(13) If, apart from this subsection, an individual might have nominated
two or more accounts for which the qualifying date would be the
same, the individual may nominate only one of those accounts.

(14) If, apart from this subsection, an account would be a qualifying
5account of two or more individuals at any time, it is not to be a
qualifying account of either or any of them at that time or any other
time.

(15) For the purposes of this section an account is an “ordinary bank
account” if it is a cash account in a bank (whether a current or savings
10account) where sums standing to the credit of the account from time
to time represent a debt owed by the bank to the account-holder.

809RC Breaches of the deposit rule

(1) There is a breach of the deposit rule if a prohibited sum is paid into
the account on or after the qualifying date.

(2) 15A breach of the deposit rule is remedied if, within 30 days beginning
with the day on which the individual became or ought reasonably to
have become aware of the payment of the prohibited sum, the
required amount is transferred out of the account by way of a single
one-off transfer.

(3) 20“The required amount” is an amount equal to—

(a) the prohibited sum, plus

(b) all the other prohibited sums (if any) that have been paid into
the account since that sum was paid in.

(4) If there are 3 breaches of the deposit rule in any 12 month period,
25subsection (2) does not apply to the third breach and, accordingly,
the third breach cannot be remedied.

(5) The payment of a prohibited sum (“the later prohibited sum”) into
the account does not result in a breach of the deposit rule if—

(a) a breach resulting from an earlier payment of a prohibited
30sum into the account is remedied, and

(b) the later prohibited sum is represented by the required
amount in relation to that breach.

(6) A “prohibited sum” is anything other than a sum that is, or derives
wholly (whether directly or indirectly) from, any of the following
35kinds of income or capital—

(a) general earnings of the individual from an employment for a
tax year which is a relevant tax year in relation to the
employment,

(b) general earnings of the individual from an employment
40which consist of money and are paid in a tax year which is a
relevant tax year in relation to the employment,

(c) an amount of specific employment income which, by virtue
of Part 6, 7 or 7A of ITEPA 2003 or any other enactment,
counts as employment income of the individual in respect of
45an employment for a tax year which is a relevant tax year in
relation to the employment,

(d) interest on the account, or

(e) consideration for the disposal of employment-related
securities or employment-related securities options in the
circumstances described in subsection (7).

(7) The circumstances are—

(a) 5the securities or options were acquired pursuant to a right or
opportunity available by reason of an employment of the
individual,

(b) the disposal is or occurs in conjunction with, or as soon as
reasonably practicable after, a relevant event involving those
10securities or options, and

(c) the tax year in which the relevant event occurs is a relevant
tax year in relation to the employment.

(8) For the purposes of subsection (7) each of the following is a “relevant
event”—

(a) 15the acquisition mentioned in subsection (7)(a), and

(b) any event on the occurrence of which an amount (if positive)
counts as employment income by virtue of Part 7 of ITEPA
2003 or would do so but for—

(i) section 421E or 474 of that Act (exclusions: residence
20etc), or

(ii) an election under section 430 or 431 of that Act.

(9) For the purposes of this section a tax year is a “relevant” tax year in
relation to an employment if—

(a) the individual has general earnings from the employment for
25the tax year,

(b) those earnings include both general earnings within section
15(1) of ITEPA 2003 (“section 15(1) earnings”) and general
earnings within section 26(1) of that Act (“section 26(1)
earnings”),

(c) 30at least some of the section 15(1) earnings, or sums deriving
(wholly or in part, and directly or indirectly) from at least
some of the section 15(1) earnings, are paid into the account
in the tax year, and

(d) at least some of the section 26(1) earnings, or sums deriving
35(wholly or in part, and directly or indirectly) from at least
some of the section 26(1) earnings, are also paid into the
account in the tax year.

(10) For the purposes of this section—

(a) “employment-related securities” has the meaning given in
40section 421B(8) of ITEPA 2003, and

(b) “employment-related securities options” has the meaning
given in section 471(5) of that Act.

809RD Effect where 30-day deadline is met

(1) This section applies if the required amount in relation to a breach of
45the deposit rule was transferred out of the account in accordance
with section 809RC(2).

(2) Sections 809Q and 809R have effect as if—

(a) the intervening transactions had never taken place, and

(b) each prohibited sum represented by the required amount
had instead been transferred directly (at the time that sum
was paid into the qualifying account) into the account or
other property into which the required amount was
5transferred by virtue of the single one-off transfer.

(3) Each of the following is an “intervening transaction”—

(a) each payment into the qualifying account of a prohibited sum
represented by the required amount, and

(b) the single one-off transfer out of the qualifying account.

(4) 10If it is supposed under step 1 or 2 of section 809RA(2) that a single
transfer had been made in the intervening period, re-apply section
809Q or 809R in relation to that transfer taking account of subsection
(2).

(5) “The intervening period” is the period—

(a) 15beginning with the day on which the breach occurred, and

(b) ending with the day on which the single one-off transfer was
made in accordance with section 809RC(2).

(6) If more than one transfer of a sum equal to the required amount was
transferred out of the qualifying account within the 30-day grace
20period, the first of those transfers is assumed to be the single one-off
transfer.

(7) “The 30-day grace period” is the period of 30 days mentioned in
section 809RC(2).”

Part 3 25Commencement

7 The amendments made by Part 1 of this Schedule have effect in relation to
earnings for the tax year 2013-14 and subsequent tax years.

8 The amendments made by Part 2 of this Schedule have effect in relation to
transfers from a mixed fund that are made in the tax year 2013-14 or any
30subsequent tax year.

Section 20

SCHEDULE 7 Remittance basis: exempt property

1 Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.

2 In section 809X(3) (exempt property: public access rule), for “sections 809Z
35and 809Z1)” substitute “section 809Z)”.

3 (1) Section 809Y (property that ceases to be exempt property treated as
remitted) is amended as follows.

(2) In subsection (2), for “either” substitute “any”.

(3) After subsection (4) insert—

“(4A) Where exempt property has been lost, stolen or destroyed, the first
and second cases do not apply in relation to the property during any
period—

(a) 5beginning with the time at which it was lost, stolen or
destroyed, and

(b) (if lost or stolen) ending with the time at which it is recovered.

(4B) The third case is where a compensation payment is released in
respect of exempt property that has been lost, stolen or destroyed.”

(4) 10In subsection (6), after “exempt property” insert “by virtue of the first or
second case”.

4 After section 809YE insert—

“809YF Exception to section 809Y: compensation taken offshore or invested

(1) Section 809Y(1) does not apply to property if—

(a) 15it ceases to be exempt property because a compensation
payment in respect of it is released, and

(b) conditions A and B are met.

(2) Condition A is that the whole of the compensation payment is taken
offshore or used by a relevant person to make a qualifying
20investment within the period of 45 days beginning with the day on
which the payment is released.

(3) Condition B is that, if Condition A is satisfied wholly or in part by
using the compensation payment to make a qualifying investment,
the remittance basis user makes a claim for relief under subsection
25(4) on or before the first anniversary of the 31 January following the
tax year in which the payment is released.

(4) If section 809Y(1) does not apply to property by virtue of subsection
(1), the income and gains treated under section 809X as not remitted
to the United Kingdom continue to be treated after the compensation
30payment is released as not remitted to the United Kingdom even
though the property has ceased to be exempt property.

(5) But nothing in subsection (4) prevents anything done in relation to
any part of the compensation payment after that payment is taken
offshore (or used to make a qualifying investment) from counting as
35a remittance of the underlying income or gains to the United
Kingdom at the time when the thing is done.

(6) Treat the compensation payment as containing or deriving from an
amount of each kind of income and gain mentioned in section
809Q(4)(a) to (h) equal to the amount of that kind of income or gain
40contained in the exempt property when it was brought to, or
received or used in, the United Kingdom (as mentioned in section
809X).

(7) Where Condition A was met by using the compensation payment to
make a qualifying investment—

(a) 45the business investment provisions apply to the income and
gains that continue, by virtue of subsection (4), to be treated

as not remitted as they apply to income or gains that are
treated under section 809VA(2) as not remitted, and

(b) if the investment was made using more than just the
compensation payment, treat only the part of the investment
5made using the payment as “the investment” for the
purposes of those provisions.”

5 (1) Section 809Z (public access rule: general) is amended as follows.

(2) In subsection (1), for “A to D” substitute “B and C”.

(3) Omit subsection (2).

(4) 10After subsection (8) insert—

“(8A) But if the property is lost or stolen—

(a) the relevant period ends with the time at which it is lost or
stolen, and

(b) a new relevant period begins with its importation or the time
15at which it is recovered.”

(5) Omit subsection (10).

6 Omit section 809Z1 (public access rule: relevant VAT relief).

7 (1) Section 809Z4 (temporary importation rule) is amended as follows.

(2) In subsection (1), after “days” insert “(subject to any increase under
20subsection (3B))”.

(3) In subsection (3)—

(a) before paragraph (a) insert—

“(za) the property meets the public access rule,”,

(b) after paragraph (b) insert—

“(ba) 25subsection (3A) applies to the property,”, and

(c) in paragraph (d) for “or 809YC(2)” substitute “, 809YC(2) or
809YF(4)”.

(4) After that subsection insert—

“(3A) This subsection applies to the property if—

(a) 30it is not available to be used or enjoyed in the United
Kingdom by or for the benefit of a relevant person because it
has been lost, stolen or destroyed,

(b) (if lost or stolen) it has not been recovered, and

(c) no compensation payment has been released in respect of it.

(3B) 35If—

(a) property that has been lost or stolen is recovered,

(b) the first day after the day on which it is recovered is a
countable day, and

(c) excluding that countable day there have already been 231 or
40more countable days in relation to the property,

the number of countable days specified in subsection (1) is read as
being increased by the number necessary for there to be 45 countable
days beginning with the countable day mentioned in paragraph (b).”

(5) Omit subsections (4) to (10).

8 In section 809Z6 (exempt property: other interpretation), after subsection (4)
insert—

“(5) References to property being lost, stolen or destroyed are to the
5property being lost, stolen or destroyed whilst in the United
Kingdom.

(6) “Compensation payment”, in relation to property that has been lost,
stolen or destroyed, means any payment of compensation (whether
under an insurance policy or otherwise) in respect of the property.

(7) 10A compensation payment is “released” on the day on which it first
becomes available for use in the United Kingdom by or for the
benefit of any relevant person.

(8) Property that has been lost or stolen is “recovered” on the day on
which it becomes available to be used or enjoyed in the United
15Kingdom by or for the benefit of a relevant person.”

9 The amendments made by paragraphs 3, 4, 5(4), 7(2), (3)(b) and (c) and (4)
and 8 have effect in relation to property that is lost, stolen or destroyed on or
after 6 April 2013.

10 The other amendments made by this Schedule have effect—

(a) 20in relation to property that is not in the United Kingdom on 6 April
2013, as from that date, and

(b) in relation to property that is in the United Kingdom on that date, as
from the time when it ceases to be in the United Kingdom or is lost
or stolen.

11 25In the case of property that falls within paragraph 10(b) by virtue of being
lost or stolen, any period that is a period of importation in relation to the
property for the purposes of section 809Z4 of ITA 2007 ends with the time at
which it is lost or stolen.

Section 24

SCHEDULE 8 30Gains from contracts for life insurance etc

1 Chapter 9 of Part 4 of ITTOIA 2005 (gains from contracts for life insurance
etc) is amended as follows.

2 In section 476 (special rules: foreign policies) in subsection (2)—

(a) after the entry relating to section 474(3) to (5) insert “and”,

(b) 35omit the entry relating to section 528,

(c) omit the “and” after the entry relating to sections 531 to 534, and

(d) omit the entry relating to section 536(6).

3 For section 528 substitute—

“528 Reduction in amount charged on basis of non-UK residence where
40individual liable for tax

(1) Subsection (2) applies if—

(a) an individual is liable for tax charged on a gain from a policy
of life insurance or a capital redemption policy, and

(b) there are one or more days in the material interest period on
which the individual is not UK resident.

(2) 5In determining the individual’s liability for tax, the gain on which
the tax is charged in the case of the individual is to be reduced by the
appropriate fraction.

(3) The appropriate fraction is—

(4) In subsection (2) the reference to the gain is to be read in accordance
15with section 463A(4), 463D(4) or 463E(3) (which relates to restricted
relief qualifying policies) if applicable.

(5) In this section “the material interest period” means so much of the
policy period as during which the individual meets condition A, B or
C in section 465 in relation to the policy (subject to subsection (7)).

(6) 20Subsections (7) and (8) apply if, before the chargeable event, there is
an assignment falling within section 487(c) in relation to the policy
where the individual is the assignee.

(7) There is to be added to the material interest period any part of the
policy period falling before the assignment—

(a) 25during which the assignor meets condition A, B or C in
section 465 in relation to the policy, and

(b) which is not included in the material interest period under
subsection (5).

(8) In relation to any period added to the material interest period under
30subsection (7), in subsection (1)(b) the reference to the individual is
to be read as a reference to the assignor.

(9) For the purposes of subsections (5) and (7), in section 465(2) to (4)
references to the rights under the policy are to be read as including
references to a share of those rights.

(10) 35In this section “the policy period” means the period for which the
policy has run before the chargeable event occurs.

(11) If the policy is a policy of life insurance which is a new policy in
relation to another policy, for the purposes of subsection (10) the new
policy is to be taken to have run—

(a) 40from the issue of the other policy, or

(b) if it also was a new policy in relation to an earlier policy, from
the issue of the earlier policy,

and so on; and in subsections (5) to (9) references to the policy are to
be read accordingly as including any relevant earlier policy.

(12) In subsection (11) “new policy” has the meaning given in paragraph
17 of Schedule 15 to ICTA.

528A Reduction in amount charged on basis of non-UK residence of
deceased person

(1) 5Subsection (3) applies if—

(a) personal representatives are liable for tax charged on a gain
from a policy of life insurance or a capital redemption policy
under section 466, and

(b) there were one or more days in the material interest period on
10which the deceased was not UK resident.

(2) Subsection (3) also applies if—

(a) trustees are liable for tax charged on a gain from a policy of
life insurance or a capital redemption policy under section
467 where—

(i) 15of conditions A to D in that section, only condition B
is met, and

(ii) the absent settlor condition which is met is the one in
subsection (4)(b) of that section (deceased settlor),

(b) there were one or more days in the material interest period on
20which the deceased was not UK resident, and

(c) the deceased was UK resident when the deceased died.

(3) In determining the liability for tax of the personal representatives or
trustees, the gain on which the tax is charged in the case of the
personal representatives or trustees is to be reduced by the
25appropriate fraction.

(4) The appropriate fraction is—

(5) In subsection (3) the reference to the gain is to be read in accordance
with section 463C(8) (which relates to restricted relief qualifying
35policies) if applicable.

(6) In this section “the material interest period” means so much of the
policy period falling before the deceased’s death as during which the
deceased met condition A, B or C in section 465 in relation to the
policy (subject to subsection (8)).

(7) 40Subsections (8) and (9) apply if, before the deceased’s death, there
was an assignment falling within section 487(c) in relation to the
policy where the deceased was the assignee.

(8) There is to be added to the material interest period any part of the
policy period falling before the assignment—

(a) 45during which the assignor met condition A, B or C in section
465 in relation to the policy, and

(b) which is not included in the material interest period under
subsection (6).

(9) In relation to any period added to the material interest period under
subsection (8), in subsection (1)(b) or (2)(b) the reference to the
5deceased is to be read as a reference to the assignor.

(10) For the purposes of subsections (6) and (8), in section 465(2) to (4)
references to the rights under the policy are to be read as including
references to a share of those rights.

(11) In this section “the policy period” means the period for which the
10policy has run before the chargeable event occurs.

(12) If the policy is a policy of life insurance which is a new policy in
relation to another policy, for the purposes of subsection (11) the new
policy is to be taken to have run—

(a) from the issue of the other policy, or

(b) 15if it also was a new policy in relation to an earlier policy, from
the issue of the earlier policy,

and so on; and in subsections (6) to (10) references to the policy are
to be read accordingly as including any relevant earlier policy.

(13) In subsection (12) “new policy” has the meaning given in paragraph
2017 of Schedule 15 to ICTA.”

4 Omit section 529 (exceptions to section 528).

5 (1) Section 536 (top slicing relieved liability: one chargeable event) is amended
as follows.

(2) In subsection (6) for the words from “from” to the end substitute “reduced
25under section 528 in the case of the individual.”

(3) For subsection (7) substitute—

“(7) If in the case of the individual the gain is reduced under section 528,
for steps 1 and 3 in subsection (1) N is reduced by the number of
complete years consisting wholly of days falling within section
30528(1)(b) (including days falling within section 528(1)(b) by virtue of
section 528(8)).”

6 In section 552 of ICTA (information: duty of insurers) after subsection (13)
insert—

“(14) For the purposes of this section no account is to be taken of the effect
35of sections 528 and 528A of ITTOIA 2005.”

7 (1) The amendments made by this Schedule have effect in relation to—

(a) any policy of life insurance issued in respect of an insurance made on
or after 6 April 2013, or

(b) any contract constituting a capital redemption policy made on or
40after that date.

(2) The amendment made by paragraph 3 above has effect in relation to any
insurance or contract made before 6 April 2013 if on or after that date—

(a) the policy or contract is varied with the result that there is an increase
in the benefits secured,

(b) there is or was an assignment (or assignation) of rights, or a share of
the rights, conferred by the policy or contract (whether or not for
money’s worth) to the individual or deceased, or

(c) some or all of the rights conferred by the policy or contract become
5or became held as a security for a debt of the individual or deceased,

and the other amendments made by this Schedule have effect in relation to
the insurance or contract accordingly.

(3) For the purposes of sub-paragraph (2)(a) an exercise of rights conferred by a
policy or contract is to count as a variation of the policy or contract.

(4) 10In the case of a policy or contract treated under section 473A of ITTOIA 2005
as a single policy or contract, for the purposes of sub-paragraphs (1) and (2)
the date on which the insurance or contract is made is the date on which, as
the case may be—

(a) the first insurance is made in respect of which the connected policies
15are issued, or

(b) the first of the connected contracts is made.

Section 25

SCHEDULE 9 Qualifying insurance policies

Part 1 20Amendments of Schedule 15 to ICTA etc

1 Schedule 15 to ICTA (qualifying insurance policies) is amended as follows.

2 Before Part 1 insert—

“ Part A1 Premium limit for qualifying policies

A1 25Premium limit for qualifying policies to apply from 6 April 2013

(1) Sub-paragraph (2) applies if—

(a) an event falling within sub-paragraph (3) occurs,

(b) apart from sub-paragraph (2), the policy to which the event
relates would be a qualifying policy after the event, and

(c) 30an individual who is a beneficiary under that policy is in
breach of the premium limit for qualifying policies.

(2) That policy is not to be a qualifying policy after the event.

(3) The events falling within this sub-paragraph are—

(a) the issue of a policy in respect of an insurance made on or
35after 6 April 2013;

(b) the variation of a policy on or after 6 April 2013 where as a
result of the variation—

(i) the period over which premiums are payable
under the policy is or could be lengthened, or