Legalize / United Kingdom / Public General Act

Finance Act 2003

Type Public General Act

Publication 2003-07-10

Last updated 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(azab) in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for special tax sites) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section);

(azb) in the case of an amount payable under paragraph 6(3) of Schedule 7A (PAIF seeding relief: portfolio test), the first time mentioned in paragraph 6(3)(a) or (b) at which the portfolio test was not met;

(azc) in the case of an amount payable under paragraph 14(1) of Schedule 7A (co-ownership scheme seeding relief: genuine diversity of ownership condition) because the genuine diversity of ownership condition was not met at a time mentioned in paragraph 14(1)(b) or (c), the first time mentioned in paragraph 14(1)(b) or (c) at which that condition was not met;

(azd) in the case of an amount payable under paragraph 16(3) of Schedule 7A (co-ownership scheme seeding relief: portfolio test), the first time mentioned in paragraph 16(3)(a) or (b) at which the portfolio test was not met;

(aa) in the case of an amount payable under section 81A in respect of an earlier transaction because of the effect of a later linked transaction, the effective date of the later transaction;

(aaa) in the case of an amount payable under paragraph 3(3) of Schedule 17A (leases that continue after a fixed term) by reason of the continuation of a lease for a period (or further period) under paragraph 3(2) or (6) of that Schedule, the final day of the period (or further period),

(ab) in the case of an amount payable under paragraph ... 4(3) of Schedule 17A (... treatment of leases for an indefinite term), the day on which the lease becomes treated as being for a longer fixed term;

(b) in the case of a deferred payment under section 90, the date when the deferred payment is due;

(4) In subsection (3)(a) “the disqualifying event” has the same meaning as in section 81(4) (except in a case to which section 87A applies).

(5) Subsection (3)(c) applies in a case within section 51 (contingent, uncertain or unascertained consideration) if payment is not deferred under section 90, with the result that interest on any tax payable under section 80 (adjustment where contingency ceases or consideration is ascertained) runs from the effective date of the transaction.

(6) If an amount is lodged with the Inland Revenue in respect of the tax, the amount on which interest is payable is reduced by that amount.

(7) Interest is calculated at the rate applicable under section 178 of the Finance Act 1989 (c. 26) (power of Treasury to prescribe rates of interest).

Interest on penalties

88

A penalty under this Part shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the date it is determined until payment.

Interest on repayment of tax overpaid etc

89

(1) A repayment by the Inland Revenue to which this section applies shall be made with interest at the rate applicable under section 178 of the Finance Act 1989 for the period between the relevant time (as defined below) and the date when the order for repayment is issued.

(2) This section applies to—

(a) any repayment of tax, and

(b) any repayment of a penalty under this Part.

In that case the relevant time is the date on which the payment of tax or penalty was made.

(3) This section also applies to a repayment by the Inland Revenue of an amount lodged with them in respect of the tax payable in respect of a transaction. In that case the relevant time is the date on which the amount was lodged with them.

(4) No interest is payable under this section in respect of a payment made in consequence of an order or judgment of a court having power to allow interest on the payment.

(5) Interest paid to any person under this section is not income of that person for any tax purposes.

Application to defer payment in case of contingent or uncertain consideration

90

(1) The purchaser may apply to the Inland Revenue to defer payment of tax in a case where the amount payable depends on the amount or value of chargeable consideration that—

(a) at the effective date of the transaction is contingent or uncertain, and

(b) falls to be paid or provided on one or more future dates of which at least one falls, or may fall, more than six months after the effective date of the transaction.

(2) The Inland Revenue may make provision by regulations for carrying this section into effect.

(3) The regulations may in particular—

(a) specify when an application is to be made;

(b) impose requirements as to the form and contents of an application;

(c) require the applicant to provide such information as the Inland Revenue may reasonably require for the purposes of determining whether to accept an application;

(d) specify the grounds on which an application may be refused;

(e) specify the procedure for reaching a decision on an application;

(f) make provision for postponing payment of tax when an application has been made;

(g) provide for an appeal to the tribunal against a refusal to accept an application, and make provision in relation to such an appeal corresponding to any provision made in relation to appeals under Part 7 of Schedule 10 (appeals against Revenue decisions on tax);

(h) provide for the effect of accepting an application;

(i) require the purchaser to make a return or further return, and to make such payments or further payments of tax as may be specified, in such circumstances as may be specified.

(4) The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a land transaction return.

(5) An application under this section does not affect the purchaser’s obligations as regards payment of tax in respect of chargeable consideration that has already been paid or provided or is not contingent and whose amount is ascertained or ascertainable at the time the application is made.

This applies as regards both the time of payment and the calculation of the amount payable.

(6) Regulations under this section may provide that where—

(a) a payment is made as mentioned in subsection (5), and

(b) an application under this section is accepted in respect of other chargeable consideration taken into account in calculating the amount of that payment,

section 80 (adjustment where contingency ceases or consideration is ascertained) does not apply in relation to the payment and, instead, any necessary adjustment shall be made in accordance with the regulations.

(7) This section does not apply so far as the consideration consists of rent.

Collection and recovery of tax etc

91

(1) The provisions of Schedule 12 have effect with respect to the collection and recovery of tax.

Part 1 contains general provisions, and

Part 2 relates to court proceedings.

(2) The provisions of that Schedule have effect in relation to the collection and recovery of any unpaid amount by way of—

(a) penalty under this Part, or

(b) interest under this Part (on unpaid tax or penalty),

as if it were an amount of unpaid tax.

Payment by cheque

92

For the purposes of this Part where—

(a) payment to the Inland Revenue is made by cheque, and

(b) the cheque is paid on its first presentation to the banker on whom it is drawn,

the payment is treated as made on the day on which the cheque was received by the Inland Revenue.

Compliance

Information powers

93

(1) Schedule 13 has effect with respect to the powers of the Inland Revenue to call for documents and information for the purposes of stamp duty land tax.

(2) In that Schedule—

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

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Part 6 provides for an order of a judicial authority for the delivery of documents;

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Part 8 relates to falsification etc of documents.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to inspect premises

94

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Offence of fraudulent evasion of tax

95

(1) A person commits an offence if he is knowingly concerned in the fraudulent evasion of tax by him or any other person.

(2) A person guilty of an offence under this section is liable—

(a) on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding 14 years or a fine, or both.

Penalty for assisting in preparation of incorrect return etc

96

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Power to allow further time and reasonable excuse for failure

97

(1) For the purposes of this Part a person shall be deemed not to have failed to do anything required to be done within a limited time if he did it within such further time, if any, as the Inland Revenue may allow.

(2) Where a person had a reasonable excuse for not doing anything required to be done for the purposes of this Part—

(a) he shall be deemed not to have failed to do it unless the excuse ceased, and

(b) after the excuse ceased, he shall be deemed not to have failed to do it if he did it without unreasonably delay after the excuse had ceased.

Admissibility of evidence not affected by offer of settlement etc

98

(1) Statements made or documents produced by or on behalf of a person are not inadmissible in proceedings to which this section applies by reason only that it has been drawn to his attention—

(a) that where serious tax fraud has been committed the Board may accept a money settlement and that the Board will accept such a settlement, and will not pursue a criminal prosecution, if he makes a full confession of all tax irregularities, or

(b) that the extent to which he is helpful and volunteers information is a factor that will be taken into account in determining the amount of any penalty,

and that he was or may have been induced thereby to make the statements or produce the documents.

(2) The proceedings to which this section applies are—

(a) any criminal proceedings against the person in question for any form of fraudulent conduct in connection with or in relation to tax;

(b) any proceedings against him for the recovery of any tax due from him;

General provisions about penalties

99

(1) Schedule 14 has effect with respect to the determination of penalties under this Part and related appeals.

(2) The Board may in their discretion mitigate a penalty under this Part, or stay or compound any proceedings for the recovery of such a penalty.

They may also, after judgment, further mitigate or entirely remit the penalty.

(2A) Where a person is liable to more than one tax-related penalty in respect of the same land transaction, each penalty after the first shall be reduced so that his liability to such penalties, in total, does not exceed the amount of whichever is (or, but for this subsection, would be) the greatest one.

(3) Nothing in the provisions of this Part relating to penalties affects any criminal proceedings for an offence.

Application of provisions

Companies

100

(1) In this Part “company”, except as otherwise expressly provided, means any body corporate or unincorporated association, but does not include a partnership.

(2) Everything to be done by a company under this Part shall be done by the company acting through—

(a) the proper officer of the company, or

(b) another person having for the time being having the express, implied or apparent authority of the company to act on its behalf for the purpose.

Paragraph (b) does not apply where a liquidator has been appointed for the company.

(3) Service on a company of any document under or in pursuance of this Part may be effected by serving it on the proper officer.

(4) Tax due from a company that—

(a) is not a body corporate, or

(b) is incorporated under the law of a country or territory outside the United Kingdom,

may, without prejudice to any other method of recovery, be recovered from the proper officer of the company.

(5) The proper officer may retain out of any money coming into his hands on behalf of the company sufficient sums to pay that tax and, so far as he is not so reimbursed, he is entitled to be indemnified by the company in respect of the liability imposed on him.

(6) For the purposes of this Part—

(a) the proper officer of a body corporate is the secretary, or person acting as secretary, of the company, and

(b) the proper officer of an unincorporated association, or of a body corporate that does not have a proper officer within paragraph (a), is the treasurer, or person acting as treasurer, of the company.

This subsection does not apply if a liquidator or administrator has been appointed for the company.

(7) If a liquidator or administrator has been appointed for the company, then, for the purposes of this Part—

(a) the liquidator or, as the case may be, the administrator is the proper officer, and

(b) if two or more persons are appointed to act jointly or concurrently as the administrator of the company, the proper officer is—

(i) such one of them as is specified in a notice given to the Inland Revenue by those persons for the purposes of this section, or

(ii) where the Inland Revenue is not so notified, such one or more of those persons as the Inland Revenue may designate as the proper officer for those purposes.

Unit trust schemes

101

(1) This Part (with the exception of the provision mentioned in subsection (7) below) applies in relation to a unit trust scheme as if—

(a) the trustees were a company, and

(b) the rights of the unit holders were shares in the company.

(2) Each of the parts of an umbrella scheme is regarded for the purposes of this Part as a separate unit trust scheme and the scheme as a whole is not so regarded.

(3) An “umbrella scheme” means a unit trust scheme—

(a) that provides arrangements for separate pooling of the contributions of participants and the profits or income out of which payments are to be made for them, and

(b) under which the participants are entitled to exchange rights in one pool for rights in another.

A “part” of an umbrella scheme means such of the arrangements as relate to a separate pool.

(4) In this Part, subject to any regulations under subsection (5)—

“unit trust scheme” has the same meaning as in the Financial Services and Markets Act 2000 (c. 8), and

“unit holder” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme.

(5) The Treasury may by regulations provide that a scheme of a description specified in the regulations is to be treated as not being a unit trust scheme for the purposes of this Part.

Any such regulations may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.

(6) Section 620 of the Corporation Tax Act 2010 (court investment funds treated as authorised unit trusts) applies for the purposes of this Part as it applies for the purposes of that Act, with the substitution for references to an authorised unit trust of references to a unit trust scheme.

(7) An unit trust scheme is not to be treated as a company for the purposes of—

Schedule 7 (group relief, reconstruction relief or acquisition relief) , or

Schedule 9A (increased rates for non-resident transactions).

Open-ended investment companies

102

(1) The Treasury may by regulations make such provision as they consider appropriate for securing that the provisions of this Part have effect in relation to—

(a) open-ended investment companies of such description as may be prescribed in the regulations, and

(b) transactions involving such companies,

in a manner corresponding, subject to such modifications as the Treasury consider appropriate, to the manner in which they have effect in relation to unit trust schemes and transactions involving such trusts.

(2) The regulations may, in particular, make provision—

(a) modifying the operation of any prescribed provision in relation to open-ended investment companies so as to secure that arrangements for treating the assets of such a company as assets comprised in separate pools are given an effect corresponding to that of equivalent arrangements constituting the separate parts of an umbrella scheme;

(b) treating the separate parts of the undertaking of an open-ended investment company in relation to which such provision is made as distinct companies for the purposes of this Part.

(3) Regulations under this section may—

(a) make different provision for different cases, and

(b) contain such incidental, supplementary, consequential and transitional provision as the Treasury think fit.

(4) In this section—

“open-ended investment company” has the meaning given by section 236 of the Financial Services and Markets Act 2000 (c. 8);

“prescribed” means prescribed by regulations under this section; and

“unit trust scheme” and “umbrella scheme” have the same meaning as in section 101.

Joint purchasers

103

(1) This section applies to a land transaction where there are two or more purchasers who are or will be jointly entitled to the interest acquired.

(2) The general rules are that—

(a) any obligation of the purchaser under this Part in relation to the transaction is an obligation of the purchasers jointly but may be discharged by any of them,

(b) anything required or authorised by this Part to be done in relation to the purchaser must be done by or in relation to all of them, and

(c) any liability of the purchaser under this Part in relation to the transaction (in particular, any liability arising by virtue of the failure to fulfil an obligation within paragraph (a)), is a joint and several liability of the purchasers.

These rules are subject to the following provisions.

(3) If the transaction is a notifiable transaction, a single land transaction return is required.

(4) The declaration required by paragraph 1(1)(c) of Schedule 10 ... (declaration that return ... is complete and correct) must be made by all the purchasers.

(5) If the Inland Revenue give notice of an enquiry into the return ...—

(a) the notice must be given to each of the purchasers,

(b) the powers of the Inland Revenue as to the production of documents and provision of information for the purposes of the enquiry are exercisable separately (and differently) in relation to each of the purchasers,

(c) any of the purchasers may apply for a direction that a closure notice be given (and all of them are entitled to to be parties to the application), and

(d) the closure notice must be given to each of the purchasers.

(6) A Revenue determination or discovery assessment relating to the transaction must be made against all the purchasers and is not effective against any of them unless notice of it is given to each of them whose identity is known to the Inland Revenue.

(7) In the case of an appeal arising from proceedings under this Part relating to the transaction—

(a) the appeal may be brought by any of the purchasers,

(b) notice of the appeal must be given to any of them by whom it is not brought,

(d) if it is not settled, and is notified to the tribunal, any of them are entitled to be parties to the appeal, and

(e) the tribunal’s decision on the appeal binds all of them.

(7A) In a case where subsection (7) applies and some (but not all) of the purchasers require HMRC to undertake a review under paragraph 36B or 36C of Schedule 10—

(a) notification of the review must be given by HMRC to each of the other purchasers whose identity is known to HMRC,

(b) any of the other purchasers may be a party to the review if they notify HMRC in writing,

(d) paragraph 36F of Schedule 10 (effect of conclusions of review) applies in relation to all of the purchasers, and

(e) any of the purchasers may notify the appeal to the tribunal under paragraph 36G.

(8) This section has effect subject to—

the provisions of Schedule 15 relating to partnerships, and

the provisions of Schedule 16 relating to trustees.

Partnerships

104

(1) Schedule 15 has effect with respect to the application of this Part in relation to partnerships.

(2) In that Schedule—

Part 1 defines “partnership” and contains other general provisions, and

Part 2 deals with ordinary partnership transactions, and

Part 3 makes special provision for certain transactions.

Trustees

105

Schedule 16 has effect with respect to the application of this Part in relation to trustees.

Persons acting in a representative capacity etc

106

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The personal representatives of a person who is the purchaser under a land transaction—

(a) are responsible for discharging the obligations of the purchaser under this Part in relation to the transaction, and

(b) may deduct any payment made by them under this Part out of the assets and effects of the deceased person.

(4) A receiver appointed by a court in the United Kingdom having the direction and control of any property is responsible for discharging any obligations under this Part in relation to a transaction affecting that property as if the property were not under the direction and control of the court.

Crown application

107

(1) This Part binds the Crown, subject to the following provisions of this section.

(2) A land transaction under which the purchaser is any of the following is exempt from charge:

GovernmentA Minister of the CrownThe Scottish MinistersA Northern Ireland department The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government
Government
A Minister of the Crown
The Scottish Ministers
A Northern Ireland department
The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government
Parliament etcThe Corporate Officer of the House of LordsThe Corporate Officer of the House of CommonsThe Scottish Parliamentary Corporate BodyThe Northern Ireland Assembly Commission The National Assembly for Wales Commission
Parliament etc
The Corporate Officer of the House of Lords
The Corporate Officer of the House of Commons
The Scottish Parliamentary Corporate Body
The Northern Ireland Assembly Commission
The National Assembly for Wales Commission

(3) The powers conferred by Part 7 of Schedule 13 (entry with warrant to obtain information) are not exercisable in relation to premises occupied for the purposes of the Crown.

(4) Nothing in this section shall be read as making the Crown liable to prosecution for an offence.

Supplementary provisions

Linked transactions

108

(1) Transactions are “linked” for the purposes of this Part if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them.

Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this subsection

(1A) A transaction is not a linked transaction if —

(a) the transaction relates to land in Scotland, or

(b) the transaction relates to land in Wales (whether by virtue of section 48A(2) or otherwise).

(2) Where there are two or more linked transactions with the same effective date, the purchaser, or all of the purchasers if there is more than one, may make a single land transaction return as if all of those transactions that are notifiable were a single notifiable transaction.

(3) Where two or more purchasers make a single return in respect of linked transactions, section 103 (joint purchasers) applies as if—

(a) the transactions in question were a single transaction, and

(b) those purchasers were purchasers acting jointly.

(4) This section is subject to section 47(1).

General power to vary this Part by regulations

109

(1) The Treasury may if they consider it expedient in the public interest make provision by regulations for the variation of this Part in its application to land transactions of any description.

(2) The power conferred by this section includes, in particular, power to alter—

(a) the descriptions of land transaction that are chargeable or notifiable;

(b) the descriptions of land transaction in respect of which tax is chargeable at any existing rate or amount, or in respect of which tax is calculated in accordance with any particular provision.

(2A) The power under subsection (2)(b) includes power to alter the conditions for the application to a chargeable transaction of paragraph 3 of Schedule 4A (higher rate for certain transactions), other than the condition that the transaction must be a high-value residential transaction.

(3) The power conferred by this section does not, except as mentioned in subsections (2)(b) and (2A), include power to vary any threshold, rate or amount specified in—

(a) section 55 (amount of tax chargeable: general), ...

(aa) section 74(1A) (exercise of collective rights by tenants of flats),

(ab) Schedule 4A (amount of tax chargeable: high-value interests in dwellings), or

(b) Schedule 5 (amount of tax chargeable: rent).

(4) This section has effect subject to section 110 (approval of regulations by House of Commons).

(5) Regulations under this section do not apply in relation to any transaction of which the effective date is after the end of—

(a) the period of 18 months beginning with the day on which the regulations were made, or

(b) such shorter period as may be specified in the regulations.

This does not affect the power to make further provision by regulations under this section to the same or similar effect.

(6) Regulations under this section may include such supplementary, transitional and incidental provision as appears to the Treasury to be necessary or expedient.

(7) The power conferred by this section may be exercised at any time after the passing of this Act.

Approval of regulations under general power

110

(1) An instrument containing regulations under section 109 (general power to vary this Part by regulations) must be laid before the House of Commons after being made.

(2) If the regulations are not approved by the House of Commons before the end of the period of 28 days beginning with the day on which they are made, they shall cease to have effect at the end of that period (if they have not already ceased to have effect under subsection (3)).

(3) If on any day during that period of 28 days the House of Commons, in proceedings on a motion that (or to the effect that) the regulations be approved, comes to a decision rejecting the regulations, they shall cease to have effect at the end of that day.

(4) In reckoning any such period of 28 days take no account of any time during which—

(a) Parliament is prorogued or dissolved, or

(b) the House of Commons is adjourned for more than four days.

(5) Where regulations cease to have effect under this section, their ceasing to have effect is without prejudice to anything done in reliance on them.

As to claims for repayment, see section 111.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) This section does not apply to regulations containing only provision varying Schedule 6ZA or paragraph 16 of Schedule 9 which does not increase any person's liability to tax.

Claim for repayment if regulations under general power not approved

111

(1) Where regulations cease to have effect under section 110, a claim may be made to the Inland Revenue for repayment of any tax, interest or penalty that would not have been payable but for the regulations.

(2) Section 89 (interest on repayment of tax overpaid etc) applies to a repayment under this section.

(3) A claim for repayment must be made within two years after the effective date of the transaction in question.

(4) The Inland Revenue may make provision by regulations—

(a) for varying the time limit for making a claim;

(b) as to any other conditions that must be met before repayment is made.

Power to amend certain provisions before implementation

112

(1) The Treasury may by regulations amend the following provisions of this Part—

(a) Schedule 5 (amount of tax chargeable: rent);

(b) subsection (2) of section 55 (amount of tax chargeable: general) so far as relating to the thresholds at which different rates of tax become payable.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) A statutory instrument containing regulations under this section shall not be made unless a draft of the instrument has been laid before and approved by resolution of the House of Commons.

(4) The power conferred by this section is not exercisable after the implementation date.

Functions conferred on “the Inland Revenue”

113

(1) References in this Part to “the Inland Revenue” are to any officer of the Board, except as otherwise provided.

(2) Any power of the Inland Revenue to make regulations is exercisable only by the Board.

(3) In Schedule 10 (returns, assessments and other administrative matters)—

(a) functions of the Inland Revenue under these provisions are exercisable by the Board or an officer of the Board—

(i) paragraph 28 (discovery assessment),

(ii) paragraph 29 (assessment to recover excessive repayment);

(b) functions of the Inland Revenue under these provisions are functions of the Board—

(i) paragraph 33 (relief in case of double assessment),

(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3A) The following functions of the Inland Revenue under Schedule 11A (claims not included in returns) are functions of the Board—

(a) functions under paragraph 2(1) (form of claims),

(b) functions relating to a claim made to the Board.

(4) Nothing in this section affects any provision of this Part that expressly confers functions on the Board, an officer of the Board, a collector or a specific officer of the Board.

Orders and regulations made by the Treasury or the Inland Revenue

114

(1) Except as otherwise provided, any power of the Treasury or the Inland Revenue to make an order or regulations under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), is exercisable by statutory instrument.

(2) Subsection (1) does not apply in relation to the power conferred by—

paragraph 8 of Schedule 5 to this Act (tax chargeable in respect of rent: power to prescribe temporal discount rate),

section 178(5) of the Finance Act 1989 (c. 26) (power to prescribe rates of interest).

(3) Except as otherwise provided, a statutory instrument containing any order or regulations made by the Treasury or the Inland Revenue under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), shall be subject to annulment in pursuance of a resolution of the House of Commons.

(4) Subsection (3) does not apply to a statutory instrument made under the power conferred by—

section 61(3) (compliance with planning obligations: power to add to list of public authorities);

paragraph 1(3) of Schedule 9 (right to buy transactions: power to add to list of relevant public sector bodies);

paragraph 2(2) of Schedule 19 (commencement and transitional provisions: power to appoint implementation date).

(5) The first set of regulations under section 58B (new zero-carbon homes) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.

(6) An order or regulations under this Part—

(a) may make provision having effect generally or only in specified cases or circumstances,

(b) may make different provision for different cases or circumstances, and

General and Special Commissioners, appeals and other proceedings

115

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Interpretation etc

Meaning of “residential property”

116

(1) In this Part “residential property” means—

(a) a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use, and

(b) land that is or forms part of the garden or grounds of a building within paragraph (a) (including any building or structure on such land), or

(c) an interest in or right over land that subsists for the benefit of a building within paragraph (a) or of land within paragraph (b);

and “non-residential property” means any property that is not residential property.

This is subject to the rule in subsection (7) in the case of a transaction involving six or more dwellings.

(2) For the purposes of subsection (1) a building used for any of the following purposes is used as a dwelling—

(a) residential accommodation for school pupils;

(b) residential accommodation for students, other than accommodation falling with subsection (3)(b);

(d) an institution that is the sole or main residence of at least 90% of its residents and does not fall within any of paragraphs (a) to (f) of subsection (3).

(3) For the purposes of subsection (1) a building used for any of the following purposes is not used as a dwelling—

(a) a home or other institution providing residential accommodation for children;

(b) a hall of residence for students in further or higher education;

(c) a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder;

(d) a hospital or hospice;

(e) a prison or similar establishment;

(f) a hotel or inn or similar establishment.

(4) Where a building is used for a purpose specified in subsection (3), no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use.

(5) Where a building that is not in use is suitable for use for at least one of the purposes specified in subsection (2) and at least one of those specified in subsection (3)—

(a) if there is one such use for which it is most suitable, or if the uses for which it is most suitable are all specified in the same sub-paragraph, no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use,

(b) otherwise, the building shall be treated for those purposes as suitable for use as a dwelling.

(6) In this section “building” includes part of a building.

(7) Where six or more separate dwellings are the subject of a single transaction involving the transfer of a major interest in, or the grant of a lease over, them, then, for the purposes of this Part as it applies in relation to that transaction, those dwellings are treated as not being residential property.

(8) The Treasury may by order—

(a) amend subsections (2) and (3) so as to change or clarify the cases where use of a building is, or is not to be, use of a building as a dwelling for the purposes of subsection (1);

(b) amend or repeal subsection (7) and the reference to that subsection in subsection (1).

Any such order may contain such incidental, supplementary, consequential or transitional provision as appears to the Treasury to be necessary or expedient.

Meaning of “major interest” in land

117

(1) References in this Part to a “major interest” in land shall be construed as follows.

(2) In relation to land in England ... , the references are to—

(a) an estate in fee simple absolute, or

(b) a term of years absolute,

whether subsisting at law or in equity.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In relation to land in Northern Ireland, the references are to—

(a) any freehold estate, or

(b) any leasehold estate,

whether subsisting at law or in equity.

Meaning of “market value”

118

(1) For the purposes of this Part “market value” shall be determined as for the purposes of the Taxation of Chargeable Gains Act 1992 (c. 12) (see sections 272 to 274 of that Act).

(2) This is subject to paragraphs 7(7) and 17(7) of Schedule 7A (which define “market value” for certain purposes of PAIF seeding relief and co-ownership scheme seeding relief).

Meaning of “effective date” of a transaction

119

(1) Except as otherwise provided, the effective date of a land transaction for the purposes of this Part is

(a) the date of completion, or

(b) such alternative date as the Commissioners for Her Majesty's Revenue and Customs may prescribe by regulations.

(2) Other provision as to the effective date of certain descriptions of land transaction is made by—

section 44(4) (contract and conveyance: contract substantially performed without having been completed), ...

section 44A(3) (contract providing for conveyance to third party),

section 45A(8) (contract providing for conveyance to third party: effect of transfer of rights),

section 46(3) (options and rights of pre-emption).

paragraph 5 of Schedule 2A,

paragraph 3(4) of Schedule 17A (leases that continue after a fixed term),

paragraph 12A(2) of Schedule 17A (agreement for lease followed by substantial performance),

paragraph 12B(3) of that Schedule (assignment of agreement for lease occurring after agreement substantially performed), and

Meaning of “lease” and other supplementary provisions

120

Schedule 17A contains further provisions relating to leases.

Minor definitions

121

In this Part—

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

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

“employee” includes an office-holder and related expressions have a corresponding meaning;

“HMRC” means Her Majesty’s Revenue and Customs;

“jointly entitled” means—in England ... , beneficially entitled as joint tenants or tenants in common,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .in Northern Ireland, beneficially entitled as joint tenants, tenants in common or coparceners;

“land” includes—buildings and structures, andland covered by water;

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

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

“statutory provision” means any provision made by or under an Act of Parliament, an Act of the Scottish Parliament or any Northern Ireland legislation;

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

“tax”, unless the context otherwise requires, means tax under this Part.

“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

Index of defined expressions

122

In this Part the expressions listed below are defined or otherwise explained by the provisions indicated—

Final provisions

Consequential amendments

123

(1) Schedule 18 contains certain amendments consequential on the provisions of this Part.

(2) The Treasury may by regulations make such other amendments and repeals as appear to them appropriate in consequence of the provisions of this Part.

(3) The regulations may, in particular, make such provision as the Treasury think fit for reproducing in relation to stamp duty land tax the effect of enactments providing for exemption from stamp duty.

Commencement and transitional provisions

124

Schedule 19 makes provision for and in connection with the coming into force of the provisions of this Part.

Part 5 — Stamp duty

Abolition of stamp duty except on instruments relating to stock or marketable securities

125

(1) Stamp duty is chargeable under Schedule 13 of the Finance Act 1999 (c. 16) only on instruments relating to stock or marketable securities.

(2) Section 12 of the Finance Act 1895 (c. 16) (collection of stamp duty in cases of property vested by Act or purchased under statutory powers) does not apply to property other than stock or marketable securities.

(3) This section shall be construed as one with the Stamp Act 1891 (c. 39).

(4) Part 1 of Schedule 20 to this Act contains provisions supplementing this section and Part 2 of that Schedule provides for consequential amendments and repeals.

(5) This section and that Schedule have effect—

(a) in relation to an instrument effecting a land transaction (or any duplicate or counterpart of such an instrument), if the transaction—

(i) is an SDLT transaction within the meaning of Schedule 19 to this Act (stamp duty land tax: commencement and transitional provisions), or

(ii) would be such a transaction but for an exemption or relief from stamp duty land tax;

(b) in relation to an instrument effecting a transaction other than a land transaction (or any duplicate or counterpart of such an instrument), if the instrument is executed on or after the implementation date for the purposes of stamp duty land tax (see paragraph 2(2) of that Schedule).

For this purpose an instrument effecting both a land transaction and a transaction other than a land transaction (or any duplicate or counterpart of such an instrument) is treated as if it were two instruments to which paragraph (a) and paragraph (b) above respectively applied.

(6) Where in the case of an instrument effecting both a land transaction and a transaction other than a land transaction the result of applying subsection (5) is that stamp duty is chargeable on either or both of the deemed instruments, the enactments relating to stamp duty have effect as if—

(a) there were two instruments as mentioned in the closing words of that subsection,

(b) the consideration had been apportioned between them in a just and reasonable manner, and

(c) the amount found on that apportionment to be attributable to the chargeable instrument, or (as the case may be) to each of them, had been set forth distinctly in that instrument.

(7) In subsections (5) and (6) “land transaction” has the same meaning as in Part 4 of this Act.

(8) This section and Schedule 20 have effect subject to paragraph 31 of Schedule 15 to this Act (continued application of stamp duty in relation to certain partnership transactions).

Circumstances in which group relief withdrawn

126

(1) Section 111 of the Finance Act 2002 (c. 23) (stamp duty: withdrawal of group relief) is amended as follows.

(2) In subsection (1)(b) (circumstances in which relief withdrawn: transferee company ceasing to be member of group within two years) for “two years” substitute “ three years ”.

(3) In subsection (1)(c) (circumstances in which relief withdrawn: transferee company holding estate or interest when it ceases to be member of group)—

(a) in the opening words—

(i) for “it ceases” substitute “ the transferee company ceases ”, and

(ii) for “it holds” substitute “ it or a relevant associated company holds ”;

(b) in sub-paragraph (i) for “to it” substitute “ to the transferee company ”; and

(c) for the closing words substitute “ and that has not subsequently been transferred at market value by a duly stamped instrument on which ad valorem duty was paid and in respect of which group relief was not claimed ”.

(4) In subsection (3)—

(a) after “transferred” insert “ to the transferee company ”, and

(b) for “what the transferee company holds at the time it ceases to be a member” substitute “ what is held by that company or, as the case may be, that company and any relevant associated companies, at the time it or they cease to be members ”.

(5) After subsection (4) insert—

(4A) In this section “relevant associated company”, in relation to the transferee company, means a company that— (a) is a member of the same group as the transferee company immediately before that company ceases to be a member of the same group as the transferor company, and (b) ceases to be a member of the same group as the transferor company in consequence of the transferee company so ceasing.

(6) In paragraph 4(3) of Schedule 34 to the Finance Act 2002 (c. 23) (withdrawal of group relief: supplementary provisions), in paragraph (b)—

(a) in the opening words—

(i) for “it ceases” substitute “ the transferee company ceases ”, and

(ii) for “it holds” substitute “ it or a relevant associated company (as defined in sub-paragraph (4) below) holds ”;

(b) in sub-paragraph (i) for “to it” substitute “ to the transferee company ”; and

(c) for the closing words substitute “ and that has not subsequently been transferred at market value by a duly stamped instrument on which ad valorem duty was paid and in respect of which group relief was not claimed ”.

(7) In the closing words of that sub-paragraph, for the words from “as if” to the end substitute “ as if the transferee had then ceased to be a member of the same group as the transferor company and had then held the estate or interest referred to in paragraph (b). ”.

(8) After that sub-paragraph insert—

(4) In sub-paragraph (3)(b) “relevant associated company”, in relation to the transferee company, means a company that is in the same group as the transferee company immediately before the transferee company ceases to be a member of the new group and which ceases to be a member of the new group in consequence of the transferee company so ceasing.

(9) This section applies to instruments executed after 14th April 2003.

(10) But this section does not apply to an instrument giving effect to a contract made on or before 9th April 2003, unless—

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or

(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract because of an assignment (or, in Scotland, assignation) or further contract made after that date.

(11) This section shall be deemed to have come into force on 15th April 2003.

Circumstances in which relief for company acquisitions withdrawn

127

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

128

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

Relief for certain leases granted before section 128 has effect

129

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

130

(1) This section applies to a lease in relation to which the following conditions are met—

(a) it is a lease of a dwelling to one or more individuals;

(b) it is for an indefinite term or is terminable by notice of a month or less;

(d) at the time it was executed the rate or average rate of the rent (whether reserved as a yearly rent or not) was £5,000 a year or less; and

(e) the landlord’s interest has at any time before 26th June 2003 been held by a registered social landlord.

(2) A lease to which this section applies (whether or not presented for stamping) shall be treated—

(a) for the purposes of section 14 of the Stamp Act 1891 (c. 39) (production of instrument in evidence) as it applies in relation to proceedings begun after the day on which this Act is passed, and

(b) for the purposes of section 17 of that Act (enrolment etc of instrument) as it applies to any act done after that day,

as if it had been duly stamped in accordance with the law in force at the time when it was executed.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) This section shall be construed as one with the Stamp Act 1891.

(8) The reference in subsection (1) above to the landlord’s interest being held by a “registered social landlord” is to its being held by a body that—

(a) is registered in a register maintained under—

(i) Article 124 of the Housing (Northern Ireland) Order 1981 (S.I. 1981/156 (N.I. 3)),

(ii) section 3(1) of the Housing Associations Act 1985 (c. 69),

(iii) Article 14 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15)),

(iv) section 1(1) of the Housing Act 1996 (c. 52), or

(v) section 57 of the Housing (Scotland) Act 2001 (asp 10), or

(b) is a body corporate whose objects correspond to those of a housing association and which, pursuant to a contract with Scottish Homes, is registered in a register kept for the purposes by Scottish Homes.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 6 — Income tax and corporation tax: charge and rate bands

Income tax

Charge and rates for 2003-04

131

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

Indexed rate bands for 2003-04: PAYE deductions etc

132

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

Corporation tax

Charge and main rate for financial year 2004

133

Corporation tax shall be charged for the financial year 2004 at the rate of 30%.

Small companies' rate and fraction for financial year 2003

134

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

Corporation tax starting rate and fraction for financial year 2003

135

For the financial year 2003—

(a) the corporation tax starting rate shall be 0%, and

(b) the fraction mentioned in section 13AA of the Taxes Act 1988 (marginal relief for small companies) shall be 19/400ths.

Part 7 — Income tax, corporation tax and capital gains tax: general

Provision of services through intermediary

136

(1) Chapter 8 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (provision of services through an intermediary) is amended as follows.

(2) In section 49(1)(a) (services to which the Chapter applies), for “for the purposes of a business carried on by another person” substitute “ for another person ”.

(3) In consequence of the above amendment—

(a) omit section 49(2) of that Act, and

(b) in section 56(7) of that Act—

(i) at the end of paragraph (a) insert “ , and ”, and

(ii) omit paragraph (c) and the word “and” preceding it.

(4) This section applies in relation to services performed or due to be performed on or after 10th April 2003.

Exemption where homeworker’s additional expenses met by employer

137

(1) In Part 4 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (employment income: exemptions), after section 316 insert—

(316A) (1) This section applies where an employer makes a payment to an employee in respect of reasonable additional household expenses which the employee incurs in carrying out duties of the employment at home under homeworking arrangements. (2) No liability to income tax arises in respect of the payment. (3) In this section, in relation to an employee— - “homeworking arrangements” means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home; and - “household expenses” means expenses connected with the day to day running of the employee’s home.

(2) This section applies to payments which the employer makes on or after 6th April 2003 in respect of expenses which the employee incurs on or after that date.

Taxable benefits: lower threshold for cars with a CO2 emissions figure

138

(1) In section 139 of the Income Tax (Earnings and Pensions) Act 2003 (cash equivalent of the benefit of a car: calculation of the appropriate percentage for a year for cars with a CO₂ emissions figure) the table in subsection (4) (which specifies the lower threshold for each year for the purposes of that calculation) is amended as follows.

(2) In the entry relating to 2004-05 and subsequent tax years omit “and subsequent tax years”.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In section 170(3) of that Act (power to provide by order for a lower threshold different from that specified in the table in section 139(4) to apply for tax years beginning on or after 6th April 2005) for “6th April 2005” substitute “ 6th April 2006 ”.

139

Schedule 21 to this Act (which contains amendments relating to share incentive plans, SAYE option schemes and CSOP schemes) has effect.

Employee securities and options

140

Schedule 22 to this Act (which makes provision about securities, and options to acquire securities, acquired by reason of employment) has effect.

141

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

Ending of relief for contributions to QUESTS

142

(1) Section 67 of the Finance Act 1989 (c. 26) (tax relief for contributions to trustees of qualifying employee share ownership trust) does not apply in relation to sums expended by a company in an accounting period of the company beginning on or after 1st January 2003.

(2) In section 69 of that Act (chargeable events)—

(a) the definitions in subsections (3AC) and (3AD) (by virtue of which certain transfers of shares by trustees of an employee share ownership trust to a SIP trust are not chargeable events) have effect in relation to 26th November 2002 as they had effect in relation to 20th March 2000;

(b) in relation to shares that are relevant shares by virtue of paragraph (a) above, subsection (3AB) (deemed order of disposal of shares) has effect as if the reference there to 21st March 2000 were to 27th November 2002; and

(3) In consequence of subsection (2), in paragraph 78(2)(b) of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (reference to section 69(3AA) of the Finance Act 1989) after “21st March 2000” insert “ or, by virtue of section 142(2) of the Finance Act 2003, 27th November 2002 ”.

Restriction of deductions for employee benefit contributions

143

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

PAYE on notional payments: reimbursement period

144

(1) In section 222(1)(c) of the Income Tax (Earnings and Pensions) Act 2003 (period within which employee must reimburse employer for amount to be accounted for to Inland Revenue in respect of income tax on notional payment), for “30 days” substitute “ 90 days ”.

(2) This section has effect in relation to payments of income treated as made on or after 9th April 2003.

PAYE: regulations and notional payments

145

(1) In the list in subsection (2) of section 684 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (PAYE regulations)—

(a) for item 2 substitute—

(1A) Provision— (a) for deductions to be made, if and to the extent that the payee does not object, with a view to securing that income tax payable in respect of any income of a payee for a tax year which is not PAYE income is deducted from PAYE income of the payee paid during that year; and (b) as to the circumstances and manner in which a payee may object to the making of deductions. (2) Provision— (a) for repayments or deductions to be made, if and to the extent that the payee does not object, in respect of any amounts overpaid or remaining unpaid (or treated as overpaid or remaining unpaid) on account of— (i) income tax in respect of income for a previous tax year, or (ii) capital gains tax in respect of chargeable gains for such a year; and (b) as to the circumstances in which repayments or deductions may be made, and the circumstances and manner in which a payee may object to the making of repayments or deductions.

;

(b) after item 4 insert —

(4A) Provision authorising the recovery from the payee rather than the payer of any amount that the Inland Revenue considers should have been deducted by the payer.

;

(7A) Provision for excluding payments of such description as may be specified from the operation of the regulations in such circumstances as may be specified. (8) Provision for the making of decisions by the Board or the Inland Revenue as to any matter required to be decided for the purposes of the regulations and for appeals against such decisions.

(2) After subsection (7) of that section insert—

(7A) Nothing in PAYE regulations may be read— (a) as preventing the making of arrangements for the collection of tax in such manner as may be agreed by, or on behalf of, the payer and the Inland Revenue, or (b) as requiring the payer to comply with the regulations in circumstances in which the Inland Revenue is satisfied that it is unnecessary or not appropriate for the payer to do so. (7B) References in this section and section 685 to income tax in respect of PAYE income are references to income tax in respect of that income if reasonable assumptions are (when necessary) made about other income. (7C) In this section and section 685— “payer” means any person paying PAYE income and “payee” means any person in receipt of such income; “specified” means specified in PAYE regulations.

(3) In subsection (2) of section 685 of that Act (tax tables), for paragraph (b) substitute—

(b) subject to an adjustment in respect of amounts required to be deducted or repaid by PAYE regulations made under item 1A or 2 in the list in section 684(2).

(4) After subsection (3) of that section insert—

(4) PAYE regulations may make provision, where it appears to the Inland Revenue that it is impracticable for a payer to deduct tax by reference to tax tables— (a) for deductions to be made by the payer in accordance with other arrangements agreed as mentioned in section 684(7A)(a), or (b) for the payee to be required to keep records and make payments and returns as if he were the payer.

(5) In section 707 of that Act (interpretation of Chapter 5 of Part 11), in the definition of “employment”, for “this section” substitute “ this Chapter ”.

(6) In section 710 of that Act (notional payments: accounting for tax)—

(a) in subsections (1) and (4), after “must” insert “ , subject to and in accordance with PAYE regulations, ”;

(b) in subsection (5)(b) and (c), for “accounted for” substitute “ deducted or accounted for (or required to be deducted or accounted for) ”; and

(c) in subsection (6), for “an amount which” substitute “ an amount of tax which ” and for “is paid by the employee” substitute “ is deducted ”.

(7) Substitute “ PAYE regulations ”

(a) for “the said section 203” in subsection (8) of section 59A of the Taxes Management Act 1970 (c. 9) (payments on account of income tax); and

(b) for “that section” in subsection (10) of that section and subsections (2) and (8) of section 59B of that Act (payments of income tax and capital gains tax).

Payroll giving: extension of 10% supplement to 5th April 2004

146

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

Sub-contractor deductions etc: interest on late payment or repayment

147

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In the Social Security Contributions and Benefits Act 1992 (c. 4) and the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), in paragraph 6 of Schedule 1 (power to combine collection of national insurance contributions with tax) after sub-paragraph (4A) insert—

(4B) Interest required to be paid, by virtue of sub-paragraph (2)(a) or (b) above, by regulations under sub-paragraph (1) above shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes.

(3) In section 22 of the Teaching and Higher Education Act 1998 (c. 30) (student loans), after subsection (9) insert—

(10) Interest required to be paid, by virtue of subsection (5)(d), by regulations under this section shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes.

(4) In Article 3 of the Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14)) (student loans), after paragraph (9) insert—

(10) Interest required to be paid, by virtue of paragraph (5)(d), by regulations under this Article shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes.

(5) In its application to the computation of income, profits or losses for an accounting period (in the case of a company) or a year of assessment (in the case of a person who is not a company), this section has effect in relation to—

(a) accounting periods ending on or after 9th April 2003, or

(b) 2003-04 and subsequent years of assessment.

Meaning of “permanent establishment”

148

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

Non-resident companies: basis of charge to corporation tax

149

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) After section 10A of the Taxation of Chargeable Gains Act 1992 (c. 12) insert—

(10B) (1) Subject to any exceptions provided by this Act, the chargeable profits for the purposes of corporation tax of a company not resident in the United Kingdom but carrying on a trade in the United Kingdom through a permanent establishment there include chargeable gains accruing to the company on the disposal of— (a) assets situated in the United Kingdom and used in or for the purposes of the trade at or before the time the gain accrued, or (b) assets situated in the United Kingdom and used or held for the purposes of the permanent establishment at or before the time the gain accrued or acquired for use by or for the purposes of the permanent establishment. (2) Subsection (1) does not apply unless the disposal is made at a time when the company is carrying on a trade in the United Kingdom through a permanent establishment there. (3) This section does not apply to a company that, by virtue of Part 18 of the Taxes Act (double taxation relief arrangements), is exempt from corporation tax for the chargeable period in respect of the profits of the permanent establishment. (4) In this section “trade” has the meaning given by section 6(4)(b) of the Taxes Act.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) This section has effect in relation to accounting periods (of the non-resident company) beginning on or after 1st January 2003, and regulations under section 11AA(5) of the Taxes Act 1988 (inserted by subsection (2) above) may be made so as to have effect from that date.

Non-resident companies: assessment, collection and recovery of corporation tax

150

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

Non-resident companies: extent of charge to income tax

151

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

Non-resident companies: transactions carried out through broker, investment manager or Lloyd’s agent

152

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

General replacement of references to branch or agency of company

153

(1) In the following provisions (which relate only to companies) for “branch or agency” or “branches or agencies”, wherever occurring, substitute “ permanent establishment ” or “ permanent establishments ”.

The provisions are—

(a) in the Taxes Act 1988, sections ..., ... ... 442(1), ... ..., 748A(1)(c) and (2), ...; in Schedule 15, paragraphs 17(3)(c) and 25(2)(c); ... in Schedule 24, paragraphs 1 and 8; and in Schedule 25, paragraphs 6(2A) and (2C), 8 and 11(3);

(b) in the Taxation of Chargeable Gains Act 1992 (c. 12), sections 140(1), 140C(1)(a), 173(3)(b), 175(1A)(b), 185(4) and 213(5A);

(d) in the Capital Allowances Act 2001 (c. 2), sections 560(2) and 561(1)(c);

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In the following provisions (which relate to companies and other persons), any reference to a branch or agency shall be read, in relation to a company, as a reference to a permanent establishment.

The provisions are—

(a) in the Taxes Act 1988, sections ... ... 806K(1)... ......;

(b) in the Taxation of Chargeable Gains Act 1992, sections 25(2), (3) and (5), 80(4)(a) and (b) and (7)(b), 199(2) and (4) and 276(7);

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Any reference to a branch or agency—

(a) in subordinate legislation made under an enactment contained in the Tax Acts or relating to chargeable gains, or

(b) that is to be construed as having the same meaning as in any such enactment,

shall be read, in relation to a company, as a reference to a permanent establishment.

“Subordinate legislation” here has the same meaning as in the Interpretation Act 1978 (c. 30).

(4) This section has effect in relation to accounting periods beginning on or after 1st January 2003.

Double taxation relief: profits attributable to overseas permanent establishment

154

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

Consequential amendments

155

(1) Schedule 27 to this Act provides for amendments consequential on the provisions of sections 148 to 153.

(2) The amendments made by that Schedule have effect in relation to accounting periods beginning on or after 1st January 2003.

Overseas life insurance companies

156

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

Chargeable gains

Life insurance policies and deferred annuity contracts

157

(1) For section 210 of the Taxation of Chargeable Gains Act 1992 (c. 12) substitute—

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