Finance Bill (HC Bill 47)

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(b) where it is necessary to apportion an amount for the straddling
period to the two separate accounting periods, it is to be
apportioned—

(i) in accordance with section 1172 of CTA 2010 (time basis), or

(ii) 5if that method would produce a result that is unjust or
unreasonable, on a just and reasonable basis.

26 In this Part of this Schedule “the commencement date” means 1 January
2017.

SCHEDULE 11 Section 82 10Disposals of non-UK residential property interests

1 TCGA 1992 is amended in accordance with this Schedule.

2 In section 14B(1) (meaning of “non-resident CGT disposal”), in paragraph (a)
after “disposal of a UK residential property interest” insert “(within the
meaning given by Schedule B1)”.

3 15Omit section 14C (which introduces Schedule B1 and is superseded by the
section 4BB inserted by section 82 of this Act).

4 In Schedule B1 (disposals of UK residential property interests), in paragraph
1—

(a) in sub-paragraph (4) for “6 April 2015” substitute “the relevant date”;

(b) 20after that sub-paragraph insert—

(4A) In sub-paragraph (4) “the relevant date” means—

(a) for the purpose of determining whether a disposal
is a non-resident CGT disposal, 6 April 2015;

(b) for any other purpose, 31 March 1982.”

5 25After Schedule B1 insert—

“Schedule BA1 Section 4BB. Disposals of non-UK residential property interests

Meaning of “disposal of a non-UK residential property interest”

1 (1) For the purposes of this Act, the disposal by a person (“P”) of an
interest in non-UK land (whether made before or after this
30Schedule comes into force) is a “disposal of a non-UK residential
property interest” if the first or second condition is met.

(2) The first condition is that—

(a) the land has at any time in the relevant ownership period
consisted of or included a dwelling, or

(b) 35the interest in non-UK land subsists for the benefit of land
that has at any time in the relevant ownership period
consisted of or included a dwelling.

(3) The second condition is that the interest in non-UK land subsists
under a contract for an off-plan purchase.

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(4) In sub-paragraph (2) “relevant ownership period” means the
period—

(a) beginning with the day on which P acquired the interest in
non-UK land or 31 March 1982 (whichever is later), and

(b) 5ending with the day before the day on which the disposal
occurs.

(5)
If the interest in non-UK land disposed of by P as mentioned in
sub-paragraph (1) results from interests in non-UK land which P
has acquired at different times (“the acquired interests”), P is
10regarded for the purposes of sub-paragraph (4)(a) as having
acquired the interest when P first acquired any of the acquired in-
terests.

(6) In this paragraph—

  • “contract for an off-plan purchase” means a contract for the
    15acquisition of land consisting of, or including, a building or
    part of a building that is to be constructed or adapted for
    use as a dwelling;

  • “dwelling” is to be read in accordance with paragraph 4.

(7) Paragraphs 6 and 20 of Schedule 4ZZC contain further provision
20about interests under contracts for off-plan purchases.

“Interest in non-UK land”

2 (1) In this Schedule “interest in non-UK land” means—

(a) an estate, interest, right or power in or over land outside
the United Kingdom, or

(b) 25the benefit of an obligation, restriction or condition
affecting the value of any such estate, interest, right or
power,

other than an excluded interest.

(2) The following are excluded interests—

(a) 30any security interest;

(b) a licence to use or occupy land.

(3) In sub-paragraph (2) “security interest” means an interest or right
held for the purpose of securing the payment of money or the
performance of any other obligation.

(4) 35The Treasury may by regulations—

(a) provide that any other description of interest or right in
relation to land outside the United Kingdom is an
excluded interest;

(b) exclude from sub-paragraph (2) such interests or rights as
40may be prescribed in the regulations.

(NaN)
Regulations under sub-paragraph (4) may make incidental,
consequential, supplementary or transitional provision or
savings.

Grants of options

3 (1) 45Sub-paragraph (2) applies where—

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(a) a person (“P”) grants at any time an option binding P to sell
an interest in non-UK land, and

(b) a disposal by P of that interest in non-UK land at that time
would be a disposal of a non-UK residential property
5interest by virtue of paragraph 1.

(2) The grant of the option is regarded for the purposes of this
Schedule as the disposal of an interest in the land in question (if it
would not be so regarded apart from this paragraph).

(3) Nothing in this paragraph affects the operation of section 144 in
10relation to the grant of the option (or otherwise).

(4) Subsection (6) of section 144 (interpretation of references to “sale”
etc) applies for the purposes of this paragraph as it applies for the
purposes of that section.

Meaning of “dwelling”

4 (1) 15Paragraph 4 of Schedule B1 (meaning of “dwelling”), read with
paragraphs 6 to 10 of that Schedule, applies for the purposes of
this Schedule as it applies for the purposes of Schedule B1, but as
if—

(a) in paragraph 4, sub-paragraphs (5) and (6) were omitted,

(b) 20in paragraphs 6 and 8—

(i) any reference to an interest in UK land were to an
interest in non-UK land within the meaning of this
Schedule, and

(ii) any reference to paragraph 1(4) of that Schedule
25were a reference to paragraph 1(4) of this Schedule,
and

(c) in paragraphs 7 to 9 any reference to planning permission
or development consent were to any permission or consent
corresponding to planning permission or development
30consent within the meaning of that Schedule.

(2) In paragraph 5 of Schedule B1 (power to amend), the reference to
paragraph 4 includes paragraph 4 as applied by this paragraph.

(3) The Treasury may by regulations under this sub-paragraph make
provision changing or clarifying the cases where a building
35outside the United Kingdom counts as a dwelling for the purposes
of this Schedule (and sub-paragraph (1) has effect subject to any
such regulations).

(4) Provision made under sub-paragraph (3) may include provision
corresponding to paragraph 4(5) of Schedule B1.

40Interpretation

5 In this Schedule “land” includes a building.”

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SCHEDULE 12 Section 82 Disposals of residential property interests: gains and losses

1 TCGA 1992 is amended in accordance with this Schedule.

2 In section 57A(3) (gains and losses on relevant high value disposals:
5interaction with other provisions)—

(a) the words from “Part 4” to the end become paragraph (a), and

(b) after that paragraph insert or,

(b) Part 3 of Schedule 4ZZC applies (other disposals of
residential property interests which are or involve
10relevant high value disposals).”

3 After section 57B insert—

“Chapter 7

Computation of gains and losses: disposals of residential property interests

57C Gains and losses on disposals of residential property interests

Schedule 4ZZC makes provision about the computation of—

(a) residential property gains or losses, and

(b) 15other gains or losses,

on disposals of residential property interests which are not non-
resident CGT disposals.”

4 In Schedule B1 (disposals of UK residential property interests), in paragraph
1(7) after “Schedule 4ZZB” insert “and paragraphs 6 and 20 of Schedule
204ZZC”.

5 After Schedule 4ZZB insert—

“Schedule 4ZZC Section 57C Disposals of residential property interests: gains and losses

Part 1 Introduction and interpretation

25Introduction

1 (1) In this Schedule “RPI disposal” means a disposal of a residential
property interest which is not a non-resident CGT disposal.

(2) This Schedule applies for the purpose of determining, in relation
to an RPI disposal—

(a) 30whether a residential property gain or loss accrues on the
disposal, and the amount of any such gain or loss, and

(b) whether a gain or loss other than a residential property
gain or loss accrues on the disposal, and the amount of any
such gain or loss.

(3) 35In this Schedule—

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(a) Part 2 contains the main rules for computing the gains and
losses;

(b) Part 3 contains the rules for computing the gains and losses
in a case where the RPI disposal is, or involves, a relevant
5high value disposal (as defined in section 2C).

Interpretation

2 (1) For the purposes of this Schedule, a relevant high value disposal
is “comprised in” an RPI disposal if—

(a) the RPI disposal is treated for the purposes of section 2C
10and Schedule 4ZZA as two or more disposals, and

(b) the relevant high value disposal is one of those.

(2) In this Schedule—

  • “chargeable interest” has the same meaning as in Part 3 of the
    Finance Act 2013 (annual tax on enveloped dwellings) (see
    15section 107 of that Act);

  • “dwelling” has the meaning given by —

    (a)

    paragraph 4 of Schedule B1, in relation to a disposal
    of a UK residential property interest;

    (b)

    paragraph 4 of Schedule BA1, in relation to a disposal
    20of a non-UK residential property interest;

  • “subject-matter”, in relation to an interest in land (or a
    chargeable interest) means the land to which the interest
    relates.

Part 2 25RPI disposals not involving relevant high value disposals

Application of Part

3 (1) This Part of this Schedule applies where a person (“P”) makes an
RPI disposal of (or of part of) an interest in land.

(2) But this Part of this Schedule does not apply if the disposal is—

(a) 30a relevant high value disposal, or

(b) a disposal in which a relevant high value disposal is
comprised.

(3) In this Part of this Schedule “the disposed of interest” means—

(a) the interest in land, or

(b) 35if the disposal is of part of that interest, the part disposed
of.

Computation of residential property gains and losses

4 (1) The residential property gain or loss accruing on the disposal is
computed as follows.

40Step 1

Determine the amount of the gain or loss that accrues to P.

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(For the purpose of determining the amount of that gain or loss, no
account is taken of section 57C or this Schedule.)

Step 2

The residential property gain or loss accruing on the disposal is an
5amount equal to the relevant fraction of that gain or loss (but see
Step 3).

Step 3

If there has been mixed use of the subject matter of the disposed of
interest on one or more days in the relevant ownership period, the
10residential property gain or loss accruing on the disposal is equal
to the appropriate fraction of the amount given by Step 2.

(2) In Step 2 “the relevant fraction” means—


where—

  • 15“RD” is the number of days in the relevant ownership period
    on which the subject matter of the disposed of interest
    consists wholly or partly of a dwelling;

  • TD” is the total number of days in the relevant ownership
    period.

(3) 20For the purposes of Step 3 there is “mixed use” of land on any day
on which the land consists partly, but not exclusively, of one or
more dwellings.

(4) In Step 3 “the appropriate fraction” means the fraction that is, on a
just and reasonable apportionment, attributable to the dwelling or
25dwellings.

(5) In this paragraph the “relevant ownership period” means the
period—

(a) beginning with the day on which P acquired the disposed
of interest or, if later, 31 March 1982, and

(b) 30ending with the day before the day on which the disposal
occurs.

Computation of balancing gains and loses

5 The gain or loss accruing on the disposal which is not a residential
property gain or loss is computed as follows.

35Step 1

In a case where there is a gain under Step 1 of paragraph 4(1),
determine the amount of that gain remaining after the deduction
of the residential property gain determined under that paragraph.

Step 2

40In a case where there is a loss under Step 1 of paragraph 4(1),
determine the amount of that loss remaining after the deduction of
the residential property loss determined under that paragraph.

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That remaining loss is the loss accruing on the disposal which is
not a residential property loss.

Interest subsisting under contract for off-plan purchase

6 (1) This paragraph applies where the disposal referred to in
5paragraph 3(1) is a disposal of a residential property interest only
because of—

(a) the second condition in paragraph 1 of Schedule B1, or

(b) the second condition in paragraph 1 of Schedule BA1,

(interest subsisting under a contract for the acquisition of land that
10consists of, or includes, a building that is to be constructed for use
as a dwelling).

(2) The land that is the subject of the contract concerned is treated for
the purposes of this Part of this Schedule as consisting of (or, as the
case requires, including) a dwelling throughout P’s period of
15ownership of the disposed of interest.

Part 3 RPI disposals involving relevant high value disposals

Application of Part

7 (1) This Part of this Schedule applies where—

(a) 20a person (other than an excluded person) (“P”) makes an
RPI disposal of (or of part of) an interest in land, and

(b) that disposal (“the disposal of land”) is a relevant high
value disposal or a relevant high value disposal is
comprised in it.

(2) 25“Excluded person” has the meaning given by section 2B(2).

Interpretation of Part

8 (1) This paragraph applies for the interpretation of this Part of this
Schedule.

(2) “The asset”, in relation to a relevant high value disposal, means the
30chargeable interest which (or a part of which) is the subject of that
disposal.

(3) “The disposed of interest”, in relation to a relevant high value
disposal, means the asset or, if only part of the asset is the subject
of the relevant high value disposal, that part of the asset.

(4) 35A day is a “residential property chargeable day” in relation to a
relevant high value disposal if—

(a) it is a day on which the subject matter of the disposed of
interest consists wholly or partly of a dwelling, but

(b) it is not an ATED chargeable day (as defined in paragraph
403 of Schedule 4ZZA).

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Computation of residential property gains or losses on the RPI disposal

9 (1) The residential property gain or loss accruing on the disposal of
land is computed as follows.

Step 1

5Determine in accordance with paragraphs 10 to 15 the amount of
the residential property gain or loss accruing on each relevant
high value disposal.

Step 2

Add together the amounts of any gains or losses determined
10under Step 1 (treating any amount which is a loss as a negative
amount).

(2) If the result is a positive amount, that amount is the residential
property gain on the disposal of land.

(3) If the result is a negative amount, that amount (expressed as a
15positive number) is the residential property loss on the disposal of
land.

Computation of residential property gains or losses on relevant high value disposal not
within Case 1, 2 or 3 (or where an election is made)

10 (1) This paragraph applies to a relevant high value disposal where—

(a) 20the disposal does not fall within any of Cases 1, 2 or 3 in
paragraph 2 of Schedule 4ZZA, or

(b) P has made an election under paragraph 5 of that Schedule
in respect of the asset.

(2) The residential property gain or loss accruing on the relevant high
25value disposal is computed as follows—

Step 1

Determine the amount of gain or loss which accrues to P.

Step 2

The residential property gain or loss accruing on the relevant high
30value disposal is equal to the special fraction of that gain or loss.

(3) The “special fraction” is—


where—

  • “SD” is the number of residential property chargeable days in
    35the relevant ownership period;

  • TD” is the total number of days in the relevant ownership
    period.

(4) “Relevant ownership period” means the period—

(a) beginning with the day on which P acquired the disposed
40of interest or, if later, 31 March 1982, and

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(b) ending with the day before the day on which the relevant
high value disposal occurs.

Computation of residential property gains and losses on relevant high value disposal
within Case 1, 2 or 3 (and no election made)

11 (1) 5This paragraph applies to a relevant high value disposal where—

(a) the disposal falls within Case 1, 2 or 3 in paragraph 2 of
Schedule 4ZZA, and

(b) P has not made an election under paragraph 5 of that
Schedule in respect of the asset.

(2) 10The residential property gain or loss accruing on the relevant high
value disposal is computed in accordance with paragraphs 12 to
15.

(3) In those paragraphs “the relevant year” means—

(a) where the relevant high value disposal falls within Case 1
15in paragraph 2 of Schedule 4ZZA, 2013,

(b) where it falls within Case 2 in that paragraph, 2015, and

(c) where it falls within Case 3 in that paragraph, 2016.

12 (1) Take the following steps—

Step 1

20Determine the amount equal to the special fraction of the notional
pre-ATED gain or loss (as the case may be) (see paragraph 13).

Step 2

Determine the amount equal to the special fraction of the notional
post-ATED gain or loss (as the case may be) (see paragraph 14).

25Step 3

Add (treating any amount which is a loss as a negative amount)—

(a) the amount of any gain or loss determined under Step 1,
and

(b) the amount of any gain or loss determined under Step 2.

(2) 30If the result is a positive amount, that amount is the residential
property gain on the relevant high value disposal.

(3) If the result is a negative amount, that amount (expressed as a
positive number) is the residential property loss on the relevant
high value disposal.

13 (1) 35This paragraph applies for the purposes of Step 1 in paragraph 12.

(2) “Notional pre-ATED gain or loss” means the gain or loss which
would have accrued on 5 April of the relevant year had the
disposed of interest been disposed of for a consideration equal to
the market value of the interest on that date.

(3) 40The “special fraction” is—


where—

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  • “SD” is the number of residential property chargeable days in
    the relevant ownership period;

  • TD” is the total number of days in the relevant ownership
    period.

(4) 5The “relevant ownership period” is the period—

(a) beginning with the day on which P acquired the disposed
of interest or, if later, 31 March 1982, and

(b) ending with 5 April of the relevant year.

14 (1) This paragraph applies for the purposes of Step 2 in paragraph 12.

(2) 10“Notional post-ATED gain or loss” means the gain or loss which
would have accrued on the relevant high value disposal had P
acquired the disposed of interest on 5 April of the relevant year for
a consideration equal to its market value on that date (and see
paragraph 15).

(3) 15The “special fraction” is—


where—

  • “SD” is the number of residential property chargeable days in
    the relevant ownership period;

  • 20TD” is the total number of days in the relevant ownership
    period.

(4) The “relevant ownership period” is the period beginning with 6
April of the relevant year and ending with the day before the day
on which the relevant high value disposal occurs.

15 (1) 25This paragraph applies for the purposes of computing the notional
post-ATED gain or loss for the purposes of Step 2 in paragraph 12.

(2) In determining whether the asset which is the subject of the
relevant high value disposal is a wasting asset (as defined for the
purposes of Chapter 2 of Part 2), ignore the assumption that the
30asset was acquired on 5 April of the relevant year.

(3) Sections 41 (restriction of losses by reference to capital allowances
and renewals allowances) and 47 (wasting assets subject to capital
allowances) apply in relation to any capital allowance or renewals
allowance made in respect of the expenditure actually incurred by
35P in acquiring or providing the asset as if that allowance were
made in respect of the expenditure treated as incurred by P on 5
April of the relevant year.

Computation of balancing gains or losses on the RPI disposal

16 (1) The gain or loss on the disposal of land which is neither ATED-
40related nor a residential property gain or loss (“the balancing gain
or loss”) is computed as follows.

Step 1

Determine in accordance with paragraphs 17 and 18 the amount of
the gain or loss accruing on each relevant high value disposal