Finance (No. 3) Bill (HC Bill 282)

Finance (No. 3) BillPage 170

Section 14

SCHEDULE 2 Returns for disposals of UK land etc

Part 1 Returns and payments on account: disposals of UK land etc

5Disposals to which Schedule applies

1 (1) This Schedule applies for the purposes of capital gains tax to—

(a) any direct or indirect disposal of UK land which meets the non-
residence condition (whether or not a gain accrues) and which is
made on or after 6 April 2019, and

(b) 10any other direct disposal of UK land on which a residential property
gain accrues and which is made on or after 6 April 2020,

but this Schedule does not apply to excluded disposals.

(2) A disposal is an excluded disposal if—

(a) it is a disposal on which, as a result of any of the no gain/no loss
15provisions, neither a gain nor a loss accrues,

(b) it is the grant of a lease for no premium to a person not connected
with the grantor under a bargain made at arm’s length,

(c) it is a disposal made by a charity, or

(d) it is a disposal of any pension scheme investments.

(3) 20The Treasury may by regulations amend sub-paragraph (2).

(4) See also paragraph 9 for a case where a disposal which would have been
within sub-paragraph (1)(b) if a gain had accrued is treated, for certain
purposes, as if it were a disposal to which this Schedule applies.

2 (1) A disposal is a “direct or indirect disposal of UK land which meets the non-
25residence condition” if it is—

(a) a disposal on which a gain accrues that falls to be dealt with by
section 1A(3) of TCGA 1992 because the asset disposed of is within
paragraph (b) or (c) of that subsection,

(b) a disposal on which a gain accrues that falls to be dealt with by
30section 1A(1) of that Act in accordance with section 1G(2) because the
asset disposed of is within section 1A(3)(b) or (c), or

(c) a disposal of an asset on which a gain does not accrue but which, had
a gain accrued, would fall to be dealt with as mentioned in either of
the preceding paragraphs of this sub-paragraph.

(2) 35A disposal is “any other direct disposal of UK land on which a residential
property gain accrues” if the disposal is a disposal on which a residential
property gain accrues where—

(a) the land in question is in the United Kingdom, and

(b) the gain falls to be dealt with by section 1A(1) or (3)(a) of TCGA 1992,

40and the disposal does not fall within sub-paragraph (1).

(3) This paragraph applies for the purposes of this Part of this Schedule.

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Obligation to deliver a return to officer of Revenue and Customs

3 (1) If a person makes a disposal to which this Schedule applies, the person—

(a) must make a return in respect of the disposal, and

(b) must deliver the return to an officer of Revenue and Customs on or
5before the 30th day following the day of the completion of the
disposal.

(2) If—

(a) a person makes two or more disposals to which this Schedule
applies, and

(b) 10the disposals are made in the same tax year with the same
completion date,

the person must make and deliver a single return with respect to the
disposals.

(3) This paragraph is subject to—

(a) 15paragraph 4 (residential property gain accruing but no payment on
account required),

(b) paragraph 5 (ordinary tax return already delivered etc), and

(c) paragraph 10 (disposal in case of a collective investment scheme).

4 (1) If—

(a) 20a person makes a disposal to which this Schedule applies as a result
of paragraph 1(1)(b), and

(b) the person would not be liable under paragraph 6 to pay an amount
on account of the person’s liability to capital gains tax for the tax year
concerned,

25the person is not required to make or deliver a return under this Schedule in
respect of the disposal.

(2) In determining whether sub-paragraph (1)(b) applies, it is to be assumed
that the person is required to make a return under this Schedule in respect
of the disposal.

5 (1) 30A person is not required to make or deliver a return under this Schedule in
respect of a disposal if the filing date for the return would otherwise fall on
or after—

(a) the date on which the person has delivered to an officer of Revenue
and Customs the person’s ordinary tax return containing a self-
35assessment that takes account of the disposal, or

(b) the date on or before which the person has (by notice) been required
to deliver to an officer of Revenue and Customs the person’s
ordinary tax return for the tax year concerned.

(2) For the purposes of sub-paragraph (1)(a), a self-assessment does not take
40account of the disposal if the amount of capital gains tax that is self-assessed
is less than the amount that would be payable under paragraph 6 if the
person were required to make and deliver a return under this Schedule in
respect of the disposal.

Obligation to make a payment on account of capital gains tax

6 (1) 45This paragraph applies if—

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(a) a person is required to make a return under this Schedule in respect
of any disposal, and

(b) as at the filing date for the return, an amount of capital gains tax is
notionally chargeable on the person (as determined in accordance
5with paragraph 7).

(2) The person is liable to pay that amount on account of the person’s liability
to capital gains tax for the tax year concerned so far as that amount has not
already become payable as a result of any previous return under this
Schedule in respect of a disposal in that period.

(3) 10The amount is payable on the filing date for the return.

(4) For cases where there are repayments of amounts previously paid on
account of capital gains tax, see paragraphs 8 and 9.

Calculation of an amount of capital gains tax notionally chargeable

7 (1) This paragraph applies for determining the amount of capital gains tax (if
15any) which is notionally chargeable on a person as at the filing date for a
return.

(2) The amount of capital gains tax notionally chargeable on the person as at
that date is the amount of that tax for which the person would be liable for
the tax year concerned, ignoring, for this purpose, the following disposals—

(a) 20disposals which have a completion date later than the completion
date of the disposal in respect of which the return is made (but see
sub-paragraph (3)), and

(b) disposals on which gains accrue but which are not disposals to which
this Schedule applies.

(3) 25A disposal on which a loss accrues is not to be ignored under sub-paragraph
(2)(a) if the time at which the disposal is made (as determined under section
28 of TCGA 1992) falls on or before the completion date of the disposal in
respect of which the return is made.

(4) For provision relevant to the operation of this paragraph, see paragraphs 14
30and 15 (making of assumptions, reasonable estimates etc).

Repayments of amounts previously paid on account of capital gains tax

8 (1) This paragraph applies if—

(a) a person makes and delivers a return under this Schedule in respect
of a disposal,

(b) 35the person has previously paid amounts on account of the person’s
liability to capital gains tax for the tax year concerned, and

(c) the amounts exceed the amount of capital gains tax notionally
chargeable on the person as at the filing date for the return.

(2) The excess is repayable to the person on the filing date for the return.

(3) 40In determining the total amount of payments that have, at any time, been
made on account of a person’s liability to capital gains tax for a tax year,
account must be taken of amounts already repaid under this paragraph.

9 (1) If—

(a) a person makes a disposal on which an allowable loss accrues, and

Finance (No. 3) BillPage 173

(b) had a gain accrued instead, the disposal would have been one to
which this Schedule applies as a result of paragraph 1(1)(b),

the person may make and deliver a return under this Schedule in respect of
the disposal for the purpose of securing the application of paragraph 8.

(2) 5Accordingly, the disposal is treated for that purpose as if it were a disposal
to which this Schedule applies.

(3) This paragraph does not apply in respect of a disposal if the filing date for
the return which the person would otherwise be entitled to make and
deliver falls on or after the date mentioned in paragraph 5(1)(a) or (b).

10Collective investment schemes to which Sch.5AAA to TCGA 1992 applies

10 (1) A person is not required to make or deliver a return under this Schedule in
respect of a disposal if—

(a) the disposal has an appropriate connection to a collective investment
scheme for the purposes of paragraph 6 of Schedule 5AAA to TCGA
151992, and

(b) the person would not be liable under paragraph 6 of this Schedule to
pay an amount on account of the person’s liability to capital gains tax
for the tax year concerned.

(2) In determining whether sub-paragraph (1)(b) applies, it is to be assumed
20that the person is required to make a return under this Schedule in respect
of the disposal.

11 (1) This paragraph applies if—

(a) an election under paragraph 8 of Schedule 5AAA to TCGA 1992
(election for CIS to be treated as partnership for purposes of Act) has
25effect in respect of an offshore collective investment scheme (within
the meaning of that Schedule),

(b) a disposal is made of property that is the subject of the scheme,

(c) the disposal is made before the day on which this election is made,
and

(d) 30a person is required to make a return under this Schedule in respect
of the disposal.

(2) The disposal is treated for the purposes of this Part of this Schedule as if it
completed on the day on which the election is made.

12 (1) This paragraph applies if—

(a) 35a disposal is deemed to have been made by a person as a result of
paragraph 21 or 22 of Schedule 5AAA to TCGA 1992 (qualifying
offshore CIS etc), and

(b) the person is required to make a return under this Schedule in
respect of the disposal.

(2) 40If the disposal is one to which paragraph 23 of that Schedule applies (gains
treated as accruing when value received)—

(a) a disposal to which this Schedule applies is treated as being made by
the person on each occasion on which any part of the gain is treated
as accruing to the person under that paragraph, and

(b) 45the time at which that disposal is treated as completing is the time at
which the part of the gain is treated as so accruing to the person or,

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if later, the time at which the required notification is given to the
person.

(3) If the disposal is not one to which paragraph 23 of Schedule 5AAA to TCGA
1992 applies, it is treated for the purposes of this Part of this Schedule as if it
5completed on the day on which the required notification is given to the
person.

(4) In this paragraph “the required notification” means notification under
paragraph 25 of Schedule 5AAA to TCGA 1992 in relation to the disposal
deemed to have been made as a result of paragraph 21 or 22 of that Schedule.

(5) 10In determining for the purposes of sub-paragraph (1)(b) whether a person is
required to make a return under this Schedule in respect of the disposal the
effect of paragraphs 4, 5 and 10 is ignored.

Effect of s.144(2) or 144A(2)(b) of TCGA 1992 when asset sold on exercise of option

13 (1) This paragraph applies if—

(a) 15an option is granted binding the grantor to sell an asset and the grant
of the option is a disposal to which this Schedule applies, and

(b) the option is then exercised so that, as a result of section 144(2) or
144A(2)(b) of TCGA 1992, the grant of the option is treated as the
same transaction as the sale.

(2) 20Despite section 144(2) or 144A(2)(b) of TCGA 1992, the grantor remains
subject to the obligations under this Schedule in relation to the grant of the
option.

(3) In this paragraph references to sale are to be read in accordance with section
144(6) of TCGA 1992.

25Making of assumptions, reasonable estimates etc

14 (1) If, in determining whether a disposal is one to which this Schedule applies—

(a) a question arises as to whether a provision of TCGA 1992 applies,
and

(b) the determination of the question requires account to be taken of
30times after the completion of the disposal,

it is to be assumed that the provision does apply if, at the time of the
completion of the disposal, it is reasonable to expect that it will apply.

(2) For the purposes of this Schedule it is to be assumed that a person has made
a claim or election or given a notice if, at the time of the completion of the
35disposal in respect of which a return is required to be made under this
Schedule, it is reasonable to expect that one will be made or given.

(3) Nothing in sub-paragraph (2) is to be read as affecting—

(a) any requirement imposed by or under any Act for a claim, election
or notice to be made or given in a particular way or by a particular
40time, or

(b) any other provision made by or under any Act that is concerned with
the making or giving of the claim, election or notice.

(4) If—

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(a) a person is required to make and deliver a return under this
Schedule, and

(b) having regard to the person’s knowledge and all other relevant
circumstances, it is reasonable to make an estimate of a qualifying
5matter,

the person may make a reasonable estimate of that matter in the return.

(5) For this purpose “qualifying matter” means—

(a) anything that is relevant to the application of section 1I of TCGA
1992,

(b) 10the value of anything, or

(c) the value of amounts to be apportioned to anything.

15 (1) This paragraph applies if a person is required to make and deliver a return
under this Schedule in respect of a disposal and, at any time after the
completion of the disposal—

(a) 15it becomes reasonable to expect that, by reference to the person’s
residence, a provision of TCGA 1992 will apply,

(b) it becomes reasonable to conclude that a provision of TCGA 1992
conferring a relief applies in relation to the disposal,

(c) matters relevant to the application of section 1I of TCGA 1992
20become known, or it becomes reasonable to make a different
estimate of those matters, where an estimate of those matters was
used in the return, or

(d) the value of anything, or of any amount to be apportioned to
anything, becomes known where an estimate was used in the return.

(2) 25The person may (but need not) assume, for the purposes of this Schedule—

(a) that there is an additional disposal to which this Schedule applies,

(b) that the additional disposal completed at the later time by reference
to which this paragraph applies, and

(c) that the additional disposal is in all other respects a replication of the
30actual disposal.

(3) In determining the amount of capital gains tax notionally chargeable as at
the filing date for a return in respect of the additional disposal, the actual
disposal is ignored.

Contents of return

16 35A return under this Schedule—

(a) must contain information of a description specified by an officer of
Revenue and Customs (and different descriptions of information
may be specified for different cases), and

(b) must include a declaration by the person making it that the return is,
40to the best of the person’s knowledge, correct and complete.

Interpretation

17 (1) In this Part of this Schedule—

  • “the filing date”, in relation to a return in respect of a disposal, means
    the date on or before which the return in respect of the disposal must
    45be delivered to an officer of Revenue and Customs,

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  • “lease” has the meaning given by paragraph 10 of Schedule 8 to TCGA
    1992,

  • “ordinary tax return” means a return under section 8 or 8A of TMA
    1970,

  • 5“pension scheme investments” means investments held for the
    purposes of a registered pension scheme or an overseas pension
    scheme (and expressions used in this definition have the same
    meaning as they have in section 271(1A) of TCGA 1992),

  • “premium” has the meaning given by paragraph 10 of Schedule 8 to
    10TCGA 1992,

  • “residential property gain” has the meaning given by Schedule 1B to
    TCGA 1992, and

  • “the tax year concerned”, in relation to a disposal, means the tax year in
    which the disposal is made.

(2) 15In this Part of this Schedule the “completion” of a disposal is regarded as
occurring—

(a) at the time of the disposal, or

(b) if the disposal is under a contract which is completed by a
conveyance, transfer or other instrument later than the time of the
20disposal, at the time when the instrument takes effect.

(3) This Part of this Schedule has effect as if it were included in TCGA 1992.

Part 2 Notification of chargeable amounts, amendments of returns, enquiries etc

Requirement to notify HMRC of amounts chargeable to tax

18 (1) 25A person is not required to give a notice under section 7 of TMA 1970 merely
by reference to a chargeable gain accruing on a disposal if—

(a) the person delivers a return under this Schedule in respect of the
disposal, and

(b) the return is delivered before the end of the notification period
30within the meaning of that section.

(2) But sub-paragraph (1) does not apply if the amount of capital gains tax
notionally chargeable on the person as at the filing date for the return (as
determined in accordance with paragraph 7) is less than the amount of
capital gains tax for which the person is liable for the tax year concerned.

35Amendments of returns

19 (1) The amendment provisions applicable to ordinary tax returns apply in
relation to returns made by a person under this Schedule as they apply in
relation to ordinary tax returns, but subject to the following limitations or
other modifications.

(2) 40An amendment is permitted only so far as the return under this Schedule
could, when originally delivered, have included the amendment by
reference to things already done.

(3) A person may not make an amendment of a return under this Schedule in
respect of a disposal at any time on or after—

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(a) the date on which the person has delivered to an officer of Revenue
and Customs the person’s ordinary tax return containing a self-
assessment that takes account of the disposal, or

(b) the date on or before which the person has (by notice) been required
5to deliver to an officer of Revenue and Customs the person’s
ordinary tax return for the tax year concerned.

(4) If a person is not required to deliver an ordinary tax return for the tax year
concerned, the person may not make an amendment of a return under this
Schedule more than 12 months after the last day for delivery of an ordinary
10tax return.

(5) For the purposes of this paragraph “the amendment provisions applicable to
ordinary tax returns” means sections 9ZA and 9ZB of TMA 1970.

Enquiries

20 (1) The enquiry provisions apply in relation to returns made by a person under
15this Schedule as they apply in relation to ordinary tax returns, but subject as
follows.

(2) If the person is required to deliver an ordinary tax return for the tax year
concerned, the time allowed for giving a notice of enquiry into a return
under this Schedule is the same as that allowed for giving a notice of enquiry
20into the ordinary tax return.

(3) If the person is not required to deliver an ordinary tax return for the tax year
concerned, the time allowed for giving a notice of enquiry into a return
under this Schedule is determined on the assumption that the person was
required to deliver an ordinary tax return for that year and that it was
25delivered at the later of—

(a) the last day for delivery of an ordinary tax return, and

(b) the day on which the return under this Schedule was delivered.

(4) If there is an enquiry into a return under this Schedule—

(a) nothing in paragraph 8 requires any repayment to be made before
30the day on which the enquiry is completed, but

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

(5) If—

(a) 35a notice of enquiry (“the main enquiry notice”) is given at any time
into an ordinary tax return for a tax year, and

(b) a notice of enquiry into a return under this Schedule has not been
given, on or before that time, in respect of a disposal to which this
Schedule applies which is made in that tax year,

40the main enquiry notice is also taken to constitute a notice of enquiry into the
return under this Schedule in respect of the disposal.

(6) If—

(a) a final closure notice (“the main closure notice”) is given at any time
which completes an enquiry into an ordinary tax return for a tax
45year, and

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(b) a final closure notice of an enquiry into a return under this Schedule
has not been given, on or before that time, in respect of a disposal to
which this Schedule applies which is made in that period,

the main closure notice is also taken to constitute a final closure notice of the
5enquiry into the return under this Schedule in respect of the disposal.

(7) For the purposes of this paragraph “the enquiry provisions” means sections
9A and 28A of TMA 1970 and the other provisions of that Act so far as they
relate to those sections.

(8) Nothing in this paragraph is to be read as affecting the operation of the
10enquiry provisions in relation to ordinary tax returns.

Amendments of returns during enquiry etc

21 (1) For other provisions which, as a result of paragraph 19 and 20, are relevant
to returns made by a person under this Schedule, see sections 9B and 9C of
TMA 1970.

(2) 15In the case of Schedule 3ZA to TMA 1970 (date by which payment to be
made after amendment or correction of self-assessment)—

(a) paragraph 1(2) of that Schedule has effect as if the reference to section
59B(3) and (4) of TMA 1970 included a reference to paragraph 7 of
this Schedule, and

(b) 20the other provisions of that Schedule have effect in accordance with
the provision made elsewhere by this Part of this Schedule (see, in
particular, paragraph 24(3)).

(3) For provisions of that Schedule relevant to returns made by a person under
this Schedule, see—

(a) 25paragraph 2 (amendment of return by taxpayer),

(b) paragraph 3 (correction of return by HMRC),

(c) paragraph 4 (jeopardy amendment by HMRC), and

(d) paragraph 5 (amendment of return by closure notice).

Revenue determinations

22 (1) 30The Revenue determination provision applicable to ordinary tax returns
applies in relation to returns made by a person under this Schedule as it
applies in relation to ordinary tax returns, but subject to the following
modifications.

(2) The modifications are that—

(a) 35any reference to being given a notice is to be read as a reference to
being required to deliver a return under this Schedule,

(b) any reference to the filing date is to be read as a reference to the filing
date within the meaning of this Part of this Schedule (but see
paragraph (e)),

(c) 40any reference to the amounts to be determined is to be read as a
reference to the amount of capital gains tax which is notionally
chargeable on a person as at the filing date for a return under this
Schedule,

(d) any reference in any enactment to the purposes for which a
45determination is to have effect is to be ignored, and

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(e) the determination may not be made after the end of the period of 3
years beginning with the last day for delivery of an ordinary tax
return.

(3) If—

(a) 5a determination is made as a result of this paragraph, but

(b) it is then superseded by a return made under this Schedule,

any amount which, as a result of the supersession, is payable or repayable
under paragraph 6 or 8 is to be payable or repayable on the filing date for the
return.

(4) 10For the purposes of this paragraph “the Revenue determination provision”
means section 28C of TMA 1970.

Discovery assessments

23 (1) A return made by a person under this Schedule is treated for the purposes
of the discovery provisions as if it were an assessment required to be
15included as part of the person’s ordinary tax return (whether or not the
person is actually required to deliver an ordinary tax return).

(2) References in the discovery provisions to an ordinary tax return for a tax
year include a return under this Schedule made in respect of a disposal for
the tax year concerned.

(3) 20For the purposes of this paragraph “the discovery provisions” means section
29 of TMA 1970 and the other provisions of that Act relating to that section.

Interpretation

24 (1) Expressions have the same meaning in this Part of this Schedule as they have
in Part 1 of this Schedule (see paragraph 17).

(2) 25For the purposes of this Part of this Schedule any reference to the last day for
delivery of an ordinary tax return is to 31 January in the tax year following
the tax year concerned.

(3) A return made by a person under this Schedule is to be treated for the
purposes of any provision made by or under TMA 1970 as if it contained a
30self-assessment of an amount of capital gains tax.

Part 3 Consequential amendments

Amendments of TMA 1970

25 (1) TMA 1970 is amended as follows.

(2) 35Omit section 7A (disregard of certain NRCGT gains for purposes of section
7).

(3) Omit sections 12ZA to 12ZN (NRCGT returns) and the italic heading before
those sections.

(4) In section 28A (completion of enquiry into personal or trustee return)—

(a) 40in subsection (1), omit “or 12ZM”, and