Finance (No. 2) Bill (HC Bill 193)

(a) the NRCGT return by virtue of which P is not required to give
a notice under section 7 with respect to year X, or

(b) if more than one NRCGT return falls within paragraph (a),
the one relating to the disposal which has the latest
5completion date.

(3) P is treated for the purposes of the Taxes Acts as having been
required to make and deliver to an officer of Revenue and Customs
a return under section 8 for the purpose of establishing, with respect
to year X, the matters mentioned in section 8(1).

(4) 10For the purposes of subsection (3), section 8 is to be read as if
subsections (1E) to (1G) of that section were omitted.

(5) If P does not give a notice under subsection (6) before 31 January in
the tax year after year X, the Taxes Acts have effect, from that date,
as if the advance self-assessment contained in the relevant NRCGT
15return were a self-assessment included, for the purposes set out in
section 9(1), in a return under section 8 made by P and delivered on
that date.

(6) If P gives HMRC a notice under this subsection specifying an
NRCGT return which—

(a) 20relates to year X, and

(b) contains an advance self-assessment,

the Taxes Acts are to have effect, from the effective date of the notice,
as if that advance self-assessment were a self-assessment included,
for the purposes set out in section 9(1), in a return under section 8
25made by P and delivered on that date.

(7) References in the Taxes Acts to a return under section 8 (for example,
references to amending, or enquiring into, a return under that
section) are to be read in accordance with subsections (5) and (6).

(8) A notice under subsection (6)—

(a) 30must be given before 31 January in the tax year after year X;

(b) must state that P considers the advance self-assessment in
question to be an accurate self-assessment in respect of year
X for the purposes of section 9.

(9) The “effective date” of a notice under subsection (6) is—

(a) 35the day on which the NRCGT return specified in the notice is
delivered, or

(b) if later, the day on which the notice is given.

(10) The self-assessment which subsection (5) or (6) treats as having been
made by P is referred to in this section as the “section 9 self-
40assessment”.

(11) If P—

(a) gives a notice under subsection (6), and

(b) makes and delivers a subsequent NRCGT return relating to
year X which contains an advance self-assessment,

45that advance self-assessment is to be treated as amending the section
9 self-assessment.

(12) For the purposes of subsection (11), an NRCGT return made and
delivered by P (“return B”) is “subsequent” to an NRCGT return to
which P’s notice under subsection (6) relates (“the notified return”) if
the day of the completion of the disposal to which return B relates is
5later than the day of the completion of the disposal to which the
notified return relates.

12ZI NRCGT returns and annual self-assessment: section 8A

(1) This section applies where the relevant trustees of a settlement (“the
trustees”)—

(a) 10are not required to give a notice under section 7 with respect
to a tax year (“year X”), and

(b) would be required to give such a notice in the absence of
section 7A (which removes that duty in certain cases where
the person has made an NRCGT return including an advance
15self-assessment).

(2) In this section, “the relevant NRCGT return” means—

(a) the NRCGT return by virtue of which P is not required to give
a notice under section 7 with respect to year X, or

(b) if more than one NRCGT return falls within paragraph (a),
20the one relating to the disposal which has the latest
completion date.

(3) The trustees are treated for the purposes of the Taxes Acts as having
been required to make and deliver to an officer of Revenue and
Customs a return under section 8A, for the purpose of establishing,
25with respect to year X, the matters mentioned in section 8A(1).

(4) For the purposes of subsection (3), section 8A is to be read as if—

(a) in subsection (1) of that section, “, and the settlors and
beneficiaries,” were omitted, and

(b) subsections (1C) to (1E) of that section were omitted.

(5) 30If the trustees do not give a notice under subsection (6) before 31
January in the tax year after year X, the Taxes Acts have effect, from
that date, as if the advance self-assessment contained in the relevant
NRCGT return were a self-assessment included, for the purposes set
out in section 9(1), in a return under section 8A made by the trustees
35and delivered on that date.

(6) If the trustees give HMRC a notice under this subsection specifying
an NRCGT return which—

(a) relates to year X, and

(b) contains an advance self-assessment,

40the Taxes Acts are to have effect, from the effective date of the notice,
as if that advance self-assessment were a self-assessment included,
for the purposes set out in section 9(1), in a return under section 8A
made by the trustees and delivered on that date.

(7) References in the Taxes Acts to a return under section 8A (for
45example, references to amending, or enquiring into, a return under
that section) are to be read in accordance with subsections (5) and (6).

(8) A notice under subsection (6)—

(a) must be given before 31 January in the tax year after year X;

(b) must state that the trustees consider the advance self-
assessment in question to be an accurate self-assessment in
respect of year X for the purposes of section 9.

(9) 5The “effective date” of a notice under subsection (6) is—

(a) the day on which the NRCGT return specified in the notice is
delivered, or

(b) if later, the day on which the notice is given.

(10) The self-assessment which subsection (5) or (6) treats as having been
10made by the trustees is referred to in this section as the “section 9 self-
assessment”.

(11) If the trustees—

(a) give a notice under subsection (6), and

(b) make and deliver a subsequent NRCGT return relating to
15year X which contains an advance self-assessment,

that advance self-assessment is to be treated as amending the section
9 self-assessment.

(12) For the purposes of subsection (11), an NRCGT return made and
delivered by the trustees (“return B”) is “subsequent” to an NRCGT
20return to which the trustees’ notice under subsection (6) relates (“the
notified return”) if the day of the completion of the disposal to which
return B relates is later than the day of the completion of the disposal
to which the notified return relates.

12ZJ Sections 12ZA to 12ZI: determination of residence status

(1) 25For the purposes of sections 12ZA to 12ZI, the question whether or
not a disposal of a UK residential property interest is a non-resident
CGT disposal is to be determined in accordance with subsections (2)
and (3).

(2) A non-residence condition is to be taken to be met in relation to a
30disposal of a UK residential property interest if, at the time of the
completion of the disposal—

(a) it is uncertain whether or not that condition will be met, but

(b) it is reasonable to expect that that condition will be met.

(3) If (in a case within subsection (2)) it later becomes certain that neither
35of the non-residence conditions is met in relation to the disposal, the
disposal is treated as not being, and as never having been, a non-
resident CGT disposal (and any necessary repayments or
adjustments are to be made accordingly).

(4) Subsection (5) applies if—

(a) 40at the time of the completion of the disposal of a UK
residential property interest it is uncertain whether or not the
disposal is a non-resident CGT disposal because it is
uncertain whether or not a non-residence condition will be
met, but the case does not fall within subsection (2), and

(b) 45it later becomes certain that a non-residence condition is met
in relation to the disposal.

(5) For the purposes of this Act, the filing date for the NRCGT return is
taken to be the 30th day following the day on which it becomes
certain that a non-residence condition is met in relation to the
disposal.

(6) 5In this section “a non-residence condition” means condition A or B in
section 14B of the 1992 Act.

12ZK Amendment of NRCGT return by the taxpayer

(1) A person may, by notice to an officer of Revenue and Customs,
amend the person’s NRCGT return.

(2) 10An amendment may not be made more than 12 months after 31
January of the year following the relevant tax year.

(3) In subsection (2) “the relevant tax year” means the tax year in which
any gains on the disposal to which the return relates would accrue.

12ZL Correction of NRCGT return by HMRC

(1) 15An officer of Revenue and Customs may amend an NRCGT return
so as to correct—

(a) obvious errors or omissions in the return (whether errors of
principle, arithmetical mistakes or otherwise), and

(b) anything else in the return that the officer has reason to
20believe is incorrect in the light of information available to the
officer.

(2) A correction under this section is made by notice to the person whose
return it is.

(3) No such correction may be made more than 9 months after—

(a) 25the day on which the return was delivered, or

(b) if the correction is required in consequence of an amendment
of the return under section 12ZK (amendment by the
taxpayer), the day on which that amendment was made.

(4) A correction under this section is of no effect if the person to whom
30the notice of correction was given gives notice rejecting the
correction.

(5) Notice of rejection under subsection (4) must be given—

(a) to the officer of Revenue and Customs by whom the notice of
correction was given,

(b) 35before the end of the period of 30 days beginning with the
date of issue of the notice of correction.

12ZM Notice of enquiry

(1) An officer of Revenue and Customs may enquire into an NRCGT
return if the officer gives notice of the intention to do so (“notice of
40enquiry”)—

(a) to the person whose return it is,

(b) within the time allowed.

(2) The time allowed is—

(a) if the return was delivered on or before 31 January in the year
following the relevant tax year, (the “annual filing date”) up
to the end of the period of 12 months after the day on which
the return was delivered,

(b) 5if the return was delivered after the annual filing date, up to
and including the quarter day next following the first
anniversary of the day on which the return was delivered,

(c) if the return is amended under section 12ZL (correction by
HMRC), up to and including the quarter day next following
10the first anniversary of the day on which the amendment was
made.

For this purpose the quarter days are 31 January, 30 April, 31 July
and 31 October.

(3) An enquiry extends to anything contained in the return, or required
15to be contained in the return, including any claim or election
included in the return, subject to the following limitation.

(4) If the notice of enquiry is given as a result of an amendment of the
return under section 12ZK (amendment by taxpayer)—

(a) at a time when it is no longer possible to give notice of
20enquiry under subsection (2)(a) or (b), or

(b) after an enquiry into the return has been completed,

the enquiry into the return is limited to matters to which the
amendment relates or which are affected by the amendment.

(5) In subsection (2) “the relevant tax year” means the tax year in which
25any gain on the disposal to which the return relates would accrue.

12ZN Amendment of return by taxpayer during enquiry

(1) This section applies if an NRCGT is amended under section 12ZK
(amendment by taxpayer) at a time when an enquiry is in progress
into the return.

(2) 30The amendment does not restrict the scope of the enquiry but may be
taken into account (together with any matters arising) in the enquiry.

(3) So far as the amendment affects the amount notionally chargeable
for the purposes of the return (see section 12ZF(1)), it does not take
effect while the enquiry is in progress and—

(a) 35if the officer states in the closure notice that the officer has
taken the amendment into account and that—

(i) the amendment has been taken into account in
formulating the amendments contained in the notice,
or

(ii) 40the officer’s conclusion is that the amendment is
incorrect,

the amendment is not to take effect;

(b) otherwise, the amendment takes effect when the closure
notice is issued.

(4) 45For the purposes of this section the period during which an enquiry
is in progress is the whole of the period—

(a) beginning with the day on which the notice of enquiry is
given, and

(b) ending with the day on which the enquiry is completed.”

44 (1) Section 28A (completion of enquiry into personal or trustee return) is
amended as follows.

(2) In subsection (1), after “9A(1)” insert “or 12ZM”.

(3) 5In the heading, after “return” insert “or NRCGT return”.

45 Before section 29 insert—

“28CG Determination of amount notionally chargeable where no NRCGT
return delivered

(1) This section applies where it appears to an officer of Revenue and
10Customs that—

(a) a person is required to make and deliver in respect of a non-
resident CGT disposal an NRCGT return containing an
advance self-assessment, and

(b) the person has not delivered the required return by the filing
15date for the return.

(2) The officer may make a determination, to the best of the officer’s
information and belief, of the amount of capital gains tax which
should have been assessed in the required return as the amount
notionally chargeable.

(3) 20Notice of any determination under this section must be served on the
person in respect of whom it is made and must state the date on
which it is issued.

(4) Until such time (if any) as it is superseded by an advance self-
assessment on the basis of information contained in an NRCGT
25return, a determination under this section is to have effect as if it
were an advance self-assessment contained in an NRCGT return
made by the person in respect of the disposal concerned.

(5) Where—

(a) proceedings have been commenced for the recovery of an
30amount payable by virtue of a determination under this
section, and

(b) before those proceedings are concluded, the determination is
superseded by an advance self-assessment made by the
person in respect of the disposal,

35those proceedings may be continued as if they were proceedings for
the recovery of so much of the amount payable by virtue of the
advance self-assessment as is due and payable and has not been
paid.

(6) No determination under this section, and no advance self-
40assessment superseding such a determination may be made—

(a) after the end of the period of 3 years beginning with 31
January of the year following the tax year to which the
determination relates, or

(b) in the case of such an advance self-assessment, after the end
45of the period of 12 months beginning with the date of the
determination.

(7) In this section—

• “advance self-assessment” is to be interpreted in accordance
  with section 12ZE(1);

• “amount notionally chargeable” is to be interpreted in
  5accordance with section 12ZF(1);

• “filing date”, in relation to an NRCGT return, is to be
  interpreted in accordance with section 12ZB(8).

(8) For the meaning in this section of “non-resident CGT disposal” see
section 14B of the 1992 Act.”

46 10In section 29 (assessment where loss of tax discovered), in subsection (7)(a),
omit the “and” following sub-paragraph (i), and after that sub-paragraph
insert—

“(ia) a reference to any NRCGT return made and delivered
by the taxpayer which contains an advance self-
15assessment relating to the relevant year of assessment
or either of the two immediately preceding
chargeable periods; and”.

47 After section 29 insert—

“29A Non-resident CGT disposals: determination of amount which should
20have been assessed

(1) Subsection (2) applies if HMRC discover, as regards a non-resident
CGT disposal made by a person (“P”) (or two or more such disposals
in a case falling within section 12ZC) and a tax year (“the relevant tax
year”) that—

(a) 25an amount that ought to have been assessed as the amount
notionally chargeable in an advance self-assessment under
section 12ZE(1) has not been so assessed by the filing date, or

(b) an assessment of the amount notionally chargeable for the
purposes of section 12ZF(1) contained in an NRCGT return
30made and delivered by P has become insufficient.

(2) HMRC may determine that the amount or further amount which in
its opinion ought to be assessed under section 12ZE to remedy the
failure mentioned in subsection (1)(a) or the insufficiency mentioned
in subsection (1)(b) is to be treated for the purposes of this Act as if it
35were so assessed in—

(a) an NRCGT return made by P in respect of the disposal, or

(b) (if P has made and delivered an NRCGT return in respect of
the disposal) that return.

But see subsections (3) to (5).

(3) 40Where P has made and delivered in respect of the disposal an
NRCGT return containing an advance self-assessment, HMRC may
not make a determination under subsection (2) in respect of the
disposal unless one of the two conditions mentioned below is met.

(4) The first condition is that the situation mentioned in subsection (1)
45was brought about carelessly or deliberately by P or a person acting
on P’s behalf.

(5) The second condition is that at the time when an officer of Revenue
and Customs—

(a) ceased to be entitled to give notice of the officer’s intention to
enquire into the NRCGT return, or

(b) informed P of the completion of the officer’s enquiries into
the return,

5the officer could not reasonably have been expected, on the basis of
the information made available to the officer before that time, to be
aware of the situation mentioned in subsection (1).

(6) For the purposes of subsection (5), information is made available to
an officer of Revenue and Customs if—

(a) 10it is contained in an NRCGT return made and delivered by P
which relates to the relevant tax year or either or the two
immediately preceding tax years,

(b) it is contained in any return under section 8 or 8A made and
delivered by P in respect of either of the two tax years
15immediately preceding the relevant tax year,

(c) it is contained in any claim made by P which relates to P’s
capital gains tax position with respect to the relevant tax year
or either of the two immediately preceding tax years,

(d) it is contained in any accounts, statements or documents
20accompanying a return falling within paragraph (a) or (b) or
a claim falling within paragraph (c),

(e) it is contained in any documents, accounts or particulars
which, for the purposes of any enquiries by an officer of
Revenue and Customs into a return falling within paragraph
25(a) or (b) or a claim falling within paragraph (c) are produced
or provided by P to the officer, or

(f) it is information the existence of which, and the relevance of
which as regards the situation mentioned in subsection (1)
above—

(i) 30could be reasonably expected to be inferred by an
officer of Revenue and Customs from information
falling within paragraphs (a) to (e) above, or

(ii) are notified in writing by the taxpayer to an officer of
Revenue and Customs.

(a)(a)35it is contained in an NRCGT return made and delivered by P
which relates to the relevant tax year or either or the two
immediately preceding tax years,

(b) it is contained in any return under section 8 or 8A made and
delivered by P in respect of either of the two tax years
40immediately preceding the relevant tax year,

(c) it is contained in any claim made by P which relates to P’s
capital gains tax position with respect to the relevant tax year
or either of the two immediately preceding tax years,

(d) it is contained in any accounts, statements or documents
45accompanying a return falling within paragraph (a) or (b) or
a claim falling within paragraph (c),

(e) it is contained in any documents, accounts or particulars
which, for the purposes of any enquiries by an officer of
Revenue and Customs into a return falling within paragraph
50(a) or (b) or a claim falling within paragraph (c) are produced
or provided by P to the officer, or

(f) it is information the existence of which, and the relevance of
which as regards the situation mentioned in subsection (1)
above—

(i) 55could be reasonably expected to be inferred by an
officer of Revenue and Customs from information
falling within paragraphs (a) to (e) above, or

(ii) are notified in writing by the taxpayer to an officer of
Revenue and Customs.

(7) 60In subsection (6)—

(a) any reference to a return made and delivered by P under
section 8 in respect of a tax year includes, if P carries on a
trade, profession or business in partnership, a reference to
any partnership return with respect to the partnership for
65that tax year, and

(b) any reference to P includes a person acting on P’s behalf.

(8) An objection to the making of a determination under subsection (2)
on the ground that neither of the two conditions mentioned above is
fulfilled may not be made otherwise than on an appeal against the
70assessment.

(9) In this section—

• “advance self-assessment” has the meaning given by section
  12ZF(1);

• “amount notionally chargeable” is to be interpreted in
  75accordance with section 12ZE(1);

Finance (No. 2) BillPage 248

• “filing date”, in relation to an NRCGT return, has the meaning
  given by section 12ZB(8).

(10) For the meaning in this section of “non-resident CGT disposal” see
section 14B of the 1992 Act.”

48 5In section 34 (ordinary time limit of 4 years), after subsection (1) insert—

“(1A) In subsection (1) the reference to an assessment to capital gains tax
includes a determination under section 29A (non-resident CGT
disposals: determination of amount which should have been
assessed).”

49 10In section 42 (procedure for making claims), in subsection (11), after “8A,”
insert “12ZB”.

50 In section 59A (payments on account of income tax), omit subsection (7).

51 After section 59A insert—

“59AA Non-resident CGT disposals: payments on account of capital gains
15tax

(1) Subsections (2) and (3) apply where a person (“P”) is required to
make, in relation to a tax year, an NRCGT return in respect of one or
more non-resident CGT disposals containing an advance self-
assessment and the amount in subsection (6)(a) is greater than the
20amount in subsection (6)(b).

(2) With effect from the filing date for the return, the balancing amount
is (or, where applicable, becomes) the amount payable by P on
account of P’s liability to capital gains tax for the tax year.

(3) Where P is the relevant members of an NRCGT group, P is
25responsible for discharging the obligation of the taxable person to
pay any balancing amounts and such amounts are payable on
account of the taxable person’s liability to capital gains tax for the tax
year.

(4) Subsection (5) applies where a person (“P”) is required to make, in
30relation to a tax year, an NRCGT return containing an advance self-
assessment and the amount in subsection (6)(a) is less than the
amount in subsection (6)(b).

(5) The balancing amount is repayable to P on the filing date for the
return.

(6) 35The amounts referred to in subsections (1) and (4) are—

(a) the amount notionally chargeable contained in the self-
assessment, and

(b) the total of any amounts previously paid under this section
on account of P’s liability to capital gains tax for the tax year.

(7) 40In subsections (2) and (5) “the balancing amount” means the
difference between those amounts.

(8) Where, in the case of a repayment, the NRCGT return is enquired
into by an officer of Revenue and Customs—

(a) nothing in subsection (5) requires the repayment to be made
before the day on which, by virtue of section 28A(1), the
enquiry is completed, but

(b) the officer may at any time before that day make the
5repayment, on a provisional basis, to such extent as the
officer thinks fit.

(9) Subsection (10) applies to—

(a) any amount payable on account of capital gains tax as a result
of the amendment or correction under section 12ZK, 12ZL or
1028A of an advance self-assessment, and

(b) any amount paid on account of capital gains tax which is
repayable as a result of such an amendment or correction.

(10) The amount is payable or (as the case may be) repayable on or before
the day specified by the relevant provision of Schedule 3ZA.

(11) 15Subsection (12) applies where a determination under section 28G
(determination of amount notionally chargeable where no NRCGT
return delivered) which has effect as a person’s advance self-
assessment is superseded by an advance self-assessment in an
NRCGT return made and delivered by the person under section
2012ZB.

(12) Any amount which is payable on account of capital gains tax, and
any amount paid on account of capital gains tax which is repayable,
by virtue of the supersession is to be payable or (as the case may be)
repayable on or before the filing date for the return.

(13) 25In this section—

• “advance self-assessment” has the meaning given by section
  12ZE(1);

• “amount notionally chargeable” is to be interpreted in
  accordance with section 12ZF(1);

• 30“filing date”, in relation to an NRCGT return, has the meaning
  given by section 12ZB(8);

• the “taxable person”, in relation to a non-resident CGT disposal,
  means the person who would be chargeable to capital gains
  tax in respect of any chargeable NRCGT gain accruing on the
  35disposal (were such a gain to accrue).

(14) For the meaning in this section of “non-resident CGT disposal” see
section 14B of the 1992 Act.

(15) For the meaning in this section of “NRCGT group” see section 288(1)
of the 1992 Act.

59AB 40Amounts payable on account: recovery

The provisions of the Taxes Acts as to the recovery of tax shall apply
to an amount falling to be paid on account of tax in the same manner
as they apply to an amount of tax.”

52 (1) Section 59B (payment of income tax and capital gains tax) is amended as
45follows.

(2) In subsection (1)(b), after “59A” insert “or 59AA”.