Finance Bill (HC Bill 57)

(b) any amount that is specified under section 371BI(2) of TIOPA
2010 (calculation of CFC charge on banking companies) for
the period,

may not exceed the available surcharge allowance for the period.

(7) 5Section 269DJ contains provision about what happens if the
requirement in subsection (6) is not met.

269DE Group surcharge allowance and the nominated company

(1) This section applies where—

(a) two or more members of a group are banking companies, and

(b) 10all the banking companies that are members of the group
together nominate (the “group allowance nomination”) one
of their number (the “nominated company”) for the purposes
of this Chapter.

(2) The “group surcharge allowance” for the group is £25,000,000 for
15each accounting period of the nominated company throughout
which the group allowance nomination has effect.

(3) If the group allowance nomination takes effect, or ceases to have
effect, part of the way through an accounting period of the
nominated company, the “group surcharge allowance” for the group
20for that period is—

(4) If an accounting period of the nominated company is less than 12
months, the group surcharge allowance for that period is
proportionally reduced.

(5) 30A group allowance nomination must state the date on which it is to
take effect (which may be earlier than the date the nomination is
made).

(6) A group allowance nomination is of no effect unless it is signed by
the appropriate person on behalf of each company that is, when the
35nomination is made, a member of the group and a banking company.

(7) A group allowance nomination ceases to have effect—

(a) immediately before the date on which a new group
allowance nomination in respect of the group takes effect,

(b) upon the appropriate person in relation to a banking
40company that is a member of the group notifying an officer of
Revenue and Customs, in writing, that the group allowance
nomination is revoked, or

(c) upon the nominated company ceasing to be a banking
company or ceasing to be a member of the group.

(8) The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make further provision about a group allowance
nomination or any notification under this section including, in
particular, provision—

(a) 5about the form and manner in which a nomination or
notification may be made,

(b) about how a nomination may be revoked and the form and
manner of such revocation,

(c) requiring a person to notify HMRC of the making or
10revocation of a nomination,

(d) requiring a person to give information to HMRC in
connection with the making or revocation of a nomination or
the giving of a notification,

(e) imposing time limits in relation to making or revoking a
15nomination or giving a notification, and

(f) providing that a nomination or its revocation, or a
notification, is of no effect, or ceases to have effect, if time
limits or other requirements under the regulations are not
met.

(9) 20In this Chapter “the appropriate person”, in relation to a company,
means—

(a) the proper officer of the company, or

(b) such other person as may for the time being have the express,
implied or apparent authority of the company to act on its
25behalf for the purposes of this Chapter.

(10) Subsections (3) and (4) of section 108 of TMA 1970 (responsibility of
company officers: meaning of “proper officer”) apply for the
purposes of subsection (9) as they apply for the purposes of that
section.

269DF 30 Group allowance allocation statement: submission

(1) A company must submit a group allowance allocation statement to
HMRC for each of its accounting periods in which it is the nominated
company in relation to a group.

This is subject to subsections (2) and (3).

(2) 35If a company ceases to be the nominated company in relation to a
group before it submits a group allowance allocation statement to
HMRC for an accounting period—

(a) that company may not submit the statement, and

(b) the company that is for the time being the nominated
40company in relation to the group must do so.

(3) But if a new group allowance nomination in respect of the group
takes effect on a date before it is made, that does not affect the
validity of the submission of any group allowance allocation
statement submitted before the date the new nomination is made.

(4) 45A group allowance allocation statement under this section must be
received by HMRC within 12 months of the end of the accounting
period, of the nominated company, to which it relates.

(5) A group allowance allocation statement under this section may be
submitted at a later time if an officer of Revenue and Customs allows
it.

(6) A group allowance allocation statement under this section must
5comply with the requirements of section 269DH.

269DG Group allowance allocation statement: submission of revised
statement

(1) This section applies if a group allowance allocation statement has
been submitted under section 269DF, or this section, in respect of an
10accounting period of a company that is, or was, a nominated
company (“the nominee’s accounting period”).

(2) A revised group allowance allocation statement in respect of the
nominee’s accounting period may be submitted to HMRC by the
company that is for the time being the nominated company in
15relation to the group.

(3) But if a new group allowance nomination in respect of the group
takes effect on a date before it is made, that does not affect the
validity of the submission of any revised group allowance allocation
statement submitted before the date the new nomination is made.

(4) 20A revised group allowance allocation statement may be submitted
on or before whichever is the latest of the following dates—

(a) the last day of the period of 36 months after the end of the
nominee’s accounting period;

(b) if notice of enquiry (within the meaning of Schedule 18 to FA
251998) is given into a relevant company tax return, 30 days
after the enquiry is completed;

(c) if, after such an enquiry, an officer of Revenue and Customs
amends the return under paragraph 34(2) of that Schedule, 30
days after the notice of amendment is issued;

(d) 30if an appeal is brought against such an amendment, 30 days
after the date on which the appeal is finally determined.

(5) A revised group allowance allocation statement may be submitted at
a later time if an officer of Revenue and Customs allows it.

(6) In this section “relevant company tax return” means a company tax
35return of a banking company for a chargeable accounting period for
which an amount of group surcharge allowance was, or could have
been, allocated by a previous group allowance allocation statement
in respect of the nominee’s accounting period.

(7) The references in subsection (4) to an enquiry into a relevant
40company tax return do not include an enquiry resulting from an
amendment of such a return where—

(a) the scope of the enquiry is limited as mentioned in paragraph
25(2) of Schedule 18 to FA 1998 (enquiry into amendments
when time limit for enquiry into return as originally
45submitted is passed), and

(b) the amendment relates only to the allocation of group
surcharge allowance for the nominee’s accounting period.

(8) A group allowance allocation statement under this section must
comply with the requirements of section 269DH.

269DH Group allowance allocation statement: requirements and effect

(1) This section applies in relation to a group allowance allocation
5statement submitted under section 269DF or 269DG.

(2) The statement must be signed by the appropriate person in relation
to the company giving the statement.

(3) The statement must—

(a) identify the group to which it relates,

(b) 10specify the accounting period, of the company that is or was
the nominated company, to which the statement relates (“the
nominee’s accounting period”),

(c) specify the days in the nominee’s accounting period on
which that company was the nominated company in relation
15to the group or state that that company was the nominated
company throughout the period,

(d) state the group surcharge allowance the group has for the
nominee’s accounting period,

(e) list one or more of the banking companies that were members
20of the group in the nominee’s accounting period (“listed
banking companies”),

(f) allocate amounts of the group surcharge allowance to the
listed banking companies, and

(g) for each amount of group surcharge allowance allocated to a
25listed banking company, specify the chargeable accounting
period of the listed banking company for which it is
allocated.

(4) An amount of group surcharge allowance allocated to a listed
banking company must be allocated to that company for a
30chargeable accounting period that falls wholly or partly in the
nominee’s accounting period.

(5) The maximum amount of group surcharge allowance that may be
allocated, by the group allowance allocation statement, to a listed
banking company for a chargeable accounting period of that
35company is—

(6) The sum of the amounts allocated to listed banking companies by the
45group allowance allocation statement may not exceed the group
surcharge allowance for the nominee’s accounting period.

(7) If a group allowance allocation statement is submitted that does not
comply with subsection (5) or (6), the company that is, for the time
being, the nominated company in relation to the group must submit
a revised group allowance allocation statement that does comply
5with those subsections within 30 days of the date on which the group
allowance allocation statement that did not comply was submitted.

(8) If a group allowance allocation statement—

(a) complies with those subsections when it is submitted, but

(b) subsequently ceases to comply with either of them,

10the company that is, for the time being, the nominated company in
relation to the group must submit a revised group allowance
allocation statement that does comply with those subsections within
30 days of the date on which the group allowance allocation
statement ceased to comply with one of those subsections.

(9) 15If a company fails to comply with subsection (7) or (8), an officer of
Revenue and Customs may by written notice to the company amend
the group allowance allocation statement as the officer thinks fit for
the purpose of making it comply with subsections (5) and (6).

(10) An officer of Revenue and Customs who issues a notice under
20subsection (9) to a company must, at the same time, send a copy of
the notice to each of the listed banking companies.

(11) The time limits otherwise applicable to the amendment of a company
tax return do not apply to any such amendment to the extent that it
is made in consequence of a group allowance allocation statement
25being submitted in accordance with section 269DF or 269DG.

(12) The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make further provision about a group allowance
allocation statement including, in particular, provision—

(a) about the form of a statement and the manner in which it is
30to be submitted,

(b) requiring a person to give information to HMRC in
connection with a statement,

(c) as to the circumstances in which a statement that is not
received by the time specified in section 269DF(4) or
35269DG(4) is to be treated as if it were so received, and

(d) as to circumstances in which a statement that does not
comply with the requirements of this section is to be treated
as if it did comply.

269DI Surcharge allowance for company not in a group containing other
40banking companies

(1) This section makes provision as to the surcharge allowance of a
banking company for a chargeable accounting period where section
269DD (surcharge allowance for banking company in a group
containing other banking companies) does not apply.

(2) 45The banking company’s surcharge allowance for the chargeable
accounting period is so much of its available surcharge allowance for
the period as it specifies in its company tax return as its surcharge
allowance for that period.

(3) The banking company’s “available surcharge allowance” for the
chargeable accounting period is £25,000,000.

(4) If the chargeable accounting period is less than 12 months, the
banking company’s available surcharge allowance for the period is
5proportionally reduced.

(5) The sum of—

(a) any amount specified under subsection (2) for the chargeable
accounting period, and

(b) any amount that is specified under section 371BI(2) of TIOPA
102010 (calculation of CFC charge on banking companies) for
the period,

may not exceed the available surcharge allowance for the period.

(6) Section 269DJ contains provision about what happens if the
requirement in subsection (5) is not met.

269DJ 15 Excessive specifications of available surcharge allowance

(1) This section applies if—

(a) a banking company’s company tax return for a chargeable
accounting period—

(i) specifies an amount under section 269DD(2) or
20269DI(2) as its surcharge allowance for the period, or

(ii) specifies an amount under section 371BI(2) of TIOPA
2010 (calculation of CFC charge on banking
companies) for the period, and

(b) the requirement in section 269DD(6) or (as the case may be)
25269DI(5) is not met.

(2) The company must, so far at it may do so, amend the company tax
return so that the requirement is met.

(3) If an officer of Revenue and Customs considers that, as a
consequence of the requirement not being met, an insufficient sum
30has been charged on the company under section 269DA, or at step 5
in section 371BC(1) of TIOPA 2010, for the chargeable accounting
period, the officer may make an assessment to tax in the amount
which in the officer’s opinion ought to be charged.

(4) The power in subsection (3) is without prejudice to the power to
35make a discovery assessment under paragraph 41(1) of Schedule 18
to FA 1998.

(5) If an assessment under subsection (3) is made because a company
fails, or is unable, to amend its company tax return in accordance
with subsection (2) in consequence of the amount of group surcharge
40allowance allocated to it for an accounting period being altered, the
assessment is not out of time if it is made within 12 months of the
date on which the alteration took place.

Application of Corporation Tax Acts: administration, double taxation etc

269DK Application of enactments applying to corporation tax: assessment,
recovery, double taxation etc

(1) The provision in section 269DA relating to the charging of a sum as
5if it were an amount of corporation tax is to be taken as applying all
enactments applying generally to corporation tax.

(2) But this is subject to—

(a) the provisions of the Taxes Acts,

(b) any necessary modifications, and

(c) 10subsection (5).

(3) The enactments mentioned in subsection (1) include—

(a) those relating to returns of information and the supply of
accounts, statements and reports,

(b) those relating to the assessing, collecting and receiving of
15corporation tax,

(c) those conferring or regulating a right of appeal, and

(d) those concerning administration, penalties, interest on
unpaid tax and priority of tax in cases of insolvency under the
law of any part of the United Kingdom.

(4) 20Accordingly, TMA 1970 is to have effect as if any reference to
corporation tax included a sum chargeable under section 269DA as
if it were an amount of corporation tax (but this does not limit
subsections (1) to (3)).

(5) In the Corporation Tax (Treatment of Unrelieved Surplus Advance
25Corporation Tax) Regulations 1999 (S.I. 1999/358S.I. 1999/358) or any further
regulations made under section 32 of FA 1998 (unrelieved surplus
advance corporation tax)—

(a) references to corporation tax do not include a sum chargeable
on a banking company under section 269DA as if it were an
30amount of corporation tax, and

(b) references to profits charged to corporation tax do not
include surcharge profits.

(6) Part 2 of TIOPA 2010 (double taxation relief) applies to a sum
chargeable under section 269DA as if it were an amount of
35corporation tax, subject to subsections (7) to (9).

In those subsections, “credit for foreign tax” means a credit allowable
under that Part.

(7) A non-banking or pre-2016 carried-forward credit for foreign tax is
not to be allowed against a sum chargeable on a company under
40section 269DA, for a chargeable accounting period, as if it were an
amount of corporation tax.

(8) “A non-banking or pre-2016 carried-forward credit for foreign tax” is
a credit for foreign tax in respect of an amount—

(a) which was an amount of a credit for foreign tax that would
45(ignoring section 42 of TIOPA 2010) have been allowable
against corporation tax of the kind mentioned in section
72(1)(a) of that Act in an accounting period of the company—

(i) in relation to which the company was not a banking
company, or

(ii) ending before 1 January 2016, and

(b) which is treated under paragraph (a) of section 73(1) of that
5Act as if it were foreign tax of the kind mentioned in that
paragraph in relation to the chargeable accounting period.

(9) Any credit for foreign tax that is allowable against—

(a) corporation tax for an accounting period, and

(b) a sum chargeable for that period under section 269DA as if it
10were an amount of corporation tax,

is to be allowed against the corporation tax first, before any of the
credit then remaining is allowed against the sum so chargeable.

(10) In this section “the Taxes Acts” has the same meaning as in TMA 1970
(see section 118(1) of that Act).

269DL 15 Payments in respect of the surcharge: information to be provided

(1) This section applies if—

(a) a sum is chargeable on a company (“the chargeable
company”) under section 269DA, for a chargeable accounting
period, as if it were an amount of corporation tax, and

(b) 20a payment is made (whether or not by the chargeable
company) that is wholly or partly in respect of that sum.

(2) The responsible company must notify an officer of Revenue and
Customs in writing, on or before the date the payment is made, of the
amount of the payment that is in respect of the sum that is chargeable
25under section 269DA.

(3) “The responsible company” is—

(a) if the chargeable company is party to relevant group
payment arrangements, the company that is, under those
arrangements, to discharge the liability of the chargeable
30company to pay corporation tax for the chargeable
accounting period, and

(b) otherwise, the chargeable company.

(4) “Relevant group payment arrangements” means arrangements
under section 59F(1) of TMA 1970 (arrangements for paying of tax on
35behalf of group members) that relate to the chargeable accounting
period.

(5) The requirement in subsection (2) is to be treated, for the purposes of
Part 7 of Schedule 36 to FA 2008 (information and inspection powers:
penalties), as a requirement in an information notice.

(6) 40This section is subject to any provision to the contrary in regulations
under section 59E of TMA 1970 (further provision as to when
corporation tax is due and payable).

Anti-avoidance

269DM Profit and loss shifting to avoid or reduce surcharge liability

(1) 45Subsection (3) applies in relation to a banking company if—

(a) there are arrangements that result in a relevant transfer, and

(b) the main purpose, or one of the main purposes, of the
arrangements is to avoid, or reduce, a sum being charged on
the banking company under section 269DA.

(2) 5There is a “relevant transfer” if there is, in substance—

(a) a transfer (directly or indirectly) of all or a significant part of
the surcharge profits of the banking company, for a
chargeable accounting period, to a non-banking company, or

(b) a transfer (directly or indirectly) of a loss or deductible
10amount to the banking company, for a chargeable accounting
period, from a non-banking company, resulting in the
elimination or significant reduction of the banking
company’s surcharge profits for that period.

(3) For the purposes of section 269DA, the surcharge profits of the
15banking company, for the chargeable accounting period, are to be
taken to be what they would have been had the relevant transfer not
taken place.

(4) In this section—

• “arrangements” includes any agreement, understanding,
  20scheme, transaction or series of transactions (whether or not
  legally enforceable);

• “CFC” and “chargeable company” have the same meaning as in
  Part 9A of TIOPA 2010 (controlled foreign companies) (see
  section 371VA of that Act);

• 25“deductible amount” means—

  (a)

  an expense of a trade, other than an amount treated as
  such an expense by section 450(a) of CAA 2001
  (research and development allowances treated as
  expenses in calculating profits of a trade),

  (b)

  30an expense of a UK property business or overseas
  property business,

  (c)

  an expense of management of a company’s
  investment business within the meaning of section
  1219 of CTA 2009,

  (d)

  35a non-trading debit within the meaning of Parts 5 and
  6 of CTA 2009 (loan relationships and relationships
  treated as such) (see section 301(2) of that Act), or

  (e)

  a non-trading debit within the meaning of Part 8 of
  CTA 2009 (intangible fixed assets) (see section 746 of
  40that Act);

• “non-banking company” means a company that, at any time
  when the arrangements mentioned in subsection (1) have
  effect, is neither—

  (a)

  a banking company, nor

  (b)

  45a CFC in relation to which a banking company is a
  chargeable company.

Interpretation

269DN Interpretation

In this Chapter—

• “the appropriate person” has the meaning given by 269DE(9);

• 5“banking company” has the meaning given by section 269B;

• “chargeable accounting period” has the meaning given by
  section 269DA(1);

• “company tax return” has the same meaning as in Schedule 18
  to FA 1998;

• 10“group” has the meaning given by section 269BD;

• “group allowance allocation statement” means a group
  allowance allocation statement submitted under section
  269DF or 269DG;

• “group allowance nomination” has the meaning given by
  15section 269DE(1);

• “group surcharge allowance” has the meaning given by section
  269DE;

• “HMRC” means Her Majesty’s Revenue and Customs;

• “nominated company” has the meaning given by section
  20269DE(1);

• “surcharge allowance” has the meaning given by section
  269DA(3) and (4);

• “surcharge profits” has the meaning given by section
  269DA(2).””

25Part 2 Consequential amendments

TMA 1970

2 In section 59E of TMA 1970 (further provision as to when corporation tax is
due and payable), in subsection (11), after paragraph (b) insert—

“(ba) 30to any sum chargeable on a company under section 269DA of
CTA 2010 (surcharge on banking companies) as if it were an
amount of corporation tax chargeable on the company;”.”

FA 1998

3 (1) Schedule 18 to FA 1998 (company tax returns, assessments and related
35matters) is amended as follows.

(2) In paragraph 1 (meaning of “tax”)—

(a) before the entry relating to section 455 of CTA 2010 insert—

““section 269DA of the Corporation Tax Act 2010
(surcharge on banking companies),”, and”

(b) 40in the entry relating to section 455 of CTA 2010, for “the Corporation
Tax Act 2010” substitute “that Act”.

(3) In paragraph 8(1) (calculation of tax payable), in the third step, after