Finance Bill (HL Bill 123)

Part 3 continued    

Stamp duty and stamp duty reserve tax

77 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)5This 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
10company, 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)15For the purposes of the enactments relating to stamp duty the amount
or value of the consideration is to be treated as being equal to—

(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
20duty” means the Stamp Act 1891 and any enactment amending that Act
or 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)25“market value” has the same meaning as in TCGA 1992 and is
to 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)30This section is to be construed as one with the Stamp Act 1891.

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

78 SDRT: unlisted securities and connected persons

After section 48 of FA 2019—

“48A 35SDRT: unlisted securities and connected persons

(1)This 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
40money’s worth, or

(ii)transfers 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)5In this section “unlisted securities” means chargeable securities that are
not 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
10consideration is to be treated as being equal to—

(a)the 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
15chargeable under section 93 of FA 1986 (depositary receipts) or section
96 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
20consideration in money equal to that value.

(6)For the purposes of this section—

(a)the value of unlisted securities is to be taken to be their market
value;

(b)“market value” has the same meaning as in TCGA 1992 and is
25to be determined in accordance with sections 272 and 273 of that
Act (valuation).

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

(8)This section is to be construed as one with Part 4 of FA 1986.

(9)30This section has effect—

(a)in relation to the charge to tax under section 87 of FA 1986
where—

(i)the agreement to transfer securities is conditional and
the condition is satisfied on or after the relevant date, or

(ii)35in any other case, the agreement is made on or after that
date;

(b)in relation to the charge to tax under section 93 or 96 of that Act,
where the transfer is on or after the relevant date (whenever the
arrangement was made).

40In this subsection “the relevant date” is the day on which FA 2020 is
passed.”

79 Stamp duty: acquisition of target company’s share capital

(1)Section 77A of FA 1986 (disqualifying arrangements) is amended as follows.

(2)In subsection (2), after paragraph (b) insert—

“but a person who has held at least 25% of the issued share capital of
the target company at all times during the relevant period is not within
paragraph (a) or (b).”

(3)After that subsection insert—

“(2A)5For the purposes of subsection (2) the “relevant period” is the period of
3 years ending immediately before the time at which the shares in the
acquiring company are issued (or first issued) as consideration for the
acquisition.”

(4)10In subsection (3) omit “But”.

(5)After subsection (5) insert—

“(5A)The Treasury may by regulations amend subsection (2) or (2A) so as to
alter the percentage or length of the period for the time being specified
there.

(5B)15The power to make regulations under subsection (5A) is exercisable by
statutory instrument subject to annulment in pursuance of a resolution
of the House of Commons.”

(6)The amendments made by this section have effect in relation to instruments
executed on or after the day on which this Act is passed.

20Value added tax

80 Call-off stock arrangements

(1)VATA 1994 is amended as follows.

(2)After section 14 insert—

“Goods supplied between the UK and member States under call-off stock arrangements

14A 25Call-off stock arrangements

Schedule 4B (call-off stock arrangements) has effect.”

(3)In section 69 (breaches of regulatory provisions)—

(a)in subsection (1)(a) for “or paragraph 5 of Schedule 3A” substitute “,
paragraph 5 of Schedule 3A or paragraph 9(1) or (2)(a) of Schedule 4B”,
30and

(b)in subsection (2) after “under” insert “paragraph 8 or 9(2)(b) of
Schedule 4B or”.

(4)In Schedule 4 (matters to be treated as a supply of goods or services) in
paragraph 6, after sub-paragraph (2) insert—

“(3)35Sub-paragraph (1) above is subject to paragraph 2 of Schedule 4B (call-
off stock arrangements).”

(5)After Schedule 4A insert—

Section 14A

“Schedule 4B call-off stock arrangements

Where this Schedule applies

1 (1) 5This Schedule applies where—

(a)on or after 1 January 2020 goods forming part of the assets of
any business are removed —

(i)from the United Kingdom for the purpose of being
taken to a place in a member State, or

(ii)10from a member State for the purpose of being taken to
a place in the United Kingdom,

(b)the goods are removed in the course or furtherance of that
business by or under the directions of the person carrying on
that business (“the supplier”),

(c)15the goods are removed with a view to their being supplied in
the destination State, at a later stage and after their arrival
there, to another person (“the customer”),

(d)at the time of the removal the customer is entitled to take
ownership of the goods in accordance with an agreement
20existing between the customer and the supplier,

(e)at the time of the removal the supplier does not have a
business establishment or other fixed establishment in the
destination State,

(f)at the time of the removal the customer is identified for the
25purposes of VAT in accordance with the law of the
destination State and both the identity of the customer and
the number assigned to the customer for the purposes of VAT
by the destination State are known to the supplier,

(g)as soon as reasonably practicable after the removal the
30supplier records the removal in the register provided for in
Article 243(3) of Council Directive 2006/112/EC of 28
November 2006 on the common system of value added tax,
and

(h)the supplier includes the number mentioned in paragraph (f)
35in the recapitulative statement provided for in Article 262(2)
of Council Directive 2006/112/EC.

(2)In this Schedule—

• “the destination State” means—

  (a)

  in a case within paragraph (i) of sub-paragraph (1)(a),
  40the member State concerned, and

  (b)

  in a case within paragraph (ii) of sub-paragraph
  (1)(a), the United Kingdom, and

• “the origin State” means—

  (a)

  in a case within paragraph (i) of sub-paragraph (1)(a),
  45the United Kingdom, and

  (b)

  in a case within paragraph (ii) of sub-paragraph
  (1)(a), the member State concerned.

Removal of the goods not to be treated as a supply

2The removal of the goods from the origin State is not to be treated by
reason of paragraph 6(1) of Schedule 4 as a supply of goods by the
supplier.

5Goods transferred to the customer within 12 months of arrival

3 (1) The rules in sub-paragraph (2) apply if—

(a)during the period of 12 months beginning with the day the
goods arrive in the destination State the supplier transfers the
whole property in the goods to the customer, and

(b)10during the period beginning with the day the goods arrive in
the destination State and ending immediately before the time
of that transfer no relevant event occurs.

(2)The rules are that—

(a)a supply of the goods in the origin State is deemed to be made
15by the supplier,

(b)the deemed supply is deemed to involve the removal of the
goods from the origin State at the time of the transfer
mentioned in sub-paragraph (1),

(c)the consideration given by the customer for the transfer
20mentioned in sub-paragraph (1) is deemed to have been
given for the deemed supply, and

(d)an acquisition of the goods by the customer in pursuance of
the deemed supply is deemed to take place in the destination
State.

(3)25For the meaning of a “relevant event”, see paragraph 7.

Relevant event occurs within 12 months of arrival

4 (1) The rules in sub-paragraph (2) apply (subject to paragraph 6) if—

(a)during the period of 12 months beginning with the day the
goods arrive in the destination State a relevant event occurs,
30and

(b)during the period beginning with the day the goods arrive in
the destination State and ending immediately before the time
that relevant event occurs the supplier does not transfer the
whole property in the goods to the customer.

(2)35The rules are that—

(a)a supply of the goods in the origin State is deemed to be made
by the supplier,

(b)the deemed supply is deemed to involve the removal of the
goods from the origin State at the time the relevant event
40occurs, and

(c)an acquisition of the goods by the supplier in pursuance of
the deemed supply is deemed to take place in the destination
State.

(3)For the meaning of a “relevant event”, see paragraph 7.

Goods not transferred and no relevant event occurs within 12 months of arrival

5 (1) The rules in sub-paragraph (2) apply (subject to paragraph 6) if
during the period of 12 months beginning with the day the goods
arrive in the destination State the supplier does not transfer the
5whole property in the goods to the customer and no relevant event
occurs.

(2)The rules are that—

(a)a supply of the goods in the origin State is deemed to be made
by the supplier,

(b)10the deemed supply is deemed to involve the removal of the
goods from the origin State at the beginning of the day
following the expiry of the period of 12 months mentioned in
sub-paragraph (1), and

(c)an acquisition of the goods by the supplier in pursuance of
15the deemed supply is deemed to take place in the destination
State.

(3)For the meaning of a “relevant event”, see paragraph 7.

Exception to paragraphs 4 and 5: goods returned to origin State

6The rules in paragraphs 4(2) and 5(2) do not apply if during the
20period of 12 months beginning with the day the goods arrive in the
destination State—

(a)the goods are returned to the origin State by or under the
direction of the supplier, and

(b)the supplier records the return of the goods in the register
25provided for in Article 243(3) of Council Directive 2006/112/
EC.

Meaning of “relevant event”

7 (1) For the purposes of this Schedule each of the following events is a
relevant event—

(a)30the supplier forms an intention not to supply the goods to the
customer (but see sub-paragraph (2)),

(b)the supplier forms an intention to supply the goods to the
customer otherwise than in the destination State,

(c)the supplier establishes a business establishment or other
35fixed establishment in the destination State,

(d)the customer ceases to be identified for the purposes of VAT
in accordance with the law of the destination State,

(e)the goods are removed from the destination State by or under
the directions of the supplier otherwise than for the purpose
40of being returned to the origin State, or

(f)the goods are destroyed, lost or stolen.

(2)But the event mentioned in paragraph (a) of sub-paragraph (1) is not
a relevant event for the purposes of this Schedule if—

(a)at the time that the event occurs the supplier forms an
45intention to supply the goods to another person (“the
substitute customer”),

(b)at that time the substitute customer is identified for the
purposes of VAT in accordance with the law of the
destination State,

(c)the supplier includes the number assigned to the substitute
5customer for the purposes of VAT by the destination State in
the recapitulative statement provided for in Article 262(2) of
Council Directive 2006/112/EC, and

(d)as soon as reasonably practicable after forming the intention
to supply the goods to the substitute customer the supplier
10records that intention in the register provided for in Article
243(3) of Council Directive 2006/112/EC.

(3)In a case where sub-paragraph (2) applies, references in this
Schedule to the customer are to be then read as references to the
substitute customer.

(4)15In a case where the goods are destroyed, lost or stolen but it is not
possible to determine the date on which that occurred, the goods are
to be treated for the purposes of this Schedule as having been
destroyed, lost or stolen on the date on which they were found to be
destroyed or missing.

20Record keeping by the supplier

8In a case where the origin State is the United Kingdom, any record
made by the supplier in pursuance of paragraph 1(1)(g), 6(b) or
7(2)(d) must be preserved for such period not exceeding 6 years as
the Commissioners may specify in writing.

25Record keeping by the customer

9 (1) In a case where the destination State is the United Kingdom, the
customer must as soon as is reasonably practicable make a record of
the information relating to the goods that is specified in Article
54A(2) of Council Implementing Regulation (EU) No. 282/2011 of 15
30March 2011 laying down implementing measures for Directive
2006/112/EC on the common system of value added tax.

(2)A record made under this paragraph must—

(a)be made in a register kept by the customer for the purposes
of this paragraph, and

(b)35be preserved for such period not exceeding 6 years as the
Commissioners may specify in writing.”

(6)In Schedule 6 (valuation of supplies: special cases) in paragraph 6(1) in
paragraph (c) after “that Schedule” insert “; or

“(d)paragraph 4(2)(a) or 5(2)(a) of Schedule 4B”.

(7)40The Value Added Tax Regulations 1995 (S.I. 1995/2518) are amended as
follows.

(8)In regulation 21 (interpretation of Part 4)—

(a)the existing text becomes paragraph (1), and

(b)after that paragraph insert—

“(2)45For the purposes of this Part—

(a)goods are removed from the United Kingdom under
call-off stock arrangements if they are removed from
the United Kingdom in circumstances where the
conditions in paragraphs (a) to (g) of paragraph 1(1)
5of Schedule 4B to the Act are met,

(b)references to “the customer” or “the destination
State”, in relation to goods removed from the United
Kingdom under call-off stock arrangements, are to be
construed in accordance with paragraph 1 of
10Schedule 4B to the Act, and

(c)“call-off stock goods”, in relation to a taxable person,
means goods that have been removed from the
United Kingdom under call-off stock arrangements
by or under the directions of the taxable person.”

(9)15After regulation 22 insert—

“22ZA (1) A taxable person must submit a statement to the Commissioners if
any of the following events occurs—

(a)goods are removed from the United Kingdom under call-off
stock arrangements by or under the directions of the taxable
20person;

(b)call-off stock goods are returned to the United Kingdom by or
under the directions of the taxable person at any time during
the period of 12 months beginning with their arrival in the
destination State;

(c)25the taxable person forms an intention to supply call-off stock
goods to a person (“the substitute”) other than the customer
in circumstances where—

(i)the taxable person forms that intention during the
period of 12 months beginning with the arrival of the
30goods in the destination State, and

(ii)the substitute is identified for VAT purposes in
accordance with the law of the destination State.

(2)The statement must—

(a)be made in the form specified in a notice published by the
35Commissioners,

(b)contain, in respect of each event mentioned in paragraph (1)
which has occurred within the period in respect of which the
statement is made, such information as may from time to
time be specified in a notice published by the Commissioners,
40and

(c)contain a declaration that the information provided in the
statement is true and complete.

(3)Paragraphs (3), (4) and (6) of regulation 22 have effect for the purpose
of determining the period in respect of which the statement must be
45made, but as if—

(a)in paragraph (3)(a) of regulation 22, for “paragraphs (4) to
(6)” there were substituted “paragraphs (4) and (6)”,

(b)in paragraph (3)(a) of regulation 22, for “the EU supply of
goods is made” there were substituted “the event occurs”,

(c)in paragraph (4)(a) of regulation 22, for “the supply is made”
there were substituted “the event occurs”, and

(d)in paragraph (6) of regulation 22, the reference to paragraph
(1) of that regulation were a reference to paragraph (1) of this
5regulation.

(4)In determining the period in respect of which the statement must be
made, the time at which an event mentioned in paragraph (1)(a) of
this regulation is to be taken to occur is the time the goods concerned
are removed from the United Kingdom (rather than the time the
10condition mentioned in paragraph (g) of paragraph 1(1) to Schedule
4B to the Act is met in respect of the removal).”

(10)In regulation 22B (EC sales statements: supplementary)—

(a)in paragraph (1) for the words from “statements”, in the first place it
occurs, to “and” substitute “more than one statement is to be submitted
15under regulations 22 to”,

(b)in paragraph (2) after “22” insert “, 22ZA”, and

(c)in paragraph (3), in the words before paragraph (a), after “22” insert “,
22ZA”.

(11)Regulation 22ZA of the Value Added Tax Regulations 1995 (as inserted by
20subsection (9)) is to be treated for the purposes of sections 65 and 66 of VATA
1994 as having been made under paragraph 2(3) of Schedule 11 to that Act.

Alcohol liquor duties

81 Post-duty point dilution of wine or made-wine

(1)After section 55 of ALDA 1979 insert—

“55ZA 25   Post-duty point dilution of wine or made-wine

(1)This section applies if—

(a)wine or made-wine is imported into the United Kingdom or
produced in the United Kingdom for sale,

(b)excise duty is chargeable on the wine or made-wine as a result
30of section 54 or 55,

(c)after the excise duty point in relation to that charge, a person
mixes or otherwise adds, at any place in the United Kingdom,
water or any other substance to the wine or made-wine in a case
where what results (“the new product”) is intended for sale, and

(d)35if the addition had taken place immediately before that duty
point, the amount of the excise duty would have been greater
than the amount actually payable.

(2)The addition attracts a penalty under section 9 of the Finance Act 1994
(civil penalties), and the new product is liable to forfeiture.

(3)40This section has effect, despite section 8 of the Isle of Man Act 1979, as
if a removal of wine or made-wine to the United Kingdom from the Isle
of Man constituted its importation into the United Kingdom (and
references to the charge to excise duty as a result of section 54 or 55 and
to the excise duty point are to be read accordingly).”

(2)The amendment made by this section has effect in relation to any addition of
water or any other substance on or after 1 April 2020.

Tobacco products duty

82 Rates of tobacco products duty

(1)5In Schedule 1 to TPDA 1979 (table of rates of tobacco products duty), for the
Table substitute—

(2)20The amendment made by this section is treated as having come into force at
6pm on 11 March 2020.

Vehicle taxes

83 Rates for light passenger or light goods vehicles, motorcycles etc

(1)Schedule 1 to VERA 1994 (annual rates of vehicle excise duty) is amended as
25follows.

(2)In paragraph 1 (general rate)—

(a)in sub-paragraph (2) (vehicle not covered elsewhere in Schedule with
engine cylinder capacity exceeding 1,549cc), for “£265” substitute
“£270”, and

(b)30in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with
engine cylinder capacity not exceeding 1,549cc), for “£160” substitute
“£165”.

(3)In paragraph 1B (graduated rates for light passenger vehicles registered before
1 April 2017), for the Table substitute—