Finance Bill (HC Bill 10)

(2) There is to be taken into account for the purpose mentioned in sub-
paragraph (1) only chargeable periods of one year or less (whether or not
they are chargeable periods within paragraph 1(1) or 4(1)), and, if there is
more than one such period, only that period which gives rise to the greatest
5maximum allowance.

(3) For the purposes of sub-paragraph (2) any chargeable period which—

(a) is longer than a year, and

(b) ends in the tax year 2013-14, 2014-15, 2015-16, 2016-17 or 2017-18,

is to be treated as being a chargeable period of one year ending at the same
10time as it actually ends.

(4) Nothing in this paragraph affects the operation of sections 51M and 51N of
CAA 2001.

Part 2 Amendments of FA 2013

6 (1) 15Section 7 of FA 2013 (temporary increase in annual investment allowance) is
amended as follows.

(2) In subsection (1), for “of two years beginning with 1 January 2013” substitute
“beginning with 1 January 2013 and ending with the specified date”.

(3) After subsection (1) insert—

“(1A) 20The specified date is —

(a) for the purposes of corporation tax, 31 March 2014, and

(b) for the purposes of income tax, 5 April 2014.”

(4) In subsection (2), omit “or 1 January 2015”.

7 (1) Schedule 1 to FA 2013 (annual investment allowance) is amended as follows.

(2) 25In paragraph 1 (chargeable periods which straddle 1 January 2013)—

(a) in sub-paragraph (1), after “that date” insert “but not later than the
specified date”, and

(b) after sub-paragraph (1) insert—

“(1A) The specified date” means—

(a) 30for the purposes of corporation tax, 31 March 2014,
and

(b) for the purposes of income tax, 5 April 2014.”

(3) Omit paragraph 4 (chargeable periods which straddle 1 January 2015).

(4) In paragraph 5 (operation of annual investment allowance where
35restrictions apply)—

(a) in sub-paragraph (1)—

(i) for “to 4” substitute “to 3”, and

(ii) omit “or 4(1)”, and

(b) in sub-paragraph (2), omit “or 4(1)”,

(c) 40in sub-paragraph (3)(b), for “, 2014-15, 2015-16 or 2016-17” substitute
“or 2014-15”.

Section 15

SCHEDULE 3 Restrictions on remittance basis

1 ITEPA 2003 is amended as follows.

2 In section 23 (taxable earnings: calculation of “chargeable overseas
5earnings”) after subsection (1) insert—

“(1A) But none of an employee’s general earnings from an employment for
a tax year are to be “chargeable overseas earnings” if section 24A
applies in relation to the employment for the tax year.”

3 After section 24 insert—

“24A 10 Restrictions on remittance basis

(1) This section applies in relation to an employment (“the relevant
employment”) for a tax year (“the relevant tax year”) if—

(a) one or more of the paragraphs in subsection (5) applies,

(b) conditions 1 to 4 are met, and

(c) 15condition 5 is not met.

(2) The consequences of this section applying are set out in sections
23(1A), 41C(4A), 41H(5) and 554Z9(1A).

(3) But, for the purpose of determining if, and the extent to which, any
provision of Part 11 (PAYE), or of PAYE regulations, applies in
20relation to any income, the application of any provision mentioned
in subsection (2) in relation to the income is to be ignored.

(4) In this section—

(a) “the relevant employee” means the employee in respect of the
relevant employment,

(b) 25“the relevant employer” means the employer in respect of the
relevant employment, and

(c) “UK employment” means an employment the duties of
which are not performed wholly outside the United
Kingdom and “UK employer” is to be read accordingly,

30and the rules in section 24(5) (“associated” persons) apply for the
purposes of this section.

(5) The paragraphs referred to in subsection (1)(a) are—

(a) general earnings from the relevant employment which are for
the relevant tax year would, apart from section 23(1A) and
35Step 3 in section 23(3), be “chargeable overseas earnings”
under section 23(3);

(b) employment income in respect of the relevant employment
which is treated as accruing in the relevant tax year under
section 41C(2) would, apart from sections 41C(4A), 41D and
4041E, be “foreign” under section 41C(3);

(c) employment income in respect of the relevant employment
which is treated as accruing in the relevant tax year under
section 41H(2) would, apart from sections 41H(5), 41I and
41L, be “chargeable foreign securities income” under section
4541H(3);

(d) section 554Z9(2) would, apart from section 554Z9(1A) and (4)
and (5), apply to employment income in respect of the
relevant employment which corresponds to the value of a
relevant step, or a part of the value of a relevant step, which
5is “for” the relevant tax year as determined under section
554Z4.

(6) Condition 1 is that the relevant employee holds a UK employment—

(a) at a time in the relevant tax year when the relevant employee
also holds the relevant employment, or

(b) 10if the relevant tax year is a split year as respects the relevant
employee, at a time in the UK part of the relevant tax year
when the relevant employee also holds the relevant
employment.

(7) Condition 2 is that the UK employer is the same as, or is associated
15with, the relevant employer.

(8) Condition 3 is that the UK employment and the relevant
employment are related to each other.

(9) Without prejudice to the generality of subsection (8), the UK
employment and the relevant employment are to be assumed to be
20related to each other if one or more of the following paragraphs
applies—

(a) it is reasonable to suppose that—

(i) the relevant employee would not hold one
employment without holding the other employment,
25or

(ii) the employments will cease at the same time or one
employment will cease in consequence of the other
employment ceasing;

(b) the terms of one employment operate to any extent by
30reference to the other employment;

(c) the performance of duties of one employment is (wholly or
partly) dependent upon, or otherwise linked (directly or
indirectly) to, the performance of duties of the other
employment;

(d) 35the duties of the employments are wholly or mainly of the
same type (ignoring the fact that they may be performed
(wholly or partly) in different locations);

(e) the duties of the employments involve (wholly or partly) the
provision of goods or services to the same customers or
40clients;

(f) the relevant employee is—

(i) a director (as defined in section 67) of the UK
employer or the relevant employer who has a
material interest (as defined in section 68) in the UK
45employer or the relevant employer,

(ii) a senior employee of the UK employer or the relevant
employer, or

(iii) one of the employees of the UK employer or the
relevant employer who receives the higher or highest
50levels of remuneration.

(10) In subsection (9)(f) references to the UK employer or the relevant
employer include references to—

(a) any person with which the UK employer or the relevant
employer (as the case may be) is associated, and

(b) 5if the UK employer or the relevant employer (as the case may
be) is a company, the following companies taken together as
if they were one company—

(i) the UK employer or the relevant employer (as the case
may be), and

(ii) 10all the companies with which the UK employer or the
relevant employer (as the case may be) is associated.

(11) The Treasury may by regulations amend this section so as to add to,
reduce or modify the cases in which the UK employment and the
relevant employment are to be assumed to be related to each other.

(12) 15A statutory instrument containing regulations under subsection (11)
may not be made unless a draft has been laid before, and approved
by a resolution of, the House of Commons.

(13) Condition 4 is that X% is less than Y%.

(14) “X%” is given by the following formula—

20

See section 24B for the definitions of “C” and “I”.

(15) “Y%” is 65% of the additional rate for the relevant tax year.

(16) The Treasury may by regulations amend this section so as to amend
the definition of “Y%”.

(17) 25Condition 5 is that—

(a) were the duties of the relevant employment to be duties of
the UK employment instead, all or substantially all of them
could not lawfully be performed in the relevant territory
(whether on the meeting of any condition or otherwise) by
30virtue of any regulatory requirements imposed by or under
the law of that territory, and

(b) were the UK duties of the UK employment to be duties of the
relevant employment instead, all or substantially all of them
could not lawfully be performed in the part of the United
35Kingdom in which they are performed (whether on the
meeting of any condition or otherwise) by virtue of any
regulatory requirements imposed by or under the law of that
part of the United Kingdom.

(18) In subsection (17)—

• 40“the relevant territory” means the territory in which the duties
  of the relevant employment are performed, and

• “UK duties” means duties performed in the United Kingdom.

24B Definitions of “C” and “I” for the purposes of section 24A(14)

(1) This section applies for the purposes of section 24A(14).

(2) “C” is the total amount of credit which would be allowed under
section 18(2) of TIOPA 2010 (double taxation relief by way of credit)
against income tax in respect of all the employment income falling
within section 24A(5)(a) to (d) were none of that income to be, as
5relevant—

(a) “chargeable overseas earnings”,

(b) “foreign”,

(c) “chargeable foreign securities income”, or

(d) income to which section 554Z9(2) applies.

(3) 10For this purpose, assume—

(a) that all relief is claimed within the applicable time limit given
by section 19 of TIOPA 2010, and

(b) that all reasonable steps are taken to minimise any amounts
of tax payable as mentioned in section 33 of that Act.

(4) 15“I” is the total amount of all the employment income falling within
section 24A(5)(a) to (d).”

4 (1) Section 41C (taxable specific income from employment-related securities etc:
foreign securities income) is amended as follows.

(2) After subsection (4) insert—

“(4A) 20But subsection (4) does not apply to a tax year if section 24A applies
in relation to the employment for the tax year.”

(3) After subsection (8) insert—

“(9) If subsection (4) does not apply to a tax year by virtue of subsection
(4A), it is to be assumed for the purposes of section 41E that it is just
25and reasonable for none of the securities income treated as accruing
in the tax year to be “foreign”.”

5 In section 554Z9 (employment income provided through third parties:
remittance basis) after subsection (1) insert—

“(1A) But subsection (2) does not apply if section 24A applies in relation to
30A’s employment with B for the relevant tax year.”

6 In section 717 (orders and regulations) in subsection (4) after “under” insert
“section 24A(11) (assumptions about related employments),”.

7 (1) Section 23(1A) of ITEPA 2003 (as inserted by paragraph 2) has effect in
relation to general earnings which are general earnings from an employment
35for the tax year 2014-15 or any subsequent tax year.

(2) Section 41C(4A) of ITEPA 2003 (as inserted by paragraph 4(2)) has effect for
cases where the tax year in question is the tax year 2014-15 or any
subsequent tax year.

(3) Section 41H(5) of ITEPA 2003 (as inserted by Part 1 of Schedule 7 to this Act)
40has effect for cases where the tax year in question is the tax year 2014-15 or
any subsequent tax year.

(4) Section 554Z9(1A) of ITEPA 2003 (as inserted by paragraph 5) has effect for
cases where the relevant tax year (see section 554Z9(1)(a) of that Act) is the
tax year 2014-15 or any subsequent tax year.

Section 41

SCHEDULE 4 Transitional provision relating to new standard lifetime allowance for the
tax year 2014-15 etc

Part 1 5“Individual protection 2014”

The protection

1 (1) Sub-paragraph (2) applies on and after 6 April 2014 in the case of an
individual—

(a) who, on 5 April 2014, has one or more relevant arrangements (see
10sub-paragraph (4)),

(b) whose relevant amount is greater than £1,250,000 (see sub-paragraph
(5)), and

(c) in relation to whom paragraph 7 of Schedule 36 to FA 2004 (primary
protection) does not make provision for a lifetime allowance
15enhancement factor,

if notice of intention to rely on it is given to an officer of Revenue and
Customs before 6 April 2017.

(2) Part 4 of FA 2004 has effect in relation to the individual as if the standard
lifetime allowance were—

(a) 20if the individual’s relevant amount is greater than £1,500,000, the
greater of the standard lifetime allowance and £1,500,000, or

(b) otherwise, the greater of the standard lifetime allowance and the
individual’s relevant amount.

(3) But sub-paragraph (2) does not apply at any time when any of the following
25provisions applies in the case of the individual—

(a) paragraph 12 of Schedule 36 to FA 2004 (enhanced protection);

(b) paragraph 14 of Schedule 18 to FA 2011 (fixed protection 2012);

(c) paragraph 1 of Schedule 22 to FA 2013 (fixed protection 2014).

(4) “Relevant arrangement”, in relation to an individual, means an arrangement
30relating to the individual under—

(a) a registered pension scheme of which the individual is a member, or

(b) a relieved non-UK pension scheme of which the individual is a
relieved member.

(5) An individual’s “relevant amount” is the sum of amounts A, B, C and D (see
35paragraphs 2 to 5).

(6) Sub-paragraphs (7) and (8) apply if rights of an individual under a relevant
arrangement become subject to a pension debit where the transfer day falls
on or after 6 April 2014.

(7) For the purpose of applying sub-paragraph (2) in the case of the individual
40on and after the transfer day, the individual’s relevant amount is reduced (or
further reduced) by the following amount—

(If the formula gives a negative amount, it is to be taken to be nil.)

(8) 5But if the individual’s relevant amount would be reduced (or further
reduced) to £1,250,000 or less, sub-paragraph (2) is not to apply at all in the
case of the individual on and after the transfer day.

(9) In sub-paragraphs (6) to (8) “appropriate amount” and “transfer day”, in
relation to a pension debit, have the same meaning as in section 29 of WRPA
101999 or Article 26 of WRP(NI)O 1999 (as the case may be).

Amount A (pre-6 April 2006 pensions in payment)

2 (1) To determine amount A—

(a) apply sub-paragraph (2) if a benefit crystallisation event has
occurred in relation to the individual during the period comprising
15the tax year 2006-07 and all subsequent tax years up to (and
including) the tax year 2013-14;

(b) otherwise, apply sub-paragraph (6).

(2) If this sub-paragraph is to be applied, amount A is—

(3) 30Paragraph 20(4) of Schedule 36 to FA 2004 applies for the purposes of the
definition of “ARP” in sub-paragraph (2) (and, for this purpose, in
paragraph 20(4) any reference to “the time” is to be read as a reference to the
time immediately before the benefit crystallisation event occurred).

(4) If the time immediately before the benefit crystallisation event occurred falls
35before 6 April 2011, in sub-paragraph (3) references to paragraph 20(4) are
to be read as references to that provision as it stood at the time immediately
before the benefit crystallisation event occurred.

(5) If more than one benefit crystallisation event has occurred, in sub-
paragraphs (2) to (4) references to the benefit crystallisation event are to be
40read as references to the first benefit crystallisation event.

(6) If this sub-paragraph is to be applied, amount A is—

(a) the annual rate at which any relevant existing pension is payable to
45the individual at the end of 5 April 2014, or

(b) if more than one relevant existing pension is payable to the
individual at the end of 5 April 2014, the sum of the annual rates at
which each of the relevant existing pensions is so payable.

(7) Paragraph 20(4) of Schedule 36 to FA 2004 applies for the purposes of the
5definition of “ARP” in sub-paragraph (6) (and, for this purpose, in
paragraph 20(4) any reference to “the time” is to be read as a reference to 5
April 2014).

(8) In this paragraph “relevant existing pension” means (subject to sub-
paragraph (9)) a pension, annuity or right—

(a) 10which was, at the end of 5 April 2006, a “relevant existing pension”
as defined by paragraph 10(2) and (3) of Schedule 36 to FA 2004, and

(b) the payment of which the individual had, at the end of 5 April 2006,
an actual (rather than a prospective) right to.

(9) If—

(a) 15before 6 April 2014, there was a recognised transfer of sums or assets
representing a relevant existing pension, and

(b) those sums or assets were, after the transfer, applied towards the
provision of a scheme pension (“the new scheme pension”),

the new scheme pension is also to be a “relevant existing pension” (including
20for the purposes of this sub-paragraph).

Amount B (pre-6 April 2014 benefit crystallisation events)

3 (1) To determine amount B—

(a) identify each benefit crystallisation event that has occurred in
relation to the individual during the period comprising the tax year
252006-07 and all subsequent tax years up to (and including) the tax
year 2013-14,

(b) determine the amount which was crystallised by each of those
benefit crystallisation events (applying paragraph 14 of Schedule 34
to FA 2004 if relevant), and

(c) 30multiply each crystallised amount by the following fraction—

(2) 35Amount B is the sum of the crystallised amounts determined under sub-
paragraph (1)(b) as adjusted under sub-paragraph (1)(c).

Amount C (uncrystallised rights at end of 5 April 2014 under registered pension schemes)

4 Amount C is the total value of the individual’s uncrystallised rights at the
end of 5 April 2014 under arrangements relating to the individual under
40registered pension schemes of which the individual is a member as
determined in accordance with section 212 of FA 2004.

Amount D (uncrystallised rights at end of 5 April 2014 under relieved non-UK pension
schemes)

5 (1) To determine amount D—

(a) identify each relieved non-UK pension scheme of which the
5individual is a relieved member at the end of 5 April 2014, and

(b) in relation to each such scheme—

(i) assume that a benefit crystallisation event occurs in relation
to the individual at the end of 5 April 2014, and

(ii) in accordance with paragraph 14 of Schedule 34 to FA 2004,
10determine what the untested portion of the relevant relieved
amount would be immediately before the assumed benefit
crystallisation event.

(2) Amount D is the sum of the untested portions determined under sub-
paragraph (1)(b)(ii).

15Interpretation

6 (1) Expressions used in this Part of this Schedule and Part 4 of FA 2004 have the
same meaning in this Part as in that Part.

(2) In particular, references to a relieved non-UK pension scheme or a relieved
member of such a scheme are to be read in accordance with paragraphs 13(3)
20and (4) and 18 of Schedule 34 to FA 2004.

Part 2 Regulations

7 (1) The Commissioners for Her Majesty’s Revenue and Customs may by
regulations amend Part 1 of this Schedule.

(2) 25Regulations under this paragraph may (for example) add to the cases in
which paragraph 1(2) is to apply.

(3) Regulations under this paragraph must not increase any person’s liability to
tax.

(4) Regulations under this paragraph may include provision having effect in
30relation to a time before the regulations are made; but the time must be no
earlier than 6 April 2014.

8 (1) The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make provision specifying how any notice required to be given
to an officer of Revenue and Customs under Part 1 of this Schedule is to be
35given.

(2) In sub-paragraph (1) the reference to Part 1 of this Schedule is to that Part as
amended from time to time by regulations under paragraph 7.

9 (1) Regulations under paragraph 7 or 8 may include supplementary or
incidental provision.

(2) 40The powers to make regulations under paragraphs 7 and 8 are exercisable by
statutory instrument.

(3) A statutory instrument containing regulations under paragraph 7 or 8 is
subject to annulment in pursuance of a resolution of the House of Commons.

Part 3 Other provision

5Amendment of section 219(5A) of FA 2004

10 (1) In section 219 of FA 2004 (availability of individual’s lifetime allowance) in
subsection (5A) after “effect” insert “where the previous benefit
crystallisation event occurred before 6 April 2014”.

(2) The amendment made by this paragraph is treated as having come into force
10on 6 April 2014.

Amendment of section 98 of TMA 1970

11 (1) Column 2 of the Table at the end of section 98 of TMA 1970 (special returns:
penalties) is amended as follows.

(2) After the entry for section 228 of TIOPA 2010 insert—

“(None) 15Regulations under paragraph 16 of Schedule 18 to the
Finance Act 2011.”

(3) After the entry for regulations under section 61(5) of FA 2012 insert—

“(None) Regulations under paragraph 3 of Schedule 22 to the
Finance Act 2013.

(None) 20Regulations under paragraph 8 of Schedule 4 to the Finance
Act 2014.”

Section 43

SCHEDULE 5 Pension schemes

Introduction

1 25Part 4 of FA 2004 (pension schemes etc) is amended as follows.

Registration of pension schemes

2 (1) Section 153 (applications for registration) is amended as follows.

(2) In subsection (4) for “On” substitute “Following”.

(3) In subsection (5) for paragraphs (a) and (b) substitute—

“(a) 30any information falling within subsection (5A) is inaccurate
in a material respect,

(b) any document falling within subsection (5B) contains a
material inaccuracy,

(c) any declaration accompanying the application is false,

(d) 35the scheme administrator has failed to comply with an
information notice under section 153A given in connection