Finance Bill (HC Bill 10)

(13) The Treasury may by regulations—

(a) make provision for the revocation by the Commissioners of a
recognition under this section and about the consequences of
a revocation;

(b) 5amend this section so as to add, remove or alter a condition
which must be met in relation to a market for it to be
recognised by the Commissioners under this section.

(14) Regulations under this section may contain incidental,
supplemental, consequential and transitional provision and savings.

(15) 10The power to make regulations under this section is exercisable by
statutory instrument, and any statutory instrument containing such
regulations is subject to annulment in pursuance of a resolution of
the House of Commons.

(16) This section is to be construed as one with the Stamp Act 1891.”

15Commencement of Part 1 and transitional provision

4 (1) The amendment made by paragraph 2 has effect in relation to any
agreement to transfer securities—

(a) where the agreement is conditional, if the condition is satisfied on or
after 28 April 2014, and

(b) 20in any other case, if the agreement is made on or after that date.

(2) Subject to sub-paragraph (3), the amendment made by paragraph 3 is treated
as having come into force on 28 April 2014.

(3) The following provisions of section 99A of FA 1986 (inserted by paragraph
3) come into force on the day on which this Act is passed—

(a) 25paragraph (b) of subsection (13), and

(b) subsections (14) and (15) so far as relating to that paragraph.

(4) Where, having been satisfied as mentioned in subsection (4) of section 99A
of FA 1986, the Commissioners for Her Majesty’s Revenue and Customs
have recognised a market as a growth market in anticipation of the coming
30into force of that section, that recognition has effect on and after 28 April
2014 as if it were a recognition under that section.

Part 2 Stamp duty

Main charge

5 35Stamp duty is not chargeable under Schedule 13 to FA 1999 (transfers on
sale) on instruments relating to stock or marketable securities admitted to
trading on a recognised growth market but not listed on any market.

Charge in relation to the purchase by a company of its own shares

6 Stamp duty is not chargeable by virtue of section 66(2) of FA 1986 (return
40relating to company’s purchase of own shares treated as instrument of
transfer on sale) on returns relating to shares admitted to trading on a
recognised growth market but not listed on any market.

Charge in relation to property vested by Act or purchased under statutory power

7 Section 12 of FA 1895 (collection of stamp duty in cases of property vested
by Act or purchased under statutory powers) does not apply to stock or
marketable securities admitted to trading on a recognised growth market
5but not listed on any market.

Interpretation of paragraphs 5 to 7

8 In paragraphs 5 to 7 “listed” and “recognised growth market” are to be
construed in accordance with section 99A of FA 1986 (inserted by paragraph
3 of this Schedule).

10Depositary receipts: charge

9 In section 67 of FA 1986 (depositary receipts), after subsection (8) insert—

“(8A) Where an instrument transfers shares or stock or marketable
securities admitted to trading on a recognised growth market but not
listed on any market, subsections (2) to (5) do not apply and stamp
15duty is not chargeable on the instrument.

(8B) In subsection (8A) “listed” and “recognised growth market” are to be
construed in accordance with section 99A below.”

Clearance services: charge

10 In section 70 of that Act (clearance services), after subsection (8) insert—

“(8A) 20Where an instrument transfers shares or stock or marketable
securities admitted to trading on a recognised growth market but not
listed on any market, subsections (2) to (5) do not apply and stamp
duty is not chargeable on the instrument.

(8B) In subsection (8A) “listed” and “recognised growth market” are to be
25construed in accordance with section 99A below.”

Charge on transfers of partnership interests

11 (1) Schedule 15 to FA 2003 (SDLT: partnerships) is amended as follows.

(2) In paragraph 31(1) (stamp duty on transfers of partnership interests:
continued application), after “that section)” insert “or in Schedule 20 to the
30Finance Act 2014 (abolition of stamp duty in relation to certain securities)”.

(3) In paragraph 33—

(a) in sub-paragraph (1A), for “stock or marketable” substitute
“relevant”,

(b) in sub-paragraph (3), for “stock or marketable” substitute “relevant”,

(c) 35in that sub-paragraph omit “that stock and” (in both places),

(d) in sub-paragraph (6), for “stock or” (in each place) substitute
“relevant”,

(e) in sub-paragraph (7), for “stock or” (in both places) substitute
“relevant”, and

(f) after sub-paragraph (8) insert—

“(8A) In this paragraph “relevant securities” means stock or
marketable securities other than any stock or marketable
securities admitted to trading on a recognised growth
5market but not listed on any market.”

Commencement of Part 2

12 (1) Paragraph 6 has effect in relation to any purchase of shares by a company on
or after 28 April 2014.

(2) Paragraph 7 has effect in relation to—

(a) 10any Act passed on or after 28 April 2014, and

(b) any instrument of transfer pursuant to such an Act executed on or
after that date.

(3) Paragraph 8 is treated as having come into force on 28 April 2014.

(4) Subject to that, this Part of this Schedule has effect in relation to—

(a) 15any instrument which is executed on or after 28 April 2014 in
pursuance of—

(i) an agreement made on or after that date, or

(ii) a conditional agreement made before that date where the
condition is satisfied on or after that date, and

(b) 20any instrument which is not executed in pursuance of a contract and
is executed on or after that date.

Section 110

SCHEDULE 21 Inheritance tax

Introductory

1 25IHTA 1984 is amended as follows.

Rate bands for tax years 2015-16, 2016-17 and 2017-18

2 Section 8 (indexation) does not have effect by virtue of any difference
between the consumer prices index for the month of September in 2014, 2015
or 2016 and the previous September.

30Treatment of certain liabilities

3 (1) After section 162A (liabilities attributable to financing excluded property)
insert—

“162AA Liabilities attributable to financing non-residents’ foreign currency
accounts

(1) 35This section applies if—

(a) in determining the value of a person’s estate immediately
before death, a balance on any qualifying foreign currency
account (“the relevant balance”) is to be left out of account
under section 157 (non-residents’ bank accounts), and

(b) 5the person has a liability which is attributable, in whole or in
part, to financing (directly or indirectly) the relevant balance.

(2) To the extent that the liability is attributable as mentioned in
subsection (1)(b), it may only be taken into account in determining
the value of the person’s estate immediately before death so far as
10permitted by subsection (3).

(3) If the amount of the liability that is attributable as mentioned in
subsection (1)(b) exceeds the value of the relevant balance, the excess
may be taken into account, but only so far as the excess does not arise
for either of the reasons mentioned in subsection (4).

(4) 15The reasons are—

(a) arrangements the main purpose, or one of the main purposes,
of which is to secure a tax advantage, or

(b) an increase in the amount of the liability (whether due to the
accrual of interest or otherwise).

(5) 20In subsection (4)(a)—

• “arrangements” includes any scheme, transaction or series of
  transactions, agreement or understanding, whether or not
  legally enforceable, and any associated operations;

• “tax advantage” means—

  (a)

  25the avoidance or reduction of a charge to tax, or

  (b)

  the avoidance of a possible determination in respect
  of tax.”

(2) Section 162C (sections 162A and 162B: supplementary provision) is
amended as follows.

(3) 30In the heading, after “162A” insert “, 162AA”.

(4) In subsection (1), after “162A(1) or (5)” insert “, 162AA(1)”.

(5) After subsection (1) insert—

“(1A) In a case in which the value of a person’s estate immediately before
death is to be determined, where a liability was discharged in part
35before that time—

(a) any part of the liability that, at the time of discharge, was not
attributable as mentioned in subsection (1) is, so far as
possible, to be taken to have been discharged first,

(b) any part of the liability that, at the time of discharge, was
40attributable as mentioned in section 162B(1)(b), (3)(b) or (5)(c)
is, so far as possible, only to be taken to have been discharged
after any part of the liability within paragraph (a) was
discharged,

(c) any part of the liability that, at the time of discharge, was
45attributable as mentioned in section 162AA(1) is, so far as
possible, only to be taken to have been discharged after any

parts of the liability within paragraph (a) or (b) were
discharged, and

(d) any part of the liability that, at the time of discharge, was
attributable as mentioned in section 162A(1) or (5) is, so far as
5possible, only to be taken to have been discharged after any
parts of the liability within paragraphs (a) to (c) were
discharged.”

(6) In subsection (2)—

(a) for “Where” substitute “In any other case, where”, and

(b) 10in paragraph (a), for “subsection (1)” substitute “section 162A(1) or
(5) or 162B(1)(b), (3)(b) or (5)(c)”.

(7) In section 175A (discharge of liabilities after death), in subsection (7)—

(a) after paragraph (a) insert—

“(aa) any part of the liability that is attributable as
15mentioned in section 162AA(1) is, so far as possible,
taken to be discharged only after any part of the
liability within paragraph (a) is discharged,”,

(b) in paragraph (b)—

(i) for “part”, in the second place it appears, substitute “parts”,
20and

(ii) for “(a) is” substitute “(a) or (aa) are”,

(c) in paragraph (c)—

(i) for “paragraph (a) or (b)” substitute “any of paragraphs (a) to
(b)”, and

(ii) 25for “either” substitute “any”.

(8) The amendments made by this paragraph have effect in relation to transfers
of value made, or treated as made, on or after the day on which this Act is
passed.

Ten-year anniversary charge

4 (1) 30In section 64 (charge at ten-year anniversary), after subsection (1) insert—

“(1A) For the purposes of subsection (1) above, property held by the
trustees of a settlement immediately before a ten-year anniversary is
to be regarded as relevant property comprised in the settlement at
that time if—

(a) 35it is income of the settlement,

(b) the income arose before the start of the five years ending
immediately before the ten-year anniversary,

(c) the income arose (directly or indirectly) from property
comprised in the settlement that, when the income arose, was
40relevant property, and

(d) when the income arose, no person was beneficially entitled to
an interest in possession in the property from which the
income arose.

(1B) Where the settlor of a settlement was not domiciled in the United
45Kingdom at the time the settlement was made, income of the
settlement is not to be regarded as relevant property comprised in

the settlement as a result of subsection (1A) above so far as the
income—

(a) is situated outside the United Kingdom, or

(b) is represented by a holding in an authorised unit trust or a
5share in an open-ended investment company.

(1C) Income of the settlement is not to be regarded as relevant property
comprised in the settlement as a result of subsection (1A) above so
far as the income—

(a) is represented by securities issued by the Treasury subject to
10a condition of the kind mentioned in subsection (2) of section
6 above, and

(b) it is shown that all known persons for whose benefit the
settled property or income from it has been or might be
applied, or who are or might become beneficially entitled to
15an interest in possession in it, are persons of a description
specified in the condition in question.”

(2) In section 66 (rate of ten-yearly charge), after subsection (2) insert—

“(2A) Subsection (2) above does not apply to property which is regarded as
relevant property as a result of section 64(1A) (and accordingly that
20property is charged to tax at the rate given by subsection (1) above).”

(3) The amendments made by this paragraph have effect in relation to occasions
on which tax falls to be charged under section 64 of IHTA 1984 on or after 6
April 2014.

Delivery of account and payment of tax

5 (1) 25In section 216(6) (time for delivery of accounts), before paragraph (b)
insert—

“(ad) in the case of an account to be delivered by a person within
subsection (1)(c) above, before the expiration of the period of
six months from the end of the month in which the occasion
30concerned occurs;”.

(2) In section 226 (payment of tax: general rules), after subsection (3B) insert—

“(3C) Tax chargeable under Chapter 3 of Part 3 of this Act on the value
transferred by a chargeable transfer, other than any for which the
due date is given by subsection (3B) above, is due six months after
35the end of the month in which the chargeable transfer is made.”

(3) In section 233 (interest on unpaid tax)—

(a) in subsection (1)(a), after “transfer” insert “not within paragraph (aa)
below and”,

(b) after subsection (1)(a) insert—

“(aa) 40an amount of tax charged under Chapter 3 of Part 3 of
this Act on the value transferred by a chargeable
transfer remains unpaid after the end of the period of
six months beginning with the end of the month in
which the chargeable transfer was made, or”, and

(c) 45in subsection (1)(b), for “any other chargeable transfer” substitute “a
chargeable transfer not within paragraph (a) or (aa) above”.

(4) The amendments made by this paragraph have effect in relation to
chargeable transfers made on or after 6 April 2014.

Section 113

SCHEDULE 22 The bank levy: miscellaneous changes

5Introduction

1 Schedule 19 to FA 2011 (the bank levy) is amended in accordance with this
Schedule.

High quality liquid assets etc

2 In paragraph 15 (chargeable equity and liabilities of a UK banking group or
10a building society group)—

(a) in sub-paragraph (2)(c), for “finally,” substitute “finally (subject to
sub-paragraph (6))”, and

(b) for sub-paragraph (6) substitute—

“(6) Where any amount (“A”) within sub-paragraph (2)(c) is
15used to reduce short term liabilities, the amount of the
reduction is determined as if A were an amount equal to
half of A.”

3 In paragraph 17 (chargeable equity and liabilities of foreign banking
groups)—

(a) 20in sub-paragraph (6)(c), for “finally,” substitute “finally (subject to
sub-paragraph (16))”,

(b) in sub-paragraph (12)(c), for “finally,” substitute “finally (subject to
sub-paragraph (16))”, and

(c) for sub-paragraph (16) substitute—

“(16) 25Where any amount (“A”) within sub-paragraph (6)(c) or
(12)(c) is used to reduce short term liabilities, the amount
of the reduction is determined as if A were an amount
equal to half of A.”

4 In paragraph 19 (chargeable equity and liabilities of non-banking groups)—

(a) 30in sub-paragraph (6)(c), for “finally,” substitute “finally (subject to
sub-paragraph (16))”,

(b) in sub-paragraph (12)(c), for “finally,” substitute “finally (subject to
sub-paragraph (16))”, and

(c) for sub-paragraph (16) substitute—

“(16) 35Where an amount (“A”) within sub-paragraph (6)(c) or
(12)(c) is used to reduce short term liabilities, the amount
of the reduction is determined as if A were an amount
equal to half of A.”

5 In paragraph 21 (chargeable equity and liabilities of UK resident banks and
40building societies which are not members of groups)—

(a) in sub-paragraph (2)(c), for “finally,” substitute “finally (subject to
sub-paragraph (6))”, and

(b) for sub-paragraph (6) substitute—

“(6) Where an amount (“A”) within sub-paragraph (2)(c) is
used to reduce short term liabilities, the amount of the
reduction is determined as if A were an amount equal to
5half of A.”

6 In paragraph 27 (determination of foreign bank’s chargeable equity and
liabilities)—

(a) in sub-paragraph (2)(c), for “finally,” substitute “finally (subject to
sub-paragraph (6))”, and

(b) 10for sub-paragraph (6) substitute—

“(6) Where an amount (“A”) within sub-paragraph (2)(c) is
used to reduce short term liabilities, the amount of the
reduction is determined as if A were an amount equal to
half of A.”

7 15The amendments made by paragraphs 2 to 6 have effect in relation to
chargeable periods ending on or after 1 January 2015.

Protected deposits

8 (1) Paragraph 29 (“excluded” equity and liabilities: protected deposits) is
amended as follows.

(2) 20Omit sub-paragraphs (4) to (6).

(3) In sub-paragraph (8) omit “, and sub-paragraphs (4), (5) and (6) so far as
relating to a scheme within sub-paragraph (2),”.

(4) In sub-paragraph (9) omit “, and sub-paragraphs (4), (5) and (6) so far as
relating to a scheme within sub-paragraph (3),”.

(5) 25The amendments made by this paragraph have effect for chargeable periods
ending on or after 1 January 2015.

Tier one capital equity and liabilities

9 (1) Paragraph 30 (“excluded” equity and liabilities: tier one capital equity and
liabilities) is amended as follows.

(2) 30For sub-paragraph (2) substitute—

“(2) Tier one capital equity and liabilities” means, in relation to an
entity or group of entities, so much of the entity or group’s equity
and liabilities as is tier one capital within the meaning of Article 25
of the Capital Requirements Regulation (taking account of the
35transitional provisions in Part Ten of that Regulation).

(3) For the purposes of sub-paragraph (2), the Capital Requirements
Regulation is to be treated as applying, in relation to all entities
and groups of entities, as if—

(a) to the extent it would not otherwise be the case, the
40Prudential Regulation Authority were the competent
authority in relation to those entities and groups,

(b) the only determinations made, and discretions exercised,
by the Prudential Regulation Authority for the purposes of

the Capital Requirement Regulation were those published
by it in accordance with that Regulation, and

(c) those entities and groups (to the extent that it would not
otherwise be the case) were subject to the provisions of the
5PRA Handbook immediately before 1 January 2014.

(4) “The Capital Requirements Regulation” means Regulation (EU)
No 575/2013 of the European Parliament and of the Council of 26
June 2013 on prudential requirements for credit institutions and
investment firms.”

(3) 10The amendment made by this paragraph has effect in relation to chargeable
periods ending on or after 1 January 2014.

Liabilities representing QCP margin in relation to trades executed under clearing agreements

10 (1) After paragraph 38 insert—

“38A (1) Liabilities are excluded if they represent cash collateral provided
15as QCP margin in relation to a trade executed or to be executed
under a client clearing agreement.

(2) Cash collateral is provided as “QCP margin” if, and to the extent
that—

(a) it exceeds the fair value of the instrument to which the
20trade relates, and

(b) it corresponds to either—

(i) an asset held in respect of the qualifying central
counterparty which represents cash collateral
provided to that qualifying central counterparty, or

(ii) 25cash collateral provided to the qualifying central
counterparty which has the effect of reducing a
liability of the clearing member to the qualifying
central counterparty.

(3) In this paragraph—

• 30“clearing member”, in relation to a recognised central
  counterparty, has the meaning given by Article 2(14) of the
  EMIR Regulation,

• “client” has the meaning given by Article 2(15) of the EMIR
  Regulation,

• 35“client clearing agreement” means a contract between a
  clearing member of a qualifying central counterparty and
  a client, relating to the clearing of transactions with the
  qualifying central counterparty,

• “derivative contract” has the meaning given by international
  40accounting standards,

• “the EMIR Regulation” means Regulation (EU) No 648/2012
  of the European Parliament and of the Council of 4 July
  2012 on OTC derivatives, central counterparties and trade
  repositories,

• 45“qualifying central counterparty” means a central
  counterparty that has been either authorised or recognised
  under the EMIR Regulation,

Finance BillPage 509

• “trade” means a transaction relating to the sale and purchase
  of a financial instrument or to the entering into of a
  derivative contract.”

(2) The amendment made by this paragraph has effect in relation to chargeable
5periods ending on or after 1 January 2014.

Certain liabilities deemed short term liabilities

11 (1) After paragraph 76 insert—

“76A (1) Liabilities under derivative contracts are never “long term” (and
are therefore always short term).

(2) 10In this paragraph “derivative contract” has the meaning given by
international accounting standards.”

(2) In paragraph 75 (liabilities not required to be repaid within 12 months etc are
long term liabilities), after sub-paragraph (2) insert—

“(3) This paragraph is subject to paragraph 76A.”

(3) 15In paragraph 77 (which relates to the calculation of “UK allocated equity and
liabilities”), for “76” substitute “76A”.

(4) The amendments made by this paragraph have effect for chargeable periods
ending on or after 1 January 2015.

Amendments consequential on regulatory changes

12 20In paragraph 81 (power to make consequential amendments), in sub-
paragraph (1), omit the “or” at the end of paragraph (b), and after paragraph
(c) insert “, or

(d) any regulatory requirement, or change to any regulatory
requirement, imposed by EU legislation, or by or under any
25Act (whenever adopted, enacted or made).”

Transitional provision

13 (1) This paragraph applies 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
30period of E,

(b) the chargeable period in respect of which the amount of the bank
levy is 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
35period, were treated as becoming due and payable before the
commencement date (“pre-commencement instalment payments”).

(2) Paragraphs 9 and 10 of this Schedule are to be ignored for the purpose of
determining the amount of any pre-commencement instalment payment.

(3) If there is at least one instalment payment, in respect of the total liability of
40E for the accounting period, which under the Instalment Payment
Regulations is treated as becoming due and payable on or after the
commencement date (“post-commencement instalment payments”), the