|
| |
|
April 2012; and for the purpose of determining whether section 41(1A) of |
| |
that Act applies, section 41(1) is to be read as substituted by paragraph 38(2) |
| |
| |
(10) | For the purposes of section 1293(1A) of CTA 2009 (as inserted by paragraph |
| |
47(3) of this Schedule), the early step is treated as having been taken on 6 |
| 5 |
April 2012; and for the purpose of determining whether section 1293(1A) of |
| |
that Act applies, section 1293(1) is to be read as substituted by paragraph |
| |
| |
54 (1) | This paragraph applies if— |
| |
(a) | on or after 9 December 2010 but before 6 April 2011 a relevant step |
| 10 |
(“the early step”) within section 554C(1)(d) of ITEPA 2003 is taken, |
| |
(b) | the relevant step does not involve a sum of money within the |
| |
meaning of section 554Y(9) of ITEPA 2003, |
| |
(c) | the asset which is the subject of the early step is a readily convertible |
| |
asset which P makes available to secure the payment of a sum of |
| 15 |
| |
(d) | Chapter 2 of Part 7A of ITEPA 2003 would have applied by reason of |
| |
the early step had the reference in paragraph 52(1) of this Schedule |
| |
to 6 April 2011 been a reference to 9 December 2010, and |
| |
(e) | the early step is not chargeable to income tax by virtue of Schedule |
| 20 |
34 to FA 2004 in whole or in part. |
| |
(2) | For the purposes of sub-paragraph (1)(a) section 554C(1)(d) of ITEPA 2003 is |
| |
to be read as if the words “or makes it available under an arrangement which |
| |
permits its use” were omitted. |
| |
(3) | In this paragraph “readily convertible asset” means anything mentioned in |
| 25 |
section 702(1)(a) to (c) of ITEPA 2003 (ignoring section 702(3)). |
| |
(4) | Subject to what follows, Chapter 2 of Part 7A of ITEPA 2003 is to apply by |
| |
reason of the early step; and the amendments made by this Schedule have |
| |
| |
(5) | In determining the tax year for which the employment income of A counts |
| 30 |
for the purposes of section 554Z1(1) of ITEPA 2003, the early step is treated |
| |
as having been taken on 6 April 2012; but otherwise Chapter 2 of Part 7A of |
| |
that Act applies by reference to when the early step was actually taken. |
| |
(6) | The amount which (apart from this sub-paragraph) would count as |
| |
employment income of A is to be reduced to nil if— |
| 35 |
(a) | before 6 April 2012 the readily convertible asset has been returned to |
| |
| |
(b) | as at that date the asset is not being used to secure the payment of the |
| |
sum of money (or any part of it), |
| |
| and the Tax Acts are to apply in relation to the early step as if Chapter 2 of |
| 40 |
Part 7A of ITEPA 2003 had never applied by reason of it, with any |
| |
adjustments that need to be made to any assessment to tax being made |
| |
| |
(7) | Section 554Z4 of ITEPA 2003 does not apply in relation to the early step and, |
| |
in the application of that section in relation to any other relevant step |
| 45 |
(whenever taken), the early step is to be ignored. |
| |
(8) | Section 554Z7 of ITEPA 2003 applies in relation to the early step as if |
| |
subsection (6)(b) were omitted. |
| |
|
| |
|
| |
|
(9) | Section 554Z11 of ITEPA 2003 does not apply in relation to the early step. |
| |
(10) | For the purposes of section 695A(3)(a) of ITEPA 2003 (as inserted by |
| |
paragraph 31 of this Schedule), the early step is treated as having been taken |
| |
| |
(11) | For the purposes of section 41(1A) of ITTOIA 2005 (as inserted by paragraph |
| 5 |
38(3) of this Schedule), the early step is treated as having been taken on 6 |
| |
April 2012; and for the purpose of determining whether section 41(1A) of |
| |
that Act applies, section 41(1) is to be read as substituted by paragraph 38(2) |
| |
| |
(12) | For the purposes of section 1293(1A) of CTA 2009 (as inserted by paragraph |
| 10 |
47(3) of this Schedule), the early step is treated as having been taken on 6 |
| |
April 2012; and for the purpose of determining whether section 1293(1A) of |
| |
that Act applies, section 1293(1) is to be read as substituted by paragraph |
| |
| |
55 (1) | For the purpose of determining whether Chapter 2 of Part 7A of ITEPA 2003 |
| 15 |
would have applied by reason of the early step as mentioned in paragraph |
| |
53(1)(b) or 54(1)(d), section 554G of ITEPA 2003 is to be read— |
| |
(a) | as if subsection (1)(a) were omitted, and |
| |
(b) | as if the definition contained in sub-paragraph (2) applied for the |
| |
purposes of the reference to a group of companies in subsection |
| 20 |
(4)(d) instead of section 554Y(5) of ITEPA 2003. |
| |
(2) | The definition referred to in sub-paragraph (1)(b) is— |
| |
““group of companies” means a company and any other |
| |
companies of which it has control (as defined in section 995 |
| |
| 25 |
(3) | For the purpose of determining whether Chapter 2 of Part 7A of ITEPA 2003 |
| |
would have applied by reason of the early step, Chapter 1 of that Part is to |
| |
be read as if section 554M(7) to (11) were omitted. |
| |
(4) | If, by virtue of section 554N of ITEPA 2003, Chapter 2 of Part 7A of that Act |
| |
would not have applied by reason of the early step, section 554N(3) and (4) |
| 30 |
have effect in relation to the car loan. |
| |
(5) | But, for this purpose, if the repayment date is before 6 April 2012, in section |
| |
section 554N(3) and (4) references to the repayment date are to be read as |
| |
references to 6 April 2012. |
| |
56 (1) | This paragraph applies for the purposes of section 554P of ITEPA 2003 in a |
| 35 |
| |
(a) | the relevant step mentioned in subsection (2)(a) of that section was |
| |
taken before 6 April 2011, and |
| |
(b) | the requirement of subsection (2)(b) of that section would have been |
| |
met had Part 7A of ITEPA 2003 had effect in relation to relevant steps |
| 40 |
within section 554B of that Act taken before that date. |
| |
(2) | The requirement of subsection (2)(b) of that section is to be treated as met in |
| |
| |
57 (1) | This paragraph applies for the purposes of section 554Q of ITEPA 2003 in a |
| |
| 45 |
(a) | the relevant step mentioned in subsection (3)(a) of that section was |
| |
taken before 6 April 2011, and |
| |
|
| |
|
| |
|
(b) | the requirement of subsection (3)(b) of that section would have been |
| |
met had Part 7A of ITEPA 2003 had effect in relation to relevant steps |
| |
within section 554B of that Act taken before that date. |
| |
(2) | The requirement of subsection (3)(b) of that section is to be treated as met in |
| |
| 5 |
58 (1) | This paragraph applies if— |
| |
(a) | a relevant step within section 554C or 554D of ITEPA 2003 (“the |
| |
chargeable step”) is taken, |
| |
(b) | Chapter 2 of Part 7A of ITEPA 2003 applies by reason of the |
| |
| 10 |
(c) | in a tax year before 6 April 2011 (“the pre-6 April 2011 tax year”) a |
| |
relevant step (“the pre-6 April 2011 step”) within section 554B of |
| |
| |
(d) | before the chargeable step is taken— |
| |
(i) | an agreement was made between Her Majesty’s Revenue and |
| 15 |
Customs and either A or B (or both) under which it was |
| |
agreed that the pre-6 April 2011 step was to be treated as |
| |
giving rise to earnings within Chapter 1 of Part 3 of ITEPA |
| |
2003 for the pre-6 April 2011 tax year, and |
| |
(ii) | A or B has paid, or otherwise accounted for, any tax which A |
| 20 |
or B is required to pay or otherwise account for as a |
| |
consequence of the agreement, and |
| |
(e) | Chapter 2 of Part 7A of ITEPA 2003 would have applied by reason of |
| |
the pre-6 April 2011 step but for the step having been taken before 6 |
| |
| 25 |
(2) | In relation to the chargeable step, section 554Z4 of ITEPA 2003 has effect as |
| |
if Chapter 2 of Part 7A of that Act applied by reason of the pre-6 April 2011 |
| |
| |
Other commencement provision |
| |
59 | The amendments made by paragraph 14 of this Schedule, so far as relating |
| 30 |
to general earnings, have effect in relation to benefits to which Chapter 2 of |
| |
Part 6 of ITEPA 2003 applies received on or after 6 April 2011. |
| |
60 | The amendments made by paragraphs 36, 39(a), 45 and 48(a) of this |
| |
Schedule have effect in relation to acts or omissions occurring on or after 6 |
| |
| 35 |
61 | The amendments made by paragraphs 37(2), 39(b), 46(2) and 48(b) of this |
| |
Schedule have effect in relation to payments or transfers made on or after 6 |
| |
| |
62 | The amendments made by paragraphs 38(2) and 47(2) of this Schedule have |
| |
effect in relation to money treated as received on or after 6 April 2011 |
| 40 |
(subject to paragraphs 53(9) and (10) and 54(11) and (12) of this Schedule). |
| |
Power to make provision dealing with interactions etc |
| |
63 (1) | The Treasury may by order made by statutory instrument make such |
| |
provision as the Treasury consider appropriate dealing with the interaction |
| |
between Part 7A of ITEPA 2003 (as inserted by paragraph 1 of this Schedule) |
| 45 |
|
| |
|
| |
|
and any other provision of the Tax Acts or any enactment relating to capital |
| |
gains tax or inheritance tax. |
| |
(2) | The Treasury may by order made by statutory instrument make such |
| |
provision as the Treasury consider appropriate in consequence of this |
| |
| 5 |
(3) | An order under this paragraph may contain provision having retrospective |
| |
effect, so long as it does not increase any person’s liability to any tax. |
| |
(4) | An order under this paragraph may amend, repeal or revoke any provision |
| |
made by or under an Act, including, in the case of an order under sub- |
| |
paragraph (1), Part 7A of ITEPA 2003. |
| 10 |
(5) | An order under this paragraph may contain incidental, supplemental, |
| |
consequential and transitional provision and savings. |
| |
(6) | The powers conferred by this paragraph may not be exercised after 5 April |
| |
| |
(7) | A statutory instrument containing an order under this paragraph is subject |
| 15 |
to annulment in pursuance of a resolution of the House of Commons. |
| |
| |
| |
Tainted charity donations |
| |
| |
| 20 |
1 | In Part 13 of ITA 2007 (tax avoidance), after Chapter 7 insert— |
| |
| |
| |
Tainted charity donations |
| |
| 25 |
809ZH | Overview of Chapter |
| |
(1) | This Chapter makes provision for removing entitlement to income |
| |
tax reliefs, and counteracting income tax advantages, where a person |
| |
makes a relievable charity donation which is a tainted donation. |
| |
(2) | See section 257A of TCGA 1992 and Part 21C of CTA 2010 for the |
| 30 |
removal of entitlement to other reliefs where a person makes a |
| |
relievable charity donation which is a tainted donation. |
| |
809ZI | Relievable charity donations |
| |
(1) | In this Chapter “relievable charity donation” means a gift or other |
| |
| 35 |
(a) | is made by a person to a charity, and |
| |
|
| |
|
| |
|
(b) | is eligible for tax relief. |
| |
(2) | A gift or other disposal is eligible for tax relief if one or both of the |
| |
| |
(a) | (ignoring the tainted donation provisions) tax relief would be |
| |
available in respect of it under a relevant relieving provision; |
| 5 |
(b) | the charity is entitled to claim a repayment of tax in respect of |
| |
| |
(3) | “The tainted donation provisions” are— |
| |
| |
(b) | section 257A of TCGA 1992 (tainted charity donations: |
| 10 |
disapplication of section 257), and |
| |
(c) | Part 21C of CTA 2010 (tainted charity donations: removal of |
| |
corporation tax reliefs). |
| |
(4) | The following are “relevant relieving provisions”— |
| |
(a) | section 257 of TCGA 1992 (gifts of chargeable assets), |
| 15 |
(b) | section 63(2)(a), (aa) and (ab) of CAA 2001 (gifts of plant and |
| |
| |
(c) | Part 12 of ITEPA 2003 (payroll giving), |
| |
(d) | section 108 of ITTOIA 2005 (gifts of trading stock), |
| |
(e) | Chapters 2 and 3 of Part 8 of this Act (gift aid and gifts of |
| 20 |
| |
(f) | section 105 of CTA 2009 (gifts of trading stock), and |
| |
(g) | Part 6 of CTA 2010 (charitable donations relief). |
| |
(5) | For the purposes of this Chapter, an amount of income which arises |
| |
under a UK settlement and to which a charity is entitled under the |
| 25 |
terms of the settlement is to be regarded as an amount gifted to the |
| |
charity by the trustees of the settlement. |
| |
| “UK settlement” has the same meaning as in section 628 of ITTOIA |
| |
| |
| 30 |
| |
(1) | For the purposes of this Chapter, a relievable charity donation is a |
| |
tainted donation if (and only if) Conditions A, B and C are met. |
| |
| |
(a) | a linked person enters into arrangements (whether before or |
| 35 |
after the donation is made), and |
| |
(b) | it is reasonable to assume from either or both of— |
| |
(i) | the likely effects of the donation and the |
| |
| |
(ii) | the circumstances in which the donation is made and |
| 40 |
the circumstances in which the arrangements are |
| |
| |
| that the donation would not have been made and the |
| |
arrangements would not have been entered into |
| |
independently of one another. |
| 45 |
|
| |
|
| |
|
(3) | “Linked person” means— |
| |
(a) | the person who made the donation (“the donor”), or |
| |
(b) | a person connected with the donor at a relevant time. |
| |
(4) | In subsection (3) “relevant time” means a time during the period |
| |
which begins with the earliest, and ends with the latest, of the |
| 5 |
| |
(a) | the time when the arrangements are entered into as |
| |
mentioned in subsection (2); |
| |
(b) | the time when the relievable charity donation is made; |
| |
(c) | the time when the arrangements are first materially |
| 10 |
| |
(5) | Condition B is that the main purpose, or one of the main purposes, |
| |
of the linked person in entering into the arrangements is to obtain a |
| |
| |
(a) | directly or indirectly from the charity to which the donation |
| 15 |
is made or a connected charity, |
| |
(b) | for one or more linked persons who are not charities (each of |
| |
whom is referred to in this Chapter as “a potentially |
| |
| |
(6) | Condition C is that the donor is not— |
| 20 |
(a) | a qualifying charity-owned company, or |
| |
(b) | a relevant housing provider linked with the charity to which |
| |
| |
(7) | For the purposes of subsection (6)(b) a relevant housing provider is |
| |
linked with the charity if (and only if)— |
| 25 |
(a) | one is wholly owned, or subject to control, by the other, or |
| |
(b) | both are wholly owned, or subject to control, by the same |
| |
| |
| |
“qualifying charity-owned company”, in relation to a relievable |
| 30 |
charity donation, means a company which— |
| |
(a) | is wholly owned by one or more charities, at least one |
| |
of which is the charity to which the donation is made |
| |
or a connected charity, and |
| |
(b) | has not previously been under the control of, and |
| 35 |
does not carry on a trade or business previously |
| |
carried on by, one or more of the following— |
| |
(i) | a potentially advantaged person; |
| |
(ii) | a person (other than a charity) who, at any |
| |
time within the period of 4 years ending with |
| 40 |
the day on which paragraph (a) was first |
| |
satisfied, was connected with a person who is |
| |
a potentially advantaged person; |
| |
“relevant housing provider” means a body which is— |
| |
(a) | a non-profit registered provider of social housing, or |
| 45 |
(b) | entered on a register maintained under section 1 of |
| |
the Housing Act 1996, section 20 of the Housing |
| |
(Scotland) Act 2010 (asp 17) or Article 14 of the |
| |
|
| |
|
| |
|
Housing (Northern Ireland) Order 1992 (S.I. 1992/ |
| |
| |
(9) | Section 200 of CTA 2010 (company wholly owned by a charity) |
| |
applies for the purposes of subsection (8), and for those purposes |
| |
references in that section to “charity” include a registered club within |
| 5 |
the meaning of section 658(6) of that Act. |
| |
(10) | This section is subject to section 809ZL (certain financial advantages |
| |
| |
809ZK | Circumstances in which financial advantage deemed to be obtained |
| |
(1) | This section applies for the purposes of Condition B. |
| 10 |
(2) | Subsection (3) applies where the arrangements entered into by the |
| |
linked person (as mentioned in Condition A) involve a transaction to |
| |
| |
(a) | that or any other linked person (“X”), and |
| |
(b) | another person (“Y”), |
| 15 |
| |
(3) | X obtains a financial advantage from the charity to which the |
| |
donation is made or a connected charity if— |
| |
(a) | the terms of the transaction are less beneficial to Y or more |
| |
beneficial to X (or both) than those which might reasonably |
| 20 |
be expected in a transaction concluded between parties |
| |
dealing at arm’s length, or |
| |
(b) | the transaction is not of a kind which a person dealing at |
| |
arm’s length and in place of Y might reasonably be expected |
| |
| 25 |
(4) | Nothing in this section is intended to limit the circumstances in |
| |
which a linked person may be regarded as obtaining a financial |
| |
advantage for the purposes of section 809ZJ. |
| |
| |
“Condition A” and “Condition B” have the same meaning as in |
| 30 |
| |
“linked person” has the meaning given by section 809ZJ(3); |
| |
“transaction” includes (for example)— |
| |
(a) | the sale or letting of property, |
| |
(b) | the provision of services, |
| 35 |
(c) | the exchange of property, |
| |
(d) | the provision of a loan or any other form of financial |
| |
| |
(e) | investment in a business. |
| |
809ZL | Certain financial advantages to be ignored |
| 40 |
(1) | When determining whether a relievable charity donation is a tainted |
| |
donation, a financial advantage within subsection (2), (3), (4) or (5) is |
| |
| |
(2) | A financial advantage is within this subsection if the person for |
| |
whom it is obtained applies the advantage for charitable purposes |
| 45 |
| |
|
| |
|