. |
| |
Qualifying corporation tax |
| |
2 (1) | The company is liable to pay qualifying corporation tax in respect |
| |
of the migration accounting period if CT1 is greater than CT2 |
| |
| 45 |
CT1 is the corporation tax which the company is liable to pay |
| |
for the accounting period, and |
| |
|
| |
|
| |
|
CT2 is the corporation tax which the company would be |
| |
liable to pay for the accounting period if any income, |
| |
profits, gains, losses or debits arising only by virtue of the |
| |
exit charge provisions were ignored, |
| |
| (CT2 will be zero if the company would not be liable to pay any |
| 5 |
corporation tax for the period). |
| |
(2) | The amount of qualifying corporation tax which the company is |
| |
liable to pay is the difference between CT1 and CT2. |
| |
(3) | “Exit charge provisions” means— |
| |
(a) | section 185 of the 1992 Act, |
| 10 |
(b) | section 187(4) of that Act, where that subsection applies by |
| |
virtue of section 187(4)(c), |
| |
(c) | section 162 of CTA 2009, where that section applies by |
| |
virtue of section 41(2)(b) of that Act, |
| |
(d) | section 333 of that Act, |
| 15 |
(e) | section 609 of that Act, |
| |
(f) | section 859 of that Act, where that section applies by virtue |
| |
of section 859(2)(a), and |
| |
(g) | section 862 of that Act, where that section applies by virtue |
| |
| 20 |
(4) | References in this Part of this Schedule and Part 3 of this Schedule |
| |
to qualifying corporation tax are to be read in accordance with this |
| |
| |
Interpretation: exit charge assets and liabilities |
| |
3 (1) | This paragraph applies for the purposes of this Part of this |
| 25 |
Schedule and Part 3 of this Schedule. |
| |
(2) | “Exit charge assets” and “exit charge liabilities” means assets or |
| |
liabilities (as the case may be) in respect of which income, profits |
| |
or gains arise in the migration accounting period by virtue of the |
| |
exit charge provisions, and in particular— |
| 30 |
(a) | “TCGA or trading stock exit charge assets” means those |
| |
exit charge assets, other than pre-FA 2002 intangible fixed |
| |
assets, in respect of which income, profits or gains arise by |
| |
virtue of the exit charge provision mentioned in paragraph |
| |
| 35 |
(b) | “financial exit charge assets or liabilities” means those exit |
| |
charge assets or liabilities in respect of which income, |
| |
profits or gains arise by virtue of the exit charge provision |
| |
mentioned in paragraph 2(3)(d) or (e), |
| |
(c) | “intangible exit charge assets” means— |
| 40 |
(i) | those exit charge assets in respect of which income, |
| |
profits or gains arise by virtue of the exit charge |
| |
provision mentioned in paragraph 2(3)(f) or (g), |
| |
| |
(ii) | those exit charge assets which are pre-FA 2002 |
| 45 |
intangible fixed assets in respect of which income, |
| |
profits or gains arise by virtue of the exit charge |
| |
provision mentioned in paragraph 2(3)(a) or (b). |
| |
|
| |
|
| |
|
(3) | In sub-paragraph (2)— |
| |
(a) | “exit charge provisions” has the meaning given in |
| |
| |
(b) | “pre-FA 2002 intangible fixed asset” means an intangible |
| |
fixed asset which is a pre-FA 2002 asset (as defined in |
| 5 |
section 881 of CTA 2009). |
| |
| |
Non-UK resident companies with UK permanent establishments |
| |
Circumstances in which exit charge payment plan may be entered into |
| |
4 (1) | This Part of this Schedule and Part 3 of this Schedule apply |
| 10 |
| |
(a) | at any time during an accounting period (“the migration |
| |
accounting period”) an eligible company which is not |
| |
resident in the United Kingdom carries on a trade in the |
| |
United Kingdom through a permanent establishment |
| 15 |
| |
(b) | one or more PE qualifying events occurs in respect of any |
| |
assets or liabilities of the company as mentioned in sub- |
| |
| |
(c) | the company is liable to pay qualifying corporation tax in |
| 20 |
respect of the migration accounting period. |
| |
(2) | The company may defer payment of some or all of the qualifying |
| |
corporation tax if it enters into an exit charge payment plan in |
| |
respect of it in accordance with this Schedule. |
| |
(3) | The company may enter into an exit charge payment plan only if |
| 25 |
before the end of the period of 9 months beginning immediately |
| |
after the migration accounting period— |
| |
(a) | an application to enter into the exit charge payment plan is |
| |
made to Her Majesty’s Revenue and Customs, and |
| |
(b) | the application contains details of all the matters which are |
| 30 |
required by Part 3 of this Schedule to be specified in the |
| |
| |
(4) | For the purposes of this Part of this Schedule, a “PE qualifying |
| |
event” occurs in respect of an asset or liability of a company if— |
| |
(a) | an event occurs which triggers— |
| 35 |
(i) | a deemed disposal and reacquisition of the asset or |
| |
liability under the exit charge provision mentioned |
| |
in paragraph 5(3)(a), (c), (d) or (e), or |
| |
(ii) | a valuation of the asset under the exit charge |
| |
provision mentioned in paragraph 5(3)(b), |
| 40 |
| |
(i) | occurs during the migration accounting period, or |
| |
(ii) | causes the migration accounting period to come to |
| |
| |
(c) | at the time of the event, the company is not treated as |
| 45 |
resident in a territory outside the European Economic Area |
| |
for the purposes of any double taxation arrangements. |
| |
|
| |
|
| |
|
(5) | In this Part of this Schedule, references to a PE qualifying asset or |
| |
liability are to an asset or liability in respect of which a PE |
| |
| |
(6) | In this paragraph “double taxation arrangements” and “eligible |
| |
company” have the meanings given in paragraph 1(7). |
| 5 |
(7) | In this Part of this Schedule— |
| |
(a) | references to the migration accounting period are to be |
| |
read in accordance with this paragraph; |
| |
(b) | references to a Part 2 company are to a company in relation |
| |
to which this Part of this Schedule applies, |
| 10 |
(c) | references to Part 3 of this Schedule are to Part 3 of this |
| |
Schedule as it applies to a Part 2 company, and |
| |
(d) | “permanent establishment”, in relation to a company, is to |
| |
be read in accordance with Chapter 2 of Part 24 of CTA |
| |
| 15 |
Qualifying corporation tax |
| |
5 (1) | The company is liable to pay qualifying corporation tax in respect |
| |
of the migration accounting period if CT1 is greater than CT2 |
| |
| |
CT1 is the corporation tax which the company is liable to pay |
| 20 |
for the accounting period, and |
| |
CT2 is the corporation tax which the company would be |
| |
liable to pay for the accounting period if any income, |
| |
profits, gains, losses or debits arising as a result of any PE |
| |
qualifying events, and arising only by virtue of the exit |
| 25 |
charge provisions, were ignored, |
| |
| (CT2 will be zero if the company would not be liable to pay any |
| |
corporation tax for the period). |
| |
(2) | The amount of qualifying corporation tax which the company is |
| |
liable to pay is the difference between CT1 and CT2. |
| 30 |
(3) | Exit charge provisions means— |
| |
(a) | section 25 of the 1992 Act, |
| |
(b) | section 162 of CTA 2009, where that section applies by |
| |
virtue of section 41(2)(b) of that Act, |
| |
(c) | section 334 of that Act, |
| 35 |
(d) | section 610 of that Act, and |
| |
(e) | section 859 of that Act, where that section applies by virtue |
| |
| |
(4) | References in this Part of this Schedule and Part 3 of this Schedule |
| |
to qualifying corporation tax are to be read in accordance with this |
| 40 |
| |
Interpretation: exit charge assets and liabilities |
| |
6 (1) | This paragraph applies for the purposes of this Part of this |
| |
Schedule and Part 3 of this Schedule. |
| |
|
| |
|
| |
|
(2) | “Exit charge assets” and “exit charge liabilities” means any PE |
| |
qualifying assets or liabilities (as the case may be) in respect of |
| |
which income, profits or gains arise in the migration accounting |
| |
period by virtue of the exit charge provisions, and in particular— |
| |
(a) | “TCGA or trading stock exit charge assets” means those |
| 5 |
exit charge assets, other than pre-FA 2002 intangible fixed |
| |
assets, in respect of which income, profits or gains arise by |
| |
virtue of the exit charge provision mentioned in paragraph |
| |
| |
(b) | “financial exit charge assets or liabilities” means those exit |
| 10 |
charge assets or liabilities in respect of which income, |
| |
profits or gains arise by virtue of the exit charge provision |
| |
mentioned in paragraph 5(3)(c) or (d); |
| |
(c) | “intangible exit charge assets” means— |
| |
(i) | those exit charge assets in respect of which income, |
| 15 |
profits or gains arise by virtue of the exit charge |
| |
provision mentioned in paragraph 5(3)(e), and |
| |
(ii) | those exit charge assets which are pre-FA 2002 |
| |
intangible fixed assets in respect of which income, |
| |
profits or gains arise by virtue of the exit charge |
| 20 |
provision mentioned in paragraph 5(3)(a). |
| |
(3) | In sub-paragraph (2)— |
| |
(a) | “exit charge provisions” has the meaning given in |
| |
| |
(b) | “pre-FA 2002 intangible fixed asset” means an intangible |
| 25 |
fixed asset which is a pre-FA 2002 asset (as defined in |
| |
section 881 of CTA 2009). |
| |
| |
Entering into an exit charge payment plan |
| |
| 30 |
7 (1) | As to when this Part of this Schedule applies, see— |
| |
(a) | Part 1 of this Schedule (companies ceasing to be resident in |
| |
| |
(b) | Part 2 of this Schedule (companies with permanent |
| |
establishments in the United Kingdom). |
| 35 |
(2) | In this Part of this Schedule, as it applies to a company in relation |
| |
to which Part 1 of this Schedule applies, terms and expressions |
| |
which are used in this Part and in that Part have the same |
| |
meanings in this Part as in that Part. |
| |
(3) | In this Part of this Schedule, as it applies to a company in relation |
| 40 |
to which Part 2 of this Schedule applies, terms and expressions |
| |
which are used in this Part and in that Part have the same |
| |
meanings in this Part as in that Part. |
| |
|
| |
|
| |
|
Entering into an exit charge payment plan |
| |
8 (1) | A Part 1 company or a Part 2 company enters into an exit charge |
| |
payment plan in respect of qualifying corporation tax in |
| |
accordance with this Schedule if— |
| |
(a) | the company agrees to pay, and an officer of Revenue and |
| 5 |
Customs agrees to accept payment of, the tax in |
| |
accordance with the standard instalment method (see |
| |
paragraph 13) or the realisation method (see paragraphs 14 |
| |
to 17) or a combination of the two methods, |
| |
(b) | the company agrees to pay interest on the tax in |
| 10 |
accordance with paragraph 9(3), and |
| |
(c) | the plan meets the requirements set out in paragraphs 10 |
| |
to 12 as to the matters that must be specified in it. |
| |
(2) | The exit charge payment plan may, in the circumstances |
| |
mentioned in sub-paragraph (3), contain appropriate provision |
| 15 |
regarding security for Her Majesty’s Revenue and Customs in |
| |
respect of the deferred payment of the tax. |
| |
(3) | Those circumstances are where an officer of Her Majesty’s |
| |
Revenue and Customs considers that agreeing to accept payment |
| |
of qualifying corporation tax in accordance with the plan would |
| 20 |
present a serious risk as to collection of the tax in the absence of |
| |
provision regarding security in respect of that tax. |
| |
(4) | An exit charge payment plan is void if any information furnished |
| |
by the company in connection with the plan does not fully and |
| |
accurately disclose all facts and considerations material to the |
| 25 |
decision of the officer of Revenue and Customs to accept payment |
| |
of qualifying corporation tax in accordance with the plan. |
| |
Effect of exit charge payment plan |
| |
9 (1) | This paragraph applies where an exit charge payment plan is |
| |
entered into by a company in respect of qualifying corporation tax |
| 30 |
in accordance with this Schedule. |
| |
(2) | As regards when the tax is payable— |
| |
(a) | the plan does not prevent the tax becoming due and |
| |
payable under section 59D or 59E, but |
| |
(b) | the Commissioners for Her Majesty’s Revenue and |
| 35 |
| |
(i) | may not seek payment of the tax otherwise than in |
| |
accordance with the plan; |
| |
(ii) | may make repayments in respect of any amount of |
| |
the tax paid, or any amount paid on account of the |
| 40 |
tax, before the plan is entered into. |
| |
| |
(a) | the tax carries interest in accordance with Part 9 as if the |
| |
plan had not been entered into, and |
| |
(b) | each time a payment is made under the plan, it is to be paid |
| 45 |
together with any interest payable on it. |
| |
|
| |
|
| |
|
(4) | As regards penalties, the company will be liable to penalties for |
| |
late payment of the tax only if it fails to make payments in |
| |
accordance with the plan (see item 6ZA of the Table at the end of |
| |
paragraph 1 of Schedule 56 to the Finance Act 2009). |
| |
(5) | Qualifying corporation tax payable in accordance with an exit |
| 5 |
charge payment plan which is for the time being unpaid may be |
| |
paid at any time before it becomes payable under the plan together |
| |
with interest payable on it to the date of payment. |
| |
Content of exit charge payment plan |
| |
10 (1) | An exit charge payment plan entered into by a Part 1 company |
| 10 |
| |
(a) | the date on which the company ceased to be resident in the |
| |
| |
(b) | the EEA state in which the company has become resident. |
| |
(2) | An exit charge payment plan entered into by a Part 2 company |
| 15 |
| |
(a) | the EEA state in which the company is resident, and |
| |
(b) | if the company has ceased to carry on a trade in the United |
| |
Kingdom through a permanent establishment there, the |
| |
date on which it ceased to do so. |
| 20 |
(3) | In either case an exit charge payment plan entered into by a |
| |
company must also specify— |
| |
(a) | the amount of qualifying corporation tax which, in the |
| |
company’s opinion, is payable by it in respect of the |
| |
migration accounting period, |
| 25 |
(b) | the amount of that qualifying corporation tax which the |
| |
company wishes to defer paying under the exit charge |
| |
payment plan (“ECPP tax”), and |
| |
(c) | whether the ECPP tax is to be paid in accordance with— |
| |
(i) | the standard instalment method (see paragraph |
| 30 |
| |
(ii) | the realisation method (see paragraphs 14 to 17), or |
| |
(iii) | a combination of the two methods. |
| |
(4) | If the ECPP tax is to be paid in accordance with a combination of |
| |
the two methods, the exit charge payment plan must also |
| 35 |
| |
(a) | in the case of each of the company’s exit charge assets or |
| |
liabilities (see paragraphs 3(2) or 6(2), as the case may be), |
| |
the method in accordance with which the amount of ECPP |
| |
tax attributable to the asset or liability (see sub-paragraph |
| 40 |
| |
(b) | the amount of the ECPP tax specified under sub-paragraph |
| |
(3)(b) that is to be paid in accordance with each method. |
| |
(5) | But an exit charge payment plan may specify that any ECPP tax is |
| |
to be paid in accordance with the standard instalment method |
| 45 |
| |
(a) | in the case of a plan entered into by a Part 1 company, the |
| |
company’s ceasing to be resident in the United Kingdom is |
| |
|
| |
|