Taxation (International and Other Provisions) Bill

House of Commons

Session 2009 - 10
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Other Bills before Parliament

Taxation (International and Other Provisions) Bill

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 1 — Relocation of section 38 of, and Schedule 15 to, FA 1973
311

(3)
An officer of Revenue and Customs applying subsection (2) is to
make all such allocations and apportionments of receipts, expenses,
allowances and deductions taken into account, or made, for the
purposes of the actual assessment as appear to the officer to be just
and reasonable in the circumstances.
5
77I
Information
(1)
The holder of a licence must, if required to do so by a notice served
on the holder by an officer of Revenue and Customs, give to the
officer within the time specified by the notice (which is not to be less
than 30 days) such particulars as may be required by the notice of—
10
(a)
licence-related transactions (see subsection (2)),
(b)
licence-related payments (see subsection (3)), or
(c)
persons to whom licence-related payments have been paid or
are payable.
(2)
In subsection (1) “licence-related transaction” means a transaction in
15
connection with activities authorised by the licence as a result of
which any person is or might be liable to tax by virtue of—
(a)
section 276 of the 1992 Act,
(b)
section 874 of ITTOIA 2005, or
(c)
section 1313 of CTA 2009.
20
(3)
In subsection (1) “licence-related payment” means—
(a)
earnings which constitute employment income (see section
7(2)(a) of ITEPA 2003),
(b)
amounts which are treated as earnings and constitute
employment income (see section 7(2)(b) of ITEPA 2003), or
25
(c)
other payments,

paid or payable in respect of duties or services performed in an area
in which activities authorised by the licence may be carried on under
the licence.
(4)
If a notice under subsection (1) is served on the holder of a licence,
30
the holder must take reasonable steps to obtain the information
necessary to enable the holder to comply with the notice.
77J
Meaning of “related to a licence” as respects tax, or profits or gains
(1)
Subsections (2) and (3) apply for the purposes of this Part.
(2)
An amount of tax is related to a licence if the tax is in respect of
35
profits or chargeable gains related to the licence.
(3)
Profits or chargeable gains are related to a licence if they are—
(a)
profits from activities authorised by the licence,
(b)
profits from activities carried on in connection with activities
authorised by the licence, or
40
(c)
profits from, or chargeable gains accruing on the disposal of,
exploration or exploitation rights connected with—
(i)
activities authorised by the licence, or
(ii)
activities carried on in connection with activities
authorised by the licence.
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(4)
In this section—

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 1 — Relocation of section 38 of, and Schedule 15 to, FA 1973
312

(a)
“designated area” means an area designated by Order in
Council under section 1(7) of the Continental Shelf Act 1964,
(b)
“exploration or exploitation activities” means activities
carried on in connection with the exploration or exploitation
of so much of the seabed and subsoil and their natural
5
resources as is situated in the United Kingdom or a
designated area,
(c)
“exploration or exploitation rights” means rights to—
(i)
assets to be produced by exploration or exploitation
activities,
10
(ii)
interests in such assets, or
(iii)
the benefit of such assets,
(d)
any reference to the disposal of exploration or exploitation
rights includes a reference to the disposal of unlisted shares
deriving their value, or the greater part of their value, directly
15
or indirectly from such rights,
(e)
“shares” includes—
(i)
stock, and
(ii)
securities not creating or evidencing a charge on
assets,
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(f)
“unlisted shares” means shares that are not listed on a
recognised stock exchange, and
(g)
“recognised stock exchange” has the meaning given by
section 1005(1) and (2) of ITA 2007.
77K
Other definitions in Part 7A
25
(1)
This section applies for the purposes of this Part.
(2)
“Licence” has the meaning given by section 77B(7).
(3)
“Secondary-liability notice” has the meaning given by section
77C(6).”
5     (1)
Amend the first column of the Table in section 98 (special returns etc) as
30
follows.
      (2)
Omit the entry for paragraph 2 of Schedule 15 to FA 1973.
      (3)
After the entry for regulations under section 59E of TMA 1970 insert—
“Section 77I(1) of this Act.”
Finance Act 1973 (c. 51)
35
6
FA 1973 is amended as follows.
7
Omit section 38 (which introduces and interprets Schedule 15).
8
Omit Schedule 15 (territorial extension of charge to tax: supplementary
provisions).
Oil Taxation Act 1975 (c. 22)
40
9
The Oil Taxation Act 1975 is amended as follows.
10
In section 3(4) (expenditure not allowable under the section) for paragraph

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 2 — Relocation of section 24 of FA 1974
313

(f) (which refers to notices under paragraph 4 of Schedule 15 to FA 1973),
and the “or” preceding it, substitute “or
(f)
any payment made in pursuance of a notice under section
77C of the Taxes Management Act 1970 (notice requiring
licence-holder to pay unpaid tax assessed on non-UK
5
resident);”.
Part 2
Relocation of section 24 of FA 1974
Taxes Management Act 1970 (c. 9)
11
TMA 1970 is amended as follows.
10
12
In section 8 (personal return) after subsection (4) insert—
“(4A)
Subsection (4B) applies if a notice under this section is given to a
person within section 8ZA of this Act (certain persons employed etc
by person not resident in United Kingdom who perform their duties
for UK clients).
15
(4B)
The notice may require a return of the person’s income to include
particulars of any general earnings (see section 7(3) of ITEPA 2003)
paid to the person.”
13
After section 8 insert—
“8ZA
Interpretation of section 8(4A)
20
(1)
For the purposes of section 8(4A) of this Act, a person (“F”) is within
this section if each of conditions A to C is met.
(2)
Condition A is that F performs in the United Kingdom, for a
continuous period of 30 days or more, duties of an office or
employment.
25
(3)
Condition B is that the office or employment is under or with a
person who—
(a)
is not resident in the United Kingdom, but
(b)
is resident outside the United Kingdom.
(4)
Condition C is that the duties are performed for the benefit of a
30
person who—
(a)
is resident in the United Kingdom, or
(b)
carries on a trade, profession or vocation in the United
Kingdom.”
14
After section 15 insert—
35
“15A
Non-resident’s staff are UK client’s employees for section 15 purposes
(1)
Subsection (5) applies if each of conditions A to C is met.
(2)
Condition A is that a person (“F”) performs in the United Kingdom,
for a continuous period of 30 days or more, duties of an office or
employment.
40

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 3 — Relocation of section 42 of ICTA
314

(3)
Condition B is that the office or employment is under or with a
person who—
(a)
is not resident in the United Kingdom, but
(b)
is resident outside the United Kingdom.
(4)
Condition C is that the duties are performed for the benefit of a
5
person (“P”) who—
(a)
is resident in the United Kingdom, or
(b)
carries on a trade, profession or vocation in the United
Kingdom.
(5)
Section 15 of this Act applies as if P were F’s employer, but only so
10
as to enable P to be required to make a return of F’s name and place
of residence.”
Finance Act 1974 (c. 30)
15
FA 1974 is amended as follows.
16
Omit section 24 (returns of persons treated as employees).
15
Part 3
Relocation of section 42 of ICTA
Taxes Management Act 1970 (c. 9)
17
TMA 1970 is amended as follows.
18    (1)
Amend the first column of the Table in section 98 (special returns etc) as
20
follows.
      (2)
Omit the entry for section 42 of ICTA.
      (3)
Before the entry for section 647 of ITTOIA 2005 insert—
“Section 302B of ITTOIA 2005.”
Income and Corporation Taxes Act 1988 (c. 1)
25
19
ICTA is amended as follows.
20
Omit section 42 (appeals against determinations under Chapter 4 of Part 3 of
ITTOIA 2005).
Income Tax (Trading and Other Income) Act 2005 (c. 5)
21
ITTOIA 2005 is amended as follows.
30
22
After section 302 insert—
“Determinations affecting liability of more than one person
302A
Appeals against proposed determinations
(1)
Subsection (2) applies if it appears to an officer of Revenue and
Customs that—
35

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 3 — Relocation of section 42 of ICTA
315

(a)
a determination is needed of an amount that is to be brought
into account as a receipt under this Chapter in calculating the
liability to tax of a person (“the first taxpayer”), and
(b)
the determination may affect the liability to income tax,
corporation tax or capital gains tax of other persons.
5
(2)
The officer may give notice (a “provisional notice of determination”)
to the first taxpayer and the other persons of—
(a)
the determination the officer proposes to make, and
(b)
their rights under this section and section 302C.
(3)
A person to whom a provisional notice of determination is given
10
may object to the proposed determination by giving notice (a “notice
of objection”) to the officer.
(4)
The notice of objection must be given within 30 days of the date on
which the provisional notice of determination was given.
(5)
If an officer gives provisional notices of determination and no person
15
gives a notice of objection—
(a)
a determination must be made by the officer as proposed in
the provisional notices, and
(b)
the determination is not to be called in question in any
proceedings.
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302B
Section 302A: supplementary
(1)
A provisional notice of determination under section 302A(2) may
include a statement of the grounds on which the officer proposes to
make the determination.
(2)
Subsection (1) applies despite any obligation as to secrecy or other
25
restriction on the disclosure of information.
(3)
An officer of Revenue and Customs may by notice (“a preliminary
notice”) require any person to give any information that appears to
the officer to be needed for deciding whether to give any person a
provisional notice of determination under section 302A(2).
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(4)
The preliminary notice must state the time within which the
information is to be given.
302C
Determination by tribunal
(1)
If a notice of objection is given under section 302A(3), the amount
mentioned in section 302A(1) must be determined in the same way
35
as an appeal.
(2)
All persons to whom provisional notices of determination have been
given under section 302A(2) may be a party to—
(a)
any proceedings under subsection (1), and
(b)
any appeal arising out of those proceedings.
40
(3)
Those persons are bound by the determination made in the
proceedings or on appeal, whether or not they have taken part in the
proceedings.
(4)
Their successors in title are bound in the same way.”

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 4 — Relocation of section 84A of ICTA
316

Corporation Tax Act 2009 (c. 4)
23
CTA 2009 is amended as follows.
24
In section 242(2) (determination by tribunal) for the words from “take part”
to the end substitute “be a party to—
(a)
any proceedings under subsection (1), and
5
(b)
any appeal arising out of those proceedings.”
Part 4
Relocation of section 84A of ICTA
Income and Corporation Taxes Act 1988 (c. 1)
25
ICTA is amended as follows.
10
26
Omit section 84A (costs of establishing share option or profit sharing
scheme: relief).
Income Tax (Trading and Other Income) Act 2005 (c. 5)
27
ITTOIA 2005 is amended as follows.
28
In Chapter 5 of Part 2, after section 94 insert—
15
“SAYE option schemes, CSOP schemes
94A
Costs of setting up SAYE option scheme or CSOP scheme
(1)
This section applies if—
(a)
a company incurs expenses in setting up a scheme within
subsection (2) that is approved by an officer of Revenue and
20
Customs, and
(b)
no employee or director acquires rights under the scheme
before it is approved.
(2)
The schemes within this subsection are—
(a)
SAYE option schemes within the meaning of the SAYE code
25
(see section 516(4) of ITEPA 2003), and
(b)
CSOP schemes within the meaning of the CSOP code (see
section 521(4) of ITEPA 2003).

The references in subsection (1) to a scheme being approved are to it
being approved under Schedule 3 or 4 to ITEPA 2003 (as the case
30
may be).
(3)
A deduction for the expenses is to be made in calculating the profits
of a trade carried on by the company.
(4)
If the approval is given more than 9 months after the end of the
period of account in which the expenses are incurred, for the
35
purposes of subsection (3) the deduction is to be made for the period
of account in which the approval is given.”
29
In section 272(2) (profits of property business: application of trading income

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 5 — Relocation of section 152 of ICTA
317

rules) at the appropriate place insert—

“section 94A
costs of setting up SAYE option

scheme or CSOP scheme”.

Part 5
Relocation of section 152 of ICTA
5
Taxes Management Act 1970 (c. 9)
30
TMA 1970 is amended as follows.
31    (1)
Amend section 48 (application of following provisions of Part 5) as follows.
      (2)
In subsection (2)(a) (application to appeals other than appeals against
assessments) for “section 56” substitute “sections 54A to 54C and 56”.
10
      (3)
In subsection (3) (meaning of “relevant provisions” for purpose of
application to proceedings other than appeals) after “except sections 49A to
49I” insert “and 54A to 54C”.
32
After section 54 insert—
“54A
No questioning in appeal of amounts of certain social security income
15
(1)
Subsection (2) applies if an amount is notified under section 54B(1)
and—
(a)
no objection is made to the notification within 60 days after
its date of issue, or such further period as may be allowed
under section 54B(4) and (5), or
20
(b)
an objection is made but is withdrawn by the objector by
notice.
(2)
The amount is not to be questioned in any appeal against any
assessment in respect of income including the amount.
(3)
Subsection (4) applies if an amount is notified under section 54B(1)
25
and—
(a)
an objection is made to the notification within 60 days after its
date of issue, or such further period as may be allowed under
section 54B(4) and (5),
(b)
the appropriate officer and the objector come to an agreement
30
that the amount notified should be varied in a particular
manner, and
(c)
the officer confirms that agreement in writing.
(4)
The amount, as varied, is not to be questioned in any appeal against
any assessment in respect of income including that amount.
35
(5)
Subsection (4) does not apply if, within 60 days from the date when
the agreement was come to, the objector gives to the appropriate
officer notice that the objector wishes to repudiate or resile from the
agreement.