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 12 — Relocation of Schedule 12 to F(No.2)A 1992 so far as applying for income tax purposes
330

837E
Allowable deductions
(1)
In calculating the amount on which income tax is charged under this
Chapter for a tax year, deductions are allowed in accordance with
this section from the amount which would otherwise be chargeable
to income tax under this Chapter.
5
(2)
A deduction is allowed for the total sum of all losses, expenses and
debits within subsection (3) that are incurred during or before the tax
year (but subject to subsections (4) and (5)).
(3)
The losses, expenses and debits within this subsection are those
which, if the company carrying on the deposit-taking trade had not
10
permanently ceased to do so—
(a)
would have been deducted in calculating the profits of the
trade for income or corporation tax purposes, or
(b)
would have been deducted from or set off against the profits
of the trade for income or corporation tax purposes.
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(4)
No deduction is allowed if the loss, expense or debit arises directly
or indirectly from the cessation itself.
(5)
A loss, expense or debit is only within subsection (3) if incurred—
(a)
after the start of the winding up proceedings or, if later, the
permanent cessation of the deposit-taking trade, or
20
(b)
in the case of a loss, at or before the permanent cessation of
the deposit-taking trade.
(6)
No deduction for an amount is allowed under this section if the
amount has already been allowed (whether under this section or
under any other provision of the Tax Acts).
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837F
Election to carry back
(1)
This section applies if a winding up receipt arising from the deposit-
taking trade is received in a tax year beginning no later than 6 years
after the company permanently ceased to carry on the trade.
(2)
The company or its liquidator may elect that the income tax
30
chargeable under this Chapter in respect of the receipt is to be
charged as if the receipt has been received on the date of the
cessation.
(3)
The election must be made before the end of the period of two years
beginning immediately after the end of the tax year in which the
35
receipt is received.
(4)
If an election is made under this section an assessment to income tax
must be made accordingly (regardless of anything in the Income Tax
Acts).
837G
Relationship of Chapter with other income tax provisions
40
If a winding up receipt arising from the deposit-taking trade is
chargeable to income tax under this Chapter it is not chargeable to
income tax under any other provision.

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 13 — Relocation of section 200 of FA 1996 so far as applying for income tax purposes
331

837H
Interpretation of Chapter
(1)
This section applies for the purposes of this Chapter.
(2)
There is the permanent cessation of a company’s trade if—
(a)
the company ceases to carry on the trade, or
(b)
the company ceases to be within the charge to corporation tax
5
in respect of the trade,

whether or not the trade is in fact ceased.
(3)
A company is insolvent at any time if at that time—
(a)
it is unable to pay its debts as they fall due, or
(b)
the value of its assets is less than the amount of its liabilities
10
(including its contingent and prospective liabilities).
(4)
“Company” means—
(a)
a company as defined in section 1(1) of the Companies Act
2006, or
(b)
an unregistered company as defined in section 220 of the
15
Insolvency Act 1986 or Article 184 of the Insolvency
(Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).
(5)
For the meaning of “deposit-taking trade” and “winding up receipt”,
see sections 837B(3) and 837C(3) respectively.”
72
In Schedule 4 (index of defined expressions) at the appropriate places
20
insert—

“company (in Chapter 3A of Part 14)
section 837H(4)”

“deposit-taking trade (in Chapter 3A of
section 837B(3)”

Part 14)

“winding up receipt (in Chapter 3A of
section 837C(3)”

25

Part 14)

Part 13
Relocation of section 200 of FA 1996 so far as applying for income tax purposes
Finance Act 1996 (c. 8)
73
FA 1996 is amended as follows.
30
74    (1)
Amend section 200 (domicile for tax purposes of overseas electors) as
follows.
      (2)
In subsection (1)(a) (determinations for purposes of inheritance tax, income
tax or capital gains tax) omit “, income tax”.
      (3)
In subsection (4)(a) (which refers to any of the taxes mentioned in subsection
35
(1)(a)) for “any” substitute “either”.
Income Tax Act 2007 (c. 3)
75
ITA 2007 is amended as follows.

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 14 — Relocation of section 36 of FA 1998 and section 111 of FA 2009
332

76
In section 2(14)(b) (overview of Act: reference to Chapter 2 of Part 14) for
“(Chapter 2)” substitute “and domicile (Chapters 2 and 2A)”.
77
After section 835A insert—
“Chapter 2A
Domicile
5
835B
Domicile for income tax purposes of overseas electors
(1)
In determining for income tax purposes where a person is domiciled,
disregard any relevant electoral action taken by the person (whether
taken before, on or after the day on which TIOPA 2010 is passed).
(2)
For the purposes of this section, relevant electoral action is taken by
10
a person if—
(a)
the person does anything with a view to, or in connection
with, being registered as an overseas elector, or
(b)
the person, when registered as an overseas elector, votes in
any election at which the person is entitled to vote as a result
15
of being registered as an overseas elector.
(3)
For the purposes of this section, a person is registered as an overseas
elector if the person is—
(a)
registered in any register of parliamentary electors in
pursuance of such a declaration as is mentioned in section
20
1(1)(a) of the Representation of the People Act 1985
(extension of parliamentary franchise to certain non-resident
British citizens), or
(b)
registered under section 3 of that Act (certain non-resident
peers entitled to vote at European Parliamentary elections).
25
(4)
Subsection (1) does not prevent regard being had, in determining a
person’s domicile at any time, to any relevant electoral action taken
by the person if—
(a)
the person’s domicile at that time is being determined for the
purpose of ascertaining that or any other person’s liability to
30
income tax, and
(b)
the person whose liability is being ascertained wishes regard
to be had to that action.
(5)
If a person’s domicile is determined in accordance with any such
wishes, that domicile is to be regarded as having been determined
35
for the purpose only of ascertaining the liability concerned.”
Part 14
Relocation of section 36 of FA 1998 and section 111 of FA 2009
Taxes Management Act 1970 (c. 9)
78
TMA 1970 is amended as follows.
40

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 14 — Relocation of section 36 of FA 1998 and section 111 of FA 2009
333

79
In Part 5A (payment of tax) after section 59E insert—
“59F
Arrangements for paying tax on behalf of group members
(1)
An officer of Revenue and Customs may enter into arrangements for
the specified purpose with some or all of the members of a group.
(2)
For the purposes of subsection (1), arrangements entered into with
5
some or all of the members of a group are for “the specified purpose”
if they are arrangements for one of those members to discharge any
liability of each of those members to pay corporation tax for the
accounting periods to which the arrangements relate.
(3)
For the purposes of this section, a company and all its 51%
10
subsidiaries form a group and, if any of those subsidiaries has 51%
subsidiaries, the group includes them and their 51% subsidiaries,
and so on.
(4)
Arrangements entered into under subsection (1)—
(a)
may make provision in relation to cases where companies
15
become or cease to be members of a group,
(b)
may make provision in relation to the discharge of liability to
pay interest or penalties,
(c)
may make provision in relation to the discharge of liability to
pay any amount within subsection (6),
20
(d)
may make provision for or in connection with the
termination of the arrangements, and
(e)
may make such supplementary, incidental, consequential or
transitional provision as is necessary for the purposes of the
arrangements.
25
(5)
Arrangements entered into under subsection (1)—
(a)
do not affect the liability to corporation tax, or to pay
corporation tax, of any company to which the arrangements
relate, and
(b)
do not affect any other liability under the Tax Acts of any
30
company to which the arrangements relate.
(6)
The following amounts are within this subsection—
(a)
an amount due from a company under section 455 of CTA
2010 (charge to tax in case of loan to participator in close
company) as if it were an amount of corporation tax
35
chargeable on the company, and
(b)
a sum chargeable on a company under section 747(4)(a) of the
principal Act (controlled foreign companies) as if it were an
amount of corporation tax.”
80
In Part 5A after section 59F insert—
40
“59G
Managed payment plans
(1)
This section applies if a person (“P”) has entered into a managed
payment plan in respect of—
(a)
an amount on account of income tax which is to become
payable in accordance with section 59A(2),
45
(b)
an amount of income tax or capital gains tax which is to
become payable in accordance with section 59B, or

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 14 — Relocation of section 36 of FA 1998 and section 111 of FA 2009
334

(c)
an amount of corporation tax which is to become payable in
accordance with section 59D.
(2)
P enters into a managed payment plan in respect of an amount if—
(a)
P agrees to pay, and an officer of Revenue and Customs
agrees to accept payment of, the amount by way of
5
instalments,
(b)
the instalments to be paid before the due date are balanced by
the instalments to be paid after it (see section 59H), and
(c)
the agreement meets such other requirements as may be
specified in regulations made by the Commissioners for Her
10
Majesty’s Revenue and Customs.
(3)
But this section does not apply, in the case of an amount of
corporation tax, if an arrangement under section 59F has been made
in relation to the amount.
(4)
If P pays all of the instalments in accordance with the plan, P is to be
15
treated as having paid, on the due date, the total of those instalments.
(5)
If P—
(a)
pays one or more instalments in accordance with the plan,
but
(b)
fails to pay one or more later instalments in accordance with
20
it,

P is to be treated as having paid, on the due date, the total of the
instalments paid before the failure (but this is subject to subsection
(6)).
(6)
If—
25
(a)
subsection (5) applies in a case in which the first failure to pay
an instalment occurs before the due date, and
(b)
P would (in the absence of a managed payment plan) be
entitled to be paid interest on any amount paid before that
date,
30

then, despite that subsection, P is entitled to be paid that interest.
(7)
If—
(a)
subsection (5) applies,
(b)
P makes one or more payments after the due date (whether
or not in accordance with the plan), and
35
(c)
an officer of Revenue and Customs gives P a notice
specifying any or all of those payments,

P is not liable to a penalty or surcharge for failing to pay the amount
of the specified payments on or before the due date.
(8)
Regulations under this section may make different provision for
40
different cases.
(9)
In this section “the due date”, in relation to an amount mentioned in
subsection (1), means the date on which it becomes payable.
59H
Balancing of instalments for the purposes of section 59G
(1)
Subsection (2) applies for the purposes of section 59G(2)(b).
45

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 15 — Relocation of section 118 of FA 1998
335

(2)
The instalments to be paid before the due date are balanced by those
to be paid after it if the time value of the instalments to be paid before
that date is equal, or approximately equal, to the time value of the
instalments to be paid after it.
(3)
The time value of the instalments to be paid before the due date is the
5
total of the time value of each of the instalments to be paid before that
date (and the time value of the instalments to be paid after that date
is to be read accordingly).
(4)
The time value of an instalment is—


where—
10
A is the amount of the instalment, and
T is the number of days before, or after, the due date that the
instalment is to be paid.
(5)
The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make provision for the purpose of determining when an
15
amount is approximately equal to another amount.
(6)
Regulations under this section may make different provision for
different cases.”
Finance Act 1998 (c. 36)
81
FA 1998 is amended as follows.
20
82
Omit section 36 (arrangements with respect to payment of corporation tax).
Finance Act 2009 (c. 10)
83
FA 2009 is amended as follows.
84
Omit section 111 (managed payment plans).
Part 15
25
Relocation of section 118 of FA 1998
Taxes Management Act 1970 (c. 9)
85
TMA 1970 is amended as follows.
86
In Part 4, after section 43D (which is inserted by Schedule 8) insert—
“43E
Making of income tax claims by electronic communications etc
30
(1)
The Commissioners for Her Majesty’s Revenue and Customs may,
by publishing them in a manner the Commissioners consider
appropriate, give any claims directions that the Commissioners
consider appropriate.
(2)
In subsection (1) “claims directions” means general directions for the
35
purposes of income tax relating to—
(a)
the circumstances in which, and
(b)
the conditions subject to which,

Taxation (International and Other Provisions) Bill
Schedule 7 — Miscellaneous relocations
Part 15 — Relocation of section 118 of FA 1998
336


claims by individuals under the Tax Acts may be made by the use of
an electronic communications service or otherwise without
producing a claim in writing.
(3)
Directions under subsection (1)—
(a)
may not relate to the making of a claim by an individual in
5
the individual’s capacity as a trustee, partner or personal
representative, but
(b)
subject to that, may relate to claims made by an individual
through another person acting on the individual’s behalf.
(4)
Directions under subsection (1) may not relate to—
10
(a)
the making of a claim to which Schedule 1B to this Act
applies, or
(b)
the making of a claim under any provision of the Capital
Allowances Act 2001.
(5)
Directions under subsection (1)—
15
(a)
cannot modify any requirement imposed by or under any
enactment as to the period within which any claim is to be
made or as to the contents of any claim, but
(b)
may include provision as to how any requirement as to the
contents of a claim is to be met when the claim is not
20
produced in writing.
(6)
Directions under subsection (1) may make different provision in
relation to the making of claims of different descriptions.
(7)
A direction under subsection (1) may revoke or vary any previous
direction given under that subsection.
25
(8)
In subsection (2) “electronic communications service” has the same
meaning as in the Communications Act 2003 (see section 32 of that
Act).
(9)
In subsections (1) to (6), references to the making of a claim include
references to any of the following—
30
(a)
the making of an election,
(b)
the giving of a notification or notice,
(c)
the amendment of any return, claim, election, notification or
notice, and
(d)
the withdrawal of any claim, election, notification or notice,
35

and in those subsections “claim” is to be read accordingly.
(10)
For the purposes of subsection (9)(c)—
(a)
“return” includes any statement or declaration under the
Income Tax Acts, and
(b)
the definition of “return” given by section 118(1) of this Act
40
does not apply.
43F
Effect of directions under section 43E
(1)
If directions under section 43E(1) are in force in relation to the
making of claims of any description to the Commissioners for Her
Majesty’s Revenue and Customs, claims of that description may be
45
made to the Commissioners in accordance with the directions.