Finance Bill (HC Bill 114)

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(2)The adjustments (whether or not made by an officer of Revenue and Customs)
may be made by way of an assessment, the modification of an assessment,
amendment or disallowance of a claim, or otherwise.

(3)Arrangements are “relevant avoidance arrangements” if their main purpose, or
5one of their main purposes, is to enable a person to obtain a tax advantage.

(4)But arrangements are not “relevant avoidance arrangements” if the obtaining
of any tax advantage that would (apart from this section) arise from them can
reasonably be regarded as consistent with—

(a)any principles on which the provisions of this Part that are relevant to
10the arrangements are based (whether express or implied), and

(b)the policy objectives of those provisions.

(5)In this section—

  • “arrangements” include any agreement, understanding, scheme,
    transaction or series of transactions (whether or not legally
    15enforceable);

  • “tax” means digital services tax (and “tax advantage” is to be construed
    accordingly);

  • “tax advantage” includes—

    (a)

    avoidance or reduction of a charge to tax or an assessment to
    20tax,

    (b)

    repayment or increased repayment of tax,

    (c)

    avoidance of a possible assessment to tax, and

    (d)

    deferral of a payment of tax or advancement of a repayment of
    tax.

65 25Notice requiring payment from other group members

(1)This section applies where any DST liability relating to a group for an
accounting period is unpaid at the end of the period of 3 months after the
relevant date.

(2)A designated officer may give a notice (a “payment notice”) to a relevant
30person requiring that person, within 30 days of the giving of the notice, to pay
all unpaid DST liabilities relating to the group for the accounting period.

(3)A payment notice must state—

(a)the amount of any digital services tax or penalty that remains unpaid,

(b)the date any digital services tax or penalty first became payable, and

(c)35the relevant person’s right of appeal.

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

(5)If the DST liability arose because of a determination under Part 5 of Schedule
7, the relevant date is the date on which the notice of determination is issued.

(6)40If the DST liability arose because of a self-assessment, the relevant date is the
later of—

(a)the date on which the tax becomes due and payable;

(b)in a case where the DST return is delivered after the filing date, the date
on which the return is delivered;

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(c)if notice of enquiry is given, the date on which the enquiry is
completed;

(d)if more than one notice of enquiry is given, the date on which the last
notice is given;

(e)5if as a result of such an enquiry the DST return is amended, the date on
which the notice of the amendment is issued;

(f)if there is an appeal against such an amendment, the date on which the
appeal is finally determined.

(7)If the DST liability arose because of an assessment under Part 6 or 7 of Schedule
107, the relevant date is—

(a)if there is no appeal against the assessment, the date on which the notice
of assessment is issued, or

(b)if there is such an appeal, the date on which the appeal is finally
determined.

(8)15If the DST liability arose because of a penalty, the relevant date is the date on
which the notice of the penalty is issued.

(9)A payment notice may be given anywhere in the world, to any relevant person
(whether or not resident in the United Kingdom).

(10)Schedule 8 makes further provision about payment notices.

(11)20In this section—

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

  • “DST liability”, in relation to a group for an accounting period, means—

    (a)

    a liability of a relevant person to digital services tax in respect of
    25that period, or

    (b)

    a liability of a person to a penalty for anything done (or not
    done) in respect of the accounting period;

  • “the filing date” has the same meaning as in Schedule 7 (see paragraph
    1(1));

  • 30“relevant person” means any person who was a member of the group in
    the accounting period.

(12)The reference in subsection (6) to a self-assessment includes a reference to a
self-assessment that supersedes a determination (see paragraph 18 of Schedule
7).

(13)35In this section references to “digital services tax” include references to interest
on digital services tax.

66 Interest on overdue DST

(1)Digital services tax carries interest at the applicable rate from the date when the
tax becomes due and payable until payment.

(2)40This applies even if the date when the tax becomes due and payable is—

(a)a Saturday or Sunday,

(b)Good Friday, Christmas day, a bank holiday or other public holiday, or

(c)a day specified in an order made under section 2 of the Banking and
Financial Dealings Act 1971 (power to suspend financial dealings).

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(3)In this section “the applicable rate” means the rate applicable under section 178
of FA 1989.

67 Interest on overpaid DST etc

(1)Where a payment in respect of a person’s digital services tax liability for an
5accounting period is made before the due date, the payment carries interest at
the applicable rate from the later of—

(a)the date the payment is made, and

(b)6 months and 13 days from the start of the accounting period,

until the due date.

(2)10Where a repayment of digital services tax paid by a person for an accounting
period falls to be made, the repayment carries interest at the applicable rate—

(a)from the due date or, if later, the date the digital services tax was paid,
and

(b)until the order for repayment is issued.

(3)15Where a repayment of digital services tax is a repayment of tax paid by a
person on different dates, it is to be treated so far as possible as a repayment of
tax paid on a later (rather than an earlier) date among those dates.

(4)Where—

(a)interest has been paid to a person under this section,

(b)20there is a change in the person’s assessed liability,

(c)the change does not correct (wholly or in part) an error made by an
officer of Revenue and Customs, and

(d)as a result of the change (and in particular not as a result of an error in
the calculation of interest) it appears to an officer of Revenue and
25Customs that some or all of the interest ought not to have been paid,

the interest that ought not to have been paid may be recovered from the person.

(5)For the purposes of subsection (4)(b) there is a change in a person’s assessed
liability if (and only if)—

(a)an assessment, or an amendment of an assessment, of the amount of
30digital services tax payable by the person for the accounting period in
question is made, or

(b)an HMRC determination of that amount is made,

whether or not any previous assessment or determination has been made.

(6)In this section—

  • 35“the applicable rate” has the same meaning as in section 66;

  • “the due date”, in relation to an accounting period, means the date digital
    services tax for the accounting period becomes due and payable;

  • “error” includes—

    (a)

    any computational error, and

    (b)

    40the allowance of a claim that ought not to have been allowed;

  • HMRC determination” means a determination under Part 5 of Schedule
    7.

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68 Recovery of DST liability

(1)Any amount due by way of DST liability is recoverable as a debt due to the
Crown.

(2)In this section “DST liability” has the same meaning as in section 65.

69 5Minor and consequential amendments

Schedule 9 contains minor and consequential amendments.

70 Review of DST

(1)The Treasury must, before the end of 2025, conduct a review of digital services
tax and prepare a report of the review.

(2)10The Treasury must lay a copy of the report before Parliament.

General

71 Interpretation of Part

In this Part—

  • “accounting period” has the meaning given by section 60;

  • 15“the applicable accounting standards” has the meaning given by section
    63;

  • “the Commissioners” has the meaning given by section 38;

  • “company” has the meaning given by section 1121(1) of CTA 2010;

  • “digital services activity” has the meaning given by section 42;

  • 20“digital services revenues” has the meaning given by section 39;

  • “group” has the meaning given by section 56;

  • “group’s accounts” has the meaning given by section 60;

  • HMRC” means Her Majesty’s Revenue and Customs;

  • IAS” has the meaning given by section 63;

  • 25“member” has the meaning given by section 56;

  • “parent” has the meaning given by section 56;

  • “the responsible member” has the meaning given by section 51;

  • “subsidiary” has the meaning given by section 56;

  • “the threshold conditions” has the meaning given by section 45;

  • 30UK digital services revenues” has the meaning given by section 40;

  • UK user” has the meaning given by section 43;

  • “user” has the meaning given by section 43.

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Part 3 Other taxes

Inheritance tax

72 Excluded property etc

(1)5IHTA 1984 is amended as follows.

(2)In section 48 (excluded property)—

(a)in subsection (3)(a), for “settlement was made” substitute “property
became comprised in the settlement (but see also subsection (3F))”,

(b)in subsection (3A)(a), for “settlement was made” substitute “property
10became comprised in the settlement (but see also subsection (3F))”,

(c)in subsection (3E), for “settlement is made” substitute “property
became comprised in the settlement (but see also subsection (3F))”, and

(d)after subsection (3E) insert—

(3F)If—

(a)15an amount is payable in respect of property (“the
existing property”) comprised in a settlement, and

(b)the amount represents an accumulation of income
which (once accumulated) becomes comprised in the
settlement,

20subsections (3)(a), (3A)(a) and (3E) have effect, in the case of the
amount, as if any reference to the time it became comprised in
the settlement were to the time the existing property became
comprised in the settlement.”

(3)After section 48 insert—

48A 25Commencement of settlement

In this Act any reference to the commencement of a settlement is to the
time when property first becomes comprised in it.”

(4)Omit section 60 (meaning of commencement of settlement for purposes of
Chapter).

(5)30In section 64 (charge at ten-year anniversary)—

(a)in subsection (1B)—

(i)after “settlor of” insert “property comprised in”,

(ii)for “settlement was made” substitute “property became
comprised in the settlement (but see also subsection (1BA))”,
35and

(iii)after “income of the settlement” insert “that arose (directly or
indirectly) from the property”, and

(b)after that subsection insert—

(1BA)If—

(a)40an amount is payable in respect of property (“the
existing property”) comprised in a settlement, and

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(b)the amount represents an accumulation of income
which (once accumulated) becomes comprised in the
settlement,

subsection (1B) has effect, in the case of the amount, as if any
5reference to the time it became comprised in the settlement were
to the time the existing property became comprised in the
settlement.”

(6)In section 65 (charge at other times)—

(a)in subsection (7A), for “settlement made” substitute “property became
10comprised in settlement”,

(b)in subsection (8)—

(i)after “settlor of” insert “property comprised in”,

(ii)for “settlement was made” substitute “property became
comprised in the settlement (but see also subsection (8A))”, and

(iii)15for “property comprised in the settlement” substitute “the
property”, and

(c)after that subsection insert—

(8A)If—

(a)an amount is payable in respect of property (“the
20existing property”) comprised in a settlement, and

(b)the amount represents an accumulation of income
which (once accumulated) becomes comprised in the
settlement,

subsection (8) has effect, in the case of the amount, as if any
25reference to the time it became comprised in the settlement were
to the time the existing property became comprised in the
settlement.”

(7)In section 74A (arrangements involving acquisition of interest in settled
property etc)—

(a)30in subsection (2)(a), for “settlement was made” substitute “relevant
settled property became comprised in the settlement”, and

(b)in subsection (3)(a), for “settlement was made” substitute “relevant
settled property became comprised in the settlement”.

(8)In section 157(3) (non-residents’ bank accounts), for “he made” substitute “the
35settled property became comprised in”.

(9)In section 237(1)(b) (imposition of charge), for “the chargeable transfer is made
by the making of a settlement or” substitute “property becomes comprised in a
settlement by virtue of the chargeable transfer or the chargeable transfer”.

(10)In section 272 (general interpretation)—

(a)40before the definition of “conditionally exempt transfer” insert—

  • ““commencement” of a settlement has the meaning given
    by section 48A;”, and

(b)in the definition of “foreign-owned”, in paragraph (b)(ii), at the end
insert “(and section 64(1BA) applies for the purposes of this sub-
45paragraph as it applies for the purposes of section 64(1B))”.

(11)In relation to any chargeable transfer made on or after the day on which this
Act is passed, the amendments made by this section are treated as always
having been in force.

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Section 2(3) of IHTA 1984 applies for the purposes of this subsection.

73 Transfers between settlements etc

(1)IHTA 1984 is amended as follows.

(2)After section 81A insert—

81B 5Excluded property: property to which section 80 applies

(1)This section applies to property to which section 80 (initial interest of
settlor etc) applies.

(2)If the property would apart from this section be excluded property by
virtue of section 48(3)(a) or (3A)(a), the property is at any time in a tax
10year to be regarded as excluded property for the purposes of this
Chapter, except sections 78 and 79, only if Conditions A and B are met.

(3)Section 65(8) has effect in relation to the property only if Condition A is
met (in addition to any condition mentioned in that provision).

(4)Condition A is that the actual settlor was not domiciled in the United
15Kingdom at the time of the occasion first referred to in section 80(1).

(5)Condition B is that the actual settlor is not a formerly domiciled
resident for the tax year.

(6)In this section “the actual settlor” means the person who is the settlor of
the property in relation to the settlement first mentioned in section
2080(1).

(7)Where the occasion first referred to in section 80(1) occurred before the
day on which the Finance Act 2020 was passed, this section has effect
as if, in subsection (2), “or (3A)(a)” were omitted.”

(3)In section 82 (excluded property)—

(a)25in subsection (1), omit “80 or”,

(b)in subsection (2)—

(i)omit “80 or”, and

(ii)for “settlement was made” substitute “property became
comprised in the settlement”,

(c)30in subsection (3), omit paragraph (a),

(d)in subsection (4), omit paragraph (a),

(e)after that subsection insert—

(5)This section does not apply in relation to a case to which section
82A applies.”, and

(f)35in the heading at the end insert “: property to which section 81 applies
(old cases)”.

(4)After section 82 insert—

82A Excluded property: property to which section 81 applies (new cases)

(1)This section—

(a)40applies where, at any time on or after the day on which the
Finance Act 2020 is passed, property ceases to be comprised in
a settlement (“the first settlement”) but is treated as a result of



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section 81 as remaining comprised in that settlement for the
purposes of this Chapter, and

(b)applies whether or not at any subsequent time the property is
comprised in the first settlement without regard to that section.

(2)5If the property would apart from this section be excluded property by
virtue of section 48(3)(a) or (3A)(a), the property is to be regarded as
excluded property for the purposes of this Chapter, except sections 78
and 79, at any time only if the non-domicile condition is met in relation
to each qualifying transfer occurring on or before that time.

(3)10Section 65(8) has effect in relation to the property at any time only if (in
addition to the condition mentioned there) the non-domicile condition
is met in relation to each qualifying transfer occurring on or before that
time; but, for the purposes of this subsection, the non-domicile
condition has effect with the omission of subsection (6)(a)(ii).

(4)15For the purposes of this section each of the following is a “qualifying
transfer”—

(a)the occasion on which section 81 applies to the property; and

(b)any subsequent occasion on which the property would, if the
effect of section 81 were ignored, become comprised in a
20settlement to which this Chapter applies (including the first
settlement).

(5)But a qualifying transfer does not occur as a result of—

(a)an assignment by a beneficiary of an interest in a settlement, or

(b)an exercise of a general power of appointment,

25unless the time of the assignment or exercise of the power falls on or
after the day on which the Finance Act 2020 is passed.

(6)For the purposes of this section “the non-domicile condition” is—

(a)in a case where a qualifying transfer occurs as a result of an
assignment by a beneficiary of an interest in a settlement or an
30exercise of a general power of appointment, that the beneficiary
or the person exercising the power—

(i)was not domiciled in the United Kingdom at the time of
the assignment or exercise of the power, and

(ii)is not a formerly domiciled resident for the tax year in
35which the time mentioned in subsection (2) falls;

(b)in a case in which section 81 applies which is not within
paragraph (a), that the person who was the settlor of the
property in relation to the first settlement was not domiciled in
the United Kingdom immediately before the time when the
40property ceased to be comprised in the first settlement;

(c)in any other case, that the person who was the settlor of the
property in relation to the first settlement was not domiciled in
the United Kingdom immediately before the time of the
subsequent occasion.

(7)45If—

(a)the settlor mentioned in subsection (6)(b) or (c) has died before
the time mentioned there, and

(b)the death does not give rise to a qualifying transfer,

the non-domicile condition is treated as met.

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(8)In this section any reference to a qualifying transfer occurring as a
result of—

(a)an assignment by a beneficiary of an interest in a settlement, or

(b)an exercise of a general power of appointment,

5includes the transfer occurring partly as a result of the assignment or
exercise of the power.

(9)In this section any reference to an assignment includes an assignation.”

(5)In relation to any chargeable transfer made on or after the day on which this
Act is passed, the amendments made by subsections (2) and (3) are treated as
10always having been in force.

Section 2(3) of IHTA 1984 applies for the purposes of this subsection.

74 Relief for payments to victims of persecution during Second World War era

(1)IHTA 1984 is amended as follows.

(2)In section 153ZA (inheritance tax relief for payments to victims of persecution
15during Second World War era: qualifying payments) after subsection (8)
insert—

(8A)Regulations under this section may have effect in relation to deaths
occurring before the regulations are made.”

(3)In Schedule 5A (inheritance tax relief for payments to victims of persecution
20during Second World War era), in Part 1 (compensation payments), after
paragraph 9 insert—

10A one-off payment of a fixed amount from the Kindertransport Fund
established by the Government of the Federal Republic of Germany”.

(4)The amendment made by subsection (3) has effect in relation to deaths
25occurring on or after 1 January 2019.

Stamp duty and stamp duty reserve tax

75 Stamp duty: transfers of unlisted securities and connected persons

After section 47 of FA 2019 insert—

47A Stamp duty: transfers of unlisted securities and connected persons

(1)30This section applies if—

(a)an instrument transfers unlisted securities to a company or a
company’s nominee for consideration,

(b)the person transferring the securities is connected with the
company or is the nominee of a person connected with the
35company, and

(c)some or all of the consideration consists of the issue of shares.

(2)In this section “unlisted securities” means stock or marketable
securities that are not listed securities within the meaning of section 47
(stamp duty: transfers of listed securities and connected persons).

(3)40For the purposes of the enactments relating to stamp duty the amount
or value of the consideration is to be treated as being equal to—

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(a)the amount or value of the consideration for the transfer, or

(b)if higher, the value of the unlisted securities.

(4)For the purposes of subsection (3) “the enactments relating to stamp
duty” means the Stamp Act 1891 and any enactment amending that Act
5or that is to be construed as one with that Act.

(5)For the purposes of this section—

(a)the value of unlisted securities is to be taken to be the market
value of the securities at the date the instrument is executed;

(b)“market value” has the same meaning as in TCGA 1992 and is
10to be determined in accordance with sections 272 and 273 of that
Act (valuation).

(6)Section 1122 of CTA 2010 (connected persons) has effect for the
purposes of this section.

(7)This section is to be construed as one with the Stamp Act 1891.

(8)15This section has effect in relation to instruments executed on or after the
date on which FA 2020 is passed.”

76 SDRT: unlisted securities and connected persons

After section 48 of FA 2019—

48A SDRT: unlisted securities and connected persons

(1)20This section applies if a person is connected with a company and—

(a)the person or the person’s nominee—

(i)agrees to transfer unlisted securities to the company or
the company’s nominee for consideration in money or
money’s worth, or

(ii)25transfers such securities to the company or the
company’s nominee for consideration in money or
money’s worth, and

(b)some or all of the consideration consists of the issue of shares.

(2)In this section “unlisted securities” means chargeable securities that are
30not listed securities within the meaning of section 48 (SDRT: listed
securities and connected persons).

(3)For the purposes of stamp duty reserve tax chargeable under section 87
of FA 1986 (the principal charge), the amount or value of the
consideration is to be treated as being equal to—

(a)35the amount or value of the consideration for the transfer, or

(b)if higher, the market value of the unlisted securities at the time
the agreement is made.

(4)Subsection (5) has effect for the purposes of stamp duty reserve tax
chargeable under section 93 of FA 1986 (depositary receipts) or section
4096 of that Act (clearance services).

(5)If the amount or value of the consideration for any transfer of unlisted
securities is less than the value of those securities at the time they are
transferred, the transfer is to be treated as being for an amount of
consideration in money equal to that value.