Income and Corporation Taxes Act 1988

• (6) For the purposes of this paragraph it shall be assumed that advance corporation tax actually paid (or correctly treated as paid) by the subsidiary has been set against the subsidiary’s liability to corporation tax before any advance corporation tax incorrectly treated as paid by the subsidiary.

Standard provisions about enquiries into self-assessments

14

• (1) The standard provisions about enquiries into self-assessments . . . are as follows.

• (2) An officer of the Board may, at any time before the end of the period of one year beginning with the day on which the self-assessment is received, give notice of his intention to enquire into the self-assessment.

• (3) The officer’s enquiries shall end on such day as he by notice—

• (a) informs the company that he has completed his enquiries, and

• (b) states his conclusions as to the amount of tax which should be contained in the company’s self-assessment.

• (4) At any time in the period of 30 days beginning with the day on which the enquiries end, the company may amend its self-assessment so as to make good any deficiency or eliminate any excess in the amount of tax contained in the self-assessment.

• (5) At any time in the period of 30 days beginning immediately after the period mentioned in sub-paragraph (4) above, the officer may by notice to the company amend the company’s self-assessment so as to make good any deficiency or eliminate any excess in the amount of tax contained in the self-assessment.

• (6) The provisions of the Management Act apply to an amendment of a self-assessment under sub-paragraph (5) above as they apply to an amendment of a company tax return under paragraph 34(2) of Schedule 18 to the Finance Act 1998.

• (7) At any time before a notice is given under sub-paragraph (3) above, the company may apply for a direction that the officer shall give such a notice within such period as may be specified in the direction.

• (8) Subject to sub-paragraph (9) below, an application under sub-paragraph (7) above shall be heard and determined in the same way as an appeal . . . .

• (9) The Commissioners hearing an application under sub-paragraph (7) above shall give the direction applied for unless they are satisfied that the officer has reasonable grounds for not giving the notice.

Repayments

15

• (1) Where—

• (a) a claim is withdrawn after an assessment for the relevant accounting period of the surrendering company has become final, and

• (b) an amount of corporation tax paid by the surrendering company in respect of that period would not have been payable if the claim had not been made,

the surrendering company shall be entitled by notice to claim repayment of that amount.

• (2) Where—

• (a) a claim is made after the date on which an assessment for any relevant accounting period of the subsidiary in whose favour the claim is made becomes final, and

• (b) an amount of corporation tax paid by the subsidiary in respect of that period would not have been payable if the claim had not been made,

the subsidiary shall be entitled by notice to claim repayment of that amount.

• (3) In this paragraph “relevant accounting period of the subsidiary” has the same meaning as in paragraph 9.

Schedule 13B

Child living with more than one adult: married and unmarried couples

1

• (1) Paragraphs 2 to 5 below apply where at any time in a year of assessment—

• (a) a husband and wife are living together or a man and a woman are living together as husband and wife, and

• (b) a relevant child is resident with them.

• (2) In those paragraphs—

• (a) the husband and wife, or the man and the woman, are referred to as the partners,

• (b) “the higher-earning partner” means the partner who has the higher total income for the year of assessment,

• (c) “the lower-earning partner” means the partner who has the lower total income for the year of assessment, and

• (d) “relevant child” means a child who is a qualifying child in relation to both partners.

• (3) If the partners have the same total income for the year—

• (a) they may elect that one of them be treated for the purposes of paragraphs 2 to 5 below as the lower-earning partner, and

• (b) if they do not make an election, neither shall be entitled to a children’s tax credit for the year in respect of a relevant child.

2

Subject to paragraph 3 below, the lower-earning partner shall not be entitled to a children’s tax credit for the year in respect of a relevant child.

3

• (1) This paragraph applies if no part of either partner’s income for the year falls within section 1(2)(b).

• (2) If the lower-earning partner makes a claim for a children’s tax credit for the year in respect of a relevant child—

• (a) paragraph 2 above shall not apply, and

• (b) in calculating the credit for each partner, the amount mentioned in section 257AA(2) shall be halved.

• (2A) If a relevant child is a qualifying baby the reference in sub-paragraph (2)(b) above to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section.

• (3) If the partners make an election under this sub-paragraph—

• (a) paragraph 2 above shall not apply, and

• (b) the higher-earning partner shall not be entitled to a children’s tax credit for the year in respect of a relevant child.

4

• (1) This paragraph applies where—

• (a) a partner is entitled to a children’s tax credit for a year of assessment,

• (b) the amount by reference to which his credit falls to be calculated (Amount A) exceeds the amount which would be necessary, in accordance with section 256(2) (read with section 25(6)(c) of the Finance Act 1990 where applicable), to reduce his liability for the year to income tax on his total income to nil (Amount B), and

• (c) he gives notice to an officer of the Board under this paragraph.

• (2) Where the other partner would not, by virtue of paragraph 2 or 3 above, be entitled to a children’s tax credit for the year in respect of a relevant child—

• (a) he shall be entitled to a children’s tax credit in respect of a relevant child notwithstanding that paragraph, and

• (b) the amount by reference to which his credit shall be calculated shall be the amount of the difference between Amount A and Amount B.

• (3) In any other case, the difference between Amount A and Amount B shall be added to the amount by reference to which children’s tax credit would otherwise be calculated for the other partner in respect of a relevant child.

• (4) A notice under this paragraph—

• (a) must be given on or before the fifth anniversary of the 31st January next following the end of the year of assessment to which it relates,

• (b) shall be in such form as the Board may determine, and

• (c) shall be irrevocable.

5

• (1) This paragraph applies to elections under paragraph 3 above.

• (2) An election—

• (a) shall be made by giving notice to an officer of the Board in such form as the Board may determine, and

• (b) may be made so as to have effect for a single year of assessment or for two or more consecutive years.

• (3) Subject to sub-paragraph (4) below, an election must be made before the first year of assessment for which it is to have effect and on the basis of assumptions about the partners’ incomes for that year.

• (4) An election may be made, on the basis of such assumptions, at a time during the first year for which it is to have effect if—

• (a) the election is made within the first 30 days of that year and an officer of the Board has been given written notification before that year that the election will be made, or

• (b) the partners marry in that year, or

• (c) the partners start to live together as man and wife in that year, or

• (ca) a relevant child is born in that year, or

• (d) a relevant child becomes resident with the partners in that year and no relevant child has previously in that year been resident with the partners, or

• (e) it is assumed that the partner who was the higher-earning partner in the previous year will be the lower-earning partner in that year.

• (5) An election may be withdrawn—

• (a) by the making of another election which supersedes the first, or

• (b) by notice given to an officer of the Board, in such form as the Board may determine, by either partner.

• (6) A withdrawal shall have effect for the year of assessment in which it is given and subsequent years.

• (7) If the higher-earning partner for one year of assessment (Year 1) is the lower-earning partner for the next year (Year 2), an election having effect for Year 1 shall not have effect for Year 2 or subsequent years.

Child living with more than one adult: other cases

6

• (1) This paragraph applies to a child for a year of assessment if—

• (a) he is resident with two or more persons at the same time or at different times during the year,

• (b) he is a qualifying child in relation to two or more of those persons, and

• (c) paragraphs 2 to 5 above do not apply in relation to him in that year.

• (2) The persons in relation to whom the child is a qualifying child are referred to in this paragraph as the taxpayers.

• (3) None of the taxpayers shall be entitled to a children’s tax credit for the year of assessment by virtue of the residence of any child to whom this paragraph applies except in accordance with the following provisions of this paragraph.

• (4) If a taxpayer claims a children’s tax credit for the year of assessment by virtue of the residence of any child to whom this paragraph applies, for the amount mentioned in section 257AA(2) (before any reduction) there shall be substituted his allotted proportion of that amount.

• (4A) If the child is a qualifying baby the reference in sub-paragraph (4) above to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section.

• (5) A taxpayer’s allotted proportion is—

• (a) such proportion as may be agreed between him and the other taxpayers, or

• (b) in default of agreement, a proportion which is assigned to him by the Commissioners.

• (6) For the purposes of sub-paragraph (5) above—

• (a) a proportion may be 100 per cent.,

• (b) the sum of the proportions shall not exceed 100 per cent., and

• (c) “the Commissioners” means such body of General Commissioners, being the General Commissioners for a division in which one of the taxpayers resides, as the Board may direct or, if none of the taxpayers resides in the United Kingdom, the Special Commissioners.

• (7) Where a person—

• (a) is a member of more than one set of taxpayers in relation to whom this paragraph applies for a year of assessment,

• (b) has more than one allotted proportion under this paragraph for the year, and

• (c) claims a children’s tax credit for the year,

for the amount mentioned in section 257AA(2) (before any reduction) there shall be substituted the aggregate of his allotted proportions of that amount (not exceeding 100 per cent.).

• (7A) Where sub-paragraph (7) above applies in relation to a person, and any child in respect of which a proportion has been, or could have been, allotted to that person is a qualifying baby, the reference in that sub-paragraph to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section.

• (8) Where—

• (a) a taxpayer makes a claim under section 257AA, and

• (b) it appears that an allotted proportion will need to be assigned to him under sub-paragraph (5)(b) above for that purpose,

the Board may direct that the claim shall be dealt with, and the assignment shall be made, by a specified body of Commissioners which could be directed under sub-paragraph (6)(c) above to make the assignment; and where a direction is given no other body of Commissioners shall have jurisdiction to determine the claim.

• (9) For the purposes of any assignment to a taxpayer under sub-paragraph (5)(b) above—

• (a) the Commissioners shall hear and determine the case in the same manner as an appeal, and

• (b) any of the taxpayers shall be entitled to appear and be heard by the Commissioners or to make representations to them in writing.

Combined cases

7

• (1) This paragraph applies where a child is a relevant child for the purposes of paragraphs 2 to 5 above in a year of assessment and—

• (a) he is a relevant child for the year in relation to more than one pair of partners, or

• (b) paragraph 6 above would apply to him for the year but for the fact that he is a relevant child for the purposes of paragraphs 2 to 5 above.

• (2) Where this paragraph applies—

• (a) paragraph 6 above shall apply, but with each pair of partners for the purposes of paragraphs 2 to 5 above being treated as a single taxpayer, and

• (b) paragraphs 2 to 5 above shall apply in relation to each pair of partners, taking for the amount mentioned in section 257AA(2) (before any reduction) the amount substituted by virtue of paragraph 6 above.

• (3) Where paragraph 6(4A) or (7A) above applies, the reference in sub-paragraph (2) above to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section.

Change of circumstances

8

• (1) For the purposes of this paragraph a change of circumstances occurs in relation to a child in a year of assessment if a relevant event takes place in that year and—

• (a) as a result of the event the child becomes a qualifying child in relation to any person or stops being a qualifying child in relation to any person, or

• (b) the child is, immediately before the event, a qualifying child in relation to both parties to the event.

• (2) The following are relevant events—

• (a) a marriage or a man and a woman starting to live together as husband and wife;

• (b) a separation.

• (3) A separation occurs when—

• (a) a husband and wife cease to live together, or

• (b) a man and a woman cease to live together as husband and wife, having been living together as husband and wife without being married.

• (4) In a year of assessment in which a change of circumstances (or more than one) occurs in relation to a child, section 257AA (except subsection (4A)) and paragraphs 2 to 7 above shall apply in relation to the child’s residence as if each of the following were a separate year of assessment—

• (a) the period ending with the day before the first (or only) change of circumstances,

• (b) the period starting with the day of the last (or only) change of circumstances, and

• (c) any period starting with the day of one change of circumstances and ending with the day before the next.

• (5) For the purposes of sub-paragraph (4) above the amount specified in section 257AA(2) (before any reduction or substitution) shall be taken to be the result of the following formula—

$Daysduringtheperiod365x Amountins.257AA(2)$

• (5A) If the child is a qualifying baby the references in sub-paragraph (5) above to the amount specified in section 257AA(2) are to the higher amount applicable by virtue of subsection (2A) of that section.

• (6) In applying sub-paragraph (4) above a reference in section 257AA or this Schedule to a person’s income for the year shall be taken as a reference to his income for the year and not his income for the period.

PART A1 — Premium limit for qualifying policies

Premium limit for qualifying policies to apply from 6 April 2013

A1

• (1) Sub-paragraph (2) applies if—

• (a) an event falling within sub-paragraph (3) occurs,

• (b) apart from sub-paragraph (2), the policy to which the event relates would be a qualifying policy after the event, and

• (c) an individual who is a beneficiary under that policy is in breach of the premium limit for qualifying policies.

• (2) That policy is not to be a qualifying policy after the event.

• (3) The events falling within this sub-paragraph are—

• (a) the issue of a policy in respect of an insurance made on or after 6 April 2013;

• (b) the variation of a policy on or after 6 April 2013 where as a result of the variation—

• (i) the period over which premiums are payable under the policy is or could be lengthened, or

• (ii) the total amount of the premiums payable under the policy in any relevant period is or could be increased,

or both;

• (c) the assignment on or after 6 April 2013 of any rights, or any share in any rights, under a policy where the assignment falls within paragraph B2(3)(c) to (g) or (5) below;

• (d) a deceased beneficiary event on or after 6 April 2013;

• (e) the conditions in paragraph 24(3) below being fulfilled for the first time in respect of a new non-resident policy where—

• (i) the conditions are fulfilled for the first time on or after 6 April 2013, and

• (ii) but for the conditions being fulfilled, the policy could not be a qualifying policy because of paragraph 24(2).

• (4) An event does not fall within sub-paragraph (3) if—

• (a) the policy to which the event relates is—

• (i) a protected policy,

• (ii) a restricted relief qualifying policy, or

• (iii) a pure protection policy,

• (b) the event is the issue of a policy which is a new policy in relation to an earlier policy where—

• (i) the new policy is issued in substitution for the earlier policy (and not on its maturity), and

• (ii) the life assured under the new policy is different to the life assured under the earlier policy but that is the only difference to what the position would have been had the earlier policy continued to run,

• (c) paragraph 20ZA below applies to a policy and the event is the reinstatement or replacement of the policy as mentioned in paragraph 20ZA(4),

• (d) the event is the issue or variation of a policy in relation to which paragraph 29 of Schedule 39 to the Finance Act 2012 applies, or

• (e) the event is an assignment falling within paragraph B2(3)(e) below where the assignment is a mortgage endowment assignment.

• (5) In sub-paragraph (3)(b)(ii) “relevant period” means any period of 12 months beginning at or after the time of the variation.

• (6) A variation is to be ignored for the purposes of sub-paragraph (3)(b) if its effect is nullified before the end of the period of 3 months after the day on which the variation occurs.

• (7) Sub-paragraph (4)(a)(i) does not apply in the case of an event mentioned in sub-paragraph (3)(e).

• (8) Sub-paragraph (4)(a)(ii) does not apply in the case of—

• (a) an event mentioned in sub-paragraph (3)(c) or (d) occurring in relation to a restricted relief qualifying policy (“the assigned policy”),

• (b) any subsequent event relating to the assigned policy, or

• (c) any event relating to—

• (i) a later policy which is a new policy in relation to the assigned policy, or

• (ii) any policy which is a new policy in relation to the later policy,

and so on.

• (9) In the case of an event mentioned in sub-paragraph (3)(b), sub-paragraph (4)(a)(iii) applies only if the policy is a pure protection policy both before and after the variation.

• (10) This paragraph is to be applied after all other provisions of this Schedule relevant to the question of whether a policy is a qualifying policy after an event have been applied.

Restricted relief qualifying policies

A2

• (1) Sub-paragraph (2) applies if—

• (a) an event falling within sub-paragraph (3) occurs,

• (b) the policy to which the event relates is a qualifying policy after the event, and

• (c) an individual who is a beneficiary under that policy is in breach of the premium limit for qualifying policies.

• (2) That policy is to be a restricted relief qualifying policy after the event.

• (3) The events falling within this sub-paragraph are—

• (a) a premium limit event in relation to a protected policy on or after 21 March 2012;

• (b) the issue of a policy as mentioned in paragraph A4(2)(b) below if, assuming that the substitution of the protected policy were instead a variation of that policy, there would be a premium limit event in relation to that policy;

• (c) the assignment on or after 6 April 2013 of any rights, or any share in any rights, under a protected policy where the assignment falls within paragraph B2(3)(c) to (g) or (5) below;

• (d) a deceased beneficiary event on or after 6 April 2013 where the policy in question is a protected policy;

• (e) the issue of a policy in respect of an insurance made on or after 21 March 2012 but before 6 April 2013 otherwise than as mentioned in paragraph A4(2)(b) below;

• (f) the variation of a policy, other than a protected policy, on or after 21 March 2012 but before 6 April 2013 where as a result of the variation—

• (i) the period over which premiums are payable under the policy is or could be lengthened, or

• (ii) the total amount of the premiums payable under the policy in any relevant period is or could be increased,

or both;

• (g) the conditions in either sub-paragraph (3) or sub-paragraph (4) of paragraph 24 below being fulfilled for the first time in respect of a new non-resident policy where—

• (i) the conditions are fulfilled for the first time on or after 21 March 2012 but before 6 April 2013, and

• (ii) but for the conditions being fulfilled, the policy could not be a qualifying policy because of sub-paragraph (2) of paragraph 24.

• (4) An event does not fall within sub-paragraph (3) if—

• (a) the policy to which the event relates is a pure protection policy,

• (b) the event is the issue of a policy which is a new policy in relation to an earlier policy where—

• (i) the new policy is issued in substitution for the earlier policy (and not on its maturity), and

• (ii) the life assured under the new policy is different to the life assured under the earlier policy but that is the only difference to what the position would have been had the earlier policy continued to run,

• (c) paragraph 20ZA below applies to a policy and the event is the reinstatement or replacement of the policy as mentioned in paragraph 20ZA(4),

• (d) the event is the issue or variation of a policy in relation to which paragraph 29 of Schedule 39 to the Finance Act 2012 applies, or

• (e) the event is an assignment falling within paragraph B2(3)(e) below where the assignment is a mortgage endowment assignment.

• (5) In sub-paragraph (3)(f)(ii) “relevant period” means any period of 12 months beginning at or after the time of the variation.

• (6) A premium limit event or a variation is to be ignored for the purposes of sub-paragraph (3)(a) or (f) if its effect is nullified before 6 July 2013.

• (7) In the case of a premium limit event which occurs on or after 6 April 2013, in sub-paragraph (6) the reference to 6 July 2013 is to be read as a reference to the end of the period of 3 months after the day on which the premium limit event occurs.

• (8) In the case of an event mentioned in sub-paragraph (3)(a) or (f), sub-paragraph (4)(a) applies only if the policy is a pure protection policy both before and after the premium limit event or variation.

• (9) A “premium limit event” occurs in relation to a protected policy if—

• (a) the policy is varied or a relevant option is exercised so as to change the terms of the policy, and

• (b) as a result of the variation or exercise of the relevant option—

• (i) the period over which premiums are payable under the policy is or could be lengthened, or

• (ii) the total amount of the premiums payable under the policy in any relevant period is or could be increased,

or both.

• (10) A “premium limit event” also occurs in relation to a protected policy if on or after 6 April 2013—

• (a) the policy is varied or a relevant option is exercised so as to change the terms of the policy, and

• (b) as a result of the variation or exercise of the relevant option—

• (i) the period over which premiums are payable under the policy is or could be shortened, or

• (ii) the total amount of the premiums payable under the policy in any relevant period is or could be decreased,

or both.

• (11) In sub-paragraphs (9)(b)(ii) and (10)(b)(ii) “relevant period” means any period of 12 months beginning at or after the time of the variation or exercise of the relevant option.

• (12) The variation of, or exercise of a relevant option under, a protected policy is not a premium limit event in relation to the policy if—

• (a) the policy secures a capital sum payable either—

• (i) on survival for a specified term, or

• (ii) on earlier death or on earlier death or disability,

• (b) the policy is issued and maintained for the sole purpose of ensuring that the borrower under an interest-only mortgage will have sufficient funds to repay the principal lent under the mortgage, and

• (c) the policy is varied, or the relevant option is exercised, for that sole purpose.

• (13) In sub-paragraph (3)(g) references to paragraph 24 below are to that paragraph as it has effect before the appointed date for the purposes of section 55 of the Finance Act 1995.

• (14) A qualifying policy which is a new policy in relation to an earlier policy is a restricted relief qualifying policy if the earlier policy is a restricted relief qualifying policy.

• (15) A policy which is a restricted relief qualifying policy remains a restricted relief qualifying policy so long as it is a qualifying policy.

• (16) Paragraph A1 above is to be ignored in determining for the purposes of sub-paragraph (14) or (15) if a policy is a qualifying policy. This is subject to paragraph A1(8).

• (17) For further provision about restricted relief qualifying policies, see sections 463A to 463D of ITTOIA 2005.

The premium limit for qualifying policies

A3

• (1) For the purposes of paragraphs A1(1)(c) and A2(1)(c) above an individual is in breach of the premium limit for qualifying policies if the total amount of the premiums payable under relevant policies in any relevant period—

• (a) exceeds £3,600, or

• (b) could exceed £3,600 as a result of—

• (i) the exercise of any one or more relevant options conferred by one or more relevant policies, or

• (ii) so far as not covered by sub-paragraph (i), the application of one or more terms of one or more relevant policies relating to increases in premiums.

• (2) For the purposes of sub-paragraph (1)—

• (a) so much of a premium payable under a relevant policy as is charged on the grounds that an exceptional risk of death or disability is involved is to be left out of account in determining the premiums payable under the policy,

• (b) so much of the first premium payable under a relevant policy the liability for the payment of which—

• (i) is discharged in accordance with paragraph 15(2) below, or

• (ii) in the case of a policy in relation to which paragraph 3 below applies, is discharged under a provision of the policy falling within paragraph 3(4)(c),

is to be left out of account in determining the premiums payable under the policy (subject to sub-paragraph (3) below),

• (c) in determining the premiums payable under a relevant policy any provision for the waiver of premiums by reason of a person's disability is to be ignored, and

• (d) “relevant period” means any period of 12 months beginning at or after the time when the event falling within paragraph A1(3) or A2(3) above (“the relevant event”) occurs.

• (3) The maximum amount that may be left out of account under sub-paragraph (2)(b) in the case of a relevant policy is—

$$£ 3,600 x N$where N is the number of complete years for which ran—the other policy involved, orif there is more than one other policy involved, the policy which ran for the most number of complete years.$

• (4) For the purposes of this paragraph the following are “relevant policies”—

• (a) the policy to which the relevant event relates, and

• (b) any other policy—

• (i) which is a qualifying policy, and

• (ii) under which the individual is a beneficiary.

• (5) But neither a protected policy nor a pure protection policy is to be a relevant policy by virtue of sub-paragraph (4)(b).

• (6) Sub-paragraph (7) applies if this paragraph is to be applied in the case of an individual in consequence of two or more events occurring at the same time (including where one or more of the events falls within paragraph A1(3) above and one or more of the events falls within paragraph A2(3) above).

• (7) For the purpose of applying this paragraph in the case of the individual in consequence of any of the events, sub-paragraph (4)(a) has effect as if the reference to the policy to which the relevant event relates were a reference to all the policies to which the events, taken together, relate.

• (8) But sub-paragraph (7) does not apply, and sub-paragraph (9) applies instead, if—

• (a) all the policies in question are policies issued by the same issuer, and

• (b) each of them has an unique identifier in a series of unique identifiers which the issuer gives to policies issued by it.

• (9) For the purpose of applying this paragraph in the case of the individual in consequence of any of the events, an event relating to a policy (“policy A”) is treated as occurring before an event relating to another policy (“policy B”) if, in the issuer's series of unique identifiers, policy A's unique identifier comes before policy B's unique identifier.

Protected policies

A4

• (1) This paragraph applies for the purposes of this Part of this Schedule.

• (2) A policy is “protected” if—

• (a) it is issued in respect of an insurance made before 21 March 2012, or

• (b) it is issued in respect of an insurance made on or after 21 March 2012 where—

• (i) it is a new policy in relation to an earlier policy,

• (ii) it is issued in substitution for the earlier policy (and not on its maturity), and

• (iii) the earlier policy is a protected policy (whether by virtue of paragraph (a) or this paragraph).

• (3) A policy which is protected ceases to be protected if it becomes a restricted relief qualifying policy.

• (4) A policy issued as mentioned in sub-paragraph (2)(b) is not protected if—

• (a) its issue is an event falling within paragraph A2(3) above, and

• (b) after that event it is a restricted relief qualifying policy.

How to determine if an individual is a beneficiary under a policy

A5

• (1) This paragraph applies for the purposes of this Part of this Schedule in determining if an individual is a beneficiary under a policy.

• (2) An individual is a beneficiary under a policy if the individual beneficially owns—

• (a) any rights under the policy, or

• (b) any share in any rights under the policy.

• (3) An individual is a beneficiary under a policy if—

• (a) any rights under the policy are, or any share in any rights under the policy is, held on non-charitable trusts created by the individual, and

• (b) those rights are, or that share is, not beneficially owned by any individual.

• (4) The following provisions of ITTOIA 2005 apply for the purposes of sub-paragraph (3)(a)—

• (a) section 465(6), and

• (b) the definition of “non-charitable trust” in section 545(1).

• (5) An individual is a beneficiary under a policy if—

• (a) any rights under the policy are, or any share in any rights under the policy is, held as security for a debt of the individual, and

• (b) those rights are, or that share is, not beneficially owned by any individual.

Further definitions

A6

• (1) In this Part of this Schedule—

• (a) “new policy” has the meaning given in paragraph 17 below,

• (b) references to the variation of a policy are to a variation in relation to which paragraph 18 below applies,

• (c) “pure protection policy” means a policy—

• (i) which has no surrender value and is not capable of acquiring a surrender value, or

• (ii) under which the benefits payable cannot exceed the amount of the premiums paid except on death or in respect of disability, and

• (d) “relevant option”, in relation to a policy, means an option conferred by the policy on the person to whom it is issued to have another policy substituted for it or to have any of its terms changed.

• (2) For the purposes of this Part of this Schedule a “deceased beneficiary event” occurs if, in connection with the death of an individual (“D”) who was a beneficiary under a policy, an individual (“B”) becomes a beneficiary under that policy by reference (wholly or partly) to any rights, or to any share in any rights, by reference to which D was a beneficiary (wholly or partly).

For this purpose, it does not matter if B is already a beneficiary under the policy.

• (3) For the purposes of this Part of this Schedule an assignment is a “mortgage endowment assignment” if—

• (a) the policy to which the assignment relates secures a capital sum payable either—

• (i) on survival for a specified term, or

• (ii) on earlier death or on earlier death or disability,

• (b) the policy is issued and maintained for the sole purpose of ensuring that the borrower under an interest-only mortgage will have sufficient funds to repay the principal lent under the mortgage, and

• (c) when the assignment occurs, it is intended that the policy will continue to be maintained for that sole purpose.

RULES FOR QUALIFYING POLICIES

Rights to be beneficially owned by individuals only

B1

• (1) Sub-paragraph (2) applies in relation to a policy issued in respect of an insurance made on or after 6 April 2013.

• (2) In order for the policy to be a qualifying policy, when it is issued all the rights under it must be beneficially owned by (and only by)—

• (a) one individual, or

• (b) two or more individuals taken together.

(This is the case notwithstanding any other provision of this Schedule.)

• (3) Sub-paragraph (2) does not apply if the policy is protected.

• (4) A policy is “protected” if it is a new policy (as defined in paragraph 17 below) in relation to—

• (a) a policy issued in respect of an insurance made before 21 March 2012, or

• (b) a policy which is protected (whether by virtue of paragraph (a) or this paragraph).

Assignments

B2

• (1) Sub-paragraph (2) applies if any rights under a qualifying policy are, or any share in any rights under a qualifying policy is, assigned on or after 6 April 2013.

• (2) The policy is not to be a qualifying policy after the assignment (notwithstanding any other provision of this Schedule).

• (3) Sub-paragraph (2) does not apply if—

• (a) the assignment is from an individual by way of security for a debt of the individual,

• (b) the assignment is to an individual on the discharge of a debt of the individual secured by the rights or share,

• (c) the assignment is from an individual to the individual's spouse or civil partner,

• (d) the assignment is to an individual in pursuance of an order made by a court,

• (e) the assignment is to an individual in pursuance of a legally enforceable obligation relating to a divorce or the dissolution of a civil partnership,

• (f) the assignment is from an individual and, as a result of the assignment, the rights assigned are, or the share assigned is, held on trusts created by the individual,

• (g) the assignment is to an individual and, as a result of the assignment, the rights assigned are, or the share assigned is, no longer held on trusts, or

• (h) the assignment—

• (i) is to the personal representatives of a deceased individual, or

• (ii) is to an individual where, as a result of the assignment, a deceased beneficiary event (see paragraph A6(2) above) occurs.

• (4) Section 465(6) of ITTOIA 2005 applies for the purposes of sub-paragraph (3)(f).

• (5) The Commissioners for Her Majesty's Revenue and Customs may by regulations provide that sub-paragraph (2) does not apply if prescribed conditions are met in relation to the assignment.

“Prescribed” means prescribed by the regulations.

• (6) Regulations under sub-paragraph (5) may—

• (a) make different provision for different cases or circumstances, and

• (b) contain incidental, supplementary, consequential, transitional, transitory or saving provision.

• (7) See paragraphs A1 and A2 above which may apply in consequence of an assignment falling within sub-paragraph (3) or (5).

Required statements

B3

• (1) Sub-paragraph (2) applies if any of the following events occurs—

• (a) the issue of a policy in respect of an insurance made on or after 6 April 2013;

• (b) the variation of a policy on or after 6 April 2013 where paragraph 18 below applies in relation to the variation and as a result of the variation—

• (i) the period over which premiums are payable under the policy is or could be lengthened, or

• (ii) the total amount of the premiums payable under the policy in any relevant period is or could be increased,

or both;

• (c) a premium limit event in relation to a protected policy on or after 6 April 2013 (see paragraph A2(9) to (12) above);

• (d) an event on or after 6 April 2013 which would be a premium limit event in relation to a protected policy but for paragraph A2(12) above;

• (e) the assignment on or after 6 April 2013 of any rights, or any share in any rights, under a policy where the assignment falls within paragraph B2(3)(c) to (g) or (5) above;

• (f) a deceased beneficiary event (see paragraph A6(2) above) on or after 6 April 2013;

• (g) the conditions in paragraph 24(3) below being fulfilled for the first time in respect of a new non-resident policy where—

• (i) the conditions are fulfilled for the first time on or after 6 April 2013, and

• (ii) but for the conditions being fulfilled, the policy could not be a qualifying policy because of paragraph 24(2).

• (2) Each individual who is a beneficiary under the policy must, before the end of the statement period, make to the issuer of the policy a statement dealing with the prescribed matters.

• (3) If an individual does not comply with sub-paragraph (2) the policy is not to be a qualifying policy after the event (notwithstanding any other provision of this Schedule).

• (4) In sub-paragraph (1)(b)(ii) “relevant period” means any period of 12 months beginning at or after the time of the variation.

• (5) Sub-paragraph (2)—

• (a) does not apply in the case of an event mentioned in sub-paragraph (1)(a), (e), (f) or (g) if the policy is a pure protection policy, and

• (b) does not apply in the case of an event mentioned in sub-paragraph (1)(b), (c) or (d) if the policy is a pure protection policy both before and after the event.

“Pure protection policy” has the meaning given by paragraph A6(1)(c) above.

• (6) Sub-paragraph (2) does not apply in the case of an event mentioned in sub-paragraph (1)(e) where the assignment falls within paragraph B2(3)(e) above and is a mortgage endowment assignment.

“Mortgage endowment assignment” is to be read in accordance with paragraph A6(3) above.

• (7) The Commissioners for Her Majesty's Revenue and Customs may by regulations provide that an individual is not required to comply with sub-paragraph (2) if prescribed conditions are met.

“Prescribed” means prescribed by the regulations.

• (8) Accordingly, if by virtue of regulations under sub-paragraph (7) an individual is not required to comply with sub-paragraph (2), sub-paragraph (3) does not apply because that individual does not comply with sub-paragraph (2).

• (9) In sub-paragraph (2)—

• (a) the reference to an individual who is a beneficiary under the policy is to be read in accordance with paragraph A5 above,

• (b) “the statement period” means—

• (i) the period of 3 months after the day on which the event occurs, or

• (ii) if the event occurs before the day on which the first regulations under paragraph (c) below come into force, the period of 3 months after that day,

or such longer period as an officer of Revenue and Customs may allow, and

• (c) “prescribed” means prescribed by regulations made by the Commissioners for Her Majesty's Revenue and Customs.

• (10) An officer of Revenue and Customs may allow a longer period for the purposes of sub-paragraph (9)(b) only if—

• (a) the individual in question has made a request in writing to an officer of Revenue and Customs for a longer period to be allowed, and

• (b) such an officer is satisfied—

• (i) that there is a reasonable excuse for the required statement not having been made within the period mentioned in sub-paragraph (9)(b)(i) or (ii), and

• (ii) that the request under paragraph (a) was made without unreasonable delay after the reasonable excuse ceased.

• (11) Sub-paragraph (12) applies in relation to a policy if the obligations under the policy of its issuer are at any time the obligations of another person (“the transferee”) to whom there has been a transfer of the whole or any part of a business previously carried on by the issuer.

• (12) In relation to that time, in sub-paragraph (2) the reference to the issuer of the policy is to be read as a reference to the transferee.

• (13) Regulations under sub-paragraph (7) or (9)(c) may—

• (a) make different provision for different cases or circumstances, and

• (b) contain incidental, supplementary, consequential, transitional, transitory or saving provision.

General rules applicable to whole life and term assurances

General rules applicable to endowment assurances

Special types of policy

(i)Friendly Society policies

6A

Any expression—

• (a) which is used in any provision made by any of paragraphs 3 to 6, and

• (b) which is used in Part 3 of the Finance Act 2012,

has the same meaning in that provision as it has in that Part.

(ii) Industrial assurance policies

8A

• (1) Paragraphs 7 and 8 above shall have effect in relation to any policy issued on or after the appointed day as if the references to the issue of a policy in the course of an industrial assurance business were references to the issue of a policy by any company in a case in which—

• (a) the company, before that day and in the course of such a business, issued any policy which was a qualifying policy by virtue of either of those paragraphs; and

• (b) the policies which on 28th November 1995 were being offered by the company as available to be issued included policies of the same description as the policy issued on or after the appointed day.

• (2) In this paragraph “the appointed day” means such day as the Board may by order appoint.

(iii) Family income policies and mortgage protection

Other special provisions

(i) Short-term assurances

(ii) Personal accident insurance

(iii) Exceptional risk of death or disability

(iv) Connected policies

(v) Premiums paid out of sums due under previous policies

(vi) Additional premiums under section 72(9) of the Ginance Act 1984

(viii) Substituitions and variations

(viii) Policy reinstated after non-payment of premium

20ZA

• (1) This paragraph applies to a qualifying policy (“the original policy”) if conditions A to D are satisfied.

• (2) Condition A is that one or more premiums due under the original policy are not paid on or before the date on which they become due.

• (3) Condition B is that the original policy, in accordance with its terms, is treated as having lapsed or is converted into a paid-up policy—

• (a) by reason only of the failure to pay that premium or those premiums, and

• (b) within the period of 12 months beginning with the day following the day on which the earliest unpaid premium becomes due.

• (4) Condition C is that the original policy—

• (a) is reinstated on the same terms, or

• (b) is replaced by another policy in the same terms (“the replacement policy”),

on or before the thirtieth day after the first anniversary of the day following the day on which the earliest unpaid premium becomes due.

• (5) Condition D is that all unpaid premiums due under the original policy are paid on or before the date on which the policy is reinstated or replaced.

• (6) Where condition C is satisfied by virtue of sub-paragraph (4)(b) the replacement policy is to be treated for the purposes of this Schedule as if it were the original policy.

• (7) The policy is to be treated for the purposes of this Schedule as if the premiums payable under it had been paid on their due dates.

SCHEDULE 15A

Introduction

1

This Schedule shall have effect for the purposes of section 326.

Share option linked schemes

2

• (1) A share option linked scheme is a scheme under which periodical contributions are to be made by an individual—

• (a) who is eligible to participate in (that is, to obtain and exercise rights under) an approved SAYE option scheme, and

• (b) who is to make the contributions for the purpose of enabling him to participate in that approved scheme.

• (2) In sub-paragraph (1) above, “approved” and “SAYE option scheme” have the same meanings as in the SAYE code (see section 516(4) of ITEPA 2003 (approved SAYE option schemes)).

Relevant European institutions

3

A relevant European institution is an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to accept deposits.

Treasury specifications

4

• (1) The requirements which may be specified under section 326(3)(b), (4)(b) or (5)(b) are such requirements as the Treasury think fit.

• (2) In particular, the requirements may relate to—

• (a) the descriptions of individuals who may enter into contracts under a scheme;

• (b) the contributions to be paid by individuals;

• (c) the sums to be paid or repaid to individuals.

• (3) The requirements which may be specified under any of the relevant provisions may be different from those specified under any of the other relevant provisions; and the relevant provisions are section 326(3)(b), (4)(b) and (5)(b).

5

• (1) Where a specification has been made under section 326(3)(b), (4)(b) or (5)(b) the Treasury may—

• (a) withdraw the specification and any certification made by reference to the specification, and

• (b) stipulate the date on which the withdrawal is to become effective.

• (2) No withdrawal under this paragraph shall affect—

• (a) the operation of the scheme before the stipulated date, or

• (b) any contract entered into before that date.

• (3) No withdrawal under this paragraph shall be effective unless the Treasury—

• (a) send a notice by post to each relevant body informing it of the withdrawal, and

• (b) do so not less than 28 days before the stipulated date;

and a relevant body is a society or institution authorised (whether unconditionally or subject to conditions being met) to enter into contracts under the scheme concerned.

6

• (1) Where a specification has been made under section 326(3)(b), (4)(b) or (5)(b) the Treasury may—

• (a) vary the specification,

• (b) withdraw any certification made by reference to the specification obtaining before the variation, and

• (c) stipulate the date on which the variation and withdrawal are to become effective;

and the Treasury may at any time certify a scheme as fulfilling the requirements obtaining after the variation.

• (2) No variation and withdrawal under this paragraph shall affect—

• (a) the operation of the scheme before the stipulated date, or

• (b) any contract entered into before that date.

• (3) No variation and withdrawal under this paragraph shall be effective unless the Treasury—

• (a) send a notice by post to each relevant body informing it of the variation and withdrawal, and

• (b) do so not less than 28 days before the stipulated date;

and a relevant body is a society or institution authorised (whether unconditionally or subject to conditions being met) to enter into contracts under the scheme concerned.

Treasury authorisation

7

• (1) The Treasury may authorise a society or institution under section 326(7) or (8) as regards schemes generally or as regards a particular scheme or particular schemes.

• (2) More than one authorisation may be given to the same society or institution.

8

• (1) Where an authorisation has been given under section 326(7) or (8) the Treasury may withdraw the authorisation and stipulate the date on which the withdrawal is to become effective; and the withdrawal shall have effect as regards any contract not entered into before the stipulated date.

• (2) No withdrawal under this paragraph shall be effective unless the Treasury—

• (a) send a notice by post to the society or institution concerned informing it of the withdrawal, and

• (b) do so not less than 28 days before the stipulated date.

• (3) A withdrawal of an authorisation shall not affect the Treasury’s power to give another authorisation or other authorisations.

9

• (1) Where an authorisation has been given under section 326(7) the Treasury may—

• (a) stipulate that the authorisation is to be varied by being treated as given subject to specified conditions being met, and

• (b) stipulate the date on which the variation is to become effective.

• (2) As regards any contract entered into on or after the stipulated date the authorisation shall be treated as having been given under section 326(8) subject to the conditions being met.

• (3) No variation under this paragraph shall be effective unless the Treasury—

• (a) send a notice by post to the society or institution concerned informing it of the variation, and

• (b) do so not less than 28 days before the stipulated date.

10

• (1) Where an authorisation has been given under section 326(8) the Treasury may withdraw the conditions and stipulate the date on which the withdrawal is to become effective.

• (2) As regards any contract entered into on or after the stipulated date the authorisation shall be treated as having been given under section 326(7) without any conditions being imposed.

11

• (1) Where an authorisation has been given under section 326(8) the Treasury may vary the conditions and stipulate the date on which the variation is to become effective; and the variation shall have effect as regards any contract entered into on or after the stipulated date.

• (2) No variation under this paragraph shall be effective unless the Treasury—

• (a) send a notice by post to the society or institution concerned informing it of the variation, and

• (b) do so not less than 28 days before the stipulated date.

12

• (1) If the Treasury act as regards an authorisation under a relevant paragraph, the paragraph concerned shall have effect subject to their power to act later, as regards the same authorisation, under the same or (as the case may be) another relevant paragraph.

• (2) If the Treasury act later as mentioned in sub-paragraph (1) above that sub-paragraph shall apply again, and so on however many times they act as regards an authorisation.

• (3) If the Treasury act as regards an authorisation under a relevant paragraph the paragraph concerned shall have effect subject to their power to act later, as regards the same authorisation, under paragraph 8 above.

• (4) For the purposes of this paragraph the relevant paragraphs are paragraphs 9 to 11 above.

SCHEDULE 15B

Part I — Relief on investment

Entitlement to claim relief

1

• (1) Subject to the following provisions of this Schedule, an individual shall, for any year of assessment, be entitled under this Part of this Schedule to claim relief in respect of an amount equal to the aggregate of the amounts (if any) which, by reference to eligible shares issued to him by venture capital trusts in the course of that year, are amounts on which he is eligible for relief in accordance with sub-paragraph (2) below.

• (2) The amounts on which an individual shall be taken for the purposes of sub-paragraph (1) above to be eligible for relief shall be any amounts subscribed by him on his own behalf for eligible shares issued by a venture capital trust for raising money.

• (3) An individual shall not be entitled under this Part of this Schedule to claim relief for any given year of assessment in respect of an amount of more than £200,000.

• (4) An individual shall not be entitled under this Schedule to claim any relief to which he is eligible by reference to any shares unless he had attained the age of eighteen years before those shares were issued.

• (5) Where an individual makes a claim for any relief to which he is entitled under this Part of this Schedule for any year of assessment, the amount of his liability for that year to income tax on his total income shall be equal to the amount to which he would be so liable apart from this Part of this Schedule less whichever is the smaller of—

• (a) an amount equal to 30 per cent of the amount in respect of which he is entitled to claim relief for that year, and

• (b) the amount which reduces his liability to nil.

• (6) In determining for the purposes of sub-paragraph (5) above the amount of income tax to which a person would be liable apart from this Part of this Schedule, no account shall be taken of—

• (a) any income tax reduction under section 289A,

• (b) any income tax reduction under Chapter I of Part VII or under section 347B,

• (c) any income tax reduction under section 353(1A),

• (d) any income tax reduction under section 54(3A) of the Finance Act 1989,

• (da) any income tax reduction under paragraph 19(2) of Schedule 16 to the Finance Act 2002 (community investment tax relief),

• (e) any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1), or

• (f) any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) A person shall not be entitled to be given any relief under this Part of this Schedule by reference to any shares if circumstances have arisen which would have resulted, had that relief already been given, in the withdrawal or reduction of the relief.

• (9) A person shall not under this Part of this Schedule be eligible for any relief on any amount by reference to any shares unless the shares are both subscribed for and issued for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.

• (10) An individual is not eligible for relief under this Part of this Schedule by reference to any shares which are treated as issued to him by virtue of section 195(8) of the Finance Act 2003 (tax treatment of disposal by company of its own shares).

• (11) Where a company which is a venture capital trust issues to any individual eligible shares to which sub-paragraph (10) above applies, it must—

• (a) at the time of the issue of those shares, give that individual a notice stating that he is not eligible for relief under this Part of this Schedule by reference to those shares, and

• (b) no later than three months after the issue of those shares, give a copy of that notice to an officer of the Board.

Loan-linked investments

2

• (1) An individual shall not be entitled to relief under this Part of this Schedule in respect of any shares if—

• (a) there is a loan made by any person, at any time in the relevant period, to that individual or any associate of his; and

• (b) the loan is one which would not have been made, or would not have been made on the same terms, if that individual had not subscribed for those shares or had not been proposing to do so.

• (2) References in this paragraph to the making by any person of a loan to any individual or an associate of his include references—

• (a) to the giving by that person of any credit to that individual or any associate of his; and

• (b) to the assignment or assignation to that person of any debt due from that individual or any associate of his.

• (3) In this paragraph—

• “associate” has the meaning given in subsections (3) and (4) of section 417, except that in those subsections (as applied for the purposes of this paragraph) “relative” shall not include a brother or sister; and

• “the relevant period”, in relation to relief under this Part of this Schedule in respect of any shares in a company which is a venture capital trust, means the period beginning with the incorporation of the company (or, if the company was incorporated more than two years before the date on which the shares were issued, beginning two years before that date) and ending immediately before the fifth anniversary of the date on which the shares were issued.

Loss of investment relief

3

• (1) This paragraph applies, subject to sub-paragraph (5) below, where—

• (a) an individual who has made any claim for relief under this Part of this Schedule makes any disposal of eligible shares in a venture capital trust, and

• (b) that disposal takes place before the end of the period of five years beginning with the date on which those shares were issued to that individual.

• (2) If the disposal is made otherwise than by way of a bargain made at arm’s length, any relief given under this Part of this Schedule by reference to the shares which are disposed of shall be withdrawn.

• (3) Where the disposal was made by way of a bargain made at arm’s length—

• (a) if, apart from this sub-paragraph, the relief given by reference to the shares that are disposed of is greater than the amount mentioned in sub-paragraph (4) below, it shall be reduced by that amount, and

• (b) if paragraph (a) above does not apply, any relief given by reference to those shares shall be withdrawn.

• (4) The amount referred to in sub-paragraph (3) above is an amount equal to tax at the lower rate for the year of assessment for which the relief was given on the amount or value of the consideration which the individual receives for the shares.

• (5) This paragraph shall not apply in the case of any disposal of shares which is made by a person to his spouse or civil partner at a time when they are living together.

• (6) Where any eligible shares issued to any individual (“the transferor”), being shares by reference to which any amount of relief under this Part of this Schedule has been given, are transferred to the transferor’s spouse or civil partner (“the transferee”) by a disposal such as is mentioned in sub-paragraph (5) above, this paragraph shall have effect, in relation to any subsequent disposal or other event, as if—

• (a) the transferee were the person who had subscribed for the shares,

• (b) the shares had been issued to the transferee at the time when they were issued to the transferor,

• (c) there had been, in respect of the transferred shares, such a reduction under this Part of this Schedule in the transferee’s liability to income tax as is equal to the actual reduction in respect of those shares of the transferor’s liability, and

• (d) that deemed reduction were (notwithstanding the transfer) to be treated for the purposes of this paragraph as an amount of relief given by reference to the shares transferred.

• (7) Any assessment for withdrawing or reducing relief by reason of a disposal or other event falling within sub-paragraph (6) above shall be made on the transferee.

• (8) In determining for the purposes of this paragraph any question whether any disposal relates to shares by reference to which any relief under this Part of this Schedule has been given, it shall be assumed, in relation to any disposal by any person of any eligible shares in a venture capital trust, that—

• (a) as between eligible shares acquired by the same person on different days, those acquired on an earlier day are disposed of by that person before those acquired on a later day; and

• (b) as between eligible shares acquired by the same person on the same day, those by reference to which relief under this Part of this Schedule has been given are disposed of by that person only after he has disposed of any other eligible shares acquired by him on that day.

• (9) Where—

• (a) the approval of any company as a venture capital trust is withdrawn, and

• (b) the withdrawal of the approval is not one to which section 842AA(8) applies,

any person who, at the time when the withdrawal takes effect, is holding any shares by reference to which relief under this Part of this Schedule has been given shall be deemed for the purposes of this paragraph to have disposed of those shares immediately before that time and otherwise than by way of a bargain made at arm’s length.

Assessment on withdrawal or reduction of relief

4

• (1) Any relief given under this Part of this Schedule which is subsequently found not to have been due shall be withdrawn by the making of an assessment to tax . . . for the year of assessment for which the relief was given.

• (2) An assessment for withdrawing or reducing relief in pursuance of paragraph 3 above shall also be made as an assessment to tax . . . for the year of assessment for which the relief was given.

• (3) No assessment for withdrawing or reducing relief given by reference to shares issued to any person shall be made by reason of any event occurring after his death.

Provision of information

5

• (1) Where an event occurs by reason of which any relief under this Part of this Schedule falls to be withdrawn or reduced, the individual to whom the relief was given shall, within 60 days of his coming to know of the event, give a notice to the inspector containing particulars of the event.

• (2) If the inspector has reason to believe that a person has not given a notice which he is required to give under sub-paragraph (1) above in respect of any event, the inspector may by notice require that person to furnish him within such time (not being less than 60 days) as may be specified in the notice with such information relating to the event as the inspector may reasonably require for the purposes of this Part of this Schedule.

• (3) No obligation as to secrecy imposed by statute or otherwise shall preclude the inspector from disclosing to a venture capital trust that relief given by reference to a particular number or proportion of its shares has been given or claimed under this Part of this Schedule.

Interpretation of Part I

6

• (1) In this Part of this Schedule “eligible shares”, in relation to a company which is a venture capital trust, means new ordinary shares in that trust which, throughout the period of five years beginning with the date on which they are issued, carry no present or future preferential right to dividends or to a company’s assets on its winding up and no present or future . . . right to be redeemed.

• (2) In this Part of this Schedule “ordinary shares”, in relation to a company, means shares forming part of a company’s ordinary share capital.

• (3) In this Part of this Schedule references to a disposal of shares shall include references to a disposal of an interest or right in or over the shares.

Part II — Relief on distributions

7

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

Meaning of “permitted maximum”

8

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

Interpretation of Part II

9

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

Amended return where company becomes aware of an error

7A

• (1) If a company becomes aware—

• (a) that anything which ought to have been included in a return made by it under this Schedule for any period has not been so included,

• (b) that anything which ought not to have been included in a return made by it under this Schedule for any period has been so included, or

• (c) that any other error has occurred in a return made by it under this Schedule for any period,

it shall forthwith supply to the collector an amended return for that period.

• (2) The duty imposed by sub-paragraph (1) above is without prejudice to any duty that may also arise under paragraph 7A of Schedule 13.

• (3) Where an amended return is supplied under this paragraph, all such assessments, adjustments, set-offs or payments or repayments of tax shall be made as may be required for securing that the resulting liabilities to tax (including interest on unpaid or overpaid tax) whether of the company or any other person are the same as they would have been if a correct return had been made.

Schedule 17A

Introductory

1

• (1) This Schedule has effect as respects claims for group relief.

• (2) Section 42 of the Management Act (procedure for making claims) shall not apply to such claims.

Time limits

2

• (1) No claim for an accounting period of a company may be made if—

• (a) the company has been assessed to corporation tax for the period, and

• (b) the assessment has become final and conclusive.

• (2) Sub-paragraph (1) above shall not apply in the case of a claim made before the end of 2 years from the end of the period.

• (3) This paragraph applies to the withdrawal of a claim as it applies to the making of a claim.

3

• (1) No claim for an accounting period of a company may be made after the end of 6 years from the end of the period, except under paragraph 5 below.

• (2) This paragraph applies to the withdrawal of a claim as it applies to the making of a claim.

4

Where under paragraph 2 or 3 above a claim may not be made after a certain time, it may be made within such further time as the Board may allow.

5

• (1) A claim for an accounting period of a company may be made after the end of 6 years from the end of the period if—

• (a) the company has been assessed to corporation tax for the period before the end of 6 years from the end of the period,

• (b) the company has appealed against the assessment, and

• (c) the assessment has not become final and conclusive.

• (2) No claim for an accounting period of a company may be made under this paragraph after the end of 6 years and 3 months from the end of the period.

Method of making claim

6

• (1) A claim shall be made by being included in a return under section 11 of the Management Act (corporation tax return) for the period for which the claim is made.

• (2) In sub-paragraph (1) above the reference to a claim being included in a return includes a reference to a claim being included by virtue of an amendment of the return.

• (3) This paragraph applies to the withdrawal of a claim as it applies to the making of a claim.

Nature of claim

7

A claim may be made for less than the full amount available.

8

A claim, other than one under paragraph 5 above, shall be for an amount which is quantified at the time the claim is made.

9

• (1) A claim under paragraph 5 above shall be expressed to be conditional, as to the amount claimed, on, and only on, the outcome of one or more relevant matters specified in the claim.

• (2) For the purposes of this paragraph a matter is relevant if it is relevant to the determination of the assessment of the claimant company to corporation tax for the period for which the claim is made.

Consent to surrender

10

• (1) A claim shall require the consent of the surrendering company.

• (2) A consortium claim shall require the consent of each member of the consortium in addition to the consent of the surrendering company.

• (3) Consent to surrender shall be of no effect unless, at or before the time the claim is made, notice of consent is given by the consenting company to the inspector to whom the surrendering company makes its returns under section 11 of the Management Act.

• (4) Notice of consent to surrender, in the case of consent by the surrendering company, shall be of no effect unless it contains the following particulars—

• (a) the name of the surrendering company;

• (b) the name of the company to which relief is being surrendered;

• (c) the amount of relief being surrendered;

• (d) the accounting period of the surrendering company to which the surrender relates;

• (e) the tax district references of the surrendering company and the company to which relief is being surrendered.

• (5) Where notice of the surrendering company’s consent to surrender is given to the inspector after the surrendering company has made a return under section 11 of the Management Act for the period to which the relief being surrendered relates, the notice shall be of no effect unless the surrendering company at the same time amends the return.

• (6) Where consent to surrender relates to a loss in respect of which relief has been given under section 393(1), notice of consent to surrender, in the case of the surrendering company, shall be of no effect unless, at the same time as giving the notice to the inspector, the company amends its return under section 11 of the Management Act for the period, or, if more than one, each of the periods, in which relief for the loss has been given under section 393(1).

• (7) For the purposes of sub-paragraph (6) above relief under section 393(1) shall be treated as given for losses incurred in earlier accounting periods before losses incurred in later accounting periods.

• (8) A claim shall require to be accompanied by a copy of the notice of consent to surrender given for the purposes of this paragraph by the surrendering company.

• (9) A consortium claim shall in addition require to be accompanied by a copy of the notice of consent to surrender given for the purposes of this paragraph by each member of the consortium.

11

• (1) This paragraph applies in relation to claims under paragraph 5 above.

• (2) In the case of consent to surrender by the surrendering company, consent which relates to relief which is the subject of more than one claim under paragraph 5 above shall be of no effect unless it specifies an order of priority in relation to the claims.

Adjustments

12

• (1) All such assessments or adjustments of assessments shall be made as may be necessary to give effect to a claim or the withdrawal of a claim.

• (2) An assessment under this paragraph shall not be out of time if it is made—

• (a) in the case of a claim, within one year from the date on which an assessment of the claimant company to corporation tax for the period for which the claim is made becomes final and conclusive, and

• (b) in the case of the withdrawal of a claim, within one year from the date on which the claim is withdrawn.

1A

• (1) This paragraph applies to a right to dividends carried by shares in a company if—

• (a) the dividends represent no more than a reasonable commercial return on the new consideration received by the company in respect of the issue of the shares, and

• (b) condition A, B or C is met.

• (2) Condition A is that—

• (a) the dividends are of a fixed amount or at a fixed rate per cent of the nominal value of the shares, and