Income Tax Bill

House of Commons

Session 2006 - 07
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Other Bills before Parliament

Income Tax Bill

Income Tax Bill
Part 13 — Tax avoidance
Chapter 1 — Transactions in securities
360

(2)
The officer may serve a notice on the person requiring the person to give the
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.
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(4)
Those matters must be specified in the notice under subsection (2).
(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
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704
The tribunal
(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
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matters.
(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
20
age of 75).
Appeals
705
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—
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(a)
section 684 (person liable to counteraction of income tax advantage)
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
30
Her Majesty’s Revenue and Customs within 30 days of the service of the
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
35
notice.
(4)
But the bringing of an appeal under this section (or a request for its rehearing
under section 706) does not affect—
(a)
the validity of the counteraction notice, or

Income Tax Bill
Part 13 — Tax avoidance
Chapter 1 — Transactions in securities
361

(b)
the validity of any other thing done under or in accordance with section
698 (counteraction notices),

pending the determination of the proceedings.
706
Rehearing by tribunal of appeal against counteraction notice
(1)
The appellant or an officer of Revenue and Customs may, if dissatisfied with
5
the determination of the Special Commissioners under section 705, require the
appeal to be reheard by the tribunal appointed under section 704.
(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—
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(a)
the Special Commissioners must transmit to the tribunal any document
in their possession which was delivered to them for the purposes of the
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
15
Commissioners.
(5)
On the rehearing of an appeal under this section, the tribunal 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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(6)
The tribunal’s determination is final and conclusive (but see sections 707 to
711).
707
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
25
section 706 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
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
30
fee of £25 to the tribunal.
(4)
The case must set out the facts and the determination of the tribunal.
(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
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(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
party’s application, and
(ii)
a copy of the case.
(6)
The statement of a case under this section does not affect—
40
(a)
the validity of the counteraction notice, or

Income Tax Bill
Part 13 — Tax avoidance
Chapter 1 — Transactions in securities
362

(b)
the validity of any other thing done under or in accordance with section
698 (counteraction notices),

pending the determination of the proceedings.
(7)
In this section and sections 708 to 710 references to the Court of Session are
references to the Court of Session sitting as the Court of Exchequer.
5
708
Cases before High Court or Court of Session
(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
707(5).
(2)
The Court may—
10
(a)
affirm, reverse or amend the determination in respect of which the case
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.
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(4)
A case sent back for amendment must be amended accordingly, and judgment
must be delivered after it has been amended.
709
Effect of appeals against tribunal’s determination under section 706
(1)
This section applies if the tribunal has made a determination under section 706
about an assessment and a case—
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(a)
has been required to be stated about it under section 707(2), or
(b)
is pending before the High Court or the Court of Session.
(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
25
overpaid tax must be refunded with such interest, if any, as the Court may
allow.
(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.
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(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.
710
Appeals from High Court or Court of Session
(1)
In the case of a decision under section 708 of the High Court, an appeal lies to
the Court of Appeal and from there to the Supreme Court.
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(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).
(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.

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Part 13 — Tax avoidance
Chapter 1 — Transactions in securities
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(4)
In the case of a decision under section 708 of the Court of Session, an appeal lies
to the Supreme Court.
711
Proceedings in Northern Ireland
(1)
A case which is stated by the tribunal under section 707 (statement of case by
tribunal for opinion of High Court or Court of Session) in proceedings in
5
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—
(a)
section 707 applied in relation to such proceedings with the omission of
subsections (4) and (5), and
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(b)
that section and sections 708 and 709 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.
(3)
The procedure relating to—
(a)
transmitting the case to the Court of Appeal in Northern Ireland, and
15
(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.
(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
20
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 707 as applied by this section, the case
must be settled and sent to the applicant as soon after the application as is
reasonably practicable.
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(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
712
Application of Chapter where individual within section 684 dies
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(1)
This section applies if an individual to whom section 684 (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.
713
Interpretation of Chapter
In this Chapter—
“company” includes any body corporate,
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Income Tax Bill
Part 13 — Tax avoidance
Chapter 2 — Transfer of assets abroad
364

“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
5
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,
10
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
714
Overview of Chapter
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(1)
This Chapter imposes a charge to income tax on—
(a)
individuals to whom income is treated as arising under section 721
(individuals with power to enjoy income as a result of relevant
transactions),
(b)
individuals to whom income is treated as arising under section 728
25
(individuals receiving capital sums as a result of relevant transactions),
and
(c)
individuals to whom income is treated as arising under section 732
(non-transferors receiving a benefit as a result of relevant transactions).
(2)
The charges apply only if a relevant transfer occurs, and they operate by
30
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 715, 716 and 718 respectively.
(4)
In this Chapter references to individuals include their spouses or civil partners.
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715
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.
(2)
For the meaning of “relevant transfer” and “associated operation”, see sections
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716 and 719 respectively.