Finance (No. 2) Bill (HC Bill 190)

(2) In subsection (2), for paragraph (c) (and the “and” after it) substitute—

“(c) the dissolution of Parliament;

(ca) the prorogation of Parliament in a case where subsection (2B)
does not apply; and”.

(3) 5In that subsection, in paragraph (d), for “six” substitute “seven”.

(4) After that subsection insert—

“(2A) Subsection (2B) applies where Parliament is prorogued at the end of a
session if—

(a) during the session a Bill containing provisions to the same effect
10as the resolution is read a second time by the House or a Bill is
amended (whether by the House or a Committee of the House
or a Public Bill Committee) so as to include such provisions,

(b) the Standing Orders or Sessional Orders of the House provide,
or during the session the House orders, that proceedings on the
15Bill not completed before the end of the session shall be
resumed in the next session, and

(c) proceedings on the Bill are not completed during the session.

(2B) A resolution shall cease to have statutory effect under this section if,
during the period of thirty sitting days beginning with the first sitting
20day of the next session, no Bill containing provisions to the same effect
as the resolution is presented to the House.

(2C) In subsection (2B) “sitting day” means a day on which the House sits.

(2D) Where a Bill is amended as mentioned in subsection (2A)(a), it does not
matter for the purposes of subsection (2A)(b) if the House orders as
25mentioned in subsection (2A)(b) before the amendment to the Bill is
made.”

Inheritance tax

110 Inheritance tax

Schedule 21 contains provision about inheritance tax.

30Estate duty

111 Gifts to the nation: estate duty

(1) In Schedule 14 to FA 2012 (gifts to the nation), before paragraph 33 insert—

“32A (1) This paragraph applies where a person (“the donor”) makes a
qualifying gift of an object in circumstances where, had the donor
35instead sold the object to an individual at market value, a charge to
estate duty would have arisen under section 40 of FA 1930 on the
proceeds of sale.

(2) At the time when the gift is made, estate duty becomes chargeable
under that section as if the gift were such a sale (subject to any
40limitation imposed by paragraph 33(2)).

(3) In the application of this paragraph to Northern Ireland, the
references to section 40 of FA 1930 are to be read as references to
section 2 of the Finance Act (Northern Ireland) 1931.”

(2) Subsection (3) applies where a person (“the donor”) has, before the day on
5which this Act is passed, made a qualifying gift of an object in circumstances
where, had the donor instead sold the object to an individual at market value,
a charge to estate duty would have arisen under section 40 of FA 1930 on the
proceeds of sale.

(3) No liability to estate duty under section 40 of FA 1930 arises in respect of the
10object on or after the day on which this Act is passed.

(4) In subsection (2) “qualifying gift” has the same meaning as in Schedule 14 to
FA 2012.

(5) In the application of subsections (2) and (3) to Northern Ireland, the references
to section 40 of FA 1930 are to be read as references to section 2 of the Finance
15Act (Northern Ireland) 1931.

Bank levy

112 Bank levy: rates from 1 January 2014

(1) Schedule 19 to FA 2011 (bank levy) is amended as follows.

(2) In paragraph 6 (steps for determining the amount of the bank levy), in sub-
20paragraph (2)—

(a) for “0.065%” substitute “0.078%”, and

(b) for “0.130%” substitute “0.156%”.

(3) In paragraph 7 (special provision for chargeable periods falling wholly or
partly before 1 January 2013)—

(a) 25in sub-paragraph (1) for “2013” substitute “2014”,

(b) in sub-paragraph (2), in the first column of the table in the substituted
Step 7, for “Any time on or after 1 January 2013” substitute “1 January
2013 to 31 December 2013”, and

(c) at the end of that table add—

35and in the italic heading immediately before paragraph 7, for “2013” substitute
“2014”.

(4) Section 203 of FA 2013 (bank levy rates from 1 January 2014) is repealed.

(5) The amendments made by subsections (2) to (4) are treated as having come into
force on 1 January 2014 (and accordingly the section repealed by subsection (4)
40is treated as never having come into force).

(6) Subsections (7) to (13) apply where—

(a) an amount of the bank levy is treated as if it were an amount of
corporation tax chargeable on an entity (“E”) for an accounting period
of E,

(b) the chargeable period in respect of which the amount of the bank levy
5is charged falls (or partly falls) on or after 1 January 2014, and

(c) under the Instalment Payment Regulations, one or more instalment
payments, in respect of the total liability of E for the accounting period,
were treated as becoming due and payable before the commencement
date (“pre-commencement instalment payments”).

(7) 10Subsections (1) to (5) are to be ignored for the purpose of determining the
amount of any pre-commencement instalment payment.

(8) If there is at least one instalment payment, in respect of the total liability of E
for the accounting period, which under the Instalment Payment Regulations is
treated as becoming due and payable on or after the commencement date
15(“post-commencement instalment payments”), the amount of that instalment
payment, or the first of them, is to be increased by the adjustment amount.

(9) If there are no post-commencement instalment payments, a further instalment
payment, in respect of the total liability of E for the accounting period, of an
amount equal to the adjustment amount is to be treated as becoming due and
20payable at the end of the period of 30 days beginning with the commencement
date.

(10) “The adjustment amount” is the difference between—

(a) the aggregate amount of the pre-commencement instalments
determined in accordance with subsection (7), and

(b) 25the aggregate amount of those instalment payments determined
ignoring subsection (7) (and so taking account of subsections (1) to (5)).

(11) In the Instalment Payment Regulations—

(a) in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13,
references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those Regulations
30are to be read as including a reference to subsections (6) to (10) (and in
regulation 7(2) “the regulation in question”, and in regulation 8(2) “that
regulation”, are to be read accordingly), and

(b) in regulation 9(3), the reference to those Regulations is to be read as
including a reference to subsections (6) to (10).

(12) 35In section 59D of TMA 1970 (general rule as to when corporation tax is due and
payable), in subsection (5), the reference to section 59E is to be read as
including a reference to subsections (6) to (11).

(13) In this section—

• “the chargeable period” is to be construed in accordance with paragraph
  404 or (as the case may be) 5 of Schedule 19 to FA 2011;

• “the commencement date” means the day on which this Act is passed;

• “the Instalment Payment Regulations” means the Corporation Tax
  (Instalment Payments) Regulations 1998 (S.I. 1998/3175);

and references to the total liability of E for an accounting period are to be
45construed in accordance with regulation 2(3) of the Instalment Payment
Regulations.

113 Bank levy: miscellaneous changes

Schedule 22 contains miscellaneous changes to the bank levy.

Gaming duty

114 Rates of gaming duty

(1) 5In section 11(2) of FA 1997 (rates of gaming duty) for the table substitute—

(2) 20The amendment made by this section has effect in relation to accounting
periods beginning on or after 1 April 2014.

Bingo duty

115 Rate of bingo duty

(1) In section 17(1)(b) of BGDA 1981 (bingo duty chargeable at 20 per cent of bingo
25promotion profits), for “20” substitute “10”.

(2) The amendment made by subsection (1) has effect in relation to accounting
periods beginning on or after 30 June 2014.

116 Exemption from bingo duty: small-scale amusements provided commercially

(1) In paragraph 5(1) of Schedule 3 to BGDA 1981 (exemptions from bingo duty for
30small-scale amusements provided commercially), for paragraph (b)
substitute—

“(b) on any premises if, for the time being—

(i) a machine in respect of which a person is liable for
machine games duty is located on the premises, and

(ii) 35an adult gaming centre premises licence issued under
Part 8 of the Gambling Act 2005 (see section 150(1)(c))
is in force in respect of the premises; or”.

(2) The amendment made by this section has effect in relation to games of bingo
which begin to be played on or after the day on which this Act is passed.

Machine games duty

117 Rates of machine games duty

(1) Schedule 24 to FA 2012 is amended as follows.

(2) For paragraph 5 substitute—

5“Types of machine

5 (1) Machines are divided into three types for the purposes of machine
games duty.

(2) A machine is a “type 1 machine” if it can be demonstrated that—

(a) the highest charge payable for playing a dutiable machine
10game on the machine does not exceed 20p, and

(b) the maximum amount of cash that can be won from playing
a dutiable machine game on the machine does not exceed £10.

(3) A machine is a “type 2 machine” if—

(a) it is not a type 1 machine, and

(b) 15it can be demonstrated that the highest charge payable for
playing a dutiable machine game on the machine does not
exceed £5.

(4) Any other machine is a “type 3 machine”.

(5) The Treasury may by order substitute for a sum for the time being
20specified in sub-paragraph (2)(a) or (b) or (3)(b) such higher sum as
may be specified in the order.”

(3) For paragraph 6(2) substitute—

“(2) The amount of the duty is found by—

(a) applying the lower rate to the person’s total net takings in the
25accounting period for type 1 machines,

(b) applying the standard rate to the person’s total net takings in
the accounting period for type 2 machines,

(c) applying the higher rate to the person’s total net takings in
the accounting period for type 3 machines, and

(d) 30aggregating the results.”

(4) For paragraph 9 substitute—

“The rates

9 (1) The lower rate is 5%.

(2) The standard rate is 20%.

(3) 35The higher rate is 25%.

(4) If a rate changes during an accounting period—

(a) the old rate is to be applied to the person’s total net takings in
the part of the period before the change, and

(b) the new rate is to be applied to the person’s total net takings
40in the part of the period after the change.

(5) If it is not possible to identify for the purposes of sub-paragraph (4)
the part of the period to which an amount relates, it is to be
apportioned on a just and reasonable basis.”

(5) The Machine Games Duty (Types of Machine) Order 2014 (S.I. 2014/47) is
5revoked.

(6) The amendments and revocation made by this section have effect in relation to
the playing of machine games on or after 1 March 2015.

Part 3 General betting duty, pool betting duty and remote gaming duty

CHAPTER 1 10General betting duty

The duty

118 General betting duty

A duty of excise, to be known as general betting duty, is charged in accordance
with this Chapter.

15General and spread bets

119 General bets

(1) A bet is a general bet for the purposes of this Part if—

(a) it is not an on-course bet,

(b) it is not a spread bet,

(c) 20it is not made by way of pool betting, and

(d) one or more of conditions A to C is met in relation to it.

(2) Condition A is that the person who makes the bet (whether as principal or
agent) does so while present at a place in the United Kingdom where betting
facilities are provided in the course of a business and the bet is made using
25those facilities.

(3) Condition B is that—

(a) the person who makes the bet as principal is a UK person, and

(b) the bet is not an excluded bet.

(4) Condition C is that—

(a) 30the person who makes the bet as principal is a body corporate not
legally constituted in the United Kingdom,

(b) the bookmaker with whom the bet is made knows or has reasonable
cause to believe that at least one potential beneficiary of any winnings
from the bet is a UK person, and

(c) 35the bet is not an excluded bet.

120 General betting duty charge on general bets

(1) General betting duty is charged on a general bet made with a bookmaker.

(2) It is charged at the rate of 15% of the bookmaker’s profits on general bets for
an accounting period.

(3) 5The bookmaker’s profits on general bets for an accounting period are the
aggregate of—

(a) the amount of the bookmaker’s ordinary profits for the period in
respect of general bets (calculated in accordance with section 124), and

(b) the amount of the bookmaker’s retained winnings profits for the period
10in respect of general bets (calculated in accordance with section 125).

(4) Where the calculation for an accounting period under subsection (3) produces
a negative amount—

(a) the bookmaker’s profits on general bets for the accounting period are
treated as nil, and

(b) 15the amount produced by the calculation may be carried forward in
reduction of the bookmaker’s profits on general bets for one or more
later accounting periods.

121 Spread bets

(1) A bet is a spread bet for the purposes of this Part if it constitutes a contract the
20making or accepting of which is a regulated activity within the meaning of
section 22 of the Financial Services and Markets Act 2000.

(2) In this Part—

• “financial spread bet” means a spread bet the subject of which is a
  financial matter, and

• 25“non-financial spread bet” means any other spread bet.

(3) The Commissioners may by regulations provide that a specified matter—

(a) is to be treated as a financial matter for the purposes of subsection (2),
or

(b) is not to be treated as a financial matter for those purposes.

122 30General betting duty charge on financial spread bets

(1) General betting duty is charged on a financial spread bet made with a
bookmaker who is in the United Kingdom.

(2) It is charged at the rate of 3% of the bookmaker’s profits on financial spread
bets for an accounting period.

(3) 35The bookmaker’s profits on financial spread bets for an accounting period are
the aggregate of—

(a) the amount of the bookmaker’s ordinary profits for the period in
respect of financial spread bets (calculated in accordance with section
124), and

(b) 40the amount of the bookmaker’s retained winnings profits for the period
in respect of financial spread bets (calculated in accordance with
section 125).

(4) Where the calculation for an accounting period under subsection (3) produces
a negative amount—

(a) the bookmaker’s profits on financial spread bets for the accounting
period are treated as nil, and

(b) 5the amount produced by the calculation may be carried forward in
reduction of the bookmaker’s profits on financial spread bets for one or
more later accounting periods.

123 General betting duty charge on non-financial spread bets

(1) General betting duty is charged on a non-financial spread bet made with a
10bookmaker who is in the United Kingdom.

(2) It is charged at the rate of 10% of the bookmaker’s profits on non-financial
spread bets for an accounting period.

(3) The bookmaker’s profits on non-financial spread bets for an accounting period
are the aggregate of—

(a) 15the amount of the bookmaker’s ordinary profits for the period in
respect of non-financial spread bets (calculated in accordance with
section 124), and

(b) the amount of the bookmaker’s retained winnings profits for the period
in respect of non-financial spread bets (calculated in accordance with
20section 125).

(4) Where the calculation for an accounting period under subsection (3) produces
a negative amount—

(a) the bookmaker’s profits on non-financial spread bets for the accounting
period are treated as nil, and

(b) 25the amount produced by the calculation may be carried forward in
reduction of the bookmaker’s profits on non-financial spread bets for
one or more later accounting periods.

124 Ordinary profits

Take the following steps to calculate the amount of a bookmaker’s ordinary
30profits in respect of a class of bets for an accounting period.

Step 1

Calculate the aggregate of the stake money falling due to the bookmaker in the
accounting period in respect of bets of that class made with the bookmaker.

Step 2

35Calculate the aggregate of the amounts paid by the bookmaker in that period
by way of winnings to persons who made bets of that class with the bookmaker
(irrespective of when the bets were made or determined).

Step 3

125 Retained winnings profits

(1) 40The amount of a bookmaker’s retained winnings profits in respect of a class of
bets for an accounting period is the aggregate of amounts which cease to be
qualifying amounts in the accounting period.

(2) An amount is a qualifying amount for the purposes of this section if, as a result
of a person (“P”) being notified as mentioned in section 133(2)(b), it has been
taken into account in calculating the bookmaker’s ordinary profits for bets of
that class in any accounting period.

(3) 5An amount ceases to be a qualifying amount for the purposes of this section if,
otherwise than by virtue of being withdrawn by P as mentioned in section
133(2)(b), P ceases to be entitled to withdraw it.

(4) The Commissioners may by notice published by them direct that subsection (3)
is not to apply in a specified case or class of cases.

126 10Bet-brokers

(1) This section applies where—

(a) one person (the “bettor”) makes a bet with another person (the “bet-
taker”) using facilities provided in the course of a business, other than
a betting exchange business, by a third person (the “bet-broker”), or

(b) 15one person (the “bet-broker”) in the course of a business makes a bet
with another person (the “bet-taker”) as the agent of a third person (the
“bettor”) (whether the bettor is a disclosed principal or an undisclosed
principal).

(2) For the purposes of sections 119 to 125—

(a) 20the bet is to be treated as if it were made separately by the bettor with
the bet-broker and by the bet-broker with the bet-taker,

(b) the bet-broker is to be treated as a bookmaker in respect of the bet,

(c) the aggregate of amounts due to be paid by the bettor in respect of the
bet is to be treated as being due separately to the bet-broker and to the
25bet-taker (and any amount due to be paid by the bet-broker to the bet-
taker is to be disregarded), and

(d) a sum paid by the bet-taker by way of winnings in respect of the bet is
to be treated as having been paid separately by the bet-taker and by the
bet-broker at that time and for that purpose (and any sum paid by the
30bet-broker is to be disregarded).

(3) Where there is any doubt as to which of two persons is the bettor and which
the bet-taker for the purposes of subsection (1)(a), whichever of the two was
the first to use the facilities of the bet-broker to offer the bet is to be treated as
the bet-taker.

(4) 35In this section “betting exchange business” means a business such as is
mentioned in section 134(1).

Pool betting on horse and dog races

127 Chapter 1 pool bets

(1) A bet is a “Chapter 1 pool bet” for the purposes of this Part if—

(a) 40it relates only to horse racing or dog racing,

(b) it is not an on-course bet,

(c) it is made by way of pool betting, and

(d) one or more of conditions A to C is met in relation to it.

(2) Condition A is that the person who makes the bet (whether as principal or
agent) does so while present at a place in the United Kingdom where betting
facilities are provided in the course of a business and the bet is made using
those facilities.

(3) 5Condition B is that—

(a) the person who makes the bet as principal is a UK person, and

(b) the bet is not an excluded bet.

(4) Condition C is that—

(a) the person who makes the bet as principal is a body corporate not
10legally constituted in the United Kingdom,

(b) the bookmaker with whom the bet is made knows or has reasonable
cause to believe that at least one potential beneficiary of any winnings
from the bet is a UK person, and

(c) the bet is not an excluded bet.

(5) 15A Chapter 1 pool bet is a “pooled stake Chapter 1 pool bet” for the purposes of
this Part if all or any part of the stake money on the bet is assigned by or on
behalf of the bookmaker with whom it is made to a fund (referred to in this Part
as a “Chapter 1 stake fund”) from which winnings are to be paid in respect of
pool betting.

(6) 20A Chapter 1 pool bet is an “ordinary Chapter 1 pool bet” for the purposes of
this Part if it is not a pooled stake Chapter 1 pool bet.

128 General betting duty charge on Chapter 1 pool bets

(1) General betting duty is charged on a Chapter 1 pool bet made with a
bookmaker.

(2) 25It is charged at the rate of 15% of the bookmaker’s profits on Chapter 1 pool
bets for an accounting period.

(3) The bookmaker’s profits on Chapter 1 pool bets for an accounting period are
the aggregate of—

(a) the amount of the bookmaker’s profits for the period in respect of
30pooled stake Chapter 1 pool bets (calculated in accordance with section
129), and

(b) the amount of the bookmaker’s profits for the period in respect of
ordinary Chapter 1 pool bets (calculated in accordance with section
130), and

(c) 35the amount of the bookmaker’s profits for the period in respect of
retained winnings on Chapter 1 pool bets (calculated in accordance
with section 131).

(4) Where the calculation for an accounting period under subsection (3) produces
a negative amount—

(a) 40the bookmaker’s profits on Chapter 1 pool bets for the accounting
period are treated as nil, and

(b) the amount produced by the calculation may be carried forward in
reduction of the bookmaker’s profits on Chapter 1 pool bets for one or
more later accounting periods.