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Income Tax Bill


Income Tax Bill
Part 12 — Tax avoidance
Chapter 1 — Transactions in securities

330

 

635     

Effect of clearance notification under section 634

(1)   

This section applies if the Commissioners for Her Majesty’s Revenue and

Customs notify a person under section 634 that they are satisfied that a

transaction or transactions, as described in the particulars provided under that

section, were or will be such that no counteraction notice ought to be served

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about the transaction or transactions.

(2)   

No such notice may be served on the person in respect of the transaction or

transactions.

(3)   

But the notification does not prevent such a notice being served on the person

in respect of transactions including not only the ones to which the notification

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relates but also others.

(4)   

The notification is void if the particulars and any further information given

under section 634 about the transaction or transactions do not fully and

accurately disclose all facts and considerations which are material for the

purposes of that section.

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636     

Power to obtain information

(1)   

This section applies if it appears to an officer of Revenue and Customs that a

person may be a person to whom section 617 (person liable to counteraction of

income tax advantage) applies in respect of one or more transactions.

(2)   

The officer may serve a notice on the person requiring the person to give the

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officer information in the person’s possession about the transaction or, if there

are two or more, about any of them.

(3)   

That information must be information about matters which are relevant to the

question whether a counteraction notice should be served on the person.

(4)   

Those matters must be specified in the notice under subsection (2).

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(5)   

That notice must require the information to be given within such period as is

specified in it.

(6)   

That period must be at least 30 days.

The tribunal

637     

The tribunal

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(1)   

The tribunal for the purposes of this Chapter consists of—

(a)   

a chairman appointed by the Lord Chancellor, and

(b)   

two or more persons appointed by the Lord Chancellor as having

special knowledge of and experience in financial or commercial

matters.

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(2)   

A person appointed as chairman or other member of the tribunal must vacate

the office on attaining the age of 70.

(3)   

But subsection (2) is subject to section 26(4) to (6) of the Judicial Pensions and

Retirement Act 1993 (c. 8) (power to authorise continuance in office up to the

age of 75).

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Income Tax Bill
Part 12 — Tax avoidance
Chapter 1 — Transactions in securities

331

 

Appeals

638     

Appeals against counteraction notices

(1)   

A person on whom a counteraction notice has been served may appeal to the

Special Commissioners on the grounds that—

(a)   

section 617 (person liable to counteraction of income tax advantage)

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does not apply to the person in respect of the transaction or transactions

in question, or

(b)   

the adjustments directed to be made are inappropriate.

(2)   

Such an appeal may be made only by giving notice to the Commissioners for

Her Majesty’s Revenue and Customs within 30 days of the service of the

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counteraction notice.

(3)   

On an appeal under this section the Special Commissioners may—

(a)   

affirm, vary or cancel the counteraction notice, or

(b)   

affirm, vary or quash an assessment made in accordance with the

notice.

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(4)   

But the bringing of an appeal under this section (or a request for its rehearing

under section 639) does not affect—

(a)   

the validity of the counteraction notice, or

(b)   

the validity of any other thing done under or in accordance with section

631 (counteraction notices),

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pending the determination of the proceedings.

639     

Rehearing by tribunal of appeal against counteraction notice

(1)   

The appellant or an officer of Revenue and Customs may, if dissatisfied with

the determination of the Special Commissioners under section 638, require the

appeal to be reheard by the tribunal appointed under section 637.

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(2)   

Such a request may be made only by giving notice to the Clerk to the Special

Commissioners within 30 days after the determination.

(3)   

If such a request is made—

(a)   

the Special Commissioners must transmit to the tribunal any document

in their possession which was delivered to them for the purposes of the

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appeal, and

(b)   

the tribunal must rehear and determine the appeal.

(4)   

The tribunal has the same powers in relation to the appeal as the Special

Commissioners.

(5)   

On the rehearing of an appeal under this section, the tribunal may—

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(a)   

affirm, vary or cancel the counteraction notice, or

(b)   

affirm, vary or quash an assessment made in accordance with the

notice.

(6)   

The tribunal’s determination is final and conclusive (but see sections 640 to

644).

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Income Tax Bill
Part 12 — Tax avoidance
Chapter 1 — Transactions in securities

332

 

640     

Statement of case by tribunal for opinion of High Court or Court of Session

(1)   

This section applies if the appellant or an officer of Revenue and Customs (“the

dissatisfied party”) is dissatisfied with the tribunal’s determination under

section 639 on the rehearing of an appeal as being wrong in law.

(2)   

The dissatisfied party may, within 30 days after the determination, by notice in

5

writing require the tribunal to state and sign a case for the opinion of the High

Court or in Scotland the Court of Session.

(3)   

The dissatisfied party is entitled to have the case stated only on payment of a

fee of £25 to the tribunal.

(4)   

The case must set out the facts and the determination of the tribunal.

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(5)   

The dissatisfied party must—

(a)   

within 30 days after receiving the stated and signed case, transmit it to

the High Court or in Scotland the Court of Session, and

(b)   

not later than transmitting the case, send to the other party—

(i)   

notice in writing that the case has been stated on the dissatisfied

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party’s application, and

(ii)   

a copy of the case.

(6)   

The statement of a case under this section does not affect—

(a)   

the validity of the counteraction notice, or

(b)   

the validity of any other thing done under or in accordance with section

20

631 (counteraction notices),

   

pending the determination of the proceedings.

(7)   

In this section and sections 641 to 643 references to the Court of Session are

references to the Court of Session sitting as the Court of Exchequer.

641     

Cases before High Court or Court of Session

25

(1)   

The High Court or in Scotland the Court of Session must hear and determine

any question of law arising on a case transmitted to the Court under section

640(5).

(2)   

The Court may—

(a)   

affirm, reverse or amend the determination in respect of which the case

30

has been stated,

(b)   

remit the matter to the tribunal with the Court’s opinion on it, or

(c)   

make such other order about the matter as it considers appropriate.

(3)   

The Court may send the case back for amendment.

(4)   

A case sent back for amendment must be amended accordingly, and judgment

35

must be delivered after it has been amended.

642     

Effect of appeals against tribunal’s determination under section 639

(1)   

This section applies if the tribunal has made a determination under section 639

about an assessment and a case—

(a)   

has been required to be stated about it under section 640(2), or

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(b)   

is pending before the High Court or the Court of Session.

 
 

Income Tax Bill
Part 12 — Tax avoidance
Chapter 1 — Transactions in securities

333

 

(2)   

Income tax must be paid in accordance with the determination except so far as

subsection (3) or (4) applies.

(3)   

If the amount charged is reduced by the order or judgment of the Court, the

overpaid tax must be refunded with such interest, if any, as the Court may

allow.

5

(4)   

If the amount charged is increased by the order or judgment, an officer of

Revenue and Customs must issue the person assessed with a notice of the total

amount payable in accordance with the order or judgment.

(5)   

The tax undercharged is due and payable at the end of the period of 30 days

beginning with the date on which the notice is issued.

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643     

Appeals from High Court or Court of Session

(1)   

In the case of a decision under section 641 of the High Court, an appeal lies to

the Court of Appeal and from there to the Supreme Court.

(2)   

But that is subject to subsection (3) and to Part 2 of the Administration of Justice

Act 1969 (c. 58) (appeal from High Court to Supreme Court).

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(3)   

No appeal lies to the Supreme Court from the Court of Appeal except with the

leave of the Court of Appeal or the Supreme Court.

(4)   

In the case of a decision under section 641 of the Court of Session, an appeal lies

to the Supreme Court.

644     

Proceedings in Northern Ireland

20

(1)   

A case which is stated by the tribunal under section 640 (statement of case by

tribunal for opinion of High Court or Court of Session) in proceedings in

Northern Ireland is a case for the opinion of the Court of Appeal in Northern

Ireland.

(2)   

The Income Tax Acts and TMA 1970 have effect as if—

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(a)   

section 640 applied in relation to such proceedings with the omission of

subsections (4) and (5), and

(b)   

that section and sections 641 and 642 applied in relation to such

proceedings with the substitution of references to the Court of Appeal

in Northern Ireland for references to the High Court.

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(3)   

The procedure relating to—

(a)   

transmitting the case to the Court of Appeal in Northern Ireland, and

(b)   

the hearing and determination of the case by that Court,

   

is that for the time being in force in Northern Ireland as respects cases stated

by a county court in exercise of its general jurisdiction.

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(4)   

An appeal lies from the Court of Appeal in Northern Ireland to the Supreme

Court in accordance with section 42 of the Judicature (Northern Ireland) Act

1978 (c. 23).

(5)   

If in proceedings in Northern Ireland an application is made for a case to be

stated by the tribunal under section 640 as applied by this section, the case

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must be settled and sent to the applicant as soon after the application as is

reasonably practicable.

 
 

Income Tax Bill
Part 12 — Tax avoidance
Chapter 2 — Transfer of assets abroad

334

 

(6)   

In this section “proceedings in Northern Ireland” means proceedings as

respects which the place given by the rules in Schedule 3 to TMA 1970 is in

Northern Ireland.

Supplementary

645     

Application of Chapter where individual within section 617 dies

5

(1)   

This section applies if an individual to whom section 617 (person liable to

counteraction of income tax advantage) applies (or may apply) has died.

(2)   

Any notice or notification to the individual under this Chapter may be given to

the individual’s personal representatives.

(3)   

The provisions of this Chapter relating to any such notice or notification, to the

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making of a statutory declaration, to rights of appeal and to the giving of

information must be read accordingly.

646     

Interpretation of Chapter

In this Chapter—

“company” includes any body corporate,

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“dividends” includes references to other qualifying distributions and to

interest,

“securities”—

(a)   

includes shares and stock, and

(b)   

in relation to a company not limited by shares (whether or not

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it has a share capital) also includes a reference to the interest of

a member of the company as such, whatever the form of that

interest,

“trading stock” has the meaning given by section 174 of ITTOIA 2005, and

“transaction in securities” means transactions, of whatever description,

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relating to securities, and in particular—

(a)   

the purchase, sale or exchange of securities,

(b)   

issuing or securing the issue of new securities,

(c)   

applying or subscribing for new securities, and

(d)   

altering or securing the alteration of the rights attached to

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securities.

Chapter 2

Transfer of assets abroad

Introduction

647     

Overview of Chapter

35

(1)   

This Chapter imposes a charge to income tax on—

(a)   

individuals to whom income is treated as arising under section 654

(individuals with power to enjoy income as a result of relevant

transactions),

 
 

Income Tax Bill
Part 12 — Tax avoidance
Chapter 2 — Transfer of assets abroad

335

 

(b)   

individuals to whom income is treated as arising under section 661

(individuals receiving capital sums as a result of relevant transactions),

and

(c)   

individuals to whom income is treated as arising under section 665

(non-transferors receiving a benefit as a result of relevant transactions).

5

(2)   

The charges apply only if a relevant transfer occurs, and they operate by

reference to income of a person abroad that is connected with the transfer or

another relevant transaction.

(3)   

For the meaning of “relevant transaction”, “relevant transfer” and “person

abroad”, see sections 648, 649 and 651 respectively.

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(4)   

In this Chapter references to individuals include their spouses or civil partners.

648     

Meaning of “relevant transaction”

(1)   

A transaction is a relevant transaction for the purposes of this Chapter if it is—

(a)   

a relevant transfer, or

(b)   

an associated operation.

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(2)   

For the meaning of “relevant transfer” and “associated operation”, see sections

649 and 652 respectively.

649     

Meaning of “relevant transfer” and “transfer”

(1)   

A transfer is a relevant transfer for the purposes of this Chapter if—

(a)   

it is a transfer of assets, and

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(b)   

as a result of—

(i)   

the transfer,

(ii)   

one or more associated operations, or

(iii)   

the transfer and one or more associated operations,

   

income becomes payable to a person abroad.

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(2)   

In this Chapter “transfer”, in relation to rights, includes the creation of the

rights.

(3)   

For the meaning of “assets”, see section 650.

650     

Meaning of “assets” etc

In this Chapter—

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(a)   

“assets” includes property or rights of any kind, and

(b)   

references to assets representing any assets, income or accumulations

of income include references to—

(i)   

shares in or obligations of any company to which the assets,

income or accumulations are or have been transferred, or

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(ii)   

obligations of any other person to whom the assets, income or

accumulations are or have been transferred.

 
 

 
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