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

(b) in the heading, omit “or NRCGT return”.

(5) Omit section 28G (determination of amount notionally chargeable where no
NRCGT return delivered).

(6) In section 29 (assessment where loss of tax discovered), omit subsection
5(7)(a)(ia).

(7) Omit section 29A (non-resident CGT disposals: determination of amount
which should have been assessed).

(8) In section 34 (ordinary time limit of 4 years), omit subsection (1A).

(9) In section 42 (procedure for making claims etc), in subsection (11)(a)—

(a) 10omit “12ZB”, and

(b) after “12AA of this Act” insert “or a return under Schedule 2 to the
Finance Act 2019”.

(10) After section 59A insert—

“59AZA Payments on account of capital gains tax: disposals of land etc

15For provision requiring payments to be made on account of capital
gains tax, see Schedule 2 to the Finance Act 2019.”

(11) Omit section 59AA (non-resident CGT disposals: payments on account of
capital gains tax).

(12) In section 59B (payment of income tax and capital gains tax: assessments
20other than simple assessments)—

(a) in subsection (1)(b), for “or 59AA of this Act” substitute “of this Act
or under Schedule 2 to the Finance Act 2019”, and

(b) omit subsection (2A).

(13) In section 59BA (payment of income tax and capital gains tax: simple
25assessments), in subsection (1)(b), for “or 59AA of this Act” substitute “of
this Act or under Schedule 2 to the Finance Act 2019”.

(14) In section 107A (relevant trustees), in subsection (2)(b)—

(a) omit “, 59AA”, and

(b) after “59B of this Act” insert “or under Schedule 2 to the Finance Act
302019”.

(15) In section 118 (interpretation), omit the definition of “NRCGT return”.

(16) In Schedule 3ZA (date by which payment to be made after amendment or
correction of self-assessment)—

(a) in paragraph 1(1), omit “or an advance self-assessment (see section
3512ZE(1))”,

(b) in paragraph 1(2), omit “59AA(2) or”,

(c) in paragraph 2(1), omit “or an amendment of an advance self-
assessment under section 12K (amendment of NRCGT return by
taxpayer)”,

(d) 40in paragraph 2(3), omit “or 12ZN(3)” and “or advance self-
assessment”,

(e) in paragraph 3(1), omit “or 12ZL” and “or NRCGT return”, and

(f) in paragraph 5(1), omit “or advance self-assessment”.

Amendments of other Acts

26 (1) TCGA 1992 is amended as follows.

(2) In section 222A (determination of main residence: disposals by non-
residents)—

(a) 5in subsection (6)(a), for “the NRCGT return” substitute “the return
under Schedule 2 to the Finance Act 2019”, and

(b) in subsection (7)(a), for “an NRCGT return” substitute “a return
under Schedule 2 to the Finance Act 2019”.

(3) In section 223A (amount of relief: disposals by non-residents), in subsection
10(3)(b), for “the NRCGT return” substitute “the return under Schedule 2 to the
Finance Act 2019”.

27 (1) Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

(2) In paragraph 1(4), in the entry relating to capital gains tax, in the second
column, for “section 12ZB of TMA 1970 (NRCGT return)” substitute
15“Schedule 2 to FA 2019”.

(3) In paragraph 21C, for “section 59AA(2) of TMA 1970 (non-resident CGT
disposals: payments on account of capital gains tax)” substitute “Schedule 2
to FA 2019”.

28 (1) Schedule 36 to FA 2008 (information and inspection powers) is amended as
20follows.

(2) For paragraph 21ZA and the italic heading before it substitute—

““Application of paragraph 21 in case of returns under Schedule 2 to FA 2019

21ZA (1) For the purposes of paragraph 21 any reference to the making by
a person of a return under section 8 or 8A of TMA 1970 includes
25the making by the person of a return under Schedule 2 to FA 2019.

(2) In the application of paragraph 21 in relation to a return under
Schedule 2 to FA 2019, the return is to be treated as if it required a
self-assessment of an amount of capital gains tax.

(3) For the purposes of paragraph 21, the definition of “the notice of
30enquiry” in its application to a return under Schedule 2 to FA 2019
needs to be read in the light of the provision made by paragraph
20 of that Schedule.”

29 (1) Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended
as follows.

(2) 35In the table in paragraph 1(5), in item 2A, in the third column, for “NRCGT
return under section 12ZB of TMA 1970” substitute “Return under Schedule
2 to FA 2019 (other than one made under paragraph 9 or 15 of that
Schedule)”.

(3) Schedule 55 to FA 2009, as amended by this paragraph, is taken to have come
40into force for the purposes of returns under this Schedule on the day on
which this Act is passed.

30 (1) Schedule 56 to FA 2009 (penalty for failure to make payments on time) is
amended as follows.

(2) In paragraph 1, in the Table, after item 3A insert—

(3) In paragraph 3(1)(a), after paragraph “3” insert “3B”.

(4) 10In paragraph 5(3) of Schedule 11 to F(No.3)A 2010 (which amends
paragraph 3(1)(a) of Schedule 56 to FA 2009), after “3” insert (in both places)
“3B”.

(5) Schedule 56 to FA 2009, as amended by this paragraph, is taken to have come
into force for the purposes of returns under this Schedule on the day on
15which this Act is passed.

Late payment interest

31 So far as relating to amounts that are payable (or repayable) as a result of a
requirement under this Schedule, sections 101 to 103 of FA 2009 (late
payment interest on sums due to HMRC etc) come into force on 6 April 2019.

20Commencement

32 (1) The amendments made by this Part of this Schedule have effect in relation
to disposals made on or after 6 April 2019.

(2) But section 12ZG of TMA 1970 (cases where advance self-assessment not
required) continues to have effect in relation to disposals made on or after
25that date but before 6 April 2020; and that section has effect in relation to
those disposals—

(a) as if references to an NRCGT return were to a return under this
Schedule, and

(b) as if references to section 12ZE(1) of TMA 1970 were to paragraph 6
30of this Schedule.

Section 15

SCHEDULE 3 Offshore receipts in respect of intangible property

1 ITTOIA 2005 is amended as follows.

2 (1) Section 574 (overview of Part 5) is amended as follows.

(2) 35In subsection (1) after paragraph (a) insert—

“(aa) Chapter 2A (offshore receipts in respect of intangible
property),”.

(3) In subsection (2) at the end insert “(but see section 608X)”.

3 (1) Section 576 (priority between Chapters within Part 5) is amended as follows.

(2) The existing provision becomes subsection (2) of that section.

(3) Before that subsection insert—

“(1) Any income, so far as it falls within Chapter 2 (receipts from
5intellectual property) and Chapter 2A (offshore receipts in respect of
intangible property), is dealt with under Chapter 2.”

4 After section 608 insert—

““CHAPTER 2A Offshore receipts in respect of intangible property

Charge to tax on offshore receipts in respect of intangible property

608A 10Charge to tax on UK-derived amounts

(1) This section applies if—

(a) at any time in a tax year, a person is not UK resident and is
not resident in a full treaty territory, and

(b) UK-derived amounts arise to the person in the tax year.

(2) 15Income tax is charged on the UK-derived amounts.

(3) See—

• sections 608D to 608H for the meaning of expressions used in
  this section;

• sections 608J to 608N for exemptions from the charge under this
  20section.

(4) References in the Tax Acts to income from a source in the United
Kingdom include UK-derived amounts.

608B Income charged under section 608A

Tax is charged under section 608A on the full amount of the UK-
25derived amounts arising in the tax year.

608C Person liable for tax under section 608A

The person liable for any tax charged under section 608A is the person
receiving or entitled to the UK-derived amounts.

608D Meaning of residence

(1) 30This section applies for the purposes of this Chapter.

(2) A person is “resident” in a territory if, under the laws of the territory,
the person is liable to tax there—

(a) by reason of the person’s domicile, residence or place of
management, but

(b) 35not in respect only of income from sources in that territory or
capital situated there.

(3) Where—

(a) a person is resident in a territory outside the United Kingdom
generally for the purposes of the laws of the territory or for
particular purposes under those laws, and

(b) the laws of the territory have no provision for a person to be
5resident there for tax purposes,

the person is “resident” in the territory.

608E Meaning of “full treaty territory”

(1) For the purposes of this Chapter a territory is a “full treaty territory”
if—

(a) 10double taxation arrangements have been made in relation to
the territory, and

(b) the arrangements contain a non-discrimination provision.

(2) In subsection (1) “non-discrimination provision”, in relation to
double taxation arrangements, means a provision to the effect that
15nationals of a state which is a party to those arrangements (a
“contracting state”) are not to be subject in the other contracting state
to—

(a) any taxation, or

(b) any requirement connected with taxation,

20which is other or more burdensome than the taxation and connected
requirements to which nationals of that other contracting state in the
same circumstances (in particular with respect to residence) are or
may be subjected.

(3) In subsection (2) “national”, in relation to a contracting state,
25includes—

(a) an individual possessing the nationality or citizenship of the
contracting state, and

(b) a legal person, partnership or association deriving its status
as such from the laws in force in that contracting state.

608F 30Meaning of “UK-derived amount” and “UK sales”

(1) For the purposes of this Chapter an amount is a “UK-derived
amount” if—

(a) it is an amount (whether of a revenue or capital nature) in
respect of the enjoyment or exercise of rights that constitute
35any intangible property, and

(b) the enjoyment or exercise of those rights (or of any rights
derived, directly or indirectly, from those rights) enables,
facilitates or promotes UK sales (directly or indirectly).

(2) It does not matter whether the amount relates to UK sales in the tax
40year mentioned in section 608A or any other tax year.

(3) In this Chapter “UK sales” means any services, goods or other
property—

(a) provided in the United Kingdom, or

(b) provided to persons in the United Kingdom.

608G 45Section 608F: apportionment of amounts

(1) This section applies where—

(a) a person receives or is entitled to an amount in respect of the
enjoyment or exercise of rights that constitute any intangible
property, and that enjoyment or exercise enables, facilitates
or promotes UK sales and other sales, or

(b) 5a person receives or is entitled to an amount in respect of—

(i) the enjoyment or exercise of rights that constitute any
intangible property, where that enjoyment or exercise
enables, facilitates or promotes UK sales, and

(ii) anything else.

(2) 10The amount is to be regarded for the purposes of this Chapter as
constituting a UK-derived amount to such extent as is just and
reasonable.

(3) In a case within subsection (1)(a) it is to be presumed, unless the
contrary is shown, that the proportion of the amount that is just and
15reasonable is—

608H Meaning of “intangible property”

(1) In this Chapter “intangible property” means any property except—

(a) 20tangible property,

(b) an estate, interest or right in or over land,

(c) a right in respect of anything within paragraph (a) or (b),

(d) a financial asset,

(e) a share or other right in relation to the profits, governance or
25winding up of a company, or

(f) any property of a prescribed description.

(2) In this section—

• “financial asset” has the meaning given by section 806 of CTA
  2009;

• 30“prescribed” means prescribed by regulations made by the
  Treasury.

608I Application of Chapter to certain partnerships

(1) This section applies where, under the laws of a full treaty territory, a
partnership is regarded for tax purposes as an entity separate and
35distinct from the partners.

(2) If the partnership is resident in the full treaty territory at any time,
each of the partners is treated for the purposes of this Chapter as
resident in the territory at that time.

(3) Section 608D(2) applies for the purposes of determining whether the
40partnership is resident in the territory at any time (references there to
a person being read as references to the partnership).

(4) Nothing in this section affects the application of section 848 (firm not
to be regarded as entity separate and distinct from partners) or any
other provision of Part 9 (partnerships) to this Chapter.

Exemptions

608J Exemption where limited UK sales

(1) Section 608A does not apply in relation to a person for a tax year if
the total value of the person’s UK sales in that tax year does not
5exceed £10,000,000.

(2) Where—

(a) a person (A), or a person connected with A, receives or is
entitled to an amount (whether of a revenue or capital
nature), and

(b) 10the amount relates (wholly or in part, and directly or
indirectly) to the provision of services, goods or other
property constituting UK sales,

the UK sales are regarded for the purposes of subsection (1) as A’s
UK sales.

608K 15Exemption where business undertaken within territory of residence

(1) Section 608A does not apply in relation to a person (“the relevant
person”) for a tax year if—

(a) the relevant person is resident in a territory throughout the
tax year,

(b) 20all (or substantially all) relevant activity in relation to
relevant intangible property is, and has at all times been,
undertaken in that territory,

(c) there is no relevant connection between relevant intangible
property and a related person, and

(d) 25the person makes a claim under this section.

(2) For the purposes of this section intangible property is “relevant” if
any UK-derived amount arising to the person in the tax year relates
to it.

(3) In subsection (1)(b) “relevant activity”, in relation to relevant
30intangible property, means anything done (by any person)—

(a) for the purpose of creating, developing or maintaining any of
the relevant intangible property; or

(b) for the purpose of generating, for the relevant person,
amounts (whether of a revenue or capital nature) that relate,
35wholly or in part and directly or indirectly, to the enjoyment
or exercise of rights that constitute any of the relevant
intangible property.

(4) For the purposes of subsection (1)(c) there is a “relevant connection”
between relevant intangible property and a related person if any
40relevant intangible property—

(a) has been transferred (directly or indirectly) from a person
related to the relevant person,

(b) derives (directly or indirectly) from anything so transferred,
or

(c) 45derives (directly or indirectly) from intangible property held
by a person related to the relevant person.

(5) See section 608T for the meaning of two persons being “related”.

608L Exemption where foreign tax at least half of UK tax

(1) Section 608A does not apply in relation to a person for a tax year if—

(a) the person is resident in a territory outside the United
Kingdom in that year,

(b) 5the amount of tax (“the local tax amount”) which is paid in
the territory in respect of UK-derived amounts arising in the
tax year is at least half of the corresponding UK tax, and

(c) the local tax amount is not determined under designer tax
provisions.

(2) 10See section 608M for provisions about the local tax amount.

(3) “The corresponding UK tax” means the amount of income tax that
would be charged under this Chapter in respect of UK-derived
amounts arising in the tax year, calculated on the following basis—

(a) section 608A applies in relation to the UK-derived amounts,
15and

(b) the person is not entitled to any relief or allowance for the tax
year.

(4) “Designer tax provisions” means provisions which appear to the
Commissioners to be designed to enable persons to exercise
20significant control over the amount of tax which they pay in respect
of UK-derived amounts.

608M Section 608L: the local tax amount

(1) This section applies for the purposes of section 608L.

(2) Where an amount of tax is paid in the territory in respect of—

(a) 25UK-derived amounts arising in the tax year, and

(b) other amounts,

the amount of tax is to be apportioned between the amounts
mentioned in paragraph (a) and paragraph (b) on a just and
reasonable basis.

(3) 30Where—

(a) in the territory any tax falls to be paid in respect of UK-
derived amounts arising in the tax year,

(b) under the laws of the territory, a repayment of tax, or a
payment in respect of credit for tax, is made to any person,
35and

(c) that repayment or payment is directly or indirectly in respect
of the whole or part of the tax mentioned in paragraph (a),

the local tax amount is to be reduced by the amount of that
repayment or payment (but this is subject to subsections (4) and (5)).

(4) 40Subsection (5) applies if the repayment or payment mentioned in
subsection (3)(b) is in respect of—

(a) the tax mentioned in subsection (3)(a), and

(b) other tax.

(5) The amount of the repayment or payment is to be apportioned
45between the tax mentioned in subsection (3)(a) and the other tax on
a just and reasonable basis, and the reduction under subsection (3) is

limited to the amount apportioned to the tax mentioned in
subsection (3)(a).

(6) Any reduction under subsection (3) is to be undertaken after any
apportionment under subsection (2).

608N 5Exemptions: further provision

(1) The Treasury may by regulations—

(a) amend this Chapter for the purpose of creating additional
exemptions;

(b) amend any exemption for the time being in force.

(2) 10“Exemption” means a total or partial exemption from the charge
under this Chapter.

(3) The regulations may confer a power to make subordinate legislation
or confer a discretion on any person.

(4) The regulations may make retrospective provision, except insofar as
15they impose or increase taxation.

(5) A statutory instrument containing regulations under this section
may not be made unless a draft of the instrument has been laid
before and approved by a resolution of the House of Commons.

Recovery of tax from person in same control group

608O 20Notice requiring payment from person in same control group as
taxpayer

(1) This section applies where—

(a) an amount of income tax has been assessed on a person (“the
taxpayer”) for a tax year by virtue of this Chapter, and

(b) 25the whole or any part of that amount, or of any interest on
that amount, is unpaid at the end of the period of 6 months
after the relevant date.

(2) A designated officer may give a notice to a relevant person requiring
that person, within 30 days of the giving of the notice, to pay any
30unpaid tax and interest.

(3) The notice must state—

(a) the amount of income tax and interest that remains unpaid,

(b) the date when the income tax first became payable, and

(c) the relevant person’s right of appeal.

(4) 35A notice under this section may not be given more than 3 years and
6 months after the relevant date.

(5) In this section “relevant person” means any person who was in the
same control group as the taxpayer at any time in the tax year (see
section 608S for the meaning of being in the same “control group”).

(6) 40In this section “the relevant date” means—

(a) in relation to an amount of income tax determined under
section 28C of TMA 1970, the date on which the
determination was issued;

(b) in relation to an amount of income tax under a self-
assessment in a case where the taxpayer’s return under
section 8 or 8A of TMA 1970 was delivered after the last day
for delivering it in accordance with that section, the date on
5which the return was delivered;

(c) in any other case, the date the amount mentioned in
subsection (1)(a) became due and payable.

(7) A notice may be given anywhere in the world, to any relevant person
(whether or not UK resident).

(8) 10In this section—

• “assessment”: any reference to an amount of income tax that has
  been assessed on a person includes an amount of income tax
  that has been determined under section 28C of TMA 1970 in
  relation to the person;

• 15“designated officer” means an officer of Revenue and Customs
  who has been designated by the Commissioners for the
  purposes of this Chapter.

608P Payment notice: effect

(1) This section applies where a notice under section 608O is given to a
20person.

(2) For the purposes of the recovery from the person of any unpaid tax
and interest (including interest accruing after the date of the notice),
the person is treated as if—

(a) the amount of income tax assessed as mentioned in section
25608O(1)(a) had been assessed on the person,

(b) that amount became due and payable when the tax
mentioned in section 608O(1)(a) became due and payable,
and

(c) any payments made in respect of the amount mentioned in
30section 608O(1)(a) (or in respect of interest on that amount)
had been made in respect of the amount treated as assessed
by virtue of paragraph (a) of this subsection (or in respect of
interest on that amount).

(3) Nothing in subsection (2) gives the person a right to appeal against
35the assessment mentioned in section 608O(1)(a) (or against any
assessment treated as made by virtue of subsection (2) of this
section).

(4) Any appeal by the taxpayer against the assessment mentioned in
section 608O(1)(a) does not affect the liabilities arising by virtue of
40the giving of the notice.

608Q Payment notice: appeals

(1) This section applies where a notice under section 608O is given to a
person.

(2) The person may appeal against the notice, within the period of 30
45days beginning with the date on which it is given, on the ground that
the person is not a relevant person (as defined by section 608O).