|
| |
|
(b) | if only part of the capital payment is matched, the amount |
| |
| |
(3) | Section 87A applies for a tax year for the purposes of matching |
| |
capital payments received from the trustees of a relevant |
| |
settlement with section 2(2) amounts in the Schedule 4C pool as |
| 5 |
| |
(a) | references to section 2(2) amounts were to section 2(2) |
| |
amounts in the Schedule 4C pool, |
| |
(b) | references to a capital payment received from the trustees |
| |
by a beneficiary were to a capital payment received from |
| 10 |
the trustees of a relevant settlement by a beneficiary who is |
| |
chargeable to tax for that year, and |
| |
(c) | for section 87A(3)(b) there were substituted— |
| |
“(b) | all section 2(2) amounts in the Schedule 4C pool have |
| |
| 15 |
(4) | Section 87A applies for a tax year by virtue of this paragraph |
| |
before it applies for that year otherwise than by virtue of this |
| |
paragraph; but this is subject to sub-paragraph (5). |
| |
(5) | If section 87A applies for a tax year by virtue of section 762(3) of |
| |
the Taxes Act (offshore income gains), it applies for that year by |
| 20 |
virtue of that provision before it applies for that year by virtue of |
| |
| |
140 | After paragraph 8A insert— |
| |
“Attribution of gains: remittance basis |
| |
8AA | Section 87B (remittance basis) applies in relation to chargeable |
| 25 |
gains treated under paragraph 8 as accruing as it applies in |
| |
relation to chargeable gains treated under section 87 as accruing.” |
| |
141 | Omit paragraphs 8B and 8C (including the heading before paragraph 8B). |
| |
142 | For paragraph 9 (and the heading before it) substitute— |
| |
“Attribution of gains: disregard of certain capital payments |
| 30 |
9 (1) | For the purposes of paragraph 8 (and section 87A as it applies for |
| |
the purposes of that paragraph), no account is to be taken of a |
| |
capital payment to which any of sub-paragraphs (2) to (4) applies |
| |
(or a part of a capital payment to which sub-paragraph (4) |
| |
| 35 |
(2) | This sub-paragraph applies to a capital payment received before |
| |
the tax year preceding the tax year in which the original transfer is |
| |
| |
(3) | This sub-paragraph applies to a capital payment that— |
| |
(a) | is received by a beneficiary of a settlement from the |
| 40 |
trustees in a tax year during the whole of which the |
| |
| |
(i) | are resident and ordinarily resident in the United |
| |
| |
(ii) | are not Treaty non-resident, |
| 45 |
|
| |
|
| |
|
(b) | was made before any transfer of value to which Schedule |
| |
| |
(c) | was not made in anticipation of the making of any such |
| |
transfer of value or of chargeable gains accruing under that |
| |
| 5 |
(4) | This sub-paragraph applies to a capital payment if (and to the |
| |
extent that) it is received (or treated as received) in a tax year from |
| |
the trustees by a company that— |
| |
(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 |
| 10 |
| |
| (and is not treated under any of subsections (3) to (5) of section 96 |
| |
as received by another person).” |
| |
143 | In paragraph 10 (residence of trustees from whom capital payment |
| |
| 15 |
(a) | in sub-paragraph (1) for “sub-paragraph (2) below” substitute |
| |
| |
(b) | omit sub-paragraphs (2) and (3). |
| |
144 (1) | Paragraph 12 (attribution of gains to settlor in section 10A cases) is amended |
| |
| 20 |
(2) | For sub-paragraphs (1) to (3) substitute— |
| |
“(1) | This paragraph applies if— |
| |
(a) | by virtue of section 10A, an amount of chargeable gains |
| |
within section 86(1)(e) that accrued in an intervening year |
| |
to the trustees of a settlement would be treated as accruing |
| 25 |
to a person (“the settlor”) in the year of return, and |
| |
(b) | after paragraph 8 has applied for the year of return, the |
| |
section 2(2) amount for the intervening year that is in the |
| |
Schedule 4C pool for the settlement is less than the amount |
| |
mentioned in paragraph (a). |
| 30 |
(2) | The amount of chargeable gains treated as mentioned in sub- |
| |
paragraph (1)(a) as accruing to the settlor in the year of return is |
| |
limited to the section 2(2) amount referred to in sub-paragraph |
| |
| |
145 | In paragraph 12A(3), for “87(4)” substitute “87(2)”. |
| 35 |
146 (1) | Paragraph 13 (increase in tax payable under this Schedule) is amended as |
| |
| |
(2) | For sub-paragraph (1) substitute— |
| |
“(1) | This paragraph applies if— |
| |
(a) | chargeable gains are treated under paragraph 8 as accruing |
| 40 |
to a beneficiary by virtue of the matching (under section |
| |
87A) of all or part of a capital payment with the section 2(2) |
| |
amount for a tax year (“the relevant tax year”), and |
| |
(b) | the beneficiary is charged to tax by virtue of the matching. |
| |
|
| |
|
| |
|
(1A) | Where part of a capital payment is matched, references in sub- |
| |
paragraphs (2) and (3) to the capital payment are to the part |
| |
| |
(3) | In sub-paragraph (5)(a), for the words from “year of assessment” to the end |
| |
(excluding the “and”) substitute “tax year immediately after the relevant tax |
| 5 |
| |
147 | Omit paragraph 3 and 6(2) and (3) of Schedule 29 to FA 2003. |
| |
Attribution of gains to beneficiaries in cases involving transfers of value: commencement etc |
| |
148 | The amendments made by paragraphs 129 to 147 have effect in relation to |
| |
transfers of value to which Schedule 4B to TCGA 1992 applies that are made |
| 10 |
on or after 6 April 2008. |
| |
149 | For the purposes of paragraph 8 of Schedule 4C to TCGA 1992 (and section |
| |
87A of that Act as it applies for the purposes of that paragraph), no account |
| |
is to be taken of any capital payment received before 21 March 2000. |
| |
150 | A capital payment received before 6 April 2008 is not within paragraph 9(4) |
| 15 |
of Schedule 4C to TCGA 1992 (if it otherwise would be). |
| |
151 | Paragraph 125 applies in relation to chargeable gains treated under |
| |
paragraph 8 of Schedule 4C to TCGA 1992 as accruing as it applies in |
| |
relation to chargeable gains treated under section 87 as accruing. |
| |
152 (1) | This paragraph applies for the tax year 2008-09 or any subsequent tax year |
| 20 |
(“the relevant tax year”) if— |
| |
(a) | an individual who was resident or ordinarily resident, but not |
| |
domiciled, in the United Kingdom in the tax year 2007-08 received a |
| |
capital payment from the trustees of a settlement on or after 12 |
| |
March 2008 but before 6 April 2008, and |
| 25 |
(b) | the individual is resident or ordinarily resident, but not domiciled, in |
| |
the United Kingdom in the relevant tax year. |
| |
(2) | For the purposes of paragraph 8 of Schedule 4C to TCGA 1992 as it applies |
| |
for the relevant tax year (and section 87A of that Act as it applies for those |
| |
purposes), no account is to be taken of the capital payment. |
| 30 |
Attribution of gains to beneficiaries: existing Schedule 4C pools |
| |
153 | Schedule 4C to TCGA 1992 (as it has effect without the amendments made |
| |
by paragraphs 129 to 147) applies for the tax year 2008-09 and subsequent |
| |
tax years in relation to Schedule 4C pools created before 6 April 2008 |
| |
(“existing Schedule 4C pools”) as if paragraphs 7B and 9(2) were omitted. |
| 35 |
154 | Any reduction in the amount of a capital payment has effect for the purposes |
| |
of Schedule 4C to TCGA 1992 as it applies in relation to existing Schedule 4C |
| |
pools (as well as for other purposes). |
| |
155 (1) | If all of a capital payment ceases (in the tax year 2008-09 or any subsequent |
| |
tax year) to be available, the amount of the capital payment is reduced to nil. |
| 40 |
(2) | If part of a capital payment ceases (in the tax year 2008-09 or any subsequent |
| |
tax year) to be available, the amount of the capital payment is reduced by the |
| |
| |
|
| |
|
| |
|
(3) | A capital payment “ceases to be available” in a tax year if and to the extent |
| |
that, by reason of the capital payment, chargeable gains are treated under |
| |
paragraph 8 of Schedule 4C to TCGA 1992 (as it has effect in relation to |
| |
existing Schedule 4C pools) as accruing in that year to the recipient. |
| |
| 5 |
(a) | chargeable gains are treated under paragraph 8 of Schedule 4C to |
| |
TCGA 1992 (as it has effect in relation to existing Schedule 4C pools) |
| |
as accruing in a tax year, |
| |
(b) | more than one capital payment that the beneficiary has received is |
| |
taken into account for the purposes of determining the amount of |
| 10 |
chargeable gains treated as accruing to the beneficiary, and |
| |
(c) | the amount of the chargeable gains is less than the total amount of |
| |
capital payments taken into account, |
| |
| sub-paragraph (3) applies in relation to earlier capital payments before later |
| |
| 15 |
| |
(a) | Schedule 4C to TCGA 1992 (as amended by paragraphs 129 to 147) |
| |
applies in relation to a settlement before that Schedule (as it has effect |
| |
without those amendments) applies in relation to the settlement, and |
| |
(b) | that Schedule (as it has effect without those amendments) applies in |
| 20 |
relation to the settlement before section 87 or 89(2) of that Act applies |
| |
in relation to the settlement. |
| |
Transfers of securities: accrued income profits |
| |
157 | In section 830(4) of ITTOIA 2005 (meaning of “relevant foreign income”)— |
| |
(a) | omit the “and” at the end of paragraph (f), and |
| 25 |
(b) | at the end of paragraph (g) insert— |
| |
“(h) | section 670A of ITA 2007 (accrued income profits),”. |
| |
158 | In section 617 of ITA 2007 (accrued income profits: income charged), after |
| |
| |
“(7) | Subsection (1) is subject to section 832 of ITTOIA 2005 (relevant |
| 30 |
foreign income charged on remittance basis).” |
| |
159 | Omit section 644 of that Act (accrued income profits: individuals to whom |
| |
remittance basis applies). |
| |
160 | After section 670 of that Act insert— |
| |
“Individuals to whom remittance basis applies |
| 35 |
670A | Individuals to whom remittance basis applies |
| |
(1) | This section applies if— |
| |
(a) | accrued income profits are made by an individual as a result |
| |
of a transfer of foreign securities, and |
| |
(b) | section 809B, 809D or 809E (remittance basis) applies to the |
| 40 |
individual for the tax year in which the profits are made. |
| |
(2) | Treat the accrued income profits as relevant foreign income of the |
| |
| |
|
| |
|
| |
|
(3) | For the purposes of sections 809L to 809R (meaning of “remitted to |
| |
the United Kingdom” etc)— |
| |
(a) | if the individual is the transferor— |
| |
(i) | treat any consideration for the transfer as deriving |
| |
from the accrued income profits, and |
| 5 |
(ii) | if on the transfer the individual does not receive |
| |
consideration of an amount equal to the market value |
| |
of the securities, treat the securities as deriving from |
| |
the accrued income profits, and |
| |
(b) | if the individual is the transferee, treat the securities as |
| 10 |
deriving from the accrued income profits. |
| |
(4) | For the purposes of this section securities are “foreign” if income |
| |
from them would be relevant foreign income.” |
| |
161 | The amendments made by paragraphs 157 to 160 have effect in relation to |
| |
transfers of securities where the settlement day is on or after 6 April 2008. |
| 15 |
Transfers of assets abroad |
| |
162 | In section 46B(4)(c) of TMA 1970 (questions to be determined by Special |
| |
Commissioners), for “sections 720, 727 and 731” substitute “any provision of |
| |
| |
163 | In section 830(4) of ITTOIA 2005 (meaning of “relevant foreign income”), |
| 20 |
after paragraph (h) insert “and |
| |
(i) | sections 726, 730 and 735 of that Act (transfer of assets abroad: |
| |
| |
164 | ITA 2007 is amended as follows. |
| |
165 | In section 720(4) (transfer of assets abroad: charge where power to enjoy |
| 25 |
income), after “abroad)” insert “and section 726 (non-UK domiciled |
| |
individuals to whom remittance basis applies)”. |
| |
166 | For section 726 substitute— |
| |
“726 | Non-UK domiciled individuals to whom remittance basis applies |
| |
(1) | This section applies in relation to income treated under section 721 as |
| 30 |
arising to an individual in a tax year (“the deemed income”) if— |
| |
(a) | section 809B, 809D or 809E (remittance basis) applies to the |
| |
individual for the year, and |
| |
(b) | the individual is not domiciled in the United Kingdom in the |
| |
| 35 |
(2) | For the purposes of this section the deemed income is “foreign” if |
| |
(and to the extent that) the income mentioned in section 721(2) would |
| |
be relevant foreign income if it were the individual’s. |
| |
(3) | Treat the foreign deemed income as relevant foreign income of the |
| |
| 40 |
(4) | For the purposes of sections 809L to 809R (meaning of “remitted to |
| |
the United Kingdom” etc), treat so much of the income within section |
| |
721(2) as would be relevant foreign income if it were the individual’s |
| |
as deriving from the foreign deemed income.” |
| |
|
| |
|
| |
|
167 | In section 727 (transfer of assets abroad: charge where capital sums |
| |
received), after subsection (3) insert— |
| |
“(3A) | But see section 730 (non-UK domiciled individuals to whom |
| |
remittance basis applies).” |
| |
168 | For section 730 substitute— |
| 5 |
“730 | Non-UK domiciled individuals to whom remittance basis applies |
| |
(1) | This section applies in relation to income treated under section 728 as |
| |
arising to an individual in a tax year (“the deemed income”) if— |
| |
(a) | section 809B, 809D or 809E (remittance basis) applies to the |
| |
individual for the year, and |
| 10 |
(b) | the individual is not domiciled in the United Kingdom in the |
| |
| |
(2) | For the purposes of this section the deemed income is “foreign” if |
| |
(and to the extent that) the income mentioned in section 728(1)(a) |
| |
would be relevant foreign income if it were the individual’s. |
| 15 |
(3) | Treat the foreign deemed income as relevant foreign income of the |
| |
| |
(4) | For the purposes of sections 809L to 809R (meaning of “remitted to |
| |
the United Kingdom” etc), treat so much of the income within section |
| |
728(1)(a) as would be relevant foreign income if it were the |
| 20 |
individual’s as deriving from the foreign deemed income.” |
| |
169 | In section 731 (transfer of assets abroad: charge where benefit received), after |
| |
| |
“(2A) | But see section 735 (non-UK domiciled individuals to whom |
| |
remittance basis applies).” |
| 25 |
170 | For section 735 substitute— |
| |
“735 | Non-UK domiciled individuals to whom remittance basis applies |
| |
(1) | This section applies if— |
| |
(a) | income is treated under section 732 as arising to an individual |
| |
in a tax year (“the deemed income”), |
| 30 |
(b) | section 809B, 809D or 809E (remittance basis) applies to the |
| |
individual for the year, and |
| |
(c) | the individual is not domiciled in the United Kingdom in the |
| |
| |
(2) | For the purposes of this section the deemed income is “foreign” if |
| 35 |
(and to the extent that) the relevant income to which it relates would |
| |
be relevant foreign income if it were the individual’s. |
| |
(3) | Treat the foreign deemed income as relevant foreign income of the |
| |
| |
(4) | For the purposes of sections 809L to 809R (meaning of “remitted to |
| 40 |
the United Kingdom” etc), treat relevant income, or a benefit, that |
| |
relates to any part of the foreign deemed income as deriving from |
| |
that part of the foreign deemed income. |
| |
|
| |
|