|
| |
|
(a) | the individual made a claim under section 831 of ITTOIA 2005 for the |
| |
| |
(b) | section 65(5) of ICTA (or any earlier superseded enactment |
| |
corresponding to that provision) applied in relation to the individual |
| |
| 5 |
82 (1) | Section 809K of ITA 2007 (meaning of “remitted to the United Kingdom”) |
| |
has effect subject to this paragraph. |
| |
(2) | In either of the cases set out in sub-paragraph (3) or (4), an individual’s |
| |
relevant foreign income is not to be treated as remitted to the United |
| |
Kingdom by virtue of property of a relevant person being brought to, or |
| 10 |
received or used in, the United Kingdom in circumstances in which section |
| |
| |
(3) | The first case is where the property was acquired by the relevant person |
| |
| |
(4) | The second case is where the property— |
| 15 |
(a) | was acquired by the relevant person (“the owner”)— |
| |
(i) | on or after 12 March 2008, but |
| |
(ii) | before 6 April 2008, and |
| |
(b) | has been brought to, or received or used in, the United Kingdom by |
| |
or for the benefit of any relevant person at any time— |
| 20 |
(i) | after its acquisition by the owner, and |
| |
(ii) | before 6 April 2008. |
| |
(5) | Subject to sub-paragraphs (2) to (4), in relation to an individual’s income and |
| |
chargeable gains for the tax year 2007-08 or any earlier tax year, section 809L |
| |
has effect as if the references to a relevant person were to the individual. |
| 25 |
83 | Section 809M of ITA 2007 (section 809L: gift recipients, qualifying property |
| |
and enjoyment) has effect in relation to an individual’s income and |
| |
chargeable gains for the tax year 2007-08 or any earlier tax year as if— |
| |
(a) | the reference in subsection (2) to a relevant person were to the |
| |
| 30 |
(b) | subsections (3) and (4) were omitted, and |
| |
(c) | the references in subsection (9) to a relevant person, all relevant |
| |
persons, or relevant persons were to the individual. |
| |
84 | Section 809N of ITA 2007 (section 809L: dealings where there is a connected |
| |
operation) has effect in relation to an individual’s income and chargeable |
| 35 |
gains for the tax year 2007-08 or any earlier tax year as if— |
| |
(a) | subsection (2) were omitted, and |
| |
(b) | the references in subsections (4) and (6) to a relevant person, all |
| |
relevant persons, or relevant persons were to the individual. |
| |
85 | Sections 809P and 809Q of ITA 2007 (transfers from mixed funds) do not |
| 40 |
apply for the purposes of determining whether income or chargeable gains |
| |
for the tax year 2007-08 or any earlier tax year are remitted to the United |
| |
Kingdom (or the amount of any such income or chargeable gains so |
| |
| |
86 (1) | This paragraph applies if— |
| 45 |
(a) | before 12 March 2008, money was lent to an individual outside the |
| |
| |
|
| |
|
| |
|
(b) | the loan was made for the purpose of enabling the individual to |
| |
acquire an interest in residential property in the United Kingdom |
| |
(and for no other purpose), and |
| |
| |
(i) | the money was received in the United Kingdom, |
| 5 |
(ii) | the individual used the money to acquire an interest in |
| |
residential property in the United Kingdom, and |
| |
(iii) | repayment of the debt for the money (“the debt”) was secured |
| |
| |
(2) | Relevant foreign income of the individual used outside the United Kingdom |
| 10 |
before 6 April 2028 to pay interest on the debt is treated as not remitted to |
| |
| |
(3) | If, at any time on or after 12 March 2008— |
| |
(a) | any term upon which the loan was made is varied or waived, |
| |
(b) | the debt ceases to be secured on the interest referred to in sub- |
| 15 |
| |
(c) | any other debt is secured on that interest, |
| |
| sub-paragraph (2) does not apply in relation to relevant foreign income used |
| |
as mentioned there after that time. |
| |
(4) | In this paragraph “residential property” has the same meaning as in Part 4 |
| 20 |
of FA 2003 (see section 116 of that Act). |
| |
| |
Non-resident companies and trusts etc |
| |
| |
87 | In section 761 of ICTA (charge to income tax or corporation tax of offshore |
| 25 |
income gain), for subsection (5) substitute— |
| |
“(5) | Subsections (1)(b) and (1A) are subject to section 762ZA (income |
| |
treated as arising: non-UK domiciled individuals to whom |
| |
remittance basis applies).” |
| |
88 (1) | Section 762 of that Act (offshore income gains accruing to persons resident |
| 30 |
or domiciled abroad) is amended as follows. |
| |
(2) | For subsections (2) to (4) substitute— |
| |
“(2) | Subsections (3) to (4A) apply if— |
| |
(a) | offshore income gains accrue in a tax year (“the relevant tax |
| |
year”) to the trustees of a settlement, and |
| 35 |
(b) | section 87 of the 1992 Act (non-UK resident settlement: |
| |
attribution of gains to beneficiaries) applies to the settlement |
| |
for the relevant tax year or any earlier tax year. |
| |
(3) | For the relevant tax year, sections 87 to 87C (and sections 96 and 97) |
| |
of the 1992 Act apply to the settlement in relation to the offshore |
| 40 |
| |
(a) | references to chargeable gains were to offshore income gains, |
| |
|
| |
|
| |
|
(b) | the section 2(2) amount for the relevant tax year were the |
| |
amount of offshore income gains accruing to the trustees in |
| |
| |
(c) | the section 2(2) amount for any earlier tax year were nil. |
| |
(4) | For the relevant tax year, sections 87 and 87A of the 1992 Act have |
| 5 |
effect by virtue of subsection (3) before they have effect otherwise |
| |
than by virtue of that subsection. |
| |
| |
(a) | by virtue of subsection (5), Chapter 2 of Part 13 of ITA 2007 |
| |
(transfer of assets abroad) applies in relation to the offshore |
| 10 |
income gains (or part of them), and |
| |
(b) | by virtue of any of sections 737 to 742 of that Act, no liability |
| |
to income tax arises under that Chapter in respect of those |
| |
| |
| subsections (3) and (4) apply in relation to the gains (or the part |
| 15 |
referred to in paragraph (b)) for tax years after the relevant tax year |
| |
as they apply in relation to the gains for the relevant tax year.” |
| |
(3) | In subsection (6), for “subsection (2) above” substitute “subsection (3)”. |
| |
89 | After that section insert— |
| |
“762ZA | Income treated as arising under section 761(1): remittance basis |
| 20 |
(1) | This section applies to income treated as arising under section 761(1) |
| |
to an individual in a tax year if— |
| |
(a) | section 809B, 809C or 809D of ITA 2007 (remittance basis) |
| |
applies to the individual for that year, and |
| |
(b) | the individual is not domiciled in the United Kingdom in that |
| 25 |
| |
(2) | If any of the income is remitted to the United Kingdom in a tax year, |
| |
tax is charged on the full amount of the income so remitted in that |
| |
| |
(3) | Sections 809K to 809Q of ITA 2007 (meaning of “remitted to the |
| 30 |
United Kingdom” etc) apply in relation to the income as if it were the |
| |
individual’s relevant foreign income. |
| |
(4) | For the purposes of those sections— |
| |
(a) | treat any consideration obtained on the disposal of the asset |
| |
as deriving from the income, and |
| 35 |
(b) | unless the consideration so obtained is of an amount equal to |
| |
the market value of the asset, treat the asset as deriving from |
| |
| |
| |
(a) | “the asset” means the asset the disposal of which causes the |
| 40 |
income to be treated as arising, and |
| |
(b) | “the disposal” means the disposal mentioned in paragraph |
| |
| |
90 | In Schedule 10 to TCGA 1992 (consequential amendments), omit paragraph |
| |
14(47)(c) and (48)(b) to (d). |
| 45 |
|
| |
|
| |
|
91 | The amendments made by paragraphs 87 to 90 have effect for the tax year |
| |
2008-09 and subsequent tax years. |
| |
Attribution of gains to members of non-resident companies |
| |
92 | In section 13(2) of TCGA 1992 (attribution of gains to members of non- |
| |
resident companies), for the words from “, who, if” to “and who” substitute |
| 5 |
| |
93 | After section 14 of that Act insert— |
| |
“14A | Section 13: non-UK domiciled individuals |
| |
(1) | This section applies if— |
| |
(a) | by virtue of section 13, part of a chargeable gain that accrues |
| 10 |
to a company on the disposal of an asset is treated as accruing |
| |
to an individual in a tax year, and |
| |
(b) | the individual is not domiciled in the United Kingdom in that |
| |
| |
(2) | The part of the chargeable gain treated as accruing to the individual |
| 15 |
(“the deemed chargeable gain”) is a foreign chargeable gain within |
| |
the meaning of section 12 if (and only if) the asset is situated outside |
| |
| |
(3) | For the purposes of sections 809K to 809Q of ITA 2007 (meaning of |
| |
“remitted to the United Kingdom” etc)— |
| 20 |
(a) | treat any consideration obtained by the company on the |
| |
disposal of the asset as deriving from the deemed chargeable |
| |
| |
(b) | unless the consideration so obtained is of an amount equal to |
| |
the market value of the asset, treat the asset as deriving from |
| 25 |
the deemed chargeable gain. |
| |
| |
(a) | the deemed chargeable gain is a foreign chargeable gain |
| |
(within the meaning of section 12), |
| |
(b) | section 809B, 809C or 809D of ITA 2007 (remittance basis) |
| 30 |
applies to the individual for the year mentioned in subsection |
| |
| |
(c) | any of the deemed chargeable gain is remitted to the United |
| |
Kingdom in a tax year after that year, |
| |
| the chargeable gain treated under section 12(2) as accruing may not |
| 35 |
be reduced or extinguished under section 13(8).” |
| |
94 | The amendments made by paragraphs 92 and 93 have effect in relation to |
| |
chargeable gains accruing on or after 6 April 2008. |
| |
Attribution of gains to beneficiaries |
| |
95 | TCGA 1992 is amended as follows. |
| 40 |
96 | In section 85(11) (disposal of interests in non-resident settlements), for the |
| |
words from “there would” to the end substitute “chargeable gains would be |
| |
treated under section 89(2) or paragraph 8 of Schedule 4C as accruing in the |
| |
|
| |
|
| |
|
following year of assessment to a beneficiary who received a capital |
| |
payment from the trustees of the settlement in that year.” |
| |
97 | For section 87 substitute— |
| |
“87 | Non-UK resident settlements: attribution of gains to beneficiaries |
| |
(1) | This section applies to a settlement for a tax year (“the relevant tax |
| 5 |
year”) if the trustees are neither resident nor ordinarily resident in |
| |
the United Kingdom in that year. |
| |
(2) | Chargeable gains are treated as accruing in the relevant tax year to a |
| |
beneficiary of the settlement who has received a capital payment |
| |
from the trustees in the relevant tax year or any earlier tax year if all |
| 10 |
or part of the capital payment is matched (under section 87A as it |
| |
applies for the relevant tax year) with the section 2(2) amount for the |
| |
relevant tax year or any earlier tax year. |
| |
(3) | The amount of chargeable gains treated as accruing is equal to— |
| |
(a) | the amount of the capital payment, or |
| 15 |
(b) | if only part of the capital payment is matched, the amount of |
| |
| |
(4) | The section 2(2) amount for a tax year is— |
| |
(a) | the amount upon which the trustees would be chargeable to |
| |
tax under section 2(2) for that year if they were resident and |
| 20 |
ordinarily resident in the United Kingdom in that year, or |
| |
(b) | if section 86 applies to the settlement for that year, the |
| |
amount mentioned in paragraph (a) minus the total amount |
| |
of chargeable gains treated under that section as accruing in |
| |
| 25 |
| |
(1) | This section supplements section 87. |
| |
(2) | The following steps are to be taken for the purposes of matching |
| |
capital payments with section 2(2) amounts. |
| |
| 30 |
| Find the section 2(2) amount for the relevant tax year. |
| |
| |
| Find the total amount of capital payments received by the |
| |
beneficiaries from the trustees in the relevant tax year. |
| |
| 35 |
| The section 2(2) amount for the relevant tax year is matched with— |
| |
(a) | if the total amount of capital payments received in the |
| |
relevant tax year does not exceed the section 2(2) amount for |
| |
the relevant tax year, each capital payment so received, and |
| |
(b) | otherwise, the relevant proportion of each of those capital |
| 40 |
| |
| “The relevant proportion” is the section 2(2) amount for the relevant |
| |
tax year divided by the total amount of capital payments received in |
| |
| |
| 45 |
| If paragraph (a) of Step 3 applies— |
| |
|
| |
|
| |
|
(a) | reduce the section 2(2) amount for the relevant tax year by the |
| |
total amount of capital payments referred to there, and |
| |
(b) | reduce the amount of those capital payments to nil. |
| |
| If paragraph (b) of that Step applies— |
| |
(a) | reduce the section 2(2) amount for the relevant tax year to nil, |
| 5 |
| |
(b) | reduce the amount of each of the capital payments referred to |
| |
there by the relevant proportion of that capital payment. |
| |
| |
| Start again at Step 1 (unless subsection (3) applies). |
| 10 |
| If the section 2(2) amount for the relevant tax year (as reduced under |
| |
Step 4) is not nil, read references to capital payments received in the |
| |
relevant tax year as references to capital payments received in the |
| |
| |
(a) | is before the last tax year for which Steps 1 to 4 have been |
| 15 |
| |
(b) | is a tax year in which capital payments (the amounts of which |
| |
have not been reduced to nil) were received by beneficiaries. |
| |
| If the section 2(2) amount for the relevant tax year (as so reduced) is |
| |
nil, read references to the section 2(2) amount for the relevant tax |
| 20 |
year as the section 2(2) amount for the latest tax year which— |
| |
(a) | is before the last tax year for which Steps 1 to 4 have been |
| |
| |
(b) | is a tax year to which section 87 applies to the settlement, and |
| |
(c) | is a tax year for which the section 2(2) amount is not nil. |
| 25 |
(3) | This subsection applies if— |
| |
(a) | all of the capital payments received by beneficiaries from the |
| |
trustees in the relevant tax year or any earlier tax year have |
| |
| |
(b) | the section 2(2) amounts for the relevant tax year and all |
| 30 |
earlier tax years to which section 87 applies to the settlement |
| |
have been reduced to nil. |
| |
(4) | The effect of any reduction under Step 4 of subsection (2) by virtue of |
| |
section 87 applying to a settlement for a tax year is to be taken into |
| |
account in the application of this section by virtue of section 87 |
| 35 |
applying to the settlement for any subsequent tax year. |
| |
87B | Section 87: remittance basis |
| |
(1) | This section applies in relation to chargeable gains treated under |
| |
section 87 as accruing to an individual. |
| |
(2) | The chargeable gains are foreign chargeable gains within the |
| 40 |
meaning of section 12 (non-UK domiciled beneficiaries to whom |
| |
remittance basis applies). |
| |
(3) | For the purposes of sections 809K to 809Q of ITA 2007 (meaning of |
| |
“remitted to the United Kingdom” etc), treat relevant property or |
| |
benefits as deriving from the chargeable gains. |
| 45 |
(4) | For the purposes of subsection (3) property or a benefit is “relevant” |
| |
if the capital payment by reason of which the chargeable gains are |
| |
treated as accruing consists of— |
| |
|
| |
|
| |
|
(a) | the payment or transfer of the property or its becoming |
| |
property to which section 60 applies, or |
| |
(b) | the conferring of the benefit. |
| |
87C | Sections 87 and 87A: disregard of certain capital payments |
| |
(1) | For the purposes of sections 87 and 87A as they apply in relation to a |
| 5 |
settlement, no account is to be taken of a capital payment (or a part |
| |
of a capital payment) within subsection (2). |
| |
(2) | A capital payment is within this subsection if (and to the extent that) |
| |
it is received (or treated as received) in a tax year from the trustees of |
| |
the settlement by a company that— |
| 10 |
(a) | is not resident in the United Kingdom in that year, and |
| |
(b) | would be a close company if it were resident in the United |
| |
| |
| (and is not treated under any of subsections (3) to (5) of section 96 as |
| |
received by another person).” |
| 15 |
98 (1) | Section 88 (gains of dual resident settlements) is amended as follows. |
| |
(2) | For subsection (2) substitute— |
| |
“(2) | The section 2(2) amount for a tax year for which section 87 applies by |
| |
virtue of this section is what it would be if the amount mentioned in |
| |
section 87(4)(a) were the assumed chargeable amount.” |
| 20 |
| |
99 (1) | Section 89 (migrant settlements) is amended as follows. |
| |
(2) | In subsection (1), for “section 87 if” substitute “sections 87 and 87A if”. |
| |
(3) | For subsections (2) and (3) substitute— |
| |
“(1A) | Subsection (2) applies to a settlement if— |
| 25 |
(a) | a non-resident period is succeeded by a resident period, and |
| |
(b) | in relation to the last tax year in the non-resident period (“the |
| |
last non-resident tax year”), section 87A(3) applied by virtue |
| |
of paragraph (a) of that provision (exhaustion of capital |
| |
| 30 |
(2) | Chargeable gains are treated as accruing in a tax year (in the resident |
| |
period) to a beneficiary of the settlement who receives a capital |
| |
payment from the trustees in that year if all or part of the capital |
| |
payment is matched (under section 87A as it applies for that year) |
| |
with the section 2(2) amount for the last non-resident tax year or any |
| 35 |
| |
(3) | Section 87(3) and (4) and sections 87A to 87C apply for the purposes |
| |
| |
(a) | the relevant tax year were the tax year mentioned in |
| |
| 40 |
(b) | the section 2(2) amount for any tax year after the last non- |
| |
resident tax year were nil, and |
| |
(c) | references in section 87A(4) to section 87 included references |
| |
| |
|
| |
|