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Index to Taxation (International And Other Provisions) Bill

Summary Background Steering Committee Consultative Committee Consultation Taxation (International and Other Provisions) Bill Glossary Part 1: Overview Part 2: Double taxation relief Chapter 1: Double taxation arrangements and unilateral relief arrangements Clause 2: Giving effect to arrangements made in relation to other territories Clause 3: Arrangements may include retrospective or supplementary provision Clause 4: Meaning of “double taxation” in sections 2 and 3 Clause 5: Orders under section 2: contents and procedure Clause 6: The effect given by section 2 to double taxation arrangements Clause 7: General regulations Clause 8: Interpretation: “unilateral relief arrangements” means rules 1 to 9, etc Clause 9: Rule 1: the unilateral entitlement to credit for non-UK tax Clause 10: Rule 2: accrued income profits Clause 11: Rule 3: interaction between double taxation arrangements and rules 1 and 2 Clause 12: Rule 4: cases in which, and calculation of, credit allowed for tax on dividends Clause 13: Rule 5: credit for tax charged directly on dividend Clause 14: Rule 6: credit for underlying tax on dividend paid to 10% associate of payer Clauses 15 and 16: Rule 7: credit for underlying tax on dividend paid to sub-10% associate; Rule 8: credit for underlying tax on dividend paid by exchanged associate Clause 17: Rule 9: credit in relation to dividends for spared tax Chapter 2: Double taxation relief by way of credit Clause 18: Entitlement to credit for foreign tax reduces UK tax by amount of the credit Clause 19: Time limits for claims for relief under section 18(2) Clause 20: Foreign tax includes tax spared because of international development relief Clause 21: Meaning of “the arrangements”, “the non-UK territory”, “foreign tax” etc Clause 22: Credit for foreign tax on overlap profit if credit for that tax already allowed Clause 23: Time limits for claims for relief under section 22(2) Clause 24: Claw-back of relief under section 22(2) Clause 25: Credit not allowed if relief allowed against overseas tax Clause 26: Credit not allowed under arrangements unless taxpayer is UK resident Clause 27: Credit not allowed if person elects against credit Clause 28: Unilateral relief for Isle of Man or Channel Islands tax Clause 29: Unilateral relief for tax on income from employment or office Clause 30: Unilateral relief for non-UK tax on non-resident’s UK branch or agency etc Clause 31: Calculation of income or gain where remittance basis does not apply Clause 32: Calculation of amount received where UK tax charged on remittance basis Clause 33: Limit on credit: minimisation of the foreign tax Clause 34: Reduction in credit: payment by reference to foreign tax Clause 35: Disallowed credit: use as a deduction Clause 36: Amount of limit Clause 37: Credit against tax on trade income: further rules Clause 38: Credit against tax on royalties: further rules Clause 39: Credit reduced by reference to accrued income losses Clause 40: Amount of limit Clause 41: Amount of limit Clause 42: Amount of limit Clause 43: Profits attributable to permanent establishment for purposes of section 42(2) Clause 44: Credit against tax on trade income Clause 45: Credit against tax on trade income: anti-avoidance rules Clause 46: Applying section 44(2): asset in hedging relationship with derivative contract Clause 47: Applying section 44(2): royalty income Clause 48: Applying section 44(2): “portfolio” of transactions, arrangements or assets Clause 49: Restricting section 44(3) if company is a bank or connected with a bank Clauses 50 and 51: Tax for period on loan relationships; tax for period on intangible fixed assets Clause 52: General deductions Clauses 53 to 55: Earlier years’ non-trading deficits on loan relationships; non-trading debits on loan relationships; current year’s non-trading deficits on loan relationships Clause 56: Non-trading debits on intangible fixed assets Clause 57: Credit in respect of dividend: taking account of underlying tax Clause 58: Calculation if dividend paid by non-resident company to resident company Clause 59: Meaning of “relevant profits” in section 58 Clause 60: Underlying tax to be left out of account on claim to that effect Clause 61: Calculation if section 58 does not apply Clause 62: Meaning of “relevant profits” in section 61 Clause 63: Non-UK company dividend paid to 10% investor: relief for UK and other tax Clause 64: Meaning of “dividend-paying chain” of companies Clause 65: Relief for underlying tax paid by company lower in dividend-paying chain Clause 66: Limitations on section 65(4) Clause 67: Restriction of relief if underlying tax at rate higher than rate of corporation tax Clause 68: Meaning of “avoidance scheme” in section 67 Clause 69: Dividends paid out of transferred profits Clause 70: Underlying tax reflecting interest on loans Clause 71: Foreign taxation of group as single entity Clause 72: Application of section 73(1) Clause 73: Carry-forward and carry-back of unrelieved foreign tax Clause 74: Rules for carrying back unrelieved foreign tax Clause 75: Two or more establishments treated as a single establishment Clause 76: Former and subsequent establishments regarded as distinct establishments Clause 77: Claims for relief under section 73(1) Clause 78: Meaning of “overseas permanent establishment” Clause 79: Time limits for action if tax adjustment makes credit excessive or insufficient Clause 80: Duty to give notice that adjustment has rendered credit excessive Clause 81: Giving a counteraction notice Clause 82: Conditions for the purposes of section 81(1) Clause 83: Schemes and arrangements referred to in section 82(4) Clause 84: Section 83(2) and (4): schemes enabling attribution of foreign tax Clause 85: Section 83(2) and (4): schemes about effect of paying foreign tax Clause 86: Section 83(2) and (4): schemes about claims or elections etc Clause 87: Section 83(2) and (4): schemes that would reduce a person’s tax liability Clause 88: Section 83(2) and (4): schemes involving tax-deductible payments Clause 89: Contents of counteraction notice Clause 90: Consequences of counteraction notices Clause 91: Counteraction notices given before tax return made Clause 92: Counteraction notices given after tax return made Clause 93: Amendment, closure notices and discovery assessments in section 92 cases Clause 94: Information made available for the purposes of section 92(4) Clause 95: Interpretation of sections 89 to 94 Clause 96: Companies with overseas branches: restriction of credit Clause 97: Companies with more than one category of business: restriction of credit Clause 98: Attribution for section 97 purposes if category is gross roll-up business Clause 99: Allocation of expenses etc in calculations under section 35 of CTA 2009 Clause 100: First limitation for purposes of section 99(2) Clause 101: Second limitation for purposes of section 99(2) Clauses 102 to 104: Interpreting sections 99 to 101 for life assurance or gross roll-up business; interpreting sections 99 to 101 for other insurance business; interpreting sections 100 and 101: amounts referable to category of business Chapter 3: Miscellaneous provisions Clause 105: Meaning of “chargeable gain” Clause 106: Chapters 1 and 2 apply to capital gains tax separately from other taxes Clause 107: Disregard of foreign tax referable to derivative contract Clause 108: Disregard of foreign tax attributable to interest under a loan relationship Clauses 109 and 110: Repo cases in which no disregard under section 108; stock-lending cases in which no disregard under section 108 Clause 111: When payment to beneficiary treated as arising from foreign source Clauses 112 and 113 Deduction from income for foreign tax (instead of credit against UK tax); deduction from capital gain for foreign tax (instead of credit against UK tax) Clause 114: Time limits for action if tax adjustment makes reduction too large or too small Clause 115: Duty to give notice that adjustment has rendered reduction too large Clause 116: Introduction to section 117 Clause 117: Tax treated as chargeable in respect of transfer of loan relationship, derivative contract or intangible fixed assets Clause 118: Introduction to section 119 Clause 119: Tax treated as chargeable in respect of transfer of loan relationship, derivative contract or intangible fixed assets Clause 120: Introduction to section 121 Clause 121: Tax treated as chargeable in respect of relevant transactions Clause 122: Tax treated as chargeable in respect of gains on transfer of non-UK business Clause 123: Interpretation of sections 116 to 122 Clause 124: Giving effect to solutions to cases and mutual agreements resolving cases Clause 125: Effect of, and deadline for, presenting a case Clause 126: Meaning of “the Arbitration Convention” Clause 127: Giving effect to agreements, decisions and opinions under the Convention Clause 128: Disclosure under the Convention Clause 129: Disclosure where relief given overseas for tax paid in the United Kingdom Clause 130: Interpreting provision about UK taxation of profits of foreign enterprises Clause 131: Interpreting provision about interest influenced by special relationship Clause 132: Interpreting provision about royalties influenced by special relationship Clause 133: Special relationship rule for royalties: matters to be shown by taxpayer Clause 134: Correcting assessments where relief is available Part 3: Double taxation relief for special withholding tax Clause 135: Relief under this Part: introductory Clause 136: Interpretation of Part Clause 137: Income tax credit etc for special withholding tax Clause 138: Amount and application of the deemed tax under section 137 Clause 139: Capital gains tax credit etc for special withholding tax Clause 140: Provisions about the deemed tax under section 139 Clause 141: Credit under Chapter 2 of Part 2 to be allowed first Clause 142: Conditions for purposes of section 143 Clause 143: Taking account of special withholding tax in calculating income or gains Clause 144: Issue of certificate Clause 145: Refusal to issue certificate and appeal against refusal Part 4: Transfer pricing Chapter 1: Basic transfer-pricing rule Clause 146: Application of this Part Clause 147: Tax calculations to be based on arm’s length, not actual, provision Clause 148: The “participation condition” Chapter 2: Key interpretative provisions Clause 149: “Actual provision” and “affected persons” Clause 150: “Transaction” and “series of transactions” Clause 151: “Arm’s length provision” Clause 152: Arm’s length provision where actual provision relates to securities Clause 153: Arm’s length provision where security issued and guarantee given Clause 154: Interpretation of sections 152 and 153 Clause 155: “Potential advantage” in relation to United Kingdom taxation Clause 156: “Losses” and “profits” Clause 157: Direct participation Clause 158: Indirect participation: defined by sections 159 to 162 Clause 159: Indirect participation: potential direct participant Clause 160: Indirect participation: one of several major participants Clause 161: Indirect participation: sections 148 and 175: financing cases Clause 162: Indirect participation: sections 148 and 175: further financing cases Clause 163: Meaning of “connected” in section 159 Clause 164: Part to be interpreted in accordance with OECD principles Chapter 3: Exemptions from basic rule Clause 165: Exemption for dormant companies Clause 166: Exemption for small and medium-sized enterprises Clause 167: Small and medium-sized enterprises: exceptions from exemption Clause 168: Medium-sized enterprises: exception from exemption: transfer pricing notice Clause 169: Giving of transfer pricing notices Clause 170: Appeals against transfer pricing notices Clause 171: Tax returns where transfer pricing notice given Clause 172: Meaning of “small enterprise” and “medium-sized enterprise” Clause 173: Meaning of “qualifying territory” and “non-qualifying territory” Chapter 4: Position, if only one affected person potentially advantaged, of other affected person Clause 174: Claim by the affected person who is not potentially advantaged Clause 175: Claims under section 174 where actual provision relates to a security Clause 176: Claims under section 174: advantaged person must have made return Clause 177: Time for making, or amending, claim under section 174 Clause 178: Meaning of “return” in sections 176 and 177 Clause 179: Compensating payment if advantaged person is controlled foreign company Clause 180: Application of section 174(2)(a) in relation to transfers of trading stock etc Clause 181: Section 182 applies to claims where actual provision relates to a security Clause 182: Making of section 182 claims Clause 183: Giving effect to section 182 claims Clause 184: Amending a section 182 claim if it is followed by a relevant notice Clause 185: Notice to potential claimants Clause 186: Extending claim period if notice under section 185 not given or given late Clause 187: Tax treatment if actual interest exceeds arm’s length interest Clause 188: Double taxation relief by way of credit for foreign tax Clause 189: Double taxation relief by way of deduction for foreign tax Clause 190: Meaning of “relevant notice” Chapter 5: Position of guarantor of affected person’s liabilities under a security issued by the person Clause 191: When sections 192 to 194 apply Clause 192: Attribution to guarantor company of things done by issuing company Clause 193: Interaction between claims under sections 174 and 192(1) Clause 194: Claims under section 192(1): general provisions Chapter 6: Balancing payments Clause 195: Qualifying conditions for purposes of section 196 Clause 196: Balancing payments between affected persons: no charge to, or relief from, tax Clause 197: Qualifying conditions for purposes of section 198 Clause 198: Balancing payments by guarantor to issuer: no charge to, or relief from, tax Clause 199: Pre-conditions for making election under section 200 Clause 200: Election to pay tax rather than make balancing payments Clause 201: Pre-conditions for making election under section 202 Clause 202: Election, in guarantee case, to pay tax rather than make balancing payments Clause 203: Elections under section 200 or 202 Clause 204: Meaning of “capital market condition” in sections 199 and 201 Chapter 7: Oil-related ring-fence trades Clause 205: Provision made or imposed between ring-fence trade and other activities Clause 206: Meaning of “oil-related ring-fence trade” in sections 205 and 218 Chapter 8: Supplementary provisions and interpretation of Part Clause 207: Application of Part to unit trusts Clause 208: The determinations which require the Commissioners’ sanction Clause 209: Determinations exempt from requirement for Commissioners’ sanction Clause 210: The requirement for the Commissioners’ sanction Clause 211: Restriction of right to appeal against Commissioners’ approval Clause 212: Appeals Clause 213: Capital allowances Clause 214: Chargeable gains Clause 215: Manner of making adjustments to give effect to Part Clause 216: Meaning of “the relevant activities” Clause 217: Meaning of “control” and “firm” Part 5: Advance pricing agreements Clause 218: Meaning of “advance pricing agreement” Clause 219: Meaning of “associate” in section 218(2)(e) Clause 220: Effect of agreement on party to it Clause 221: Effect of revocation of agreement or breach of its conditions Clause 222: Effect of agreement on non-parties Clause 223: Application for agreement Clause 224: Provision in agreement about years ended or begun before agreement made Clause 225: Modification and revocation of agreement Clause 226: Annulment of agreement for misrepresentation Clause 227: Penalty for misrepresentation in connection with agreement Clause 228: Party to agreement: duty to provide information Clause 229: Modifications of agreement for double taxation purposes Clause 230: Interpretation of Part: meaning of “Commissioners” and “officer” Part 6: Tax arbitrage Clause 231: Overview Clause 232: Deduction notices Clause 233: The deduction scheme conditions Clause 234: Schemes achieving UK tax advantage for a company Clause 235: Further provisions about deduction notices Clause 236: Schemes involving hybrid entities Clause 237: Instruments of alterable character Clause 238: Shares subject to conversion Clause 239: Securities subject to conversion Clause 240: Debt instruments treated as equity Clause 241: Scheme including issue of shares not conferring qualifying beneficial entitlement Clause 242: Scheme including transfer of rights under a security Clause 243: Consequences of deduction notices Clause 244: The rule against double deduction Clause 245: Application of the rule against deduction for untaxable payments Clause 246: Cases where payee’s non-liability treated as not a result of scheme Clause 247: Cases where payee treated as having reduced liability as a result of scheme Clause 248: The rule against deduction for untaxable payments Clause 249: Receipt notices Clause 250: The receipt scheme conditions Clause 251: Amounts within corporation tax Clause 252: Further provisions about receipt notices Clause 253: Exception for dealers Clause 254: Rule for calculation or recalculation of income etc following receipt notice Clause 255: Notices given before tax return made Clause 256: Notices given after tax return made Clause 257: Amendments, closure notices and discovery assessments where section 256 applies Clause 258: Schemes and series of transactions Clause 259: Minor definitions Part 7: Tax treatment of financing costs and income Chapter 1: Introduction Chapter 2: Application of Part Clause 261: Application of Part Clause 262: UK net debt of worldwide group for period of account of worldwide group Clause 263: Net debt of a company Clause 264: Worldwide gross debt of worldwide group for period of account of the group Clause 265: References to amounts disclosed in balance sheet of relevant group company Clause 266: Qualifying financial services groups Clause 267: Qualifying activities Clause 268: Lending activities and activities ancillary to lending activities Clause 269: Insurance activities and insurance-related activities Clause 270: Relevant dealing in financial instruments Clause 271: UK trading income of the worldwide group Clause 272: Worldwide trading income of the worldwide group Clause 273: Foreign currency accounting Chapter 3: Disallowance of deductions Clause 274: Application of Chapter and meaning of “total disallowed amount” Clause 275: Meaning of “company to which this Chapter applies” Clause 276: Appointment of authorised company for relevant period of account Clause 277: Meaning of “the reporting body” Clause 278: Statement of allocated disallowances: submission Clause 279: Statement of allocated disallowances: submission of revised statement Clause 280: Statement of allocated disallowances: requirements Clause 281: Statement of allocated disallowances: effect Clause 282: Company tax returns Clause 283: Power to make regulations about statement of allocated disallowances Clause 284: Failure of reporting body to submit statement of allocated disallowances Clause 285: Powers to make regulations in relation to reductions under section 284 Chapter 4: Exemption of financing income Clause 286: Application of Chapter and meaning of “total disallowed amount” Clause 287: Meaning of “company to which this Chapter applies” Clause 288: Appointment of authorised company for relevant period of account Clause 289: Meaning of “the reporting body” Clause 290: Statement of allocated exemptions: submission Clause 291: Statement of allocated exemptions: submission of revised statement Clause 292: Statement of allocated exemptions: requirements Clause 293: Statement of allocated exemptions: effect Clause 294: Company tax returns Clause 295: Power to make regulations about statement of allocated exemptions Clause 296: Failure of reporting body to submit statement of allocated exemptions Clause 297: Power to make regulations in relation to reductions under section 296 Clause 298: Balancing payments between group companies: no tax charge or relief Chapter 5: Intra-group financing income where payer denied deduction Clause 299: Tax exemption for certain financing income received from EEA companies Clause 300: Meaning of “relevant associate” Clause 301: Meaning of “tax-resident” and “EEA territory” Clause 302: Qualifying EEA tax relief for payment in current or previous period Clause 303: Qualifying EEA tax relief for payment in future period Clause 304: References to tax of a territory Clause 305: Financing income amounts of a company Chapter 6: Tax avoidance Clause 306: Schemes involving manipulation of rules in Chapter 2 Clause 307: Schemes involving manipulation of rules in Chapters 3 and 4 Clause 308: Meaning of “relevant net deduction” Clause 309: Calculation of amounts Clause 310: Meaning of “carried-back amount” and “carried-forward amount” Clause 311: Schemes involving manipulation of rules in Chapter 5 Clause 312: Meaning of “scheme” and “excluded scheme” Chapter 7: “Financing expense amount” and “financing income amount” Clause 313: The financing expense amounts of a company Clause 314: The financing income amounts of a company Clause 315: Interpretation of sections 313 and 314 Clause 316: Group treasury companies Clause 317: Real estate investment trusts Clause 318: Companies engaged in oil extraction activities Clause 319: Intra-group short-term finance: financing expense Clause 320: Intra-group short-term finance: financing income Clause 321: Short-term loan relationships Clause 322: Stranded deficits in non-trading loan relationships: financing expense Clause 323: Stranded deficits in non-trading loan relationships: financing income Clause 324: Stranded management expenses in non-trading loan relationships: financing expense Clause 325: Stranded management expenses in non-trading loan relationships: financing income Clause 326: Charities Clause 327: Educational and public bodies Clause 328: Interpretation of sections 316 to 327 Chapter 8: “Tested expense amount” and “tested income amount” Clause 329: The tested expense amount Clause 330: The tested income amount Clause 331: Companies with net financing deduction or net financing income that is small Chapter 9: “Available amount” Clause 332: The available amount Clause 333: Group members with income from oil extraction subject to particular tax treatment in UK Clause 334: Group members with income from shipping subject to particular tax treatment in UK Clause 335: Group members with income from property rental subject to particular tax treatment in UK Clause 336: Meaning of accounting expressions used in this Chapter Chapter 10: Other interpretative provisions Clause 337: The worldwide group Clause 338: Meaning of “group” Clause 339: Meaning of “ultimate parent” Clause 340: Meaning of “corporate entity” Clause 341: Meaning of “relevant non-corporate entity” Clause 342: Treatment of entities stapled to corporate, or relevant non-corporate, entities Clause 343: Treatment of business combinations Clause 344: Meaning of “large” in relation to a group Clause 345: Meaning of “UK group company” and “relevant group company” Clause 346: Financial statements of the worldwide group Clause 347: Non-compliant financial statements of the worldwide group Clause 348: Non-existent financial statements of the worldwide group Clause 349: References to amounts disclosed in financial statements Clause 350: Translation of amounts disclosed in financial statements Clause 351: Expressions taking their meaning from international accounting standards Clause 352: Meaning of “relevant accounting period” Clause 353: Other expressions Part 8: Offshore funds Clause 354: Power to make regulations about tax treatment of participants Clause 355: Meaning of “offshore fund” Clause 356: Meaning of “mutual fund” Clause 357: Exceptions to definition of “mutual fund” Clause 358: Meaning of “relevant income-producing asset” Clause 359: Power to make regulations about exceptions to definition of “mutual fund” Clause 360: Treatment of umbrella arrangements Clause 361: Treatment of arrangements comprising more than one class of interest Clause 362: Meaning of “participant” and “participation” Clause 363: Meaning of “umbrella arrangements” and “part of umbrella arrangements” Part 9: Amendments to relocate provisions of tax legislation Clause 364: Oil activities Clause 365: Alternative finance arrangements Clause 366: Power to amend the alternative finance provisions Clause 367: Leasing arrangements: finance leases and loans Clause 368: Sale and lease-back etc Clause 369: Factoring of income etc Clause 370: UK representatives of non-UK residents Clause 371: Miscellaneous relocations Part 10: General provisions Clause 372: Orders and regulations Clause 373: Abbreviated references to Acts Clause 374: Minor and consequential amendments Clause 375: Power to make consequential provision Clause 376: Power to undo changes Clause 377: Transitional provisions and savings Clause 378: Repeals and revocations Clause 379: Index of defined expressions Clause 380: Extent Clause 381: Commencement Clause 382: Short title Schedule 1: Oil activities: new Chapter 16A of Part 2 of ITTOIA 2005 Section 225A: Meaning of “oil extraction activities” Section 225B: Meaning of “oil rights” Section 225C: Meaning of “ring fence income” Section 225D: Meaning of “ring fence trade” Section 225E: Other definitions Section 225F: Valuation where market value taken into account under section 2 of OTA 1975 Section 225G: Valuation where disposal not at arm’s length Section 225H: Valuation where excess of nominated proceeds Section 225I: Valuation where relevant appropriation but no disposal Section 225J: Valuation where appropriation to refining etc Section 225K: Reduction of expenditure by reference to regional development grant Section 225L: Adjustment as a result of regional development grant Section 225M: Tariff receipts etc Section 225N: Expenditure on and under abandonment guarantees Section 225O: Relief for reimbursement expenditure under abandonment guarantees Section 225P: Payment under abandonment guarantee not immediately applied Section 225Q: Amounts excluded from section 225O(1) Section 225R: Introduction to sections 225S and 225T Section 225S: Relief for expenditure incurred by a participator in meeting defaulter’s abandonment expenditure Section 225T: Reimbursement by defaulter in respect of certain abandonment expenditure Schedule 2: Alternative finance arrangements Part 1: New Part 10A of ITA 2007 Section 564A: Introduction Section 564B: Meaning of “financial institution” Section 564C: Purchase and resale arrangements Section 564D: Diminishing shared ownership arrangements Section 564E: Deposit arrangements Section 564F: Profit share agency arrangements Section 564G: Investment bond arrangements Section 564H: Provision not at arm’s length: exclusion of arrangements from sections 564C to 564G Section 564I: Purchase and resale arrangements Section 564J: Purchase and resale arrangements where return in foreign currency Section 564K: Diminishing shared ownership arrangements Section 564L: Other arrangements Section 564M: Treatment of alternative finance return as interest for ITTOIA 2005 Section 564N: Alternative finance return under arrangements for trade or property business purposes Section 564O: Relief for some alternative finance return under Chapter 1 of Part 8 etc Section 564P: Tax relief schemes and arrangements Section 564Q: Deduction of income tax at source under Part 15 Section 564R: Treatment of discount Section 564S: Treatment of bond-holder and bond-issuer Section 564T: Treatment as securities Section 564U: Arrangements not unit trust scheme or offshore fund Section 564V: Exclusion of alternative finance return from consideration for sale of assets Section 564W: Diminishing shared ownership arrangements not partnerships Section 564X: Treatment of principal under profit share agency arrangements Section 564Y: Provision not at arm’s length: relevant return Part 2: New Chapter 4 of Part 4 of TCGA 1992 Sections 151H to 151S: Meaning of alternative finance arrangements etc Section 151T: Investment bond arrangements are qualifying corporate bonds Sections 151U to 151Y: Rules for investment bond arrangements and other rules Part 3: Other amendments Section 367A of ICTA: Alternative finance arrangements Section 173A of ITEPA: Alternative finance arrangements Sections 372A to 372D of ITA: Community investment tax relief: alternative finance arrangements Section 372A: Meaning of “loan” and “interest” Section 372B: Purchase and resale arrangements Section 372C: Deposit arrangements Section 372D: Profit share agency arrangements Schedule 3: Leasing arrangements: finance leases and loans Part 1: New Part 11A of ITA 2007 Section 614A: Overview of Part Section 614AA: Normal rent Section 614AB: Accountancy rental earnings Section 614AC: Rental earnings Chapter 2: Finance leases with return in capital form Section 614B: Arrangements to which this Chapter applies Section 614BA: Purposes of this Chapter Section 614BB: Application of this Chapter Section 614BC: The conditions referred to in section 614BB(1) Section 614BD: Provisions supplementing section 614BC Section 614BE: The arrangements and circumstances referred to in section 614BC(8) Section 614BF: Current lessor taxed by reference to accountancy rental earnings Sections 614BG to 614BK: Reduction of taxable rent by cumulative rental excesses Section 614BG: Reduction of taxable rent by cumulative rental excesses: introduction Section 614BH: Meaning of “accountancy rental excess” and “cumulative accountancy rental excess” Section 614BI: Reduction of taxable rent by the cumulative accountancy rental excess Section 614BJ: Meaning of “normal rental excess” and “cumulative normal rental excess” Section 614BK: Reduction of taxable rent by the cumulative normal rental excess Sections 614BL to 614BO: Relief for bad debts by reduction of cumulative rental excesses Section 614BL: Relief for bad debts: reduction of cumulative accountancy rental excess Section 614BM: Recovery of bad debts following reduction under section 614BL Section 614BN: Relief for bad debts: reduction of cumulative normal rental excess Section 614BO: Recovery of bad debts following reduction under section 614BN Section 614BP: Effect of disposals of leases: general Section 614BQ: Assignments on which neither a gain nor a loss accrues Sections 614BR to 614BW: Capital allowances: claw-back of major lump sum Section 614BR: Effect of capital allowances: introduction Section 614BS: Cases where expenditure taken into account under Part 2, 5 or 8 of CAA 2001 Section 614BT: Cases where expenditure taken into account under other provisions of CAA 2001 Section 614BU: Capital allowances deductions: waste disposal and cemeteries Section 614BV: Capital allowances deductions: films and sound recordings Section 614BW: Contributors to capital expenditure Section 614BX: Pre-26 November 1996 schemes where this Chapter does not at first apply Section 614BY: Post-25 November 1996 schemes to which Chapter 3 applied first Chapter 3: Other finance leases Section 614C: Introduction to Chapter Section 614CA: Purpose of this Chapter Section 614CB: Leases to which this Chapter applies Section 614CC: Current lessor taxed by reference to accountancy rental earnings Section 614CD: Application of provisions of Chapter 2 for purposes of this Chapter Chapter 4: Supplementary provisions Section 614D: Pre-26 November 1996 schemes and post-25 November 1996 schemes Section 614DA: Time apportionment where periods of account do not coincide Section 614DB: Periods of account and related periods of account and tax years Section 614DC: Connected persons Section 614DD: Assets which represent the leased asset Section 614DE: Parent undertakings and consolidated group accounts Section 614DF: Assessments and adjustments Section 614DG: Interpretation Part 2: New section 37A of TCGA 1992 Section 37A: Consideration on disposal of certain leases Schedule 4: Sale and lease-back etc: new Part 12A of ITA 2007 Overview Chapter 1: Payments connected with transferred land Section 681A: Overview Section 681AA: Transferor or associate becomes liable for payment of rent Section 681AB: Transferor or associate becomes liable for payment other than rent Section 681AC: Relevant income tax relief and relevant deduction from earnings Section 681AD: Relevant income tax relief: deduction not to exceed commercial rent Section 681AE: Deduction from earnings not to exceed commercial rent Section 681AF: Carrying forward parts of payments Section 681AG: Aggregation and apportionment of payments Section 681AH: Payments made for later periods Section 681AI: Exclusion of service charges etc Section 681AJ: Commercial rent: comparison with rent under a lease Section 681AK: Commercial rent: comparison with payments other than rent Section 681AL: Lease and rent Section 681AM: Associated persons Section 681AN: Land outside the UK Chapter 2: New lease of land after assignment or surrender Section 681B: Overview Section 681BA: New lease after assignment or surrender Section 681BB: Taxation of consideration Section 681BC: Position where new lease does not include all original property Section 681BD: Relief for rent under new lease Section 681BE: New lease treated as ending Section 681BF: Position where rent reduces Section 681BG: Position where lease may be ended Section 681BH: Position where lease may be varied Section 681BI: Lease treated as ending: rentcharge Section 681BJ: Lease varied to provide for increased rent Section 681BK: Relevant income tax relief Section 681BL: Linked persons Section 681BM: Lease, lessee, lessor and rent Chapter 3: Leased trading assets Section 681C: Overview Section 681CA: Professions and vocations Section 681CB: Leased trading assets Section 681CC: Tax deduction not to exceed commercial rent Section 681CD: Long funding finance leases Sections 681CE and 681CF: Commercial rent; lease Section 681CG: Relevant asset Chapter 4: Leased assets: capital sums Section 681D: Overview Section 681DA: Application of the Chapter Section 681DB: Payment under lease Section 681DC: Sum obtained Section 681DD: Charge to income tax Section 681DE: Hire-purchase agreements Section 681DF: Adjustments where sum obtained before payment made Section 681DG: Sum obtained in respect of interest Section 681DH: Sum obtained in respect of lessee’s interest Section 681DI: Disposal of interest to associate Section 681DJ: Apportionment of payments made and of sums obtained Section 681DK: Manner of apportionment Section 681DL: Associates Section 681DM: Capital sum Section 681DN: Lease Section 681DO: Relevant asset Section 681DP: Relevant tax relief Schedule 5: Factoring of income etc: new Chapters 5B and 5C of Part 13 of ITA 2007 Chapter 5B: Finance arrangements Section 809BZA: Type 1 finance arrangement defined Section 809BZB: Certain tax consequences not to have effect Section 809BZC: Payments treated as borrower’s income Section 809BZD: Deemed interest if borrower is not a partnership Section 809BZE: Deemed interest if borrower is a partnership Section 809BZF: Type 2 finance arrangement defined Section 809BZG: Relevant change in relation to partnership Section 809BZH: Certain tax consequences not to have effect Section 809BZI: Deemed interest Section 809BZJ: Type 3 finance arrangement defined Section 809BZK: Certain tax consequences not to have effect Section 809BZL: Deemed interest Section 809BZM: Exceptions: preliminary Section 809BZN: Exceptions Section 809BZO: Exceptions: relevant person Section 809BZP: Power to make further exceptions Sections 809BZQ to 809BZS: Accounts; arrangements; assets Chapter 5C: Loan or credit transactions Section 809CZA: Loan or credit transaction defined Section 809CZB: Certain payments treated as yearly interest Section 809CZC: Tax charged on income transferred Schedule 6: UK representatives of non-UK residents Part 1: New Chapters 2B and 2C of Part 14 of ITA 2007 Overview Section 835C: Overview of Chapter Section 835D: Income tax chargeable on company’s income: application Section 835E: Branch or agency treated as UK representative Section 835F: Trade or profession carried on in partnership Section 835G: Agents Section 835H: Brokers Section 835I: Investment managers Section 835J: Persons acting under alternative finance arrangements Section 835K: Lloyd’s agents Section 835L: The independent broker conditions Section 835M: The independent investment manager conditions Section 835N: Investment managers: the 20% rule Section 835O: Meaning of “qualifying period”, “relevant disregarded income” and “beneficial entitlement” Section 835P: Treatment of transactions where 20% rule not met Section 835Q: Application of 20% rule to collective investment schemes Section 835R: Supplementary provision Section 835S: Interpretation of Chapter Chapter 2C: Income tax obligations and liabilities imposed on UK representatives Section 835T: Introduction to Chapter Section 835U: Obligations and liabilities of UK representative Section 835V: Exceptions: notices and information Section 835W: Exceptions: criminal offences and penalties etc Section 835X: Indemnities Section 835Y: Meaning of “independent agent” Part 2: New Part 7A of TCGA 1992 Overview Chapter 1: Treatment of branch or agency as UK representative of non-UK resident Section 271A: Overview of Chapter Section 271B: Branch or agency treated as UK representative Section 271C: Trade or profession carried on in partnership Section 271D: Interpretation of Chapter Chapter 2: Capital gains tax obligations and liabilities imposed on UK representatives Section 271E: Introduction to Chapter Section 271F: Obligations and liabilities of UK representative Section 271G: Exceptions: notices and information Section 271H: Exceptions: criminal offences and penalties etc Section 271I: Indemnities Section 271J: Meaning of “non-UK resident” and “independent agent” Schedule 7: Miscellaneous relocations Part 1: Relocation of section 38 of, and Schedule 15 to, FA 1973 Section 77B of TMA: Pre-conditions for serving secondary-liability notice Section 77C of TMA: Secondary-liability notices Section 77D of TMA: Payments under secondary-liability notices Section 77E of TMA: Exception for certain pre-1974 cases Section 77F of TMA: Issue, cancellation and effect of exemption certificates Section 77G of TMA: Liabilities for assessments made after exemption certificate cancelled Section 77H of TMA: Calculations under sections 77C(3) and 77G(7) Section 77I of TMA: Information Section 77J of TMA: Meaning of “related to a licence” as respects tax, or profits or gains Section 77K of TMA: Other definitions in Part 7A Part 2: Relocation of section 24 of FA 1974 Section 8(4A) and (4B) of TMA: Personal return Section 8ZA of TMA: Interpretation of section 8(4A) Section 15A of TMA: Non-resident’s staff are UK client’s employees for section 15 purposes Part 3: Relocation of section 42 of ICTA Section 302A of ITTOIA: Appeals against proposed determinations Section 302B of ITTOIA: Section 302A: supplementary Section 302C of ITTOIA: Determination by tribunal Section 242 of CTA 2009: Determination by tribunal Part 4: Relocation of section 84A of ICTA Section 94A of ITTOIA: Costs of setting up SAYE option scheme or CSOP scheme Section 272 of ITTOIA: Profits of a property business: application of trading income rules Part 5: Relocation of section 152 of ICTA Section 54A of TMA: No questioning in appeal of amounts of certain social security income Section 54B of TMA: Notifications of taxable amounts of certain social security income Section 54C of TMA: Interpretation of sections 54A and 54B: “appropriate officer” etc Part 6: Relocation of section 337A(2) of ICTA Section 1301A of CTA 2009: Restriction of deductions for interest Part 7: Relocation of section 475 of ICTA Section 154A of ITTOIA: Certain non-UK residents with interest on 31/2% War Loan 1952 Or After Part 8: Relocation of section 700 of ICTA Section 682A of ITTOIA: Statements relating to estate income Part 9: Relocation of section 787 of ICTA Part 10: Relocation of sections 130 to 132 of FA 1988 Section 109B of TMA: Provisions for securing payment by company of outstanding tax Section 109C of TMA: Penalty for company’s failure to comply with section 109B Section 109D of TMA: Penalty for other persons if company fails to comply with section 109B Section 109E of TMA: Liability of other persons for unpaid tax Section 109F of TMA: Interpretation of sections 109B to 109E Part 11: Relocation of section 151 of FA 1989 Part 12: Relocation of Schedule 12 to F(No 2)A 1992 so far as applying for income tax purposes Section 837A of ITA: Overview of Chapter Section 837B of ITA: Application of Chapter Section 837C of ITA: Charge to income tax on winding up receipts Section 837D of ITA: Transfer of rights to payment Section 837E of ITA: Allowable deductions Section 837F of ITA: Election to carry back Section 837G of ITA: Relationship of Chapter with other income tax provisions Section 837H of ITA: Interpretation of Chapter Part 13: Relocation of section 200 of FA 1996 so far as applying for income tax purposes Section 835B of ITA: Domicile for income tax purposes of overseas electors Part 14: Relocation of section 36 of FA 1998 and section 111 of FA 2009 Section 59F of TMA: Arrangements for paying tax on behalf of group members Sections 59G and 59H of TMA: Managed payment plans Part 15: Relocation of section 118 of FA 1998 Section 43E of TMA: Making of income tax claims by electronic communications etc Section 43F of TMA: Effect of directions under section 43E Part 16: Relocation of section 144 of FA 2000 Section 106A of TMA: Offence of fraudulent evasion of income tax Part 17: Relocation of section 199 of FA 2003 Section 18B of TMA: Savings income; regulations about European and international aspects Section 18C of TMA: Regulations under section 18B: provision about “paying agents” Section 18D of TMA: Content of regulations under section 18B: supplementary provision Section 18E of TMA: Interpretation of sections 18B to 18D: “prescribed” etc Part 18: Relocation of section 61 of F(No 2)A 2005 Paragraph 87A of Schedule 18 to FA 1998: Company ceasing to be UK resident on formation of SE by merger Paragraph 87B of Schedule 18 to FA 1998: SE ceasing to be UK resident Paragraph 87C of Schedule 18 to FA 1998: Meaning of SE Part 19: Relocation of paragraph 13 of Schedule 13 to FA 2007 Section 925A of ITA: Creditor repos Section 925B of ITA: Debtor repos Section 925C of ITA: Actual payments ignored if section 925A or 925B applies Section 925D of ITA: Power to modify repo sections Section 925E of ITA: Cases where section 925D applies: non-standard repos Section 925F of ITA: Interpretation of the repo sections Section 926 of ITA: Interpretation of Chapter Schedule 8: Minor and consequential amendments Part 1: Double taxation relief Section 24 of TMA: Power to obtain information as to income from securities Section 43D of TMA: Claims for double taxation relief in relation to petroleum revenue tax Section 790 of ICTA: Unilateral relief Sections 806A to 806K of ICTA: Foreign dividends: onshore pooling, utilisation of eligible unrelieved foreign tax and branches or agencies in the United Kingdom of persons resident elsewhere Section 807 of ICTA: Sale of securities with or without accrued interest Sections 812 to 814 of ICTA: Withdrawal of right to tax credit of certain non-resident companies connected with unitary states Section 816 of ICTA: Disclosure of information Schedule 26 to ICTA: Controlled foreign companies: reliefs against liability for tax in respect of chargeable profits Section 194 of FA 1993: DTR in relation to PRT Schedule 18 to FA 1998: Company tax returns, assessments and related matters Section 115 of FA 2004: Supplementary Section 527 of ITA: charitable trusts: exemption from charges under provisions to which section 1016 of ITA applies Section 1026 of ITA: meaning of “non-qualifying income” for the purposes of section 1025 of ITA (meaning of “modified net income”) Section 793 of CTA 2009: Intangible fixed assets: reallocation of degrouping charge within group and recovery: further requirements about elections under section 793 Sections 931H and 931J of CTA 2009: Dividends derived from transactions not designed to reduce tax; schemes involving manipulation of controlled company rules Part 9: Sale and lease-back etc Section 781(5) of ICTA: Assets leased to traders and others: cessation of trade Broadcasting Act 1996, Greater London Authority Act 1999 and Transport Act 2000 Part 10: Factoring of income etc Part 11: UK representatives of non-UK residents Section 824 of ITA: Application of 20% rule to collective investment schemes Part 12: Amendments for purposes connected with other tax law rewrite Acts Greater London Authority Act 1999 FA 2005 CTA 2009 Schedule 9: Transitionals and savings etc Part 3: Double taxation relief Part 10: Alternative finance arrangements Part 12: Factoring of income etc Application of section 809CZC of ITA 2007 (income-transfer under loan or credit transaction) Schedule 10: Repeals and revocations Part 6: Oil activities Schedule 11: Index of defined expressions used in Parts 2 to 8 Part 2 Double taxation relief Part 4: Transfer Pricing Part 6 Tax Arbitrage Part 7: Tax Treatment of Financing Costs and Income Part 8: Offshore Funds Part 2 of Schedule 9 Change 1: Double taxation relief: capital gains tax relief under double taxation arrangements: clause 3 Change 2: References to “officer of Revenue and Customs”: Change 3: Double taxation relief: unilateral relief for tax on profits of UK branch, agency or permanent establishment: limit: clause 30 Change 4: Double taxation relief: income tax and capital gains tax: order in which credit relief is allowed: clauses 36 and 40 Change 5: Requiring an apportionment, or a reduction, to be just and reasonable: clauses 37 and 44 and Schedule 4 (sections 681DE and 681DJ of ITA) Change 6: Double taxation relief: limit on total credit against income tax and capital gains tax: interaction with gift aid: clause 41 Change 7: Double taxation relief: corporation tax: credit relief: royalty income: clause 47 Change 8: Double taxation relief: cases about being taxed otherwise than in accordance with DTAs: capital gains tax and PRT: clauses 124 and 125 Change 9: Avoidance: tax arbitrage: cases where payee not treated as not liable as a result of scheme: clause 245 Change 10: Oil taxation: abandonment guarantees and expenditure under sections 63 and 65 of FA 1991: Schedule 1 (sections 225O, 225Q, 225R and 225T of ITTOIA) Change 11: Sale and lease-back etc: restriction of excessive lease rentals: relationship with accounting practice: Schedule 4 (sections 681AD and 681CC of ITA) Change 12: Sale and lease-back etc: exclusion of service charges etc to be on just and reasonable basis: Schedule 4 (section 681AI of ITA) Change 13: Trading income: omission of references to a company carrying on a profession or a vocation: Schedule 4 (section 681DP of ITA) Change 14: Relocation of section 152 of ICTA: Schedule 7 Change 15: Omission of section 59(3) of ICTA: Schedule 8 This change is in principle adverse to some taxpayers and favourable to others. But it is expected to have no practical effect as it is in line with generally accepted practice.

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