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Scotland Bill (HL Bill 138)

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26 Income tax for Scottish taxpayers

(1) The Income Tax Act 2007 is amended as follows.

(2) In section 6 (the rates of income tax) after subsection (2) insert—

(2A) Subsection (2) does not apply to the non-savings income of a Scottish
5taxpayer.

(2B) The basic rate, higher rate and additional rate for a tax year on the non-
savings income of a Scottish taxpayer is to be found as follows.

Step 1

Take the basic rate, higher rate or additional rate determined as such
10under subsection (2).

Step 2

Deduct 10 percentage points.

Step 3

Add the Scottish rate (if any) set by the Scottish Parliament for that
15year.

(2C) Chapter 2 of Part 4A of the Scotland Act 1998 makes provision about
the meaning of “Scottish taxpayer” and the setting of the Scottish rate.

(3) In section 10 (income charged at particular rates: individuals) after subsection
(3A) insert—

(3B) 20If the individual is a Scottish taxpayer, the basic rate, higher rate and
additional rate are—

(a) on so much of the individual’s income as is savings income, the
rates determined as such under section 6(2);

(b) on so much of the individual’s income as is not savings income,
25the rates determined as such under section 6(2B).

(3C) Section 16 has effect for determining which part of a Scottish taxpayer’s
income consists of savings income.

(4) In section 16 (savings and dividend income to be treated as highest part), in
subsection (1) before paragraph (a) insert—

(za) 30which part of a Scottish taxpayer’s income consists of savings
income,.

(5) In section 809H (charge on nominated income of long-term UK resident), after
subsection (3) insert—

(3A) For the purpose of calculating income tax charged under subsection (2),
35ignore section 6(2A) to (2C) (special rates of income tax for Scottish
taxpayers).

(6) In section 989 (definitions), in the definitions of “additional rate”, “basic rate”
and “higher rate”, after “section 6(2)” insert “or (2B)”.

(7) In section 1 of the Provisional Collection of Taxes Act 1968 (temporary
40statutory effect of resolution of House of Commons), after subsection (3)
insert—

(3A) If a resolution specifies the basic rate, higher rate or additional rate of
income tax, the resolution has effect in relation to Scottish taxpayers
(within the meaning of Chapter 2 of Part 4A of the Scotland Act 1998)

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as if it specified the rate calculated in accordance with section 6(2A) to
(2C) of the Income Tax Act 2007.

(8) The amendments made by this section have effect in relation to the tax year
appointed by the Treasury under section 25(5) and subsequent tax years.

27 5Definition of Scottish taxpayer for Scottish variable rate

(1) In Part 4 of the 1998 Act (power to vary income tax rate), for subsections (1) to
(6) of section 75 (Scottish taxpayers) substitute—

Sections 80D to 80F (definition of Scottish taxpayer) apply for the
purposes of this Part.

(2) 10This section ceases to have effect at the end of the last year for which Part 4 has
effect (see section 25(2) and (4)).

Scottish tax on land transactions

28 Scottish tax on transactions involving interests in land

(1) In Part 4A of the 1998 Act (as inserted by section 23), after Chapter 2 (inserted
15by section 25) insert—

CHAPTER 3 Tax on transactions involving interests in land
80I Tax on transactions involving interests in land

(1) A tax charged on any of the following transactions is a devolved tax—

(a) the acquisition of an estate, interest, right or power in or over
20land in Scotland;

(b) the acquisition of the benefit of an obligation, restriction or
condition affecting the value of any such estate, interest, right or
power.

(2) The tax may be chargeable—

(a) 25whether or not there is any instrument effecting the transaction,

(b) if there is such an instrument, regardless of where it is executed,
and

(c) regardless of where any party to the transaction is or is resident.

80J Certain transactions not taxable

(1) 30Tax may not be imposed under section 80I on so much of a transaction
as relates to land below mean low water mark.

(2) The following persons are not to be liable to pay a tax imposed under
section 80I

(none) Government

35A Minister of the Crown

The Scottish Ministers

A Northern Ireland department

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The Welsh Ministers, the First Minister for Wales and
the Counsel General to the Welsh Assembly
Government

(none) Parliament etc

5The Corporate Officer of the House of Lords

The Corporate Officer of the House of Commons

The Scottish Parliamentary Corporate Body

The Northern Ireland Assembly Commission

The National Assembly for Wales Commission

10The National Assembly for Wales.

(2) Tax may not be charged in accordance with the provisions inserted by this
section on a land transaction within the meaning of Part 4 of the Finance Act
2003 unless section 29 (disapplication of UK stamp duty land tax) has effect in
relation to that transaction.

29 15Disapplication of UK stamp duty land tax

(1) Part 4 of the Finance Act 2003 (stamp duty land tax) is amended as follows.

(2) In section 48 (chargeable interests), in subsection (1)(a) for “the United
Kingdom” substitute “England and Wales or Northern Ireland”.

(3) In Schedule 3—

(a) 20Part 1 contains further amendments relating to the disapplication of
stamp duty land tax to Scotland, and

(b) Part 2 makes provision, in consequence of the disapplication of
paragraph 1(1)(b) of Schedule 10 to the Finance Act 2003 (prescribed
information in land transaction returns) to transactions relating to land
25in Scotland, about the supply of information to Her Majesty’s Revenue
and Customs.

(4) This section has effect in relation to land transactions with an effective date on
or after such date as is appointed by the Treasury by order under this
subsection.

(5) 30But this section does not have effect in relation to any transaction—

(a) effected in pursuance of a contract entered into and substantially
performed on or before the date on which this Act receives Royal
Assent, or

(b) effected in pursuance of a contract entered into on or before that date
35and not excluded by subsection (6).

(6) A transaction effected in pursuance of a contract entered into on or before the
date on which this Act receives Royal Assent is excluded if—

(a) there is any variation of the contract, or assignation of rights under the
contract, after that date,

(b) 40the transaction is effected in consequence of the exercise after that date
of any option, right of pre-emption or similar right, or

(c) after that date there is an assignation, subsale or other transaction
relating to the whole or part of the subject-matter of the contract as a
result of which a person other than the purchaser under the contract
45becomes entitled to call for a conveyance.

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Scottish tax on disposals to landfill

30 Scottish tax on disposals to landfill

(1) In Part 4A of the 1998 Act (as inserted by section 23), after Chapter 3 (inserted
by section 28) insert—

CHAPTER 4 5Tax on disposals to landfill
80K Tax on disposals to landfill

(1) A tax charged on disposals to landfill made in Scotland is a devolved
tax.

(2) A disposal is a disposal to landfill if—

(a) 10it is a disposal of material as waste, and

(b) it is made by way of landfill.

(2) Tax may not be charged in accordance with the provision inserted by this
section on a disposal if the disposal is made before the date appointed under
section 31(4).

31 15Disapplication of UK landfill tax

(1) Part 3 of the Finance Act 1996 (landfill tax) is amended as follows.

(2) In section 40(1) (charge on taxable disposal), after “taxable disposal” insert
“made in England and Wales or Northern Ireland”.

(3) Schedule 4 contains further amendments relating to the disapplication of
20landfill tax to Scotland.

(4) This section has effect in relation to disposals made on or after such date as is
appointed by the Treasury by order under this subsection.

Borrowing

32 Borrowing by the Scottish Ministers

(1) 25The 1998 Act is amended as follows.

(2) Section 66 (borrowing by the Scottish Ministers etc) is amended as follows.

(3) For subsection (1) substitute—

(1) The Scottish Ministers may borrow from the Secretary of State—

(a) any sums required by them for the purpose of meeting a
30temporary excess of sums paid out of the Scottish Consolidated
Fund over sums paid into that Fund,

(b) any sums required by them for the purpose of providing a
working balance in the Scottish Consolidated Fund, and

(c) any sums which in accordance with rules determined by the
35Treasury are required by them to meet current expenditure
because of a shortfall in receipts from devolved taxes, or from

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income tax charged by virtue of a Scottish rate resolution,
against forecast receipts.

(1A) The Scottish Ministers may, with the approval of the Treasury, borrow
by way of loan any sums required by them for the purpose of meeting
5capital expenditure.

(1B) A sum is required for the purpose of meeting capital expenditure if the
expenditure would be capital expenditure for the purposes of accounts
under section 70.

(4) In subsection (3) after “section” insert “from the Secretary of State”.

(5) 10After subsection (4) insert—

(5) The Secretary of State may by order made with the consent of the
Treasury amend subsection (1A) so as to vary the means by which the
Scottish Ministers may borrow money.

(6) Section 67 (lending by the Secretary of State) is amended as follows.

(7) 15In subsection (2) for “that section” substitute “section 66(1)”.

(8) In subsection (3) omit “increased”.

(9) After subsection (3) insert—

(3A) An amount substituted under subsection (3) may be more or less than
the amount for which it is substituted but may not be less than £500
20million.

(10) After section 67 insert—

67A Lending for capital expenditure

(1) The aggregate at any time outstanding in respect of the principal of
sums borrowed under section 66(1A) shall not exceed £2.2 billion.

(2) 25The Secretary of State may by order made with the consent of the
Treasury substitute for the amount (or substituted amount) specified in
subsection (1) such amount as may be specified in the order.

(3) An amount substituted under subsection (2) may be more or less than
the amount for which it is substituted but may not be less than £2.2
30billion.

(4) A person lending money to a member of the Scottish Government is not
bound to enquire whether the member of the Scottish Government has
power to borrow the money and is not to be prejudiced by the absence
of any such power.

(5) 35The Scottish Ministers may not mortgage or charge any of their
property as security for money which they have borrowed under
section 66(1A).

This is subject to section 66(2).

(6) Security given in breach of subsection (5) is unenforceable.

(11) 40In section 114(1) (powers which may be exercised by modifying the 1998 Act),
after “sections” insert “66(5),”.

(12) In Schedule 7 (procedure for subordinate legislation), in paragraph 1, at the

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appropriate places insert—

Section 66(5) Type E”; and
“Section 67A(2) Type E.

Reports on operation of this Part

33 5Reports on the implementation and operation of this Part

(1) The Secretary of State must—

(a) make reports on the implementation and operation of this Part (see
subsection (5)),

(b) lay a copy of each report before both Houses of Parliament, and

(c) 10send a copy of each report to the Scottish Ministers, who must lay a
copy of it before the Scottish Parliament.

(2) The Scottish Ministers must—

(a) make reports on the implementation and operation of this Part (see
subsection (5)),

(b) 15lay a copy of each report before the Scottish Parliament, and

(c) send a copy of each report to the Secretary of State, who must lay a copy
of it before both Houses of Parliament.

(3) A report must be made under each of subsections (1) and (2)

(a) before the end of the period of one year beginning with the day on
20which this Act is passed, and

(b) thereafter, before the end of each subsequent period of one year until
the final reports are made under subsection (4).

(4) Final reports must be made on or as soon as practicable after—

(a) 1 April 2020, or

(b) 25if later, the first anniversary of the day on which the last of the
provisions of this Part comes into force.

(5) A report on the implementation and operation of this Part must include—

(a) a statement of the steps which have been taken, whether by the maker
of the report or by others, since the making of the previous report (or,
30in the case of the first report, since the passing of this Act) towards the
commencement of the provisions of this Part,

(b) a statement of the steps which the maker of the report proposes should
be taken, whether by the maker of the report or by others, towards the
commencement of the provisions of this Part,

(c) 35an assessment of the operation of the provisions of this Part which have
been commenced,

(d) an assessment of the operation of any other powers to devolve taxes to
the Scottish Parliament or to change the powers of the Scottish
Ministers to borrow money, and of any other changes affecting the
40provisions inserted or amended by this Part,

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(e) the effect of this Part on the amount of any payments made by the
Secretary of State under section 64(2) of the 1998 Act (payments into the
Scottish Consolidated Fund), and

(f) any other matters concerning the sources of revenue for the Scottish
5Administration (within the meaning of section 126(6) of the 1998 Act)
which the maker of the report considers should be brought to the
attention of the Parliament of the United Kingdom or the Scottish
Parliament.

Part 4 10Miscellaneous and General

Miscellaneous

34 Convention rights and EU law: role of Advocate General in relation to
criminal proceedings

(1) The Criminal Procedure (Scotland) Act 1995 is amended as follows.

(2) 15For the italic heading before section 288A substitute “Convention rights and
EU law compatibility issues, and devolution issues”.

(3) After that heading insert—

288ZA Right of Advocate General to take part in proceedings

(1) The Advocate General for Scotland may take part as a party in criminal
20proceedings so far as they relate to a compatibility issue.

(2) In this section “compatibility issue” means a question, arising in
criminal proceedings, as to—

(a) whether a public authority has acted (or proposes to act)—

(i) in a way which is made unlawful by section 6(1) of the
25Human Rights Act 1998, or

(ii) in a way which is incompatible with EU law, or

(b) whether an Act of the Scottish Parliament or any provision of an
Act of the Scottish Parliament is incompatible with any of the
Convention rights or with EU law.

(3) 30In subsection (2)

(a) “public authority” has the same meaning as in section 6 of the
Human Rights Act 1998;

(b) references to acting include failing to act;

(c) EU law” has the meaning given by section 126(9) of the
35Scotland Act 1998.

(4) Section 288A (rights of appeal for Advocate General: devolution issues) is
amended as follows.

(5) In the heading, before “devolution issues” insert “compatibility issues and”.

(6) In subsection (1) omit “in pursuance of paragraph 6 of Schedule 6 to the
40Scotland Act 1998 (devolution issues)”.

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(7) For subsection (2) substitute—

(2) Where the Advocate General for Scotland was a party in pursuance of
paragraph 6 of Schedule 6 to the Scotland Act 1998 (devolution issues),
the Advocate General may refer to the High Court for their opinion any
5devolution issue which has arisen in the proceedings.

(2A) Where the Advocate General for Scotland was a party in pursuance of
section 288ZA, the Advocate General may refer to the High Court for
their opinion any compatibility issue (within the meaning of that
section) which has arisen in the proceedings.

(2B) 10If a reference is made under subsection (2) or (2A) the Clerk of Justiciary
shall send to the person acquitted or convicted and to any solicitor who
acted for that person at the trial a copy of the reference and intimation
of the date fixed by the Court for a hearing.

(8) In subsection (6) after “(2)” insert “or (2A)”.

35 15References of compatibility issues to the High Court or Supreme Court

In the Criminal Procedure (Scotland) Act 1995, after section 288ZA (inserted by
section 34) insert—

288ZB References of compatibility issues to the High Court or Supreme
Court

(1) 20Where a compatibility issue has arisen in criminal proceedings before a
court, other than a court consisting of two or more judges of the High
Court, the court may, instead of determining it, refer the issue to the
High Court.

(2) The Lord Advocate or the Advocate General for Scotland, if a party to
25criminal proceedings before a court, other than a court consisting of
two or more judges of the High Court, may require the court to refer to
the High Court any compatibility issue which has arisen in the
proceedings.

(3) The High Court may, instead of determining a compatibility issue
30referred to it under subsection (2), refer it to the Supreme Court.

(4) Where a compatibility issue has arisen in criminal proceedings before a
court consisting of two or more judges of the High Court, otherwise
than on a reference, the court may, instead of determining it, refer it to
the Supreme Court.

(5) 35On a reference to the Supreme Court under this section—

(a) the powers of the Supreme Court are exercisable only for the
purpose of determining the compatibility issue;

(b) for that purpose the Court may make any change in the
formulation of that issue that it thinks necessary in the interests
40of justice.

(6) When it has determined a compatibility issue on a reference under this
section, the Supreme Court must remit the proceedings to the High
Court.

(7) An issue referred to the High Court or the Supreme Court under this
45section is referred to it for determination.

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(8) In this section “compatibility issue” has the meaning given by section
288ZA.

36 Convention rights and EU law: criminal appeals to the Supreme Court

(1) The 1998 Act is amended as follows.

(2) 5In section 57(3) (EU law and Convention rights: excepted acts of the Lord
Advocate) omit the words after paragraph (b).

(3) In section 102 (powers of courts or tribunals to vary retrospective decisions)—

(a) in subsection (4)(b) at the end insert “or to a compatibility issue,”;

(b) after subsection (5) insert—

(5A) 10Where the decision mentioned in subsection (1) is a decision of
the Supreme Court on a compatibility issue, the power to make
an order under this section is exercisable by the High Court of
Justiciary instead of the Supreme Court.;

(c) in subsection (7) before the definition of “intimation” insert—

  • 15“compatibility issue” has the meaning given by section
    288ZA of the Criminal Procedure (Scotland) Act 1995,.

(4) In paragraph 1 of Schedule 6 (devolution issues), after sub-paragraph (f)
insert—

ERROR:This is very likely an error in markup in the FM document. Amendments generally should not occur nested in this manner [\t\t\xd2 But a question arising in criminal proceedings in Scotland that would, apart from this paragraph, be a devolution issue is not a devolution issue if (however formulated) it relates to the compatibility with any of the Convention rights or with EU law of \t(a)\t an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament, \t(b)\t a function, \t(c)\t the purported or proposed exercise of a function, \t(d)\t a failure to act.\xd3 ]

But a question arising in criminal proceedings in Scotland that
20would, apart from this paragraph, be a devolution issue is not a
devolution issue if (however formulated) it relates to the
compatibility with any of the Convention rights or with EU law
of—

(a) an Act of the Scottish Parliament or any provision of an Act
25of the Scottish Parliament,

(b) a function,

(c) the purported or proposed exercise of a function,

(d) a failure to act.

(5) The Criminal Procedure (Scotland) Act 1995 is amended as follows.

(6) 30After section 288A insert—

288AA Appeals to the Supreme Court: compatibility issues

(1) For the purpose of determining any compatibility issue an appeal lies
to the Supreme Court against a determination in criminal proceedings
by a court of two or more judges of the High Court.

(2) 35On an appeal under this section—

(a) the powers of the Supreme Court are exercisable only for the
purpose of determining the compatibility issue;

(b) for that purpose the Court may make any change in the
formulation of that issue that it thinks necessary in the interests
40of justice.

(3) When it has determined the compatibility issue the Supreme Court
must remit the proceedings to the High Court.

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(4) In this section “compatibility issue” has the same meaning as in section
288ZA.

(5) An appeal under this section against a determination lies only with the
permission of the High Court or, failing that permission, with the
5permission of the Supreme Court.

(6) An application to the High Court for permission under subsection (5)
must be made—

(a) within 28 days of the date of the determination against which
the appeal lies, or

(b) 10within such longer period as the High Court considers equitable
having regard to all the circumstances.

(7) An application to the Supreme Court for permission under subsection
(5) must be made—

(a) within 28 days of the date on which the High Court refused
15permission under that subsection, or

(b) within such longer period as the Supreme Court considers
equitable having regard to all the circumstances.

(7) Section 288B (appeals to the Supreme Court) is amended as follows.

(8) For the heading substitute “Appeals to the Supreme Court: general”.

(9) 20In subsection (1)—

(a) after “under” insert “section 288AA of this Act or”;

(b) omit “of a devolution issue”.

(10) In sections 112(6), 121(5)(a), 121A(5), 122(4) and (5) and 177(8), after “under”
insert “section 288AA of this Act or”.

(11) 25In section 124(2)—

(a) after “Part XA” insert “and sections 288ZB and 288AA”;

(b) after “purposes of” insert “a reference under section 288ZB or”;

(c) after “appeal under” insert “section 288AA of this Act or”.

37 Time limits for appeals on devolution issues in criminal proceedings

30In Schedule 6 to the 1998 Act (devolution issues) after paragraph 13 insert—

13A In criminal proceedings, an application to the High Court for
permission under paragraph 13 must be made—

(a) within 28 days of the date of the determination against which
the appeal lies, or

(b) 35within such longer period as the High Court considers
equitable having regard to all the circumstances.

13B In criminal proceedings, an application to the Supreme Court for
permission under paragraph 13 must be made—

(a) within 28 days of the date on which the High Court refused
40permission under that paragraph, or

(b) within such longer period as the Supreme Court considers
equitable having regard to all the circumstances.