Finance Bill

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Finance Bill

Finance Bill (Volume I)
Schedule 7 — Remittance basis
Part 1 — Main provisions
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(2)
Treat the mixed fund as containing so much (if any) of the income or
capital as is just and reasonable.
(3)
“Arrangement” includes any scheme, understanding, transaction or
series or transactions (whether or not enforceable).
(4)
“Income tax advantage” has the meaning given by section 683.
5
(5)
“Capital gains tax advantage” means—
(a)
a relief from capital gains tax or increased relief from capital
gains tax,
(b)
a repayment of capital gains tax or increased repayment of
capital gains tax,
10
(c)
the avoidance or reduction of a charge to capital gains tax or
an assessment to capital gains tax, or
(d)
the avoidance of a possible assessment to capital gains tax.
Remittance of income and gains: supplementary
809T
Foreign chargeable gains accruing on disposal made other than for full
15
consideration
(1)
This section applies if—
(a)
foreign chargeable gains accrue to an individual on the
disposal of an asset, and
(b)
the individual does not receive consideration for the disposal
20
of an amount equal to the market value of the asset.
(2)
For the purposes of sections 809L to 809R, treat the asset as deriving
from the chargeable gains.
809U
Deemed income or gains not to be regarded as remitted before time
when they are treated as arising or accruing
25
Where—
(a)
income or foreign chargeable gains are treated as arising or
accruing, and
(b)
by virtue of anything done in relation to anything regarded
as deriving from the income or chargeable gains, the income
30
or chargeable gains would otherwise be regarded as remitted
to the United Kingdom before the time when they are treated
as arising or accruing,
treat the income or chargeable gains as remitted to the United
Kingdom at that time.
35
Remittance of income and gains: property treated as not remitted
809V
Money paid to the Commissioners
(1)
Money that is brought to the United Kingdom by way of one or more
direct payments to the Commissioners is to be treated as not remitted
to the United Kingdom—
40
(a)
if the payments are made in relation to a tax year to which
section 809H applies, and
(b)
if, or to the extent that, the payments do not exceed £30,000.

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Part 1 — Main provisions
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(2)
Subsection (1) does not apply to a payment if, or to the extent that, it
is repaid by the Commissioners.
809W
Consideration for certain services
(1)
This section applies to income or chargeable gains if—
(a)
the income or gains would (but for subsection (2)) be taken to
5
be remitted to the United Kingdom because conditions A and
B in section 809L are met,
(b)
condition A in section 809L is met because a service is
provided in the United Kingdom (“the relevant UK service”),
and
10
(c)
condition B in section 809L is met because section 809L(3)(a)
or (b) applies to the consideration for the relevant UK service
(“the relevant consideration”).
(2)
The income or chargeable gains are to be treated as not remitted to
the United Kingdom if the following conditions are met.
15
(3)
Condition A is that the relevant UK service relates wholly or mainly
to property situated outside the United Kingdom.
(4)
Condition B is that the whole of the relevant consideration is given
by way of one or more payments to one or more bank accounts held
outside the United Kingdom by or on behalf of the person who
20
provides the relevant UK service.
(5)
Sections 275 to 275C of TCGA 1992 (location of assets) apply for the
purposes of subsection (3) as they apply for the purposes of TCGA
1992.
809X
Exempt property
25
(1)
Exempt property which is brought to, or received or used in, the
United Kingdom in circumstances in which section 809L(2)(a)
applies is to be treated as not remitted to the United Kingdom.
(2)
Subsections (3) to (5) set out the cases in which property is exempt
property.
30
(3)
Property is exempt property if it meets the public access rule (see
sections 809Z and 809Z1).
(4)
Clothing, footwear, jewellery and watches that derive from relevant
foreign income are exempt property if they meet the personal use
rule (see section 809Z2).
35
(5)
Property of any description that derives from relevant foreign
income is exempt property if—
(a)
the property meets the repair rule (see section 809Z3),
(b)
the property meets the temporary importation rule (see
section 809Z4), or
40
(c)
the notional remitted amount (see section 809Z5) is less than
£1,000.

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Schedule 7 — Remittance basis
Part 1 — Main provisions
172

809Y
Property that ceases to be exempt property treated as remitted
(1)
Property that ceases to be exempt property is to be treated as having
been remitted to the United Kingdom at the time it ceases to be
exempt property.
(2)
Property ceases to be exempt property in either of the following
5
cases.
(3)
The first case is where the whole or part of the exempt property is
sold, or otherwise converted into money, whilst it is in the United
Kingdom.
(4)
The second case is where the property—
10
(a)
is exempt property only because it meets one or more of the
relevant rules,
(b)
ceases to meet that rule, or all of those rules, whilst it is in the
United Kingdom, and
(c)
does not meet any other relevant rule.
15
(5)
In this section—
“money” includes—
(a)
a traveller’s cheque,
(b)
a promissory note,
(c)
a bill of exchange, and
20
(d)
any other—
(i)
instrument that is evidence of a debt, or
(ii)
voucher, stamp or similar token or document
which is capable of being exchanged for
money, goods or services, and
25
“relevant rule” means—
(a)
the public access rule,
(b)
the personal use rule,
(c)
the repair rule, and
(d)
the temporary importation rule.
30
809Z
Public access rule: general
(1)
Property meets the public access rule if conditions A to D are met.
(2)
Condition A is that the property is—
(a)
a work of art,
(b)
a collectors’ item, or
35
(c)
an antique,

within the meaning of Council Directive 2006/112/EC (see, in
particular, Annex IX to that Directive).
(3)
Condition B is that—
(a)
the property is available for public access at an approved
40
establishment,
(b)
the property is to be available for public access at an
approved establishment and, in connection with its being so
available, is in transit to, or in storage at, public access rule
premises, or
45

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Schedule 7 — Remittance basis
Part 1 — Main provisions
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(c)
the property has been available for public access at an
approved establishment and, in connection with its having
been so available, is in transit from, or in storage at, public
access rule premises.
(4)
Property is “available for public access” at an approved
5
establishment if the property is—
(a)
on public display at the establishment,
(b)
held by the establishment and made available to the public
on request for viewing or for educational use, or
(c)
held by the establishment for public exhibition in connection
10
with the sale of the property.
(5)
An “approved establishment” is—
(a)
an approved museum, gallery or other institution within the
meaning of Group 9 of Schedule 2 to the Value Added Tax
(Imported Goods) Relief Order 1984, or
15
(b)
any other person, premises or institution designated (or of a
description designated) by the Commissioners.
(6)
“Public access rule premises” are—
(a)
premises in the United Kingdom at which the property is to
be, or has been, available for public access, or
20
(b)
other commercial premises in the United Kingdom used by
the approved establishment for the storage of property in
advance of its being, or after its having been, available for
public access at the approved establishment.
(7)
Condition C is that, during the relevant period, the property meets
25
condition B for no more than—
(a)
two years, or
(b)
such longer period as the Commissioners may specify.
(8)
“The relevant period” means the period—
(a)
beginning with the importation of the property, and
30
(b)
ending when it ceases to be in the United Kingdom after that
importation.
(9)
“Importation” means the property being brought to, or received or
used in, the United Kingdom in circumstances in which section
809L(2)(a) applies.
35
(10)
Condition D is that the property attracts a relevant VAT relief (see
section 809Z1).
809Z1
Public access rule: relevant VAT relief
(1)
Property “attracts a relevant VAT relief” if any of conditions 1 to 4 are
met.
40
(2)
Condition 1 is that article 5(1) of the Value Added Tax (Imported
Goods) Relief Order 1984 applies in relation to the importation of the
property by virtue of Group 9 of Schedule 2 to that Order
(importation of works of art or collectors’ pieces by museums etc).
(3)
Condition 2 is that article 5(1) would so apply if the following
45
requirements were disregarded—

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(a)
the requirement that the importation be from a third country,
and
(b)
the requirement that the purpose of the importation be a
purpose other than sale.
(4)
Condition 3 is that article 576(3)(a) of Commission Regulation (EEC)
5
No 2454/93 (relief from import duties for works of art etc imported
for the purposes of exhibition, with a view to possible sale) applies in
relation to the importation of the property.
(5)
Condition 4 is that article 576(3)(a) would so apply if the requirement
that the importation be from a third country were disregarded.
10
(6)
Where the property does not meet condition B in section 809Z at the
time of its importation it is to be assumed for the purposes of this
section that the property was imported on the day during the
relevant period when the property first meets that condition.
(7)
“The relevant period” and “importation” have the same meaning as
15
in section 809Z and “imported” is to be read accordingly.
809Z2
Personal use rule
(1)
Clothing, footwear, jewellery or watches meet the personal use rule
if they—
(a)
are property of a relevant person, and
20
(b)
are for the personal use of a relevant individual.
(2)
In this section—
(a)
“relevant person” has the meaning given by section 809M,
and
(b)
“relevant individual” means an individual who is a relevant
25
person by virtue of section 809M(2)(a), (b), (c) or (d) (the
individual with income or gains, or a husband, wife, civil
partner, child or grandchild).
809Z3
Repair rule
(1)
Property meets the repair rule for the whole of the relevant period if,
30
during the whole of that period, the property meets the repair
conditions.
(2)
Property meets the repair rule for a part of the relevant period if—
(a)
during the whole of that part of that period, the property
meets the repair conditions, and
35
(b)
during the whole of the other part of that period, or the whole
of each other part of that period, the property meets the
repair conditions or the public access rule.
(3)
Property meets the repair conditions if the property—
(a)
is under repair or restoration,
40
(b)
is in transit from a place outside the United Kingdom to
repair rule premises, in transit between such premises, or in
storage at such premises, in advance of repair or restoration,
or

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(c)
is in storage at such premises, in transit between such
premises, or in transit from such premises to a place outside
the United Kingdom, following repair or restoration.
(4)
“Repair rule premises” means—
(a)
premises in the United Kingdom that are to be used, or have
5
been used, for the repair or restoration referred to in
subsection (3)(b) or (c), or
(b)
other commercial premises in the United Kingdom used by
the restorer for the storage of property in advance of, or
following, repair or restoration of property by the restorer.
10
(5)
“Restorer” means the person who is to carry out, or has carried out,
the repair or restoration referred to in subsection (3)(b) or (c).
(6)
Property meets the repair conditions, or the public access rule,
during the whole of a period, or the whole of part of a period, if the
property meets those conditions or that rule—
15
(a)
on the whole of, or on part of, the first day of that period or
part period,
(b)
on the whole of, or on part of, the last day of that period or
part period, and
(c)
on the whole of each other day of that period or part period.
20
(7)
“The relevant period” has the same meaning as in section 809Z.
809Z4
Temporary importation rule
(1)
Property meets the temporary importation rule if the total number of
countable days is 275 or fewer.
(2)
A “countable day” is a day on which, or on part of which, the
25
property is in the United Kingdom by virtue of being brought to, or
received or used in, the United Kingdom in circumstances in which
section 809L(2)(a) applies (whether the current case, or a past case,
when the property was so brought, received or used).
(3)
A day is not a countable day if, on that day or any part of that day—
30
(a)
the property meets the personal use rule,
(b)
the property meets the repair rule, or
(c)
the notional remitted amount in relation to the property is
less than £1,000.
(4)
A day on which, or on part of which, the property meets the public
35
access rule (the “relevant day”) is not a countable day if any of
conditions A to C is met.
(5)
Condition A is that the property meets the public access rule during
the whole of the period of importation in which the relevant day
falls.
40
(6)
Condition B is that—
(a)
the property does not meet the public access rule during the
whole of the period of importation in which the relevant day
falls, and
(b)
that period of importation—
45
(i)
begins with a period of no public access, and

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(ii)
ends with a period of public access which
immediately follows that period of no public access.
(7)
Condition C is that—
(a)
the property does not meet the public access rule during the
whole of the period of importation in which the relevant day
5
falls, and
(b)
during the parts, or each of the parts of the period of
importation during which the property does not meet the
public access rule it meets the repair conditions.
(8)
Section 809Z3(6) applies for the purposes of this section.
10
(9)
“Period of importation” means a period that—
(a)
begins when property is brought to, or received or used in,
the United Kingdom in circumstances in which section
809L(2)(a) applies, and
(b)
ends when the property ceases to be in the United Kingdom
15
after having been so brought, received or used.
(10)
“Period of no public access” means a period which is not a period of
public access and “period of public access” means a period during
the whole of which property meets the public access rule.
809Z5
Notional remitted amount
20
(1)
The “notional remitted amount”, in relation to property, is the
amount of income that would be taken to be remitted to the United
Kingdom in relation to the property (if section 809X did not apply in
relation to the property).
(2)
If—
25
(a)
property forms part of a set, and
(b)
only part of the set is in the United Kingdom,

the notional remitted amount is such part of the amount specified in
subsection (3) as is just and reasonable having regard to the part of
the set that actually is in the United Kingdom.
30
(3)
That amount is the amount that would be taken to be remitted to the
United Kingdom if the complete set had been brought to, or received
or used in, the United Kingdom, at the same time as the part in
question.
809Z6
Exempt property: other interpretation
35
(1)
This section applies for the purposes of sections 809X to 809Z5.
(2)
“Property” does not include money.
(3)
In subsection (2) “money” includes—
(a)
a traveller’s cheque,
(b)
a promissory note,
40
(c)
a bill of exchange, and
(d)
any other—
(i)
instrument that is evidence of a debt, or