Finance (No. 2) Bill (HL Bill 156)

the scheme manager is to notify that address to HMRC within 3
months after the date on which the scheme manager becomes aware
of it.””

(5) In regulation 3, after paragraph (3) insert—

“(3A) 5No obligation arises under paragraph (2B) in relation to a transfer if
the following conditions are met—

(a) at the date of the transfer more than 10 years has elapsed
since the key date for the ring-fenced transfer fund arising
from the transfer (see paragraph 1 of Schedule 34); and

(b) 10the relevant member to whom the transfer is made is a person
to whom the member payment provisions do not apply.””

(6) In regulation 3(6), in the definition of “relevant member”, after “relevant
transfer fund” insert “or any ring-fenced transfer fund”.

(7) In regulation 3AB(4), for the words from “as a result” to the end substitute
15“as a result of—

“(1)(a)a transfer of the member’s relevant transfer fund,

(b) a transfer of any of the member’s ring-fenced transfer funds,
or

(c) a recognised transfer,

20after the date of the relevant event concerned.””

(8) In regulation 3AC—

(a) in paragraph (1)(a), before the “or” at the end of paragraph (i)
insert—

“(“ia) any of the member’s ring-fenced transfer
25funds;”, and”

(b) in the title omit “relevant”.

(9) In regulation 3AD—

(a) in paragraph (1)(a), before the “or” at the end of paragraph (i)
insert—

“(“ia) 30any of the member’s ring-fenced transfer
funds;”,”

(b) in paragraph (2), after sub-paragraph (a) insert—

“(aa) where any of the transferred sums or assets are
referable to the member’s UK-tax relieved fund, the
35value of so many of them as are referable to tax-
relieved contributions, or tax-exempt provision,
made under the scheme before 9 March 2017;

(ab) the value of so many of the transferred sums or assets
as are referable to any of the member’s ring-fenced
40transfer funds (if any);”,”

(c) in paragraph (2)(b) omit the “and” at the end,

(d) in paragraph (2)(c)(i), after “fund” insert “or any of the member’s
ring-fenced transfer funds”,

(e) in paragraph (2)(c), in the words after paragraph (ii)—

(i) 45omit “it is”, and

(ii) after “the date of that transfer” insert “and the date it was
requested”,

(f) in paragraph (2), after sub-paragraph (c) insert—

“(d) whether the overseas transfer charge arises on the
transfer;

(e) if the charge does arise on the transfer—

(i) 5the transferred value of the transfer, and

(ii) the amount in respect of the charge deducted
by the scheme manager from the transfer;

(f) if the transfer is excluded from the charge—

(i) the reason for its exclusion, and

(ii) 10where section 244G(2)(a) or (b) (charge paid
on earlier transfer) is the reason for its
exclusion, the date of the earlier transfer on
which the charge was paid and the amount of
charge paid on that earlier transfer; and

(g) 15the relevant period for the transfer (see section
244A(4)).”, and”

(g) in the title omit “relevant”.

(10) After regulation 3AD insert—

“3AE Information provided by member to QROPS: onward transfers

(1) 20Paragraph (4) applies where a member of a QROPS or former
QROPS makes a request to the scheme manager to make an onward
transfer to a QROPS.

(2) But paragraph (4) does not apply if—

(a) the transfer will be excluded from the overseas transfer
25charge by section 244G, or

(b) the transfer will take after the end of the relevant period (see
section 244A(4)) for what would be the original transfer in
relation to the requested onward transfer.

(3) In this regulation “original transfer”, in relation to an onward
30transfer, has the meaning given by section 244A(5).

(4) The member must provide to the scheme manager—

(a) the member’s name, date of birth and principal residential
address,

(b) if the member is not UK resident for income tax purposes, the
35date when the member last ceased to be UK resident for those
purposes,

(c) the member’s national insurance number or, where
applicable, confirmation that the member does not qualify for
a national insurance number,

(d) 40the name and address of the QROPS to which the transfer is
to be made,

(e) the country or territory under the law of which that QROPS
is established and regulated,

(f) the reference number, if any, given by the Commissioners for
45that QROPS,

(g) whether the member knows for certain that the transfer
would be excluded from the overseas transfer charge by one

of sections 244D, 244E and 244F, and if the member does
know that for certain—

(i) the section concerned (if known),

(ii) the name and address of the member’s employer
5whose connection with the QROPS gives rise to
exclusion of the transfer from the charge,

(iii) the member’s job title as an employee of that
employer,

(iv) the date the member’s employment with that
10employer began, and

(v) if known, that employer’s tax reference for that
employment, and

(h) the member’s acknowledgement in writing that the
member—

(i) 15is aware that an onward transfer to a qualifying
recognised overseas pension scheme may give rise to
a liability to overseas transfer charge, and

(ii) is aware of the circumstances in which liability arises,
in which liability is excluded from the outset and in
20which liability is excluded only if conditions continue
to be met over a period of time.

(5) The information specified in paragraph (4) must be provided within
60 days beginning with the day the transfer request is made.

(6) The scheme manager must send the member notification of the
25requirements specified in this regulation within 30 days beginning
with that day.

3AF Provision of information about liability for overseas transfer charge

(1) If an onward transfer is made from a QROPS or former QROPS and
the overseas transfer charge arises on the transfer, the scheme
30manager of the QROPS or former QROPS must within 90 days after
the date of the transfer provide the member with a notice stating—

(a) the date of the transfer,

(b) that overseas transfer charge arises on the transfer,

(c) the transferred value of the transfer,

(d) 35the amount of the charge on the transfer,

(e) whether, and to what extent, the scheme manager has
accounted, or intends to account, for the charge, and

(f) where the scheme manager has accounted for the charge, the
date the scheme manager did so.

(2) 40If an onward transfer is made from a QROPS or former QROPS and
the transfer is excluded from the overseas transfer charge by or
under sections 244B to 244H, the scheme manager of the QROPS or
former QROPS must within 90 days after the date of the transfer
provide the member with a notice stating—

(a) 45the date of the transfer,

(b) that the transfer is excluded from the overseas transfer
charge,

(c) the provision by reason of which the transfer is excluded, and

(d) where that provision is section 244B or 244C—

(i) when the relevant period for the transfer ends, and

(ii) how the transfer may turn out not to be excluded as a
result of the member changing country or territory of
residence within the relevant period for the transfer.

(3) 5Paragraph (4) applies if—

(a) a recognised transfer is made to a QROPS, or

(b) an onward transfer is made by a QROPS or former QROPS.

(a)(a)a recognised transfer is made to a QROPS, or

(b) an onward transfer is made by a QROPS or former QROPS.

(4) 10Where an event occurring before the end of the relevant period for
the transfer (see section 244A(4)) means that the transfer no longer
counts as excluded from the overseas transfer charge or that
entitlement to repayment under section 244M arises, the scheme
manager of the QROPS or former QROPS must, within 90 days after
15the date the scheme manager is notified of the event, provide the
member with a notice stating—

(a) the amount of overseas transfer charge on the transfer,

(b) whether, and to what extent, the scheme manager has
accounted, or intends to account, for the charge, and

(c) 20where the scheme manager has accounted for the charge, the
date the scheme manager did so.

3AG Accounting for overseas transfer charge on onward transfers

(1) Paragraph (2) applies where—

(a) overseas transfer charge arises on an onward transfer from a
25QROPS or former QROPS,

(b) the scheme manager has notified HMRC of the transfer or,
where applicable, of the event triggering payability of the
charge on the transfer, and

(c) HMRC have provided the scheme manager with an
30accounting reference for paying the charge on the transfer.

(2) The scheme manager must pay the charge to HMRC using the
accounting reference.

(3) Payment of the charge is due at the end of the 91 days beginning with
the date of issue of the accounting reference.

3AH 35Assessments of unpaid overseas transfer charge on onward transfers

(1) Where the correct amount of overseas transfer charge due from a
scheme manager under regulation 3AG on an onward transfer has
not been paid by the time it is due, an officer of Revenue and
Customs must issue an assessment to tax to the scheme manager.

(2) 40Tax assessed under this regulation is payable within 30 days after the
issue of the notice of assessment.

3AI Interest on overdue overseas transfer charge

(1) Tax which—

(a) becomes due and payable in accordance with regulation
453AG, or

(b) is assessed under regulation 3AH,

carries interest at the prescribed rate from the due date under
regulation 3AG until payment (“the interest period”).

(2) Paragraph (1) applies even if the due date is a non-business day as
defined by section 92 of the Bills of Exchange Act 1882.

(3) The “prescribed rate” means the rate applicable under section 178 of
the Finance Act 1989 for the purposes of section 86 of TMA.

(4) 5Any change made to the prescribed rate during the interest period
applies to the unpaid amount from the date of the change.

3AJ Adjustments, repayments and interest on overpaid charge

(1) If the correct tax due under regulation 3AG has not been paid on or
before the due date, an officer of Revenue and Customs may make
10such adjustments or repayments as may be required for securing that
the resulting liabilities to tax (including interest on unpaid or
overpaid tax) whether of the scheme manager or of any other person
are the same as they would have been if the correct tax had been
paid.

(2) 15Tax overpaid which is repaid to the scheme manager or any other
person carries interest at the prescribed rate from the later of the due
date and the date on which the tax was paid until the date of
repayment (“the interest period”).

(3) The “prescribed rate” means the rate applicable under section 178 of
20the Finance Act 1989 for the purposes of section 824 of the Income
and Corporation Taxes Act 1988.

(4) Any change to the prescribed rate during the interest period applies
to the overpaid amount from the date of the change.””

(11) In regulation 3B (information on cessation of a QROPS), after “relevant
25transfer fund”, in both places, insert “, or ring-fenced transfer fund,”.

(12) In regulation 3C (correction of information)—

(a) in paragraph (3)(a)(i), after “existence” insert “or, where the
information relates to a ring-fenced transfer fund in respect of the
relevant member, more than 10 years has elapsed beginning with the
30date on which that ring-fenced transfer fund came into existence”,
and

(b) in paragraph (3)(b), at the end insert “and there are no ring-fenced
transfer funds”.

(13) In regulation 5(1) (application of provisions providing for penalties)—

(a) 35after “3(2),” insert “(2B) or (2C),”, and

(b) before “or 3C(1)” insert “, 3AE(6), 3AF”.

(14) The amendments made by this paragraph—

(a) are, so far as they insert new regulation 3AE(1) to (5), to be treated as
having been made by the Commissioners for Her Majesty’s Revenue
40and Customs under the powers to make regulations conferred by
section 169(4ZA) of FA 2004,

(b) are, so far as they insert new regulations 3AE(6) and 3AF and amend
regulations 3 to 3AD and 3B to 5, to be treated as having been made
by the Commissioners under the powers to make regulations under
45section 169(4) of FA 2004 (see section 169(4), (4A), (4B) and (4C) of
that Act), and

(c) are, so far as they insert new regulations 3AG to 3AJ, to be treated as
having been made by the Commissioners under the applicable
powers to make regulations conferred by section 244L of FA 2004.

22 (1) The Registered Pension Schemes (Transfers of Sums and Assets)
5Regulations 2006 (S.I. 2006/499S.I. 2006/499) are amended as follows.

(2) In regulation 5, the existing text becomes paragraph (1).

(3) After that paragraph insert—

“(2) In paragraph (1)(a) “administration costs” includes, in particular,
payments of overseas transfer charge.””

(4) 10The amendments made by this paragraph are to be treated as made by the
Commissioners for Her Majesty’s Customs and Revenue under the powers
to make regulations conferred by paragraph 2(4)(h) of Schedule 28 to FA
2004.

23 (1) The Registered Pension Schemes (Provision of Information) Regulations
152006 (S.I. 2006/567S.I. 2006/567) are amended as follows.

(2) In regulation 3(1) (provision of information by scheme administrators to
HMRC), in column 2 of the entry in the Table for reportable event 9—

(a) after paragraph (g) insert—

“(ga) whether or not overseas transfer charge arises on the
20transfer;

(gb) if the transfer is excluded from the charge, the reason
why it is excluded;

(gc) if the charge arises on the transfer—

(i) the transferred value, and

(ii) 25the amount in respect of the charge deducted
from the transfer;”, and”

(b) after paragraph (h) insert—

“(ha) the reference number, if any, given by the
Commissioners for the QROPS;”.”

(3) 30In regulation 3(7) (deadline for event report for reportable event 9), at the
end insert “but, if the scheme administrator applies before the end of those
60 days for a repayment of overseas transfer charge on the transfer, the
report must be delivered before the administrator applies for the
repayment.”

(4) 35In regulation 11BA(2) (information about transfer to be provided by member
to scheme administrator)—

(a) in sub-paragraph (a), omit paragraphs (vi) and (vii), including the
“and” at the end,

(b) after sub-paragraph (a) insert—

“(aa) 40the name and address of, and (if known) the reference
number given by the Commissioners for, the
qualifying recognised overseas pension scheme (“the
QROPS”);

(ab) the country or territory under the law of which the
45QROPS is established and regulated;

(ac) whether the member knows for certain that the
transfer would be excluded from the overseas

transfer charge by one of sections 244D, 244E and
244F, and if the member does know that for certain—

(i) the section concerned (if known),

(ii) the name and address of the member’s
5employer whose connection with the QROPS
gives rise to exclusion of the transfer from the
charge,

(iii) the member’s job title as an employee of that
employer,

(iv) 10the date the member’s employment with that
employer began, and

(v) if known, that employer’s tax reference for
that employment;”, and”

(c) after sub-paragraph (b) insert “; and

(c) 15the member’s acknowledgement in writing that the
member—

(i) is aware that a recognised transfer to a
qualifying recognised overseas pension
scheme may give rise to a liability to overseas
20transfer charge, and

(ii) is aware of the circumstances in which
liability arises, in which liability is excluded
from the outset and in which liability is
excluded only if conditions continue to be met
25over a period of time.””

(5) After regulation 11BA insert—

“11BB Information provided by members to scheme administrators:
potentially excluded transfers

(1) Paragraph (2) applies where—

(a) 30a recognised transfer is made by a registered pension scheme
to a qualifying recognised overseas pension scheme, and

(b) the transfer is required by section 244B or 244C to be initially
assumed to be excluded from the overseas transfer charge by
that section.

(2) 35Each time during the relevant period for the transfer that the
member—

(a) becomes resident in a country or territory, or

(b) ceases to be resident in a country or territory,

the member must, within 60 days after the date that happens, inform
40the scheme administrator of the registered pension scheme that it has
happened.””

(6) After regulation 12 insert—

“12A Provision of information about liability for overseas transfer charge

(1) If a recognised transfer is made by a registered pension scheme to a
45qualifying recognised overseas pension scheme and the overseas
transfer charge arises on the transfer, the scheme administrator of the
registered pension scheme must within 90 days after the date of the
transfer provide the member with a notice stating—

(a) the date of the transfer,

(b) that overseas transfer charge arises on the transfer,

(c) the transferred value of the transfer,

(d) the amount of the charge on the transfer,

(e) 5whether, and to what extent, the scheme administrator has
accounted, or intends to account, for the charge, and

(f) where the scheme administrator has accounted for the
charge, the date the scheme administrator did so.

(2) If a recognised transfer is made by a registered pension scheme to a
10qualifying recognised overseas pension scheme and the transfer is
excluded from the overseas transfer charge by or under sections 244B
to 244H, the scheme administrator of the registered pension scheme
must within 90 days after the date of the transfer provide the
member with a notice stating—

(a) 15the date of the transfer,

(b) that the transfer is excluded from the overseas transfer
charge,

(c) the provision by reason of which the transfer is excluded, and

(d) where that provision is section 244B or 244C, how the transfer
20may turn out not to be excluded as a result of the member
changing country or territory of residence within the relevant
period for the transfer.

(3) If overseas transfer charge on a transfer is repaid to the scheme
administrator of a registered pension scheme, the scheme
25administrator must within 90 days after the date of the repayment
provide the member with a notice stating—

(a) the date of the repayment,

(b) the amount of the repayment, and

(c) the reason for the repayment.””

(7) 30After regulation 14ZC insert—

“14ZCA Further information provided by scheme administrators on
recognised transfers to overseas schemes

(1) This regulation applies if there is a recognised transfer from a
registered pension scheme to a qualifying recognised overseas
35pensions scheme.

(2) The scheme administrator of the registered pension scheme must
provide the scheme manager of the qualifying recognised overseas
pension scheme with a statement—

(a) stating whether or not the overseas transfer charge arose on
40the transfer, and

(b) stating—

(i) if the charge arose, the amount of the charge, and

(ii) if the transfer is excluded from the charge, the reason
why it is excluded.

(3) 45The requirement under paragraph (2) is to be complied with before
the end of the 31 days beginning with the date of the transfer.

(4) Paragraph (5) applies if overseas transfer charge on the transfer is
repaid to the scheme administrator of the registered pension scheme.

(5) The scheme administrator of the registered pension scheme must
provide the scheme manager of the qualifying recognised overseas
5pension scheme with—

(a) a copy of the statement under paragraph (2),

(b) a statement that the original statement is inaccurate and that
the overseas transfer charge on the transfer has been repaid
to the scheme administrator, and

(c) 10the reason why the transfer is excluded from the charge.

(6) The requirement under paragraph (5) is to be complied with before
the end of the 31 days beginning with the date of the repayment.””

(8) The amendments made by this paragraph are to be treated as made by the
Commissioners for Her Majesty’s Revenue and Customs under the
15applicable powers to make regulations conferred by section 251 of FA 2004.

Commencement and transitional provision

24 (1) Subject to sub-paragraphs (2) to (4), the amendments made by this Part of
this Schedule have effect in relation to transfers made on or after 9 March
2017.

(2) 20The new section 169(2)(ba) of FA 2004—

(a) has effect on and after 9 March 2017 in the case of a recognised
overseas pension scheme where—

(i) the notification mentioned in section 169(2)(a) of FA 2004
(notification that scheme is a recognised overseas pension
25scheme) is given on or after 9 March 2017, or

(ii) although that notification is given before 9 March 2017, the
letter from the Commissioners for Her Majesty’s Revenue
and Customs advising the scheme of the reference number
allocated to the scheme is dated on or after 9 March 2017, and

(b) 30has effect on and after 14 April 2017 in the case of a recognised
overseas pension scheme where that letter is dated before 9 March
2017.

(3) The other amendments in section 169 of FA 2004, and the amendment in
section 255 of that Act, come into force on 9 March 2017.

(4) 35The amendments in regulation 3(2) of the Pension Schemes (Information
Requirements for Qualifying Overseas Pension Schemes, Qualifying
Recognised Overseas Pension Schemes and Corresponding Relief)
Regulations 2006 have effect in relation to payments made on or after 9
March 2017; and the new regulation 3AE inserted into those Regulations,
40and the reference to the new regulation 3AE(6) inserted into regulation 5(1)
of those Regulations, have effect in relation to requests made on or after 9
March 2017.

(5) Overseas transfer charge on transfers made in the period beginning with 9
March 2017 and ending with 30 June 2017 is, for the purposes of section 254
45of FA 2004, to be treated as charged in the 3 months ending with 30
September 2017.

Section 19

SCHEDULE 5 Trades and property businesses: calculation of profits

Part 1 Trades etc: amendments of ITTOIA 2005

1 5ITTOIA 2005 is amended as follows.

2 For section 33A (cash basis: capital expenditure) substitute—

“33A Cash basis: capital expenditure

(1) This section applies in relation to the calculation of the profits of a
trade on the cash basis.

(2) 10No deduction is allowed for an item of a capital nature incurred on,
or in connection with, the acquisition or disposal of a business or part
of a business.

(3) No deduction is allowed for an item of a capital nature incurred on,
or in connection with, education or training.

(4) 15No deduction is allowed for an item of a capital nature incurred on,
or in connection with, the provision, alteration or disposal of—

(a) any asset that is not a depreciating asset (see subsections (6)
and (7)),

(b) any asset not acquired or created for use on a continuing
20basis in the trade,

(c) a car (see subsection (14)),

(d) land,

(e) a non-qualifying intangible asset (see subsections (8) to (11)),
or

(f) 25a financial asset (see subsection (12)).

(5) But subsection (4)(d) does not prevent a deduction being made for
expenditure that—

(a) is incurred on the provision of a depreciating asset which, in
being provided, is installed or otherwise fixed to land so as to
30become, in law, part of the land, but

(b) is not incurred on, or in connection with, the provision of—

(i) a building,

(ii) a wall, floor, ceiling, door, gate, shutter or window or
stairs,

(iii) 35a waste disposal system,

(iv) a sewerage or drainage system, or

(v) a shaft or other structure in which a lift, hoist,
escalator or moving walkway may be installed.

(6) An asset is a “depreciating” asset if, on the date the item of a capital
40nature is incurred, it is reasonable to expect that before the end of 20
years beginning with that date—

(a) the useful life of the asset will end, or

(b) the asset will decline in value by 90% or more.