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Finance (No. 2) BillPage 410

Meaning of “filing date”

58 “Filing date”, in relation to an annual tax on enveloped dwellings return,
means the day by the end of which the return is required to be delivered.

Section 162

SCHEDULE 32 5Annual tax on enveloped dwellings: information and enforcement

Part 1 Information and inspection powers

1 Schedule 36 to FA 2008 (information and inspection powers) is amended as
follows.

2 10In paragraph 12A (powers to inspect property for valuation etc), in sub-
paragraph (3)—

(a) omit the “or” after paragraph (d), and

(b) after paragraph (e) insert , or

(f) annual tax on enveloped dwellings.

3 15After paragraph 21A insert—

Taxpayer notices following annual tax on enveloped dwellings return

21B (1) Where a person has delivered, for a chargeable period with
respect to a single-dwelling interest—

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

(b) 20a return of the adjusted chargeable amount,

a taxpayer notice may not be given for the purpose of checking the
person’s annual tax on enveloped dwellings position as regards
the matters dealt with in that return.

(2) Sub-paragraph (1) does not apply where, or to the extent that, any
25of conditions A to C is met.

(3) Condition A is that notice of enquiry has been given in respect
of—

(a) the return, or

(b) a claim (or an amendment of a claim) made by the person
30in relation to the chargeable period,

and the enquiry has not been completed.

(4) In sub-paragraph (3) “notice of enquiry” means a notice under
paragraph 8 of Schedule 31 to FA 2013 or paragraph 7 of Schedule
11A to FA 2003 (as applied by paragraph 28(2) of Schedule 31 to
35FA 2013).

(5) Condition B is that, as regards the person, an officer of Revenue
and Customs has reason to suspect that—

Finance (No. 2) BillPage 411

(a) an amount that ought to have been assessed to annual tax
on enveloped dwellings for the chargeable period may not
have been assessed,

(b) an assessment to annual tax on enveloped dwellings for
5the chargeable period may be or have become insufficient,
or

(c) relief from annual tax on enveloped dwellings for the
chargeable period may be or have become excessive.

(6) Condition C is that the notice is given for the purpose of obtaining
10any information or document that is also required for the purpose
of checking that person’s position as regards a tax other than
annual tax on enveloped dwellings.

(7) In this Schedule references to a “single-dwelling interest” are to be
read in accordance with section 105 of FA 2013.

4 15In paragraph 37 (partnerships), after sub-paragraph (2A) insert—

(2B) Where, in respect of a single-dwelling interest (see paragraph
21B(7)) to which one or more companies are or were entitled as
members of a partnership, any member of the partnership has—

(a) delivered an annual tax on enveloped dwellings return
20under Part 3 of FA 2013, or

(b) made a claim under that Part of that Act,

paragraph 21B (restrictions where taxpayer has delivered annual
return) has effect as if that return had been delivered, or that claim
had been made, by each member of the partnership.

5 25In paragraph 63(1) (meaning of “tax” in the Schedule), after paragraph (h)
insert—

(ha) annual tax on enveloped dwellings,.

Part 2 Penalties

30Errors in returns

6 In Schedule 24 to FA 2007 (penalties for errors), in the Table in paragraph 1,
after the entry relating to stamp duty reserve tax insert—

Annual tax on enveloped
dwellings
Annual tax on enveloped
dwellings return.
Annual tax on enveloped
dwellings
35Return of adjusted chargeable
amount.

Failure to make returns

7 (1) In Schedule 55 to FA 2009 (penalty for failure to make returns etc), in the

Finance (No. 2) BillPage 412

Table in paragraph 1, after item 11 insert—

11A Annual tax on enveloped
dwellings
Annual tax on enveloped
dwellings return under
section 157 of FA 2013
11B Annual tax on enveloped
dwellings
5Return of adjusted chargeable
amount under section 158.

(2) That Schedule, as amended by sub-paragraph (1), is taken to have come into
force for the purposes of annual tax on enveloped dwellings on the date on
which this Act is passed.

10Failure to make payments on time

8 Paragraphs 9 to 12 contain amendments and modifications of Schedule 56 to
FA 2009 (penalty for failure to make payments on time).

9 (1) the Table in paragraph 1 of that Schedule is amended as follows.

(2) After item 10 insert—

10A Annual tax on
enveloped
dwellings
Amount payable
under section
161(1) or (2) of FA
2013 (except an
amount falling
within item 23).
15The date falling 30 days
after the date specified
in section 161(1) or (2) of
FA 2013 as the date by
which the amount must
20be paid.

(3) After item 15 insert—

15A Annual tax on
enveloped
dwellings
Amount shown in
determination
under paragraph 18
of Schedule 31 to
FA 2013
The date falling 30 days
after the filing date for
the return in question.
25

(4) In item 17, in the second column, for “or 10” substitute “, 10 or 10A” and in
the third column for “15” substitute “15A”.

10 (1) Until paragraphs 2(13)(a) and 2(14)(a) of Schedule 11 to F(No. 3)A 2010
30(which amend items 23 and 24) come into force, paragraph 1 of Schedule 56
to FA 2009 has effect as if—

(a) in item 23 the references in the second and third columns to items 1
to 6, 9 or 10 included item 10A, and

(b) in item 24 the reference in the second column to items 1 to 6, 9 or 10
35included item 10A.

(2) With effect from the coming into force of paragraphs 2(13)(a) and 2(14)(a) of
Schedule 11 to F(No. 3)A 2010, paragraph 1 of Schedule 56 to FA 2009 is
amended as follows—

Finance (No. 2) BillPage 413

(a) in item 23, in the second and third columns, for “9, 10” substitute “9
to 10A”;

(b) in item 24, in the second column, for “9, 10” substitute “9 to 10A”.

11 Until paragraph 3 of Schedule 11 to F(No. 3)A 2010 comes into force,
5paragraph 2(c) has effect as if the reference in that paragraph to items 1 to 10
were to items 1 to 10A.

12 Schedule 56 to FA 2009, as amended by paragraph 4, is taken to have come
into force for the purposes of annual tax on enveloped dwellings on the date
on which this Act is passed.

Section 166

10SCHEDULE 33 Annual tax on enveloped dwellings: miscellaneous amendments and
transitory provision

Part 1 Miscellaneous amendments

15Provisional collection of taxes

1 In section 1(1) of the Provisional Collection of Taxes Act 1968 (temporary
statutory effect of House of Commons resolutions), after “stamp duty land
tax,” insert “annual tax on enveloped dwellings,”.

Disclosure of tax avoidance schemes

2 20In section 318(1) of FA 2004 (disclosure of tax avoidance schemes:
interpretation), in the definition of “tax”—

(a) omit the “or” after paragraph (f), and

(b) after paragraph (g) insert , or

(h) annual tax on enveloped dwellings.

25Definitions relating to charities

3 In paragraph 7 of Schedule 6 to FA 2010 (definition of “charity”, “charitable
company” and “charitable trust”)—

(a) omit the “and” after paragraph (g), and

(b) after paragraph (h) insert , and

(i) 30annual tax on enveloped dwellings.

Part 2 Transitory provision: the first chargeable period

4 In relation to the chargeable period beginning on 1 April 2013, section 157
has effect as if subsections (2) and (3) of that section provided as follows—

(2) 35A return under subsection (1) must be delivered by the end of 1
October 2013 if the days on which the person is within the charge
with respect to the interest include 1 April 2013.

Finance (No. 2) BillPage 414

(3) If the days on which the person is within the charge with respect to
the interest do not include 1 April 2013, the return must be
delivered—

(a) by the end of 1 October 2013, or

(b) 5by the end of the period of 30 days beginning with the first
day in the chargeable period on which the person is within
the charge with respect to the interest,

whichever is the later.

5 In relation to the chargeable period beginning on 1 April 2013, section 161
10(payment of tax) has effect as if subsection (1) of that section provided as
follows—

(1) Tax charged on a person under section 96 with respect to a single-
dwelling interest must be paid—

(a) by the end of 31 October 2013, or

(b) 15if later, by the end of the filing date for the return.

Section 174

SCHEDULE 34 Treatment of liabilities for inheritance tax purposes

IHTA 1984

1 IHTA 1984 is amended as follows.

2 (1) 20Section 162 (liabilities) is amended as follows.

(2) In subsection (4), after “possible” insert “and to the extent that it is not taken
to reduce value in accordance with section 162B”.

(3) In subsection (5), after “possible” insert “and to the extent that it is not taken
to reduce value in accordance with section 162B”.

3 25After section 162 insert—

162A Liabilities attributable to financing excluded property

(1) To the extent that a liability is attributable to financing (directly or
indirectly)—

(a) the acquisition of any excluded property, or

(b) 30the maintenance, or an enhancement, of the value of any such
property,

it may only be taken into account so far as permitted by subsection
(2) or (3).

(2) Where the excluded property has been disposed of, in whole or in
35part, for full consideration in money or money’s worth, the liability
may be taken into account up to an amount equal to so much of that
consideration as—

(a) is not excluded property, and

(b) has not been used—

Finance (No. 2) BillPage 415

(i) to finance (directly or indirectly) the acquisition of
excluded property or the maintenance, or an
enhancement, of the value of such property, or

(ii) to discharge (directly or indirectly) any other liability
5that, by virtue of this section, would not be taken into
account.

(3) The liability may be taken into account to the extent that it is greater
than the value of such of the excluded property as has not been
disposed of, but only so far as the liability is not greater than that
10value by virtue of—

(a) arrangements the main purpose, or one of the main purposes,
of which is to secure a tax advantage,

(b) an increase in the amount of the liability (whether due to the
accrual of interest or otherwise), or

(c) 15a disposal, in whole or in part, of the excluded property.

(4) In subsection (3)(a)—

162B Liabilities attributable to financing certain relievable property

(1) 25Subsection (2) applies if—

(a) the whole or part of any value transferred by a transfer of
value is to be treated as reduced, under section 104, by virtue
of it being attributable to the value of relevant business
property, and

(b) 30the transferor has a liability which is attributable, in whole or
in part, to financing (directly or indirectly)—

(i) the acquisition of that property, or

(ii) the maintenance, or an enhancement, of its value.

(2) The liability is, so far as possible, to be taken to reduce the value
35attributable to the value of the relevant business property, before it is
treated as reduced under section 104, but only to the extent that the
liability—

(a) is attributable as mentioned in subsection (1)(b), and

(b) does not reduce the value of the relevant business property
40by virtue of section 110(b).

(3) Subsection (4) applies if—

(a) the whole or part of any value transferred by a transfer of
value is to be treated as reduced, under section 116, by virtue
of it being attributable to the agricultural value of agricultural
45property, and

(b) the transferor has a liability which is attributable, in whole or
in part, to financing (directly or indirectly)—

(i) the acquisition of that property, or

Finance (No. 2) BillPage 416

(ii) the maintenance, or an enhancement, of its
agricultural value.

(4) To the extent that the liability is attributable as mentioned in
subsection (3)(b), it is, so far as possible, to be taken to reduce the
5value attributable to the agricultural value of the agricultural
property, before it is treated as reduced under section 116.

(5) For the purposes of subsections (1) to (4) references to a transfer of
value include references to an occasion on which tax is chargeable
under Chapter 3 of Part 3 (apart from section 79) and—

(a) 10references to the value transferred by a transfer of value
include references to the amount on which tax is then
chargeable, and

(b) references to the transferor include references to the trustees
of the settlement concerned.

(6) 15Subsection (7) applies if—

(a) part of the value of a person’s estate immediately before
death is attributable to the value of land on which trees or
underwood are growing,

(b) the value of the trees or underwood is to be left out of
20account, under section 125(2)(a), in determining the value
transferred by the chargeable transfer made on the person’s
death, and

(c) the person has a liability which is attributable, in whole or in
part, to financing (directly or indirectly)—

(i) 25the acquisition of the land or trees or underwood,

(ii) planting the trees or underwood, or

(iii) the maintenance, or an enhancement, of the value of
the trees or underwood.

(7) To the extent that the liability is attributable as mentioned in
30subsection (6)(c), it is, so far as possible, to be taken to reduce the
value of the trees or underwood, before their value is left out of
account.

(8) In this section—

162C Sections 162A and 162B: supplementary provision

(1) This section applies for the purposes of determining the extent to
40which a liability is attributable as mentioned in section 162A(1) or
162B(1)(b), (3)(b) or (6)(c).

(2) Where a liability was discharged in part before the time in relation to
which the question as to whether or how to take it into account
arises—

(a) 45any part of the liability that, at the time of discharge, was not
attributable as mentioned in subsection (1) is, so far as
possible, to be taken to have been discharged first,

Finance (No. 2) BillPage 417

(b) any part of the liability that, at the time of discharge, was
attributable as mentioned in section 162B(1)(b), (3)(b) or (6)(c)
is, so far as possible, only to be taken to have been discharged
after any part of the liability within paragraph (a) was
5discharged, and

(c) any part of the liability that, at the time of discharge, was
attributable as mentioned in section 162A(1) is, so far as
possible, only to be taken to have been discharged after any
parts of the liability within paragraph (a) or (b) were
10discharged.

4 After section 175 (estate on death: liability to make future payments etc)
insert—

175A Discharge of liabilities after death

(1) In determining the value of a person’s estate immediately before
15death, a liability may be taken into account to the extent that—

(a) it is discharged on or after death, out of the estate, in money
or money’s worth, and

(b) it is not otherwise prevented, under any provision of this Act,
from being taken into account.

(2) 20Where the whole or any part of a liability is not discharged in
accordance with paragraph (a) of subsection (1), the liability or (as
the case may be) the part may only be taken into account for the
purpose mentioned in that subsection to the extent that—

(a) there is a real commercial reason for the liability or the part
25not being discharged,

(b) the liability or the part is not being left undischarged as part
of arrangements the main purpose, or one of the main
purposes, of which is to secure a tax advantage, and

(c) the liability or the part is not otherwise prevented, under any
30provision of this Act, from being taken into account.

(3) For the purposes of subsection (2)(a) there is a real commercial
reason for a liability, or part of a liability, not being discharged where
it is shown that—

(a) the liability is to a person dealing at arm’s length, or

(b) 35if the liability were to a person dealing at arm’s length, that
person would not require the liability to be discharged.

(4) In subsection (2)(b)—

(5) In subsection (4) “tax” includes income tax and capital gains tax.

Finance (No. 2) BillPage 418

(6) Where the liability is discharged as mentioned in subsection (1)(a)
only in part—

(a) any part of the liability that is attributable as mentioned in
section 162A(1) is, so far possible, taken to be discharged first,

(b) 5any part of the liability that is attributable as mentioned in
section 162B(1)(b), (3)(b) or (6)(c) is, so far as possible, taken
to be discharged only after any part of the liability within
paragraph (a) is discharged, and

(c) the liability so far as it is not attributable as mentioned in
10paragraph (a) or (b) is, so far as possible, taken to be
discharged only after any parts of the liability within either of
those paragraphs are discharged.

Commencement

5 The amendments made by this Schedule have effect in relation to transfers
15of value made, or treated as made, on or after the day on which this Act is
passed.

Section 188

SCHEDULE 35 Vehicle licences for disabled people

1 VERA 1994 is amended as follows.

2 (1) 20Section 19 (rebates) is amended as follows.

(2) In subsection (3), after paragraph (c) insert—

(ca) a qualifying application for a vehicle licence for the vehicle is
made,.

(3) After that subsection insert—

(3ZA) 25An application for a vehicle licence is a qualifying application for the
purposes of subsection (3)(ca) if—

(a) paragraph 1ZA of Schedule 1 applies to the vehicle when the
application is made, but

(b) that paragraph did not apply to the vehicle when the licence
30which is unexpired when the application is made was taken
out.

3 (1) Section 22ZA (nil licences for vehicles for disabled persons: information) is
amended as follows.

(2) In subsection (1)(b), at the beginning insert “falls within subsection (1A) or”.

(3) 35After subsection (1) insert—

(1A) Information falls within this subsection if it is—

(a) the name, date of birth or national insurance number of a
person who is in receipt of a relevant payment, or would be
in receipt of such a payment but for—

Finance (No. 2) BillPage 419

(i) regulations under section 86(1) of the Welfare Reform
Act 2012 (treatment as in-patient in hospital or similar
institution), or

(ii) corresponding provision having effect in relation to
5personal independence payment in Northern Ireland;

(b) in the case of a person who is or would be in receipt of
personal independence payment attributable to entitlement
to the mobility component, the rate of the payment to which
the person is or would be entitled;

(c) 10in the case of a person who has ceased or will cease to receive
a relevant payment, the date on which the person ceased or
will cease to receive it and the reason for the person ceasing
to receive it.

(1B) In subsection (1A) “relevant payment” means—

(a) 15personal independence payment attributable to entitlement
to the mobility component, and

(b) armed forces independence payment.

(4) In subsections (2) and (4), and in the heading, omit “nil”.

(5) For subsection (5) substitute—

(5) 20In this section “relevant licence functions” means functions relating
to applications for, and the issue of—

(a) vehicle licences in respect of vehicles to which paragraph
1ZA of Schedule 1 applies, and

(b) nil licences in respect of vehicles that are exempt vehicles
25under paragraph 19 of Schedule 2 or paragraph 7 of Schedule
4.

4 In section 62(1) (definitions), at the appropriate places insert—

5 In Schedule 1 (annual rates of duty), in Part 1 after paragraph 1 insert—

1ZA (1) The annual rate of vehicle excise duty applicable to a vehicle to
which this paragraph applies is 50 per cent of the rate which (but
40for this paragraph) would be applicable.

(2) This paragraph applies to a vehicle when it is being used, or kept
for use, by or for the purposes of a disabled person who is in
receipt of personal independence payment by virtue of
entitlement to the mobility component at the standard rate if—

(a) 45the vehicle is registered under this Act in the name of the
disabled person, and

(b) no other vehicle registered in his or her name under this
Act is—

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