Wales Bill (HC Bill 6)

(b) who, for that year, meets condition A, B or C.

(2) T meets condition A if T has a close connection with Wales (see section
116G).

(3) T meets condition B if—

(a) 5T does not have a close connection with England, Scotland or
Northern Ireland (see section 116G), and

(b) T spends more days of that year in Wales than in any other part
of the UK (see section 116H).

(4) T meets condition C if, for the whole or any part of the year, T is—

(a) 10a member of Parliament for a constituency in Wales,

(b) a member of the European Parliament for Wales, or

(c) an Assembly member.

(5) Subsection (1) does not apply if T is a Scottish parliamentarian for the
whole or any part of the year (see section 116F).

(6) 15For the purposes of subsection (5) and section 116F, T is a Scottish
parliamentarian if T is a member as described in any of paragraphs (a)
to (c) of section 80D(4) of the Scotland Act 1998 (definition of a Scottish
taxpayer).

(7) In this Chapter “the UK” means the United Kingdom.

116F 20Welsh taxpayers: Scottish parliamentarians

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

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

(b) 25T meets condition C in section 116E 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 in any of paragraphs (a) to (c) of section 116E(4),

30exceeds

(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)
35and (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) 40subsection (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) T 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) 5T has 2 or more places of residence in the UK,

(b) for 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
10times when T’s main place of residence is in each other part of
the 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
15of transport.

116H Days 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) 20the 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 Scotland at the
end of the day;

(c) the number of days in the year on which T is in Northern
25Ireland at the end of the day.

(2) T 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
30engage in activities which are to a substantial extent unrelated
to T’s passage through the UK.

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)
35for the purpose of altering—

(a) the definition of the income which is charged to income tax at
the rates provided for under the section, or

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

(2) 40The Treasury may by order modify any enactment not contained in
Chapter 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
45additional rate.

(3) If the Treasury consider it necessary or expedient to do so, they may by
order provide that—

(a) the Welsh rate set by the Assembly for a tax year, or

(b) the fact that the Welsh rate has not been so set for a tax year,

does not require any change in the amounts repayable or deductible
under PAYE regulations between the beginning of that year and such
5later date as may be specified in the order.

(4) The 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), (2) or (3).

(5) An order under this section may, to the extent that the Treasury
10consider it to be appropriate, take effect retrospectively from the
beginning of the tax year in which the order is made.

(6) No order is to be made under subsection (1), (2) or (4) unless a draft of
the statutory instrument containing it has been laid before, and
approved by a resolution of, the House of Commons.

(7) 15A statutory instrument containing an order under subsection (3) is
subject to annulment in pursuance of a resolution of the House of
Commons.

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

(a) 20savings income, or

(b) dividend income which would otherwise be charged to income
tax at a rate provided for under section 13 of the Income Tax Act
2007,

is income which is charged to income tax at a rate provided for under
25section 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
virtue of this Chapter at any time after the passing of the Wales Act 2014
30by the Minister or department.

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) 35the 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)
40are 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
45to 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) any provision made by or under the Income Tax Acts relating to
the Welsh basic rate, the Welsh higher rate or the Welsh
5additional rate.

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

(5) “Relevant functions” are functions of HMRC in the performance of
10which 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
tax as mentioned in subsection (2)(a)).

(6) HMRC must give the Comptroller and Auditor General such
15information 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
not later than 31 January of the financial year following that to which
the report relates.

(8) 20In 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) In section 6 (the basic rate, higher rate and additional rate), in subsection (3),
before paragraph (a) insert—

“(zb) 25section 6B (Welsh basic, higher and additional rates),”.

(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.

30Step 1

Take the basic rate, higher rate or additional rate.

Step 2

Deduct 10 percentage points.

Step 3

35Add 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
404A 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) Before 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) 5is non-savings income, and

(b) would 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) 10would otherwise be charged at the higher rate.

(3) Income 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) 15For the purposes of this section, “non-savings income” means income
which is not savings income.

(5) This section is subject to—

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

• 20any provisions of the Income Tax Acts (apart from section 10)
  which 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
25basic, higher or additional rate.”

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

(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)
30in subsection (2A)(b), before “and” insert “or the Welsh additional
rate,”,

(d)
in 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
35additional rate”.

(7) In section 16 (savings and dividend income to be treated as highest part of total
income), 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) 40In section 809H (charge on nominated income of long-term UK resident), after
subsection (3A) insert—

“(3B) If 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
45taxpayer for that year.”

(9) In section 828B (conditions to be met for exemption where individual resident
but 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
5appropriate place, insert—

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

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

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

• ““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—

(12) In 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,”.

(13) 25The 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) In section 4A (section 4: special cases), in subsection (5), before “or the
30dividend” 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) Section 80D (Scottish taxpayers) is amended in accordance with subsections (3)
35to (5).

(3) In subsection (1)—

(a) for “In” substitute “For”;

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

(4) 40In 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 any part of the year (see section 80DA).

(4B) For the purposes of subsection (4A) and section 80DA, T is a Welsh
5parliamentarian 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) After section 80D insert—

“80DA Scottish taxpayers: Welsh parliamentarians

(1) 10An 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
Schedule 45 to the Finance Act 2013),

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

(c) 15T 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 in any of paragraphs (a) to (c) of section 80D(4),

exceeds

(b) 20the number of days in that year on which T is a Welsh
parliamentarian.

(3) T meets the second condition if—

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

(b) 25T meets condition A or B in section 80D for that year.”

(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
30(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) 35the 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
40Ireland 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) Her Majesty may by Order in Council cause a referendum to be held
throughout Wales about whether the income tax provisions should come into
5force.

(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) But if they do not, that does not prevent the making of a subsequent Order
10under 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
Parliament and the Assembly.

(5) 15But 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
not be laid before either House of Parliament, or the Assembly, until the
20Secretary 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) In this section “the income tax provisions” means sections 8 and 9.

12 25Proposal for referendum by Assembly

(1) This section applies if—

(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
30Majesty to make an Order under section 11(1), and

(b) the 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,
35ensure that notice in writing of the resolution is given to the Secretary of State.

(3) Within 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)
40before each House of Parliament, or

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

(b) 5the 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
virtue of section 11(1) vote in favour of the income tax provisions coming into
force.

(2) 10The 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,
the day on which it comes into force;

(b) may provide that a provision inserted by section 8 or 9 has effect in
15relation 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) A 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
20appointed 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
year 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) 25An 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

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

(8) 30The tax year appointed under subsection (7)(b)—

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

(b) must 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) 35An order under this section may make different provision for different
purposes.

Welsh 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 Tax on transactions involving interests in land

(1) A tax which is charged on a Welsh land transaction and complies with
5the 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) the benefit of an obligation, restriction or condition affecting the
value of any such estate, interest, right or power.

(3) 10The 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) regardless of where any party to the transaction is or is resident.

(4) 15The 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

A Minister of the Crown

20The Welsh Ministers, the First Minister and the Counsel
General

The Scottish Ministers

A Northern Ireland department

(none) Parliament etc

25The Corporate Officer of the House of Lords

The Corporate Officer of the House of Commons

The Assembly Commission

The Scottish Parliamentary Corporate Body

The Northern Ireland Assembly Commission.”

(2) 30A 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
transaction.

15 35Disapplication 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
disapplication of stamp duty land tax in relation to Wales.