|
| |
|
giving any consideration for the conversion or incurring any |
| |
expenses in connection with it.” |
| |
(4) | This paragraph has effect in relation to acquisitions on or after 2nd |
| |
| |
10 (1) | In section 440 (amount of charge under section 438), after subsection (3) |
| 5 |
| |
“(3A) | If (because of subsection (2) of section 437) subsection (1) of that |
| |
section did not apply in relation to the employment-related |
| |
securities, the taxable amount is to be reduced by the amount by |
| |
| 10 |
(a) | the market value of the employment-related securities for the |
| |
purposes specified in that subsection, exceeded |
| |
(b) | what it would have been had that subsection applied, |
| |
| (less the aggregate of any amount by which the taxable amount on |
| |
any previous chargeable event relating to the employment-related |
| 15 |
securities has been reduced under this subsection).” |
| |
(2) | This paragraph has effect on and after 2nd December 2004. |
| |
11 (1) | In section 443 (exception from charge under section 438 for certain company |
| |
shares), for subsection (1A) substitute— |
| |
“(1A) | This subsection is satisfied unless something which affects the |
| 20 |
employment-related securities has been done (at or before the time |
| |
when section 438 would apply) as part of a scheme or arrangement |
| |
the main purpose (or one of the main purposes) of which is the |
| |
avoidance of tax or national insurance contributions.” |
| |
(2) | This paragraph has effect where something such as is mentioned in section |
| 25 |
443(1A) of ITEPA 2003 has been done on or after 2nd December 2004. |
| |
Securities acquired for less than market value |
| |
12 | Chapter 3C of Part 7 (securities acquired for less than market value) is |
| |
| |
13 (1) | In section 446R (exception from Chapter for certain company shares), for |
| 30 |
subsection (1A) substitute— |
| |
“(1A) | This subsection is satisfied unless something which affects the |
| |
employment-related securities has been done (at or before the time |
| |
of the acquisition) as part of a scheme or arrangement the main |
| |
purpose (or one of the main purposes) of which is the avoidance of |
| 35 |
tax or national insurance contributions.” |
| |
(2) | This paragraph has effect where something such as is mentioned in section |
| |
446R(1A) of ITEPA 2003 has been done on or after 2nd December 2004. |
| |
14 (1) | In section 446U(1) (discharge of notional loan), insert at the end “or |
| |
(c) | something which affects the employment-related securities is |
| 40 |
done as part of a scheme or arrangement the main purpose |
| |
(or one of the main purposes) of which is the avoidance of tax |
| |
or national insurance contributions.” |
| |
|
| |
|
| |
|
(2) | This paragraph has effect where something such as is mentioned in section |
| |
443U(1)(c) of ITEPA 2003 has been done on or after 2nd December 2004. |
| |
15 (1) | After section 446U insert— |
| |
“446UA | Pre-acquisition avoidance cases |
| |
(1) | Sections 446S to 446U do not apply if the main purpose (or one of the |
| 5 |
main purposes) of the arrangements under which the right or |
| |
opportunity to acquire the employment-related securities is made |
| |
available is the avoidance of tax or national insurance contributions. |
| |
(2) | But instead an amount equal to what would (apart from this section) |
| |
be the amount of the notional loan initially outstanding by virtue of |
| 10 |
sections 446S and 446T counts as employment income of the |
| |
employee for the tax year in which the acquisition takes place.” |
| |
(2) | This paragraph has effect in relation to acquisitions on or after 2nd |
| |
| |
16 (1) | Section 698 (PAYE: special charges on employment-related securities) is |
| 15 |
| |
(2) | In subsection (1), after paragraph (e) insert— |
| |
“(ea) | section 446UA (securities or interest acquired for less than |
| |
market value: charge in avoidance cases),”. |
| |
(3) | In subsection (6), after paragraph (d) insert— |
| 20 |
“(da) | in relation to an amount counting as employment income |
| |
under section 446UA, the date of the acquisition of the |
| |
securities or interest in securities in question,”. |
| |
(4) | This paragraph has effect on and after the day on which this Act is passed. |
| |
Post-acquisition benefits from securities |
| 25 |
17 | Chapter 4 of Part 7 (post-acquisition benefits from securities) is amended as |
| |
| |
18 (1) | Section 447 (charge on other chargeable benefits from securities) is amended |
| |
| |
(2) | In subsection (1), for “by virtue of the ownership of employment-related |
| 30 |
securities by that person or another associated person” substitute “in |
| |
connection with employment-related securities”. |
| |
(3) | For subsection (4) substitute— |
| |
“(4) | If the benefit is otherwise chargeable to income tax this section does |
| |
not apply unless something has been done which affects the |
| 35 |
employment-related securities as part of a scheme or arrangement |
| |
the main purpose (or one of the main purposes) of which is the |
| |
avoidance of tax or national insurance contributions.” |
| |
(4) | Sub-paragraph (2) has effect on and after 2nd December 2004 and sub- |
| |
paragraph (3) has effect where something such as is mentioned in section |
| 40 |
447(4) of ITEPA 2003 has been done on or after that date. |
| |
19 (1) | In section 449 (exception from charge under section 447 for certain company |
| |
|
| |
|
| |
|
shares), for subsection (1A) substitute— |
| |
“(1A) | This subsection is satisfied unless something which affects the |
| |
employment-related securities has been done as part of a scheme or |
| |
arrangement the main purpose (or one of the main purposes) of |
| |
which is the avoidance of tax or national insurance contributions.” |
| 5 |
(2) | This paragraph has effect where something such as is mentioned in section |
| |
449(1A) of ITEPA 2003 has been done on or after 2nd December 2004. |
| |
| |
| |
Non-UK resident vulnerable persons: interpretation |
| |
Vulnerable person’s actual income |
| 10 |
1 | The “vulnerable person’s actual income” for the tax year means the income |
| |
that would arise (or be treated as arising) under the Income Tax Acts to the |
| |
vulnerable person in the tax year on the assumption that the vulnerable |
| |
person is resident and domiciled in the United Kingdom throughout the tax |
| |
| 15 |
Trustees’ specially taxed income |
| |
2 | The “trustees’ specially taxed income” for the tax year means income arising |
| |
(or treated as arising) to the trustees in the tax year from property held on |
| |
qualifying trusts for the benefit of the vulnerable person in connection with |
| |
which special income tax treatment applies for the tax year in accordance |
| 20 |
with section 41 by virtue of a claim for special tax treatment under this |
| |
| |
Vulnerable person’s deemed CGT taxable amount |
| |
3 (1) | The “vulnerable person’s deemed CGT taxable amount” for the tax year |
| |
| 25 |
(a) | the vulnerable person’s taxable amount for the tax year for the |
| |
purposes of section 3 of TCGA 1992 calculated by reference only to |
| |
actual gains and actual losses, and |
| |
(b) | the vulnerable person’s taxable amount for the tax year for the |
| |
purposes of that section calculated by reference only to assumed |
| 30 |
gains and assumed losses. |
| |
(2) | But in calculating the taxable amount under sub-paragraph (1)(b)— |
| |
(a) | no deduction is to be made under section 2(2)(b) of TCGA 1992, and |
| |
(b) | the words “except as provided by section 62” in section 2(3) of that |
| |
Act are to be disregarded. |
| 35 |
(3) | In determining the vulnerable person’s deemed CGT taxable amount for the |
| |
tax year any claims or elections made in relation to any assumed gains of the |
| |
vulnerable person are to be disregarded. |
| |
| |
(a) | “actual gains” and “actual losses” have the meanings given in |
| 40 |
| |
|
| |
|
| |
|
(b) | “assumed gains” and “assumed losses” have the meanings given in |
| |
| |
Vulnerable person’s notional section 77 gains |
| |
4 (1) | The “vulnerable person’s notional section 77 gains” for the tax year means |
| |
the chargeable gains that would be treated as accruing to the vulnerable |
| 5 |
person in the tax year under section 77 of TCGA 1992 by virtue of section 47 |
| |
of this Act if the relevant assumptions were made. |
| |
(2) | In this paragraph “relevant assumptions” has the meaning given in |
| |
| |
Actual gains and actual losses |
| 10 |
5 (1) | “Actual gains” means any chargeable gains which accrue to the vulnerable |
| |
person and in respect of which he is chargeable to capital gains tax for the |
| |
| |
(2) | “Actual losses” means— |
| |
(a) | any allowable losses accruing to the vulnerable person in the tax |
| 15 |
| |
(b) | so far as they have not been allowed as a deduction from chargeable |
| |
gains accruing to him in any previous tax year, any allowable losses |
| |
accruing to him in any previous tax year (not earlier than that |
| |
beginning on 6th April 1965). |
| 20 |
Assumed gains and assumed losses |
| |
6 (1) | “Assumed gains” means any chargeable gains, other than actual gains, |
| |
which, on the relevant assumptions, would accrue to the vulnerable person |
| |
and in respect of which, on those assumptions, he would be chargeable to |
| |
capital gains tax for the tax year. |
| 25 |
(2) | “Assumed losses” means any allowable losses, other than actual losses, |
| |
which, on the relevant assumptions, would accrue to the vulnerable person |
| |
| |
(3) | In this paragraph “relevant assumptions” has the meaning given in |
| |
| 30 |
| |
7 (1) | For the purposes of paragraphs 4 and 6 the “relevant assumptions” are— |
| |
(a) | that the vulnerable person is resident and domiciled in the United |
| |
Kingdom throughout the tax year, and |
| |
(b) | that he has given a notice under subsection (2A) of section 16 of |
| 35 |
TCGA 1992 (computation of losses) in respect of each loss accruing |
| |
to him in the tax year which by virtue of subsection (3) of that section |
| |
would not be an allowable loss (but for the assumption in paragraph |
| |
| |
(2) | But the relevant assumption in sub-paragraph (1)(a) does not apply for the |
| 40 |
purposes of section 10A of TCGA 1992 (temporary non-residents). |
| |
|
| |
|