Finance Act 2007

• (6) In paragraph 14 (transfer of interest in property-investment partnership)—

• (a) omit sub-paragraphs (1)(b) and (4), and

• (b) insert at the end—

(9) An interest in respect of the transfer of which this paragraph applies shall be treated as a chargeable interest for the purposes of paragraph 3(1) of Schedule 7 to the extent that the relevant partnership property consists of a chargeable interest.

,

and in the italic cross-heading before it, omit “for consideration”.

• (7) In Step Two of paragraph 20(1) (transfer from partnership: how to calculate the “sum of the lower proportions”)—

• (a) in paragraph (b), for “or was connected with the relevant owner” substitute “ or was an individual connected with the relevant owner ”, and

• (b) insert at the end— “ (If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.) ”

• (8) In paragraph 20, after sub-paragraph (2) insert—

(3) For the purpose of paragraph (b) of Step 2 a company is to be treated as an individual connected with the relevant owner in so far as it— (a) holds property as trustee, and (b) is connected with the relevant owner only because of section 839(3) of the Taxes Act 1988.

• (9) After paragraph 27 insert—

(27A) (1) This paragraph applies where in calculating the sum of the lower proportions in relation to a transaction (in accordance with paragraph 12)— (a) a company (“the connected company”) would have been a corresponding partner of a relevant owner (“the original owner”) but for the fact that paragraph (b) of Step Two includes connected persons only if they are individuals, and (b) the connected company and the original owner are members of the same group. (2) The charge in respect of the transaction shall be reduced to the amount that would have been payable had the connected company been a corresponding partner of the original owner for the purposes of calculating the sum of the lower proportions. (3) The provisions of Part 1 of Schedule 7 apply to group relief under sub-paragraph (2) above as to group relief under paragraph 1(1) of Schedule 7, but— (a) with the omission of paragraph 2(2)(a), (b) with the substitution for “the purchaser” in paragraph 3(1)(a) of “a partner who was, at the effective date of the transaction, a partner and a member of the same group as the transferor (“the relevant partner”)”, and (c) with the other modifications specified in paragraph 27(3) to (6) above.

• (10) For paragraph 36 substitute—

(36) For the purposes of this Part of this Schedule, where a person acquires or increases a partnership share there is a transfer of an interest in the partnership (to that partner and from the other partners).

• (11) In paragraph 39 (“connected persons”), insert at the end—

(3) As applied by sub-paragraph (1) for the purposes of paragraph 12 or 20, that section has effect with the omission of subsection (3)(c) (trustee connected with settlement).

• (12) In Schedule 16 to FA 2003 (trusts and powers)—

• (a) in paragraph 3(1) (bare trust), after “a chargeable interest” insert “ or an interest in a partnership ”, and

• (b) in paragraph 4 (trustees of settlement), after “a chargeable interest” insert “ or an interest in a partnership ”.

• (13) The amendments made by subsections (1) to (11) have effect in respect of transfers occurring on or after the day on which this Act is passed.

• (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (15) The amendment made by subsection (12) has effect in respect of acquisitions occurring on or after the day on which this Act is passed.

• (16) An amendment made by this section replaces, to the extent provided for by subsections (13) to (15), any variation made by the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (S.I. 2006/3237).

• (17) Despite subsections (13) to (16), the transitional provisions of sub-paragraphs (8) to (10) of paragraph 2 of the Schedule to the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (S.I. 2006/3237) continue to have effect in relation to the amendments made by this section as in relation to that paragraph.

Reliefs in relation to shares etc

Exemptions: intermediaries, repurchases etc

73

Schedule 21 contains provision in relation to exemptions from stamp duty and stamp duty reserve tax in cases involving intermediaries, repurchases, stock lending or recognised investment exchanges.

Acquisition relief: disregard of company holding own shares

74

• (1) In section 75 of FA 1986 (relief on acquisition of undertaking of company in pursuance of scheme for reconstruction of that company), after subsection (5) insert—

(5A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsections (4) and (5) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

• (2) In section 77 of that Act (relief on acquisition of target company's share capital), after subsection (3) insert—

(3A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsection (3) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

• (3) In Part 2 of Schedule 7 to FA 2003 (SDLT: reconstruction and acquisition reliefs), in paragraph 7 (reconstruction relief) after sub-paragraph (5) insert—

(5A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of sub-paragraphs (2) and (4) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

• (4) The amendments made by subsections (1) and (2) have effect in relation to any instrument executed on or after the day on which this Act is passed.

• (5) The amendment made by subsection (3) has effect in relation to any land transaction of which the effective date is on or after that day.

Other reliefs etc

SDLT: alternative finance arrangements

75

• (1) In FA 2003, after section 73A insert—

(73B) (1) An interest held by a financial institution as a result of the first transaction within the meaning of section 71A(1)(a), 72(1)(a) or 72A(1)(a) is an exempt interest for the purposes of stamp duty land tax. (2) That interest ceases to be an exempt interest if— (a) the lease or agreement mentioned in section 71A(1)(c), 72(1)(b) or 72A(1)(b) ceases to have effect, or (b) the right under section 71A(1)(d), 72(1)(c) or 72A(1)(c) ceases to have effect or becomes subject to a restriction. (3) Subsection (1) does not apply if the first transaction is exempt from charge by virtue of Schedule 7. (4) Subsection (1) does not make an interest exempt in respect of— (a) the first transaction itself, or (b) a further transaction or third transaction within the meaning of section 71A(4), 72(4) or 72A(4).

• (2) In section 48 of that Act (stamp duty land tax: exempt interests), after subsection (3) insert—

(3A) Section 73B makes additional provision about exempt interests in relation to alternative finance arrangements.

• (3) For the text of sections 71A(8), 72(7), 72A(8) and 73(5)(a) of that Act (alternative finance arrangements: meaning of “financial institution”), substitute “ In this section “financial institution” has the meaning given by section 46 of the Finance Act 2005 (alternative finance arrangements). ”

• (4) The amendments made by this section—

• (a) have effect in relation to anything that would, but for the exemption provided by new section 73B inserted by subsection (1) above, be a land transaction with an effective date on or after 22nd March 2007, and

• (b) apply, in accordance with paragraph (a), to interests irrespective of the date of their creation.

SDLT: exchanges

76

• (1) In section 47(1) of FA 2003 (exchanges), insert at the end “ (and they are not linked transactions within the meaning of section 108) ”.

• (2) In section 108 of that Act (linked transactions), insert at the end—

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

• (3) The amendments made by this section have effect in relation to a set of land transactions if the effective date of any of them is on or after the day on which this Act is passed.

SDLT: shared ownership trusts

77

• (1) In Schedule 9 to FA 2003 (right to buy and shared ownership leases), insert at the end—

(7) (1) In this Schedule “shared ownership trust” means a trust of land, within the meaning of section 1 of the Trusts of Land and Appointment of Trustees Act 1996, which satisfies the following conditions. (2) Condition 1 is that the trust property is— (a) a dwelling, and (b) in England or Wales. (3) Condition 2 is that one of the beneficiaries (“the social landlord”) is a qualifying body (within the meaning of paragraph 5(2)). (4) Condition 3 is that the terms of the trust— (a) provide for one or more of the individual beneficiaries (“the purchaser”) to have exclusive use of the trust property as the only or main residence of the purchaser, (b) require the purchaser to make an initial payment to the social landlord (“the initial capital”), (c) require the purchaser to make additional payments to the social landlord by way of compensation under section 13(6)(a) of the Trusts of Land and Appointment of Trustees Act 1996 (“rent-equivalent payments”), (d) enable the purchaser to make other additional payments to the social landlord (“equity-acquisition payments”), (e) determine the initial beneficial interests of the social landlord and of the purchaser by reference to the initial capital, (f) specify a sum, equating or relating to the market value of the dwelling, by reference to which the initial capital was calculated, and (g) provide for the purchaser's beneficial interest in the trust property to increase, and the social landlord's to diminish (or to be extinguished), as equity-acquisition payments are made. (5) Section 118 (meaning of “market value”) does not apply to this paragraph. (6) In Condition 1 “dwelling” includes— (a) a building which is being constructed or adapted for use as a dwelling, (b) land which is to be used for the purpose of the construction of a dwelling, and (c) land which is, or is to become, the garden or grounds of a dwelling. (8) For the purposes of the application of stamp duty land tax in relation to a shared ownership trust, the person (or persons) identified as the purchaser in accordance with paragraph 7, and not the social landlord or any other beneficiary, is (or are) to be treated as the purchaser of the trust property. (9) (1) This paragraph applies where— (a) a shared ownership trust is declared, and (b) the purchaser elects for tax to be charged in accordance with this paragraph. (2) An election must be included in— (a) the land transaction return for the declaration of the shared ownership trust, or (b) an amendment of that return. (3) An election may not be revoked. (4) Where this paragraph applies— (a) the chargeable consideration for the declaration of the shared ownership trust shall be taken to be the amount stated in accordance with paragraph 7(4)(f), and (b) no account shall be taken for the purposes of stamp duty land tax of rent-equivalent payments. (5) The transfer to the purchaser of an interest in the trust property upon the termination of the trust is exempt from charge if— (a) an election was made under this paragraph, and (b) any tax chargeable in respect of the declaration of the shared ownership trust has been paid. (10) (1) An equity-acquisition additional payment under a shared ownership trust, and the consequent increase in the purchaser's beneficial interest, shall be exempt from charge if— (a) an election was made under paragraph 9, and (b) any tax chargeable in respect of the declaration of trust has been paid. (2) An equity-acquisition additional payment under a shared ownership trust, and the consequent increase in the purchaser's beneficial interest, shall also be exempt from charge if following the increase the purchaser's beneficial interest does not exceed 80% of the total beneficial interest in the trust property. (11) Where no election has been made under paragraph 9 in respect of a shared ownership trust— (a) the initial capital shall be treated for the purposes of stamp duty land tax as chargeable consideration other than rent, and (b) any rent-equivalent additional payment by the purchaser shall be treated for the purposes of stamp duty land tax as a payment of rent.

• (2) The amendment made by subsection (1) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed.

SDLT: shared ownership lease

78

In paragraph 2 of Schedule 9 to FA 2003 (stamp duty land tax: shared ownership lease), after sub-paragraph (4) insert—

(4A) Where this paragraph applies no account shall be taken for the purposes of stamp duty land tax of the rent mentioned in sub-paragraph (2)(d).

Certain transfers of school land

79

• (1) In Chapter 7 of Part 2 of the School Standards and Framework Act 1998 (c. 31) (“the 1998 Act”) (new framework for maintained schools), omit sections 79 and 79A (no stamp duty or SDLT payable in respect of certain transfers).

• (2) The repeal of—

• (a) section 79A of the 1998 Act, and

• (b) section 79 of that Act as it applies for the purposes of section 79A,

has effect in relation to any land transaction of which the effective date is on or after the day on which this Act is passed.

• (3) Subject to that, the repeal of section 79 of the 1998 Act has effect in relation to any instrument executed on or after that day.

SDLT: administration

Payment of tax

80

• (1) FA 2003 is amended as follows.

• (2) In section 76(3) (payment to accompany land transaction return), omit paragraph (b).

• (3) In section 80(2) (adjustment for change of circumstance: payment to accompany return), for paragraph (d) substitute—

(d) the tax or additional tax payable must be paid not later than the filing date for the return.

• (4) In section 81 (withdrawal of relief: further return)—

• (a) in subsection (2), omit paragraph (b), and

• (b) after that subsection insert—

(2A) Tax payable must be paid not later than the filing date for the return.

• (5) In section 81A(1) (later linked transaction: return), for paragraph (d) substitute—

(d) the tax or additional tax payable must be paid not later than the filing date for the return.

• (6) In section 86 (payment of tax)—

• (a) in subsection (1), for “at the same time that a land transaction return is made in respect of the transaction.” substitute “ not later than the filing date for the land transaction return relating to the transaction. ”, and

• (b) in subsection (2), for “at the same time that a return is made in respect of the withdrawal” substitute “ not later than the filing date for the return relating to the withdrawal ”.

• (7) In paragraph 2 of Schedule 10 (payment to accompany land transaction return), omit sub-paragraph (2)(b).

• (8) For each of paragraphs 3(3)(d), 4(3)(d) and 8(3)(d) of Schedule 17A (leases) substitute—

(d) the tax or additional tax payable must be paid not later than the filing date for the return.

• (9) The amendments made by this section have effect as follows—

• (a) the amendment made by subsection (2) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed,

• (b) the amendment made by subsection (3) has effect in relation to returns where the event as a result of which the return is required occurs on or after the day on which this Act is passed,

• (c) the amendment made by subsection (4) has effect in relation to returns where the disqualifying event occurs on or after the day on which this Act is passed,

• (d) the amendment made by subsection (5) has effect in relation to returns where the effective date of the later transaction is on or after the day on which this Act is passed,

• (e) the amendment made by subsection (6) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed,

• (f) the amendment made by subsection (7) has effect in relation to land transactions with an effective date on or after the day on which this Act is passed, and

• (g) the amendment made by subsection (8) has effect in respect of requirements to deliver a return or further return which arise on or after the day on which this Act is passed.

Self-certificate declarations

81

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

Part 6 — Investigation, administration etc

Investigation etc

Criminal investigations: powers of Revenue and Customs

82

• (1) Section 114 of the Police and Criminal Evidence Act 1984 (c. 60) (application of Act to customs and excise) is amended as follows.

• (2) In paragraph (a) of subsection (2)—

• (a) for “investigations conducted by officers of Customs and Excise of offences which relate to assigned matters, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ investigations conducted by officers of Revenue and Customs ”, and

• (b) for “persons detained by officers of Customs and Excise;” substitute “ persons detained by officers of Revenue and Customs; ”.

• (3) In the opening words of paragraph (b) of that subsection, for “investigations of offences conducted by officers of Customs and Excise” substitute “ investigations of offences conducted by officers of Revenue and Customs ”.

• (4) In sub-paragraph (i) of that paragraph, for “section” substitute “ sections ”.

• (5) In the section 14A deemed to be inserted by that sub-paragraph—

• (a) for “and which relates to an assigned matter, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ and which relates to a matter in relation to which Her Majesty's Revenue and Customs have functions, ” and

• (b) in the heading, for “Customs and Excise” substitute “ Revenue and Customs ”.

• (6) After that section insert—

(14B) (1) An officer of Revenue and Customs may make an application for the delivery of, or access to, documents under a provision specified in subsection (3) only if the condition in subsection (2) is satisfied. (2) The condition is that the officer thinks that an application under Schedule 1 would not succeed because the material required does not consist of or include special procedure material. (3) The provisions are— (a) section 20BA of, and Schedule 1AA to, the Taxes Management Act 1970 (serious tax fraud); (b) paragraph 11 of Schedule 11 to the Value Added Tax Act 1994 (VAT); (c) paragraph 4A of Schedule 7 to the Finance Act 1994 (insurance premium tax); (d) paragraph 7 of Schedule 5 to the Finance Act 1996 (landfill tax); (e) paragraph 131 of Schedule 6 to the Finance Act 2000 (climate change levy); (f) paragraph 8 of Schedule 7 to the Finance Act 2001 (aggregates levy); (g) Part 6 of Schedule 13 to the Finance Act 2003 (stamp duty land tax).

• (7) In paragraph (c) of subsection (2)—

• (a) for “customs detention” substitute “ Revenue and Customs detention ”, and

• (b) for “an officer of Customs and Excise” substitute “ an officer of Revenue and Customs ”.

• (8) After that paragraph insert—

(d) that where an officer of Revenue and Customs searches premises in reliance on a warrant under section 8 of, or paragraph 12 of Schedule 1 to, this Act (as applied by an order under this subsection) the officer shall have the power to search persons found on the premises— (i) in such cases and circumstances as are specified in the order, and (ii) subject to any conditions specified in the order; and (e) that powers and functions conferred by a provision of this Act (as applied by an order under this subsection) may be exercised only by officers of Revenue and Customs acting with the authority (which may be general or specific) of the Commissioners for Her Majesty's Revenue and Customs.

• (9) After that subsection insert—

(2A) A certificate of the Commissioners that an officer of Revenue and Customs had authority under subsection (2)(e) to exercise a power or function conferred by a provision of this Act shall be conclusive evidence of that fact.

• (10) For subsection (3) substitute—

(3) An order under subsection (2)— (a) may make provision that applies generally or only in specified cases or circumstances, (b) may make different provision for different cases or circumstances, (c) may, in modifying a provision, in particular impose conditions on the exercise of a function, and (d) shall not be taken to limit a power under section 164 of the Customs and Excise Management Act 1979.

• (11) The heading of section 114 accordingly becomes “ Application of Act to Revenue and Customs ”.

Northern Ireland criminal investigations

83

• (1) Article 85 of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)) (application of Order to customs and excise) is amended as follows.

• (2) In sub-paragraph (a) of paragraph (1)—

• (a) for “investigations conducted by officers of Customs and Excise of offences which relate to assigned matters, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ investigations conducted by officers of Revenue and Customs ”, and

• (b) for “persons detained by officers of Customs and Excise;” substitute “ persons detained by officers of Revenue and Customs; ”.

• (3) In the opening words of sub-paragraph (b) of that paragraph, for “investigations of offences conducted by officers of Customs and Excise” substitute “ investigations of offences conducted by officers of Revenue and Customs ”.

• (4) In paragraph (i) of that sub-paragraph, for “Article” substitute “ Articles ”.

• (5) In the Article 16A deemed to be inserted by that paragraph—

• (a) for “and which relates to an assigned matter, as defined in section 1 of the Customs and Excise Management Act 1979,” substitute “ and which relates to a matter in relation to which Her Majesty's Revenue and Customs have functions, ” and

• (b) in the heading, for “Customs and Excise” substitute “ Revenue and Customs ”.

• (6) After that Article insert—

(16B) (1) An officer of Revenue and Customs may make an application for the delivery of, or access to, documents under a provision specified in paragraph (3) only if the condition in paragraph (2) is satisfied. (2) The condition is that the officer thinks that an application under Schedule 1 would not succeed because the material required does not consist of or include special procedure material. (3) The provisions are— (a) section 20BA of, and Schedule 1AA to, the Taxes Management Act 1970 (serious tax fraud); (b) paragraph 11 of Schedule 11 to the Value Added Tax Act 1994 (VAT); (c) paragraph 4A of Schedule 7 to the Finance Act 1994 (insurance premium tax); (d) paragraph 7 of Schedule 5 to the Finance Act 1996 (landfill tax); (e) paragraph 131 of Schedule 6 to the Finance Act 2000 (climate change levy); (f) paragraph 8 of Schedule 7 to the Finance Act 2001 (aggregates levy); (g) Part 6 of Schedule 13 to the Finance Act 2003 (stamp duty land tax).

• (7) After sub-paragraph (b) of paragraph (1) insert—

(c) that where an officer of Revenue and Customs searches premises in reliance on a warrant under Article 10 of, or paragraph 9 of Schedule 1 to, this Order (as applied by an order under this paragraph) the officer shall have the power to search persons found on the premises— (i) in such cases and circumstances as are specified in the order, and (ii) subject to any conditions specified in the order; and (d) that powers and functions conferred by a provision of this Order (as applied by an order under this paragraph) may be exercised only by officers of Revenue and Customs acting with the authority (which may be general or specific) of the Commissioners for Her Majesty's Revenue and Customs.

• (8) After that paragraph insert—

(1A) A certificate of the Commissioners that an officer of Revenue and Customs had authority under paragraph (1)(d) to exercise a power or function conferred by a provision of this Order shall be conclusive evidence of that fact.

• (9) For paragraph (2) substitute—

(2) An order under paragraph (1)— (a) may, in modifying a provision, in particular impose conditions on the exercise of a function, and (b) shall not be taken to limit a power under section 164 of the Customs and Excise Management Act 1979.

• (10) The heading of Article 85 accordingly becomes “ Application of Order to Revenue and Customs ”.

Sections 82 and 83: supplementary

84

• (1) In Schedule 2 to CRCA 2005 (restrictions on the exercise of functions), omit—

• (a) paragraph 7 (Police and Criminal Evidence Act 1984 (c. 60)), and

• (b) paragraph 9 (Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12))).

• (2) Nothing in section 6 or 7 of CRCA 2005 (initial functions) restricts the functions in connection with which officers of Revenue and Customs may exercise a power under—

• (a) the Police and Criminal Evidence Act 1984 by virtue of section 114 of that Act (as amended by section 82 above), or

• (b) the Police and Criminal Evidence (Northern Ireland) Order 1989 by virtue of Article 85 of that Order (as amended by section 83 above).

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

• (4) Schedule 22 contains amendments and repeals consequential on extension of police powers to Revenue and Customs.

• (5) Sections 82 and 83 and this section come into force in accordance with provision made by the Treasury by order.

• (6) The power to make an order under subsection (5) is exercisable by statutory instrument.

Criminal investigations: Scotland

85

Schedule 23 contains provision for Scotland about the investigation of offences by Her Majesty's Revenue and Customs.

Search warrants

86

In section 8 of the Police and Criminal Evidence Act 1984, after subsection (6) insert—

(7) Section 4 of the Summary Jurisdiction (Process) Act 1881 (execution of process of English courts in Scotland) shall apply to a warrant issued on the application of an officer of Revenue and Customs under this section by virtue of section 114 below.

Cross-border exercise of powers

87

• (1) This section relates to the Criminal Justice and Public Order Act 1994 (c. 33).

• (2) Sections 136 to 139 (execution of warrants and powers of arrest and search) shall apply to an officer of Revenue and Customs as they apply to a constable; and for that purpose—

• (a) a reference to a constable (including a reference to a constable of a police force in England and Wales, a constable of a police force in Scotland or a constable of a police force in Northern Ireland) shall be treated as a reference to an officer of Revenue and Customs, and

• (b) a reference to a police station, or a designated police station, includes a reference to an office of Revenue and Customs or (in England and Wales and Northern Ireland) a designated office of Revenue and Customs.

• (2A) In the application of section 137C where a person is arrested under section 137A by an officer of Revenue and Customs in respect of a specified offence that is being investigated by an officer of Revenue and Customs—

• (a) subsection (2)(b) is to be read as if (instead of requiring the detention to be authorised by both an officer of at least the rank of inspector in the arresting force and an officer of at least the rank of inspector in the investigating force) it required the detention to be authorised by an officer of Revenue and Customs of at least the grade equivalent to the rank of inspector;

• (b) subsection (2)(c) is to be read as if (instead of requiring the detention to be authorised by both an officer of a rank above that of inspector in the arresting force and an officer of a rank above that of inspector in the investigating force) it required the detention to be authorised by an officer of Revenue and Customs of a grade above that equivalent to the rank of inspector;

• (c) subsection (3) is omitted;

• (d) in subsections (4) and (5), the reference to an officer of the investigating force is to be read as a reference to an officer of Revenue and Customs;

• (e) in subsection (6), the reference to an appropriate officer in the investigating force is to be read as a reference to an appropriate officer of Revenue and Customs (as defined by subsection (7));

• (f) subsection (6)(a) is omitted;

• (g) in subsection (7)(b), the reference to an officer of at least the rank of inspector is to be read as a reference to an officer of Revenue and Customs of at least the equivalent grade;

• (h) in subsection (7)(c), the reference to an officer of a rank above that of inspector is to be read as a reference to an officer of Revenue and Customs of above the equivalent grade;

• (i) subsections (8) to (10) are omitted.

• (2B) Where section 137C applies in accordance with subsection (2A), Schedule 7B applies with the following modifications—

• (a) any reference to a constable in the arresting force is to be read as a reference to an officer of Revenue and Customs;

• (b) any reference to an officer of at least, or above, a particular rank in the investigating force is to be read as a reference to an officer of Revenue and Customs of at least, or above, the equivalent grade;

• (c) any reference to the arresting force or to the investigating force (otherwise than in relation to a description of officer in the force) is to be read as a reference to officers of Revenue and Customs;

• (d) instead of the modification made by paragraph 9, section 42 of the Criminal Justice (Scotland) Act 2016 is to be read as if the references in subsections (1)(c)(ii) and (3)(b) to the police were references to officers of Revenue and Customs;

• (e) the Schedule is to be read as if it also provided for references in the provisions applied by section 137D(2)(d), (3)(d) and (4)(d) to a police station to include references to an office of Revenue and Customs.

• (2C) In the application of section 137C where a person is arrested under section 137A by an officer of Revenue and Customs in respect of a specified offence other than one that is being investigated by an officer of Revenue and Customs—

• (a) any reference to an officer of at least, or above, the rank of inspector in the arresting force is to be read as a reference to an officer of Revenue and Customs of at least, or above, the equivalent grade;

• (b) the reference in subsection (6)(a) to the arresting force is to be read as a reference to any officer of Revenue and Customs.

• (2D) Where section 137C applies in accordance with subsection (2C), Schedule 7B applies with the following modifications—

• (a) any reference to a constable in the arresting force is to be read as a reference to an officer of Revenue and Customs;

• (b) any reference to the arresting force (otherwise than in relation to a description of officer in the force) is to be read as a reference to officers of Revenue and Customs;

• (c) instead of the modification made by paragraph 9, section 42 of the Criminal Justice (Scotland) Act 2016 is to be read as if the references in subsections (1)(c)(ii) and (3)(b) to the police were references to officers of Revenue and Customs;

• (d) the Schedule is to be read as if it also provided for references in the provisions applied by section 137D(2)(d), (3)(d) and (4)(d) to a police station to include references to an office of Revenue and Customs.

• (2E) In the application of those sections to an officer of Revenue and Customs—

• (a) sections 136(4B) and 137(7B) apply with the omission of the words from “and, if the constable” to the end;

• (b) section 137ZA applies with the omission of subsection (6).

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

• (4) An officer of Revenue and Customs may exercise a power under sections 136 to 139 in the exercise of any function of the Commissioners for Her Majesty's Revenue and Customs or of officers of Revenue and Customs, within the meaning of the Commissioners for Revenue and Customs Act 2005 (see section 51(2) to (2B) of that Act) .

• (5) In subsection (2)—

• “office of Revenue and Customs” means premises wholly or partly occupied by Her Majesty's Revenue and Customs, and

• “designated office of Revenue and Customs” has the meaning given by an order under section 114 of the Police and Criminal Evidence Act 1984 (c. 60) (power to extend provisions to HMRC) or, in Northern Ireland, by an order under Article 85 of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)) (power to extend Order to HMRC).

• (6) In section 136, after subsection (8) insert—

(9) Powers under this section and sections 137 to 139 may be exercised by an officer of Revenue and Customs in accordance with section 87 of the Finance Act 2007.

Filing dates

Personal tax returns

88

• (1) Section 8 of TMA 1970 (personal tax return) is amended as follows.

• (2) In subsection (1)(a), omit “, on or before the day mentioned in subsection (1A) below”.

• (3) Omit subsection (1A).

• (4) After subsection (1C) insert—

(1D) A return under this section for a year of assessment (Year 1) must be delivered— (a) in the case of a non-electronic return, on or before 31st October in Year 2, and (b) in the case of an electronic return, on or before 31st January in Year 2. (1E) But subsection (1D) is subject to the following two exceptions. (1F) Exception 1 is that if a notice in respect of Year 1 is given after 31st July in Year 2 (but on or before 31st October), a return must be delivered— (a) during the period of 3 months beginning with the date of the notice (for a non-electronic return), or (b) on or before 31st January (for an electronic return). (1G) Exception 2 is that if a notice in respect of Year 1 is given after 31st October in Year 2, a return (whether electronic or not) must be delivered during the period of 3 months beginning with the date of the notice. (1H) The Commissioners— (a) shall prescribe what constitutes an electronic return, and (b) may make different provision for different cases or circumstances.

Trustee’s tax return

89

• (1) Section 8A of TMA 1970 (trustee's tax return) is amended as follows.

• (2) In subsection (1)(a), omit “, on or before the day mentioned in subsection (1A) below”.

• (3) Omit subsection (1A).

• (4) After subsection (1AA) insert—

(1B) A return under this section for a year of assessment (Year 1) must be delivered— (a) in the case of a non-electronic return, on or before 31st October in Year 2, and (b) in the case of an electronic return, on or before 31st January in Year 2. (1C) But subsection (1B) is subject to the following two exceptions. (1D) Exception 1 is that if a notice in respect of Year 1 is given after 31st July in Year 2 (but on or before 31st October), a return must be delivered— (a) during the period of 3 months beginning with the date of the notice (for a non-electronic return), or (b) on or before 31st January (for an electronic return). (1E) Exception 2 is that if a notice in respect of Year 1 is given after 31st October in Year 2, a return (whether electronic or not) must be delivered during the period of 3 months beginning with the date of the notice. (1F) The Commissioners— (a) shall prescribe what constitutes an electronic return, and (b) may make different provision for different cases or circumstances.

Partnership tax returns

90

• (1) In section 12AA of TMA 1970, for subsection (4) (partnership return: filing date) substitute—

(4) In the case of a partnership which includes one or more individuals, a notice under subsection (2) or (3) above may specify different days depending on whether a return in respect of a year of assessment (Year 1) is electronic or non-electronic. (4A) The day specified for a non-electronic return must not be earlier than 31st October of Year 2. (4B) The day specified for an electronic return must not be earlier than 31st January of Year 2. (4C) But subsections (4A) and (4B) are subject to the following two exceptions. (4D) Exception 1 is that if the notice is given after 31st July in Year 2 (but on or before 31st October)— (a) the day specified for a non-electronic return must be after the end of the period of three months beginning with the date of the notice, and (b) the day specified for an electronic return must not be earlier than 31st January. (4E) Exception 2 is that if the notice is given after 31st October in Year 2, the day specified for a return (whether or not electronic) must be after the end of the period of three months beginning with the date of the notice.

• (2) For subsection (5) of that section (partnership return where a company is a partner: filing date) substitute—

(5) In the case of a partnership which includes one or more companies, a notice may specify different dates depending on whether a notice in respect of a relevant period is electronic or non-electronic. (5A) The day specified for a non-electronic return must not be earlier than the end of the period of nine months beginning at the end of the relevant period. (5B) The day specified for an electronic return must not be earlier than the first anniversary of the end of the relevant period. (5C) But where the notice is given more than nine months after the end of the relevant period, the day specified for a return (whether or not electronic) must be after the end of the period of three months beginning with the date of the notice. (5D) For the purposes of this section “relevant period” means the period in respect of which the return is required. (5E) The Commissioners— (a) shall prescribe what constitutes an electronic return for the purposes of this section, and (b) may make different provision for different cases or circumstances.

Consequential amendments

91

• (1) In section 9(2) of TMA 1970 (returns to include self-assessment)—

• (a) in paragraph (a), for “30th September” substitute “ 31st October ”, and

• (b) in paragraph (b), for “31st July” substitute “ 31st August ”.

• (2) In section 9ZA of TMA 1970 (amendment of personal or trustee return), for subsection (3) substitute—

(3) In this section “the filing date”, in respect of a return for a year of assessment (Year 1), means— (a) 31st January of Year 2, or (b) if the notice under section 8 or 8A is given after 31st October of Year 2, the last day of the period of three months beginning with the date of the notice.

• (3) In section 9A(6) of TMA 1970 (notice of enquiry: “the filing date”), for the words from “means” to the end substitute “ means, in relation to a return, the last day for delivering it in accordance with section 8 or 8A. ”

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

• (5) In section 28C of TMA 1970 (determination of tax where no return delivered), for subsection (6) substitute—

(6) In this section “the filing date” in respect of a return for a year of assessment (Year 1) means either— (a) 31st January of Year 2, or (b) if the notice under section 8 or 8A was given after 31st October of Year 2, the last day of the period of three months beginning with the day on which the notice is given.

• (6) In section 33A of TMA 1970 (error in partnership return)—

• (a) in subsection (1), insert at the end “ for a year of assessment (Year 1), or for a relevant period which ends in Year 1 ”,

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) in subsection (9), omit the definition of “filing date”, and

• (d) in that subsection, after the definition of “relevant partner” insert—

“relevant period” means a period in respect of which a return is required.

• (7) In section 93(10) of TMA 1970 (penalty for failure to make individual or trustee return), for the definition of “filing date” substitute—

“the filing date” in respect of a return for a year of assessment (Year 1) means— (a) 31st January of Year 2, or (b) if the notice under section 8 or 8A was given after 31st October of Year 2, the last day of the period of three months beginning with the day on which the notice is given.

• (8) In section 93A of TMA 1970 (failure to make partnership return), after subsection (7) insert—

(7A) For the purposes of this section the filing date for a year of assessment (Year 1) in the case of a partnership which includes one or more individuals is— (a) 31st January of Year 2, or (b) if the notice under section 12AA was given after 31st October of Year 2, the last day of the period of three months beginning with the date of the notice. (7B) For the purposes of this section the filing date for a year of assessment (Year 1) in the case of a partnership which includes one or more companies is— (a) the first anniversary of the period for which the return is required, or (b) where the notice is given more than nine months after the end of the period for which the return is required, the last day of the period of three months beginning with the date of the notice.

• (9) In subsection (8) of section 93A, omit the definition of “the filing date”.

• (10) In paragraph 4 of Schedule 15 to FA 2006 (accountancy change: spreading of adjustment)—

• (a) in sub-paragraph (1), after “a tax year” insert “ (Year 1) ”, and

• (b) in sub-paragraph (2), for “normal self-assessment filing date for the tax year.” substitute “ 31st January of Year 2. ”

Commencement

92

• (1) Sections 88 to 91 have effect—

• (a) in relation to a return under section 8 or 8A of TMA 1970, or a return under section 12AA of that Act for a partnership which includes one or more individuals, in respect of a return for a year of assessment beginning on or after 6th April 2007, and

• (b) in relation to a return under section 12AA of that Act for a partnership which includes one or more companies, in respect of a return for a relevant period beginning on or after 6th April 2007.

• (2) In subsection (1)(b) “relevant period” means a period in respect of which a return is required.

Other administration

Mandatory electronic filing of returns

93

• (1) Section 135 of FA 2002 (mandatory electronic filing) is amended as follows.

• (2) In subsection (7), after paragraph (b) insert—

(ba) to specify other consequences of contravention of, or failure to comply with, the regulations (which may include disregarding a return delivered otherwise than by the use of electronic communications);

.

• (3) In subsection (10), for the definition of “taxation matter” substitute—

“taxation matter” means any matter relating to a tax (or duty) for which the Commissioners are responsible.

• (4) Section 76 of VATA 1994 (assessment) is amended as follows.

• (5) In subsection (1), after paragraph (c) insert—

or (d) a penalty under regulations made under section 135 of the Finance Act 2002 (mandatory electronic filing of returns) in connection with VAT,

.

• (6) In that subsection, before “may have ceased” insert “ or the regulations ”.

• (7) In subsection (3), insert at the end—

; and (f) in the case of a penalty under regulations made under section 135 of the Finance Act 2002, the relevant period is the prescribed accounting period in respect of which the contravention of, or failure to comply with, the regulations occurred.

• (8) In section 83 of VATA 1994 (appeals), after paragraph (zb) insert—

(zc) a decision of the Commissioners about the application of regulations under section 135 of the Finance Act 2002 (mandatory electronic filing of returns) in connection with VAT (including, in particular, a decision as to whether a requirement of the regulations applies and a decision to impose a penalty);

.

• (9) In section 84 of VATA 1994 (appeals), after subsection (6A) insert—

(6B) Nothing in section 83(zc) shall be taken to confer on a tribunal any power to vary an amount assessed by way of penalty except in so far as it is necessary to reduce it to the amount which is appropriate under regulations made under section 135 of the Finance Act 2002.

Mandatory electronic payment

94

• (1) Section 204 of FA 2003 (mandatory electronic payment by large employers) is amended as follows.

• (2) For subsections (1) and (2) substitute—

(1) The Commissioners for Her Majesty's Revenue and Customs may make regulations requiring a person to use electronic means in making specified payments under legislation relating to a tax (or duty) for which the Commissioners are responsible. (2) The regulations may provide for exceptions.

• (3) In subsection (5)(b), for “the Inland Revenue” substitute “ Her Majesty's Revenue and Customs ”.

• (4) In subsection (6)(a), for “the Inland Revenue” substitute “ Her Majesty's Revenue and Customs ”.

• (5) In subsection (8)—

• (a) in paragraph (a), for “a contravention of, or any failure to comply with,” substitute “ a contravention by a large employer of, or any failure by a large employer to comply with, ”, and

• (b) in paragraph (b), for “taxation matter within the care and management of the Commissioners” substitute “ matter relating to a tax (or duty) for which the Commissioners are responsible ”.

• (6) In subsection (12)—

• (a) for the definition of “the Inland Revenue” substitute—

“Her Majesty's Revenue and Customs” includes a person acting under the authority of the Commissioners in relation to payment by electronic means;

, and

• (b) after that definition insert—

• “large employer” means a person paying PAYE income to 250 or more recipients (and regulations under this section may make provision as to the date or period by reference to which this is to be determined and the circumstances in which a person is to be treated as paying PAYE income to a recipient);

.

• (7) The heading accordingly becomes “ Mandatory electronic payment ”.

• (8) In section 205(1) of FA 2003 (application of section 204 for other purposes)—

• (a) after “taxation” insert “ (or duty) ”, and

• (b) for “the Commissioners of Inland Revenue” substitute “ the Commissioners for Her Majesty's Revenue and Customs ”.

Payment by cheque

95

• (1) The Commissioners may make regulations providing for a payment to HMRC made by cheque to be treated as made when the cheque clears, as defined in the regulations.

• (2) Section 70A of TMA 1970 (payment by cheque treated as made on receipt by HMRC) is subject to regulations under subsection (1).

• (3) Regulations under subsection (1)—

• (a) may make provision generally or only for specified purposes,

• (b) may make different provision for different purposes, and

• (c) may include incidental, consequential or transitional provision.

• (4) Regulations under subsection (1)—

• (a) shall be made by statutory instrument, and

• (b) shall be subject to annulment in pursuance of a resolution of the House of Commons.

• (5) In this section—

• (a) “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs, and

• (b) “HMRC” means Her Majesty's Revenue and Customs.

• (6) In section 204 of FA 2003 (electronic payment), insert at the end—

(13) Regulations under section 95(1) of the Finance Act 2007 (payment by cheque) may, in particular, provide for a payment which is made by cheque in contravention of regulations under this section to be treated as made when the cheque clears, as defined in the regulations under that section.

• (7) In section 70A of TMA 1970 (payments by cheque), insert at the end—

(3) This section is subject to regulations under section 95(1) of the Finance Act 2007 (payment by cheque).

• (8) In VATA 1994, after section 58A insert—

(58B) Regulations under section 95(1) of the Finance Act 2007 (payment by cheque) may, in particular, provide for a payment which is made by cheque in contravention of regulations under section 25(1) above to be treated as made when the cheque clears, as defined in the regulations under section 95(1) of that Act.

Enquiry into returns

96

• (1) In section 9A(2)(a) of TMA 1970 (period during which HMRC can open enquiry into return), for “after the filing date;” substitute “ after the day on which the return was delivered; ”.

• (2) In section 12AC(2)(a) of TMA 1970 (period during which HMRC can open enquiry into partnership return), for “after the filing date;” substitute “ after the day on which the return was delivered; ”.

• (3) In paragraph 24(2) of Schedule 18 to FA 1998 (period during which HMRC can open enquiry into company tax return), for “from the filing date.” substitute “ from the day on which the return was delivered (subject to sub-paragraph (6)). ”

• (4) In paragraph 24 of that Schedule, insert at the end—

(6) In the case of a company which is a member of a group other than a small group, the 12-month period in sub-paragraph (2) shall start not from the day on which the return was delivered but from the filing date. (7) In sub-paragraph (6) “group” and “small group” have the same meaning as in sections 383(2) and 474(1) of the Companies Act 2006 (or, until their commencement, as in the provisions that they replicate).

• (5) The amendments made by subsections (1) and (2) apply to returns which relate to the tax year 2007-08 or a later tax year.

• (6) The amendments made by subsections (3) and (4) apply to returns which relate to accounting periods ending after 31st March 2008.

Penalties for errors

97

• (1) Schedule 24 contains provisions imposing penalties on taxpayers who—

• (a) make errors in certain documents sent to HMRC, or

• (b) unreasonably fail to report errors in assessments by HMRC.

• (2) That Schedule comes into force in accordance with provision made by the Treasury by order.

• (3) An order—

• (a) may commence a provision generally or only for specified purposes,

• (b) may make different provision for different purposes, and

• (c) may include incidental, consequential or transitional provision.

• (4) The power to make an order is exercisable by statutory instrument.

Part 7 — Miscellaneous

Value added tax and insurance premium tax

VAT: joint and several liability of traders in supply chain where tax unpaid

98

• (1) In section 77A of VATA 1994 (joint and several liability of traders in supply chain where tax unpaid), for subsection (9) substitute—

(9) The Treasury may by order amend subsection (1) above. (9A) The Treasury may by order amend this section in order to extend or otherwise alter the circumstances in which a person shall be presumed to have reasonable grounds for suspecting matters to be as mentioned in subsection (2)(b) above. (9B) Any order under this section may make such incidental, supplemental, consequential or transitional provision as the Treasury think fit.

• (2) In section 97(4) of that Act (orders ceasing to have effect unless approved by House of Commons), after paragraph (ea) insert—

(eb) an order under section 77A(9) or (9A);

.

VAT: non-business use etc of business goods

99

• (1) Schedule 4 to VATA 1994 (matters to be treated as supply of goods or services) is amended as follows.

• (2) In paragraph 5 (non-business use etc of business goods), omit sub-paragraph (4A) (exception to rule in case of interests in land and buildings etc that non-business use of business assets treated as supply of services).

• (3) In paragraph 9 (application of paragraphs 5 to 8 where land forms part of assets of business), insert at the end—

(4) In this paragraph “grant” includes surrender.

• (4) Paragraph 7 of Schedule 6 to VATA 1994 (valuation of supply of services otherwise than for consideration by virtue of paragraph 5(4) of Schedule 4 etc) is amended as follows.

• (5) The existing provision becomes sub-paragraph (1) and after that sub-paragraph insert—

(2) Regulations may, in relation to a supply of services by virtue of paragraph 5(4) of Schedule 4 (but otherwise than for a consideration), make provision for determining how the full cost to the taxable person of providing the services is to be calculated. (3) The regulations may, in particular, make provision for the calculation to be made by reference to any prescribed period. (4) The regulations may make— (a) different provision for different circumstances; (b) such incidental, supplementary, consequential or transitional provision as the Commissioners think fit.

• (6) The amendment made by subsection (2) comes into force on 1st September 2007.

• (7) The amendment made by subsection (3) has effect in relation to surrenders on or after 21st March 2007.

VAT: transfers of going concerns

100

• (1) Section 49 of VATA 1994 (transfers of going concern) is amended as follows.

• (2) In subsection (1) (transferor's supplies treated as transferee's supplies for purposes of registration and transferor's records to be kept by transferee after transfer)—

• (a) after “Where a business” insert “ , or part of a business, ”,

• (b) after “on the business” insert “ or part of the business ”, and

• (c) omit paragraph (b) (together with the “and” before it).

• (3) In subsection (2) (regulations for securing continuity of Act in case of transfers of going concerns), after “a business” insert “ , or part of a business, ”.

• (4) After that subsection insert—

(2A) Regulations under subsection (2) above may, in particular, provide for the duties under this Act of the transferor to preserve records relating to the business or part of the business for any period after the transfer to become duties of the transferee unless the Commissioners, at the request of the transferor, otherwise direct.

• (5) In subsection (3) (provision which may be made by regulations), in paragraph (a), after “the transferor” insert “ (other than the duties mentioned in subsection (2A) above) ”.

• (6) After that subsection insert—

(4) Subsection (5) below applies where— (a) a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, and (b) the transferor continues to be required under this Act to preserve for any period after the transfer any records relating to the business or part of the business. (5) So far as is necessary for the purpose of complying with the transferee's duties under this Act, the transferee (“E”) may require the transferor— (a) to give to E, within such time and in such form as E may reasonably require, such information contained in the records as E may reasonably specify, (b) to give to E, within such time and in such form as E may reasonably require, such copies of documents forming part of the records as E may reasonably specify, and (c) to make the records available for E's inspection at such time and place as E may reasonably require (and permit E to take copies of, or make extracts from, them). (6) Where a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, the Commissioners may disclose to the transferee any information relating to the business when it was carried on by the transferor for the purpose of enabling the transferee to comply with the transferee's duties under this Act.

• (7) In section 94(6) of VATA 1994 (meaning of “business” etc)—

• (a) after “a business” insert “ , or part of a business, ”, and

• (b) for “its assets or liabilities” substitute “ the assets or liabilities of the business or part of the business ”.

• (8) In paragraph 1(2) of Schedule 1 to that Act (registration in respect of taxable supplies), after “Where a business” insert “ , or part of a business, ”.

• (9) In paragraph 8(2)(b) of Schedule 4 to that Act (matters to be treated as supply of goods or services), after “a business” insert “ , or part of a business, ”.

• (10) The amendments made by this section have effect in relation to transfers pursuant to contracts entered into on or after 1st September 2007.

IPT: meaning of “premium”

101

• (1) In section 72 of FA 1994 (interpretation: “premium”), after subsection (1A) insert—

(1B) Where— (a) an amount is charged (to the insured or any other person) in respect of the acquisition of a right (whether of the insured or any other person) to require the insurer to provide, or offer to provide, any of the cover included in a taxable insurance contract, and (b) any payment in respect of that amount is not regarded as a payment received under that contract by the insurer by virtue of subsection (1A) above, the payment is to be regarded as a payment received under that contract by the insurer unless it is chargeable to tax at the higher rate by virtue of section 52A above.

• (2) The amendment made by subsection (1) has effect in relation to amounts charged on or after 22nd March 2007.

Petroleum revenue tax

Abolition of PRT for fields recommissioned after earlier decommissioning

102

• (1) Section 185 of FA 1993 (abolition of PRT for oil fields with development consents on or after 16th March 1993) is amended as follows.

• (2) In subsection (1) (meaning of “non-taxable field” and “taxable field”), after paragraph (b) insert “ or an oil field which does not meet the conditions in paragraphs (a) and (b) above but which does meet the conditions in subsection (1A) below ”.

• (3) After that subsection insert—

(1A) An oil field meets the conditions in this subsection if— (a) the Secretary of State has at any time approved one or more abandonment programmes under Part 4 of the Petroleum Act 1998 (or Part 1 of the Petroleum Act 1987) in relation to all assets of the field which are relevant assets; (b) those programmes have been carried out to the satisfaction of the Secretary of State; (c) a development decision is made in relation to the field; and (d) that decision is made on or after 16th March 1993 and after those programmes have been so carried out. (1B) For the purposes of subsection (1A)(a) above, an asset is a relevant asset of an oil field if— (a) it has at any time been a qualifying asset (within the meaning of the 1983 Act) in relation to any participator in the field; and (b) it has at any time been used for the purpose of winning oil from the field. (1C) For the purposes of subsection (1A)(c) and (d) above, a development decision is made in relation to an oil field when— (a) consent for development is granted to a licensee by the Secretary of State in respect of the whole or part of the field; or (b) a programme of development is served on a licensee or approved by the Secretary of State for the whole or part of the field.

• (4) In subsection (7) (meaning of “development” etc), for “subsections (1) and (2)” substitute “ this section ”.

• (5) An oil field which meets the conditions in subsection (1A) of section 185 of FA 1993 (as inserted by subsection (3) above) becomes a non-taxable field for the purposes of any enactment relating to petroleum revenue tax—

• (a) in any case where the development decision is made before 1st July 2007, on that date, and

• (b) in any other case, on the date on which the development decision is made.

Tax-exempt tariffing receipts

103

• (1) Section 6A of the Oil Taxation Act 1983 (c. 56) (tax-exempt tariffing receipts) is amended as follows.

• (2) In subsection (4), insert at the end

or (c) use in relation to a UK recommissioned field (see subsection (5) below) or oil won from such a field.

• (3) In subsection (5), insert at the end—

“UK recommissioned field” means any oil field which is not a new field or qualifying existing field but as respects which the conditions in section 185(1A) of the Finance Act 1993 are satisfied (fields recommissioned after earlier decommissioning).

• (4) The amendments made by this section are deemed to have come into force on 1st July 2007.

Allowance of unrelievable loss from abandoned field

104

• (1) In section 6 of the Oil Taxation Act 1975 (c. 22) (allowance of unrelievable loss from abandoned field), after subsection (4) insert—

(4A) For the purposes of this section and Schedule 8 to this Act, the winning of oil from an oil field shall not be regarded as having permanently ceased until all the oil wells in the field have been permanently abandoned.

• (2) The amendment made by subsection (1) is deemed to have come into force on 1st July 2007.

Other miscellaneous measures

Amendments connected with Gambling Act 2005

105

Schedule 25 contains amendments that are consequential on, or otherwise connected with, the Gambling Act 2005 (c. 19).

VED: exempt vehicles

106

• (1) In section 5 of VERA 1994 (exempt vehicles), after subsection (2) insert—

(3) The Secretary of State may by order amend Schedule 2 in order to make provision about the descriptions of— (a) tractors, and (b) vehicles used for purposes relating to agriculture, horticulture or forestry, that are to be exempt vehicles. (4) An order under subsection (3) may in particular repeal any of paragraphs 20A to 20D of Schedule 2.

• (2) In section 60(3) of that Act (orders subject to affirmative procedure), after “under” insert “ section 5(3) or ”.

Limitation period in old actions for mistake of law relating to direct tax

107

• (1) Section 32(1)(c) of the Limitation Act 1980 (c. 58) (extended period for bringing action in case of mistake) does not apply in relation to any action brought before 8th September 2003 for relief from the consequences of a mistake of law relating to a taxation matter under the care and management of the Commissioners of Inland Revenue.

• (2) Subsection (1) has effect regardless of how the grounds on which the action was brought were expressed and of whether it was also brought otherwise than for such relief.

• (3) But subsection (1) does not have effect in relation to an action, or so much of an action as relates to a cause of action, if—

• (a) the action, or cause of action, has been the subject of a judgment of the House of Lords given before 6th December 2006 as to the application of section 32(1)(c) in relation to such relief, or

• (b) the parties to the action are, in accordance with a group litigation order, bound in relation to the action, or cause of action, by a judgment of the House of Lords in another action given before that date as to the application of section 32(1)(c) in relation to such relief.

• (4) If the judgment of any court was given on or after 6th December 2006 but before the day on which this Act is passed, the judgment is to be taken to have been what it would have been had subsections (1) to (3) been in force at all times since the action was brought (and any defence of limitation which would have been available had been raised).

• (5) And any payment made to satisfy a liability under the judgment which (in consequence of subsection (4)) is to be taken not to have been imposed is repayable (with interest from the date of the payment).

• (5A) Subsection (1) also does not have effect in relation to an action, or so much of an action as relates to a cause of action, if the consequences of a mistake of law to which the action, or cause of action, relates is the charging of tax contrary to EU law.

• (6) In this section—

• “group litigation order” means an order of a court providing for the case management of actions which give rise to common or related issues of fact or law, and

• “judgment” includes order (and “given” includes made).

Disclosure of tax avoidance schemes

108

• (1) Part 7 of FA 2004 (disclosure of tax avoidance schemes) is amended as follows.

• (2) After section 306 insert—

(306A) (1) HMRC may apply to the Special Commissioners for an order that— (a) a proposal is to be treated as notifiable, or (b) arrangements are to be treated as notifiable. (2) An application must specify— (a) the proposal or arrangements in respect of which the order is sought, and (b) the promoter. (3) On an application the Special Commissioners may make the order only if satisfied that HMRC— (a) have taken all reasonable steps to establish whether the proposal or arrangements are notifiable, and (b) have reasonable grounds for suspecting that the proposal or arrangements may be notifiable. (4) Reasonable steps under subsection (3)(a) may (but need not) include taking action under section 313A or 313B. (5) Grounds for suspicion under subsection (3)(b) may include— (a) the fact that the relevant arrangements fall within a description prescribed under section 306(1)(a); (b) an attempt by the promoter to avoid or delay providing information or documents about the proposal or arrangements under or by virtue of section 313A or 313B; (c) the promoter's failure to comply with a requirement under or by virtue of section 313A or 313B in relation to another proposal or other arrangements. (6) Where an order is made under this section in respect of a proposal or arrangements, the prescribed period for the purposes of section 308(1) or (3) in so far as it applies by virtue of the order— (a) shall begin after a date prescribed for the purpose, and (b) may be of a different length than the prescribed period for the purpose of other applications of section 308(1) or (3). (7) An order under this section in relation to a proposal or arrangements is without prejudice to the possible application of section 308, other than by virtue of this section, to the proposal or arrangements.

• (3) In section 307 (“promoter”), insert at the end—

(6) In the application of this Part to a proposal or arrangements which are not notifiable, a reference to a promoter is a reference to a person who would be a promoter under subsections (1) to (5) if the proposal or arrangements were notifiable.

• (4) After section 308 insert—

(308A) (1) This section applies where— (a) a promoter (P) has provided information in purported compliance with section 308(1) or (3), but (b) HMRC believe that P has not provided all the prescribed information. (2) HMRC may apply to the Special Commissioners for an order requiring P to provide specified information about, or documents relating to, the notifiable proposal or arrangements. (3) The Special Commissioners may make an order under subsection (2) in respect of information or documents only if satisfied that HMRC have reasonable grounds for suspecting that the information or documents— (a) form part of the prescribed information, or (b) will support or explain the prescribed information. (4) A requirement by virtue of subsection (2) shall be treated as part of P's duty under section 308(1) or (3). (5) In so far as P's duty under section 308(1) or (3) arises out of a requirement by virtue of subsection (2) above, the prescribed period shall begin after a date prescribed for the purpose. (6) In so far as P's duty under section 308(1) or (3) arises out of a requirement by virtue of subsection (2) above, the prescribed period— (a) may be of a different length than the prescribed period for the purpose of other applications of section 308(1) or (3), and (b) may be extended by HMRC by direction.

• (5) After section 313 insert—

(313A) (1) Where HMRC suspect that a person (P) is the promoter of a proposal or arrangements which may be notifiable, they may by written notice require P to state— (a) whether in P's opinion the proposal or arrangements are notifiable by P, and (b) if not, the reasons for P's opinion. (2) A notice must specify the proposal or arrangements to which it relates. (3) For the purpose of subsection (1)(b)— (a) it is not sufficient to refer to the fact that a lawyer or other professional has given an opinion, (b) the reasons must show, by reference to this Part and regulations under it, why P thinks the proposal or arrangements are not notifiable by P, and (c) in particular, if P asserts that the arrangements do not fall within any description prescribed under section 306(1)(a), the reasons must provide sufficient information to enable HMRC to confirm the assertion. (4) P must comply with a requirement under or by virtue of subsection (1) within— (a) the prescribed period, or (b) such longer period as HMRC may direct. (313B) (1) Where HMRC receive from a person (P) a statement of reasons why a proposal or arrangements are not notifiable by P, HMRC may apply to the Special Commissioners for an order requiring P to provide specified information or documents in support of the reasons. (2) P must comply with a requirement under or by virtue of subsection (1) within— (a) the prescribed period, or (b) such longer period as HMRC may direct. (3) The power under subsection (1)— (a) may be exercised more than once, and (b) applies whether or not the statement of reasons was received under section 313A(1)(b).

• (6) After section 314 insert—

(314A) (1) HMRC may apply to the Special Commissioners for an order that— (a) a proposal is notifiable, or (b) arrangements are notifiable. (2) An application must specify— (a) the proposal or arrangements in respect of which the order is sought, and (b) the promoter. (3) On an application the Special Commissioners may make the order only if satisfied that section 306(1)(a) to (c) applies to the relevant arrangements.

• (7) After section 317 insert—