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

(2) For the heading substitute “Notices to file: trustees”.

(3) For subsection (1) substitute—

“(1) For the purpose of establishing—

(a) the amounts in which the relevant trustees of a settlement,
5and the settlors and beneficiaries, are chargeable to income
tax and capital gains tax for a year of assessment, and

(b) the amount payable by them by way of income tax for the
year,

an officer of Revenue and Customs may give any relevant trustee a
10notice to file for the year of assessment.

(1ZA) A notice to file may be given to any one trustee or separate notices
may be given to each trustee or to such trustees as the officer giving
the notice thinks fit.””

(4) In subsection (1AA)(a) for “return” substitute “information filed in response
15to the notice to file or in any end of period statement for the year of
assessment provided to HMRC by the relevant trustees”.

(5) After subsection (1AA) insert—

“(1AB) A notice to file for a year of assessment is a notice requiring the
trustee to whom it is given—

(a) 20to file the following for that year (in addition to any end of
period statement for the year that may be required by
regulations under paragraph 8 of Schedule A1)—

(i) such information as may reasonably be required in
pursuance of the notice for the purpose mentioned in
25subsection (1),

(ii) a self-assessment (except in a case where section 9(2)
applies), and

(iii) a final declaration, and

(b) to deliver to HMRC such accounts, statements, or other
30documents (relating to the information filed as mentioned in
paragraph (a)(i) and (ii)) as may reasonably be required for
the purpose mentioned in subsection (1).

(1AC) The duty to file the things mentioned in subsection (1AB)(a) is to be
complied with—

(a) 35where the relevant trustees are not required to provide an
end of period statement for the year, by the trustee making
and delivering to HMRC a return containing those things,
and

(b) where the relevant trustees are required to provide such a
40statement, by the trustee—

(i) making and delivering to HMRC a return containing
those things, or

(ii) providing those things to HMRC using the facility to
file mentioned in paragraph 9 of Schedule A1.

(1AD) 45It is immaterial that any of the information required as mentioned in
subsection (1AB)(a)(i) in response to a notice to file has been
provided to HMRC before the date of the notice.””

(6) For subsection (1B) substitute—

“(1B) Where the method to be used by the trustee for complying with a
notice to file for a year of assessment (Year 1) is filing a return—

(a) if the return is a non-electronic return, the trustee must
5comply with the notice on or before 31 October in Year 2, and

(b) if the return is an electronic return, the trustee must comply
with the notice on or before 31 January in Year 2.””

(7) In subsection (1D) for “a return” substitute “the return”.

(8) In subsection (1E) for “a return” substitute “the return”.

(9) 10After subsection (1F) insert—

“(1FA) Where the method to be used for complying with a notice to file for
a year of assessment (Year 1) is using the facility mentioned in
paragraph 9 of Schedule A1, the trustee must comply with the notice
on or before—

(a) 1531 January in Year 2, or

(b) if later, the last day of the period of 3 months beginning with
the date of the notice.””

(10) For subsection (2) substitute—

“(2) The final declaration required by a notice to file is a declaration by
20the trustee to the effect that to the best of the trustee’s knowledge the
information and self assessment filed in response to the notice are
(taken together) correct and complete.””

(11) In subsections (3) and (4) for “under this section” substitute “to file”.

(12) After subsection (5) insert—

“(6) 25In this section “notice to file” means a notice to file under this section.

(7) In the Taxes Acts, unless the contrary intention appears—

(a) a reference to a return under this section for a year of
assessment is a reference to the following—

(i) the information required by virtue of subsection
30(1AB)(a)(i), any self-assessment and the final
declaration filed for the year in response to a notice to
file (whether contained in a return for the year as
mentioned in subsection (1AC)(a) or (b)(i)) or filed
using the facility mentioned in paragraph 9 of
35Schedule A1), and

(ii) any end of period statement for the year which has
been provided to HMRC in order to comply with
regulations under Schedule A1,

and a reference to anything required to be included in a
40return under this section is to be construed accordingly; and

(b) a reference to making and delivering a return under this
section is a reference to—

(i) making and delivering a return as mentioned in
subsection (1AC)(a) or (b)(i), or

(ii) if the response to a notice to file is made using the
facility mentioned in paragraph 9 of Schedule A1,
making the final declaration required by the notice.””

5 In section 8B (withdrawal of notice under section 8 or 8A)—

(a) 5in the heading after “notice” insert “to file”;

(b) in subsection (1) after “notice” insert “to file”.

6 (1) Section 9 (returns to include self-assessment) is amended as follows.

(2) For the heading substitute “Self-assessment required by a notice to file”.

(3) In subsection (1) for the words from the beginning to “say—” substitute
10“Subject to subsection (1A), the self-assessment required by virtue of
subsection (1AB)(a) of section 8 or 8A from a person given a notice to file for
a year of assessment is—”.

(4) In subsection (2) for “to comply with subsection (1) above” substitute “by
virtue of section 8 or 8A to make and file a self-assessment”.

(5) 15In subsection (3) for the words from “a person” to “above” substitute
“required by virtue of section 8 or 8A a person does not include a self-
assessment”.

7 (1) Section 12ZH (NRCGT returns and self-assessment: section 8) is amended as
follows.

(2) 20In subsection (3) for the words from “required” to “return” substitute “given
a notice to file”.

(3) In subsection (4) after “(1G)” insert “and (1HA)”.

8 (1) Section 12ZI (NRCGT returns and self-assessment: section 8A) is amended
as follows.

(2) 25In subsection (3) for the words from “required” to “return” substitute “given
a notice to file”.

(3) In subsection (4)(b) after “(1E)” insert “and (1FA)”.

9 In section 12AA(10A) (definitions) for ““partnership return”” substitute
““section 12AA partnership return””.

10 30In section 12AB(1) (partnership return to include partnership statement) in
the words before paragraph (a) after “Every” insert “section 12AA”.

11 (1) Section 12ABA (amendment of partnership return by taxpayer) is amended
as follows.

(2) In subsection (1)—

(a) 35omit the words from “by the” to “successor,”;

(b) at the end insert “given by—

(a) in the case of a section 12AA partnership return, the
partner who made and delivered the return or his
successor, and

(b) 40in the case of a Schedule A1 partnership return, the
nominated partner.””

(3) In subsection (4) after “date”” insert “, in relation to a section 12AA
partnership return,”.

(4) After subsection (4) insert—

“(5) In this section “the filing date”, in relation to a Schedule A1
partnership return, means the day by which the return is required to
be provided under paragraph 10 of that Schedule.””

12 (1) 5Section 12ABB (HMRC power to correct partnership return) is amended as
follows.

(2) In subsection (2), for the words from “by notice” to the end substitute—

“(a) in the case of a section 12AA partnership return, by notice to
the partner who made and delivered the return, or his
10successor, and

(b) in the case of a Schedule A1 partnership return, by notice to
the nominated partner.””

(3) In subsection (4) for the words from “the person” to the end substitute
“notice rejecting the correction is given—

“(a) 15in the case of a section 12AA partnership return, by the
person to whom the notice of correction was given or his
successor, and

(b) in the case of a Schedule A1 partnership return, by the
nominated partner.””

13 (1) 20Section 12AC (notice of enquiry into partnership return) is amended as
follows.

(2) In subsection (1)—

(a) after “return if” insert “, within the time allowed,”;

(b) at the beginning of paragraph (a) insert “in the case of a section 12AA
25partnership return,”;

(c) after that paragraph insert—

“(aa) in the case of a Schedule A1 partnership return, to the
nominated partner.”;”

(d) omit paragraph (b).

(3) 30In subsection (7)—

(a) the words from “the day” to the end become paragraph (a);

(b) at the beginning of that paragraph insert “in relation to a section
12AA partnership return,”;

(c) after that paragraph insert—

“(b) 35in relation to a Schedule A1 partnership return, the
day by which the return is required to be provided
under paragraph 10 of that Schedule.””

14 (1) Section 12B (records to be kept for purposes of returns) is amended as
follows.

(2) 40For subsection (1) substitute—

“(1) This section applies to any person who may—

(a) be given a notice to file under section 8 or 8A in respect of a
year of assessment,

(b) be required by a notice under section 12AA to make and
45deliver a partnership return in respect of a year of assessment
or other period, or

(c) be required under paragraph 10 of Schedule A1 to provide a
partnership return for a year of assessment.

(1A) The person must—

(a) keep all such records as may be requisite for the purpose of
5enabling the person to make and deliver a correct and
complete return, under that section or paragraph, for that
year of assessment or period, and

(b) preserve those records until the end of the relevant day (see
subsections (2) to (2ZB)).””

(3) 10In subsection (2) for “day referred to in subsection (1) above is” substitute
“relevant day is (subject to subsection (2ZB))”.

(4) After subsection (2) insert—

“(2ZA) Subsection (2ZB) applies where, before the day mentioned in
subsection (2), the person—

(a) 15is given a notice under section 8, 8A or 12AA, or

(b) becomes subject to a requirement under paragraph 10 of
Schedule A1.

(2ZB) Where this subsection applies the relevant day is the later of the day
mentioned in subsection (2), and—

(a) 20if enquiries are made into the return, the day on which under
section 28A(1B) or 28B(1B) those enquiries are completed, or

(b) if no such enquiries are made, the day on which an officer no
longer has power to make them.””

(5) In subsection (2A)—

(a) 25in paragraph (a) for “(1)” substitute (1)(a) or (b)”;

(b) in the words after paragraph (b)—

(i) omit “the relevant day, that is to say,”;

(ii) for “(1)” substitute “(1A)”.

(6) In subsection (3)(a) for “(1)” substitute “(1A)”.

(7) 30In subsection (4)—

(a) for “(1)” substitute “(1A)”;

(b) at the end insert “and regulations under paragraph 11 of Schedule
A1”.

(8) In subsection (5) for “(1)” substitute “(1A)”.

15 35In section 28ZA(6) (referral of questions during enquiry)—

(a) in paragraph (b) after “of this Act” insert “into a section 12AA
partnership return”;

(b) after paragraph (b) insert—

“(c) in relation to an enquiry under section 12AC(1) of this
40Act into a Schedule A1 partnership return, the
nominated partner.””

16 In section 28B(8) (completion of enquiry into partnership return) for the
words from “the person” to the end substitute—

“(a) in relation to a section 12AA partnership return, the person to
45whom notice of enquiry was given or his successor, and

(b) in relation to a Schedule A1 partnership return, the
nominated partner.””

17 In section 28H(2)(b) (simple assessments)—

(a) for the words “to make and deliver such a return” substitute
5“imposed”;

(b) after “notice” insert “to file”.

18 In section 28I(2)(b) (simple assessments for trustees)—

(a) for the words “to make and deliver such a return” substitute
“imposed”;

(b) 10after “notice” insert “to file”.

19 (1) Section 29 (assessment where loss of tax discovered) is amended as follows.

(2) In subsection (2) at the end insert “(or, where the error or mistake is in an end
of period statement forming part of the return, if that statement was
provided on the basis of or in accordance with the practice generally
15prevailing at the time when it was provided).”

(3) In subsection (6) after paragraph (a) insert—

“(aa) it is contained in any information provided by the taxpayer
to HMRC under paragraph 7 of Schedule A1 (periodic
updates);”.”

20 20In section 30B(10) (amendment of partnership statement where loss of tax
discovered) at the end insert “or (in relation to a Schedule A1 partnership
return) the nominated partner”.

21 (1) Section 42 (procedure for making claims) is amended as follows.

(2) In subsection (2)—

(a) 25after “of this Act” insert “, or where a partnership is required under
paragraph 10 of Schedule A1 to provide a return under that
paragraph,”;

(b) after “that section” insert “or paragraph”.

(3) In subsection (9) after “of this Act” insert “or a Schedule A1 partnership
30return”.

(4) In subsection (11)(a) after “of this Act” insert “or a Schedule A1 partnership
return”.

22 (1) Section 106C (offence of failing to deliver a return) is amended as follows.

(2) In subsection (1)—

(a) 35for “required by a notice under section 8 to make and deliver a
return” substitute “given a notice to file under section 8”;

(b) in paragraph (a) for “the return” substitute “a return under that
section”.

(3) In subsection (2) for “the return” substitute “a return under section 8”.

23 40In section 106D(1) (offence of making inaccurate return)—

(a) for “required by a notice under section 8 to make and deliver a
return” substitute “given a notice to file under section 8”;

(b) in paragraph (a) after “return” insert “under that section”.

24 In section 106E (exclusions from offences under sections 106B to 106D) for
“or make and deliver the return” substitute “under section 7, or is given the
notice to file under section 8,”.

25 In section 107A(2)(a) (trustee liability for penalties) after “section 12B of this
5Act” insert “or paragraph 12 of Schedule A1 to this Act”.

26 In section 118(1) (interpretation)—

(a) after the definition of “CTA 2010” insert—

• “““end of period statement” has the meaning given by
  paragraph 8(5) of Schedule A1, and references to an
  10end of period statement for a tax year are to be read in
  accordance with that paragraph;”;”

(b) after the definition of “ITA 2007” insert—

• “““nominated partner” has the meaning given by
  paragraph 5(5) of Schedule A1;””

(c) 15in the definition of “partnership return” for the words from “has the”
to the end substitute “means (unless the context otherwise
requires)—

• “(a)

  a section 12AA partnership return, or

  (ii)

  a Schedule A1 partnership return;”;”

(d) 20after the definition of “partnership return” insert—

• “““partnership statement”—

  (a)

  in relation to a section 12AA partnership
  return, means the statement required by
  section 12AB;

  (b)

  25in relation to a Schedule A1 partnership
  return, has the meaning given by paragraph
  10(5) of that Schedule;””

(e) after the definition of “return” insert—

• “““Schedule A1 partnership return” has the meaning
  30given by paragraph 10(5) of Schedule A1;

• “section 12AA partnership return” has the meaning
  given by section 12AA(10A) of this Act;”;”

(f) in the definition of “successor” after “delivered a” insert “section
12AA”.

27 (1) 35Paragraph 3 of Schedule 1AB (recovery of overpaid tax) is amended as
follows.

(2) In sub-paragraph (2)(a) after “of this Act” insert “or a Schedule A1
partnership return”.

(3) In sub-paragraph (3)(a) after “12AA” insert “or a Schedule A1 partnership
40return”.

(4) In sub-paragraph (4) at the end insert “or a Schedule A1 partnership return”.

Section 123

SCHEDULE 26 Partial closure notices

TMA 1970

1 TMA 1970 is amended as follows.

2 5In section 9A (notice of enquiry), in subsection (5)—

(a) in paragraph (a), omit the final “or”;

(b) for paragraph (b) substitute—

“(b) after a final closure notice has been issued in relation
to an enquiry into the return, or

(c) 10after a partial closure notice has been issued in such
an enquiry in relation to the matters to which the
amendment relates or which are affected by the
amendment,”.”

3 (1) Section 9B (amendment of return by taxpayer during enquiry) is amended
15as follows.

(2) In subsection (1), for “is in progress into the return” substitute “into the
return is in progress in relation to any matter to which the amendment
relates or which is affected by the amendment”.

(3) In subsection (3)—

(a) 20after “in progress” insert “in relation to any matter to which the
amendment relates or which is affected by the amendment”;

(b) in paragraph (a), for “the closure notice” substitute “a partial or final
closure notice”;

(c) in paragraph (b), for “the closure notice is issued” substitute “a
25partial closure notice is issued in relation to the matters to which the
amendment relates or which are affected by the amendment or, if no
such notice is issued, a final closure notice is issued”.

(4) In subsection (4)—

(a) after “in progress” insert “in relation to any matter”;

(b) 30for “the enquiry is completed” substitute “a partial closure notice is
issued in relation to the matter or, if no such notice is issued, a final
closure notice is issued”.

4 (1) Section 9C (amendment of self-assessment during enquiry to prevent loss of
tax) is amended as follows.

(2) 35In subsection (1), for “is in progress into a return” substitute “into a return is
in progress in relation to any matter”.

(3) In subsection (2), after “deficiency” insert “so far as it relates to the matter”.

(4) In subsection (4)—

(a) after “in progress” insert “in relation to any matter”;

(b) 40for “the enquiry is completed” substitute “a partial closure notice is
issued in relation to the matter or, if no such notice is issued, a final
closure notice is issued”.

5 In section 12ZM (NRCGT returns: notice of enquiry), in subsection (4)—

(a) in paragraph (a), omit the final “or”;

(b) for paragraph (b) substitute—

“(b) after a final closure notice has been issued in relation
to an enquiry into the return, or

(c) 5after a partial closure notice has been issued in such
an enquiry in relation to the matters to which the
amendment relates or which are affected by the
amendment,”.”

6 (1) Section 12ZN (NRCGT returns: amendment of return by taxpayer during
10enquiry) is amended as follows.

(2) In subsection (1), for “is in progress into the return” substitute “into the
return is in progress in relation to any matter to which the amendment
relates or which is affected by the amendment”.

(3) In subsection (3)—

(a) 15after “in progress” insert “in relation to any matter to which the
amendment relates or which is affected by the amendment”;

(b) in paragraph (a), for “the closure notice” substitute “a partial or final
closure notice”;

(c) in paragraph (b), for “the closure notice is issued” substitute “a
20partial closure notice is issued in relation to the matters to which the
amendment relates or which are affected by the amendment or, if no
such notice is issued, a final closure notice is issued”.

(4) In subsection (4)—

(a) after “in progress” insert “in relation to any matter”;

(b) 25for “the enquiry is completed” substitute “a partial closure notice is
issued in relation to the matter or, if no such notice is issued, a final
closure notice is issued”.

7 In section 12AC (partnership return: notice of enquiry), in subsection (5)—

(a) in paragraph (a), omit the final “or”;

(b) 30for paragraph (b) substitute—

“(b) after a final closure notice has been issued in relation
to an enquiry into the return, or

(c) after a partial closure notice has been issued in such
an enquiry in relation to the matters to which the
35amendment relates or which are affected by the
amendment,”.”

8 (1) Section 12AD (amendment of partnership return by taxpayer during
enquiry) is amended as follows.

(2) In subsection (1), for “is in progress into the return” substitute “into the
40return is in progress in relation to any matter to which the amendment
relates or which is affected by the amendment”.

(3) In subsection (3)—

(a) after “in progress” insert “in relation to any matter to which the
amendment relates or which is affected by the amendment”;

(b) 45in paragraph (a), for “the closure notice” substitute “a partial or final
closure notice”;

(c) in paragraph (b), for “the closure notice is issued” substitute “a
partial closure notice is issued in relation to the matters to which the
amendment relates or which are affected by the amendment or, if no
such notice is issued, a final closure notice is issued”.

(4) 5In subsection (4)(a), after “in progress” insert “in relation to any matter to
which the amendment relates or which is affected by the amendment”.

(5) In subsection (5)—

(a) after “in progress” insert “in relation to any matter”;

(b) for “the enquiry is completed” substitute “a partial closure notice is
10issued in relation to the matter or, if no such notice is issued, a final
closure notice is issued”.

9 In section 12B (records), in subsection (1)(b)(i), for “28A(1) or 28B(1)”
substitute “28A(1B) or 28B(1B)”.

10 (1) Section 28ZA (referral of questions during enquiry) is amended as follows.

(2) 15In subsection (1), after “of this Act” insert “in relation to any matter”.

(3) In subsection (5)—

(a) after “in progress” insert “in relation to any matter”;

(b) for “the enquiry is completed” substitute “a partial closure notice is
issued in relation to the matter or, if no such notice is issued, a final
20closure notice is issued”.

11 In section 28ZD (effect of referral on enquiry), in subsection (1)—

(a) for paragraph (a) substitute—

“(a) no partial closure notice relating to the question
referred shall be given,

(aa) 25no final closure notice shall be given in relation to the
enquiry, and”;”

(b) in paragraph (b), for “such a notice” substitute “a notice referred to
in paragraph (a) or (aa)”.

12 (1) Section 28A (completion of enquiry into personal, trustee or NRCGT return)
30is amended as follows.

(2) For subsection (1) substitute—

“(1) This section applies in relation to an enquiry under section 9A(1) or
12ZM of this Act.

(1A) Any matter to which the enquiry relates is completed when an officer
35of Revenue and Customs informs the taxpayer by notice (a “partial
closure notice”) that the officer has completed his enquiries into that
matter.

(1B) The enquiry is completed when an officer of Revenue and Customs
informs the taxpayer by notice (a “final closure notice”) —

(a) 40in a case where no partial closure notice has been given, that
the officer has completed his enquiries, or

(b) in a case where one or more partial closure notices have been
given, that the officer has completed his remaining
enquiries.””

(3) 45In subsection (2)—