Finance (No. 2) Bill (HC Bill 154)

Finance (No. 2) BillPage 90

(2) In this section—

(a) “public body” means any body corporate that is a public body for the
purposes of section 66 of FA 2003, and

(b) references to a public body accordingly include a company such as is
5mentioned in subsection (5) of that section (companies wholly owned
by the listed bodies).

(3) The power of the Treasury to prescribe persons by an order under section 66(4)
of FA 2003 may be exercised so as to make different provision for purposes
relating to annual tax on enveloped dwellings and stamp duty land tax.

(4) 10In paragraph (b) of subsection (2) “company” means a company as defined by
section 1 of the Companies Act 2006 (and subsection (1) is to be ignored in
interpreting that paragraph).

152 Bodies established for national purposes

(1) A body listed in subsection (2) is not regarded as a company for the purposes
15of this Part.

(2) The bodies are—

  • the Historic Buildings and Monuments Commission for England;

  • the Trustees of the British Museum;

  • the Trustees of the National Heritage Memorial Fund;

  • 20the Trustees of the Natural History Museum.

153 Dwelling conditionally exempt from inheritance tax

(1) Subsection (2) applies to a single-dwelling interest if—

(a) the whole or part of the dwelling has been designated under section 31
of IHTA 1984 (buildings of outstanding historic or architectural interest
25etc),

(b) an undertaking has been made with respect to the dwelling under
section 30 of that Act (conditionally exempt transfers), and

(c) a transfer of value is exempt from inheritance tax by virtue of that
designation and that undertaking.

(2) 30The taxable value of the single-dwelling interest on any day is taken to be zero
if no chargeable event has occurred with respect to the dwelling in the time
between the transfer of value and the beginning of that day.

(3) Subsection (4) applies to a single-dwelling interest if—

(a) the whole or part of the dwelling has been designated under section 31
35of IHTA 1984,

(b) an undertaking has been made with respect to the dwelling under
section 78 of that Act (settled property: conditionally exempt
occasions), and

(c) a transfer of property or other event is a conditionally exempt occasion
40by virtue of that designation and that undertaking.

(4) The taxable value of the single-dwelling interest on any day is taken to be zero
if no chargeable event has occurred with respect to the dwelling in the time
between the conditionally exempt occasion and the beginning of that day.

(5) In this section—

    Finance (No. 2) BillPage 91

  • “chargeable event” means an event which is a chargeable event under
    section 32 of IHTA 1984;

  • “conditionally exempt occasion” is to be read in accordance with section
    78(2) of that Act;

  • 5“transfer of value” has the same meaning as in that Act.

Power to modify reliefs

154 Modification of reliefs

(1) The Treasury may by regulations—

(a) amend this Part for the purpose of providing further relief, or further
10exemptions, from tax (whether by modifying an existing relief or
exemption or otherwise);

(b) amend or repeal any of sections 130 to 153 for purposes not falling
within subsection (1);

(c) make any amendment of any other provision of this Part that may be
15necessary in consequence of provision under paragraph (b).

(2) In subsection (1)—

(a) the reference to providing further relief from tax includes the provision
of relief for additional persons or categories of person or in additional
cases or circumstances;

(b) 20the reference to providing further exemptions from tax includes the
provision of exemptions for additional persons or categories of person
or in additional cases or circumstances.

Alternative property finance

155 Land sold to financial institution and leased to person

(1) 25This section applies where—

(a) section 71A of FA 2003 (land sold to financial institution and leased to
person) or section 72 of that Act (land in Scotland sold to financial
institution and leased to person) applies in relation to arrangements
entered into between a financial institution and another person (“the
30lessee”), and

(b) the land in which the institution purchases a major interest under the
first transaction consists of or includes one or more dwellings (or parts
of a dwelling).

(2) If the lessee is a company, this Part has effect in relation to times when the
35arrangements are in operation as if—

(a) the interest held by the financial institution as mentioned in subsection
(3)(b) were held by the lessee (and not by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not
been granted.

(3) 40The reference in subsection (2) to times when the arrangements are in
operation is to times when—

(a) the lessee holds the leasehold interest granted to it under the second
transaction, and

Finance (No. 2) BillPage 92

(b) the interest purchased under the first transaction (or that interest except
so far as transferred by a further transaction) is held by a financial
institution.

(4) A company treated under subsection (2)(a) as holding an interest at a particular
5time is treated as holding it as a member of a partnership if at the time in
question the company holds the leasehold interest as a member of the
partnership (and this Part has effect accordingly in relation to the other
members of the partnership).

(5) In relation to times when the arrangements operate for the benefit of a
10collective investment scheme, this Part has effect as if—

(a) the interest held by the financial institution as mentioned in subsection
(6)(b) were held by the lessee for the purposes of a collective investment
scheme (and were not held by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not
15been granted.

(6) The reference in subsection (5) to times when the arrangements operate for the
benefit of a collective investment scheme is to times when—

(a) the lessee holds the leasehold interest for the purposes of a collective
investment scheme, and

(b) 20the interest purchased under the first transaction (or that interest except
so far as transferred by a further transaction) is held by a financial
institution.

(7) In this section—

  • “financial institution” has the meaning given by section 73BA of FA 2003;

  • 25“the first transaction” has the same meaning as in section 71A or (as the
    case requires) 72 of FA 2003;

  • “further transaction” has the same meaning as in section 71A of FA 2003;

  • “the leasehold interest” means the interest granted to the lessee under the
    second transaction;

  • 30“the second transaction” has the same meaning as in section 71A or (as the
    case requires) 72 of FA 2003.

(8) The reference in subsection (1) to a major interest in land is to be read in
accordance with section 117 of FA 2003.

(9) Where the lessee is an individual, references in subsections (5) and (6) to the
35lessee are to be read, in relation to times after the death of the lessee, as
references to the lessee’s personal representatives.

(10) In relation to transactions in relation to which section 29 of the Scotland Act
2012 (disapplication of UK stamp duty land tax) has effect, this section has
effect as if—

(a) 40in subsection (1) of that section the words “or section 72 of that Act
(land in Scotland sold to financial institution and leased to person)”
were omitted, and

(b) in subsection (7) the words, “or (as the case requires) section 72” were
omitted.

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Administration and payment of tax

156 Responsibility for collection and management

The Commissioners for Her Majesty’s Revenue and Customs are responsible
for the collection and management of annual tax on enveloped dwellings.

157 5Annual tax on enveloped dwellings return

(1) Where tax is charged on a person for a chargeable period with respect to a
single-dwelling interest the person must deliver a return for the period with
respect to the interest.

(2) A return under subsection (1) must be delivered by the end of the period of 30
10days beginning with first day in the period on which the person is within the
charge with respect to the interest.

(3) If the first day in the chargeable period on which the person is within the
charge with respect to the interest (“day 1”) is a valuation date only because of
section 122 (new dwellings) or 123 (dwellings produced from other
15dwellings)—

(a) subsection (2) does not apply, and

(b) the return must be delivered by the end of the period of 90 days
beginning with day 1.

(4) A return under this section must be delivered to an officer of Revenue and
20Customs, and is called an “annual tax on enveloped dwellings return”.

158 Return of adjusted chargeable amount

(1) A person on whom tax is charged for a chargeable period with respect to a
single-dwelling interest must deliver a further return for the period with
respect to the interest if the first or second condition is met.

(2) 25The return must be delivered by the end of the period of 30 days beginning
with the first day of the period following the period for which the tax is
charged (but see subsection (3)).

(3) If the return is required because the second condition is met and the adjusted
chargeable amount is affected by an event that has occurred after the end of the
30chargeable period mentioned in subsection (1), the return must be delivered by
the end of the period of 30 days beginning with the day on which that event
occurred.

(4) The first condition is that—

(a) the person has not made a claim under section 97 (interim relief) with
35respect to the interest for the chargeable period, and

(b) the adjusted chargeable amount is greater than the amount charged
under section 96 with respect to the single-dwelling interest for the
period.

(5) The second condition is that—

(a) 40the person has made one or more claims under section 97 with respect
to the interest for the chargeable period, and

Finance (No. 2) BillPage 94

(b) the sum of amounts A and B, as calculated under that section, in
connection with the last of those claims is less than the adjusted
chargeable amount.

(6) A return under this section must be delivered to an officer of Revenue and
5Customs, and is called a “return of the adjusted chargeable amount”.

159 Return to include self assessment

(1) A return must include a self assessment.

(2) In subsection (1) “return” means—

(a) an annual charge on enveloped dwellings return, or

(b) 10a return of the adjusted chargeable amount.

(3) In the case of an annual tax on enveloped dwellings return, “self assessment”
means an assessment of—

(a) the amount of tax to which the person is chargeable under section 96 for
the period in respect of the interest, and

(b) 15if the return includes a claim under section 97 (interim relief), the tax
payable after the relief.

(4) In in the case of a return of the adjusted chargeable amount, “self assessment”
means an assessment of—

(a) the adjusted chargeable amount, and

(b) 20the additional tax payable in accordance with section 161(2).

(5) A self assessment must include a statement of the amount taken to be the
market value of the interest on each valuation date (earlier than the date on
which the return is delivered) that is relevant for the purposes of the
assessment.

160 25Returns, enquiries, assessments and other administrative matters

(1) Schedule 31 contains provision about returns, enquiries and related matters.

(2) The Treasury may by regulations—

(a) make any amendments of Schedule 31 that they may at any time think
appropriate;

(b) 30make any amendment of any other provision of this Part that may be
necessary in consequence of provision under paragraph (a).

161 Payment of tax

(1) Tax charged on a person under section 96 for a chargeable period with respect
to a single-dwelling interest must be paid not later than the filing date for the
35annual tax on enveloped dwellings return required to be made for the period
with respect to the interest.

(2) So far as a chargeable person’s adjusted chargeable amount for a chargeable
period with respect to a single-dwelling interest exceeds the amount payable
under subsection (1) (as modified, where applicable, by section 103(3)), the
40amount of the difference must be paid not later than the filing date for the
return of the adjusted chargeable amount under section 158.

(3) Tax payable as a result of the amendment of a return must be paid—

Finance (No. 2) BillPage 95

(a) immediately, or

(b) if the amendment is made on or before the filing date for the return, not
later than that date.

(4) In subsection (3) “return” means—

(a) 5an annual tax on enveloped dwellings return, or

(b) a return of the adjusted chargeable amount.

(5) Tax payable in accordance with a determination or assessment by an officer of
Revenue and Customs must be paid within the period of 30 days beginning
with the day on which the determination or assessment is issued.

162 10Information and enforcement

In Schedule 32—

(a) Part 1 contains provision about information and inspection powers,
and

(b) Part 2 contains provision about penalties.

163 15Collection and recovery of tax etc

(1) Schedule 12 to FA 2003 (stamp duty land tax: collection and recovery of tax)
has effect in relation to the collection and recovery of tax under this Part as it
has effect in relation to stamp duty land tax.

(2) The reference in subsection (1) to tax under this Part includes any unpaid
20penalty or interest under this Part.

Application of provisions

164 Companies

(1) In this Part “company” means a body corporate but does not include—

(a) a corporation sole, or

(b) 25any partnership (see section 165(1)).

(2) Everything to be done by a company under this Part must be done by the
company acting through—

(a) the proper officer of the company, or

(b) another person who has the express, implied or apparent authority of
30the company to act on its behalf for the purpose.

(3) Service of a document on a company under this Part may be effected by serving
the document on the proper officer.

(4) Tax due from any company that is incorporated under the law of a country or
territory outside the United Kingdom may be recovered from the proper
35officer of the company (as well as by any means available in the absence of this
subsection).

(5) The proper officer—

(a) may retain, out of any money that may come into the officer’s hands on
the company’s behalf, enough money to pay that tax, and

Finance (No. 2) BillPage 96

(b) is entitled to be fully reimbursed by the company (whether by that
method or another) for amounts recovered from the officer under
subsection (4).

(6) For the purposes of this section the proper officer of a company is—

(a) 5the secretary, or a person acting as secretary, of the company, or

(b) if the company does not have a proper officer within paragraph (a), the
treasurer, or a person acting as treasurer, of the company.

(7) If a liquidator has been appointed for the company—

(a) subsections (2)(b) and (6) do not apply, and

(b) 10the liquidator is the proper officer of the company.

(8) If an administrator has been appointed for the company—

(a) subsection (6) does not apply, and

(b) the administrator is the proper officer of the company.

(9) If two or more persons are appointed to act jointly or concurrently as the
15administrator of the company, the proper officer of the company is—

(a) whichever of those persons is specified in a notice given by the
administrators to an officer of Revenue and Customs for the purposes
of this section, or

(b) if no notice is given under paragraph (a), whichever of those persons is
20designated by an officer of Revenue and Customs as the proper officer
for those purposes.

(10) See also section 151 (public bodies) and 152 (bodies established for national
purposes).

165 Partnerships

(1) 25In this Part “partnership” means—

(a) a partnership within the Partnerships Act 1890,

(b) a limited partnership registered under the Limited Partnerships Act
1907,

(c) a limited liability partnership formed under the Limited Liability
30Partnerships Act 2000 or the Limited Liability Partnerships Act
(Northern Ireland) 2002, or

(d) a firm or entity of a similar character to any of those mentioned in
paragraphs (a) to (c) formed under the law of a country or territory
outside the United Kingdom.

(2) 35This Part has effect as follows in relation to a partnership (for instance, a
limited liability partnership formed as mentioned in subsection (1)(c)) that is
itself capable of being entitled to, or of acquiring or disposing of, a chargeable
interest—

(a) transactions entered into on behalf of the partnership are treated as
40entered into by or on behalf of the partners;

(b) where the partnership is entitled to a single-dwelling interest, this Part
has effect as if the partners were jointly entitled to the interest (and the
partnership had no entitlement to it).

(3) For the purposes of this Part a partnership is treated as the same partnership
45despite a change in membership if any person who was a member before the
change remains a member after the change.

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(4) For the purposes of this Part—

(a) a collective investment scheme is not regarded as a partnership, and

(b) accordingly, a member of a partnership by or on whose behalf a single-
dwelling interest is held for the purposes of a collective investment
5scheme is not regarded as entitled to the interest as a member of the
partnership.

(5) Anything required or authorised by this Part to be done by or in relation to the
responsible partners for a partnership may instead be done by or in relation to
any representative partner or partners.

(6) 10A representative partner means a partner nominated by a majority of the
partners to act as the representative of the partnership for the purposes of this
Part of this Act.

(7) Any such nomination, or the revocation of such a nomination, has effect only
after notice of the nomination, or revocation, has been given to an officer of
15Revenue and Customs.

Supplementary provisions

166 Miscellaneous amendments and transitory provision

Schedule 33 contains—

(a) miscellaneous amendments, and

(b) 20provision about the chargeable period beginning on 1 April 2013.

167 Orders and regulations

(1) Orders and regulations under this Part are to be made by statutory instrument.

(2) A statutory instrument containing an order or regulations made under this
Part is subject to annulment in pursuance of a resolution of the House of
25Commons.

(3) Subsection (2) does not apply to an instrument containing only—

(a) an order under section 98(5), or

(b) regulations under section 154.

(4) Subsection (2) does not apply to an instrument to which subsection (5) applies.

(5) 30A statutory instrument containing (whether alone or with other provision)
provision made under section 154(1)(b) or (c) or 160(2) may not be made unless
a draft of the instrument has been laid before and approved by a resolution of
the House of Commons.

(6) An order or regulations under this Part—

(a) 35may make different provision for different purposes,

(b) may include consequential or transitional provisions or savings.

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Interpretation

168 Meaning of “chargeable day” and “within the charge”

(1) Any day on which the conditions in section 91(2) are met with respect to a
single-dwelling interest is a “chargeable day” for that interest.

(2) 5Where a day is a chargeable day as a result of subsection (1), the chargeable
person is “within the charge” with respect to a single-dwelling interest on that
day.

169 References to the state of affairs “on” a day

In determining for the purposes of any provision of this Part whether or not a
10state of affairs obtains on a particular day, it is to be assumed that the state of
affairs obtaining at the end of the day persisted throughout the day.

170 Connected persons

(1) Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for
the purposes of this Part (except where otherwise stated).

(2) 15For the purposes of this Part a person is taken to be connected with a collective
investment scheme if the person is a participant in the scheme who—

(a) is entitled to a share of at least 50% either of all the profits or income
arising from the scheme or of any profits or income arising from the
scheme that may be distributed to participants,

(b) 20would in the event of the winding up of the scheme be entitled to 50%
or more of the assets of the scheme that would then be available for
distribution among the participants.

(3) The reference in subsection (2) to a collective investment scheme does not
include a unit trust scheme; but see section 1123(2) of CTA 2010 (provision
25about the application of rules about connected persons to unit trust schemes).

(4) The reference in subsection (2)(a) to profits or income arising from the scheme
is to profits or income arising from the acquisition, holding, management or
disposal of the property subject to the scheme.

(5) For the purposes of subsection (2) a person is taken to have any rights and
30powers that the person—

(a) is entitled to acquire at a future date, or

(b) will at a future date be entitled to acquire.

(6) For the purposes of subsection (2) the rights and powers of any associate of a
person (or of any two or more associates of a person) are to be attributed to the
35person.

(7) In this section “associate” has the same meaning as in Part 10 of CTA 2010 (see
section 448 of that Act); but for this purpose section 448 is to be read as if the
words “or partner” were omitted in subsection (1)(a).

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171 Connected persons: cell companies

(1) For the purposes of this Part a person is to be treated as connected to a cell
company where, if any cell of the company were a separate company, the
person would be connected to that separate company.

(2) 5For the purposes this section a company is a “cell company” if it meets the first
or second condition.

(3) The first condition is that under the law under which the company is
incorporated or formed, under the company’s articles of association or other
document regulating the company or under arrangements entered into by or
10in relation to the company—

(a) some or all of the assets of the company are available primarily, or only,
to meet particular liabilities of the company, and

(b) some or all of the members of the company, and some or all of its
creditors, have rights primarily, or only, in relation to particular assets
15of the company.

(4) The second condition is that the company’s articles of association, or other
document regulating it, establish an entity (by whatever name known)
which—

(a) under the law under which the company is incorporated or formed, has
20legal personality distinct from that of the company, and

(b) which is not itself a company.

(5) For the purposes of this section a “cell”, in relation to a cell company, is—

(a) an identifiable part of the company (by whatever name known) that
carries on distinct business activities and to which particular assets and
25liabilities of the company are primarily or wholly attributable, or

(b) an entity of the kind specified in subsection (4).

172 General interpretation of Part 3

(1) In this Part—

  • “chargeable day” (in relation to a single-dwelling interest) is to be read in
    30accordance with section 168;

  • “chargeable interest” has the meaning given by section 104;

  • “the chargeable person” has the meaning given by section 93(2) or (3);

  • “closure notice” has the meaning given by paragraph 16 of Schedule 31;

  • “collective investment scheme” has the same meaning as in Part 17 of the
    35Financial Services and Markets Act 2000 (see section 235 of that Act);

  • “company” has the meaning given by section 164(1);

  • “completion”, in Scotland, means—

    (a)

    in relation to a lease, when it is executed by the parties (that is
    to say, by signing) or constituted by any means,

    (b)

    40in relation to any other transaction, the settlement of the
    transaction;

  • “discovery assessment” has the meaning given by paragraph 21 of
    Schedule 31;

  • EEA UCITS” has the same meaning as in Part 17 of the Financial Services
    45and Markets Act 2000 (see section 237 of that Act);

  • “excluded rents” has the meaning given by section 131(6);

  • Finance (No. 2) BillPage 100

  • “farming” has the meaning given by section 146(4);

  • “filing date”, in relation to an annual tax on enveloped dwellings return
    or a return of the adjusted chargeable amount, has the meaning given
    by paragraph 58 of Schedule 31;

  • 5“financial institution” has the meaning given by section 141 (except where
    otherwise stated);

  • HMRC” means Her Majesty’s Revenue and Customs;

  • HMRC determination” has the meaning given by paragraph 18 of
    Schedule 31;

  • 10“jointly entitled” means—

    (a)

    in England and Wales, beneficially entitled as joint tenants or
    tenants in common,

    (b)

    in Scotland, entitled as joint owners or owners in common,

    (c)

    in Northern Ireland, beneficially entitled as joint tenants,
    15tenants in common or coparceners;

  • “land” includes—

    (a)

    buildings and structures, and

    (b)

    land covered by water;

  • “market value” has the meaning given by section 95(8);

  • 20“notice of enquiry” has the meaning given by paragraph 8 of Schedule 31;

  • “open-ended investment company” has the same meaning as in Part 17 of
    the Financial Services and Markets Act 2000 (see section 236(1) of that
    Act);

  • “participant”, in relation to a collective investment scheme, has the
    25meaning given by section 95(7);

  • “partnership” has the meaning given by section 165;

  • “property development trade” has the meaning given by section 136(4)

  • “property rental business” has the meaning given by section 131(5);

  • “property trading business” has the meaning given by section 139(3);

  • 30“qualifying property rental business” has the meaning given by section
    131(4);

  • “self assessment” has the meaning given by section 159(2);

  • “tax” means tax under this Part;

  • “trade” has the same meaning as in section 35 of CTA 2009 (and cognate
    35expressions are to be read accordingly);

  • “unit trust scheme” has the same meaning as in Part 17 of the Financial
    Services and Markets Act 2000 (see section 237(1) of that Act).

(2) In this Part—

  • references to the “adjusted chargeable amount”, in relation to a person on
    40whom tax is charged for a chargeable period with respect to a single-
    dwelling interest, are to be read in accordance with section 102;

  • references to an “annual tax on enveloped dwellings return” are to be read
    in accordance with section 157(4);

  • references to the “daily amount” for a day are to be read in accordance
    45with section 102(2);

  • references to “delivery”, in relation to an annual tax on enveloped
    dwellings return, are to be read in accordance with paragraph 2 of
    Schedule 31;

  • references to the “effective date” of an acquisition are to be read in
    50accordance with section 119(4);

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  • references to the “effective date” of a disposal are to be read in accordance
    with section 119(5);

  • references to a “major interest” in land are to be read in accordance with
    section 117 of FA 2003;

  • 5references to a “return of the adjusted chargeable amount” are to be read
    in accordance with section 158(6);

  • references to meeting the “ownership condition” are to be read in
    accordance with section 91(4) to (6);

  • references to being “within the charge” with respect to a single-dwelling
    10interest are to be read in accordance with section 168.

Part 4 Excise duties and other taxes

Inheritance tax

173 Open- ended investment companies and authorised unit trusts

(1) 15In section 65 of IHTA 1984 (settlements without interests in possession etc:
charge when property ceases to be relevant property etc), after subsection (7)
insert—

(7A) Tax shall not be charged under this section by reason only that property
comprised in a settlement becomes excluded property by virtue of
20section 48(3A)(a) (holding in an authorised unit trust or a share in an
open-ended investment company is excluded property unless settlor
domiciled in UK when settlement made).

(2) The amendment made by this section is treated as having come into force on
16 October 2002.

174 25Treatment of liabilities for inheritance tax purposes

Schedule 34 makes provision in relation to the treatment of liabilities for the
purposes of inheritance tax.

175 Election to be treated as domiciled in United Kingdom

(1) IHTA 1984 is amended as follows.

(2) 30In section 267 (persons treated as domiciled in United Kingdom), at the end
insert—

(5) In determining for the purposes of this section whether a person is, or
at any time was, domiciled in the United Kingdom, sections 267ZA and
267ZB are to be ignored.

(3) 35After that section insert—

267ZA Election to be treated as domiciled in United Kingdom

(1) A person may, if condition A or B is met, elect to be treated for the
purposes of this Act as domiciled in the United Kingdom (and not
elsewhere).

Finance (No. 2) BillPage 102

(2) A person’s personal representatives may, if condition B is met, elect for
the person to be treated for the purposes of this Act as domiciled in the
United Kingdom (and not elsewhere).

(3) Condition A is that—

(a) 5the person’s spouse or civil partner is domiciled in the United
Kingdom at the time the election is made, and

(b) the person is not domiciled in the United Kingdom at that time.

(4) Condition B is that—

(a) the person’s spouse or civil partner died on or after 6 April 2013
10and was domiciled in the United Kingdom at the time of death,
and

(b) the person was not domiciled in the United Kingdom at that
time.

(5) An election under this section does not affect a person’s domicile for
15the purposes of section 6(2) or (3) or 48(4).

(6) An election under this section is to be ignored—

(a) in interpreting any such provision as is mentioned in section
158(6), and

(b) in determining the effect of any qualifying double taxation relief
20arrangements in relation to a transfer of value by the person
making the election.

(7) For the purposes of subsection (6)(b) a qualifying double taxation relief
arrangement is an arrangement which is specified in an Order in
Council made under section 158 before the coming into force of this
25section (other than by way of amendment by an Order made on or after
the coming into force of this section).

(8) In determining for the purposes of this section whether a person
making an election under this section is or was domiciled in the United
Kingdom, section 267 is to be ignored.

267ZB 30 Section 267ZA: further provision about election

(1) For the purposes of this section—

(a) references to a lifetime election are to an election made by virtue
of section 267ZA(3), and

(b) references to a death election are to an election made by virtue
35of section 267ZA(4).

(2) A lifetime or death election is to be made by notice in writing to HMRC.

(3) A lifetime or death election is treated as having taken effect on a date
specified, in accordance with subsection (5), in the notice.

(4) Where no date is specified in accordance with subsection (5)—

(a) 40a lifetime election takes effect on the date it is made, and

(b) a death election is treated as having taken effect immediately
before any transfer treated as made by section 4 immediately
before the death of the spouse or civil partner.

(5) The date specified in a notice under subsection (3) must—

(a) 45be 6 April 2013 or a later date,

Finance (No. 2) BillPage 103

(b) be within the period of 7 years ending with—

(i) in the case of a lifetime election, the date on which the
election is made, or

(ii) in the case of a death election, the date of the spouse or
5civil partner’s death, and

(c) meet the condition in subsection (6).

(6) The condition in this subsection is met by a date (“the date concerned”)
if, throughout the relevant period—

(a) the person making the election was married to, or in a civil
10partnership with, the spouse or civil partner, and

(b) the spouse or civil partner was domiciled in the United
Kingdom.

(7) In subsection (6) the “relevant period” means—

(a) in the case of a lifetime election, the period beginning with the
15date concerned and ending with the date on which the election
is made, and

(b) in the case of a death election, the period beginning with the
date concerned and ending immediately before the death of the
spouse or civil partner.

(8) 20A death election may only be made within 2 years of the death of the
spouse or civil partner or such longer period as an officer of Revenue
and Customs may in the particular case allow.

(9) Subsection (10) applies if—

(a) a lifetime or death election is made,

(b) 25a disposition is made, or another event occurs, during the
period beginning with the time when the election is treated by
virtue of subsection (3) or (4)(b) as having taken effect and
ending at the time when the election is made, and

(c) the effect of the election being treated as having taken effect at
30that time is that the disposition or event gives rise to a transfer
of value.

(10) This Act applies with the following modifications in relation to the
transfer of value—

(a) subsections (1) and (6)(c) of section 216 have effect as if the
35period specified in subsection (6)(c) of that section were the
period of 12 months from the end of the month in which the
election is made, and

(b) sections 226 and 233 have effect as if the transfer were made at
the time when the election is made.

(11) 40A lifetime or death election cannot be revoked.

(12) If a person who made a lifetime or death election is not resident in the
United Kingdom for the purposes of income tax for a period of four
successive tax years beginning at any time after the election is made, the
election ceases to have effect at the end of that period.

Finance (No. 2) BillPage 104

176 Transfer to spouse or civil partner not domiciled in United Kingdom

(1) Section 18 of IHTA 1984 (transfers between spouses or civil partners) is
amended as follows.

(2) In subsection (2) (transfer to spouse or civil partner not domiciled in United
5Kingdom), for “£55,000” substitute “the exemption limit at the time of the
transfer,”.

(3) After subsection (2) insert—

(2A) For the purposes of subsection (2), the exemption limit is the amount
shown in the second column of the first row of the Table in Schedule 1
10(upper limit of portion of value charged at rate of nil per cent).

(4) The amendments made by this section have effect in relation to transfers of
value made on or after 6 April 2013.

Fuel

177 Fuel duties: rates of duty and rebates from 1 April 2013

(1) 15HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.6097” substitute “£0.5795”,

(b) in paragraph (aa) (aviation gasoline), for “£0.3966” substitute “£0.3770”,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation
20gasoline), for “£0.7069” substitute “£0.6767”, and

(d) in paragraph (c) (heavy oil), for “£0.6097” substitute “£0.5795”.

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2907” substitute
“£0.2470”, and

(b) 25in paragraph (b) (other road fuel gas), for “£0.3734” substitute
“£0.3161”.

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1126” substitute “£0.1070”, and

(b) in paragraph (b) (gas oil), for “£0.1172” substitute “£0.1114”.

(5) 30In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1126”
substitute “£0.1070”.

(6) In section 14A(2) (rebate on certain biodiesel), for “£0.1172” substitute
“£0.1114”.

(7) The following instruments are revoked—

(a) 35Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc) Order
2012 (S.I. 2012/3055S.I. 2012/3055), and

(b) Excise Duties (Road Fuel Gas) (Reliefs) Regulations 2012 (S.I. 2012/
3056).

(8) The amendments and revocations made by this section are treated as having
40come into force on 1 April 2013.

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Alcohol

178 Rates of alcoholic liquor duties

(1) ALDA 1979 is amended as follows.

(2) In section 5 (rate of duty on spirits), for “£26.81” substitute “£28.22”.

(3) 5In section 36(1AA) (rates of general beer duty)—

(a) in paragraph (za) (rate of duty on lower strength beer), for “£9.76”
substitute “£9.17”, and

(b) in paragraph (a) (standard rate of duty on beer), for “£19.51” substitute
“£19.12”.

(4) 10In section 37(4) (rate of high strength beer duty), for “£4.88” substitute “£5.09”.

(5) In section 62(1A) (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre on sparkling cider of a
strength exceeding 5.5 per cent), for “£245.32” substitute “£258.23”,

(b) in paragraph (b) (rate of duty per hectolitre on cider of a strength
15exceeding 7.5 per cent which is not sparkling cider), for “£56.55”
substitute “£59.52”, and

(c) in paragraph (c) (rate of duty per hectolitre in any other case), for
“£37.68” substitute “£39.66”.

(6) For the table in Schedule 1 substitute—

20Schedule 1 Table of rates of duty on wine and made-wine
Part 1 Wine or made-wine of a strength not exceeding 22 per cent
Description of wine or made-wine Rates of duty
25per hectolitre £
Wine or made-wine of a strength not exceeding 4 per
cent
82.18
Wine or made-wine of a strength exceeding 4 per cent
but not exceeding 5.5 per cent
113.01
Wine or made-wine of a strength exceeding 5.5 per cent
but not exceeding 15 per cent and not being sparkling
30266.72
Sparkling wine or sparkling made-wine of a strength
exceeding 5.5 per cent but less than 8.5 per cent
258.23
Sparkling wine or sparkling made-wine of a strength of
8.5 per cent or of a strength exceeding 8.5 per cent but
not exceeding 15 per cent
341.63
35
Wine or made-wine of a strength exceeding 15 per cent
but not exceeding 22 per cent
355.59
Part 2 40Wine or made-wine of a strength exceeding 22 per cent
Description of wine or made-wine Rates of duty per
litre of alcohol in
wine or made-
wine £
Wine or made-wine of a strength exceeding 22 per cent 4528.22.

(7) The amendments made by this section are treated as having come into force on
25 March 2013.

Tobacco

179 Rates of tobacco products duty

(1) 50For the table in Schedule 1 to TPDA 1979 substitute—

TABLE
1. Cigarettes An amount equal to 16.5 per
cent of the retail price plus
£176.22 per thousand cigarettes
2. Cigars 55£219.82 per kilogram
3. Hand-rolling tobacco £172.74 per kilogram
4. Other smoking tobacco and
chewing tobacco
£96.64 per kilogram.

(2) The amendment made by this section is treated as having come into force at 6
60pm on 20 March 2013.

180 Meaning of “tobacco products”

(1) Section 1 of TPDA 1979 (tobacco products) is amended as follows.

(2) In subsection (1), omit “, but does not include herbal smoking products”.

(3) After that subsection insert—

(1A) 65But a product is not a tobacco product for the purposes of this Act if—

(a) the product does not contain any tobacco, and

(b) the Commissioners are satisfied that—

(i) the product is of a description that is used for medical
purposes, and

(ii) 70the product is intended to be used exclusively for such
purposes.

(4) In subsection (3), omit “but not including herbal smoking products”.

Finance (No. 2) BillPage 106

(5) Omit subsection (6).

(6) The amendments made by this section come into force on 1 January 2014.

Gambling

181 Rates of gaming duty

(1) 5In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—


Table
Part of gross gaming yield Rate
The first £2,242,500 15 per cent
The next £1,546,000 1020 per cent
The next £2,707,500 30 per cent
The next £5,714,500 40 per cent
The remainder 50 per cent.