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Finance (No. 2) BillPage 120

(4) Consequential adjustments—

(a) may be made in respect of any period, and

(b) may affect any person (whether or not a party to the tax arrangements).

(5) But nothing in this section requires or permits an officer to make a
5consequential adjustment the effect of which is to increase a person’s liability
to any tax.

(6) For the purposes of this section—

(a) if the claim relates to income tax or capital gains tax, Schedule 1A to
TMA 1970 applies to it;

(b) 10if the claim relates to corporation tax, Schedule 1A to TMA 1970 (and
not Schedule 18 to FA 1998) applies to it;

(c) if the claim relates to petroleum revenue tax, Schedule 1A to TMA 1970
applies to it, but as if the reference in paragraph 2A(4) of that Schedule
to a year of assessment included a reference to a chargeable period
15within the meaning of OTA 1975 (see section 1(3) and (4) of that Act);

(d) if the claim relates to inheritance tax it must be made in writing to
HMRC and section 221 of IHTA 1984 applies as if the claim were a
claim under that Act;

(e) if the claim relates to stamp duty land tax or annual tax on enveloped
20dwellings, Schedule 11A to FA 2003 applies to it as if it were a claim to
which paragraph 1 of that Schedule applies.

(7) Where an officer of Revenue and Customs makes a consequential adjustment
under this section, the officer must give the person who made the claim written
notice describing the adjustment which has been made.

(8) 25For the purposes of this section the counteraction of a tax advantage is final
when the adjustments made to effect the counteraction, and any amounts
arising as a result of those adjustments, can no longer be varied, on appeal or
otherwise.

(9) Any adjustments required to be made under this section may be made—

(a) 30by way of an assessment, the modification of an assessment, the
amendment of a claim, or otherwise, and

(b) despite any time limit imposed by or under any enactment other than
this Part.

(10) In this section “the taxpayer”, in relation to a counteraction of a tax advantage
35under section 206, means the person to whom the tax advantage would have
arisen.

208 Proceedings before a court or tribunal

(1) In proceedings before a court or tribunal in connection with the general anti-
abuse rule, HMRC must show—

(a) 40that there are tax arrangements that are abusive, and

(b) that the adjustments made to counteract the tax advantages arising
from the arrangements are just and reasonable.

(2) In determining any issue in connection with the general anti-abuse rule, a court
or tribunal must take into account—

Finance (No. 2) BillPage 121

(a) HMRC’s guidance about the general anti-abuse rule that was approved
by the GAAR Advisory Panel at the time the tax arrangements were
entered into, and

(b) any opinion of the GAAR Advisory Panel about the arrangements (see
5paragraph 11 of Schedule 41).

(3) In determining any issue in connection with the general anti-abuse rule, a court
or tribunal may take into account—

(a) guidance, statements or other material (whether of HMRC, a Minister
of the Crown or anyone else) that was in the public domain at the time
10the arrangements were entered into, and

(b) evidence of established practice at that time.

209 Relationship between the GAAR and priority rules

(1) Any priority rule has effect subject to the general anti-abuse rule (despite the
terms of the priority rule).

(2) 15A “priority rule” means a rule (however expressed) to the effect that particular
provisions have effect to the exclusion of, or otherwise in priority to, anything
else.

(3) Examples of priority rules are—

(a) the rule in section 464, 699 or 906 of CTA 2009 (priority of loan
20relationships rules, derivative contracts rules and intangible fixed
assets rules for corporation tax purposes), and

(b) the rule in section 6(1) of TIOPA 2010 (effect to be given to double
taxation arrangements despite anything in any enactment).

210 Consequential amendment

(1) 25Section 42 of TMA 1970 (procedure for making claims etc) is amended as
follows.

(2) In subsection (2), for “(3ZB)” substitute “(3ZC)”.

(3) After subsection (3ZB) insert—

(3ZC) Subsection (2) also does not apply in relation to any claim under section
30207 of the Finance Act 2013 (claims for consequential relieving
adjustments after counteraction of tax advantage under the general
anti-abuse rule).

211 Interpretation of Part 5

In this Part—

212 5Commencement and transitional provision

(1) The general anti-abuse rule has effect in relation to any tax arrangements
entered into on or after the day on which this Act is passed.

(2) Where the tax arrangements form part of any other arrangements entered into
before that day those other arrangements are to be ignored for the purposes of
10section 204(3), subject to subsection (3).

(3) Account is to be taken of those other arrangements for the purposes of section
204(3) if, as a result, the tax arrangements would not be abusive.

Part 6 Other provisions

15Trusts

213 Trusts with vulnerable beneficiary

Schedule 42 contains provision about trusts which have a vulnerable
beneficiary.

Unit trusts

214 20Unauthorised unit trusts

(1) The Treasury may by regulations make provision about the treatment of the
trustees or unit holders of unauthorised unit trusts for the purposes of income
tax, corporation tax, capital gains tax or stamp duty land tax.

(2) Regulations under this section may—

(a) 25confer or impose powers or duties on officers of Revenue and Customs
or other persons;

(b) modify any enactment or instrument (whenever passed or made);

(c) specify descriptions of unauthorised unit trust in relation to which the
regulations are to apply or are not to apply;

(d) 30make different provision for different cases or different purposes;

(e) make incidental, consequential, supplementary and transitional
provision and savings.

In paragraph (b) “modify” includes amend, repeal or revoke.

(3) The statutory instrument containing the first regulations under this section
35may not be made unless a draft has been laid before and approved by a
resolution of the House of Commons.

(4) A subsequent statutory instrument containing regulations under this section is
subject to annulment in pursuance of a resolution of the House of Commons.

Finance (No. 2) BillPage 123

(5) In this section—

(a) “unauthorised unit trust” means a unit trust scheme which is neither an
authorised unit trust nor an umbrella scheme,

(b) “unit trust scheme” has the meaning given by section 237 of the
5Financial Services and Markets Act 2000, and

(c) “authorised unit trust”, “umbrella scheme” and “unit holder” have the
same meaning as in Chapter 2 of Part 13 of CTA 2010 (authorised
investment funds).

Residence

215 10Statutory residence test

(1) Schedule 43 contains—

(a) provision for determining whether individuals are resident in the
United Kingdom for the purposes of income tax, capital gains tax and
(where relevant) inheritance tax and corporation tax,

(b) 15provision about split years, and

(c) provision about periods when individuals are temporarily non-
resident.

(2) The Treasury may by order make any incidental, supplemental, consequential,
transitional or saving provision in consequence of Schedule 43.

(3) 20An order under subsection (2) may—

(a) make different provision for different purposes, and

(b) make provision amending, repealing or revoking any provision made
by or under an Act (whenever passed or made).

(4) An order under subsection (2) is to be made by statutory instrument.

(5) 25A statutory instrument containing an order under subsection (2) is subject to
annulment in pursuance of a resolution of the House of Commons.

216 Ordinary residence

(1) Schedule 44 contains provision removing or replacing rules relating to
ordinary residence.

(2) 30The Treasury may by order make further provision removing or replacing
rules relating to ordinary residence with respect to—

(a) income tax,

(b) capital gains tax, and

(c) (so far as the ordinary residence status of individuals is relevant to
35them) inheritance tax and corporation tax.

(3) An order under subsection (2) may take effect from the start of the tax year in
which the order is made.

(4) The Treasury may by order make any incidental, supplemental, consequential,
transitional or saving provision in consequence of Schedule 44 or in
40consequence of any further provision made under subsection (2).

(5) An order under this section may—

(a) make different provision for different purposes, and

Finance (No. 2) BillPage 124

(b) make provision amending, repealing or revoking any provision made
by or under an Act (whenever passed or made).

(6) An order under this section is to be made by statutory instrument.

(7) A statutory instrument containing an order under subsection (2) (whether
5alone or with other provisions) may not be made unless a draft of the
instrument has been laid before, and approved by a resolution of, the House of
Commons.

(8) Subject to subsection (7), a statutory instrument containing an order under this
section is subject to annulment in pursuance of a resolution of the House of
10Commons.

International matters

217 Controlled foreign companies etc

Schedule 45 makes provision in relation to CFCs etc.

218 Agreement between UK and Switzerland

(1) 15In Schedule 36 to FA 2012 (agreement between UK and Switzerland), after
paragraph 26 insert—

Transfers to HMRC under Agreement

26A (1) Income or chargeable gains of a person are to be treated as not
remitted to the United Kingdom if conditions A to D are met.

(2) 20Condition A is that (but for sub-paragraph (1)) the income or gains
would be regarded as remitted to the United Kingdom by virtue of
the bringing of money to the United Kingdom.

(3) Condition B is that the money is brought to the United Kingdom
pursuant to a transfer made to HMRC in accordance with the
25Agreement.

(4) Condition C (which applies only if the money brought to the United
Kingdom is a sum levied under Article 19(2)(b)) is that the sum was
levied within the period of 45 days beginning with the day on which
the amount derived from the income or gain in question was
30remitted as mentioned in Article 19(2)(b).

(5) Condition D is that the transfer is made in relation to a tax year in
which section 809B, 809D or 809E of ITA 2007 (application of
remittance basis) applies to the person.

(6) Sub-paragraph (1) does not apply in relation to money brought to the
35United Kingdom if or to the extent that—

(a) paragraph 18(2), or section 138(4)(a) or 140(5)(a) of TIOPA
2010, is applied in relation to it (set-off against other tax
liabilities), or

(b) it is repaid or refunded by HMRC.

26B (1) 40This paragraph applies if—

Finance (No. 2) BillPage 125

(a) but for paragraph 26A(1), income or chargeable gains would
have been regarded as remitted to the United Kingdom by
virtue of the bringing of money to the United Kingdom, and

(b) section 809Q of ITA 2007 (transfers from mixed funds) would
5have applied in determining the amount that would have
been so remitted.

(2) The bringing of the money to the United Kingdom counts as an
offshore transfer for the purposes of section 809R(4) of ITA 2007
(composition of mixed fund).

(2) 10The amendment made by this section is to be treated as having come into force
on 1 January 2013.

219 International agreements to improve tax compliance

(1) The Treasury may make regulations for the purpose of giving effect to or
enabling effect to be given to—

(a) 15the agreement reached between the Government of the United
Kingdom and the Government of the United States of America to
improve international tax compliance and to implement FATCA,
signed on 12 September 2012;

(b) any agreement modifying or supplementing that agreement;

(c) 20any other agreement between the Government of the United Kingdom
and the government of another territory which makes provision
corresponding, or substantially similar, to that made by an agreement
within paragraph (a) or (b).

(2) Regulations under this section may in particular—

(a) 25authorise HMRC to require persons specified for the purposes of this
paragraph (“relevant financial entities”) to provide HMRC with
information of specified descriptions;

(b) require that information to be provided at such times and in such form
and manner as may be specified;

(c) 30impose obligations on relevant financial entities;

(d) make provision (including provision imposing penalties) about
contravention of, or non-compliance with, the regulations;

(e) make provision about appeals in relation to the imposition of any
penalty.

(3) 35Regulations under this section may—

(a) provide that a reference in the regulations to an agreement to which
subsection (1) refers, or a provision of such an agreement, is to be
construed as a reference to the agreement, or provision, as amended
from time to time;

(b) 40make different provision in relation to different periods of time;

(c) make different provision for different cases or circumstances;

(d) contain incidental, supplemental, transitional, transitory or saving
provision (including provision amending any enactment).

(4) In this section—

(5) The power conferred by this section is without prejudice to any other powers
conferred by or under any enactment.

(6) 5The power of the Treasury to make regulations under this section is exercisable
by statutory instrument.

(7) Any statutory instrument containing regulations under this section is subject
to annulment in pursuance of a resolution of the House of Commons.

Disclosure

220 10Disclosure of tax avoidance schemes

(1) Part 7 of FA 2004 (disclosure of tax avoidance schemes) is amended in
accordance with subsections (2) and (3).

(2) After section 312A insert—

312B Duty of client to provide information to promoter

(1) 15This section applies where a person who is a promoter in relation to
notifiable arrangements has provided a person (“the client”) with the
information prescribed under section 312(2) (duty of promoter to notify
client of reference number).

(2) The client must, within the prescribed period, provide the promoter
20with prescribed information relating to the client.

(3) The duty under subsection (2) is subject to any exceptions that may be
prescribed.

(3) After section 313ZA insert—

313ZB Enquiry following disclosure of client details

(1) 25This section applies where—

(a) a person who is a promoter in relation to notifiable
arrangements has provided HMRC with information in relation
to a person (“the client”) under section 313ZA(3) (duty to
provide client details), and

(b) 30HMRC suspect that a person other than the client is or is likely
to be a party to the arrangements.

(2) HMRC may by written notice require the promoter to provide
prescribed information in relation to any person other than the client
who the promoter might reasonably be expected to know is or is likely
35to be a party to the arrangements.

(3) The promoter must comply with a requirement under or by virtue of
subsection (2) within—

(a) the prescribed period, or

(b) such longer period as HMRC may direct.

(4) 40In section 98C(2) of TMA 1970 (notification under Part 7 of FA 2004)—

Finance (No. 2) BillPage 127

(a) after paragraph (da) insert—

(daa) section 312B (duty of client to provide information to
promoter),, and

(b) after paragraph (db) insert—

(dc) 5section 313ZB (enquiry following disclosure of client
details),.

Powers

221 Powers under Proceeds of Crime Act 2002

Schedule 46 makes provision for, and in connection with, conferring powers
10under Chapter 3 of Part 5 and Chapters 2 and 3 of Part 8 of the Proceeds of
Crime Act 2002 on officers of Revenue and Customs.

222 Definition of “goods” for certain customs purposes

In section 1(1) of CEMA 1979 (interpretation), in the definition of “goods”, for
“baggage” substitute “containers”.

223 15Power to detain goods

(1) Section 139 of CEMA 1979 (provisions as to detention, seizure and
condemnation of goods etc) is amended as follows.

(2) After subsection (1) insert—

(1A) A person mentioned in subsection (1) who reasonably suspects that any
20thing may be liable to forfeiture under the customs and excise Acts may
detain that thing.

(1B) References in this section and Schedule 2A to a thing detained as liable
to forfeiture under the customs and excise Acts include a thing
detained under subsection (1A).

(3) 25In subsection (2), for the words from “either” to the end substitute “deliver that
thing to an officer”.

(4) In subsection (4), for “the Commissioners at the nearest office of customs and
excise” substitute “an officer”.

(5) In subsection (5), for “Schedule 3” substitute “Schedules 2A and 3”.

(6) 30After that subsection insert—

(5A) Schedule 2A contains supplementary provisions relating to the
detention of things as liable to forfeiture under the customs and excise
Acts.

(7) After Schedule 2 to that Act (composite goods: supplementary provisions as to

Finance (No. 2) BillPage 128

excise duties and drawbacks) insert—

Section 139(5A)

Schedule 2A Supplementary provisions relating to the detention of things as liable
to forfeiture

1 In this Schedule, references (however expressed) to a thing being
5detained are references to a thing being detained as liable to
forfeiture under the customs and excise Acts.

Period of detention

2 (1) This paragraph applies where a thing is detained.

(2) The thing may be detained for 30 days beginning with the day on
10which the thing is first detained.

(3) The thing is deemed to be seized as liable to forfeiture under the
customs and excise Acts if its detention ceases to be authorised under
this paragraph.

Notice of detention

3 (1) 15The Commissioners must take reasonable steps to give written notice
of the detention of any thing, and of the grounds for the detention, to
any person who to their knowledge was, at the time of the detention,
the owner or one of the owners of the thing.

(2) But notice need not be given under sub-paragraph (1) if the detention
20occurred in the presence of—

(a) the person whose offence or suspected offence occasioned the
detention,

(b) the owner or any of the owners of the thing detained or any
servant or agent of such an owner, or

(c) 25in the case of any thing detained on a ship or aircraft, the
master or commander.

Unauthorised removal or disposal: penalties etc

4 (1) This paragraph applies where a thing is detained and, with the
agreement of a person within sub-paragraph (2) (“the responsible
30person”), the thing remains at the place where it is first detained
(rather than being removed and detained elsewhere).

(2) A person is within this sub-paragraph if the person is—

(a) the owner or any of the owners of the thing at the time it was
detained or any servant or agent of such an owner, or

(b) 35a person whom the person who detains the thing reasonably
believes to be a person within paragraph (a).

(3) If the responsible person fails to prevent the unauthorised removal
or disposal of the thing from the place where it is detained, that
failure attracts a penalty under section 9 of the Finance Act 1994 (civil
40penalties).

Finance (No. 2) BillPage 129

(4) The removal or disposal of the thing is unauthorised unless it is done
with the permission of a proper officer of Revenue and Customs.

(5) Where any duty of excise is payable in respect of the thing—

(a) the penalty is to be calculated by reference to the amount of
5that duty (whether it has been paid or not), and

(b) section 9 of the Finance Act 1994 has effect as if in subsection
(2)(a) the words “5 per cent of” were omitted.

(6) If no duty of excise is payable in respect of the thing, that section has
effect as if the penalty provided for by subsection (2)(b) of that
10section were whichever is the greater of—

(a) the value of the thing at the time it was first detained, or

(b) £250.

5 (1) This paragraph applies where—

(a) a thing is detained at a revenue trader’s premises,

(b) 15the thing is liable to forfeiture under the customs and excise
Acts, and

(c) without the permission of a proper officer of Revenue and
Customs, the thing is removed from the trader’s premises, or
otherwise disposed of, by any person.

(2) 20The Commissioners may seize, as liable to forfeiture under the
customs and excise Acts, goods of equivalent value to the thing, from
the revenue trader’s stock.

(3) For the purposes of this paragraph, a revenue trader’s premises
include any premises used to hold or store anything for the purposes
25of the revenue trader’s trade, regardless of who owns or occupies the
premises.

(8) The amendments made by this section have effect in relation to things detained
on or after the day on which this Act is passed.

224 Penalty instead of forfeiture of larger ships

(1) 30Section 143 of CEMA 1979 (penalty in lieu of forfeiture of larger ship where
responsible officer is implicated in offence) is amended as follows.

(2) For subsection (1) (Commissioners’ power to impose fine up to £50)
substitute—

(1) This section applies where—

(a) 35any ship of 250 or more tons register would, but for section 142,
be liable to forfeiture for, or in connection with, any offence
under the customs and excise Acts, and

(b) in the opinion of the Commissioners, a responsible officer of the
ship is implicated either by the officer’s own act, or by neglect,
40in that offence.

(3) In subsection (3) (Commissioners’ power to bring condemnation
proceedings)—

(a) for the words from the beginning to the first “they” substitute “The
Commissioners”, and

(b) 45for “£500” substitute “£10,000”.

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