Finance Bill

House of Commons

Session 2007 - 08
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Finance Bill

Finance Bill (Volume II)
Schedule 29 — Further provision about pension schemes
360

individual becomes entitled to payment of the pension at the
increased rate.”
10
In paragraph 13 (benefit crystallisation event 3: meaning of XP), for sub-
paragraph (2) substitute—
    “(2)
But if one or more benefit crystallisation events has or have
previously occurred by reason of the individual having become
entitled to payment of the pension at an increased rate, XP does
not include the amount of XP on that event or the aggregate of the
amounts of XP on those events.
     (2A)
For the purposes of sub-paragraph (2), the amount of XP on a
previous benefit crystallisation event is to be increased by
whichever of calculation A and calculation B gives the greater
amount.
     (2B)
Calculation A involves increasing the amount of XP on the
previous event at the relevant annual percentage rate for the
whole of the period—
(a)
beginning with the month in which the previous event
occurred, and
(b)
ending with the month in which the individual becomes
entitled to payment of the pension at the increased rate.
     (2C)
The relevant annual percentage rate has the same meaning as in
paragraph 11(4).
     (2D)
Calculation B involves increasing the amount of XP on the
previous event by the relevant indexation percentage.
     (2E)
The relevant indexation percentage is—
(a)
if the retail prices index for the reference month is higher
than the retail prices index for the base month, the
percentage increase in the retail prices index, and
(b)
if it is not, 0%.
     (2F)
The scheme administrator may select as the reference month any
month in the period of 12 months ending with the month in which
the individual becomes entitled to payment of the pension at the
increased rate.
     (2G)
The base month is the month which is the same number of months
before the month in which the previous event occurred, as the
reference month is before the month in which the individual
becomes entitled to payment of the pension at the increased rate.”
11
In consequence of the amendment made by paragraph 7(3), in Schedule 10
to FA 2005, omit paragraph 44.
12    (1)
The amendments made by paragraphs 9(2) and (3) come into force on 6 April
2008.
      (2)
The amendment made by paragraph 10 has effect for the purposes of any
benefit crystallisation event 3 occurring on or after 10 October 2007
(including the calculation, for the purposes of such an event, of the amount
of XP on any benefit crystallisation event occurring before that date).

Finance Bill (Volume II)
Schedule 29 — Further provision about pension schemes
361

      (3)
Subject to that, the amendments made by paragraphs 4 to 11 are treated as
having come into force on 6 April 2006.
Transitional protection of lump sums
13    (1)
In paragraph 34 of Schedule 36 to FA 2004 (pension commencement lump
sums), in the provisions of paragraph 2 of Schedule 29 substituted by sub-
paragraph (2)—
(a)
in sub-paragraph (5), omit the words from “and relevant” to “2006”
and
(b)
omit sub-paragraphs (6) and (7C).
      (2)
The amendments made by sub-paragraph (1) are treated as having come
into force on 6 April 2006.
Miscellaneous provision about registered pension schemes
14    (1)
FA 2004 is amended as follows.
      (2)
In section 197 (spreading of relief)—
(a)
in subsection (2), for “section 196 (relief for employers in respect of
contributions paid)” substitute “the relieving provisions”,
(b)
in subsection (4), for “section 196” substitute “the relieving
provisions”, and
(c)
after subsection (9) insert—
“(9A)
In this section “the relieving provisions” means the
provisions mentioned in subsections (2) to (4) of section 196
(relief for employers in respect of contributions paid), as they
have effect under that section.”
      (3)
In section 199(2) (deemed contributions), for paragraphs (a) to (c) substitute
“the relieving provisions (within the meaning of section 197) and sections
197 and 198”.
      (4)
In consequence of the amendment made by sub-paragraph (3), in Schedule
1 to ITTOIA 2005 (consequential amendments), omit paragraph 648.
15
In section 215(4)(a) of FA 2004 (amount of lifetime allowance charge), after
“first lifetime allowance” insert “charge”.
16
In Schedule 34 to that Act (non-UK schemes: application of certain charges),
in paragraph 7ZA for “Commissions” substitute “Commissioners”.
Employer contributions under exempt approved schemes
17    (1)
This paragraph applies in relation to section 592 of ICTA (which before its
repeal made provision about exempt approved pension schemes), where
that section had effect as amended by the 2004 Order.
      (2)
Section 592 is to be treated as having had effect as if after subsection (4) (as
substituted by the 2004 Order) there had been inserted—
“(4A)
No sums other than contributions made by the employer to the
pension scheme in respect of an individual—

Finance Bill (Volume II)
Schedule 29 — Further provision about pension schemes
362

(a)
are deductible in computing the amount of the profits of the
employer for the purposes of Part 2 of ITTOIA 2005 or Case I
or II of Schedule D,
(b)
are expenses of management for the purposes of section 75,
or
(c)
are to be brought into account at Step 1 in section 76(7),

in connection with the cost of providing benefits under the pension
scheme.”
      (3)
But the words “Part 2 of ITTOIA 2005 or” in subsection (4A)(a) are to be
treated as having had effect only in relation to times in relation to which (by
virtue of paragraph 253(3) of Schedule 1 to ITTOIA 2005) they had effect in
section 592(4)(a).
      (4)
In this paragraph “the 2004 Order” means the Finance Act 2004, Sections 38
to 45 and Schedule 6 (Consequential Amendment of Enactments No. 2)
Order 2004 (S.I. 2004/3269).
Inheritance tax treatment of non-UK pension schemes
18    (1)
IHTA 1984 is amended as follows.
      (2)
In section 12(2) (dispositions conferring benefits under pension scheme), for
“or” substitute “, a qualifying non-UK pension scheme or a”.
      (3)
In section 58 (meaning of relevant property)—
(a)
in subsection (1)(d), for “or” substitute “, a qualifying non-UK
pension scheme or a”, and
(b)
in subsection (2A)(b), after “member of” insert “a qualifying non-UK
pension scheme or”.
      (4)
In section 151(2), (4) and (5) (treatment of pension rights etc), for “or section”
substitute “, a qualifying non-UK pension scheme or a section”.
      (5)
In section 152 (cash options), for “or section” substitute “, a qualifying non-
UK pension scheme or a section”.
      (6)
After section 271 insert—
“271A
Qualifying non-UK pension scheme
(1)
For the purposes of this Act “qualifying non-UK pension scheme”
means a pension scheme (other than a registered pension scheme)
which—
(a)
is established in a country or territory outside the United
Kingdom, and
(b)
satisfies any requirements prescribed for the purposes of this
section by regulations made by the Commissioners for Her
Majesty’s Revenue and Customs.
(2)
“Pension scheme” has the same meaning as in Part 4 of the Finance
Act 2004 (see section 150 of that Act).
(3)
Regulations under this section may include provision having effect
in relation to times before the regulations are made if it does not
increase any person’s liability to tax.

Finance Bill (Volume II)
Schedule 30 — Stamp duty land tax: notification etc: consequential provision
363

(4)
The power to make regulations under this section is exercisable by
statutory instrument, which is subject to annulment in pursuance of
a resolution of the House of Commons.”
      (7)
In paragraph 56 of Schedule 36 to FA 2004 (pension schemes: transitional
provision in relation to inheritance tax)—
(a)
in sub-paragraph (1)(a), after “registered pension scheme” insert “, a
qualifying non-UK pension scheme”, and
(b)
after sub-paragraph (3) insert—
    “(4)
In this paragraph “qualifying non-UK pension scheme”
has the same meaning as in the Inheritance Tax Act 1984
(see section 271A of that Act).”
      (8)
The amendments made by this paragraph are treated as having come into
force on 6 April 2006.
Application of charges to non-UK pension schemes
19    (1)
Schedule 34 to FA 2004 (which applies certain charges to non-UK pension
schemes) is amended as follows.
      (2)
In paragraph 10(2), in the definition of EI, after “tax year,” insert “excluding
any such income which is exempt income (within the meaning of section 8
of ITEPA 2003),”.
      (3)
In paragraph 11(2), in the definition of EI, after “tax year,” insert “excluding
any such income which is exempt income (within the meaning of section 8
of ITEPA 2003),”.
      (4)
The amendment made by sub-paragraph (2) has effect for the tax year 2008-
09 and subsequent tax years.
      (5)
The amendment made by sub-paragraph (3) has effect—
(a)
for the tax year 2007-08 in accordance with sub-paragraph (6), and
(b)
for the tax year 2008-09 and subsequent tax years.
      (6)
For the tax year 2007-08, for the purposes of paragraph 11(1)(b) of Schedule
34 to FA 2004 the appropriate fraction of the contributions mentioned in that
paragraph is the aggregate of—
(a)
the appropriate fraction of so much of those contributions as are paid
before 12 March 2008, calculated in accordance with paragraph 11(2)
unamended by sub-paragraph (3), and
(b)
the appropriate fraction of so much of those contributions as are paid
on and after that date, calculated in accordance with paragraph 11(2)
as amended by sub-paragraph (3).
Schedule 30
Section 92

Stamp duty land tax: notification etc: consequential provision
FA 2003
1
Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

Finance Bill (Volume II)
Schedule 30 — Stamp duty land tax: notification etc: consequential provision
364

2     (1)
Section 79 (registration of land transactions) is amended as follows.
      (2)
In subsection (3), omit the word “either”, paragraph (b) and the word “or”
before it.
      (3)
For subsection (5) substitute—
“(5)
Part 2 of Schedule 11 imposes a duty to keep and preserve records in
respect of transactions that are not notifiable.”
      (4)
In subsection (6)(a), omit “or self-certificates”.
3
In section 81B(1) (declaration by person authorised to act on behalf of
individual), omit “or paragraph 2(1)(c) of Schedule 11” and “or self-
certificate”.
4     (1)
Section 103 (joint purchasers) is amended as follows.
      (2)
In subsection (4), omit “or paragraph 2(1)(c) of Schedule 11” and “or self-
certificate”.
      (3)
In subsection (5), omit “or self-certificate”.
5     (1)
Section 122 (index of defined expressions) is amended as follows.
      (2)
In the entry for “closure notice”, omit “Schedule 11, paragraph 16(1) (in
relation to a self-certificate)”.
      (3)
In the entry for “notice of enquiry”, omit “Schedule 11, paragraph 7(1) (in
relation to a self-certificate)”.
      (4)
In the entry for “notifiable (in relation to a land transaction)”, after “72A(7)”
insert “and paragraph 30 of Schedule 15”.
      (5)
Omit the entry for “self-certificate”.
6
In Part 4 of Schedule 6 (SDLT: disadvantaged areas relief), in paragraph 13,
for “section 77 (which specifies” substitute “sections 77 and 77A (which
specify”.
7
In paragraph 36 of Schedule 10 (notice of appeal), in sub-paragraph (5A)(d),
for “one for which a self-certificate is due” substitute “not notifiable”.
8
Omit Part 1 of Schedule 11 (SDLT: self-certificates).
9     (1)
In Part 2 of that Schedule (duty to keep and preserve records), paragraph 4
is amended as follows.
      (2)
Before sub-paragraph (1) insert—
   “(A1)
This paragraph applies where a transaction is not notifiable,
unless the transaction is a transaction treated as taking place
under a provision listed in section 79(2)(a) to (d).”
      (3)
In sub-paragraph (1)—
(a)
for “A purchaser who may be required to give a self-certificate”
substitute “The purchaser”, and
(b)
in paragraph (a), for “to deliver a correct and complete certificate”
substitute “to demonstrate that the transaction is not notifiable”.
      (4)
In sub-paragraph (2), omit the words from “and” to the end.

Finance Bill (Volume II)
Schedule 31 — Stamp duty land tax: special provisions for property-investment partnerships
Part 1 — Transfer of interest in partnership: “relevant partnership property”
365

10
Omit Part 3 of that Schedule (enquiry into self-certificate).
11
Accordingly, in the heading to Schedule 11, for “self-certificates”
substitute “record-keeping where transaction is not notifiable”.
12
In Schedule 15 (SDLT: partnerships), in paragraph 8(2), omit “or paragraph
2(1)(c) of Schedule 11” and “or self-certificate”.
13    (1)
In Schedule 16 (SDLT: trusts and powers), paragraph 6 is amended as
follows.
      (2)
In sub-paragraphs (1) and (3), omit “or self-certificate”.
      (3)
In sub-paragraph (2), omit “or paragraph 2(1)(c) of Schedule 11” and “or self-
certificate”.
14
In Schedule 17A (SDLT: further provisions relating to leases), in paragraphs
3(2) and (5) and 4(1) and (4A), for “section 77” substitute “sections 77 and
77A”.
FA 2007
15
In consequence of the preceding provisions of this Schedule, omit section 81
of FA 2007.
Schedule 31
Section 95

Stamp duty land tax: special provisions for property-investment partnerships
Part 1
Transfer of interest in partnership: “relevant partnership property”
Paragraph 14 of Schedule 15 to FA 2003
1     (1)
Paragraph 14 of Schedule 15 to FA 2003 (transfer of interest in property-
investment partnership) is amended as follows.
      (2)
After sub-paragraph (3) insert—
   “(3A)
A transfer to which this paragraph applies is a Type A transfer if
it takes the form of arrangements entered into under which—
(a)
the whole or part of a partner’s interest as partner is
acquired by another person (who may be an existing
partner), and
(b)
consideration in money or money’s worth is given by or on
behalf of the person acquiring the interest.
     (3B)
A transfer to which this paragraph applies is also a Type A transfer
if it takes the form of arrangements entered into under which—
(a)
a person becomes a partner,
(b)
the interest of an existing partner in the partnership is
reduced or an existing partner ceases to be a partner, and
(c)
there is a withdrawal of money or money’s worth from the
partnership by the existing partner mentioned in

Finance Bill (Volume II)
Schedule 31 — Stamp duty land tax: special provisions for property-investment partnerships
Part 1 — Transfer of interest in partnership: “relevant partnership property”
366

paragraph (b) (other than money or money’s worth paid
from the resources available to the partnership prior to the
transfer).
     (3C)
Any other transfer to which this paragraph applies is a Type B
transfer.”
      (3)
In sub-paragraph (5)—
(a)
for “a transfer” substitute “a Type A transfer”,
(b)
in paragraph (a), after “any” insert “chargeable”, and
(c)
at the end insert “, and
(c)
any chargeable interest that is not attributable
economically to the interest in the partnership that
is transferred.”
      (4)
After that sub-paragraph insert—
   “(5A)
The “relevant partnership property”, in relation to a Type B
transfer of an interest in a partnership, is every chargeable interest
held as partnership property immediately after the transfer, other
than—
(a)
any chargeable interest that was transferred to the
partnership in connection with the transfer,
(b)
a lease to which paragraph 15 (exclusion of market rent
leases) applies,
(c)
any chargeable interest that is not attributable
economically to the interest in the partnership that is
transferred,
(d)
any chargeable interest that was transferred to the
partnership on or before 22 July 2004,
(e)
any chargeable interest in respect of whose transfer to the
partnership an election has been made under paragraph
12A, and
(f)
any other chargeable interest whose transfer to the
partnership did not fall within paragraph 10(1)(a), (b) or
(c).”
Consequential provision
2
In paragraph 15(1) of that Schedule (exclusion of market rent leases), after
“14(5)” insert “or (5A)”.
3
In paragraph 16(2) of that Schedule (application of provisions about
exchanges etc), after “14(5)” insert “or (5A) (as appropriate)”.
4
In paragraph 26(9) of that Schedule (application of disadvantaged areas
relief), in the definition of “the relevant partnership property” in the sub-
paragraph (1A) inserted by that sub-paragraph, after “14(5)” insert “or (5A)
(as appropriate)”.