|
| |
|
(2) | The first condition is that special withholding tax is levied in respect of— |
| |
(a) | the payment of savings income, or |
| |
(b) | the whole or any part of the consideration for the disposal. |
| |
(3) | The second condition is that no credit for foreign tax in respect of the savings |
| |
income or the chargeable gain in question falls to be allowed under Chapters 1 |
| 5 |
and 2 of Part 18 of the Taxes Act 1988 (double taxation relief) (so that section |
| |
795(1) and (2) of that Act, which make similar provision to subsections (4) to (6) |
| |
of this section, do not apply). |
| |
(4) | If income tax is payable by reference to the amount of the savings income |
| |
received in the United Kingdom, the amount received is to be treated for the |
| 10 |
purposes of income tax as increased by the amount of special withholding tax |
| |
| |
(5) | If capital gains tax is payable by reference to the amount of the chargeable gain |
| |
received in the United Kingdom, the amount received is to be treated for the |
| |
purposes of capital gains tax as increased by an amount equal to—![equation: times[char[S],char[W],cross[char[T],over[times[char[G],char[U],char[K]],plus[char[
G],minus[times[char[S],char[W],char[T]]]]]]]](missing.gif) |
| 15 |
| |
| SWT is the amount of special withholding tax levied in respect of the |
| |
whole or the part of the consideration for the disposal, |
| |
| GUK is the amount of the chargeable gain received in the United |
| |
| 20 |
| G is the amount of the chargeable gain accruing to the person on the |
| |
| |
(6) | If neither subsection (4) nor subsection (5) applies, then, in computing— |
| |
(a) | the amount of the income or gain in question for the purposes of |
| |
| 25 |
(b) | the amount of any chargeable gain for the purposes of capital gains tax, |
| |
| no deduction is to be made for special withholding tax (whether in respect of |
| |
the same or any other income or gain or, as the case may be, chargeable gains). |
| |
(7) | In this section references to special withholding tax are to special withholding |
| |
tax in respect of which a claim has been made under this Chapter. |
| 30 |
112 | Computation of income etc subject to foreign tax and special withholding tax |
| |
(1) | Section 795 of the Taxes Act 1988 (double taxation relief: computation of |
| |
income subject to foreign tax) is amended as follows. |
| |
(2) | In subsection (1) (remittance basis: grossing up) after “increased by” insert “— |
| |
(a)” and at the end insert— |
| 35 |
| |
(b) | the amount of any special withholding tax levied in respect of |
| |
| |
(3) | In subsection (2)(a) (other cases: no deduction for foreign tax) after “foreign |
| |
tax” insert “or special withholding tax”. |
| 40 |
(4) | After subsection (4) insert— |
| |
| |
|
| |
|
| |
|
(a) | “special withholding tax” has the same meaning as in Chapter 7 |
| |
of Part 3 of the Finance Act 2004 (see section 107(3) of that Act); |
| |
| |
(b) | references to special withholding tax are to special withholding |
| |
tax in respect of which a claim has been made under that |
| 5 |
| |
(5) | Section 277 of the Taxation of Chargeable Gains Act 1992 (c. 12) (which applies |
| |
Chapters 1 and 2 of Part 18 of the Taxes Act 1988 in relation to capital gains tax) |
| |
| |
(6) | After subsection (1) insert— |
| 10 |
“(1A) | Subsection (1B) below applies where— |
| |
(a) | a chargeable gain accrues to a person on a disposal by him of |
| |
assets in circumstances where the consideration for the disposal |
| |
consists of or includes an amount of savings income, and |
| |
(b) | special withholding tax is levied in respect of the whole or any |
| 15 |
part of the consideration for the disposal. |
| |
(1B) | In section 795 of the Taxes Act, as applied by this section, for the |
| |
reference in subsection (1)(b) to the amount of any special withholding |
| |
tax levied in respect of the income, there shall be substituted a reference |
| |
to an amount equal to—![equation: times[char[S],char[W],cross[char[T],over[times[char[G],char[U],char[K]],plus[char[
G],minus[times[char[S],char[W],char[T]]]]]]]](missing.gif) |
| 20 |
| |
| SWT is the amount of special withholding tax levied in respect |
| |
of the whole or the part of the consideration for the disposal, |
| |
| GUK is the amount of the chargeable gain received in the |
| |
| 25 |
| G is the amount of the chargeable gain accruing to the person on |
| |
| |
(1C) | In subsections (1A) and (1B) above “savings income” and “special |
| |
withholding tax” have the same meaning as in Chapter 7 of Part 3 of the |
| |
Finance Act 2004 (see section 107 of that Act); and references to special |
| 30 |
withholding tax are to special withholding tax in respect of which a |
| |
claim has been made under that Chapter.”. |
| |
Certificates to avoid levy of special withholding tax |
| |
| |
(1) | This section has effect for enabling the Inland Revenue to issue certificates to |
| 35 |
be used under the law of a territory outside the United Kingdom |
| |
| |
(a) | in the case of a member State, Article 13(1)(b) of the Savings Directive |
| |
(procedure to avoid levy of special withholding tax where beneficial |
| |
owner presents to his paying agent certificate drawn up by competent |
| 40 |
authority of his member State of residence for tax purposes), or |
| |
(b) | in the case of a territory other than a member State, any corresponding |
| |
provision of international arrangements (whatever the period for |
| |
which the provision is to have effect). |
| |
|
| |
|
| |
|
(2) | If, on the written application of a person, the Inland Revenue are satisfied that |
| |
the applicant has provided them with— |
| |
(a) | the required information, and |
| |
(b) | such documents as they may require to verify that information, |
| |
| the Inland Revenue must issue a certificate to the applicant. |
| 5 |
(3) | “The required information” means— |
| |
(a) | the applicant’s name and address, |
| |
(b) | his National Insurance number or, if he does not have one, his date, |
| |
town and country of birth, |
| |
(c) | the number of the account which is to, or may, give rise to payments of |
| 10 |
savings income to or for the applicant or, if there is no such number, a |
| |
statement identifying the debt, instrument or arrangement which is to, |
| |
or may, give rise to such payments, |
| |
(d) | the name and address of the paying agent who is to make such |
| |
payments of savings income to, or to secure such payments of savings |
| 15 |
income for, the applicant, and |
| |
(e) | the period, not exceeding three years, for which the applicant would |
| |
like the certificate to be valid. |
| |
(4) | A certificate under this section must be in writing and must state— |
| |
(a) | the information mentioned in subsection (3)(a) to (d), and |
| 20 |
(b) | the period of validity of the certificate (which must not exceed three |
| |
| |
(5) | A certificate under this section must be issued no later than the end of the |
| |
period of two months beginning with the date on which the applicant provides |
| |
the information and documents required by or under subsection (2). |
| 25 |
(6) | In this section and section 114 “the Inland Revenue” means any officer of the |
| |
Commissioners of Inland Revenue. |
| |
(7) | Where the requirements of— |
| |
(a) | Article 13(2) of the Savings Directive (requirements in relation to issue |
| |
of certificates for purposes of Article 13(1)(b) procedure), and |
| 30 |
(b) | any corresponding provision of any international arrangements, |
| |
| differ to any extent, subsections (3) to (5) shall have effect, in their application |
| |
in relation to the international arrangements concerned, with such |
| |
modifications as may be required by virtue of those arrangements. |
| |
114 | Refusal to issue certificate and appeal against refusal |
| 35 |
(1) | This section applies if, on an application for a certificate under section 113, the |
| |
Inland Revenue are not satisfied that the applicant has provided them with the |
| |
information and documents required by or under subsection (2) of that section. |
| |
(2) | The Inland Revenue must give written notice (“the refusal notice”) to the |
| |
applicant of their refusal to issue a certificate. |
| 40 |
(3) | The refusal notice must specify the reasons for the refusal. |
| |
(4) | The applicant may by written notice (“the appeal notice”) appeal to the Special |
| |
Commissioners against the refusal. |
| |
(5) | The appeal notice must be given to the Inland Revenue within 30 days of the |
| |
date of the refusal notice. |
| 45 |
|
| |
|
| |
|
(6) | Part 5 of the Taxes Management Act 1970 (c. 9) (appeals and other proceedings) |
| |
shall apply in relation to an appeal under this section. |
| |
(7) | On the appeal, the Special Commissioners may— |
| |
(a) | confirm the refusal notice, or |
| |
(b) | quash it and require the Inland Revenue to issue a certificate. |
| 5 |
| |
| |
(1) | In section 792 of the Taxes Act 1988 (double taxation relief: interpretation of the |
| |
credit code) in subsection (1), in the definition of “foreign tax”, at the end insert |
| |
“(other than special withholding tax within the meaning of Chapter 7 of Part 3 |
| 10 |
of the Finance Act 2004)”. |
| |
(2) | In section 811 of the Taxes Act 1988 (deduction for foreign tax where no credit |
| |
allowable) in subsection (2), at the end insert “and to section 111 of the Finance |
| |
Act 2004 (computation of income subject to special withholding tax)”. |
| |
(3) | In section 278 of the Taxation of Chargeable Gains Act 1992 (c. 12) (allowance |
| 15 |
for foreign tax) in subsection (1), after “section 277” insert “and to section 111 |
| |
of the Finance Act 2004 (computation of chargeable gains subject to special |
| |
| |
(4) | Section 10 of the Exchequer and Audit Departments Act 1866 (c. 39) (gross |
| |
revenues to be paid to Exchequer) is to be construed as allowing the |
| 20 |
Commissioners of Inland Revenue to deduct payments for or in respect of |
| |
amounts repaid in accordance with this Chapter before causing the gross |
| |
revenues of their department to be paid to the account mentioned in that |
| |
| |
| 25 |
| |
116 | Restriction of gifts relief etc |
| |
Schedule 21 (which makes provision for relief under section 165 or 260 of the |
| |
Taxation of Chargeable Gains Act 1992 not to be available on certain transfers |
| |
to settlor-interested settlements etc or on transfers of shares etc to companies, |
| 30 |
and makes minor amendments in sections 79 and 281 of that Act) has effect. |
| |
117 | Private residence relief |
| |
Schedule 22 (which makes provision about private residence relief) has effect. |
| |
118 | Authorised unit trusts: treatment of umbrella schemes |
| |
(1) | The Taxation of Chargeable Gains Act 1992 is amended as follows. |
| 35 |
(2) | In section 99(2) (application of Act to unit trust schemes: definitions)— |
| |
(a) | in the opening words, after “Subject to subsection (3)” insert “and |
| |
| |
|
| |
|
| |
|
(b) | for paragraph (b) substitute— |
| |
“(aa) | “unit holder” means a person entitled to a share of the |
| |
investments subject to the trusts of a unit trust scheme; |
| |
(b) | “authorised unit trust” means, as respects an accounting |
| |
period, a unit trust scheme in the case of which an order |
| 5 |
under section 243 of the Financial Services and Markets |
| |
Act 2000 is in force during the whole or part of that |
| |
| |
(3) | After that section insert— |
| |
“99A | Authorised unit trusts: treatment of umbrella schemes |
| 10 |
(1) | In this section an “umbrella scheme” means an authorised unit trust— |
| |
(a) | which provides arrangements for separate pooling of the |
| |
contributions of the participants and the profits or income out |
| |
of which payments are to be made to them, and |
| |
(b) | under which the participants are entitled to exchange rights in |
| 15 |
one pool for rights in another, |
| |
| and any reference to a part of an umbrella scheme is a reference to such |
| |
of the arrangements as relate to a separate pool. |
| |
(2) | For the purposes of this Act (except subsection (1))— |
| |
(a) | each of the parts of an umbrella scheme shall be regarded as an |
| 20 |
authorised unit trust, and |
| |
(b) | the scheme as a whole shall not be regarded as an authorised |
| |
unit trust or as any other form of collective investment scheme. |
| |
(3) | In this Act, in relation to a part of an umbrella scheme, any reference to |
| |
a unit holder is to a person for the time being having rights in the |
| 25 |
separate pool to which the part of the umbrella scheme relates. |
| |
(4) | Nothing in subsections (2) or (3) shall prevent— |
| |
(a) | gains accruing to an umbrella scheme being regarded as gains |
| |
accruing to an authorised unit trust for the purposes of section |
| |
100(1) (exemption for authorised unit trusts etc); |
| 30 |
(b) | a transfer of business to an umbrella scheme being regarded as |
| |
a transfer to an authorised unit trust for the purposes of section |
| |
139(4) (exclusion of transfers to authorised unit trusts etc); |
| |
(c) | a disposal by a unit holder of units in an umbrella scheme being |
| |
regarded as a disposal by him of units in an authorised unit |
| 35 |
trust for the purposes of section 271(1)(j) (exemption for |
| |
disposal of units in an authorised unit trust which is also an |
| |
approved personal pension scheme etc).”. |
| |
(4) | In section 288 (interpretation)— |
| |
(a) | in subsection (1), in the definition of “collective investment scheme”, at |
| 40 |
the end insert “(subject to section 99A)”; |
| |
(b) | in the table in subsection (8) (index of general definitions)— |
| |
(i) | in the first column after “Unit trust scheme” insert “and “unit |
| |
| |
(ii) | in the second column for “s 99” substitute “ss 99 and 99A”. |
| 45 |
(5) | The amendments made by this section have effect in relation to years of |
| |
assessment and accounting periods beginning on or after 1st April 2004. |
| |
|
| |
|
| |
|
| |
Avoidance involving loss relief or partnership |
| |
Individuals benefited by film relief |
| |
119 | Individuals benefited by film relief |
| |
(1) | This section applies if— |
| 5 |
(a) | an individual has made a claim under section 380 or 381 of the Taxes |
| |
Act 1988 in respect of a film-related loss sustained by him in a trade |
| |
carried on solely or in partnership (“a relevant claim”); |
| |
(b) | there is a disposal on or after 10 December 2003 of a right of the |
| |
individual to profits arising from the trade (a “relevant disposal”); and |
| 10 |
(c) | an exit event occurs. |
| |
(2) | An “exit event” occurs when any of the following happens— |
| |
(a) | on or after 10 December 2003 the individual receives any non-taxable |
| |
consideration for a relevant disposal (whether or not he also receives |
| |
any taxable consideration for it); |
| 15 |
(b) | on or after 10 December 2003 the losses claimed become greater than |
| |
the individual’s capital contribution to the trade (whether because of a |
| |
claim or a decrease in that capital contribution); |
| |
(c) | on or after 10 December 2003 there is an increase in the amount (if any) |
| |
by which the losses claimed exceed the individual’s capital |
| 20 |
contribution to the trade. |
| |
(3) | A “chargeable event” occurs whenever— |
| |
(a) | the individual makes a relevant claim, if by the time the claim has been |
| |
made a relevant disposal and an exit event have occurred; or |
| |
(b) | a relevant disposal occurs, if by the time it has occurred an exit event |
| 25 |
has occurred and the individual has made a relevant claim; or |
| |
(c) | an exit event occurs, if by the time it has occurred a relevant disposal |
| |
has occurred and the individual has made a relevant claim. |
| |
(4) | Where a chargeable event occurs, the individual shall be treated as receiving at |
| |
the time of that event annual profits or gains which are— |
| 30 |
(a) | of an amount equal to the chargeable amount; and |
| |
(b) | chargeable to income tax under Case VI of Schedule D. |
| |
(5) | The “chargeable amount” is an amount equal to the sum of the following |
| |
(computed as at the time immediately after the chargeable event)— |
| |
(a) | so much of the total amount or value of any consideration received by |
| 35 |
the individual for the relevant disposal (or, if there has been more than |
| |
one, for relevant disposals) as is non-taxable; and |
| |
(b) | the amount (if any) by which the losses claimed exceed the individual’s |
| |
capital contribution to the trade; |
| |
| but this is subject to section 122(2). |
| 40 |
(6) | For the purposes of subsection (1)(a) it is immaterial when the claim is made. |
| |
(7) | It is immaterial whether the trade is still being carried on by the individual (or |
| |
by anyone else) when a chargeable event occurs. |
| |
|
| |
|