House of Commons portcullis
House of Commons
Session 2013 - 14
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Part 3 — Annual tax on enveloped dwellings

101

 

Interpretation

168     

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

(1)   

Any day on which the conditions in section 92(2) are met with respect to a

single-dwelling interest is a “chargeable day” for that interest.

(2)   

Where a day is a chargeable day as a result of subsection (1), the chargeable

5

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

state of affairs obtains on a particular day, it is to be assumed that the state of

10

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)   

For the purposes of this Part a person is taken to be connected with a collective

15

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, or

(b)   

would in the event of the winding up of the scheme be entitled to 50%

20

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

about the application of rules about connected persons to unit trust schemes).

25

(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

powers that the person—

30

(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

person.

35

(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).

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

102

 

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)   

For the purposes of this section a company is a “cell company” if it meets the

5

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

in relation to the company—

10

(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

of the company.

15

(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

legal personality distinct from that of the company, and

20

(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

liabilities of the company are primarily or wholly attributable, or

25

(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

accordance with section 168;

30

“chargeable interest” has the meaning given by section 105;

“the chargeable person” has the meaning given by section 94(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

Financial Services and Markets Act 2000 (see section 235 of that Act);

35

“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)   

in relation to any other transaction, the settlement of the

40

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

and Markets Act 2000 (see section 237 of that Act);

45

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

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

103

 

“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;

“financial institution” has the meaning given by section 141 (except where

5

otherwise stated);

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

“HMRC determination” has the meaning given by paragraph 18 of

Schedule 31;

“jointly entitled” means—

10

(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,

tenants in common or coparceners;

15

“land” includes—

(a)   

buildings and structures, and

(b)   

land covered by water;

“market value” has the meaning given by section 96(8);

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

20

“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

meaning given by section 96(7);

25

“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(4);

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

“qualifying property rental business” has the meaning given by section

30

131(3);

“self assessment” has the meaning given by section 159(3);

“tax” means tax under this Part;

“trade” has the same meaning as in section 35 of CTA 2009 (and cognate

expressions are to be read accordingly);

35

“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

whom tax is charged for a chargeable period with respect to a single-

40

dwelling interest, are to be read in accordance with section 103;

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

with section 103(2);

45

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

accordance with section 119(4);

50

 
 

Finance Bill
Part 4 — Excise duties and other taxes

104

 

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;

references to a “return of the adjusted chargeable amount” are to be read

5

in accordance with section 158(6);

references to meeting the “ownership condition” are to be read in

accordance with section 92(4) to (6);

references to being “within the charge” with respect to a single-dwelling

interest are to be read in accordance with section 168.

10

Part 4

Excise duties and other taxes

Inheritance tax

173     

Open- ended investment companies and authorised unit trusts

(1)   

In section 65 of IHTA 1984 (settlements without interests in possession etc:

15

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

section 48(3A)(a) (holding in an authorised unit trust or a share in an

20

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     

Treatment of liabilities for inheritance tax purposes

25

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)   

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

30

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)   

After that section insert—

35

“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 Bill
Part 4 — Excise duties and other taxes

105

 

(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)   

the person’s spouse or civil partner is domiciled in the United

5

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

and was domiciled in the United Kingdom at the time of death,

10

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

the purposes of section 6(2) or (3) or 48(4).

15

(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

arrangements in relation to a transfer of value by the person

20

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

section (other than by way of amendment by an Order made on or after

25

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   

  Section 267ZA: further provision about election

30

(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

of section 267ZA(4).

35

(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)   

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

40

(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)   

be 6 April 2013 or a later date,

45

 
 

Finance Bill
Part 4 — Excise duties and other taxes

106

 

(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

civil partner’s death, and

5

(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

partnership with, the spouse or civil partner, and

10

(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

date concerned and ending with the date on which the election

15

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)   

A death election may only be made within 2 years of the death of the

20

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)   

a disposition is made, or another event occurs, during the

25

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

that time is that the disposition or event gives rise to a transfer

30

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

period specified in subsection (6)(c) of that section were the

35

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)   

A lifetime or death election cannot be revoked.

40

(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.”

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2013
Revised 25 June 2013