Legalize / United Kingdom / Public General Act

Finance Act 2014

Type Public General Act

Publication 2014-07-17

Last updated 2024-11-18

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(863H) (1) Section 863I applies in relation to an AIFM trade of an AIFM firm if the AIFM firm elects for that section to apply. (2) An election under this section must be made within 6 months after the end of the first period of account for which the election is to have effect. (3) An “AIFM firm” is a firm— (a) the regular business of which is managing one or more AIFs, or (b) which carries out one or more functions of managing one or more AIFs— (i) as the delegate of, or (ii) as the sub-delegate of a delegate of, a person whose regular business is managing one or more AIFs. (4) An “AIFM trade” is a trade of an AIFM firm which involves the firm's activities mentioned in subsection (3)(a) or (b). (5) Subsection (3)(a) and (b) is to be construed as if it were contained in regulation 4 of the Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773). (863I) (1) This section applies for a period of account of the AIFM trade if— (a) the calculation under section 849 in relation to a partner (“P”) in the AIFM firm produces a profit, and (b) P's share of that profit determined under section 850, 850A or 850C would, apart from this section, be a profit consisting (wholly or partly) of relevant restricted profit (see subsections (6) to (9)) chargeable to income tax under Chapter 2 of Part 2. (2) P may allocate all or a part of the relevant restricted profit (“the allocated profit”) to the AIFM firm itself. (3) If P does so— (a) the allocated profit is to be excluded from P's share of the AIFM firm's profit mentioned in subsection (1)(b), (b) the AIFM firm is to be treated in accordance with subsection (4) as if it were itself a person who is a partner in the AIFM firm (and for this purpose, in the case of a limited liability partnership, it is the body corporate which is to be treated as that person), and (c) all enactments applying generally to income tax are to apply accordingly with any necessary modifications (subject to subsection (5)). (4) The AIFM firm is treated on the following basis— (a) the calculation under section 849 in relation to the AIFM firm for the period of account produces the profit mentioned in subsection (1)(a), (b) the AIFM firm's share of that profit determined under section 850 is the allocated profit (and sections 850A and 850C are to be ignored), (c) that share is chargeable to tax under Chapter 2 of Part 2 for the tax year in which the period of account ends (with the person liable for the tax charged being the AIFM firm), and (d) the tax is charged at the additional rate. (5) The Commissioners for Her Majesty's Revenue and Customs may make regulations modifying any of the following enactments applying to income tax as they apply by virtue of this section in relation to the AIFM firm— (a) those relating to returns of information and supply of accounts, statements and reports, (b) those relating to the assessing, collecting and receiving of income tax, (c) those conferring or regulating a right of appeal, and (d) those concerning administration, penalties, interest on unpaid tax and priority of tax in cases of insolvency under the law of any part of the United Kingdom. (6) P's profit determined under section 850, 850A or 850C is “relevant restricted profit” so far as it represents variable remuneration awarded to P— (a) as deferred remuneration (including deferred remuneration which, if it vests in P, will vest in the form of instruments), or (b) as upfront remuneration which vests in P in the form of instruments with a retention period of at least 6 months. (7) In order for any variable remuneration to count for the purposes of subsection (6) it must be awarded to P in accordance with arrangements which are consistent with the AIFMD remuneration guidelines (see section 863L). (8) In the case of a firm which is an AIFM firm by virtue of section 863H(3)(b) only, this section applies only in relation to partners who fall within a category of staff which is classified as identified staff. (9) Terms used in subsections (6) to (8) have the same meaning as in the AIFMD remuneration guidelines. (863J) (1) Subsection (2) applies if all or a part of the variable remuneration represented by the allocated profit vests in P at a time when P is carrying on the AIFM trade (whether as a partner in the AIFM firm or otherwise). (2) The amount given by subsection (5) is treated as a profit of the relevant tax year (see subsection (7)) made by P in the AIFM trade chargeable to income tax under Chapter 2 of Part 2. (3) Subsection (4) applies if all or a part of the variable remuneration represented by the allocated profit vests in P at a time when P is no longer carrying on the AIFM trade (whether as a partner in the AIFM firm or otherwise). (4) If this subsection applies— (a) P is treated as receiving, in the relevant tax year (see subsection (7)), income of the amount given by subsection (5), (b) income tax is charged under this subsection on that income, and (c) P is the person liable for that tax. (5) The amount to be treated as a profit or as income received by P is— (a) the amount of the allocated profit, or the part of it representing the part of the variable remuneration, net of the income tax for which the AIFM firm is liable by virtue of section 863I in respect of the allocated profit or the part of it, plus (b) an amount equal to— (i) so much of the income tax mentioned in paragraph (a) as is paid by the AIFM firm by the time the vesting occurs, or (ii) if the vesting occurs in the tax year for which the allocated profit is chargeable to tax under Chapter 2 of Part 2 by virtue of section 863I, so much of the income tax mentioned in paragraph (a) as is paid by the AIFM firm. (6) Further— (a) P is treated as paying, when the vesting occurs, an amount of income tax equal to the amount given by subsection (5)(b), and (b) that amount is accordingly to be taken into account in determining the income tax payable by, or repayable to, P. (7) “The relevant tax year” is— (a) if the variable remuneration or the part of it is deferred remuneration, the tax year in which the vesting occurs, or (b) if the variable remuneration or the part of it is upfront remuneration, the tax year for which the allocated profit would have been chargeable to income tax under Chapter 2 of Part 2 as mentioned in section 863I(1)(b). (8) Terms used in this section have the same meaning as in the AIFMD remuneration guidelines (see section 863L). (9) Section 850E (payment from B to other persons after application of section 850C(4) or 850D(4)) is to be ignored for the purposes of this section. (863K) (1) This section applies if all or a part of the variable remuneration represented by the allocated profit vests in P. (2) If P requests it in writing, the AIFM firm must provide P with a statement showing— (a) the amount of the allocated profit, or the part of it representing the part of the variable remuneration, gross of the income tax for which the AIFM firm is liable by virtue of section 863I in respect of the allocated profit or the part of it, (b) the amount of the income tax for which the AIFM firm is liable, and (c) so much of that amount of income tax as is paid by the AIFM firm by the time the vesting occurs or, if section 863J(5)(b)(ii) applies, as is paid by the AIFM firm. (3) The duty to comply with a request under this section is enforceable by P. (4) In the case of a limited liability partnership, the duty is enforceable against the body corporate. (863L) In sections 863I to 863K “the AIFMD remuneration guidelines” means the “Guidelines on Sound Remuneration Policies under the AIFMD” issued by the European Securities and Markets Authority on 3 July 2013 (ESMA/2013/232).

Supplementary provision

16

(1) TMA 1970 is amended as follows.

(2) In Part 2 (returns of income and gains) after section 12AD insert—

(12ADA) (1) An officer of Revenue and Customs may by notice require a partnership which has made an election under section 863H of ITTOIA 2005 (whether or not the election has been revoked) to provide the officer with such information as the officer may reasonably require for purposes connected with the operation of sections 863H to 863K of ITTOIA 2005. (2) The information must be provided within such reasonable time as the officer may specify in the notice.

(3) In column 2 of the Table in section 98 (special returns etc), at the appropriate place, insert “ section 12ADA of this Act ”.

17

In Part 3 of TCGA 1992 (which makes special provision about partnerships etc) after section 59A insert—

(59B) (1) Subsection (2) applies if— (a) under section 863I of ITTOIA 2005, a partner (“P”) in a partnership allocates to the partnership an amount of profit (“the allocated profit”) representing variable remuneration which, if it vests in P, will vest in the form of instruments, (b) there is a disposal to P of instruments which are partnership assets of the partnership for the purposes of section 59, and (c) by virtue of that disposal the variable remuneration vests in P. (2) Both the persons making the disposal and P are to be treated as if the instruments were acquired by P from those persons for a consideration of an amount equal to the allocated profit net of the income tax for which the partnership is liable by virtue of section 863I of ITTOIA 2005 in respect of the allocated profit. (3) Terms used in this section which are also used in section 863I or 863J of ITTOIA 2005 have the same meaning as in that section. (59C) (1) Subsection (2) applies if— (a) under section 863I of ITTOIA 2005, a partner (“P”) in a partnership allocates to the partnership an amount of profit (“the allocated profit”) representing variable remuneration which, if it vests in P, will vest in the form of instruments, (b) there is a disposal to P of instruments by a company which is a partner in the partnership, (c) by virtue of that disposal the variable remuneration vests in P, and (d) the company would, as a partner in the partnership, have been charged to tax on the allocated profit but for adjustments made in the case of the company under section 1264A(2) of CTA 2009 or section 850C(5) of ITTOIA 2005. (2) Both the company and P are to be treated as if the instruments were acquired by P from the company for a consideration of an amount equal to the allocated profit net of the income tax for which the partnership is liable by virtue of section 863I of ITTOIA 2005 in respect of the allocated profit. (3) Terms used in this section which are also used in section 863I or 863J of ITTOIA 2005 have the same meaning as in that section.

18

In Part 4 of FA 2004 (pensions) in section 189 (relevant UK individual) after subsection (2A) insert—

(2B) The income covered by subsection (2)(b) includes— (a) an amount treated as a profit under section 863J(2) of ITTOIA 2005, and (b) income treated as received under section 863J(4) of that Act.

19

In section 23 of ITA 2007 (calculation of income tax liability) at the end of Step 4 insert— “ See also section 863I of ITTOIA 2005 which provides for certain partnership profits to be charged at the additional rate. ”

Power to apply amendments to other types of firms carrying on regulated activities

20

(1) The Commissioners for Her Majesty's Revenue and Customs may by regulations amend any Act—

(a) so as to apply (with or without modifications), in relation to regulated firms of a specified description, the provision made by the amendments made by this Part, or

(b) so as to make, in relation to regulated firms of a specified description, provision corresponding to the provision made by the amendments made by this Part.

(2) “Regulated firm” means a firm carrying on a regulated activity within the meaning of the Financial Services and Markets Act 2000 (see section 22 of that Act); and “firm” has the same meaning as in ITTOIA 2005 (see section 847 of that Act) (and includes a limited liability partnership in relation to which section 863(1) of that Act applies).

(3) Regulations under this paragraph may—

(a) make different provision for different cases or different purposes;

(b) make incidental, consequential, supplementary and transitional provision and savings.

Commencement

21

The amendments made by this Part have effect for the tax year 2014-15 and subsequent tax years.

PART 4 — Disposals of assets through partnerships

Income tax

22

Part 13 of ITA 2007 (tax avoidance) is amended as follows.

23

(1) In Chapter 5A (transfers of income streams) section 809AZF (partnership shares) is amended as follows.

(2) In subsection (1) omit “if condition A or B is met”.

(3) Omit subsections (2) and (3).

(4) The amendments made by this paragraph have effect for cases where the transfer of a right to relevant receipts occurs on or after 6 April 2014.

24

(1) After Chapter 5A insert—

(809AAZA) (1) This Chapter applies (subject to subsection (2)) if directly or indirectly in consequence of, or otherwise in connection with, arrangements involving a person within the charge to income tax (“the transferor”) and another person (“the transferee”)— (a) there is, or is in substance, a disposal of a right to relevant receipts by the transferor to the transferee, (b) the disposal is effected (wholly or partly) by or through a partnership (“the relevant partnership”), (c) at any time— (i) the transferor is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (ii) the transferee is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (d) the main purpose, or one of the main purposes, of one or more steps taken in effecting the disposal is the obtaining of a tax advantage for any person. (2) This Chapter does not apply if— (a) the transferor is the spouse or civil partner of the transferee and they are living together, or (b) the transferor is a brother, sister, ancestor or lineal descendant of the transferee. (3) In subsection (1)(a) the reference to a disposal of a right to relevant receipts includes anything constituting a disposal of such a right for the purposes of TCGA 1992. (4) For the purposes of subsection (1)(b) the disposal might, in particular, be effected by an acquisition or disposal of, or an increase or decrease in, an interest in the relevant partnership (including a share of the profits or assets of the relevant partnership or an interest in such a share). (5) For the purposes of subsection (1)(c) it does not matter if the transferor and the transferee are not members of a partnership as mentioned at the same time. (6) For the purposes of subsection (1)(c) a partnership is “associated” with the relevant partnership if— (a) it is a member of the relevant partnership, or (b) it is a member of a partnership which is associated with the relevant partnership (whether by virtue of paragraph (a) or this paragraph). (7) In subsections (1)(c) and (5) references to the transferor include a person connected with the transferor and references to the transferee include a person connected with the transferee. (8) In this Chapter— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), - “partnership” includes a limited liability partnership whether or not section 863(1) of ITTOIA 2005 applies in relation to it, - “relevant receipts” means any income— 1. which (but for the disposal) would be charged to income tax as income of the transferor (whether directly or as a member of a partnership), or 2. which (but for the disposal) would be brought into account as income in calculating profits of the transferor (whether directly or as a member of a partnership) for income tax purposes, and - “tax advantage” means a tax advantage, as defined in section 1139 of CTA 2010, in relation to income tax or the charge to corporation tax on income. (809AAZB) (1) The relevant amount is to be treated as income of the transferor chargeable to income tax in the same way and to the same extent as that in which the relevant receipts— (a) would have been chargeable to income tax as income of the transferor, or (b) would have been brought into account as income in calculating profits of the transferor for income tax purposes, but for the disposal. (2) In subsection (1) “the relevant amount” is to be read in accordance with section 809AZB(2) and section 809AZB(3) to (6) applies for the purpose of determining when income under subsection (1) is treated as arising. (3) For this purpose, in section 809AZB(2) to (6) references to the transfer of the right are to be read as references to the disposal of the right. (4) If, apart from this subsection and section 809DZB(3)— (a) both this Chapter and Chapter 5D would apply in relation to the disposal, and (b) Chapter 5D would give a greater amount of income of the transferor chargeable to income tax, this Chapter is not to apply in relation to the disposal.

(2) The amendment made by this paragraph has effect for cases where the arrangements mentioned in section 809AAZA(1) of ITA 2007 are made on or after 6 April 2014.

25

(1) After Chapter 5C insert—

(809DZA) (1) This Chapter applies if conditions A and B are met. (2) Condition A is (subject to subsection (3)) that directly or indirectly in consequence of, or otherwise in connection with, arrangements involving a person within the charge to income tax (“the transferor”) and another person (“the transferee”)— (a) there is, or is in substance, a disposal of an asset (“the transferred asset”) by the transferor to the transferee, (b) the disposal is effected (wholly or partly) by or through a partnership (“the relevant partnership”), (c) at any time— (i) the transferor is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (ii) the transferee is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (d) the main purpose, or one of the main purposes, of one or more steps taken in effecting the disposal is the obtaining of a tax advantage for any person. (3) Condition A is not met if— (a) the transferor is the spouse or civil partner of the transferee and they are living together, or (b) the transferor is a brother, sister, ancestor or lineal descendant of the transferee. (4) In subsection (2)(a) the reference to a disposal of an asset includes anything constituting a disposal of an asset for the purposes of TCGA 1992. (5) For the purposes of subsection (2)(b) the disposal might, in particular, be effected by an acquisition or disposal of, or an increase or decrease in, an interest in the relevant partnership (including a share of the profits or assets of the relevant partnership or an interest in such a share). (6) For the purposes of subsection (2)(c) it does not matter if the transferor and the transferee are not members of a partnership as mentioned at the same time. (7) For the purposes of subsection (2)(c) a partnership is “associated” with the relevant partnership if— (a) it is a member of the relevant partnership, or (b) it is a member of a partnership which is associated with the relevant partnership (whether by virtue of paragraph (a) or this paragraph). (8) In subsections (2)(c) and (6) references to the transferor include a person connected with the transferor and references to the transferee include a person connected with the transferee. (9) Condition B is that it is reasonable to assume that, had the transferred asset instead been disposed of directly by the transferor to the transferee, the relevant amount (or any part of it)— (a) would have been chargeable to income tax as income of the transferor, or (b) would have been brought into account as income in calculating profits of the transferor for income tax purposes. (10) In this Chapter “the relevant amount” means the amount of the consideration received by the transferor for the disposal. (11) If the transferor receives— (a) no consideration for the disposal, or (b) consideration which is substantially less than the market value of the transferred asset, assume for the purposes of subsection (10) that the transferor receives consideration of an amount equal to the market value of the transferred asset. (12) In subsection (11) references to the market value of the transferred asset are to that value at the time of the disposal. (13) In this Chapter— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), - “partnership” includes a limited liability partnership whether or not section 863(1) of ITTOIA 2005 applies in relation to it, and - “tax advantage” means a tax advantage, as defined in section 1139 of CTA 2010, in relation to income tax or the charge to corporation tax on income. (809DZB) (1) The relevant amount is to be treated as income of the transferor chargeable to income tax in the same way and to the same extent as that in which it— (a) would have been chargeable to income tax as income of the transferor, or (b) would have been brought into account as income in calculating profits of the transferor for income tax purposes, as mentioned in section 809DZA(9). (2) Section 809AZB(3) to (6) applies for the purpose of determining when income under subsection (1) is treated as arising (reading references to the transfer of the right as references to the disposal of the transferred asset). (3) If, apart from this subsection and section 809AAZB(4)— (a) both this Chapter and Chapter 5AA would apply in relation to the disposal, and (b) Chapter 5AA would give the same amount, or a greater amount, of income of the transferor chargeable to income tax, this Chapter is not to apply in relation to the disposal.

(2) The amendment made by this paragraph has effect for cases where the arrangements mentioned in section 809DZA(2) of ITA 2007 are made on or after 6 April 2014.

Corporation tax

26

Part 16 of CTA 2010 (factoring of income etc) is amended as follows.

27

(1) In Chapter 1 (transfers of income streams) section 756 (partnership shares) is amended as follows.

(2) In subsection (1) omit “if condition A or B is met”.

(3) Omit subsections (2) and (3).

(4) The amendments made by this paragraph have effect for cases where the transfer of a right to relevant receipts occurs on or after 1 April 2014.

28

(1) After Chapter 1 insert—

(757A) (1) This Chapter applies if directly or indirectly in consequence of, or otherwise in connection with, arrangements involving a company within the charge to corporation tax (“the transferor”) and another person (“the transferee”)— (a) there is, or is in substance, a disposal of a right to relevant receipts by the transferor to the transferee, (b) the disposal is effected (wholly or partly) by or through a partnership (“the relevant partnership”), (c) at any time— (i) the transferor is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (ii) the transferee is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (d) the main purpose, or one of the main purposes, of one or more steps taken in effecting the disposal is the obtaining of a tax advantage for any person. (2) In subsection (1)(a) the reference to a disposal of a right to relevant receipts includes anything constituting a disposal of such a right for the purposes of TCGA 1992. (3) For the purposes of subsection (1)(b) the disposal might, in particular, be effected by an acquisition or disposal of, or an increase or decrease in, an interest in the relevant partnership (including a share of the profits or assets of the relevant partnership or an interest in such a share). (4) For the purposes of subsection (1)(c) it does not matter if the transferor and the transferee are not members of a partnership as mentioned at the same time. (5) For the purposes of subsection (1)(c) a partnership is “associated” with the relevant partnership if— (a) it is a member of the relevant partnership, or (b) it is a member of a partnership which is associated with the relevant partnership (whether by virtue of paragraph (a) or this paragraph). (6) In subsections (1)(c) and (4) references to the transferor include a person connected with the transferor and references to the transferee include a person connected with the transferee. (7) In this Chapter— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), - “partnership” includes a limited liability partnership whether or not section 1273(1) of CTA 2009 applies in relation to it, - “relevant receipts” means any income— 1. which (but for the disposal) would be charged to corporation tax as income of the transferor (whether directly or as a member of a partnership), or 2. which (but for the disposal) would be brought into account as income in calculating profits of the transferor (whether directly or as a member of a partnership) for corporation tax purposes, and - “tax advantage” means a tax advantage, as defined in section 1139, in relation to income tax or the charge to corporation tax on income. (757B) (1) The relevant amount is to be treated as income of the transferor chargeable to corporation tax in the same way and to the same extent as that in which the relevant receipts— (a) would have been chargeable to corporation tax as income of the transferor, or (b) would have been brought into account as income in calculating profits of the transferor for corporation tax purposes, but for the disposal. (2) In subsection (1) “the relevant amount” is to be read in accordance with section 753(2) and section 753(3) and (4) applies for the purpose of determining when income under subsection (1) is treated as arising. (3) For this purpose, in section 753(2) to (4) references to the transfer of the right are to be read as references to the disposal of the right. (4) If, apart from this subsection and section 779B(3)— (a) both this Chapter and Chapter 4 would apply in relation to the disposal, and (b) Chapter 4 would give a greater amount of income of the transferor chargeable to corporation tax, this Chapter is not to apply in relation to the disposal.

(2) The amendment made by this paragraph has effect for cases where the arrangements mentioned in section 757A(1) of CTA 2010 are made on or after 1 April 2014.

29

(1) After Chapter 3 insert—

(779A) (1) This Chapter applies if conditions A and B are met. (2) Condition A is that directly or indirectly in consequence of, or otherwise in connection with, arrangements involving a company within the charge to corporation tax (“the transferor”) and another person (“the transferee”)— (a) there is, or is in substance, a disposal of an asset (“the transferred asset”) by the transferor to the transferee, (b) the disposal is effected (wholly or partly) by or through a partnership (“the relevant partnership”), (c) at any time— (i) the transferor is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (ii) the transferee is a member of the relevant partnership or of a partnership associated with the relevant partnership, and (d) the main purpose, or one of the main purposes, of one or more steps taken in effecting the disposal is the obtaining of a tax advantage for any person. (3) In subsection (2)(a) the reference to a disposal of an asset includes anything constituting a disposal of an asset for the purposes of TCGA 1992. (4) For the purposes of subsection (2)(b) the disposal might, in particular, be effected by an acquisition or disposal of, or an increase or decrease in, an interest in the relevant partnership (including a share of the profits or assets of the relevant partnership or an interest in such a share). (5) For the purposes of subsection (2)(c) it does not matter if the transferor and the transferee are not members of a partnership as mentioned at the same time. (6) For the purposes of subsection (2)(c) a partnership is “associated” with the relevant partnership if— (a) it is a member of the relevant partnership, or (b) it is a member of a partnership which is associated with the relevant partnership (whether by virtue of paragraph (a) or this paragraph). (7) In subsections (2)(c) and (5) references to the transferor include a person connected with the transferor and references to the transferee include a person connected with the transferee. (8) Condition B is that it is reasonable to assume that, had the transferred asset instead been disposed of directly by the transferor to the transferee, the relevant amount (or any part of it)— (a) would have been chargeable to corporation tax as income of the transferor, or (b) would have been brought into account as income in calculating profits of the transferor for corporation tax purposes. (9) In this Chapter “the relevant amount” means the amount of the consideration received by the transferor for the disposal. (10) If the transferor receives— (a) no consideration for the disposal, or (b) consideration which is substantially less than the market value of the transferred asset, assume for the purposes of subsection (9) that the transferor receives consideration of an amount equal to the market value of the transferred asset. (11) In subsection (10) references to the market value of the transferred asset are to that value at the time of the disposal. (12) In this Chapter— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), - “partnership” includes a limited liability partnership whether or not section 1273(1) of CTA 2009 applies in relation to it, and - “tax advantage” means a tax advantage, as defined in section 1139, in relation to income tax or the charge to corporation tax on income. (779B) (1) The relevant amount is to be treated as income of the transferor chargeable to corporation tax in the same way and to the same extent as that in which it— (a) would have been chargeable to corporation tax as income of the transferor, or (b) would have been brought into account as income in calculating profits of the transferor for corporation tax purposes, as mentioned in section 779A(8). (2) Section 753(3) and (4) applies for the purpose of determining when income under subsection (1) is treated as arising (reading references to the transfer of the right as references to the disposal of the transferred asset). (3) If, apart from this subsection and section 757B(4)— (a) both this Chapter and Chapter 1A would apply in relation to the disposal, and (b) Chapter 1A would give the same amount, or a greater amount, of income of the transferor chargeable to corporation tax, this Chapter is not to apply in relation to the disposal.

(2) The amendment made by this paragraph has effect for cases where the arrangements mentioned in section 779A(2) of CTA 2010 are made on or after 1 April 2014.

SCHEDULE 18

PART 1 — Amendments of the Vehicle Excise and Registration Act 1994

1

VERA 1994 is amended as follows.

2

Omit section 61B (certificates as to reduced pollution).

3

In consequence of the amendment made by paragraph 2—

(a) in section 45 (false declarations etc), in subsections (3A) and (3B) omit “or 61B”,

(b) in Schedule 1 (annual rates of duty)—

(i) in paragraph 3(6) omit paragraph (a) and the “and” following it,

(ii) in paragraph 4(7) omit paragraph (a) and the “and” following it,

(iii) in paragraph 5(6) omit paragraph (a) and the “and” following it, and

(iv) in paragraph 7(3) omit paragraph (a) and the “and” following it, and

(i) in sub-paragraph (1)(a) for “, a vehicle weight test or a reduced pollution test” substitute “ or a vehicle weight test ”,

(ii) in sub-paragraph (2) omit “a reduced pollution test or”,

(iii) in sub-paragraph (2A), in both places it occurs, omit “or a reduced pollution test”,

(iv) in sub-paragraph (3) omit “, or a reduced pollution test,”,

(v) omit sub-paragraph (6AA),

(vi) in sub-paragraph (6B) for “, a vehicle weight test or a reduced pollution test” substitute “ or a vehicle weight test ”, and

(vii) in sub-paragraphs (8) and (9) omit paragraph (d) and the “or” following paragraph (c).

4

In paragraph 3 of Schedule 1 (annual rates of duty: buses)—

(a) in sub-paragraph (1) omit “with respect to which the reduced pollution requirements are not satisfied”, and

(b) omit sub-paragraph (1A).

5

In paragraph 6 of Schedule 1 (annual rates of duty: vehicles used for exceptional loads), in sub-paragraph (2A)—

(a) in paragraph (a) omit “in the case of a vehicle with respect to which the reduced pollution requirements are not satisfied,”,

(b) omit the “and” following paragraph (a), and

6

In paragraph 7 of Schedule 1 (annual rates of duty: haulage vehicles), for sub-paragraph (3A) substitute—

(3A) The rate referred to in sub-paragraph (1)(b) is £350.

7

Omit paragraphs 9A and 9B of Schedule 1.

8

Omit paragraphs 11A and 11B of Schedule 1.

9

In paragraph 11C of Schedule 1 (annual rates of duty: tractive units), in sub-paragraph (2)—

(a) in paragraph (a) omit “in the case of a vehicle with respect to which the reduced pollution requirements are not satisfied,”, and

(b) omit paragraph (b).

10

In consequence of the amendments made by paragraphs 4 to 9—

(a) in section 13 (trade licences: duration and amount of duty) omit subsection (7)(a) and the “and” following it,

(b) in section 13 (trade licences: duration and amount of duty) as set out in paragraph 8(1) of Schedule 4 to VERA 1994 which is to have effect on and after a day appointed by order, omit subsection (7)(a) and the “and” following it,

(d) in paragraph 9 of Schedule 1 (annual rates of duty: rigid goods vehicles)—

(i) in sub-paragraph (1), omit “is not a vehicle with respect to which the reduced pollution requirements are satisfied and which”,

(ii) omit sub-paragraph (3)(a), and

(iii) in sub-paragraph (4), omit paragraph (a) and the “and” following it, and

(e) in paragraph 11 of Schedule 1 (annual rates of duty: tractive units)—

(i) in sub-paragraph (1), omit “is not a vehicle with respect to which the reduced pollution requirements are satisfied and which”,

(ii) omit sub-paragraph (3)(a), and

(iii) in sub-paragraph (4), omit paragraph (a) and the “and” following it.

PART 2 — Commencement

Introduction

11

This Part of this Schedule makes provision for the coming into force of the amendments made by Part 1.

Licences taken out on or after 1 April 2014

12

In the case of an exceptional load vehicle—

(a) which is charged to HGV road user levy, and

(b) which satisfies the reduced pollution requirements for the purposes of VERA 1994,

the amendments made by paragraphs 5 and 10 have effect in relation to licences taken out on or after 1 April 2014.

13

In the case of a rigid goods vehicle or tractive unit—

(a) which has a revenue weight of not less than 12,000 kgs, and

(b) which satisfies the reduced pollution requirements for the purposes of VERA 1994,

the amendments made by paragraphs 7 to 10 have effect in relation to licences taken out on or after 1 April 2014.

Licences taken out on or after 1 April 2016

14

In the case of the vehicles described in paragraph 15 the amendments made by paragraphs 4 to 10 have effect in relation to licences taken out on or after 1 April 2016.

15

Those vehicles are—

(a) a bus, light exceptional load vehicle or haulage vehicle which satisfies the reduced pollution requirements for the purposes of VERA 1994 because paragraph 4 of Schedule 2 to the Regulations applies to the vehicle as result of it falling within item 1 or 2 of Table 1 or any of items 1 to 3 of Table 2 in that paragraph (or being taken to be a vehicle falling within item 1 of Table 1 or Table 2 as a result of paragraph 5 of that Schedule), and

(b) a rigid goods vehicle or tractive unit—

(i) which has a revenue weight below 12,000 kgs, and

(ii) which satisfies the reduced pollution requirements for the purposes of VERA 1994 because paragraph 4 of Schedule 2 to the Regulations applies to the vehicle as result of it falling within item 1 or 2 of Table 1 or any of items 1 to 3 of Table 2 in that paragraph (or being taken to be a vehicle falling within item 1 of Table 1 or Table 2 as a result of paragraph 5 of that Schedule).

Licences taken out on or after 1 January 2017

16

In the case of the vehicles described in paragraphs 17 and 18 the amendments made by paragraphs 4 to 10 have effect in relation to licences taken out on or after 1 January 2017.

17

A bus, light exceptional load vehicle or haulage vehicle which satisfies the reduced pollution requirements for the purposes of VERA 1994 because—

(a) paragraph 4 of Schedule 2 to the Regulations applies to the vehicle as result of it falling within item 3 or 4 of Table 1 or item 4 of Table 2 in that paragraph,

(b) paragraph 4A of Schedule 2 to the Regulations applies to the vehicle as result of it meeting the requirements of paragraph 4B of that Schedule, or

(c) paragraph 4C of Schedule 2 to the Regulations applies to the vehicle as result of it meeting the requirements of paragraph 4D of that Schedule.

18

(1) A rigid goods vehicle or tractive unit—

(a) which has a revenue weight below 12,000 kgs, and

(b) which satisfies the reduced pollution requirements for the purposes of VERA 1994 for any of the reasons in sub-paragraph (2).

(2) Those reasons are—

(a) paragraph 4 of Schedule 2 to the Regulations applies to the vehicle as result of it falling within item 3 or 4 of Table 1 or item 4 of Table 2 in that paragraph,

(b) paragraph 4A of Schedule 2 to the Regulations applies to the vehicle as result of it meeting the requirements of paragraph 4B of that Schedule, or

(c) paragraph 4C of Schedule 2 to the Regulations applies to the vehicle as result of it meeting the requirements of paragraph 4D of that Schedule.

I January 2017

19

The amendments made by paragraphs 2 and 3 come into force on 1 January 2017.

Interpretation

20

In this Schedule—

“bus” has the same meaning as in paragraph 3(2) of Schedule 1 to VERA 1994;

“exceptional load vehicle” is a vehicle to which paragraph 6 of Schedule 1 to VERA 1994 applies by reason of falling within sub-paragraph (1) of that paragraph;

“haulage vehicle” has the same meaning as in paragraph 7(2) of Schedule 1 to VERA 1994;

“light exceptional load vehicle” means an exceptional load vehicle which is not charged to HGV road user levy;

“the Regulations” means the Road Vehicles (Registration and Licensing) Regulations 2002 (S.I. 2002/2742);

“rigid goods vehicle” and “tractive unit” have the same meaning as in VERA 1994.

SCHEDULE 19

PART 1 — Amendments of the Vehicle Excise and Registration Act 1994

1

VERA 1994 is amended as follows.

2

In section 7 (issue of vehicle licences), omit subsections (6) and (7).

3

(1) Section 7A (supplement payable on vehicle ceasing to be appropriately covered) is amended as follows.

(2) In subsection (1B)—

(a) omit “or in respect of”, and

(b) omit the words from “unless” to the end.

(3) Omit subsection (1C).

4

Omit section 10 (transfer of vehicle licences).

5

In section 14 (trade licences: supplementary)—

(a) in subsection (2), for the words from “surrender” to the end substitute “ request that the Secretary of State cancel the licence ”, and

(b) omit subsection (4).

6

(1) Section 19 (rebates) is amended as follows.

(2) In subsection (1), for the words from the beginning to “receive” substitute “ If any of the rebate conditions is satisfied in relation to a vehicle in respect of which a vehicle licence is in force, the relevant person is entitled to receive (by way of rebate of duty paid on the licence) ”.

(3) For subsection (3) substitute—

(3) The rebate conditions are as follows— (a) the vehicle has been stolen and the Secretary of State has been notified of that by the relevant person, (b) the vehicle has been destroyed and the Secretary of State has been notified of that by the relevant person, (c) a nil licence for the vehicle has been issued in accordance with regulations under section 22, (d) a qualifying application for a vehicle licence for the vehicle has been received by the Secretary of State, (e) the vehicle is neither used nor kept on a public road and the particulars and declaration required to be furnished and made by regulations under section 22(1D) have been furnished and made in relation to it in accordance with the regulations, (f) the vehicle has been sold or disposed of and the particulars prescribed by regulations under section 22(1)(d) have been furnished in relation to it in accordance with the regulations, or (g) the vehicle has been removed from the United Kingdom with a view to its remaining permanently outside the United Kingdom and the Secretary of State has been notified of that by the relevant person.

(4) In subsection (3ZA), for “(3)(ca)” substitute “ (3)(d) ”.

(5) In subsection (3A), for “when the application is made” substitute “ when the rebate condition is satisfied ”.

(6) In subsection (3B), for paragraph (b) (and the “and” following it) substitute—

(b) the rebate condition in question is that in subsection (3)(e), (f) or (g), and

(7) For subsection (4) substitute—

(4) In subsections (1) and (3) “the relevant person” means the person in whose name the vehicle is registered immediately before the rebate condition is satisfied.

(8) For subsections (5) and (6) substitute—

(5) The Secretary of State may specify requirements which must be complied with before a rebate condition can be satisfied. (5A) The requirements that may be specified include (in particular)— (a) a requirement that particulars which are required to be furnished to the Secretary of State are transmitted to the Secretary of State by such electronic means as may be specified, and (b) in a case within subsection (3)(a), requirements relating to the reporting to the police that the vehicle has been stolen.

(9) For subsection (7) substitute—

(7) Where any of the rebate conditions is satisfied in relation to a licence, the licence ceases to be in force.

(10) In subsection (8)—

(a) for “trade licence is surrendered to the Secretary of State” substitute “ request is made ”,

(b) for “holder of the licence” substitute “ holder of the trade licence ”, and

7

In section 22 (registration regulations)—

(a) omit subsection (2A)(c), and

(b) omit subsection (4).

8

In section 29 (penalty for keeping unlicensed vehicle)—

(a) in subsection (4) omit the words from “unless” to the end, and

(b) omit subsection (5).

9

In section 31 (relevant period for purposes of section 30), in subsection (7)(a), omit “surrender or”.

10

In section 31A (offence by registered keeper where vehicle unlicensed)—

(a) in subsection (4) omit the words from “unless” to the end, and

(b) omit subsection (5).

11

In section 31B (exceptions to section 31A), in subsection (9)(a)(i), omit “surrender or”.

12

In section 31C (penalties for offences under section 31A), in subsection (7)(a) omit “surrender or”.

13

Omit section 33 (offence of not exhibiting licence).

14

Omit section 33A (not exhibiting licence: period of grace).

15

Omit section 35 (failure to return licence).

16

(1) Section 35A (dishonoured cheques) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), for “contains a relevant requirement” substitute “ requires a person to pay the amount specified in subsection (4) within such reasonable period as is specified in the notice ”, and

(b) in paragraph (b), for “contained in the notice” substitute “ within that period ”.

(3) Omit subsection (3).

(4) In subsection (4), for “subsection (3)(b)” substitute “ subsection (1)(a) ”.

(5) For subsection (7) substitute—

(7) In the case of a requirement in a notice relating to a vehicle licence, those times are— (a) the end of the month in which the notice under section 19A(2)(b) or 19B(2)(c) or the further notice under section 19A(3)(d), 19B(3)(d) or 19B(5)(f) was sent, (b) the date on which the licence was due to expire, and (c) the end of the month preceding that in which there first had effect a new vehicle licence for the vehicle in question; and, in a case of a requirement in a notice relating to a trade licence, those times are the times specified in paragraphs (a) and (b).

17

(1) Section 36 (dishonoured cheques: additional liability) is amended as follows.

(2) For subsection (4A) substitute—

(4A) In the case of a vehicle licence, those times are— (a) the end of the month in which the relevant notice was sent, (b) the date on which the licence was due to expire, and (c) the end of the month preceding that in which there first had effect a new licence for the vehicle in question; and, in the case of a trade licence, those times are the times specified in paragraphs (a) and (b). (4B) In subsection (4A)(a), the “relevant notice” is the notice under section 19A(2)(b) or 19B(2)(c) or the further notice under section 19A(3)(d), 19B(3)(d) or 19B(5)(f) which contained the requirement which was not complied with, resulting in the conviction of an offence under section 35A.

(3) In subsection (6)(b), for “section 35A(3)(b)” substitute “ section 35A(1)(a) ”.

18

In section 44 (forgery and fraud), in subsection (2), omit paragraphs (a) to (c).

19

In section 58 (fees prescribed by regulations) omit “7(6)(b),”.

20

In section 62 (definitions), in the definition of “nil licence”, for the words from “document” to “and is” substitute “ licence ”.

PART 2 — Amendments of other enactments

21

In Schedule 3 to the Road Traffic Offenders Act 1988 (fixed penalty offences) omit the entry relating to section 33 of VERA 1994.

PART 3 — Commencement

22

The amendments made by this Schedule come into force on 1 October 2014.

SCHEDULE 20

PART 1 — The exemptions

1

Schedule 6 to FA 2000 (climate change levy) is amended as follows.

2

After paragraph 12 insert—

(12A) (1) A supply of a taxable commodity to a person is exempt from the levy if the commodity is to be used by the person in a mineralogical or metallurgical process. (2) “Mineralogical process” has the same meaning as in Article 2(4)(b) of Council Directive 2003/96/EC of 27 October 2003 (which relates to the taxation of energy products and electricity). (3) “Metallurgical process” means a process of any of the following descriptions. (4) The descriptions are— (a) a process falling within Division 24 of NACE Rev 2, excluding Class 24.46; (b) a process falling within Group 25.5 of NACE Rev 2; (c) a process falling within Class 25.61 of NACE Rev 2 which is— (i) plating, anodising etc of metals; (ii) heat treatment of metals; (iii) deburring, sandblasting, tumbling and cleaning of metals where carried out in conjunction with a process mentioned in paragraph (a) or (b). In this sub-paragraph “NACE Rev 2” is as set out in Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 (relating to the statistical classification of economic activities).

3

(1) Paragraph 42 (amount payable by way of levy) is amended as follows.

(2) In sub-paragraph (1)—

(a) in paragraph (a) omit “or a supply for use in scrap metal recycling”,

(b) omit paragraph (d), and

(3) Omit sub-paragraph (1ZA).

4

Omit paragraph 43A (supplies for use in scrap metal recycling) and the cross-heading before it.

5

In paragraph 43B (supplies for use in scrap metal recycling etc: deemed supply) in sub-paragraph (1)(b) omit sub-paragraph (i).

6

In paragraph 62 (tax credits) in sub-paragraph (1) omit paragraphs (ca) and (cb).

7

In paragraph 101 (civil penalties: incorrect certificates) in sub-paragraph (2)(a)—

(a) in sub-paragraph (ii) after “12,” insert “ 12A, ”,

(b) after sub-paragraph (ii) insert “ or ”, and

8

(1) The Climate Change Levy (General) Regulations 2001 (S.I. 2001/838) are amended as follows.

(2) In regulation 2 (general interpretation) in paragraph (1) omit “, recycling lower-rate part”, “a recycling lower-rate supply or” and the definition of “recycling lower-rate supply”.

(3) In regulation 8 (records which a registrable person is obliged to keep) in paragraph (c)(ii) omit “recycling lower-rate supply or a”.

(4) In regulation 11 (other tax credits: entitlement) in paragraph (1)—

(a) in sub-paragraph (c) omit “a recycling lower-rate supply or” (in both places), and

(b) omit sub-paragraph (ca).

(5) In regulation 12 (tax credits: general) in paragraph (1) omit “, recycling lower-rate supplies”.

(6) In regulation 33 (special rules for certain supplies)—

(a) in the heading omit “, recycling lower-rate supplies”, and

(b) in the text omit “, recycling lower-rate supplies”.

(7) In the title of Part 3 omit “, recycling lower-rate”.

(8) In regulation 34 (supplier certificates) in paragraph (1)(a) after “12 (transport),” insert “ 12A (mineralogical and metallurgical processes), ”.

(9) In regulation 35 (supplier certificates)—

(a) in paragraph (1) omit “a recycling lower-rate or”,

(b) in paragraph (2)(a) omit paragraph (ii) and the “or” before it, and

(10) Schedule 1 (certification etc) is amended as follows.

(11) In the title omit “, recycling lower-rate”.

(12) In paragraph 2—

(a) in the formula omit “+0.8L”,

(b) in the definition of “M”, after paragraph (b) insert—

(ba) paragraph 12A—mineralogical and metallurgical processes;

, and

(13) In paragraph 3(1) omit “recycling lower-rate and”.

(14) In paragraph 5(7) omit “Supplies for use in scrap metal recycling and”.

(15) In paragraph 6(1)—

(a) in paragraph (c) omit “a recycling lower-rate supply or” (in both places), and

(b) omit paragraph (ca).

(16) The amendments made by sub-paragraphs (8) and (12)(b) are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs in exercise of the power conferred by paragraph 22 of Schedule 6 to FA 2000 (regulations giving effect to exemptions).

9

(1) Schedule 1 to the Climate Change Levy (Fuel Use and Recycling Processes) Regulations 2005 (S.I. 2005/1715) is amended as follows.

(2) In paragraph 1 omit “Aluminium” and “Copper”.

(3) In paragraph 2 for the words from “Gold” to “platinum group metal alloys and” substitute “ The electrolytic dissolution of ”.

(4) Omit paragraphs 18 to 24, 26, 27, 28, 32, 34, 36 and 37.

(5) The amendments made by this paragraph are to be treated as having been made by the Treasury in exercise of the power conferred by paragraph 18(2) of Schedule 6 to FA 2000 (exemption for supply not used as fuel).

10

(1) The amendments made by this Part are treated as having come into force on 1 April 2014 and have effect as follows.

(2) In relation to supplies of gas or electricity, they have effect in relation to gas or electricity actually supplied on or after 1 April 2014.

(3) In relation to any other supplies, they have effect in relation to supplies treated as taking place on or after 1 April 2014.

PART 2 — Other provision

11

Schedule 6 to FA 2000 (climate change levy) is amended as follows.

12

In paragraph 12A (as inserted by paragraph 2 above) after sub-paragraph (4) insert—

(5) The Treasury may by regulations amend this paragraph so as to amend the definition of “mineralogical process”. (6) The Treasury may by regulations amend sub-paragraph (4) so as to add, remove or modify a description.

13

In paragraph 13A (power to make provision amending paragraph 13) in sub-paragraph (3) omit “Parliament”.

14

(1) Paragraph 146 (regulations and orders) is amended as follows.

(2) In sub-paragraphs (2)(b) and (3) omit “Parliament”.

(3) After sub-paragraph (3) insert—

(3A) A statutory instrument that contains (whether alone or with other provision) regulations under paragraph 12A(5) that remove a process (in whole or in part) from the scope of the definition of “mineralogical process” shall not be made unless a draft of the statutory instrument containing the regulations has been laid before and approved by a resolution of the House of Commons. (3B) A statutory instrument that contains (whether alone or with other provision) regulations under paragraph 12A(6) that— (a) remove a description, or (b) modify a description so as to narrow its scope, shall not be made unless a draft of the statutory instrument containing the regulations has been laid before and approved by a resolution of the House of Commons.

SCHEDULE 21

Meaning of “stores”

1

(1) Section 1 of CEMA 1979 (interpretation) is amended as follows.

(2) In subsection (4)(a)(i), for “relevant journey” substitute “ journey made by the ship or aircraft ”.

(3) Omit subsection (4A).

Surplus stores

2

In section 39 of CEMA 1979 (entry of surplus stores), for subsection (1) substitute—

(1) Surplus stores of any ship or aircraft— (a) may remain on board the ship or aircraft without payment of duty; or (b) may be entered for warehousing, notwithstanding that they could not lawfully be imported as merchandise. This is subject to subsection (2) below.

Power to make regulations about stores

3

In CEMA 1979, after section 60 insert—

(60A) (1) The Commissioners may by regulations make provision in relation to goods for use on a ship or aircraft as stores. (2) The provision that may be made by regulations under subsection (1) includes— (a) provision permitting, in specified circumstances, goods to be shipped or carried as stores without payment of duty or on drawback; (b) provision requiring authorisation to be obtained, in specified circumstances, for goods to be shipped or carried as stores as mentioned in paragraph (a) above; (c) provision about obtaining such authorisation; (d) provision enabling such authorisation to be withdrawn in specified circumstances; (e) provision for the supply, shipping or carriage of goods as stores as mentioned in paragraph (a) above to be subject to specified conditions or restrictions; (f) provision as to any procedure to be followed in supplying goods to be shipped or carried as stores as mentioned in paragraph (a) above. (3) Regulations made by virtue of subsection (2)(a) may include— (a) provision requiring duty to be paid on goods shipped or carried as stores without payment of duty or on drawback where those goods are— (i) consumed on a journey of a specified description; or (ii) consumed in specified circumstances in port; (b) provision as to the persons by whom such duty is payable; (c) provision about the way in which, and the time at which, such duty is to be paid; and (d) provision for goods, in specified circumstances, to be treated as having been consumed on a journey or in port. (4) The provision that may be made by regulations under this section includes— (a) different provision for different cases; and (b) incidental, supplemental, consequential or transitional provision or savings. (5) In this section “specified” means— (a) specified in regulations made under this section; or (b) specified by the Commissioners under such regulations.

4

(1) Section 61 of CEMA 1979 (provisions as to stores) is amended as follows.

(2) Omit subsections (1) to (4).

(3) In subsection (5), for the words from “for use on a voyage” to “duty” substitute “ without payment of duty ”.

(4) After subsection (5) insert—

(5A) But subsection (5) above does not apply where the goods are entered for warehousing in accordance with section 39.

(5) In subsection (6), omit “for use”.

(6) The heading of section 61 becomes “ Supplementary provision relating to stores ”.

5

In consequence of the provision made by paragraph 4, in section 103 of F(No.2)A 1987 (consumption in port of goods transhipped for use as stores etc), omit subsections (1), (2) and (4) to (7).

Penalties and enforcement

6

In CEMA 1979, after section 60A (inserted by paragraph 3 above) insert—

(60B) (1) This section applies if a person fails to comply with— (a) any provision made by or under regulations under section 60A; or (b) any condition or restriction imposed under such regulations. (2) The person's failure to comply shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) (but see subsection (4)). (3) Any goods in respect of which the person fails to comply with the provision, condition or restriction are liable to forfeiture. (4) Subsection (2) does not apply if, as a result of the failure, the person is liable to pay a penalty under Schedule 55 to the Finance Act 2009 (penalty for failure to make returns etc) or Schedule 56 to that Act (penalty for failure to make payments on time).

7

In Schedule 55 to FA 2009 (penalty for failure to make returns etc), in the Table in paragraph 1, after item 20 insert—

20A	Excise duties	Return under regulations under section 60A of the Customs and Excise Management Act 1979

8

In Schedule 56 to FA 2009 (penalty for failure to make payments on time), in the Table in paragraph 1, after item 11G insert—

11GA	Excise duties	Amount payable under regulations under section 60A of the Customs and Excise Management Act 1979 (except an amount falling within item 17A, 23 or 24).	The date determined by or under regulations under section 60A of the Customs and Excise Management Act 1979 as the date by which the amount must be paid

Review and appeal

9

In paragraph 2 of Schedule 5 to FA 1994 (decisions under CEMA 1979 subject to review and appeal), after sub-paragraph (3) insert—

(3A) Any decision which is made under or for the purposes of any regulations under section 60A of the Management Act (power to make regulations about stores) and is a decision about granting or withdrawing authorisation for goods to be shipped or carried as stores without payment of duty or on drawback.

Commencement

10

(1) Any power to make regulations conferred by virtue of this Schedule comes into force on the day on which this Act is passed.

(2) So far as not already brought into force by virtue of sub-paragraph (1), the amendments made by this Schedule come into force in accordance with provision contained in an order made by statutory instrument by the Commissioners for Her Majesty's Revenue and Customs.

11

(1) Schedule 55 to FA 2009 (including the amendments of that Schedule made by Schedule 10 to F(No.3)A 2010) is taken to have come into force for the purposes of section 60A of CEMA 1979 on the date on which paragraph 7 of this Schedule comes into force.

(2) Schedule 56 to FA 2009 (including the amendments of that Schedule made by Schedule 11 to F(No.3)A 2010) is taken to have come into force for the purposes of section 60A of CEMA 1979 on the date on which paragraph 8 of this Schedule comes into force.

SCHEDULE 22

PART 1 — Union scheme

New Union scheme for accounting for VAT on certain supplies

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to amend provisions about the Union scheme

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 2 — Non-Union scheme: amendments of Schedule 3B to VATA 1994

Introduction

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Extension of non-Union scheme to broadcasting and telecommunication services

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consequential and other amendments

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 3 — Other amendments: Union and non-Union schemes

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 4 — Commencement

23

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 23

1

Schedule 8 to FA 2003 (stamp duty land tax: charities relief) is amended as follows.

2

In paragraph 1 (conditions for charities relief)—

(a) in sub-paragraph (2), omit the words from “that is” to the end;

(b) in sub-paragraph (3), for “not been” substitute “ been ”;

(3A) For the purposes of this Schedule, a charity (“C”) holds a chargeable interest for qualifying charitable purposes if it holds it— (a) for use in furtherance of the charitable purposes of C or another charity, or (b) as an investment from which the profits are applied to the charitable purposes of C.

3

After paragraph 3 insert—

(3A) (1) Sub-paragraphs (3) to (5) apply in any case where— (a) there are two or more purchasers under a land transaction, (b) the purchasers acquire the subject-matter of the transaction as tenants in common (or, in Scotland, as owners in common), (c) at least one of them is, and at least one of them is not, a qualifying charity, and (d) no purchaser enters into the transaction for the purpose of the avoidance of tax under this Part (whether by that purchaser or another person). (2) A charity (“C”) that is a purchaser under a land transaction is a “qualifying charity” in relation to the transaction if C intends to hold its undivided share of the subject-matter of the transaction for qualifying charitable purposes. (3) The tax chargeable in respect of the transaction is reduced by the amount of the relief under sub-paragraph (4). (4) The relief is equal to the relevant proportion of the tax that would have been chargeable in respect of the transaction without this Schedule. (5) The “relevant proportion”, in the case of a qualifying charity, is the lower of P1 and P2, where— - P1 is the proportion of the subject-matter of the transaction that is acquired by all the qualifying charities that are purchasers under the transaction (in aggregate); - P2 is the proportion of the chargeable consideration for the transaction that is given by all the qualifying charities that are purchasers under the transaction (in aggregate). (3B) (1) This paragraph applies where— (a) relief has been given under paragraph 3A in respect of a transaction (“the relevant transaction”), (b) a disqualifying event occurs in relation to a qualifying charity (“C”) which was a purchaser under the transaction, and (c) the disqualifying event occurs in the circumstances required by sub-paragraphs (2) and (3). (2) The disqualifying event must occur— (a) before the end of the period of 3 years beginning with the effective date of the transaction, or (b) in pursuance of, or in connection with, arrangements made before the end of that period. (3) At the time of the disqualifying event C must hold a chargeable interest that— (a) was acquired by C under the relevant transaction, or (b) is derived from an interest so acquired. (4) There is a “disqualifying event” in relation to C if — (a) C ceases to be established for charitable purposes only, or (b) the chargeable interest acquired by C under the transaction, or any interest or right derived from that interest, is used or held by C otherwise than for qualifying charitable purposes. (5) C's portion of the relief mentioned in sub-paragraph (1)(a), or an appropriate proportion of C's portion of that relief, is withdrawn and tax is chargeable in accordance with this paragraph. (6) The amount chargeable is equal to C's portion of the relief or, as the case may be, the appropriate proportion of C's portion of the relief. (7) C's portion of the relief depends on whether P1 or P2 was lower in the calculation under paragraph 3A(5). (8) If P1 was lower, C's portion of the relief is equal to— $$p1 P1 × R$where—p1 is the proportion of the subject-matter of the transaction that was acquired by C under the transaction;P1 has the same meaning as in paragraph 3A(5);$ (9) If P2 was lower, C's portion of the relief is equal to— $$p2 P2 × R$where—p2 is the proportion of chargeable consideration for the transaction that was given by C;P2 has the same meaning as in paragraph 3A(5);$ (10) In sub-paragraphs (5) and (6) “appropriate proportion” means an appropriate proportion having regard to— (a) what was acquired by C under the relevant transaction and what is held by C at the time of the disqualifying event, and (b) the extent to which what is held by C at that time becomes used or held for purposes other than qualifying charitable purposes. (3C) (1) This paragraph applies where— (a) a charity (“C”) is one of two or more purchasers acquiring the subject-matter of a land transaction (“the relevant transaction”) as tenants in common (or, in Scotland, as owners in common), (b) C is not a qualifying charity in relation to the transaction, (c) paragraph 3A(3) to (5) would apply if C were a qualifying charity, and (d) C intends to hold the greater part of its undivided share of the subject-matter of the transaction for qualifying charitable purposes. (2) In such a case— (a) paragraph 3A has effect as if C were a qualifying charity, but (b) for the purposes of paragraph 3B (withdrawal of relief under paragraph 3A) “disqualifying event” includes any additional disqualifying transaction. (3) The following are “additional disqualifying transactions” if they are not made in furtherance of the charitable purposes of C— (a) any transfer by C of a major interest in the whole or any part of the chargeable interest acquired by C under the relevant transaction; (b) any grant by C at a premium of a low-rental lease of the whole or any part of that chargeable interest. (4) Paragraph 3(3) (meaning of “at a premium” and “low-rental”) applies for the purposes of sub-paragraph (3)(b) as it applies for the purposes of paragraph 3(2)(b)(ii). (5) In relation to a transaction that, by virtue of this paragraph, is a disqualifying event for the purposes of paragraph 3B— (a) the date of the event for those purposes is the effective date of the transaction; (b) paragraph 3B has effect with the modifications in sub-paragraph (6). (6) The modifications to paragraph 3B are— (a) in sub-paragraph (3), for “At the time of” substitute “ Immediately before ”; (b) in sub-paragraph (10)(a), for “at the time of” substitute “ immediately before and immediately after ”; (c) omit sub-paragraph (10)(b).

4

In paragraph 4(3) (charitable trusts)—

(a) in paragraph (a), for the words from “references” to “are to” substitute “ references in paragraph 1(3A) to the charitable purposes of C are to those of ”;

(b) in paragraph (b), for “reference” substitute “ references ” and for “is” substitute “ , and to C in paragraph 3B(4)(a), are ”;

(c) in paragraph (c), for the words from “reference” to “is” substitute “ references in paragraphs 3(2)(b) and 3C(3) to the charitable purposes of C are ”.

5

The amendments made by this section have effect in relation to any transaction of which the effective date (within the meaning of Part 4 of FA 2003) is on or after the day on which this Act is passed.

SCHEDULE 24

PART 1 — Stamp duty reserve tax

“Chargeable securities”

1

Part 4 of FA 1986 (stamp duty reserve tax) is amended as follows.

2

In section 99 (interpretation), after subsection (4A) insert—

(4B) Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) which are admitted to trading on a recognised growth market but not listed on that or any other market. (4C) In subsection (4B), “listed” and “recognised growth market” are to be construed in accordance with section 99A.

3

After that section insert—

(99A) (1) This section applies for the purposes of section 99(4B). (2) Section 1005(3) to (5) of the Income Tax Act 2007 (meaning of “listed” etc) applies as it applies in relation to the Income Tax Acts. (3) “Recognised growth market” means a market recognised as a growth market by the Commissioners for Her Majesty's Revenue and Customs. (4) On an application made by a market, the market is to be recognised by the Commissioners as a growth market if, and only if, the Commissioners are satisfied, on the basis of evidence provided by the market, that the market qualifies for recognition. (5) A market qualifies for recognition at any time (“the relevant time”) if it is a recognised stock exchange which meets one or both of the following conditions— (a) a majority of the companies whose stock or marketable securities are admitted to trading on the market are companies with market capitalisations of less than £170 million; (b) the Commissioners are satisfied that the admission requirements of the market include provision requiring companies to demonstrate compounded annual growth in gross revenue or employment of at least 20% over the last three periods of account preceding admission (“the pre-admission periods”). (6) In subsection (5)— - “period of account” of a company means a period for which the company draws up accounts; - “recognised stock exchange” has the meaning given by section 1005(1) of the Income Tax Act 2007. (7) For the purposes of subsection (5)(a) a company's market capitalisation at the relevant time is the average of the closing market capitalisations of the company on the last trading day of each calendar month (or part of a calendar month) in the qualifying period. (8) “The qualifying period” means whichever is the shorter of— (a) the last three calendar years preceding the relevant time, or (b) the period beginning with the day on which the company is admitted to trading on the market and ending at the end of the last calendar year preceding the relevant time. (9) For the purposes of subsection (5)(a), a company is to be disregarded if it is admitted to trading on the market in the calendar year in which the relevant time falls. (10) In the case of a company with a market capitalisation in a currency other than sterling, the closing market capitalisation for the last trading day of any calendar month is to be taken, for the purposes of subsection (7), to be the sterling equivalent of that capitalisation (calculated by reference to the spot rate of exchange for that last trading day). (11) For the purposes of subsection (5)(b), the percentage of the compounded annual growth in gross revenue over the pre-admission periods is calculated by applying the formula— $$( ( EV BV ) 1/3 - 1 ) × 100$where—“EV” is the company's gross revenue for the last of the pre-admission periods,“BV” is the company's gross revenue for the period of account immediately preceding the pre-admission periods.$ (12) For those purposes, the percentage of the compounded annual growth in employment over the pre-admission periods is calculated by applying the formula— $$( ( EV BV ) 1/3 - 1 ) × 100$where—“EV” is the number of employees of the company at the end of the last of the pre-admission periods,“BV” is the number of employees of the company at the end of the period of account immediately preceding the pre-admission periods.$ (13) The Treasury may by regulations— (a) make provision for the revocation by the Commissioners of a recognition under this section and about the consequences of a revocation; (b) amend this section so as to add, remove or alter a condition which must be met in relation to a market for it to be recognised by the Commissioners under this section. (14) Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings. (15) The power to make regulations under this section is exercisable by statutory instrument, and any statutory instrument containing such regulations is subject to annulment in pursuance of a resolution of the House of Commons. (16) This section is to be construed as one with the Stamp Act 1891.

Commencement of Part 1 and transitional provision

4

(1) The amendment made by paragraph 2 has effect in relation to any agreement to transfer securities—

(a) where the agreement is conditional, if the condition is satisfied on or after 28 April 2014, and

(b) in any other case, if the agreement is made on or after that date.

(2) Subject to sub-paragraph (3), the amendment made by paragraph 3 is treated as having come into force on 28 April 2014.

(3) The following provisions of section 99A of FA 1986 (inserted by paragraph 3) come into force on the day on which this Act is passed—

(a) paragraph (b) of subsection (13), and

(b) subsections (14) and (15) so far as relating to that paragraph.

(4) Where, having been satisfied as mentioned in subsection (4) of section 99A of FA 1986, the Commissioners for Her Majesty's Revenue and Customs have recognised a market as a growth market in anticipation of the coming into force of that section, that recognition has effect on and after 28 April 2014 as if it were a recognition under that section.

PART 2 — Stamp duty

Main charge

5

Stamp duty is not chargeable under Schedule 13 to FA 1999 (transfers on sale) on instruments relating to stock or marketable securities admitted to trading on a recognised growth market but not listed on any market.

Charge in relation to the purchase by a company of its own shares

6

Stamp duty is not chargeable by virtue of section 66(2) of FA 1986 (return relating to company's purchase of own shares treated as instrument of transfer on sale) on returns relating to shares admitted to trading on a recognised growth market but not listed on any market.

Charge in relation to property vested by Act or purchased under statutory power

7

Section 12 of FA 1895 (collection of stamp duty in cases of property vested by Act or purchased under statutory powers) does not apply to stock or marketable securities admitted to trading on a recognised growth market but not listed on any market.

Interpretation of paragraphs 5 to 7

8

In paragraphs 5 to 7 “listed” and “recognised growth market” are to be construed in accordance with section 99A of FA 1986 (inserted by paragraph 3 of this Schedule).

Depositary receipts: charge

9

In section 67 of FA 1986 (depositary receipts), after subsection (8) insert—

(8A) Where an instrument transfers shares or stock or marketable securities admitted to trading on a recognised growth market but not listed on any market, subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument. (8B) In subsection (8A) “listed” and “recognised growth market” are to be construed in accordance with section 99A below.

Clearance services: charge

10

In section 70 of that Act (clearance services), after subsection (8) insert—

(8A) Where an instrument transfers shares or stock or marketable securities admitted to trading on a recognised growth market but not listed on any market, subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument. (8B) In subsection (8A) “listed” and “recognised growth market” are to be construed in accordance with section 99A below.

Charge on transfers of partnership interests

11

(1) Schedule 15 to FA 2003 (SDLT: partnerships) is amended as follows.

(2) In paragraph 31(1) (stamp duty on transfers of partnership interests: continued application), after “that section)” insert “ or in Schedule 24 to the Finance Act 2014 (abolition of stamp duty in relation to certain securities) ”.

(3) In paragraph 33—

(a) in sub-paragraph (1A), for “stock or marketable” substitute “ relevant ”,

(b) in sub-paragraph (3), for “stock or marketable” substitute “ relevant ”,

(d) in sub-paragraph (6), for “stock or” (in each place) substitute “ relevant ”,

(e) in sub-paragraph (7), for “stock or” (in both places) substitute “ relevant ”, and

(f) after sub-paragraph (8) insert—

(8A) In this paragraph “relevant securities” means stock or marketable securities other than any stock or marketable securities admitted to trading on a recognised growth market but not listed on any market.

Commencement of Part 2

12

(1) Paragraph 6 has effect in relation to any purchase of shares by a company on or after 28 April 2014.

(2) Paragraph 7 has effect in relation to—

(a) any Act passed on or after 28 April 2014, and

(b) any instrument of transfer pursuant to such an Act executed on or after that date.

(3) Paragraph 8 is treated as having come into force on 28 April 2014.

(4) Subject to that, this Part of this Schedule has effect in relation to—

(a) any instrument which is executed on or after 28 April 2014 in pursuance of—

(i) an agreement made on or after that date, or

(ii) a conditional agreement made before that date where the condition is satisfied on or after that date, and

(b) any instrument which is not executed in pursuance of a contract and is executed on or after that date.

SCHEDULE 25

Introductory

1

IHTA 1984 is amended as follows.

Rate bands for tax years 2015-16, 2016-17 and 2017-18

2

Section 8 (indexation) does not have effect by virtue of any difference between the consumer prices index for the month of September in 2014, 2015 or 2016 and the previous September.

Treatment of certain liabilities

3

(1) After section 162A (liabilities attributable to financing excluded property) insert—

(162AA) (1) This section applies if— (a) in determining the value of a person's estate immediately before death, a balance on any qualifying foreign currency account (“the relevant balance”) is to be left out of account under section 157 (non-residents' bank accounts), and (b) the person has a liability which is attributable, in whole or in part, to financing (directly or indirectly) the relevant balance. (2) To the extent that the liability is attributable as mentioned in subsection (1)(b), it may only be taken into account in determining the value of the person's estate immediately before death so far as permitted by subsection (3). (3) If the amount of the liability that is attributable as mentioned in subsection (1)(b) exceeds the value of the relevant balance, the excess may be taken into account, but only so far as the excess does not arise for either of the reasons mentioned in subsection (4). (4) The reasons are— (a) arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, or (b) an increase in the amount of the liability (whether due to the accrual of interest or otherwise). (5) In subsection (4)(a)— - “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations; - “tax advantage” means— 1. the avoidance or reduction of a charge to tax, or 2. the avoidance of a possible determination in respect of tax.

(2) Section 162C (sections 162A and 162B: supplementary provision) is amended as follows.

(3) In the heading, after “162A” insert “ , 162AA ”.

(4) In subsection (1), after “162A(1) or (5)” insert “ , 162AA(1) ”.

(5) After subsection (1) insert—

(1A) In a case in which the value of a person's estate immediately before death is to be determined, where a liability was discharged in part before that time— (a) any part of the liability that, at the time of discharge, was not attributable as mentioned in subsection (1) is, so far as possible, to be taken to have been discharged first, (b) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162B(1)(b), (3)(b) or (5)(c) is, so far as possible, only to be taken to have been discharged after any part of the liability within paragraph (a) was discharged, (c) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162AA(1) is, so far as possible, only to be taken to have been discharged after any parts of the liability within paragraph (a) or (b) were discharged, and (d) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162A(1) or (5) is, so far as possible, only to be taken to have been discharged after any parts of the liability within paragraphs (a) to (c) were discharged.

(6) In subsection (2)—

(a) for “Where” substitute “ In any other case, where ”, and

(b) in paragraph (a), for “subsection (1)” substitute “ section 162A(1) or (5) or 162B(1)(b), (3)(b) or (5)(c) ”.

(7) In section 175A (discharge of liabilities after death), in subsection (7)—

(a) after paragraph (a) insert—

(aa) any part of the liability that is attributable as mentioned in section 162AA(1) is, so far as possible, taken to be discharged only after any part of the liability within paragraph (a) is discharged,

(b) in paragraph (b)—

(i) for “part”, in the second place it appears, substitute “ parts ”, and

(ii) for “(a) is” substitute “ (a) or (aa) are ”,

(i) for “paragraph (a) or (b)” substitute “ any of paragraphs (a) to (b) ”, and

(ii) for “either” substitute “ any ”.

(8) The amendments made by this paragraph have effect in relation to transfers of value made, or treated as made, on or after the day on which this Act is passed.

Ten-year anniversary charge

4

(1) In section 64 (charge at ten-year anniversary), after subsection (1) insert—

(1A) For the purposes of subsection (1) above, property held by the trustees of a settlement immediately before a ten-year anniversary is to be regarded as relevant property comprised in the settlement at that time if— (a) it is income of the settlement, (b) the income arose before the start of the five years ending immediately before the ten-year anniversary, (c) the income arose (directly or indirectly) from property comprised in the settlement that, when the income arose, was relevant property, and (d) when the income arose, no person was beneficially entitled to an interest in possession in the property from which the income arose. (1B) Where the settlor of a settlement was not domiciled in the United Kingdom at the time the settlement was made, income of the settlement is not to be regarded as relevant property comprised in the settlement as a result of subsection (1A) above so far as the income— (a) is situated outside the United Kingdom, or (b) is represented by a holding in an authorised unit trust or a share in an open-ended investment company. (1C) Income of the settlement is not to be regarded as relevant property comprised in the settlement as a result of subsection (1A) above so far as the income— (a) is represented by securities issued by the Treasury subject to a condition of the kind mentioned in subsection (2) of section 6 above, and (b) it is shown that all known persons for whose benefit the settled property or income from it has been or might be applied, or who are or might become beneficially entitled to an interest in possession in it, are persons of a description specified in the condition in question.

(2) In section 66 (rate of ten-yearly charge), after subsection (2) insert—

(2A) Subsection (2) above does not apply to property which is regarded as relevant property as a result of section 64(1A) (and accordingly that property is charged to tax at the rate given by subsection (1) above).

(3) The amendments made by this paragraph have effect in relation to occasions on which tax falls to be charged under section 64 of IHTA 1984 on or after 6 April 2014.

Delivery of account and payment of tax

5

(1) In section 216(6) (time for delivery of accounts), before paragraph (b) insert—

(ad) in the case of an account to be delivered by a person within subsection (1)(c) above, before the expiration of the period of six months from the end of the month in which the occasion concerned occurs;

(2) In section 226 (payment of tax: general rules), after subsection (3B) insert—

(3C) Tax chargeable under Chapter 3 of Part 3 of this Act on the value transferred by a chargeable transfer, other than any for which the due date is given by subsection (3B) above, is due six months after the end of the month in which the chargeable transfer is made.

(3) In section 233 (interest on unpaid tax)—

(a) in subsection (1)(a), after “transfer” insert “ not within paragraph (aa) below and ”,

(b) after subsection (1)(a) insert—

(aa) an amount of tax charged under Chapter 3 of Part 3 of this Act on the value transferred by a chargeable transfer remains unpaid after the end of the period of six months beginning with the end of the month in which the chargeable transfer was made, or

, and

(c) in subsection (1)(b), for “any other chargeable transfer” substitute “ a chargeable transfer not within paragraph (a) or (aa) above ”.

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