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Finance Bill
Schedule 51 — Time limits for assessments, claims etc

365

 

Schedule 51

Section 98

 

Time limits for assessments, claims etc

Insurance premium tax

1          

Schedule 7 to FA 1994 (insurance premium tax) is amended as follows.

2          

In paragraph 8(4) (recovery of overpaid tax), for “three years” substitute “4

5

years”.

3          

In paragraph 22(9) (interest payable by Commissioners), for “three years”

substitute “4 years”.

4     (1)  

Paragraph 26 (assessments: time limits) is amended as follows.

      (2)  

In sub-paragraph (1), for the words from “three years after” (in the first

10

place) to the end substitute “4 years after the relevant event”.

      (3)  

After that sub-paragraph insert—

   “(1A)  

In this paragraph “the relevant event”, in relation to an

assessment, means—

(a)   

the end of the accounting period concerned, or

15

(b)   

in the case of an assessment under paragraph 25 of an

amount due by way of a penalty other than a penalty

referred to in paragraph 25(2), the event giving rise to the

penalty.”

      (4)  

In sub-paragraph (3), for “sub-paragraph (1)” substitute “sub-paragraph

20

(1A)”.

      (5)  

For sub-paragraph (4) substitute—

    “(4)  

An assessment of an amount due from a person in a case involving

a loss of tax—

(a)   

brought about deliberately by the person (or by another

25

person acting on that person’s behalf), or

(b)   

attributable to a failure by the person to comply with an

obligation under section 53(1) or (2) or 53AA(1) or (3),

           

may be made at any time not more than 20 years after the relevant

event.

30

      (5)  

In sub-paragraph (4)(a) the reference to a loss brought about

deliberately by the person includes a loss brought about as a result

of a deliberate inaccuracy in a document given to Her Majesty’s

Revenue and Customs by or on behalf of that person.”

Inheritance tax

35

5          

IHTA 1984 is amended as follows.

6          

In section 131 (transfers within 7 years before death: the relief), after

subsection (2) insert—

“(2ZA)   

A claim under subsection (2)(b) must be made not more than 4 years

after the transferor’s death.”

40

 
 

Finance Bill
Schedule 51 — Time limits for assessments, claims etc

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7          

In section 146(2)(a) (Inheritance (Provision for Family and Dependants) Act

1975), after “claim for the purpose” insert “not more than 4 years after the

date on which the order is made”.

8          

In section 150 (voidable transfers), insert at the end—

“(3)   

A claim under this section must be made not more than 4 years after

5

the claimant knew, or ought reasonably to have known, that the

relevant transfer has been set aside.”

9          

In section 179 (sale of shares etc from deceased’s estate: the relief), after

subsection (2) insert—

“(2A)   

A claim under this Chapter must be made not more than 4 years after

10

the end of the period mentioned in subsection (1)(a).”

10         

In section 191 (sale of land from deceased’s estate: the relief), after

subsection (1) insert—

“(1A)   

A claim under this Chapter must be made not more than 4 years after

the end of the period mentioned in subsection (1)(a).”

15

11    (1)  

Section 240 (underpayments) is amended as follows.

      (2)  

In subsection (2), for “six years” substitute “4 years”.

      (3)  

For subsection (3) substitute—

“(3)   

Subsection (2) has effect subject to subsections (4) and (5).

(4)   

Proceedings in a case involving a loss of tax brought about carelessly

20

by a person liable for the tax (or a person acting on behalf of such a

person) may be brought at any time not more than 6 years after the

later of the dates in subsection (2)(a) and (b).

(5)   

Proceedings in a case involving a loss of tax brought about

deliberately by a person liable for the tax (or a person acting on

25

behalf of such a person) may be brought at any time not more than

20 years after the later of those dates.

(6)   

Subsection (7) applies to any case not falling within subsection (2)

where too little tax has been paid in respect of a chargeable transfer,

provided that the case does not involve a loss of tax brought about

30

deliberately by a person liable for the tax (or a person acting on

behalf of such a person).

(7)   

Where this subsection applies—

(a)   

no proceedings are to be brought for the recovery of the tax

after the end of the period of 20 years beginning with the date

35

on which the chargeable transfer was made, and

(b)   

at the end of that period any liability for the tax and any

Inland Revenue charge for that tax is extinguished.

(8)   

In relation to cases of tax chargeable under Chapter 3 of Part 3 of this

Act (apart from section 79), the references in subsections (4), (5) and

40

(6) to a person liable for the tax are to be treated as including

references to a person who is the settlor in relation to the settlement.”

 
 

Finance Bill
Schedule 51 — Time limits for assessments, claims etc

367

 

12         

After that section insert—

“240A   

 Underpayments: supplementary

(1)   

This section applies for the purposes of section 240.

(2)   

A loss of tax is brought about carelessly by a person if the person fails

to take reasonable care to avoid bringing about that loss.

5

(3)   

Where—

(a)   

information is provided to Her Majesty’s Revenue and

Customs,

(b)   

the person who provided the information, or the person on

whose behalf the information was provided, discovers some

10

time later that the information was inaccurate, and

(c)   

that person fails to take reasonable steps to inform Her

Majesty’s Revenue and Customs,

   

any loss of tax brought about by the inaccuracy is to be treated as

having been brought about carelessly by that person.

15

(4)   

References to a loss of tax brought about deliberately by a person

include a loss of tax brought about as a result of a deliberate

inaccuracy in a document given to Her Majesty’s Revenue and

Customs by or on behalf of that person.”

13         

In section 241(1) (overpayments), for “six years” substitute “4 years”.

20

Stamp duty land tax

14         

Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

15    (1)  

Schedule 10 (returns, enquiries, assessments and appeals) is amended as

follows.

      (2)  

In paragraph 25(3) (determination of tax chargeable if no return delivered),

25

for “six years” substitute “4 years”.

      (3)  

In paragraph 27(2)(a) (determination superseded by actual self-assessment),

for “six years” substitute “4 years”.

      (4)  

Paragraph 31 (time limit for assessment) is amended in accordance with sub-

paragraphs (5) to (8).

30

      (5)  

In sub-paragraph (1), for “six years” substitute “4 years”.

      (6)  

For sub-paragraph (2) substitute—

    “(2)  

An assessment of a person to tax in a case involving a loss of tax

brought about carelessly by the purchaser or a related person may

be made at any time not more than 6 years after the effective date

35

of the transaction to which it relates (subject to sub-paragraph

(2A)).

     (2A)  

An assessment of a person to tax in a case involving a loss of tax—

(a)   

brought about deliberately by the purchaser or a related

person,

40

(b)   

attributable to a failure by the person to comply with an

obligation under section 76(1) or paragraph 3(3)(a), 4(3)(a)

or 8(3)(a) of Schedule 17A, or

 
 

Finance Bill
Schedule 51 — Time limits for assessments, claims etc

368

 

(c)   

attributable to arrangements in respect of which the person

has failed to comply with an obligation under section 309,

310 or 313 of the Finance Act 2004 (obligation of parties to

tax avoidance schemes to provide information to Her

Majesty’s Revenue and Customs),

5

           

may be made at any time not more than 20 years after the effective

date of the transaction to which it relates.”

      (7)  

In sub-paragraph (4)(a), for “three years” substitute “4 years”.

      (8)  

After sub-paragraph (5) insert—

    “(6)  

In this paragraph “related person”, in relation to a purchaser,

10

means—

(a)   

a person acting on behalf of the purchaser, or

(b)   

a person who was a partner of the purchaser at the relevant

time.”

      (9)  

After paragraph 31 insert—

15

“Losses brought about carelessly or deliberately

31A   (1)  

This paragraph applies for the purposes of paragraph 31.

      (2)  

A loss of tax is brought about carelessly by a person if the person

fails to take reasonable care to avoid bringing about that loss.

      (3)  

Where—

20

(a)   

information is provided to Her Majesty’s Revenue and

Customs,

(b)   

the person who provided the information, or the person on

whose behalf the information was provided, discovers

some time later that the information was inaccurate, and

25

(c)   

that person fails to take reasonable steps to inform Her

Majesty’s Revenue and Customs,

           

any loss of tax brought about by the inaccuracy is to be treated as

having been brought about carelessly by that person.

      (4)  

References to a loss of tax brought about deliberately by a person

30

include a loss of tax brought about as a result of a deliberate

inaccuracy in a document given to Her Majesty’s Revenue and

Customs by or on behalf of that person.”

     (10)  

In paragraph 34(2) (relief in case of mistake in return), for “six years”

substitute “4 years”.

35

16    (1)  

Paragraph 8 of Schedule 14 (time limit for determination of penalties) is

amended as follows.

      (2)  

In sub-paragraph (2)—

(a)   

for “six years” substitute “4 years”, and

(b)   

after “began to be incurred” insert “(“the relevant date”)”.

40

      (3)  

In sub-paragraph (3), insert at the end “(subject to any of the following

provisions of this paragraph allowing a longer period)”.

 
 

Finance Bill
Schedule 51 — Time limits for assessments, claims etc

369

 

      (4)  

After sub-paragraph (4) insert—

   “(4A)  

Where a person is liable to a penalty in a case involving a loss of

tax brought about carelessly by the person (or by another person

acting on that person’s behalf), the penalty may be determined, or

the proceedings may be brought, at any time not more than 6 years

5

after the relevant date (subject to sub-paragraphs (4B) and (5)).

     (4B)  

Where a person is liable to a penalty in a case involving a loss of

tax—

(a)   

brought about deliberately by the person (or by another

person acting on that person’s behalf),

10

(b)   

attributable to a failure by the person to comply with an

obligation under section 76(1) or paragraph 3(3)(a), 4(3)(a)

or 8(3)(a) of Schedule 17A, or

(c)   

attributable to arrangements in respect of which the person

has failed to comply with an obligation under section 309,

15

310 or 313 of the Finance Act 2004 (obligation of parties to

tax avoidance schemes to provide information to Her

Majesty’s Revenue and Customs),

           

the penalty may be determined, or the proceedings may be

brought, at any time not more than 20 years after the relevant date.

20

     (4C)  

Paragraph 31A of Schedule 10 (losses brought about carelessly or

deliberately) applies for the purpose of this paragraph.”

Petroleum revenue tax

17         

OTA 1975 is amended as follows.

18    (1)  

The Table in paragraph 1(1) of Schedule 2 (applying provisions of TMA 1970

25

in relation to management and collection of petroleum revenue tax) is

amended as follows.

      (2)  

In the entry relating to section 33 of TMA 1970, in the second column, for the

entry relating to subsection (1) substitute “In subsection (1), for “year of

assessment” substitute “chargeable period”.”

30

      (3)  

Omit the entries relating to sections 34 and 36 of TMA 1970.

19         

In paragraph 10 of Schedule 2 (assessments to tax and determinations of loss

etc), after sub-paragraph (1) insert—

   “(1A)  

An assessment under sub-paragraph (1) may be made at any time

not more than 4 years after the end of the chargeable period to

35

which it relates (subject to paragraphs 12A and 12B).”

20    (1)  

Paragraph 12 of Schedule 2 (further assessments and determinations) is

amended as follows.

      (2)  

After sub-paragraph (1) insert—

   “(1A)  

An assessment (or an amendment of an assessment) under sub-

40

paragraph (1) may be made at any time not more than 4 years after

the end of the chargeable period to which the assessment relates

(subject to sub-paragraph (1B) and paragraphs 12A and 12B).

 
 

Finance Bill
Schedule 51 — Time limits for assessments, claims etc

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     (1B)  

The time limits in sub-paragraph (1A) and paragraphs 12A and

12B do not apply to an amendment of an assessment where the

amendment is made in consequence (directly or indirectly) of—

(a)   

the granting of relief under section 7(2) or (3) to any

participator for allowable losses accruing in any

5

chargeable period, or

(b)   

a notice of variation served under paragraph 9 of Schedule

5 on any responsible person in respect of a claim for any

claim period.”

      (3)  

In sub-paragraph (2)—

10

(a)   

omit “(notwithstanding anything in section 34 of the Taxes

Management Act 1970 (ordinary time limit for assessment))”,

(b)   

for “six years” substitute “4 years”, and

(c)   

insert at the end “(subject to paragraphs 12A and 12B)”.

21         

In paragraph 12A(1) of Schedule 2 (time limit for assessment following

15

extension of time for delivery of return), for “five years” substitute “4 years”.

22         

In that Schedule, after paragraph 12A insert—

“12B  (1)  

In a case involving a relevant situation brought about carelessly by

a participator (or a person acting on behalf of a participator), an

assessment (or an amendment of an assessment) under this

20

Schedule on the participator may be made at any time not more

than 6 years after the end of the relevant chargeable period

(subject to sub-paragraph (2)).

      (2)  

In a case involving a relevant situation brought about deliberately

by a participator (or a person acting on behalf of a participator), an

25

assessment (or an amendment of an assessment) on the

participator may be made at any time not more than 20 years after

the end of the relevant chargeable period.

      (3)  

“Relevant situation” means a situation in which—

(a)   

there is a loss of tax,

30

(b)   

the assessable profit charged to tax by or stated in an

assessment for a chargeable period ought to be or to have

been larger,

(c)   

the allowable loss stated in an assessment or a

determination of loss for a chargeable period ought to be or

35

to have been smaller, or

(d)   

an assessment to tax should have been made for a

chargeable period but was not made.

      (4)  

“Relevant chargeable period” means—

(a)   

in the case of a further assessment under paragraph 12(2),

40

the chargeable period in which the excessive allowable loss

accrued, and

(b)   

in any other case, the chargeable period to which the

assessment relates.

      (5)  

Where the participator carried on a trade or business with one or

45

more other persons at any time in the chargeable period for which

the assessment under sub-paragraph (1) or (2) is made, an

 
 

Finance Bill
Schedule 51 — Time limits for assessments, claims etc

371

 

assessment to tax in respect of the profits of that trade or business

may also be made on any of the participator’s partners.

      (6)  

In determining the amount of the tax to be charged on a person for

a chargeable period in an assessment in a case mentioned in sub-

paragraph (1) or (2) (including an assessment under sub-

5

paragraph (5)), effect must be given to any relief or allowance to

which that person would have been entitled for that period if a

valid claim or application had been made.

      (7)  

Sub-paragraph (6) only applies if the person on whom the

assessment is made so requires.

10

      (8)  

Subsections (5) to (7) of section 118 of the Taxes Management Act

1970 (losses and situations brought about carelessly or

deliberately) apply for the purposes of this paragraph as they

apply for the purposes of that Act.

      (9)  

In subsection (6)(b) of that section (as it applies for the purposes of

15

this paragraph), the reference to the person who provides the

information has effect as if it included any person who becomes

the responsible person for the oil field after the information is

provided.”

23    (1)  

Paragraph 2 of Schedule 5 (allowance of expenditure other than abortive

20

exploration expenditure: claim period) is amended as follows.

      (2)  

In sub-paragraph (1), for “six years” substitute “4 years”.

      (3)  

In sub-paragraph (7)—

(a)   

in paragraph (c), for “four years” substitute “2 years”, and

(b)   

in the words after that paragraph, for “six years” substitute “4 years”.

25

24    (1)  

Paragraph 9 of Schedule 5 (allowance of expenditure other than abortive

exploration expenditure: notice of variation) is amended as follows.

      (2)  

In sub-paragraph (1)—

(a)   

omit the words from “, within” to “field,”,

(b)   

for “in the notice” substitute “in a notice of a decision under

30

paragraph 3 above given to the responsible person for an oil field”,

and

(c)   

for “that period” substitute “the permitted period”.

      (3)  

Omit sub-paragraphs (1A) to (1C) and (2A).

      (4)  

After sub-paragraph (2A) insert—

35

   “(2B)  

In this paragraph “permitted period” means the period of 4 years

beginning with the date on which the notice of the decision under

paragraph 3 was given (but see sub-paragraph (2C)).

     (2C)  

Where the relevant amount was overstated in the notice of

decision as a result of an inaccuracy in a statement or declaration

40

made by the responsible person (or a person acting on behalf of the

responsible person) in connection with the claim—

(a)   

if the inaccuracy was careless, the permitted period is

extended to 6 years, and

 
 

 
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