Wales Bill (HC Bill 186)

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(b) the number of days in that year on which T is a Scottish
parliamentarian.

(3) T meets the second condition if—

(a) the number of days in that year mentioned in paragraphs (a)
5and (b) of subsection (2) are the same, and

(b) T meets condition A or B in section 116E for that year.

116G Close connection with Wales or another part of the UK

(1) To find whether, for any year, T has a close connection with any part of
the UK see—

(a) 10subsection (2) (where T has only one place of residence in the
UK), or

(b) subsection (3) (where T has 2 or more places of residence in the
UK).

(2) T has a close connection with a part of the UK if in that year—

(a) 15T has only one place of residence in the UK,

(b) that place of residence is in that part of the UK, and

(c) for at least part of the year, T lives at that place.

(3) T has a close connection with a part of the UK if in that year—

(a) T has 2 or more places of residence in the UK,

(b) 20for at least part of the year, T’s main place of residence in the UK
is in that part of the UK,

(c) the times in the year when T’s main place of residence is in that
part of the UK comprise (in aggregate) more of the year than the
times when T’s main place of residence is in each other part of
25the UK (considered separately), and

(d) for at least part of the year, T lives at a place of residence in that
part of the UK.

(4) In this section “place” includes a place on board a vessel or other means
of transport.

116H 30Days spent in Wales or another part of the UK

(1) T spends more days of a year in Wales than in any other part of the UK
if (and only if) the number of days in the year on which T is in Wales at
the end of the day exceeds each of the following—

(a) the number of days in the year on which T is in England at the
35end of the day;

(b) the number of days in the year on which T is in Scotland at the
end of the day;

(c) the number of days in the year on which T is in Northern
Ireland at the end of the day.

(2) 40T is treated as not being in the UK at the end of a day if—

(a) on that day T arrives in the UK as a passenger,

(b) T departs from the UK on the next day, and

(c) during the time between arrival and departure T does not
engage in activities which are to a substantial extent unrelated
45to T’s passage through the UK.

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116I Supplemental powers to modify enactments

(1) The Treasury may by order modify section 11B of the Income Tax Act
2007 (income charged at the Welsh basic, higher and additional rates)
for the purpose of altering—

(a) 5the definition of the income which is charged to income tax
under the section, or

(b) the application of the section in relation to a particular class of
income which is so charged.

(2) The Treasury may by order modify any enactment not contained in
10Chapter 2 of Part 2 of the Income Tax Act 2007 (rates at which income
tax is charged) so that it makes provision, in relation to a Welsh
taxpayer, by reference to the Welsh basic rate, the Welsh higher rate or
the Welsh additional rate, instead of the basic rate, the higher rate or the
additional rate.

(3) 15The Treasury may by order make such modifications of any enactment
as they consider necessary or expedient in consequence of or in
connection with an order under subsection (1) or (2).

(4) If the Treasury consider it necessary or expedient in consequence of or
in connection with the making of a Welsh rate resolution, they may by
20order modify any enactment so as to provide that the resolution does
not require any change in the amounts repayable or deductible under
PAYE regulations between—

(a) the beginning of the tax year for which the resolution has effect,
and

(b) 25such date (falling after the date of the resolution) as may be
specified in the order.

(5) An order under this section may, to the extent that the Treasury
consider it to be appropriate, take effect retrospectively from the
beginning of the tax year in which the order is made.

(6) 30No order is to be made under subsection (1), (2) or (3) unless a draft of
the statutory instrument containing it has been laid before, and
approved by a resolution of, the House of Commons.

(7) A statutory instrument containing an order under subsection (4) is
subject to annulment in pursuance of a resolution of the House of
35Commons.

(8) The power under subsection (1) does not include power to provide that
any income which is—

(a) savings income, or

(b) dividend income which would otherwise be charged to income
40tax under section 13 of the Income Tax Act 2007,

is charged to income tax under section 11B of that Act.

116J Reimbursement of expenses

The Welsh Ministers may reimburse any Minister of the Crown or
government department for administrative expenses incurred by
45virtue of this Chapter at any time after the passing of the Wales Act 2014
by the Minister or department.

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116K Report by the Comptroller and Auditor General

(1) The Comptroller and Auditor General must for each financial year prepare a
report on the matters set out in subsection (2).

(2) Those matters are—

(a) 5the adequacy of any of HMRC’s rules and procedures put in
place, in consequence of the Welsh rate provisions, for the
purpose of ensuring the proper assessment and collection of
income tax charged at rates determined under those provisions,

(b) whether the rules and procedures described in paragraph (a)
10are being complied with,

(c) the correctness of the sums brought to account by HMRC which
relate to income tax which is attributable to a Welsh rate
resolution, and

(d) the accuracy and fairness of the amounts which are reimbursed
15to HMRC under section 116J (having been identified by it as
administrative expenses incurred as a result of the charging of
income tax as mentioned in paragraph (a)).

(3) The “Welsh rate provisions” are—

(a) any provision made by or under this Chapter, and

(b) 20any provision made by or under the Income Tax Acts relating to
the Welsh basic rate, the Welsh higher rate or the Welsh
additional rate.

(4) A report under this section may also include an assessment of the
economy, efficiency and effectiveness with which HMRC has used its
25resources in carrying out relevant functions.

(5) “Relevant functions” are functions of HMRC in the performance of
which HMRC incurs administrative expenses which are reimbursed to
HMRC under section 116J (having been identified by it as
administrative expenses incurred as a result of the charging of income
30tax as mentioned in subsection (2)(a)).

(6) HMRC must give the Comptroller and Auditor General such
information as the Comptroller and Auditor General may reasonably
require for the purposes of preparing a report under this section.

(7) A report prepared under this section must be laid before the Assembly
35not later than 31 January of the financial year following that to which
the report relates.

(8) In this section “HMRC” means Her Majesty’s Revenue and Customs.

9 Welsh basic, higher and additional rates of income tax

(1) The Income Tax Act 2007 is amended in accordance with subsections (2) to (11).

(2) 40In section 6 (the basic rate, higher rate and additional rate), in subsection (3),
before paragraph (a) insert—

(zb) section 6B (Welsh basic, higher and additional rates),.

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(3) Before section 7 insert—

6B The Welsh basic, higher and additional rates

(1) The Welsh basic rate, the Welsh higher rate and the Welsh additional rate for
a tax year are calculated as follows.

5Step 1

Take the basic rate, higher rate or additional rate.

Step 2

Deduct 10 percentage points.

Step 3

10Add the Welsh rate (if any) set by the National Assembly for Wales for that
year.

Add the Welsh rate (if any) set by the National Assembly for Wales for that
year.

(2) For provision about the setting of the Welsh rate, see Chapter 2 of Part
154A of the Government of Wales Act 2006.

(4) In section 10 (income charged at the basic, higher and additional rates:
individuals), in subsection (4), at the appropriate place insert—

section 11B (income charged at the Welsh basic, higher and additional
rates),.

(5) 20Before section 12 insert—

11B Income charged at the Welsh basic, higher and additional rates

(1) Income tax is charged at the Welsh basic rate on the income of a Welsh taxpayer
which—

(a) is non-savings income, and

(b) 25would otherwise be charged at the basic rate.

(2) Income tax is charged at the Welsh higher rate on the income of a Welsh
taxpayer which—

(a) is non-savings income, and

(b) would otherwise be charged at the higher rate.

(3) 30Income tax is charged at the Welsh additional rate on the income of a Welsh
taxpayer which—

(a) is non-savings income, and

(b) would otherwise be charged at the additional rate.

(4) For the purposes of this section, “non-savings income” means income
35which is not savings income.

(5) This section is subject to—

  • section 13 (income charged at the dividend ordinary and dividend
    upper rates: individuals), and

  • any provisions of the Income Tax Acts (apart from section 10)
    40which provide for income of an individual to be charged at
    different rates of income tax in some circumstances.

(6) Section 16 has effect for determining the extent to which the non-
savings income of a Welsh taxpayer would otherwise be charged at the
basic, higher or additional rate.

(6) 45In section 13 (income charged at the dividend ordinary, upper and additional
rates)—

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(a) in subsection (1)(b), before “and” insert “or the Welsh basic rate,”,

(b)
in subsection (2)(b), before “and” insert “or the Welsh higher rate,”,

(c)
in subsection (2A)(b), before “and” insert “or the Welsh additional
rate,”,

(d)
5in subsection (3), at the end of the words in parenthesis, insert “or 11B”,
and

(e)
in subsection (4), at the end insert “or the Welsh basic, higher or
additional rate”.

(7) In section 16 (savings and dividend income to be treated as highest part of total
10income), in subsection (1), after paragraph (za) insert—

(zb) the rate at which income tax would be charged on the non-
savings income of a Welsh taxpayer apart from section 11B,.

(8) In section 809H (charge on nominated income of long-term UK resident), after
subsection (3A) insert—

(3B) 15If the individual is a Welsh taxpayer for the relevant tax year, the
individual is to be treated for the purpose of calculating income tax
charged by virtue of subsection (2) as if the individual were not a Welsh
taxpayer for that year.

(9) In section 828B (conditions to be met for exemption where individual resident
20but not domiciled in the UK), in subsection (5), before “or the starting rate”
insert “, the Welsh basic rate”.

(10) In section 989 (definitions for the purposes of the Income Tax Acts), at the
appropriate place, insert—

  • ““Welsh additional rate” means the rate of income tax of that name
    25calculated in accordance with section 6B,”,

  • ““Welsh basic rate” means the rate of income tax of that name calculated
    in accordance with section 6B,”,

  • ““Welsh higher rate” means the rate of income tax of that name calculated
    in accordance with section 6B,”,

  • 30““Welsh taxpayer” has the same meaning as in Chapter 2 of Part 4A of the
    Government of Wales Act 2006”.

(11) In Schedule 4 (index of defined expressions), at the appropriate place, insert—

Welsh additional rate section 6B (as applied by
section 989)”
“Welsh basic rate 35section 6B (as applied by
section 989)”
“Welsh higher rate section 6B (as applied by
section 989)”
“Welsh taxpayer section 989

(12) 40In section 7 of the Taxes Management Act 1970 (notice of liability to income tax
and capital gains tax), in subsection (6), before “the dividend ordinary rate”
insert “the Welsh basic rate,”.

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(13) The Taxation of Chargeable Gains Act 1992 is amended in accordance with subsections
(14) and (15).

(14) In section 4 (rates of capital gains tax), in subsections (4) and (5), before “or the
dividend” insert “, the Welsh higher rate”.

(15) 5In section 4A (section 4: special cases), in subsection (5), before “or the dividend”
insert “, the Welsh higher rate”.

10 Amendments to the definition of a Scottish taxpayer

(1) Chapter 2 of Part 4A of the Scotland Act 1998 (Scottish rate of income tax) is
amended as follows.

(2) 10Section 80D (Scottish taxpayers) is amended in accordance with subsections (3)
to (5).

(3) In subsection (1)—

(a) for “In” substitute “For”;

(b) in paragraph (a), after “purposes” insert “for that year (see Schedule 45
15to the Finance Act 2013)”.

(4) In subsection (3)(a), for “any part of the UK other than Scotland” substitute
“England, Wales or Northern Ireland”.

(5) After subsection (4), insert—

(4A) Subsection (1) does not apply if T is a Welsh parliamentarian for the whole or
20any part of the year (see section 80DA).

(4B) For the purposes of subsection (4A) and section 80DA, T is a Welsh
parliamentarian if T is a member as described in any of paragraphs (a) to (c) of
section 116E(4) of the Government of Wales Act 2006 (definition of a Welsh
taxpayer).

(6) 25After section 80D insert—

80DA Scottish taxpayers: Welsh parliamentarians

(1) An individual (T) who is a Welsh parliamentarian for the whole or any part of
a tax year is a Scottish taxpayer for that tax year if—

(a) T is resident in the UK for income tax purposes for that year (see
30Schedule 45 to the Finance Act 2013),

(b) T meets condition C in section 80D for that year, and

(c) T meets either of the following conditions for that year.

(2) T meets the first condition if—

(a) the number of days in that year on which T is a member as described
35in any of paragraphs (a) to (c) of section 80D(4),

exceeds

(b) the number of days in that year on which T is a Welsh
parliamentarian.

(3) T meets the second condition if—

(a) 40the number of days in that year mentioned in paragraphs (a) and (b)
of subsection (2) are the same, and

(b) T meets condition A or B in section 80D for that year.

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(7) In section 80E (close connection with Scotland or another part of the UK), in
subsection (3)(c)—

(a) for “at least as much of the year as” substitute “more of the year than”;

(b) for “any one other part of the UK” substitute “each other part of the UK
5(considered separately)”.

(8) In section 80F (days spent in Scotland or another part of the UK)—

(a) in subsection (1), for the words from “if)—” to the end substitute “if) the
number of days in the year on which T is in Scotland at the end of the day
exceeds each of the following—

(a) 10the number of days in the year on which T is in England at the
end of the day;

(b) the number of days in the year on which T is in Wales at the
end of the day;

the number of days in the year on which T is in Northern
15Ireland at the end of the day.”
;

(b) in subsection (2), for “But T is not to be treated as” substitute “T is
treated as not”.

Referendum on income tax provisions

11 Referendum about commencement of income tax provisions

(1) 20Her Majesty may by Order in Council cause a referendum to be held throughout Wales
about whether the income tax provisions should come into force.

(2) If the majority of the voters in a referendum held by virtue of subsection (1)
vote in favour of the income tax provisions coming into force, those provisions
are to come into force in accordance with section 13.

(3) 25But if they do not, that does not prevent the making of a subsequent Order
under subsection (1).

(4) No recommendation is to be made to Her Majesty to make an Order under
subsection (1) unless a draft of the statutory instrument containing the Order
has been laid before, and approved by a resolution of, each House of
30Parliament and the Assembly.

(5) But subsection (4) is not satisfied unless the resolution of the Assembly is
passed on a vote in which the number of Assembly members voting in favour
of it is not less than two-thirds of the total number of Assembly seats.

(6) A draft of a statutory instrument containing an Order under subsection (1) may
35not be laid before either House of Parliament, or the Assembly, until the
Secretary of State has undertaken such consultation as the Secretary of State
considers appropriate.

(7) For further provision about a referendum held by virtue of subsection (1), see
Schedule 1.

(8) 40In this section “the income tax provisions” means sections 8 and 9.

12 Proposal for referendum by Assembly

(1) This section applies if—

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(a) the First Minister or a Welsh Minister appointed under section 48 of
GOWA 2006 moves a resolution in the Assembly that, in the
Assembly’s opinion, a recommendation should be made to Her
Majesty to make an Order under section 11(1), and

(b) 5the Assembly passes the resolution on a vote in which the number of
Assembly members voting in favour of it is not less than two-thirds of
the total number of Assembly seats.

(2) The First Minister must, as soon as practicable after the resolution is passed,
ensure that notice in writing of the resolution is given to the Secretary of State.

(3) 10Within the period of 180 days beginning immediately after the day on which
notice under subsection (2) is received by the Secretary of State—

(a) the Secretary of State or the Lord President of the Council must lay a
draft of a statutory instrument containing an Order under section 11(1)
before each House of Parliament, or

(b) 15the Secretary of State must give notice in writing to the First Minister of
the refusal to lay a draft under paragraph (a) and the reasons for that
refusal.

(4) As soon as practicable after the First Minister receives notice under subsection
(3)(b)—

(a) 20the First Minister must lay a copy of the notice before the Assembly,
and

(b) the Assembly must ensure that the notice is published.

13 Commencement of the income tax provisions etc if majority in favour

(1) This section applies where the majority of the voters in a referendum held by
25virtue of section 11(1) vote in favour of the income tax provisions coming into
force.

(2) The Treasury may bring sections 8 and 9 into force by order.

(3) An order under subsection (2)

(a) must appoint, in relation to each provision inserted by section 8 or 9,
30the day on which it comes into force;

(b) may provide that a provision inserted by section 8 or 9 has effect in
relation to—

(i) a tax year appointed by the order and subsequent tax years, or

(ii) a financial year so appointed and subsequent financial years.

(4) 35A tax year may be appointed under subsection (3)(b) in relation to a provision
inserted by section 8 or 9 only if the tax year begins on or after the day
appointed under subsection (3)(a) in relation to that provision.

(5) An order under subsection (2) that brings into force section 116D of GOWA
2006 (power to set Welsh rate for Welsh taxpayers) must appoint the first tax
40year in relation to which a Welsh rate resolution may be made.

(6) The Treasury may bring section 10(5), (6), (7)(a) and (8)(a) into force by order.

(7) An order under subsection (6)

(a) must appoint a day on which the amendments made by the provisions
mentioned in that subsection come into force, and

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(b) must provide that those amendments have effect in relation to a tax
year appointed by the order and subsequent tax years.

(8) The tax year appointed under subsection (7)(b)

(a) must begin on or after the day appointed under subsection (7)(a), and

(b) 5must not precede the tax year appointed under subsection (5) or under
section 25(5) of the Scotland Act 2012 (the first tax year for which
Chapter 2 of Part 4A of the Scotland Act 1998 has effect).

(9) An order under this section may make different provision for different
purposes.

10Welsh tax on land transactions

14 Welsh tax on transactions involving interests in land

(1) In Part 4A of GOWA 2006 (as inserted by section 6), after Chapter 2 (inserted
by section 8) insert—

CHAPTER 3 Tax on transactions involving interests in land
116L 15Tax on transactions involving interests in land

(1) A tax which is charged on a Welsh land transaction and complies with the
requirements of this section is a devolved tax.

(2) In this Chapter a “Welsh land transaction” means an acquisition of—

(a) an estate, interest, right or power in or over land in Wales;

(b) 20the benefit of an obligation, restriction or condition affecting the value
of any such estate, interest, right or power.

(3) The tax may be chargeable—

(a) whether or not there is any instrument effecting the transaction,

(b) if there is such an instrument, regardless of where it is executed, and

(c) 25regardless of where any party to the transaction is or is resident.

(4) The tax may not be imposed on so much of a Welsh land transaction as
relates to land below mean low water mark.

(5) The following persons are not to be liable to pay the tax—

(none) Government

30A Minister of the Crown

The Welsh Ministers, the First Minister and the Counsel
General

The Scottish Ministers

A Northern Ireland department

(none) 35Parliament etc

The Corporate Officer of the House of Lords

The Corporate Officer of the House of Commons

The Assembly Commission

The Scottish Parliamentary Corporate Body

40The Northern Ireland Assembly Commission.

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(2) A devolved tax specified in section 116L of GOWA 2006 (as inserted by this
section) may not be charged under an Act of the Assembly on a land
transaction within the meaning of Part 4 of the Finance Act 2003 unless section
15 (disapplication of UK stamp duty land tax) has effect in relation to that
5transaction.

15 Disapplication of UK stamp duty land tax

(1) Part 4 of the Finance Act 2003 (stamp duty land tax) is amended as follows.

(2) In section 48 (chargeable interests), in subsection (1)(a), omit “and Wales”.

(3) Schedule 2 to this Act contains further amendments relating to the
10disapplication of stamp duty land tax in relation to Wales.

(4) The amendments made by this section and Schedule 2 have effect in relation to
land transactions with an effective date on or after such date as is appointed by
the Treasury by order under this subsection.

(5) But those amendments do not have effect in relation to any transaction—

(a) 15effected in pursuance of a contract entered into and substantially
performed on or before the date on which this Act is passed, or

(b) effected in pursuance of a contract entered into on or before that date
and not excluded by subsection (6).

(6) A transaction effected in pursuance of a contract entered into on or before the
20date on which this Act is passed is excluded if—

(a) there is any variation of the contract, or assignment of rights under the
contract, after that date,

(b) the transaction is effected in consequence of the exercise after that date
of any option, right of pre-emption or similar right, or

(c) 25after that date there is an assignment, subsale or other transaction
relating to the whole or part of the subject-matter of the contract as a
result of which a person other than the purchaser under the contract
becomes entitled to call for a conveyance.

(7) Expressions used in any of subsections (4) to (6) and in Part 4 of the Finance Act
302003 have the same meaning in those subsections as in that Part.

16 Information on Welsh land transactions

(1) In Part 4A of GOWA 2006 (as inserted by section 6), in Chapter 3 (inserted by
section 14), after section 116L insert—

116M Duty to disclose information on Welsh land transactions to HMRC

(1) 35A person who is a member of the Welsh Government must provide to
HMRC such of the information falling within subsection (2) as HMRC
may require.

(2) Information falls within this subsection if it—

(a) is relevant information in relation to a Welsh land transaction,
40and

(b) is in the possession or under the control of the person.

(3) “Relevant information”, in relation to a Welsh land transaction, means
information which—