Finance Act 2011

Other amendments to ITEPA 2003

2

ITEPA 2003 is amended as follows.

3

In section 1(1)(a) (overview of contents of Act) for “7” substitute “ 7A ”.

4

• (1) Amend section 3 (structure of employment income Parts) as follows.

• (2) At the end of subsection (1) insert—

Part 7A deals with employment income provided through third parties.

• (3) In subsection (2) for “7” substitute “ 7A ”.

5

For the “or” after section 7(6)(b) (meaning of “specific employment income”) substitute—

(ba) Part 7A (employment income provided through third parties), or

.

6

• (1) Amend section 10 (provision relating to “taxable specific income”) as follows.

• (2) In subsection (3) for “or 7” substitute “ , 7 or 7A ”.

• (3) After subsection (4) insert—

(5) Subsection (3) is also subject to sections 554Z9 to 554Z11 (employment income under Part 7A: remittance basis).

7

• (1) Amend section 13 (person liable for tax) as follows.

• (2) In subsection (3) for “or 7” substitute “ , 7 or 7A ”.

• (3) After subsection (4A) insert—

(4B) Subject to section 554Z12, if— (a) the tax is on specific employment income under Chapter 2 of Part 7A, and (b) the relevant step is taken, or (if relevant) the income is remitted to the United Kingdom, after the death of A, A's personal representatives are liable for the tax. (4C) Terms used in subsection (4B) have the same meaning as in Part 7A.

• (4) In subsection (5) for “or (4A)” substitute “ , (4A) or (4B) or section 554Z12(3) ”.

8

After section 63(4) (the benefits code) insert—

(5) The benefits code has effect subject to section 554Z2(2).

9

Under Step 1 in section 218(1) (exclusion of lower-paid employments from benefits code: calculation of earnings rate for tax year)—

• (a) omit the “and” after paragraphs (c) and (d), and

• (b) after paragraph (e) insert

, and (f) the total amount which counts as employment income in respect of the employment for the year under Chapter 2 of Part 7A.

10

In section 222(1)(a) and (3) (payments treated as earnings: payments by employer on account of tax where deduction not possible) after “687,” insert “ 687A, ”.

11

After section 227(4) (scope of exemptions to income tax under Part 4) insert—

(5) In relation to the interaction between this Part and Part 7A, see section 554P(1).

12

• (1) Amend section 271 (income tax exemptions: removal benefits and expenses) as follows.

• (2) In subsection (1) after “earnings” insert “ or by virtue of Part 7A ”.

• (3) In subsection (2) for “Subsection” substitute “ In relation to earnings, subsection ”.

• (4) After subsection (2) insert—

(2A) In relation to Part 7A, subsection (1) does not apply to any amount so far as the amount (disregarding this section and section 554P) would count as employment income to which section 554Z9 or 554Z10 would apply.

13

• (1) Amend section 287 (income tax exemptions: limit on exemption for removal benefits and expenses) as follows.

• (2) In subsection (2)—

• (a) omit the “and” after paragraph (a), and

• (b) after paragraph (b) insert

, and (c) the Part 7A employment income

.

• (3) After subsection (5) insert—

(6) In this section “the Part 7A employment income” means the amount in respect of which section 271 (when read with section 554P) would prevent liability to income tax arising if this section were to be disregarded.

14

• (1) Amend section 394 (employer-financed retirement benefits: charge on benefit received) as follows.

• (2) After subsection (4) insert—

(4A) Subsection (4B) applies if the receipt of a benefit to which this Chapter applies gives rise to other relevant income of the employee, or the former employee, to or in respect of whom the benefit is provided. (4B) Subsection (1) or (2) (as the case may be) applies to the amount of the benefit only so far as that amount exceeds the other relevant income. (4C) In subsections (4A) and (4B) “other relevant income” means— (a) general earnings of the employee or former employee which are chargeable to income tax, (b) an amount which counts as employment income of the employee or former employee under Chapter 2 of Part 7A, or (c) an amount which would be within paragraph (a) or (b) apart from the employee or former employee having been non-UK resident for any tax year.

• (3) After subsection (5) insert—

(6) Subsection (5) does not affect— (a) any liability to income tax on general earnings, or (b) any liability to income tax on an amount which counts as employment income under Chapter 2 of Part 7A.

15

After section 428(6) (restricted employment-related securities: amount of charge) insert—

(6A) CE also includes any amount that has counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A in relation to the employment-related securities where the relevant step (within the meaning of that Part) was taken before the chargeable event occurred.

16

In section 431(3) (restricted employment-related securities: election for disapplication of Chapter 2 of Part 7)—

• (a) omit the “and” after paragraph (c), and

• (b) after paragraph (d) insert

, and (e) determining any amount that counts as employment income of the employee in respect of the employment under Chapter 2 of Part 7A (employment income provided through third parties)

.

17

In section 437(1)(a) (convertible employment-related securities: market value) after “option)” insert “ or Chapter 2 of Part 7A (employment income provided through third parties) ”.

18

After section 441(9) (convertible employment-related securities: amount of gain realised) insert—

(10) Subsection (11) applies for the purposes of subsection (2) or (3) if— (a) prior to the acquisition, the employment-related securities were the subject of a relevant step within the meaning of Part 7A by reason of which Chapter 2 of that Part applied in respect of the employment, and (b) the amount mentioned in subsection (11)(a) is higher than the amount mentioned in subsection (11)(b). (11) The amount of the gain realised is reduced (but not below nil) by the amount equal to— (a) the amount that counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A, less (b) the market value of the employment-related securities when the relevant step was taken determined as if they were not convertible securities or an interest in convertible securities.

19

In section 446B(4) (employment-related securities with artificially depressed market value: charge on acquisition)—

• (a) omit the “or” after paragraph (d), and

• (b) after paragraph (e) insert

, or (f) Chapter 2 of Part 7A (employment income provided through third parties)

.

20

After section 446C(4) (employment-related securities with artificially depressed market value: amount of charge) insert—

(4A) Subsection (4B) applies if, prior to the acquisition, the employment-related securities were the subject of a relevant step within the meaning of Part 7A by reason of which Chapter 2 of that Part applied in respect of the employment. (4B) If what would be MV in accordance with subsection (3) or (4) (as the case may be) is less than the amount that counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A, MV is the amount of that employment income instead of the amount determined in accordance with subsection (3) or (4).

21

After section 446S(3) (employment-related securities acquired for less than market value: notional loan) insert—

(4) This section is not affected by section 554Z2(2).

22

In section 446T(3) (employment-related securities acquired for less than market value: amount of notional loan)—

• (a) omit the “and” after paragraph (d), and

• (b) after paragraph (e) insert

, and (f) any amount that has counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A in relation to the employment-related securities.

23

In section 446V (employment-related securities acquired for less than market value: charges under Chapter 3C of Part 4 to be additional to other charges)—

• (a) omit the “or” after paragraph (d), and

• (b) after paragraph (e) insert

, or (f) Chapter 2 of Part 7A (employment income provided through third parties)

.

24

In section 452(2) (shares in research institution spin-out companies: market value on acquisition)—

• (a) omit the “and” after paragraph (c), and

• (b) after paragraph (d) insert

, and (e) determining any amount that counts as employment income of the employee in respect of the employment under Chapter 2 of Part 7A (employment income provided through third parties)

.

25

In section 480(5) (employment-related securities options: deductible amounts)—

• (a) omit the “and” after paragraph (b), and

• (b) after paragraph (c) insert

, and (d) any amount that has counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A in relation to the employment-related securities option or to any sum of money or asset held solely for the purposes of the option.

26

In section 567(5) (pension income: amount charged to tax) before “section 617” insert—

section 567A (deduction to avoid double taxation where Part 7A has applied to the source of the pension income);

.

27

After section 567 insert—

(567A) (1) This section applies if— (a) for a tax year there is an amount (“amount TPI”) of taxable pension income for a pension, annuity or other item of pension income, (b) the pension, annuity or other item of pension income accrues or arises out of rights (“the relevant rights”) which represent, or have arisen or derived (directly or indirectly) from, a sum of money or asset which was the subject of a relevant step within the meaning of Part 7A, and (c) Chapter 2 of that Part applied by reason of the relevant step. (2) A deduction is allowed from amount TPI. (3) The amount of the deduction allowed is the amount (“amount EI”) which counted as employment income of A under Chapter 2 of Part 7A in relation to the relevant step (see section 554Z2(1)). (4) If amount EI exceeds amount TPI, the excess is to be carried forward to future tax years to be deducted under this section (when applicable) until all of amount EI has been deducted. (5) Subsection (6) applies if it is determined on a just and reasonable basis that the relevant rights represent, or have arisen or derived from, only part of the sum of money or asset which was the subject of the relevant step. (6) In subsection (3) the reference to the amount which counted as employment income is to be read as a reference to the corresponding proportion of that amount.

28

After section 687(4) (PAYE: payments by intermediary) insert—

(5) This section does not apply in relation to a payment so far as the sum paid is employment income under Chapter 2 of Part 7A.

29

After section 687 insert—

(687A) (1) This section applies if— (a) the value of a relevant step counts as employment income under Chapter 2 of Part 7A, and (b) the relevant step is the payment of a sum of money, and references to A and B are to be read accordingly. (2) For the purposes of PAYE regulations B is treated as making a payment of PAYE income of A of an amount which, on the basis of the best estimate which can reasonably be made, is the amount of the employment income. (3) The payment is treated as made on the latest of the following days— (a) the day on which the relevant step is taken, (b) the day on which A's employment with B starts, and (c) the day which is 30 days after the day on which FA 2011 is passed. (4) Subsection (2) does not apply if the person who takes the relevant step (whether or not a person to whom PAYE regulations apply) deducts income tax from the payment, and accounts for it, in accordance with PAYE regulations.

30

• (1) Amend section 689 (PAYE: employee of non-UK employer) as follows.

• (2) After subsection (1) insert—

(1A) Subject to subsection (4), subsection (1)(b) does not apply in relation to a payment so far as the sum paid is employment income under Chapter 2 of Part 7A.

• (3) In subsection (4) after “sections” insert “ 687A and ”.

31

Before section 696 insert—

(695A) (1) This section applies if— (a) the value of a relevant step counts as employment income under Chapter 2 of Part 7A, and (b) the relevant step is not the payment of a sum of money, and references to A and B are to be read accordingly. (2) For the purposes of PAYE regulations B is treated as making a payment of PAYE income of A of an amount which, on the basis of the best estimate which can reasonably be made, is— (a) the amount of the employment income, less (b) so much of that amount (if any) to which section 554Z9(2) or 554Z10(2) applies. (3) The payment is treated as made on the latest of the following days— (a) the day on which the relevant step is taken, (b) the day on which A's employment with B starts, and (c) the day which is 30 days after the day on which FA 2011 is passed. (4) Subsection (2) does not apply if the person who takes the relevant step (whether or not a person to whom PAYE regulations apply) accounts for income tax on the relevant step in accordance with PAYE regulations.

32

After section 696(2) (PAYE: readily convertible assets) insert—

(3) This section does not apply to any PAYE income so far as it is employment income under Chapter 2 of Part 7A.

33

In section 710(2)(a) (PAYE: accounting for tax on notional payments) after “687,” insert “ 687A, ”.

34

• (1) Amend section 716A (priority rule in relation to certain dividend income) as follows.

• (2) Make the existing text subsection (1).

• (3) After subsection (1) insert—

(2) Subsection (1) is subject to section 554Z2(2).

Amendments to ITTOIA 2005

35

ITTOIA 2005 is amended as follows.

36

• (1) Amend section 39 (employee benefit contributions: meaning of “employee benefit scheme” etc) as follows.

• (2) In subsection (2) after “employer” insert “ or persons linked with present or former employees of the employer ”.

• (3) After subsection (2) insert—

(3) Section 554Z1 of ITEPA 2003 applies for the purposes of subsection (2) but as if references to A were to a present or former employee of the employer. (4) So far as it is not covered by subsection (2), “employee benefit scheme” also means— (a) an arrangement (“the relevant arrangement”) within subsection (1)(b) of section 554A of ITEPA 2003 to which subsection (1)(c) of that section applies, or (b) any other arrangement connected (directly or indirectly) with the relevant arrangement.

37

• (1) Amend section 40 (employee benefit contributions: provision of qualifying benefits) as follows.

• (2) In subsection (5) after “scheme” insert

and the payment or transfer— (a) gives rise to an employment income tax charge under Chapter 2 of Part 6 of ITEPA 2003 or under Part 9 of that Act, or (b) is an excluded benefit as defined in section 393B(3) of that Act.

• (3) After subsection (6) insert—

(6A) For the purposes of section 38 qualifying benefits are also provided if— (a) a relevant step within the meaning of Part 7A of ITEPA 2003 is taken, and (b) Chapter 2 of that Part applies by reason of the step.

38

• (1) Amend section 41 (employee benefit contributions: timing of qualifying benefits etc) as follows.

• (2) For subsection (1) substitute—

(1) If the provision of a qualifying benefit takes the form of a payment of money, the benefit, so far as Chapter 4 of Part 2 of ITEPA 2003 applies to the money, is provided for the purposes of section 38 when the money is treated as received for the purposes of that Chapter (applying the rules in section 18 of that Act (receipt of money earnings)).

• (3) After subsection (1) insert—

(1A) Except so far as subsection (1) applies to the provision of the qualifying benefit, if the provision of a qualifying benefit is a chargeable relevant step, for the purposes of section 38— (a) the benefit is provided when A's employment with B starts if the chargeable relevant step is taken before then, or (b) otherwise, the benefit is provided when the chargeable relevant step is taken.

• (4) In subsection (2)—

• (a) after “an asset” insert “ which meets condition A, B, C or D in section 40 ”,

• (b) omit the “and” after paragraph (a), and

• (c) after paragraph (b) insert

, and (c) if the transfer is a chargeable relevant step, the cost of the relevant step so far as not covered by paragraph (a) or (b)

.

• (5) After subsection (3) insert—

(4) If the provision of a qualifying benefit is a chargeable relevant step which does not involve a sum of money (see section 554Z(10) of ITEPA 2003) and is not covered by subsection (2), the amount provided for the purposes of section 38 is the cost of the relevant step (subject to subsection (5)). (5) If the provision of a qualifying benefit is a chargeable relevant step which is not covered by subsection (2) (whether or not it involves a sum of money), the amount provided for the purposes of section 38 is not to exceed the amount that— (a) is charged to tax under ITEPA 2003 in relation to the relevant step (whether under Part 7A of that Act or otherwise), or (b) would be charged had not A been non-UK resident in any tax year. (6) In this section— (a) “chargeable relevant step” means a relevant step within the meaning of Part 7A of ITEPA 2003 by reason of which Chapter 2 of that Part applies (and references to A and B are to be read accordingly), and (b) references to the cost of a chargeable relevant step are to be read in accordance with section 554Z3(6) of that Act.

39

In section 44(1) (employee benefit contributions: interpretation)—

• (a) in the definition of “employee benefit scheme” for “39(2)” substitute “ 39(2) to (4) ”, and

• (b) in the definition of “employer-financed retirement benefits scheme” after “Act)” insert “ but ignoring section 393B(2)(a) and (c) of that Act ”.

Amendments to ITA 2007

40

ITA 2007 is amended as follows.

41

After section 809F(5) (remittance basis: effect) insert—

(5A) For the effect on amounts which count as employment income under Chapter 2 of Part 7A of ITEPA 2003, see sections 554Z9 to 554Z11 of that Act.

42

After section 809K(1)(c) (remittance basis: application of sections 809L to 809Z6) insert—

(ca) sections 554Z9 to 554Z11 of that Act (employment income provided through third parties charged on remittance basis),

.

43

For section 809Z7(4) (remittance basis: meaning of “foreign specific employment income”) substitute—

(4) An individual's “foreign specific employment income” for a tax year (“the relevant tax year”) consists of the income (if any) within subsections (4A) and (4B). (4A) The income within this subsection is the individual's specific employment income for the relevant tax year so far as it consists of foreign securities income for the purposes of section 41A of ITEPA 2003. (4B) The income within this subsection is any income, or any part of any income, of the individual— (a) to which section 554Z9(2) or 554Z10(2) of ITEPA 2003 applies, and (b) which consists of the value of a relevant step, or a part of the value of a relevant step, which is “for” the relevant tax year as determined under section 554Z4 of ITEPA 2003.

Amendments to CTA 2009

44

CTA 2009 is amended as follows.

45

• (1) Amend section 1291 (employee benefit contributions: meaning of “employee benefit scheme” etc) as follows.

• (2) In subsection (2) after “employer” insert “ or persons linked with present or former employees of the employer ”.

• (3) After subsection (2) insert—

(3) Section 554Z1 of ITEPA 2003 applies for the purposes of subsection (2) but as if references to A were to a present or former employee of the employer. (4) So far as it is not covered by subsection (2), “employee benefit scheme” also means— (a) an arrangement (“the relevant arrangement”) within subsection (1)(b) of section 554A of ITEPA 2003 to which subsection (1)(c) of that section applies, or (b) any other arrangement connected (directly or indirectly) with the relevant arrangement.

46

• (1) Amend section 1292 (employee benefit contributions: provision of qualifying benefits) as follows.

• (2) In subsection (5) after “scheme” insert

and the payment or transfer— (a) gives rise to an employment income tax charge under Chapter 2 of Part 6 of ITEPA 2003 or under Part 9 of that Act, or (b) is an excluded benefit as defined in section 393B(3) of that Act.

• (3) After subsection (6) insert—

(6A) For the purposes of section 1290 qualifying benefits are also provided if— (a) a relevant step within the meaning of Part 7A of ITEPA 2003 is taken, and (b) Chapter 2 of that Part applies by reason of the step.

47

• (1) Amend section 1293 (employee benefit contributions: timing of qualifying benefits etc) as follows.

• (2) For subsection (1) substitute—

(1) If the provision of a qualifying benefit takes the form of a payment of money, the benefit, so far as Chapter 4 of Part 2 of ITEPA 2003 applies to the money, is provided for the purposes of section 1290 when the money is treated as received for the purposes of that Chapter (applying the rules in section 18 of that Act (receipt of money earnings)).

• (3) After subsection (1) insert—

(1A) Except so far as subsection (1) applies to the provision of the qualifying benefit, if the provision of a qualifying benefit is a chargeable relevant step, for the purposes of section 1290— (a) the benefit is provided when A's employment with B starts if the chargeable relevant step is taken before then, or (b) otherwise, the benefit is provided when the chargeable relevant step is taken.

• (4) In subsection (2)—

• (a) after “an asset” insert “ which meets condition A, B, C or D in section 1292 ”,

• (b) omit the “and” after paragraph (a), and

• (c) after paragraph (b) insert

, and (c) if the transfer is a chargeable relevant step, the cost of the relevant step so far as not covered by paragraph (a) or (b)

.

• (5) After subsection (3) insert—

(4) If the provision of a qualifying benefit is a chargeable relevant step which does not involve a sum of money (see section 554Z(10) of ITEPA 2003) and is not covered by subsection (2), the amount provided for the purposes of section 1290 is the cost of the relevant step (subject to subsection (5)). (5) If the provision of a qualifying benefit is a chargeable relevant step which is not covered by subsection (2) (whether or not it involves a sum of money), the amount provided for the purposes of section 1290 is not to exceed the amount that— (a) is charged to tax under ITEPA 2003 in relation to the relevant step (whether under Part 7A of that Act or otherwise), or (b) would be charged had not A been non-UK resident in any tax year. (6) In this section— (a) “chargeable relevant step” means a relevant step within the meaning of Part 7A of ITEPA 2003 by reason of which Chapter 2 of that Part applies (and references to A and B are to be read accordingly), and (b) references to the cost of a chargeable relevant step are to be read in accordance with section 554Z3(6) of that Act.

48

In section 1296(1) (employee benefit contributions: interpretation)—

• (a) in the definition of “employee benefit scheme” for “1291(2)” substitute “ 1291(2) to (4) ”, and

• (b) in the definition of “employer-financed retirement benefits scheme” after “Act)” insert “ but ignoring section 393B(2)(a) and (c) of that Act ”.

Other amendments

49

• (1) TCGA 1992 is amended as follows.

• (2) In section 119A (increase in expenditure by reference to tax charged in relation to employment-related securities)—

• (a) in subsection (5)(a) for “or (b)” substitute “ , (b) or (d) ”, and

• (b) at the end of subsection (5A) insert “ and section 119C (unremitted Part 7A income) ”.

• (3) After section 119B insert—

(119C) (1) This section applies for the purposes of section 119A if an amount deducted under section 480(5)(d) of ITEPA 2003, which (apart from this section) would by virtue of section 119A(5)(a) be added back to an amount counting as employment income, is or includes unremitted Part 7A income. (2) So much of the amount deducted as is unremitted Part 7A income is not to be added back. (3) In this section “unremitted Part 7A income” means an amount counting as employment income under Chapter 2 of Part 7A of ITEPA 2003— (a) to which section 554Z9(2) or 554Z10(2) of that Act applies, and (b) which has not been remitted to the United Kingdom by the end of the tax year in which the disposal mentioned in section 119A(1) occurs. (4) Section 119B(4) to (6) applies if any of the unremitted Part 7A income is remitted to the United Kingdom after the end of the tax year referred to in subsection (3)(b).

50

In the following provisions, in the definition of “the employment income Parts of ITEPA 2003”, for “7” substitute “ 7A ”

• (a) section 122(1) of the Social Security Contributions and Benefits Act 1992, and

• (b) section 121(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

51

In Schedule 34 to FA 2004 (non-UK pension schemes) after paragraph 3(6) insert—

(7) The provision which may be made under sub-paragraph (6) includes (in particular) provision in consequence of Part 7A of ITEPA 2003.

Commencement and transitional provision relating to Part 7A of ITEPA 2003

52

• (1) Part 7A of ITEPA 2003 (as inserted by paragraph 1 of this Schedule) has effect in relation to relevant steps taken on or after 6 April 2011; and the other amendments made by this Schedule have effect accordingly.

• (2) Sub-paragraph (1) is subject to the following paragraphs.

53

• (1) This paragraph applies if—

• (a) on or after 9 December 2010 but before 6 April 2011 a relevant step (“the early step”) within section 554C(1)(a) of ITEPA 2003 is taken,

• (b) Chapter 2 of Part 7A of ITEPA 2003 would have applied by reason of the early step had the reference in paragraph 52(1) of this Schedule to 6 April 2011 been a reference to 9 December 2010, and

• (c) the early step is not chargeable to income tax by virtue of Schedule 34 to FA 2004 in whole or in part.

• (2) Subject to what follows, Chapter 2 of Part 7A of ITEPA 2003 is to apply by reason of the early step; and the amendments made by this Schedule have effect accordingly.

• (3) In determining the tax year for which the employment income of A counts for the purposes of section 554Z2(1) of ITEPA 2003, the early step is treated as having been taken on 6 April 2012; but otherwise Chapter 2 of Part 7A of that Act applies by reference to when the early step was actually taken.

• (4) The amount which (apart from this sub-paragraph) would count as employment income of A is to be reduced by an amount to reflect so much of the sum paid as has been repaid to P before 6 April 2012 by the person to whom the payment was made; and the Tax Acts are to apply in relation to the sum paid so far as repaid to P before that date by that person as if Chapter 2 of Part 7A of ITEPA 2003 had never applied by reason of the early step, with any adjustments that need to be made to any assessment to tax being made accordingly.

• (5) The amount of the reduction (if any) under sub-paragraph (4)—

• (a) is to be determined on a just and reasonable basis, and

• (b) may be the full amount of the employment income or nil or an amount in between (depending on the circumstances).

• (6) Section 554Z5 of ITEPA 2003 does not apply in relation to the early step and, in the application of that section in relation to any other relevant step (whenever taken), the early step is to be ignored.

• (7) Section 554Z12 of ITEPA 2003 does not apply in relation to the early step.

• (8) For the purposes of section 687A(3)(a) of ITEPA 2003 (as inserted by paragraph 29 of this Schedule), the early step is treated as having been taken on 6 April 2012.

• (9) For the purposes of section 41(1A) of ITTOIA 2005 (as inserted by paragraph 38(3) of this Schedule), the early step is treated as having been taken on 6 April 2012; and for the purpose of determining whether section 41(1A) of that Act applies, section 41(1) is to be read as substituted by paragraph 38(2) of this Schedule.

• (10) For the purposes of section 1293(1A) of CTA 2009 (as inserted by paragraph 47(3) of this Schedule), the early step is treated as having been taken on 6 April 2012; and for the purpose of determining whether section 1293(1A) of that Act applies, section 1293(1) is to be read as substituted by paragraph 47(2) of this Schedule.

54

• (1) This paragraph applies if—

• (a) on or after 9 December 2010 but before 6 April 2011 a relevant step (“the early step”) within section 554C(1)(d) of ITEPA 2003 is taken,

• (b) the relevant step does not involve a sum of money within the meaning of section 554Z(10) of ITEPA 2003,

• (c) the asset which is the subject of the early step is a readily convertible asset which P makes available to secure the payment of a sum of money,

• (d) Chapter 2 of Part 7A of ITEPA 2003 would have applied by reason of the early step had the reference in paragraph 52(1) of this Schedule to 6 April 2011 been a reference to 9 December 2010, and

• (e) the early step is not chargeable to income tax by virtue of Schedule 34 to FA 2004 in whole or in part.

• (2) For the purposes of sub-paragraph (1)(a) section 554C(1)(d) of ITEPA 2003 is to be read as if the words “or makes it available under an arrangement which permits its use” were omitted.

• (3) In this paragraph “readily convertible asset” means anything mentioned in section 702(1)(a) to (c) of ITEPA 2003 (ignoring section 702(3)).

• (4) Subject to what follows, Chapter 2 of Part 7A of ITEPA 2003 is to apply by reason of the early step; and the amendments made by this Schedule have effect accordingly.

• (5) In determining the tax year for which the employment income of A counts for the purposes of section 554Z2(1) of ITEPA 2003, the early step is treated as having been taken on 6 April 2012; but otherwise Chapter 2 of Part 7A of that Act applies by reference to when the early step was actually taken.

• (6) The amount which (apart from this sub-paragraph) would count as employment income of A is to be reduced to nil if—

• (a) before 6 April 2012 the readily convertible asset has been returned to P, and

• (b) as at that date the asset is not being used to secure the payment of the sum of money (or any part of it),

and the Tax Acts are to apply in relation to the early step as if Chapter 2 of Part 7A of ITEPA 2003 had never applied by reason of it, with any adjustments that need to be made to any assessment to tax being made accordingly.

• (7) Section 554Z5 of ITEPA 2003 does not apply in relation to the early step and, in the application of that section in relation to any other relevant step (whenever taken), the early step is to be ignored.

• (8) Section 554Z8 of ITEPA 2003 applies in relation to the early step as if subsection (6)(b) were omitted.

• (9) Section 554Z12 of ITEPA 2003 does not apply in relation to the early step.

• (10) For the purposes of section 695A(3)(a) of ITEPA 2003 (as inserted by paragraph 31 of this Schedule), the early step is treated as having been taken on 6 April 2012.

• (11) For the purposes of section 41(1A) of ITTOIA 2005 (as inserted by paragraph 38(3) of this Schedule), the early step is treated as having been taken on 6 April 2012; and for the purpose of determining whether section 41(1A) of that Act applies, section 41(1) is to be read as substituted by paragraph 38(2) of this Schedule.

• (12) For the purposes of section 1293(1A) of CTA 2009 (as inserted by paragraph 47(3) of this Schedule), the early step is treated as having been taken on 6 April 2012; and for the purpose of determining whether section 1293(1A) of that Act applies, section 1293(1) is to be read as substituted by paragraph 47(2) of this Schedule.

55

• (1) For the purpose of determining whether Chapter 2 of Part 7A of ITEPA 2003 would have applied by reason of the early step as mentioned in paragraph 53(1)(b) or 54(1)(d), section 554G of ITEPA 2003 is to be read—

• (a) as if subsection (1)(a) were omitted, and

• (b) as if the definition contained in sub-paragraph (2) applied for the purposes of the reference to a group of companies in subsection (4)(d) instead of section 554Z(5) of ITEPA 2003.

• (2) The definition referred to in sub-paragraph (1)(b) is—

“group of companies” means a company and any other companies of which it has control (as defined in section 995 of ITA 2007)

.

• (3) For the purpose of determining whether Chapter 2 of Part 7A of ITEPA 2003 would have applied by reason of the early step, Chapter 1 of that Part is to be read as if section 554N(13) to (16) were omitted.

• (4) If, by virtue of section 554O of ITEPA 2003, Chapter 2 of Part 7A of that Act would not have applied by reason of the early step, section 554O(3) and (4) have effect in relation to the car loan.

• (5) But, for this purpose, if the repayment date is before 6 April 2012, in section section 554O(3) and (4) references to the repayment date are to be read as references to 6 April 2012.

56

• (1) This paragraph applies for the purposes of section 554Q of ITEPA 2003 in a case in which—

• (a) the relevant step mentioned in subsection (2)(a) of that section was taken before 6 April 2011, and

• (b) the requirement of subsection (2)(b) of that section would have been met had Part 7A of ITEPA 2003 had effect in relation to relevant steps within section 554B of that Act taken before that date.

• (2) The requirement of subsection (2)(b) of that section is to be treated as met in that case.

57

• (1) This paragraph applies for the purposes of section 554R of ITEPA 2003 in a case in which—

• (a) the relevant step mentioned in subsection (6)(a) of that section was taken before 6 April 2011, and

• (b) the requirement of subsection (6)(b) of that section would have been met had Part 7A of ITEPA 2003 had effect in relation to relevant steps within section 554B of that Act taken before that date.

• (2) The requirement of subsection (6)(b) of that section is to be treated as met in that case.

58

• (1) This paragraph applies if—

• (a) B takes a step within section 554Z19 of ITEPA 2003 before 6 April 2011 by providing security (“the early security”) for the performance of an undertaking (“the early undertaking”),

• (b) on or after 6 April 2011 at a time when B is continuing to provide the early security, there is a change in the terms of the early undertaking which does not amount to the giving of a new undertaking, and

• (c) as a result of the change, the amount to be paid as a contribution (“the early contribution”) under the early undertaking increases, or will increase.

• (2) Chapter 3 of Part 7A of ITEPA 2003 has effect—

• (a) as if the change in the terms of the early undertaking were a new undertaking to pay a contribution covering the increase in the amount of the early contribution as determined on a just and reasonable basis, and

• (b) as if B, in continuing to provide the early security, provides security for the performance of the new undertaking at the time of the change in the terms.

• (3) Section 554Z17(7) of ITEPA 2003 applies for the purposes of this paragraph as it applies for the purposes of Chapter 3 of Part 7A of that Act.

59

• (1) This paragraph applies if—

• (a) a relevant step within section 554C or 554D of ITEPA 2003 or paragraph 1 of Schedule 11 to F(No. 2)A 2017 (“the chargeable step”) is taken,

• (b) Chapter 2 of Part 7A of ITEPA 2003 applies by reason of the chargeable step,

• (c) in a tax year before 6 April 2011 (“the pre-6 April 2011 tax year”) a relevant step (“the pre-6 April 2011 step”) within section 554B of ITEPA 2003 was taken,

• (d) before the chargeable step is taken—

• (i) an agreement was made between Her Majesty's Revenue and Customs and either A or B (or both) under which it was agreed that the pre-6 April 2011 step was to be treated as giving rise to earnings of A from A's employment with B within Chapter 1 of Part 3 of ITEPA 2003 for the pre-6 April 2011 tax year, or

• (ii) the tax payable by A for the pre-6 April 2011 tax year was otherwise decided on the basis that the pre-6 April 2011 step was to be treated as giving rise to earnings of A from A's employment with B within Chapter 1 of Part 3 of ITEPA 2003 for that tax year,

• (e) before the chargeable step is taken, A or B has paid, or otherwise accounted for, any tax which A or B is required to pay or otherwise account for as a consequence of—

• (i) the agreement mentioned in paragraph (d)(i), or

• (ii) the tax payable by A for the pre-6 April 2011 tax year having otherwise been decided on the basis mentioned in paragraph (d)(ii), and

• (f) after any reductions under sections 554Z4 and 554Z6 to 554Z8 of ITEPA 2003, it is determined on a just and reasonable basis that the value of the chargeable step represents (or still represents after any such reductions) to any extent—

• (i) the earnings treated as arising from the pre-6 April 2011 step as mentioned in paragraph (d)(i) or (ii), or

• (ii) any return on those earnings since the taking of the pre-6 April 2011 step (whether income or capital, direct or indirect or realised or unrealised).

• (2) After any reductions under sections 554Z4 and 554Z6 to 554Z8 of ITEPA 2003, the value of the chargeable step is to be reduced (but not below nil) by an amount reflecting the extent to which, as determined under sub-paragraph (1)(f), that value represents (or still represents)

• (a) where sub-paragraph (2A) or (2B) applies, the earnings mentioned in sub-paragraph (1)(f)(i) or any return on those earnings mentioned in sub-paragraph (1)(f)(ii), and

• (b) in any other case, the earnings mentioned in sub-paragraph (1)(f)(i).

• (2A) This sub-paragraph applies where—

• (a) the agreement mentioned in sub-paragraph (1)(d)(i) is made before 1 April 2017, and

• (b) A or B pays, or otherwise accounts for, any tax as mentioned in sub-paragraph (1)(e) in accordance with that agreement.

• (2B) This sub-paragraph applies where—

• (a) the decision mentioned in sub-paragraph (1)(d)(ii) is made before 1 April 2017, and

• (b) A or B pays, or otherwise accounts for, any tax as mentioned in sub-paragraph (1)(e) before 1 April 2017.

• (3) In sub-paragraph (1)(f)(ii) “return” does not include any return so far as, it is reasonable to suppose, the return exceeds the return which might have been expected applying the assumption that all relevant connected persons are acting at arm's length of each other.

• (4) In sub-paragraph (3) “relevant connected person” means a person with a connection (direct or indirect) to an arrangement (within the meaning of Part 7A of ITEPA 2003) by virtue of which the return arises.

• (5) For the purposes of sub-paragraph (1)(e), a person is not to be regarded as having paid, or otherwise accounted for, any tax by reason only of making—

• (a) a payment on account of income tax,

• (b) a payment that is treated as a payment on account under section 223(3) of FA 2014 (accelerated payments), or

• (c) a payment pending determination of an appeal made in accordance with section 55 of TMA 1970 .

Other commencement provision

60

The amendments made by paragraph 14 of this Schedule, so far as relating to general earnings, have effect in relation to benefits to which Chapter 2 of Part 6 of ITEPA 2003 applies received on or after 6 April 2011.

61

The amendments made by paragraphs 36, 39(a), 45 and 48(a) of this Schedule have effect in relation to acts or omissions occurring on or after 6 April 2011.

62

The amendments made by paragraphs 37(2), 39(b), 46(2) and 48(b) of this Schedule have effect in relation to payments or transfers made on or after 6 April 2011.

63

The amendments made by paragraphs 38(2) and 47(2) of this Schedule have effect in relation to money treated as received on or after 6 April 2011 (subject to paragraphs 53(9) and (10) and 54(11) and (12) of this Schedule).

Power to make provision dealing with interactions etc

64

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

SCHEDULE 3

Part 1 — Income tax

1

In Part 13 of ITA 2007 (tax avoidance), after Chapter 7 insert—

(809ZH) (1) This Chapter makes provision for removing entitlement to income tax reliefs, and counteracting income tax advantages, where a person makes a relievable charity donation which is a tainted donation. (2) See section 257A of TCGA 1992 and Part 21C of CTA 2010 for the removal of entitlement to other reliefs where a person makes a relievable charity donation which is a tainted donation. (809ZI) (1) In this Chapter “relievable charity donation” means a gift or other disposal which— (a) is made by a person to a charity, and (b) is eligible for tax relief. (2) A gift or other disposal is eligible for tax relief if one or both of the following apply— (a) (ignoring the tainted donation provisions) tax relief would be available in respect of it under a relevant relieving provision; (b) the charity is entitled to claim a repayment of tax in respect of it. (3) “The tainted donation provisions” are— (a) this Chapter, (b) section 257A of TCGA 1992 (tainted charity donations: disapplication of section 257), and (c) Part 21C of CTA 2010 (tainted charity donations: removal of corporation tax reliefs). (4) The following are “relevant relieving provisions”— (a) section 257 of TCGA 1992 (gifts of chargeable assets), (b) section 63(2)(a), (aa) and (ab) of CAA 2001 (gifts of plant and machinery), (c) Part 12 of ITEPA 2003 (payroll giving), (d) section 108 of ITTOIA 2005 (gifts of trading stock), (e) Chapters 2 and 3 of Part 8 of this Act (gift aid and gifts of shares), (f) section 105 of CTA 2009 (gifts of trading stock), and (g) Part 6 of CTA 2010 (charitable donations relief). (5) For the purposes of this Chapter, an amount of income which arises under a UK settlement and to which a charity is entitled under the terms of the settlement is to be regarded as an amount gifted to the charity by the trustees of the settlement. “UK settlement” has the same meaning as in section 628 of ITTOIA 2005. (809ZJ) (1) For the purposes of this Chapter, a relievable charity donation is a tainted donation if (and only if) Conditions A, B and C are met. (2) Condition A is that— (a) a linked person enters into arrangements (whether before or after the donation is made), and (b) it is reasonable to assume from either or both of— (i) the likely effects of the donation and the arrangements, and (ii) the circumstances in which the donation is made and the circumstances in which the arrangements are entered into, that the donation would not have been made and the arrangements would not have been entered into independently of one another. (3) “Linked person” means— (a) the person who made the donation (“the donor”), or (b) a person connected with the donor at a relevant time. (4) In subsection (3) “relevant time” means a time during the period which begins with the earliest, and ends with the latest, of the following times— (a) the time when the arrangements are entered into as mentioned in subsection (2); (b) the time when the relievable charity donation is made; (c) the time when the arrangements are first materially implemented. (5) Condition B is that the main purpose, or one of the main purposes, of the linked person in entering into the arrangements is to obtain a financial advantage— (a) directly or indirectly from the charity to which the donation is made or a connected charity, (b) for one or more linked persons who are not charities (each of whom is referred to in this Chapter as “a potentially advantaged person”). (6) Condition C is that the donor is not— (a) a qualifying charity-owned company, or (b) a relevant housing provider linked with the charity to which the donation is made. (7) For the purposes of subsection (6)(b) a relevant housing provider is linked with the charity if (and only if)— (a) one is wholly owned, or subject to control, by the other, or (b) both are wholly owned, or subject to control, by the same person. (8) In this section— - “qualifying charity-owned company”, in relation to a relievable charity donation, means a company which— 1. is wholly owned by one or more charities, at least one of which is the charity to which the donation is made or a connected charity, and 2. has not previously been under the control of, and does not carry on a trade or business previously carried on by, one or more of the following— 1. a potentially advantaged person; 2. a person (other than a charity) who, at any time within the period of 4 years ending with the day on which paragraph (a) was first satisfied, was connected with a person who is a potentially advantaged person; - “relevant housing provider” means a body which is— 1. a non-profit registered provider of social housing, or 2. entered on a register maintained under section 1 of the Housing Act 1996, section 20 of the Housing (Scotland) Act 2010 (asp 17) or Article 14 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15)). (9) Section 200 of CTA 2010 (company wholly owned by a charity) applies for the purposes of subsection (8), and for those purposes references in that section to “charity” include a registered club within the meaning of section 658(6) of that Act. (10) This section is subject to section 809ZL (certain financial advantages to be ignored). (809ZK) (1) This section applies for the purposes of Condition B. (2) Subsection (3) applies where the arrangements entered into by the linked person (as mentioned in Condition A) involve a transaction to which— (a) that or any other linked person (“X”), and (b) another person (“Y”), are parties. (3) X obtains a financial advantage from the charity to which the donation is made or a connected charity if— (a) the terms of the transaction are less beneficial to Y or more beneficial to X (or both) than those which might reasonably be expected in a transaction concluded between parties dealing at arm's length, or (b) the transaction is not of a kind which a person dealing at arm's length and in place of Y might reasonably be expected to make. (4) Nothing in this section is intended to limit the circumstances in which a linked person may be regarded as obtaining a financial advantage for the purposes of section 809ZJ. (5) In this section— - “Condition A” and “Condition B” have the same meaning as in section 809ZJ; - “linked person” has the meaning given by section 809ZJ(3); - “transaction” includes (for example)— 1. the sale or letting of property, 2. the provision of services, 3. the exchange of property, 4. the provision of a loan or any other form of financial assistance, and 5. investment in a business. (809ZL) (1) When determining whether a relievable charity donation is a tainted donation, a financial advantage within subsection (2), (3), (4) or (5) is to be ignored. (2) A financial advantage is within this subsection if the person for whom it is obtained applies the advantage for charitable purposes only. (3) A financial advantage is within this subsection if (ignoring the tainted donation provisions) it is— (a) a benefit associated with a gift which is a qualifying donation for the purposes of Chapter 2 of Part 8 (gift aid), or (b) a benefit associated with a payment which is a qualifying payment for the purposes of Chapter 2 of Part 6 of CTA 2010 (charitable donations relief: payments to charity). (4) A financial advantage is within this subsection if (ignoring the tainted donation provisions)— (a) the relievable charity donation is a disposal in respect of which tax relief would be available under Chapter 3 of Part 8 of this Act (gifts of shares, securities and real property to charities etc) or Chapter 3 of Part 6 of CTA 2010 (charitable donations: certain disposals to charity), and (b) the advantage is a benefit the value of which would be taken into account in determining the relievable amount in respect of the disposal for the purposes of the Chapter in question. (5) A financial advantage is within this subsection if (ignoring the tainted donation provisions)— (a) the relievable charity donation is a gift in respect of which tax relief would be available under section 108 of ITTOIA 2005 or section 105 of CTA 2009 (gifts of trading stock to charities etc), and (b) the advantage is a benefit attributable to the making of the gift in respect of which an amount would be brought into account under section 109 of ITTOIA 2005 or section 108 of CTA 2009 (receipt of benefits by donor or connected person). (6) In this section— - “benefit associated with a gift” has the meaning given by section 417; - “benefit associated with a payment” has the meaning given by section 196 of CTA 2010; - “the tainted donation provisions” has the meaning given by section 809ZI(3). (809ZM) (1) This section applies where a tainted donation is made by a person. (2) Where (ignoring this Chapter) income tax relief would be available in respect of the tainted donation, that relief is not available. (3) Where— (a) (ignoring this Chapter) income tax relief would be available in respect of an associated donation, and (b) entitlement to that relief is not withdrawn by subsection (2), that relief is not available. (4) In this section— - “associated donation”, in relation to a tainted donation, means a relievable charity donation made— 1. in accordance with the relevant arrangements, and 2. by a person, other than— 1. a qualifying charity-owned company in relation to that relievable charity donation, or 2. a relevant housing provider linked (within the meaning of section 809ZJ(7)) with the charity to which that donation is made; - “income tax relief” means relief under— 1. section 63(2)(a), (aa) or (ab) of CAA 2001 (gifts of plant and machinery), so far as it applies in relation to income tax, 2. Part 12 of ITEPA 2003 (payroll giving), 3. section 108 of ITTOIA 2005 (gifts of trading stock), 4. Chapter 2 of Part 8 of this Act (gift aid), or 5. Chapter 3 of that Part (gifts of shares etc); - “qualifying charity-owned company” has the meaning given by section 809ZJ(8) (except that paragraph (b) of that definition does not apply); - “relevant housing provider” has the meaning given by section 809ZJ(8); - “the relevant arrangements”, in relation to a tainted donation, means the arrangements by reference to which Conditions A and B in section 809ZJ are met. (5) Where entitlement to relief is withdrawn under this section in respect of a donation— (a) subsections (6) and (7) apply if the relief is under Chapter 2 of Part 8 (gift aid), and (b) subsection (8) applies if the relief is under Part 12 of ITEPA 2003 (payroll giving). (6) For the purposes of Step 2 in section 58(1), the donation is not a qualifying donation for the purposes of Chapter 2 of Part 8. (7) But— (a) the donation remains a qualifying donation for the purposes of— (i) Part 10 (special rules about charitable trusts etc), (ii) section 899(5) (meaning of “qualifying annual payment”), (iii) Chapter 2 of Part 11 of CTA 2010 (charitable companies: gifts and other payments), (iv) section 664 of that Act (community amateur sports clubs: exemption for interest and gift aid income), and (b) accordingly, section 414(2)(a) (donation treated as made after deduction of basic rate income tax) applies for the purposes of section 520(4) (income tax treated as deducted to be treated as income tax paid by charitable trust). (8) The donation remains a donation for the purposes of Part 12 of ITEPA 2003 for the purposes of— (a) section 521A (gifts under payroll deduction scheme: income tax liability and exemption), and (b) section 472A of CTA 2010 (gifts under payroll reduction scheme: corporation tax liability and exemption). (809ZN) (1) Income tax is charged under this section if— (a) a person makes a tainted donation in a tax year, (b) (ignoring this Chapter) relief would have been available under Chapter 2 of Part 8 in respect of the tainted donation or an associated donation (“the gift aid donation”), and (c) the charity to which the gift aid donation is made is entitled to claim a repayment of tax in respect of that donation. (2) The amount of the tax charged under this section is equal to the amount of the repayment of tax which the charity is entitled to claim in respect of the gift aid donation (whether or not such a claim is made). (3) Each of the persons mentioned in subsection (4) is liable for any tax charged under this section, and the liability of those persons is joint and several. (4) The persons are— (a) the donor in respect of the gift aid donation, (b) if different, the donor in respect of the tainted donation, (c) each potentially advantaged person under the relevant arrangements relating to the tainted donation, and (d) any charity to which the gift aid donation or (if different) the tainted donation is made, or any connected charity, which falls within subsection (5). (5) A charity falls within this subsection if the charity— (a) is or was party to the relevant arrangements relating to the tainted donation, and (b) was aware, at the time it entered into those arrangements, that a linked person was entering (or had entered or was likely to enter) into the arrangements in circumstances falling within Condition B in section 809ZJ. (6) No liability to income tax arises under this section in respect of a repayment of tax, if (and to the extent that) the repayment is itself repaid to the Commissioners for Her Majesty's Revenue and Customs under any other provision of the Tax Acts. (7) In this section— - “associated donation” has the same meaning as in section 809ZM; - “linked person” has the same meaning as in section 809ZJ; - “the relevant arrangements” has the same meaning as in section 809ZM. (809ZO) (1) Income tax is charged under this section if— (a) a person makes a tainted donation in a tax year, (b) the tainted donation or an associated donation is a payment by the trustees of a settlement of income arising under the settlement (“the trust donation”), and (c) the charity to which the trust donation is made is entitled to claim a repayment of tax in respect of that donation. (2) The amount of the tax charged under this section is equal to the amount of the repayment of tax which the charity is entitled to claim in respect of the trust donation (whether or not such a claim is made). (3) Each of the persons mentioned in subsection (4) is liable for any tax charged under this section, and the liability of those persons is joint and several. (4) The persons are— (a) the trustees of the settlement who made the trust donation, (b) if different, the donor in respect of the tainted donation, (c) if section 628 or 630 of ITTOIA 2005 (gifts from settlor-interested trusts etc) applies in relation to the income out of which the trust donation is made, the settlor in relation to the settlement, (d) each potentially advantaged person under the relevant arrangements relating to the tainted donation, (e) any beneficiary of the settlement who is party to those arrangements, and (f) any charity to which the trust donation or (if different) the tainted donation is made, or any connected charity, which falls within subsection (5). (5) A charity falls within this subsection if— (a) the charity is or was party to the relevant arrangements relating to the tainted donation, and (b) the charity was aware, at the time it entered into those arrangements, that a linked person was entering (or had entered or was likely to enter) into the arrangements in circumstances falling within Condition B in section 809ZJ. (6) No liability to income tax arises under this section in respect of a repayment of tax if that repayment is itself repaid to the Commissioners for Her Majesty's Revenue and Customs under any other provision of the Tax Acts. (7) In this section— - “associated donation” has the same meaning as in section 809ZM; - “linked person” has the same meaning as in section 809ZJ; - “the relevant arrangements” has the same meaning as in section 809ZM; - “settlement” and “settlor” have the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act). (809ZP) For the purposes of this Chapter, a “connected charity” in relation to another charity means a charity which is connected with that other charity in a matter relating to the structure, administration or control of either charity. (809ZQ) (1) Section 993 (meaning of “connected” persons) applies for the purposes of this Chapter— (a) subject to section 809ZP, and (b) as if, after subsection (7) there were inserted the provision in subsection (2). (2) That provision is— (8) A person who is a beneficiary of a settlement is connected with— (a) a person in the capacity as trustee of the settlement, and (b) the settlor in relation to the settlement. (9) For the purposes of this section— (a) a man and woman living together as husband and wife are treated as if they were husband and wife, (b) two people of the same sex living together as if they were civil partners of each other are treated as if they were civil partners of each other, and (c) “close company” includes a company that would be a close company if it were resident in the United Kingdom. (809ZR) (1) In this Chapter— - “arrangements” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions; - “charity” includes a registered club within the meaning of section 658(6) of CTA 2010 (meaning of “community amateur sports club” and “registered club”). (2) In this Chapter, in the case of a charitable trust, references to a charity being entitled to a repayment of, or liable to pay, tax are to be read as references to the trustees of the trust being so entitled or liable.

Part 2 — Corporation tax

2

After Part 21B of CTA 2010 (inserted by Schedule 5 to this Act) insert—