|
| |
|
(7) | In this section “relevant debt” means a debt that relates (wholly or in |
| |
part, and directly or indirectly) to— |
| |
(a) | property falling within subsection (2)(a), |
| |
(b) | a service falling within subsection (2)(b), |
| |
(c) | qualifying property dealt with as mentioned in subsection |
| 5 |
| |
(d) | a service falling within subsection (4)(b), |
| |
(e) | qualifying property dealt with as mentioned in subsection |
| |
| |
(f) | a service falling within subsection (5)(b). |
| 10 |
(8) | For that purpose, the reference to a debt that relates to property or a |
| |
service includes a debt for interest on money lent, where the lending |
| |
relates to the property or service. |
| |
(9) | If the service mentioned in subsection (2)(b) is the income or |
| |
chargeable gains, references in subsection (3)(a) and section 809P(2) |
| 15 |
to the property include the service. |
| |
(10) | The cases in which income or chargeable gains are used in respect of |
| |
a debt include cases where income or chargeable gains are used to |
| |
pay interest on the debt. |
| |
(11) | This section is subject to sections 809V to 809Z6 (property treated as |
| 20 |
not remitted to the United Kingdom). |
| |
809M | Meaning of relevant person |
| |
(1) | This section applies for the purposes of sections 809L to 809O. |
| |
(2) | A “relevant person” is— |
| |
| 25 |
(b) | the individual’s husband or wife, |
| |
(c) | the individual’s civil partner, |
| |
(d) | a child or grandchild of a person falling within any of |
| |
paragraphs (a) to (c), if the child or grandchild has not |
| |
| 30 |
(e) | a close company in which a person falling within any other |
| |
paragraph of this subsection is a participator, |
| |
(f) | a company in which a person falling within any other |
| |
paragraph of this subsection is a participator, and which |
| |
would be a close company if it were resident in the United |
| 35 |
| |
(g) | the trustees of a settlement of which a person falling within |
| |
any other paragraph of this subsection is a beneficiary, or |
| |
(h) | a body connected with such a settlement. |
| |
| 40 |
(a) | a man and woman living together as husband and wife are |
| |
treated as if they were husband and wife, |
| |
(b) | two people of the same sex living together as if they were civil |
| |
partners of each other are treated as if they were civil partners |
| |
| 45 |
(c) | “close company” has the same meaning as in the Corporation |
| |
Tax Acts (see sections 414 and 415 of ICTA), |
| |
|
| |
|
| |
|
(d) | “settlement” and “settlor” have the same meaning as in |
| |
| |
(e) | “beneficiary”, in relation to a settlement, means any person |
| |
who receives, or may receive, any benefit under or by virtue |
| |
| 5 |
(f) | “trustee” has the same meaning as in section 993 (see, in |
| |
particular, section 994(3)), and |
| |
(g) | a body is “connected with” a settlement if the body falls |
| |
within section 993(3)(c), (d), (e) or (f) as regards the |
| |
| 10 |
809N | Section 809L: gift recipients, qualifying property and enjoyment |
| |
(1) | This section applies for the purposes of determining whether or not |
| |
income or chargeable gains of an individual are remitted to the |
| |
United Kingdom by virtue of condition C in section 809L(4). |
| |
(2) | A “gift recipient” means a person, other than a relevant person, to |
| 15 |
whom the individual makes a gift of money or other property that— |
| |
(a) | is income or chargeable gains of the individual, or |
| |
(b) | derives (wholly or in part, and directly or indirectly) from |
| |
income or chargeable gains of the individual. |
| |
(3) | The question of whether or not a person is a relevant person is to be |
| 20 |
determined by reference to the time when a gift is made. |
| |
(4) | But, if a person to whom a gift is made subsequently becomes a |
| |
relevant person, the person ceases to be a gift recipient. |
| |
(5) | The individual “makes a gift of” property if the individual disposes |
| |
| 25 |
(a) | for no consideration, or |
| |
(b) | for consideration less than the full consideration in money or |
| |
money’s worth that would be given if the disposal were by |
| |
way of a bargain made at arm’s length; |
| |
| but, in a case falling in paragraph (b), the individual is to be taken to |
| 30 |
make a gift of only so much of the property as exceeds the |
| |
consideration actually given. |
| |
(6) | A reference to the individual making a gift of property includes a |
| |
| |
(a) | the individual retains an interest in the property, or |
| 35 |
(b) | an interest, right or arrangement enables or entitles the |
| |
individual to benefit from the property. |
| |
(7) | “Qualifying property”, in relation to a gift recipient, is— |
| |
(a) | the property that the individual gave to the gift recipient, |
| |
(b) | anything that derives (wholly or in part, and directly or |
| 40 |
indirectly) from that property, or |
| |
(c) | any other property, but only if it is dealt with as mentioned |
| |
in section 809L(4)(a), (b) or (c) by virtue of an operation which |
| |
| |
(i) | with reference to the gift of the property to the gift |
| 45 |
| |
|
| |
|
| |
|
(ii) | with a view to enabling or facilitating the gift of the |
| |
property to the gift recipient to be made. |
| |
| |
(a) | the reference in paragraph (b) to anything deriving from |
| |
| 5 |
(b) | the reference in paragraph (c) to other property, |
| |
| includes a thing, or property, that does not belong to the individual |
| |
but which the individual is enabled or entitled to benefit from by |
| |
virtue of any interest, right or arrangement. |
| |
(9) | Enjoyment by a relevant person of property or a service is to be |
| 10 |
disregarded in any of these cases— |
| |
(a) | if the property or service is enjoyed virtually to the entire |
| |
exclusion of all relevant persons, |
| |
(b) | if full consideration in money or money’s worth is given by a |
| |
relevant person for the enjoyment, or |
| 15 |
(c) | the property or service is enjoyed by relevant persons in the |
| |
same way, and on the same terms, as it may be enjoyed by the |
| |
general public or by a section of the general public. |
| |
(10) | The provisions of this section apply for the purposes of sections 809L |
| |
| 20 |
809O | Section 809L: dealings where there is a connected operation |
| |
(1) | This section applies for the purposes of determining whether or not |
| |
income or chargeable gains of an individual are remitted to the |
| |
United Kingdom by virtue of condition D in section 809L(5). |
| |
(2) | For the purposes of section 809L(5), the question of whether or not |
| 25 |
the person whose property is dealt with as mentioned in paragraph |
| |
(a), (b) or (c) of section 809L(5) is a relevant person is to be |
| |
determined by reference to the time when the property is so dealt |
| |
| |
(3) | A “connected operation”, in relation to property dealt with as |
| 30 |
mentioned in section 809L(5)(a), (b) or (c), means an operation which |
| |
| |
(a) | with reference to a qualifying disposition, or |
| |
(b) | with a view to enabling or facilitating a qualifying |
| |
| 35 |
(4) | A “qualifying disposition” is a disposition that— |
| |
(a) | is made by a relevant person, |
| |
(b) | is made to, or for the benefit of, the person whose property is |
| |
dealt with as mentioned in section 809L(5)(a), (b) or (c), and |
| |
(c) | is a disposition of money or other property that is, or derives |
| 40 |
(wholly or in part, and directly or indirectly) from, income or |
| |
chargeable gains of the individual. |
| |
(5) | But a disposition of property is not a qualifying disposition if the |
| |
disposition is, or is part of, the giving of full consideration in money |
| |
or money’s worth for the dealing that falls within section 809L(5)(a), |
| 45 |
| |
|
| |
|
| |
|
(6) | Enjoyment by a relevant person of property or a service is to be |
| |
disregarded in any of these cases— |
| |
(a) | if the property or service is enjoyed virtually to the entire |
| |
exclusion of all relevant persons, |
| |
(b) | if full consideration in money or money’s worth is given by a |
| 5 |
relevant person for the enjoyment, or |
| |
(c) | the property or service is enjoyed by relevant persons in the |
| |
same way, and on the same terms, as it may be enjoyed by the |
| |
general public or by a section of the general public. |
| |
(7) | The provisions of this section apply for the purposes of sections 809L |
| 10 |
to 809N (and this section). |
| |
Remittance of income and gains: amount remitted |
| |
809P | Section 809L: amount remitted |
| |
(1) | The amount of income or chargeable gains remitted to the United |
| |
Kingdom is to be determined as follows. |
| 15 |
(2) | If the property or consideration is the income or chargeable gains, the |
| |
amount remitted is equal to the amount of the income or chargeable |
| |
| |
(3) | If the property or consideration derives from the income or |
| |
chargeable gains, the amount remitted is equal to the amount of |
| 20 |
income or chargeable gains from which the property or |
| |
| |
(4) | If the income or chargeable gains are used as mentioned in section |
| |
809L(3)(c), the amount remitted is equal to the amount of income or |
| |
chargeable gains used; but this is subject to subsection (10). |
| 25 |
(5) | If anything deriving from the income or chargeable gains is used as |
| |
mentioned in section 809L(3)(c), the amount remitted is equal to the |
| |
amount of income or chargeable gains from which what is used |
| |
derives; but this is subject to subsection (10). |
| |
(6) | In a case falling within section 809L(4)(a) or (b), the amount remitted |
| 30 |
is equal to the amount of the relevant income or chargeable gains. |
| |
(7) | In a case falling within section 809L(4)(c), the amount remitted is |
| |
equal to the amount of the relevant income or chargeable gains; but |
| |
this is subject to subsection (10). |
| |
(8) | In a case falling within section 809L(5)(a) or (b), the amount remitted |
| 35 |
is equal to the amount of the income or chargeable gains referred to |
| |
| |
(9) | In a case falling within section 809L(5)(c), the amount remitted is |
| |
equal to the amount of the income or chargeable gains referred to in |
| |
section 809O(4)(c); but this is subject to subsection (10). |
| 40 |
(10) | If the debt is only partly in respect of the property or service, the |
| |
amount remitted is (if it would otherwise be greater) limited to the |
| |
amount the debt would be if it were wholly in respect of the property |
| |
| |
|
| |
|
| |
|
(11) | In subsections (6) and (7) “relevant income or chargeable gains” |
| |
| |
(a) | if the qualifying property falls within section 809N(7)(a), the |
| |
| |
(i) | of which the qualifying property consists, or |
| 5 |
(ii) | from which the qualifying property derives; |
| |
(b) | if the qualifying property falls within section 809N(7)(b), the |
| |
| |
(i) | of which the property given to the gift recipient |
| |
| 10 |
(ii) | from which that property derived; |
| |
(c) | if the qualifying property falls within section 809N(7)(c), the |
| |
| |
(i) | of which the property given to the gift recipient |
| |
| 15 |
(ii) | from which that property derives. |
| |
(12) | If the amount remitted (taken together with any amount previously |
| |
remitted) would otherwise exceed the amount of the income or |
| |
chargeable gains, the amount remitted is limited to the amount |
| |
which, when taken together with any amount previously remitted, is |
| 20 |
equal to the amount of the income or chargeable gains. |
| |
Remittance of income and gains: transfers from mixed funds |
| |
809Q | Sections 809L and 809P: transfers from mixed funds |
| |
(1) | This section applies for the purposes mentioned in subsection (2) |
| |
where condition A in section 809L is met and— |
| 25 |
(a) | the property or consideration for the service is (wholly or in |
| |
part), or derives (wholly or in part, and directly or indirectly) |
| |
from, a transfer from a mixed fund, or |
| |
(b) | a transfer from a mixed fund, or anything deriving (wholly or |
| |
in part, and directly or indirectly) from such a transfer, is |
| 30 |
used as mentioned in section 809L(3)(c). |
| |
(2) | The purposes referred to in subsection (1) are— |
| |
(a) | determining whether condition B in section 809L is met, and |
| |
(b) | if it is met, determining (under section 809P) the amount of |
| |
income or chargeable gains remitted. |
| 35 |
(3) | The extent to which the transfer is of the individual’s income or |
| |
chargeable gains is to be determined as follows. |
| |
| |
| For each of the categories of income and capital in paragraphs (a) to |
| |
(i) of subsection (4), find (applying section 809R) the amount of |
| 40 |
income or capital of the individual for the relevant tax year in the |
| |
mixed fund immediately before the transfer. |
| |
| “The relevant tax year” is the tax year in which the transfer occurs. |
| |
| |
| Find the earliest paragraph for which the amount determined under |
| 45 |
| |
|
| |
|
| |
|
| If that amount does not exceed the amount of the transfer, treat the |
| |
transfer as containing the income or capital within that paragraph |
| |
| |
| Otherwise, treat the transfer as containing the relevant proportion of |
| |
each kind of income or capital within that paragraph (and for that tax |
| 5 |
| |
| “The relevant proportion” is the amount of the transfer divided by |
| |
the amount determined under step 1 for that paragraph. |
| |
| |
| Treat the amount of the transfer as reduced by the amount taken into |
| 10 |
| |
| |
| If the amount of the transfer (as reduced under step 3) is not nil, start |
| |
| |
| In step 2, read the reference to the earliest paragraph of the kind |
| 15 |
mentioned there as a reference to the earliest such paragraph which |
| |
has not previously been taken into account under that step in relation |
| |
| |
| |
| If the amount of the transfer (as reduced under step 3) is not nil once |
| 20 |
steps 2 and 3 have been undertaken in relation to all paragraphs of |
| |
subsection (4) for which the amount determined under step 1 is not |
| |
nil, start again at step 1. |
| |
| In step 1, read the reference to the relevant tax year as a reference to |
| |
the tax year immediately before the last tax year for which step 1 has |
| 25 |
been undertaken in relation to the transfer. |
| |
(4) | The kinds of income and capital are— |
| |
(a) | employment income (other than income within paragraph |
| |
| |
(b) | relevant foreign earnings (other than income within |
| 30 |
| |
(c) | foreign specific employment income (other than income |
| |
| |
(d) | relevant foreign income (other than income within paragraph |
| |
| 35 |
(e) | foreign chargeable gains (other than chargeable gains within |
| |
| |
(f) | employment income subject to a foreign tax, |
| |
(g) | relevant foreign income subject to a foreign tax, |
| |
(h) | foreign chargeable gains subject to a foreign tax, and |
| 40 |
(i) | income or capital not within another paragraph of this |
| |
| |
(5) | In subsection (4) “foreign tax” means any tax chargeable under the |
| |
law of a territory outside the United Kingdom. |
| |
(6) | In this section “mixed fund” means money or other property which, |
| 45 |
immediately before the transfer, contains or derives from— |
| |
(a) | more than one of the kinds of income and capital mentioned |
| |
| |
(b) | income or capital for more than one tax year. |
| |
|
| |
|
| |
|
(7) | References in this section to the amount of the transfer include the |
| |
| |
809R | Section 809Q: composition of mixed fund |
| |
(1) | This section applies for the purposes of step 1 of section 809Q(3) |
| |
(composition of mixed fund). |
| 5 |
(2) | If property which derives (wholly or in part, and directly or |
| |
indirectly) from an individual’s income or gains within a relevant |
| |
paragraph (and for a tax year) is transferred to a mixed fund, treat |
| |
the transfer as consisting of or containing the income or gains. |
| |
(3) | If a debt (wholly or in part, and directly or indirectly) in respect of a |
| 10 |
mixed fund is satisfied by— |
| |
(a) | an individual’s income or gains within a relevant paragraph |
| |
| |
(b) | anything deriving (directly or indirectly) from such income |
| |
| 15 |
| treat the income or gains as transferred to the fund. |
| |
(4) | Treat an offshore transfer from a mixed fund as containing the |
| |
appropriate proportion of each kind of income or capital in the fund |
| |
immediately before the transfer. |
| |
| “The appropriate proportion” means the amount (or market value) |
| 20 |
of the transfer divided by the market value of the mixed fund |
| |
immediately before the transfer. |
| |
(5) | In subsections (2) and (3) “relevant paragraph” means any of |
| |
paragraphs (a) to (h) of section 809Q(4). |
| |
(6) | A transfer from a mixed fund is an “offshore transfer” for the |
| 25 |
purposes of subsection (4) if and to the extent that section 809Q does |
| |
not apply in relation to it. |
| |
(7) | Treat a transfer from a mixed fund as an “offshore transfer” (and |
| |
section 809Q as not applying in relation to it, if it otherwise would |
| |
do) if and to the extent that, at the end of a tax year in which it is |
| 30 |
| |
(a) | section 809Q does not apply in relation to it, and |
| |
(b) | on the basis of the best estimate that can reasonably be made |
| |
at that time, section 809Q will not apply in relation to it. |
| |
(8) | If section 809Q applies in relation to more than one transfer from a |
| 35 |
mixed fund, when undertaking step 1 in relation to the second or any |
| |
subsequent transfer take into account the effect of step 2 of section |
| |
809Q(3) (composition of transfer) as it applied in relation to each |
| |
| |
809S | Section 809Q: anti-avoidance |
| 40 |
(1) | This section applies if, by reason of an arrangement the main |
| |
purpose (or one of the main purposes) of which is to secure an |
| |
income tax advantage or capital gains tax advantage, a mixed fund |
| |
would otherwise be regarded as containing income or capital within |
| |
any of paragraphs (f) to (i) of section 809Q(4). |
| 45 |
|
| |
|