Finance Bill (HC Bill 114)

Finance BillPage 170



procedural requirements of Schedule 43, 43A or 43A have
been complied with, and

(b)the power to make adjustments by virtue of this section is
subject to any time limit imposed by or under any enactment
5other than this Part.

The provision made by this subsection needs to be read with sections
209AA to 209AC and has no effect on adjustments so far as made
otherwise than by virtue of this section.”

3After section 209 insert—

209AA 10   Protective GAAR notices

(1)An officer of Revenue and Customs may give a written notice (a
“protective GAAR notice”) to a person stating that the officer
considers—

(a)that a tax advantage might have arisen to the person from tax
15arrangements that are abusive, and

(b)that, on the assumption that the advantage does arise from
tax arrangements that are abusive, it ought to be
counteracted under section 209.

(2)The protective GAAR notice must be given within the ordinary
20assessing time limit applicable to the proposed adjustments.

(3)But if—

(a)a tax enquiry is in progress into a return made by the person,
and

(b)the return relates to the tax in respect of which the specified
25adjustments under the protective GAAR notice are made,

the protective GAAR notice must instead be given no later than the
time when the enquiry is completed.

(4)The protective GAAR notice must—

(a)specify the arrangements and the tax advantage, and

(b)30specify the adjustments that, on the assumption that the
advantage does arise from tax arrangements that are abusive,
the officer proposes ought to be made.

(5)The adjustments specified in the protective GAAR notice have effect
as if they are made by virtue of section 209.

(6)35Notice of appeal may be given against the adjustments specified in
the protective GAAR notice (whether or not the adjustments are also
made otherwise than by virtue of section 209).

(7)Any appeal against the specified adjustments (whether made by
virtue of section 209 or otherwise) is, as a result of this subsection,
40stayed—

(a)for a period of 12 months beginning with the day on which
the protective GAAR notice is given, or

(b)if a final GAAR counteraction notice is given before the end
of that period, for a period ending with the day on which the
45final GAAR counteraction notice is given.

(8)If, in the case of the specified adjustments (whether made by virtue
of section 209 or otherwise)—

Finance BillPage 171

(a)notice of appeal is not given or notice of appeal is given but
the appeal is subsequently withdrawn or determined by
agreement, and

(b)no final GAAR counteraction notice is given,

5the protective GAAR notice has effect for all purposes (other than the
purposes of section 212A) as if it had been given as a final GAAR
counteraction notice (and, accordingly, as if the GAAR procedural
requirements had been complied with).

(9)In any case not falling within subsection (8)

(a)10the specified adjustments have no effect (so far as they are
made by virtue of section 209) unless they (or lesser
adjustments) are subsequently specified in a final GAAR
counteraction notice, but

(b)the giving of the protective GAAR notice is treated as
15meeting the requirements of section 209(6)(b) in the case of
that final GAAR counteraction notice.”

4After section 209AA (as inserted by paragraph 3) insert—

209AB   Adjustments under section 209: notices under Schedule 43 or 43A

(1)This section applies in the case of any particular adjustments in
20respect of a particular period or matter (“the adjustments
concerned”) if—

(a)a person is given a notice under paragraph 3 of Schedule 43
or a pooling notice or notice of binding under Schedule 43A
(“the Schedule 43 or 43A notice”) that specifies the
25adjustments concerned (whether or not other adjustments
are specified),

(b)the Schedule 43 or 43A notice is given within the relevant
time limit applicable to the adjustments concerned, and

(c)the adjustments concerned have not been specified in a
30provisional counteraction notice under section 209A, or a
protective GAAR notice under section 209AA, given before
the time at which the Schedule 43 or 43A notice is given.

(2)The Schedule 43 or 43A notice is given within the relevant time limit
if—

(a)35it is given within the ordinary assessing time limit applicable
to the adjustments concerned, or

(b)if a tax enquiry is in progress into a return made by the
person and the particular adjustments concerned relate to the
matters contained in the return, it is given no later than the
40time when the enquiry is completed.

(3)The adjustments concerned have effect as if they are made by virtue
of section 209.

(4)If, in the case of the specified adjustments (whether made by virtue
of section 209 or otherwise)—

(a)45notice of appeal is not given or notice of appeal is given but
the appeal is subsequently withdrawn or determined by
agreement, and

(b)no final GAAR counteraction notice is given,

Finance BillPage 172

the Schedule 43 or 43A GAAR notice has effect for all purposes (other
than the purposes of section 212A) as if it had been given as a final
GAAR counteraction notice (and, accordingly, as if the GAAR
procedural requirements had been complied with).

(5)5In any case not falling within subsection (4)

(a)the adjustments concerned have no effect (so far as they are
made by virtue of section 209) unless they (or lesser
adjustments) are subsequently specified in a final GAAR
counteraction notice, but

(b)10the giving of the Schedule 43 or 43A notice is treated as
meeting the requirements of section 209(6)(b) in the case of
that final GAAR counteraction notice.”

5After section 209AB (as inserted by paragraph 4) insert—

209AC   Sections 209AA and 209AB: definitions

(1)15In sections 209AA and 209AB—

  • “final GAAR counteraction notice” means a notice given
    under—

    (a)

    paragraph 12 of Schedule 43,

    (b)

    paragraph 8 or 9 of Schedule 43A, or

    (c)

    20paragraph 8 of Schedule 43B,

  • “GAAR procedural requirements” means the procedural
    requirements of Schedule 43, 43A or 43B,

  • “lesser adjustments” means adjustments specified in the final
    GAAR counteraction notice which assume a smaller tax
    25advantage than was assumed in the protective GAAR notice
    or (as the case may be) the Schedule 43 or 43A notice, and

  • “ordinary assessing time limit”, in relation to any adjustments,
    means the time limit imposed by or under any enactment
    other than this Part for the making of the adjustments.

(2)30Expressions which are used in section 202 of FA 2014 (“tax enquiry”,
and its being “in progress”, and “return”) have the same meaning in
sections 209AA and 209AB as they have in that section (and
references to completing a tax enquiry are to be read accordingly).”

6Omit sections 209A to 209F (provisional counteraction notices).

735In section 214(1) (interpretation of Part 5 of FA 2013), omit—

(a)the definition of “notified adjustments”, and

(b)the definition of “provisional counteraction notice”.

Minor amendments

8In paragraph 11 of Schedule 43A (meaning of “equivalent arrangements”),
40omit “For the purposes of paragraph 1,”.

9In paragraph 5 of Schedule 43C (penalty under section 212A), for sub-
paragraphs (5) and (6) substitute—

(5)An assessment of a penalty under this paragraph must be made
before the end of the period of 12 months beginning with the date
45(or the latest of the dates) on which the counteraction mentioned



Finance BillPage 173



in section 212A(1)(d) becomes final (within the meaning of section
210(8)).”

Commencement

10The amendment made by paragraph 2 has effect in relation to adjustments
5made by an officer of Revenue and Customs by virtue of section 209 of FA
2013 on or after the commencement date.

11The amendment made by paragraph 3 has effect in relation to notices given
under section 209AA of FA 2013 on or after the commencement date
(whenever the arrangements are entered into) but no notice may be given
10under that section in relation to any adjustments if a provisional
counteraction notice has been given under section 209A of that Act before
that date in respect of those adjustments.

12The amendment made by paragraph 4 has effect in relation to notices given
under Schedule 43 or 43A to FA 2013 on or after the commencement date
15(whenever the arrangements are entered into).

13The amendment made by paragraph 6 does not affect the operation of
sections 209A to 209F of FA 2013 in relation to provisional counteraction
notices given under section 209A of that Act before the commencement date.

14The amendment made by paragraph 9 has effect in relation to cases where a
20person becomes liable to a penalty under section 212A of FA 2013 on or after
the commencement date.

15In paragraphs 10 to 14 “the commencement date” means the date on which
this Act is passed.

Section 99

Schedule 14 25Tax relief for scheme payments etc

Introductory

1(1)This Schedule provides for the following in respect of qualifying
payments—

(a)an exemption from income tax, and

(b)30an exemption from capital gains tax.

(2)This Schedule also provides for a relief from inheritance tax in respect of
qualifying payments (but see paragraph 5(4), which contains an excepted
case).

Qualifying payments

2(1)35In this Schedule “qualifying payment” means a payment within any of sub-
paragraphs (2) to (5).

(2)A payment is within this sub-paragraph if it is a payment under the
Windrush Compensation Scheme.

(3)A payment is within this sub-paragraph if—

Finance BillPage 174

(a)it is made otherwise than under the Windrush Compensation
Scheme,

(b)it is made to, or in respect of, a person who made a claim under that
Scheme (which the person was eligible to make),

(c)5it is made in connection with the same circumstances as gave rise to
that person’s eligibility to make that claim, and

(d)it is made by or on behalf of—

(i)the government of the United Kingdom,

(ii)the government of a part of the United Kingdom, or

(iii)10a local or other public authority in the United Kingdom.

(4)A payment is within this sub-paragraph if it is a payment under the Troubles
Permanent Disablement Payment Scheme established by the Victims’
Payments Regulations 2020 (S.I. 2020/103) (as that scheme is amended from
time to time).

(5)15A payment is within this sub-paragraph if—

(a)it is a compensation payment of a description specified in regulations
made by the Treasury by statutory instrument, and

(b)it is a payment made by or on behalf of—

(i)the government of the United Kingdom,

(ii)20the government of a part of the United Kingdom,

(iii)the government of any other country or territory,

(iv)a local or other public authority in the United Kingdom, or

(v)a local or other public authority of a territory outside the
United Kingdom.

(6)25Regulations under sub-paragraph (5) may provide that a compensation
payment of a description specified in the regulations is a qualifying payment
only for the purposes of particular provisions of this Schedule.

(7)A statutory instrument containing regulations under sub-paragraph (5) is
subject to annulment in pursuance of a resolution of the House of Commons.

(8)30In this paragraph “the Windrush Compensation Scheme” means the scheme
published by the Home Office on 3 April 2019 which provides compensation
for certain categories of persons in recognition of difficulties arising out of
an inability to demonstrate lawful immigration status (as that scheme is
amended from time to time).

35Exemption from income tax

3(1)No liability to income tax arises in respect of a qualifying payment.

(2)A qualifying payment is to be ignored for all other income tax purposes.

(3)This paragraph has effect in relation to qualifying payments within
paragraph 2(2) or (3) that are received on or after 3 April 2019.

(4)40This paragraph has effect in relation to qualifying payments within
paragraph 2(4) that are received on or after 29 May 2020.

(5)This paragraph has effect in relation to qualifying payments within
paragraph 2(5) that are received on or after such date as is specified in the
regulations concerned (which may be a date before the regulations are
45made).

Finance BillPage 175

Exemptions from capital gains tax

4(1)A gain accruing on a disposal is not a chargeable gain if it accrues on—

(a)a disposal arising as a result of the forfeiture or surrender of rights,
or as a result of refraining from exercising rights, in return for a
5qualifying payment,

(b)a disposal of the right to receive the whole or any part of a qualifying
payment, or

(c)a disposal of an interest in any such right.

(2)In sub-paragraph (1)(c) “interest”, in relation to a right, means an interest as
10a co-owner of the right (whether it is owned jointly or in common and
whether or not the interests of the co-owners are equal).

(3)This paragraph has effect—

(a)in a case where the qualifying payment concerned is within
paragraph 2(2) or (3), in relation to disposals made on or after 3 April
152019, and

(b)in a case where the qualifying payment concerned is within
paragraph 2(4), in relation to disposals made on or after 29 May 2020.

(c)in a case where the qualifying payment concerned is within
paragraph 2(5), in relation to disposals made on or after such date as
20is specified in the regulations concerned (which may be a date before
the regulations are made).

Relief from inheritance tax

5(1)This paragraph applies where a qualifying payment is at any time received
by a person or the personal representatives of a person (but see sub-
25paragraph (4)).

(2)The inheritance tax chargeable on the value transferred by the transfer made
on the person’s death is to be reduced by an amount equal to—

(a)the relevant percentage of the amount of the payment, or

(b)if lower, the amount of inheritance tax that would, apart from this
30paragraph, be chargeable on the value transferred.

(3)The “relevant percentage” means the percentage in the last row of the third
column of the Table in Schedule 1 to IHTA 1984.

(4)This paragraph does not apply in a case where—

(a)the qualifying payment is within paragraph 2(3),

(b)35the payment is made after the death of the person mentioned in
paragraph (b) of paragraph 2(3), and

(c)the payment is made otherwise than to the personal representatives
of that person.

(5)This paragraph has effect, in a case where the qualifying payment is within
40paragraph 2(2) or (3), in relation to deaths occurring on or after 3 April 2019.

(6)This paragraph has effect, in a case where the qualifying payment is within
paragraph 2(4), in relation to deaths occurring on or after 29 May 2020.

(7)This paragraph has effect, in a case where the qualifying payment is within
paragraph 2(5), in relation to deaths occurring on or after such date as is



Finance BillPage 176



specified in the regulations concerned (which may be a date before the
regulations are made).